EUR/USD: the parity level can be tested already in the first quarter

Dollar Index trading idea (DXY) on April 14, 2025ARTEM_DEEV During Monday's Asian session, the dollar index (DXY) continues to decline, and has already sunk to 99.50, the lowest value since April 2022. The third consecutive session of sales of the US currency reflects the growing distrust of investors, fueled by weak macroeconomic data from the United States and increased expectations of easing the Fed's monetary policy.The aggravation of the trade conflict between the United States and China is putting significant pressure on the dollar. Beijing's retaliatory measures, which increased duties on American goods from 84% to 125% in response to similar actions by Washington, have increased concerns about the global economic downturn. German Chancellor Friedrich Merz has warned that such protectionist policies could accelerate the onset of the next financial crisis.US economic indicators continue to show alarming signals:The University of Michigan consumer sentiment index fell to 50.8 points in April, while inflation expectations rose to 6.7%;Annual growth in the producer price index (PPI) slowed to 2.7% in March from 3.2% in February;The consumer price index (CPI) decreased to 2.4% in annual terms.This dynamic, indicating a weakening of inflationary pressure while simultaneously worsening consumer sentiment, has revived market discussions about a possible early easing of the Fed's policy. At the same time, representatives of the regulator note that the trade war significantly complicates the decision-making process on interest rates.The market is currently estimating the probability of a 90 basis point Fed rate cut by the end of 2025. In the coming days, special attention will be focused on the speech of Fed Chairman Jerome Powell – his comments may become a catalyst for further weakening of the dollar if the soft rhetoric persists.Trading recommendationWe are considering an exclusively "bearish" scenario and include a pending DXY sell order in the trading plan.Sell Stop 99.20 with a target (TP) of 96.00 and a protective order (S-L) at 100.50.

AUD/USD is showing a moderate correction around 0.6293, while maintaining an overall uptrend. The move comes amid a partial softening of the US administration's rhetoric on trade duties, although the base rate of 10% remains in effect for most US trading partners, with the exception of China, for which tariffs have been sharply increased to 145%. Chinese Commerce Minister Wang Wentao criticized this policy, noting its destabilizing effect on the global economy and calling for resistance to "unilateral protectionist measures."The Australian currency was supported by positive business activity data from the Australian Bureau of Statistics. In February, total turnover increased to 0.7% from the previous 0.6%, although growth was observed in only six of the thirteen industries. The largest growth was demonstrated by the manufacturing industry (+4.6%), the transport sector (+2.4%) and media communications (+2.2%). At the same time, the extractive industry decreased by 2.5%, and the segment of art and recreation - by 2.7%. In annual terms, the manufacturing industry shows impressive growth of 14.2%, while the extractive sector lost 6.3%.The US dollar index sank to 99.40. Last week, the currency came under pressure due to the escalation of trade conflicts, despite the temporary lifting of duties for most countries. New restrictions on semiconductor exports announced by the Trump administration have added to the uncertainty, although promises of exemptions for individual companies have somewhat mitigated the negative effect.AUD/USD technical analysis for todayFrom a technical point of view, AUD/USD continues to move in the ascending channel of 0.6250-0.6490. The indicators show a weakening of bearish signals: the fast moving averages on the Alligator are turning up, and the AO oscillator on the chart is forming several ascending bars in the negative zone.Trading recommendations- For buyers: we should wait for the pair to consolidate above 0.6340. The nearest target will be 0.6530. We put the stop loss at 0.6300- For sellers: entry is advisable when breaking down 0.6260 with a target of 0.6035 and a stop loss at 0.6310

