Forex Morning Report - Tue Mar 25 2025
Overnight Market Snapshot
The mood in the market today is tentative, with a focus on Trump’s planned tariffs ahead of the 2 April deadline. US stocks posted strong gains yesterday, but futures are more muted today. In terms of currency movements, the US dollar jumped after an upbeat services PMI, with US 10-year yields rising to 4.32%. Meanwhile, Goldman Sachs predicts that lower oil prices could slow non-OPEC+ supply growth. On the political front, Canada’s Prime Minister Carney has expressed readiness for a call with US President Trump as a sovereign country, amid trade war tensions. In Europe, there is a shift in the focus towards Eurozone stocks. The market is also eyeing the March S&P Global manufacturing and services PMI. On the commodities front, OPEC+ is set to continue oil output hike in May. HSBC warns that EUR/USD looks overstretched as gains driven more by flows than fundamentals, with its rally vulnerable if European fiscal stimulus expectations disappoint. Overall, small ranges are expected in major FX rates in the Asia-Pacific region and market sentiment remains uncertain.
Central Bank Insights
– BOJ: Governor Ueda commented it’s necessary to consider valuation and market risks when offloading ETF holdings, and that JGB holdings will continue to have stock effect due to slow reduction
– FOMC: Permanent voters Kugler and Williams of the Federal Reserve are expected to speak Tuesday
– PBOC: Set USD/CNY reference rate at 7.1788, contributing to managed floating exchange rate system, and injected 377.9bn yuan via 7-day reverse repos
– ECB: Kazimir of ECB speaks on economic forecasts, while Cipollone says inflation target may be reached sooner
– BoJ: Minutes show most members agreed on rising 2% target likelihood, with differing views on the impact on policy interest rate
– Fed: Bostic expects one FOMC rate cut this year, says inflation won’t target until 2027, and businesses delaying investment
– BOE: Governor Bailey says businesses are delaying investment, and faces challenge to raise economy’s potential growth rate
Key Economic Events Today
- No high-impact events today
Technical Analysis
– AUDUSD: Price action saw a push lower during the North American session, later rebounding but failing to break above the 200-bar moving average at 0.63077, reinforcing it as a key resistance point.
– NZDUSD: Currently testing the rising 200-bar moving average on the 4-hour chart at 0.57055, with potential support at the 100-bar moving average at 0.57189 and 100-day moving average at 0.57376.
– USDJPY: Moved above natural resistance at 150.00 and 200-bar moving average on 4-hour chart at 150.06, with next targets at 150.11 and 150.288. Uptrend supported by positive risk sentiment and higher US rates.
– EURUSD: Extended lower, breaking below the 61.8% retracement at 1.08174, reaching new session lows and lowest level since March 7.
– USDCAD: Finding resistance at the 200-hour moving average at 1.43485 and trading below the 100-hour moving average at 1.43276, with key support at 1.4270 and 38.2% retracement level at 1.4319.
– USDCHF: Trading in a well-defined sideways range, with support at 0.8794–0.87995 and resistance at 0.8838–0.88438. Consolidation between 100-hour and 200-hour moving averages, and the 200-day MA.
– GBPUSD: In a bullish posture on the H4 chart, with key resistance at 1.2988–1.3013 and support at 1.2922. Momentum favorable for the bulls while holding above support.
– USDJPY: Trading higher, gaining momentum and reaching a key resistance at 150.00. Moved above the 100-hour moving average, shifting bias in favor of buyers.
Trade smart—stay tuned for tomorrow’s update!