DXY: US dollar is firmly entrenched among outsiders

The GBP/USD pair continues to show a downward trend, testing the support level around 1.3300. The corrective movement of the pound is due to both technical factors — the overbought British currency in recent weeks — and the continuing uncertainty around the Fed's monetary policy.Donald Trump's rhetoric against Federal Reserve Chairman Jerome Powell remains in the focus of the markets' attention. Although the US president has denied rumors about the possible removal of the Fed chairman, his criticism of the central bank continues to create volatility. Trump insists on easing monetary policy, arguing that current interest rates are holding back economic growth. At the same time, he expressed moderate optimism about the prospects for trade negotiations with China, which temporarily supported market sentiment.Today, market participants will evaluate the latest data on business activity in the UK and the USA:- In the UK, PMI indices in the manufacturing and service sectors are forecast to decline, which may increase pressure on the pound.- In the United States, indicators are also expected to deteriorate, which limits the dollar's growth potential.Special attention will be paid to the speech by the head of the Bank of England, Andrew Bailey, who can give signals on the further steps of the regulator in the context of a slowing economy.The publication of City AM shows an increase in the number of bankruptcies of British companies — 25% more than in the same period last year. Economic difficulties, including high costs and declining consumer activity, continue to weigh on businesses. The revision of the UK's GDP growth forecast for 2025 to 1.0% further highlights the fragility of the recovery.Technical analysis of GBP/USD for today- The Bollinger Band indicator indicates the expansion of the price range, while maintaining the potential for growth.- The MACD indicator is showing signs of a downward reversal, forming a bearish signal.- Stochastic has moved out of the overbought zone, confirming the corrective scenario.Trading Recommendations- Short positions: at the breakdown of 1.3250 with a target of 1.3150 (stop loss of 1.3300).- Long positions: rebound from 1.3300 and rise above 1.3340 with a target of 1.3450 (stop loss of 1.3290).

Key events of the dayToday, the markets' attention is focused on the preliminary business activity indices (PMI) for April in the eurozone, the United States and the United Kingdom. These data will be the first indicator of the impact of uncertainty related to trade tariffs. In the eurozone, the manufacturing PMI is expected to decline to 48.2 from the previous level of 48.6, due to a drop in new orders from the United States. At the same time, the index in the service sector is likely to remain stable at around 51.0. Despite the fact that the PMI is usually less sensitive to sentiment, the risks of a negative effect still remain.In the United States, a similar dynamic is expected: a decline in industrial activity against the backdrop of gloomy data from the Philadelphia Fed index published last week. The service sector is expected to hold its position unless increased uncertainty begins to put pressure on consumption. However, March retail sales showed resilience, which reduces risks.Economic developments in AsiaIn Japan, the April PMIs showed mixed results. The manufacturing index continued to decline for the tenth month in a row, dropping to 48.5, partly due to concerns about U.S. tariffs. The service sector, on the contrary, grew to 52.2, driven by increased customer demand and the largest increase in sales over the past three months. Pressure on prices has increased: companies are recording the fastest cost growth in two years, leading to higher product prices. The composite index returned to the expansion zone, rising to 51.1 from 48.9 in March.Economic developments in the USAThe index of manufacturing activity of the Federal Reserve Bank of Richmond deteriorated in April to -13 from -4 in March. The shipment component decreased to -17, which, together with data from the Federal Reserve Bank of Philadelphia, signals a clear deterioration in the industrial situation. The effect of pre-accumulation of orders in the first quarter is being replaced by a slowdown due to increasing uncertainty.In the political arena, President Trump has eased pressure on the Fed, saying there are no plans to fire Jerome Powell. This led to a decrease in the probability of his resignation in the markets from 21% to 13%, supporting a positive mood among investors, strengthening the dollar and sending gold into a downward correction. Prior to Trump's statement, U.S. Treasury Secretary Bessant also described the trade war with China as "unsustainable," which gave an additional boost to asset growth. At the same time, Trump expressed cautious optimism about the deal with China, noting that tariffs would eventually be "significantly lower" but not reduced to zero.Events in EuropeIn the eurozone, the consumer confidence index dropped to -16.7 in April, which is the lowest level