Forex analysis and forecast of USD/CHF for today, March 4, 2025

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.

USA: new tariffs, market reaction and the Fed's positionThe Trump administration's mirror tariffs have been in effect in the United States since this morning. The main focus is on the countries with the largest trade deficit with the United States. China has been hit with an unprecedented 104% tariff, the culmination of an escalated trade war between the two powers. The media is actively discussing potential retaliatory measures from China, including a weakening of the yuan and a possible sale of American assets.President Trump announced the readiness of many countries for trade agreements last night and expressed confidence in reaching a deal with China. However, he also made it clear that the tariff measures may not end there — duties on pharmaceutical imports are expected.Today, special attention will be focused on the speech of Fed Member Barkin and the publication of the minutes of the last FOMC meeting. The document may shed light on discussions about the Fed's reaction function and the state of dollar liquidity. Against the background of tightening financial conditions, the regulator is likely to take a wait-and-see attitude, preferring verbal interventions to lower the rate. Nevertheless, market expectations signal almost five rate cuts of 25 basis points over the course of the year, with the probability of the first cut in May estimated at 50%.The US debt market has seen a significant increase in yields on long—term bonds - plus 20 basis points per day. This happens despite a decrease in the quotations of risky assets and indicates a likely revaluation of the premium over the term. Among the possible reasons are rumors about the sale of Treasuries from China, the reduction of hedge fund positions and weak demand at the auction of 3-year bonds. Today, the placement of 10-year securities will take place, and its results will give an idea of the real demand for long-term obligations in the new conditions.Europe: tariff confrontation with the United States and the ECB's positionA vote is expected in the eurozone today on the initiative of the European Commission to impose retaliatory tariffs of up to 21 billion euros on American imports. This could provoke an even more aggressive reaction from Washington and increase tensions in global trade.Representatives of the ECB are also speaking on the current agenda. Judging by the rhetoric, the governing council agrees that a tightening of U.S. trade policy could seriously undermine global demand. The question remains to what extent the "hawkish" part of the ECB still sees the inflation risks associated with tariffs.Yesterday, the representative of the ECB from Germany, Nagel, said that Washington's change of course "significantly worsens global prospects." At the same time, Simkus, who takes a more moderate position, noted the need to reduce the rate by 25 bps next week, but abandoned the forecast for June.China and inflation dataChina is preparing to publish data on the consumer price index. These data will be important both for assessing domestic demand and for understanding the extent to which the current trade confrontation with the United States is affecting the economy.Oceania and the commodity market: falling rates and oilThe Reserve Bank of New Zealand has lowered its key interest rate to 3.50% from 3.75%, confirming a soft monetary policy course amid global uncertainty.Oil prices have plummeted — Brent is trading in the range of 60-61 dollars per barrel, which is the lowest in the last four years. This is due to concerns about a slowdown in the Chinese economy and a general decrease in risk appetite.Sweden, Denmark and the real estate marketIn Sweden, house prices remained unchanged in March after two months of decline. This reflects household pessimism, which has begun to show up in the evidence. The decline in activity in the real estate market may intensify in the coming months, but expectations of lower rates may partially offset the negative sentiment.In Denmark, industrial production increased by 5.1% in February, reversing the decline in January. However, volumes are still lower on a three-month basis, partly due to instability in the pharmaceutical sector.Geopolitics: China, Ukraine and the USAThe head of the US Treasury Department, Vincent, sharply criticized China's retaliatory measures in the trade conflict, calling them a "serious mistake." At the Senate hearing, USTR representative Greer confirmed that there would be no exceptions to the new global tariffs, but stressed that tariffs on Chinese vessels in U.S. ports would not necessarily be cumulative.In Ukraine, President Zelensky announced the detention of two Chinese citizens who fought on the side of Russia. This has caused concern in Washington, and Kiev is demanding explanations from Beijing and the United States.Financial markets: high volatility and reduced risk appetiteStock markets continued to decline: the S&P 500 index lost 1.6%, having already fallen by 19% from its February highs. Despite attempts at a rebound, Trump's rhetoric and uncertainty about China are weighing on investor sentiment. The rise in bond yields came as a surprise, causing declines in the real estate and consumer goods sectors. At the same time, banks, industry and the utilities sector were among the rare winners, which indicates the unwillingness of investors to take on additional risks.Futures on the Asian and European markets opened lower today. The Nikkei 225 lost up to 4% after yesterday's rally, while the mood in China is more subdued — Hang Seng is down 1.6%, and Shenzhen is even up 0.6%.Currencies and yields: pressure remainsThe dollar index DXY decreased by 1% per day, EUR/USD broke through the 1.10 level again, and EUR/CHF fell below 0.93 amid deteriorating sentiment. The EUR/NOK pair reached above 12 due to the fall in oil prices. Yields on long-term U.S. Treasuries rose amid the risk-off, despite the weakness of the stock market.