Escalation of the tariff war: the US and China continue their confrontationFinancial markets are in a state of heightened anxiety as investors closely monitor further actions by US President Donald Trump as part of the ongoing tariff confrontation. At the moment, most countries face a 10% duty on a wide range of exported goods, as well as a 25% tariff on automobiles, steel, aluminum, and products from Canada and Mexico. China, by contrast, is in the worst position, facing a record 145% interest rate.The markets have already partially priced in further escalation, but the current measures from the United States represent an actual tightening of fiscal policy, which increases the likelihood of a recession. On the other hand, China is expected to take stimulating steps, possibly lowering the benchmark interest rate after Easter. At the same time, a devaluation of the yuan is unlikely, since Beijing prefers to maintain the stability of the exchange rate.Eurozone: inflation is losing priority, the focus is on slowing growthOn Wednesday, the publication of the final data on inflation in the eurozone for March is expected. The consensus forecast assumes confirmation of the preliminary values, and the market is likely not to react to the release. Investors' attention has already shifted from the inflationary agenda to economic growth prospects and trade risks.On Thursday, the ECB is expected to cut its key interest rate by 25 basis points to 2.25%. The accompanying statement is likely to repeat the phrase that monetary policy is becoming "less restrictive." The head of the regulator, Christine Lagarde, is likely to focus on the deterioration of the macroeconomic outlook, but there will be no direct hints on the next steps on rates.Current events: signals from the USA and AsiaThe US president has announced new tariffs on semiconductors in the coming week. In parallel, an investigation has been launched into national security issues in the semiconductor sector. At the same time, Trump stated the need for "flexibility" in trade issues. On the other hand, Chinese Leader Xi Jinping began his first foreign trip this year, visiting Vietnam, Malaysia and Cambodia. The visit underscores Beijing's desire to strengthen regional ties and forge a multipolar order.Over the weekend, the United States excluded a number of high—tech goods from retaliatory tariffs - smartphones, chip manufacturing equipment and some computers. This provided short-term relief for the American IT sector. However, as noted by Commerce Secretary Howard Latnick, these goods may still be subject to future tariffs on semiconductors expected before May.Macroeconomic data: alarming signals from the United StatesA preliminary survey of consumer sentiment from the University of Michigan for April revealed a sharp deterioration in indicators. The index fell to 50.8 from 57.0 in March, while expectations and current estimates also declined more than expected. At the same time, inflation expectations for the year ahead rose to 6.7%, which increases concerns about lost price control.Producer prices in March, on the contrary, showed a decrease — the PPI index dropped to 2.7% in annual terms, which turned out to be lower than expected. This indicates that manufacturers did not have time to shift potential tariff costs to the final price in anticipation of new duties.Regional inflation: Swedish stabilityIn Sweden, the final March inflation data coincided with estimates: CPI at 0.5% YoY, CPIF at 2.3% YoY. Food inflation accelerated, while other components, including clothing, transportation, and housing, showed declines. Thus, inflation remains below the Riksbank's target level for the eighth month in a row, which supports the regulator's cautious position.Stock markets: optimism with caveatsUS stock markets ended Friday on a positive note — the S&P 500 index gained 1.8%, playing off the news about the exclusion of IT products from tariffs. Apple shares have become the engine of growth. European markets lagged behind in dynamics, but futures indicate a possible increase at the opening. It is worth noting that since the beginning of the year, European stocks have been outperforming American stocks in terms of profitability.Bond and currency markets: dollar under pressure, U.S. yields risingThe EUR/USD pair briefly dropped below 1.13 on Friday, as the weakening of tariff threats supported the dollar. However, overall confidence in American assets remains in question. The yield gap between the US and Europe has become noticeably wider: the yield on 10-year US bonds rose by 50 bps to 4.5%, while German securities remained virtually unchanged (2.55%). Scandinavian currencies remain vulnerable amid global capital flows and high uncertainty.ResultsMarkets continue to balance between the hope of stabilizing trade relations and the reality of increased global risks. Further steps by the United States on tariffs, China's reaction, and central bank policies will determine market movements in the coming weeks.