since November 2023. The decline is mainly due to the effects of the trade war and falling stock markets. So far, this deterioration has not been reflected in real data — retail sales in the United States in March, as well as transaction data in Denmark, remain strong. Thus, the decrease in confidence so far looks more like an emotional reaction to external factors.According to the quarterly survey of the European Central Bank among professional forecasters, inflation expectations have slightly increased, and economic growth forecasts have been slightly revised downwards. However, the changes turned out to be insignificant, indicating moderate expectations of further consequences of the trade war. The next round of forecasts may be less optimistic due to the escalation of tariff conflicts between the United States and China in April.International trade and macroeconomicsTrade disputes remain in the spotlight: The International Monetary Fund has revised down its global economic growth forecast for 2025, noting particularly significant declines for the United States and China. The main threats are the further escalation of trade wars and the tightening of financial conditions.The situation in SwedenAn unexpected improvement was recorded in the Swedish labor market: the unemployment rate fell to 8.1% in March from 8.9% in February. At the same time, employment growth was higher than expected, and the increase in the workforce was in line with forecasts. However, risks of deterioration remain in the event of escalating tariff conflicts and turbulence in the stock markets.Geopolitical newsProgress has been made in relations between Russia and Ukraine. According to media reports, Russia offered to stop the offensive on the current front lines, and Ukraine expressed its readiness for negotiations after the establishment of a ceasefire.The raw materials marketOil prices have strengthened amid the introduction of new US sanctions against Iranian oil exports, as well as due to improved market sentiment following the softening of US rhetoric towards China. A barrel of Brent costs about $68 in the morning.Stock marketsGlobal stock markets showed solid growth, offsetting the drop at the beginning of the week. Cyclical stocks outpaced defensive sectors in growth. Bond yields declined, and the dollar strengthened. Major US indexes closed in positive territory: Dow +2.7%, S&P 500 +2.5%, Nasdaq +2.7% and Russell 2000 +2.7%. The positive mood remains for the morning in Asia, as well as on European and American futures.Debt market and foreign exchange marketThe weakening of Trump's rhetoric towards the Fed chairman and trade negotiations with China contributed to the relief in financial markets. Today's PMI releases will be an important indicator of the current state of the global economy and will play a key role in further decisions by central banks.

FOREX Fundamental analysis for EUR/USD on April 23, 2025In recent days, there has been a turning point in the dynamics of the EUR/USD pair, which is due to a change in the rhetoric of the American administration. After a period of aggressive criticism of the Fed and tightening of trade restrictions, the White House seems to have realized the risks of excesses. The threat of firing Jerome Powell, which could undermine confidence in the Fed and the dollar, is gradually fading. This was one of the factors that allowed the dollar to recover from its recent decline.Although pressure on the Fed from the administration remains, radical steps threatening the regulator's independence are now unlikely. Trump still insists on cutting rates, but markets perceive this as part of the standard political discourse, and not as a signal for immediate action.Prospects for US trade policyCredit Agricole analysts suggest that Washington will ease the tariff regime, which may support the stock market (S&P 500) and reduce pressure on the dollar. However, it is not worth waiting for the complete abolition of duties — their level is likely to remain elevated, which will continue to negatively affect export-oriented economies, including the eurozone.Statements by US Treasury Secretary Scott Bessent about a possible de-escalation of the trade conflict with China also contribute to restoring risk appetite and strengthening the dollar.Macroeconomic factorsLowering the IMF's global GDP forecast to 2.8% creates additional pressure on pro-cyclical currencies, including the euro. At the same time, the absence of signs of recession in the United States (according to IMF estimates) may temporarily support the dollar.However, the Institute of International Finance predicts a decline in US GDP in the third and fourth quarters, which in the future may weaken the greenback's position again.Technical picture and trading levelsDespite the strengthening of the bear strength indicator, the current EUR/USD correction may enter a consolidation phase. Moreover, a breakdown of the 1.1425 level will open the way for the resumption of purchases with targets in the 1.16 area. Otherwise, the pair may continue to roll back towards the 1.13–1.12 support.

