The euro is under pressure as weak economic data and rate cut expectations weigh on sentiment, while the dollar remains supported by the Federal Reserve’s cautious approach. The pound is facing mixed signals, with resilience in services offsetting weakness in manufacturing, but uncertainty surrounding UK economic policy keeps traders cautious. The yen continues to struggle despite a hawkish Bank of Japan, as weak domestic data and U.S. strength limit gains. The Australian dollar sees downside risk as global factors and yield spreads favor the dollar. Gold remains uncertain, balancing geopolitical tensions with shifting Fed expectations.
EUR/USD
Key Factors Affecting EUR/USD
- Economic Data: Mixed PMI data from the Eurozone, with weakness in the manufacturing sector but modest growth in services, limits the euro’s upward potential.
- Central Bank Policy: The European Central Bank (ECB) is leaning toward rate cuts, with markets pricing in a 59% chance of a 25bp cut in April.
- U.S. Dollar Strength: The Federal Reserve’s hawkish stance and potential for higher interest rates support the dollar, adding downward pressure on EUR/USD.
- Trade Policy: Concerns over U.S. tariffs impacting the Eurozone economy are a headwind for the euro.
- Technical Levels:
- Support: 1.0822, 1.0677, 1.0602, 1.0561, 1.0466
- Resistance: 1.0864, 1.0918, 1.0947, 1.0979
Forecast
The euro is likely to remain under pressure due to ECB rate cut expectations and stronger U.S. data. A move below 1.0822 could accelerate losses, while a breakout above 1.0864 may signal short-term bullish momentum.
GBP/USD
Key Factors Affecting GBP/USD
- Economic Resilience: The UK services sector continues to show strength, offsetting weakness in manufacturing.
- Inflation Data: CPI figures will be closely watched, with expectations of a decline.
- Fiscal Policy: Chancellor Reeves’ Spring Budget could introduce new fiscal measures impacting the pound.
- U.S. Dollar Trends: Strong U.S. economic data could weigh on GBP/USD.
- Technical Levels:
- Support: 1.2956, 1.2912, 1.2866, 1.2811, 1.2768, 1.2704, 1.2645
- Resistance: 1.3010
Forecast
The pound’s bullish trend faces challenges from upcoming inflation data and U.S. dollar strength. A drop below 1.2912 would confirm a bearish shift, while a move above 1.3010 could extend gains.
USD/JPY
Key Factors Affecting USD/JPY
- Monetary Policy Divergence: The Federal Reserve’s hawkish stance contrasts with the Bank of Japan’s cautious approach.
- Japanese Economic Data: Weak PMI figures highlight ongoing struggles in the manufacturing sector.
- Market Sentiment: Risk-on sentiment tends to weaken the yen as investors seek higher-yielding assets.
- Technical Levels:
- Support: 148.95, 148.58, 148.25
- Resistance: 149.65, 150.17, 151.29, 152.32
Forecast
The yen remains under pressure due to Japan’s weak economic outlook. A break above 150.17 could accelerate gains toward 151.29, while a move below 148.25 may signal a reversal.
AUD/USD
Key Factors Affecting AUD/USD
- Reserve Bank of Australia (RBA) Policy: The RBA remains cautious despite cutting rates, limiting downside pressure on the Australian dollar.
- China’s Economy: Additional stimulus from China could support Australian exports and stabilize the Aussie dollar.
- U.S. Dollar Influence: A strengthening U.S. dollar may weigh on AUD/USD.
- Technical Levels:
- Support: 0.6250, 0.6200, 0.6120, 0.6030
- Resistance: 0.6370, 0.6420, 0.6540
Forecast
The Australian dollar remains in a downtrend but could find support from Chinese economic stimulus. A break below 0.6215 may accelerate losses, while a move above 0.6400 could invalidate the bearish scenario.
XAU/USD
Key Factors Affecting Gold
- Market Sentiment: Gold remains above the critical $3000 level, reflecting mixed risk sentiment.
- U.S. Tariffs: Concerns over economic slowdown due to tariffs could drive safe-haven demand.
- Federal Reserve Policy: Expectations of future rate cuts may support gold prices.
- Geopolitical Factors: U.S.-Russia negotiations and developments in Ukraine influence gold’s demand.
- Technical Levels:
- Support: $3000, $2950
- Resistance: $3050, $3100
Forecast
Gold prices could remain volatile due to geopolitical uncertainties and economic data. A break below $3000 may signal further declines, while a move above $3050 could trigger additional upside momentum.
Conclusion
- EUR/USD: Bearish bias unless it breaks above 1.0864.
- GBP/USD: Bullish trend faces risks; support at 1.2912 is crucial.
- USD/JPY: Bullish trend intact unless it breaks below 148.25.
- AUD/USD: Bearish bias unless it clears 0.6400.
- Gold: Mixed outlook; needs to hold above $3000 for continued upside.