FOREX Fundamental analysis for EUR/USD on April 14, 2025The US dollar may get a chance to recover only if the White House abandons the policy of trade wars and protectionism, which continues to put pressure on the US economy. However, current trends indicate the opposite – the cooling of economic activity and the growing distrust of American assets form a stable negative background for the USD. This is not a short-term correction, but a deep structural adjustment that could lead EUR/USD to the 1.30 level by 2026.Given the tough stance of Donald Trump, who continues to pursue a review of global trade rules, the dollar remains in a vulnerable position. Consensus forecasts for US GDP growth for 2025 have already been revised downwards: while in January, Wall Street Journal analysts expected an increase of 2%, by April the estimate had fallen to 0.9%. At the same time, the probability of a recession in the next 12 months has increased from 22% to 45%, which increases investors' pessimism.Range of opinions: from recession to moderate growthForecasts of economic indicators range from a 2% reduction in GDP to a 3.1% increase. Pessimists point to a deterioration in consumer sentiment and the already tangible effects of tariffs on supply chains. Optimists, on the contrary, believe that the US administration's trade policy is tactical in nature and may soon be softened.However, such expectations look naive against the background of constant changes in the rhetoric of the White House. Trump alternately declares the tariffs unchanged, then temporarily suspends them, and then threatens new duties if there is no progress in negotiations. A striking example is the recent exemption from tariffs on electronics for $390 billion (including $100 billion of Chinese imports), which was soon called into question due to plans to introduce "special fees."Investors are losing confidenceThis inconsistency undermines confidence in American assets. For the first time in five years, demand for hedging dollar purchases has exceeded interest in insuring its sales, reaching highs since the pandemic period.The situation is aggravated by inflationary risks: According to estimates by the Wall Street Journal, price growth in 2025 may accelerate to 3.6% (versus 2.7% in January), which will limit the Fed's ability to ease policy. Although inflation is likely to slow to 2.6% by 2026, the short-term effects on the economy will be negative.Trading recommendationsIn the current conditions, the upward trend in EUR/USD looks stable. Corrections against the background of temporary positive news (for example, rumors about tariff easing or ECB rate cuts) should be considered as an opportunity to form and increase long positions with targets at the levels of 1.16 and 1.195.

The pound is showing a moderate recovery, supported mainly by external factors. The key catalyst was the Trump administration's decision to postpone the introduction of increased tariffs for 75 countries for 90 days, while maintaining the base rate of 10% for them. The exception was China, which will be subject to maximum restrictions of 125%. This decision somewhat reduced the tension in the debt markets, allowing yields to retreat from recent highs.The change in US trade rhetoric has significantly affected expectations regarding the Bank of England's policy. Before the tariffs were introduced, the probability of a rate cut in May was estimated at only 10%, but now half of analysts predict an easing by 50 basis points. Such expectations are formed against the background of growing uncertainty and changing behavior of institutional investors.Of particular concern is the dramatic change in forex hedging strategy. Large hedge funds are massively switching to gold, ignoring other assets. The volume of borrowed funds allocated for such investments increased from 4 to 61 billion pounds in just a month, which creates additional liquidity risks in the market. Claire Lombardelli, Deputy Governor of the Bank of England, noted that the US trade policy will certainly put pressure on economic growth, but its impact on inflation is still difficult to assess.The dollar index sank, retreating from yesterday's high of 103.00 to 102.30. According to Finance Minister Bessent, the original purpose of the trade restrictions was to stimulate negotiations, but an unexpectedly strong market reaction forced the administration to reconsider the timing of the measures.The technical picture of the GBP/USD pair shows a correction within the ascending channel of 1.2800-1.3220. The indicators show a weakening of the bullish signal - the moving averages on the Alligator have leveled off, and the Awesome Oscillator histogram forms corrective bars in the negative zone.Purchases will be relevant if the pair is consolidated above 1.2900 with the prospect of moving towards 1.3100. The protective stop loss is set at 1.2800.Selling is advisable when breaking 1.2800 down with a target of 1.2580. We will set the security order at 1.2900.