Macroeconomic background: expectations for the dayToday promises to be a calm day in terms of the release of macroeconomic data. Market participants' attention remains focused on uncertainty in global trade and possible signals from US President Donald Trump.In the eurozone, the focus will be on the April consumer confidence indicator. After a significant increase last year, consumer sentiment began to deteriorate again, and trade tensions in April likely intensified this process.In Sweden, the latest data on the unemployment rate is expected to be published. Given the continuing risks for companies that constrain their staffing plans, the negative trend may continue. Nevertheless, we forecast a decrease in the unemployment rate by the end of the year, although it will take several months to be sure.Key events of the week: PMI and tariff negotiationsThe key events of the week will be the publication of business activity indices (PMI) for April, scheduled for Wednesday. These data will provide the first estimates of the impact of trade uncertainty after Liberation Day. Any progress in the negotiation process between the United States and China, as well as changes in investor sentiment, will continue to affect market dynamics.An overview of Easter Week eventsIn the US, March retail sales showed resilience, rising by 1.4%, which was in line with expectations. Despite the decrease in gasoline prices, which held back the overall figure, the growth in sales of cars and catering services supported the overall dynamics. This suggests that so far weak consumer sentiment indicators have not had a serious impact on real spending.The Philadelphia Federal Reserve's manufacturing activity indicator weakened sharply in April, falling from 8.7 to -34.2 points. This may indicate a possible deterioration in the PMI in the first release after the holidays.Fed officials in their statements during Easter confirmed their commitment to a wait-and-see attitude. Chairman Jerome Powell stressed the need for caution, and New York Fed President John Williams also does not expect urgent policy changes. At the same time, market participants' attention is focused on Trump's ongoing attacks on the Fed's independence.European policy: results of the ECB meetingThe European Central Bank, as expected, lowered interest rates by 25 basis points, bringing the deposit rate to 2.25%. The regulator's comments were generally "mild": the risks of a slowdown in economic growth were emphasized with a moderate assessment of inflationary threats. This caused a decline in European bond yields and a local weakening of the euro against the dollar, although weak statistics from the United States then supported the cross.Our forecast assumes the continuation of the ECB rate reduction cycle, with the aim of reducing the deposit rate to 1.50% by September 2025.China and the Trade WarsChinese regulators kept the base rates at 3.10% for one-year loans and 3.60% for five-year loans. However, on the political front, Beijing has accused the United States of abusing its tariff policy and warned other countries against entering into agreements with Washington to the detriment of China. This statement was made against the background of rumors about possible US pressure measures on third countries as part of a trade confrontation.UK inflation and Bank of England policyIn the UK, inflation in March was below forecasts. The annual growth rate of consumer prices decreased to 2.6%, mainly due to cheaper transport services and leisure goods. The slowdown in inflationary pressure reinforces expectations of another rate cut by the Bank of England at its meeting in May.Central bank decisions: Denmark, Canada, TurkeyThe central bank of Denmark followed the example of the ECB and lowered its key interest rate by 25 basis points to 1.85%. The Bank of Canada maintained its rate at 2.75%, confirming its commitment to an inflation target of 2% and supplementing the forecast with two scenarios depending on the further escalation of the trade war.The central bank of Turkey unexpectedly raised the rate immediately by 350 basis points to 46%, which was a surprise to the markets.Japan: inflation and policy of the Bank of JapanIn Japan, core inflation rose to 3.2% year-on-year in March, in line with forecasts. The head of the Bank of Japan, Kazuo Ueda, confirmed his readiness to continue tightening monetary policy if inflation continues to accelerate, although a cautious approach remains amid uncertainty in global trade.Commodity markets: oil and goldOil prices dropped by more than 2% due to expectations of progress in negotiations on Iran's nuclear program. In the morning, Brent crude oil is trading around $67 per barrel.Gold prices continue to update records, approaching the level of $ 3,488 per troy ounce, reflecting the steady demand for safe haven assets.Stock markets: mood remains tenseAgainst the background of the Easter holidays, stock markets showed weakness. American indices have lost more than 4% over the past five trading days, while European markets have shown moderate growth. Volatility has increased: the VIX index has risen to 33 points. At the same time, the growth of the euro adds pressure on dollar assets in investors' portfolios.Debt market and currenciesThe US dollar continues to decline amid political instability and pressure on the Fed from the White House. Short-term rates in the United States have fallen, while long-term rates continue to rise, indicating an increase in the yield gap. Against the background of the ECB's softening position, yields in Europe continue to decline, and the EUR/SEK pair is moving towards fair levels around 11.

