The euro stabilized after economic data signaled resilience, though its outlook remains cautious amid ongoing policy debates. The pound rebounded as traders interpreted the absence of UK data positively, but weak manufacturing figures may weigh on sentiment. The yen remained under pressure as the dollar strengthened on solid US economic data, with traders monitoring potential policy shifts in Japan. Gold saw a modest recovery after recent losses, supported by safe-haven demand amid global trade concerns, but its upside may be capped by cautious Fed signals on interest rate adjustments.
EUR/USD
Fundamental Factors Affecting EUR/USD:
- Eurozone Economic Data:
- The IFO Business Climate Index exceeded expectations, signaling potential economic stabilization.
- Private sector activity expanded at the fastest pace since August, though manufacturing slowed.
- European Central Bank (ECB) officials hint at potential rate cuts in April, which may weigh on the euro.
- U.S. Economic Indicators:
- Consumer Confidence Index and New Home Sales data are key upcoming reports.
- Strong U.S. economic data could bolster the dollar, pressuring EUR/USD lower.
- Dovish Federal Reserve commentary or weak data may support the euro.
Technical Analysis:
Medium-Term Forecast: If ECB policy remains dovish, downside pressure could persist, testing support levels near 1.0677 and 1.0602.
Support Levels: 1.0805, 1.0766, 1.0677, 1.0602, 1.0561
Resistance Levels: 1.0858, 1.0918, 1.0947, 1.0979
Short-Term Outlook: Bearish bias unless price consolidates above 1.0858, in which case an uptrend may resume.
GBP/USD
Fundamental Factors Affecting GBP/USD:
- UK Economic Performance:
- UK Manufacturing PMI fell to 44.6, signaling further contraction.
- The upcoming inflation report and Spring Budget will be crucial for GBP direction.
- Political stability and fiscal policy will also influence market sentiment.
- U.S. Dollar Strength:
- If upcoming U.S. data exceeds expectations, the dollar could gain strength.
- A weaker dollar scenario may emerge if economic reports disappoint or if the Federal Reserve signals rate cuts.
Technical Analysis:
Medium-Term Forecast: A break below 1.2911 could confirm bearish momentum, while consolidation above 1.3010 could extend gains toward 1.3100.
Support Levels: 1.2911, 1.2866, 1.2811, 1.2768
Resistance Levels: 1.2950, 1.3010, 1.3100
Short-Term Outlook: Mixed bias; holding above 1.2911 suggests potential for continued strength.
USD/JPY
Fundamental Factors Affecting USD/JPY:
- U.S. Economic Data and Policy:
- Strong economic indicators support dollar strength.
- Federal Reserve statements and interest rate projections impact USD/JPY.
- Japan’s Monetary Policy and Economic Data:
- Bank of Japan minutes indicate openness to further rate hikes if wage growth and inflation accelerate.
- Japanese exports face risks from U.S. tariffs, potentially weakening the yen.
Technical Analysis:
Medium-Term Forecast: If the dollar maintains strength, USD/JPY could test 153.00. A break below 149.51 would signal a potential downtrend.
Support Levels: 149.51, 148.95, 148.58
Resistance Levels: 151.32, 152.32, 153.00
Short-Term Outlook: Bullish; yen weakness may persist unless strong support at 149.51 is broken.
XAU/USD
Fundamental Factors Affecting Gold:
- Safe-Haven Demand:
- Uncertainty surrounding U.S. tariffs boosts gold’s appeal.
- Any escalation in geopolitical tensions may drive further demand.
- Federal Reserve Policy:
- Hawkish Fed commentary may limit gold’s upside.
- Dovish expectations or signs of slowing inflation could provide bullish momentum.
Technical Analysis:
Medium-Term Forecast: A break above 3050 could see a test of 3150, while a drop below 2976 could initiate further downside toward 2900.
Support Levels: 3000, 2976, 2954, 2930
Resistance Levels: 3037, 3050, 3100, 3150
Short-Term Outlook: Gold remains bullish if it consolidates above 3037.
Conclusion
- EUR/USD: Weakness may persist unless U.S. data disappoints or ECB signals shift in policy.
- GBP/USD: Short-term support at 1.2911 is crucial; bullish momentum could resume above 1.3010.
- USD/JPY: Bullish unless price falls below 149.51.
- Gold: Short-term bullish momentum; break above 3050 could push gold higher, while a fall below 2976 could trigger downside pressure.