USA: inflation and government bonds in the spotlightThe focus of the American market today is the publication of the March consumer price index (CPI). Inflation is expected to slow down: according to the consensus forecast, the overall indicator will decrease from 2.8% to 2.5% in annual terms, and the core CPI index from 3.1% to 3.0%. Despite the increase in tariffs, which reinforces inflation expectations for the medium term, the Federal Reserve's attention is focused on internal, "organic" price pressures. An additional indicator of current investor sentiment will be the auction for the placement of 30-year US Treasury bonds.Sweden: signs of economic recoveryToday, at 08:00 Central European time, data on GDP, production and consumption for February will be published. Given that there has already been an increase in retail sales and the total number of hours worked, there is a possibility of positive dynamics in other segments of the economy. In addition, a speech by a representative of the Riksbank of the Seimas on monetary policy issues will be held at 09:00.Norway: inflation remains at the center of controversyThe inflation data for March will be key for the Norwegian market. In February, consumer prices unexpectedly jumped, helped by rising prices for groceries, air travel, and catering services. The main question now is whether this is a sustainable trend or a temporary effect. We tend to believe that most of the growth will be irreversible, but at the same time, the monthly inflation rate will begin to slow down. The forecast for the core CPI is 3.3% in annual terms, which, by historical standards, is rather in the lower range, especially after the strong February report.Denmark: inflation and unemploymentThe March consumer price index in Denmark is expected to be published today. According to forecasts, inflation will slow down from 2.0% to 1.7%, which will be facilitated by lower prices for electricity and fuel. There will also be data on the unemployment rate, which may affect short-term expectations for the krona. Additional context can be found in the "Reading the Markets Denmark" analysis from April 9th.China: inflation is stabilizingConsumer inflation in China in March was slightly below expectations, at -0.1% year-on-year and -0.4% month-on-month. Despite this, the indicator improved significantly compared to February (-0.7% YoY), which indicates the first signs of the effectiveness of the incentive measures taken by the authorities.Energy market: correction after sharp growthOil prices fell by about 1% after Donald Trump's announcement about tightening tariff policy towards China. Despite this, the main benchmark oil grades ended the previous session with an increase of 4%, recovering some of the sharp drop at the beginning of the day. Brent futures are currently trading in the range of 64-65 dollars per barrel.Global Trade: a sharp turnaround by the United StatesThe day before, the US administration announced a 90-day suspension of new duties on most countries in order to create conditions for negotiations. However, tariffs on Chinese goods were increased to 125%. Notably, this decision does not apply to Canada and Mexico. In response, China announced a 50% increase in duties on American goods, bringing the total tariff to 84%. Despite the escalation, the market has begun to reconsider the probability of a recession in the United States — now it is estimated at less than 50% compared to almost 70% previously.USA: Fed is concerned about inflation amid economic slowdownThe minutes of the FOMC meeting showed that the regulator is concerned about rising inflation with a slowdown in business activity and the labor market. The participants noted the difficulty of choosing between supporting economic growth and the need to curb price pressures. Later, Fed spokesman Thomas Barkin emphasized the importance of consumer spending as one of the sustainable elements of the economy at the current stage.The Eurozone: a response to US tariffsThe EU Council voted to impose duties of up to 25% on American goods worth a total of 21 billion euros, including soybeans and motorcycles. This was a response to the US tariffs on steel and aluminum. The Commission hopes to conclude a deal with the United States on the mutual zeroing of duties and an increase in purchases of American energy, but the likelihood of this remains uncertain.Stock markets: violent rebound after panicAfter a series of sales, the US market showed impressive growth: the S&P 500 index jumped by 10%, showing the best result since October 2008. Particularly strong growth was recorded in the technology sector: shares of Tesla, Apple and Nvidia increased by 20%. There is also a positive trend in Asian markets: Nikkei gained 8%, Kospi — 6%, and Chinese indices remain in the black by 2%. European futures are also signaling an opening with an increase of about 7%.Currencies and bonds: the market is adapting to new conditionsThe US decision to suspend tariffs has caused a surge of optimism: yields on short-term US bonds have increased, and the 2s10s curve has significantly tightened. The Fed's rate forecast for the end of the year has been revised up by 20 basis points. The dollar index remained stable, while the euro weakened against the dollar. Emerging market currencies gained support, while defensive assets such as the franc and the yen suffered losses.