FOREX fundamental analysis for EUR/USD on April 22, 2025Financial markets are faced with a paradox: the slogan "America first" has turned into a flight of capital from the United States in practice.Investors, who initially focused on the protectionist rhetoric of the administration, are now hastily reducing interest in American assets, considering them toxic.This led to a sharp weakening of the dollar — the USD index has declined by 7% since the beginning of the year, and the EUR/USD pair is showing steady growth.According to Apollo Management, non-residents own a significant share of American assets.:- Shares worth $19 trillion.- Treasury bonds (treasuries) worth $7 trillion.- Up to 30% of US corporate debt.A massive withdrawal of these funds can provoke serious volatility, especially against the background of the growing profitability of treasuries. Contrary to the classical correlation, the dollar does not receive support from rising rates — investors see risks in Washington's economic policy itself.The conflict between Trump and the FedThe US president is actively criticizing Jerome Powell, accusing him of a delayed reaction to inflation and political bias. Demands to lower the federal funds rate are being made against the backdrop of slowing inflation, but the new tariffs from the White House may again accelerate price increases (PCE).The historical parallel with the 1970s raises concerns: then the Fed's subordination to political pressure led to a double-dip recession. Today, the independence of the regulator is a key element of confidence in the dollar, and its erosion only accelerates capital outflow.EUR/USD prospectsThe current dynamics of the pair indicates a continuation of the uptrend. The first target for buyers is the 1.16 level, with the prospect of moving towards 1.1950. The pressure on the dollar remains, and the formation of long positions from pullbacks and corrections remains an urgent forex trading strategy.Key factors for monitoring:- Further escalation of trade restrictions.- The Fed's reaction to political pressure.- Dynamics of capital outflow from American assets.Markets are entering a period of heightened uncertainty, where political decisions may be stronger than economic fundamentals.

Dollar decline amid concerns about the Fed's independenceIn today's low-volume trading due to the holiday period, the US dollar came under widespread pressure, which was helped by growing concerns about the independence of the Federal Reserve System. Investors are alarmed after statements by White House Economic Adviser Kevin Hassett that President Donald Trump continues to explore the possibility of removing Fed Chairman Jerome Powell. Despite the fact that the legal basis for such actions remains questionable and unclear, the very fact of possible political interference in the process of monetary policy formation has seriously undermined the confidence of market participants.Rising risks amid US trade policyThe escalation of the conflict between the presidential administration and the Federal Reserve is taking place against the background of the already existing uncertainty caused by Washington's aggressive trade policy. New tariff measures and retaliatory duties are exacerbating the situation: Fed officials, including Powell, have repeatedly warned that increased trade barriers could simultaneously accelerate inflation and slow down economic growth, increasing the likelihood of a stagflationary scenario. The threat of interference in the independence of the Federal Reserve increases market instability and significantly increases long-term risks for American assets.Protecting the independence of the FedJerome Powell, in turn, strongly defends the independence of the central bank. Speaking last week, he stressed: "We will never succumb to political pressure... Our independence is enshrined in law." Powell also recalled that members of the Board of Governors can be removed only on serious grounds, and not because of differences in political views. Nevertheless, the escalation of the confrontation with the White House has already cast a shadow on the reputation of key American institutions. The markets did not remain indifferent: investors began to actively withdraw capital from the dollar in favor of alternative assets.Rising demand for Euro and goldAmid falling confidence in US assets, the euro became the main beneficiary of today's trading session. With the dollar declining, investors are looking for reliable and liquid alternatives, and the euro, with its deep financial market, relative political stability, and reputable central bank, has become one of the preferred destinations. The Japanese yen and the Swiss franc are also holding steady, but it was the euro and gold that received the most support, which remain the main safe haven assets in the face of increased turbulence.