FOREX Fundamental analysis for EUR/USD on April 10, 2025The markets showed a classic psychological reaction when a temporary pause in trade restrictions caused strong optimism. After the initial shock of the scale of the new tariffs, the announcement of a 90-day delay for all countries except China triggered an impressive 9.5% rise in the S&P 500, interrupting the EUR/USD recovery. Such a sharp reversal showed how much traders were ready to seize on any signs of easing trade tensions.The actions of the Trump administration have created an interesting market paradox. The US president, demonstrating his commitment to the American stock market, is actually manipulating market sentiment by publishing positive news at the beginning of the trading session and negative news after it closes. This creates additional difficulties for market participants in assessing the real situation.A special feature of the current situation is the change in Washington's strategy - from a global trade war to a selective confrontation with China. A sharp increase in duties on Chinese goods to 125% while offering negotiations to other countries looks like an attempt to isolate Beijing. However, Finance Minister Bessent's warnings about the consequences of the EU's rapprochement with the United States demonstrate the difficulty of making a choice for European partners.In the foreign exchange market, there remains a close correlation between EUR/USD and the dynamics of stock indices. The European currency traditionally strengthens when American stocks fall and weakens against the background of their growth. However, the current situation is complicated by fundamental factors, such as the Fed's statements about a comfortable rate level and calls from European regulators for policy easing.In such circumstances, range trading continues to be the most effective forex trading strategy. Purchases of the pair near the level of 1.09 and sales near 1.105. This approach takes into account both technical levels and the continued dependence of the currency pair on stock market fluctuations. However, it should be borne in mind that the ongoing uncertainty in trade policy cannot last forever.

The EUR/GBP currency pair has made a significant technical breakthrough through a powerful resistance zone formed in the range of 0.8625–0.8645. The 0.8625 level previously acted as a key high reached in August last year, while 0.8645 has served as an important resistance since April 2024. A steady consolidation above these levels signals an increase in the upward momentum and the undermining of the previous "bearish" structure that dominated the market.The breakout of the resistance zone coincided with the active phase of wave c within the framework of an upward correction of type ABC, designated as correction 4 on the weekly chart. This formation has been developing since the end of September and has gained additional strength against the background of steady pressure on the British pound. Wave c is usually the most dynamic in three-wave correction models, which corresponds to the current upward acceleration.The pound's position continues to weaken amid growing concerns about a slowdown in the UK economy and uncertainty around the future policy of the Bank of England. At the same time, the eurozone is showing signs of relative stability, which increases investors' interest in the euro in crosses. This fundamental alignment of forces additionally contributes to the demand for EUR/GBP.From the point of view of John Murphy's technical analysis, the immediate target is the 0.8700 level, the former resistance zone recorded in December 2023. Reaching this mark seems likely while maintaining the current upward momentum. Stability above the broken zone of 0.8625–0.8645 will serve as a signal of the continuation of the trend. More ambitious goals may be overestimated in the event of a strengthening of wave c and a further deterioration of the pound's position in the market.Recommendations and risksUnder current conditions, the following scenarios are possible:Continued growth with an immediate target at 0.8700, provided it stays above 0.8645.A potential correction may be limited to the 0.8625–0.8600 zone, which now acts as a support.The loss of this support will call into question the strength of the upward structure, but at this stage such a scenario seems unlikely.Traders should carefully monitor the volatility in the pair, especially in light of future statements by the ECB and the Bank of England, which may significantly affect the short-term dynamics of the exchange rate.