USD/CAD analysis on April 18, 2025In a shortened trading session due to the Good Friday celebrations in North America, the USD/CAD pair is showing a moderate recovery, testing the 1.3865 level after a recent pullback to November lows. The absence of new macroeconomic releases shifts the attention of market participants to technical factors and prospects for the settlement of trade disputes.The White House administration continues to signal the possibility of early agreements with the EU and China, although current conditions remain extremely stringent. Chinese exporters still face 145% duties, while European goods face a base rate of 10% with an additional 25% levies on automotive products.The American statistics, published the day before, presented a mixed picture.Improved data on initial applications for unemployment benefits (215 thousand against the expected 225 thousand)Deterioration in the rate of repeat referrals (1.885 million versus the forecast of 1.87 million)Unexpected increase in building permits to 1.482 millionSharp drop in the Philadelphia Federal Reserve Business activity Index to -26.4 pointsAt the last meeting, the Bank of Canada confirmed market expectations, leaving the rate at 2.75%. In an accompanying statement, the regulator highlighted the risks to economic growth associated with the escalation of the trade conflict with the United States, which justifies maintaining the current monetary policy.USD/CAD technical analysis for todayThe technical picture shows signs of a possible reversal:The narrowing Bollinger band retains the potential for movementMACD shows the first signals of a possible bullish crossingStochastic oscillator in the oversold zone indicates correction risksTrading recommendationsFor traders considering a buy scenario, the key entry level will be the breakdown of 1.3908 with the prospect of moving to the psychologically important 1.4000 mark. In this case, it is recommended to place a protective stop loss at 1.3850.An alternative bearish scenario suggests a breakdown of the 1.3839 support, which will pave the way for testing the 1.3730 level. It is advisable to set the stop loss for short positions at 1.3890.

The GBP/USD pair continues to strengthen, demonstrating an upward trend and approaching the level of 1.3270, which the market is testing for an upward breakdown. Trading is taking place near the highs recorded in October last year, updated last week. Against the background of the approaching Easter weekend, the activity of market participants is decreasing, which makes the current movement more inertial.Investors are focused on the macro data that has already been published, as well as statements by politicians, including former US President Donald Trump, who in his Truth Social account again called on the Federal Reserve to lower interest rates, criticizing the regulator's actions as overdue. Nevertheless, Fed Chairman Jerome Powell confirmed the central bank's commitment to follow exclusively economic logic, ignoring political pressure.The data released on Wednesday from the UK confirmed the downward trend in inflationary pressures. The core consumer price index slowed from 3.5% to 3.4%, while the overall index decreased from 2.8% to 2.6% in annual terms, with a forecast of 2.7%. On a month-on-month basis, inflation was 0.3%, with an expectation of 0.4%. The main impact on the data was a decrease in clothing prices, while the cost of services remains high at 4.7%, albeit with some weakening compared to February 5.0%. Financial market participants are already pricing in the likelihood of a 25 basis point reduction in the key rate by the Bank of England, from 4.50% to 4.25% at the May meeting. At the same time, a further reduction in inflation to the target level of 2.0% can be supported by global economic processes, in particular, US measures to adjust import duties. Analytical forecasts allow for three rate cuts in 2025, by 25 basis points each, reaching 3.75% by the end of the year.The US dollar, in turn, came under pressure amid the publication of mixed data on the US economy. Industrial production in March decreased by 0.3% against an increase of 0.8% a month earlier, which turned out to be worse than analysts' forecast (-0.2%). At the same time, retail sales pleased investors: the indicator jumped by 1.4% month—on-month (against +0.2% in February) and accelerated year-on-year from 3.5% to 4.5%, which slightly smoothed out the negative from production statistics.Technical analysis of GBP/USD for todayFrom a technical point of view, the indicators on the daily chart signal the continuation of the upward momentum. The Bollinger bands show expansion, supporting movement to new local peaks. The MACD indicator continues to form a steady buy signal: the histogram is above the signal line and shows an upward trend. Stochastic, having reached the maximum value zone (level 100), stabilized in the horizontal zone, which may indicate the risks of short-term overbought of the asset.Trading recommendationsIn the case of a confident breakout of the 1.3300 level, we form purchases with the expectation of moving towards 1.3400. It is reasonable to set a protective order at the level of 1.3250.If buyers fail to break through the 1.3300 level and the pair begins to decline with a breakdown down to 1.3250, then we will receive a sales signal with a target at 1.3150. In this case, we will set the stop loss at 1.3300.