FOREX Fundamental analysis for EUR/USD on April 9, 2025In the face of increasing uncertainty, investors are massively getting rid of American assets. Rumors of a possible agreement between Japan and the United States to reduce or eliminate tariffs have helped European stock indexes recover from recent lows. However, the S&P 500 index continued to decline, which strengthened the position of the "bulls" in the EUR/USD market.Financial markets are in a state of uncertainty, mainly due to the unpredictability of the actions of the Federal Reserve System (FRS). The introduction of new tariffs is likely to accelerate inflation and slow down US GDP growth. An attempt to lower interest rates, as required by President Donald Trump, could lead to higher prices in the economy. On the other hand, maintaining high interest rates may exacerbate the economic downturn. Thus, the Fed will have to make a difficult decision in the face of conflicting economic signals.Unlike the United States, the situation in Europe looks more predictable. If the European Union refrains from retaliating against US tariffs, GDP growth is expected to slow without significantly accelerating inflation. This is confirmed by the growing gap between inflation expectations in the United States and Europe to the highest levels since the pandemic. In such circumstances, the European Central Bank (ECB) may consider lowering interest rates to stimulate the economy. The ECB's key interest rate is expected to reach 2% by mid-2025, which will increase the attractiveness of European stocks and bonds. The increase in German bond yields, related to expectations of fiscal stimulus in Germany, makes European assets more attractive compared to American ones. This contributes to the flow of capital from the United States to Europe and the strengthening of the euro against the dollar.The loss of the dollar's status as an unquestionably strong currency is due to the protectionist policy of the Trump administration, which imposed the highest tariffs against most countries, including allies, since the beginning of the 20th century. Unlike the trade wars of 2017-2018, when the conflict was limited to the United States and China, the current situation affects global trade relations. The White House's focus on negotiations with all countries except China is reminiscent of the events of eight years ago, when the EUR/USD exchange rate rose from 1.05 to 1.25. In the current conditions, the "bulls" in the euro market can expect a repeat of this scenario.The current long positions in EUR/USD, formed at 1.09, look promising. A breakout of the resistance at 1.105 may be a signal for their build-up. The conclusion of trade agreements between the United States and Japan, as well as with other countries, creates favorable conditions for investing in European assets and strengthening the euro. Under these conditions, the euro has the potential to grow to the level of 1.15 as early as 2025, which makes the "buy and hold" forex trading strategy especially relevant.

NZD/USD analysis on April 9, 2025The Reserve Bank of New Zealand lowered the official interest rate by 25 basis points to 3.50%, which was in line with market expectations. In an accompanying statement, the regulator emphasized that the introduced global trade barriers pose "risks of reducing the prospects for economic activity and inflation" for the country. The central bank stressed that the current inflation rate near the middle of the target range allows for flexible response to changes in the economic environment.The RBNZ has clearly indicated its readiness for further policy easing, indicating that it has "the opportunity for additional rate cuts if necessary." Specific steps will depend on the development of the situation with trade restrictions and their impact on the economy. New easing is especially likely in the event of increased global economic risks or a deterioration in domestic indicators.Technical analysis of NZD/USD for todayThe New Zealand dollar showed a moderate decline against the USD amid a general deterioration in risk appetite, but the central bank's decision did not cause a sharp sell-off. The NZD/USD pair continues to develop a downward trend, formed after a decline from the level of 0.6378.The breakthrough of the key support level of 0.5515 confirms the resumption of the main downtrend. In the near term, the pressure will continue as long as the price remains below the resistance of 0.5644. The next target is 0.5319 (61.8% of the projection from the 0.6378-0.5515 movement).Medium-term prospectsThe level of 0.5467 (2020 minimum) is of particular importance. Its confident breakdown will confirm the continuation of the global downtrend from the 2014 high (0.8835) and open the way to 0.5172 (61.8% of the Fibonacci grid from the 0.7463-0.5511 movement) in the medium term.The current configuration suggests maintaining a cautious approach to the New Zealand dollar.

USD/CHF analysis on April 8, 2025The USD/CHF pair stabilized at 0.8574, reflecting the desire of investors to redistribute capital into less volatile assets. The Swiss franc is traditionally in demand as a defensive asset, but the current situation requires a deeper analysis of fundamental factors.Swiss inflation remained at 0.3%, which corresponds to the lower limit of the target range of the National Bank. However, this stable position may be disrupted by the new 31% US tariffs on imports. According to a study by Capital Economics, these measures may weaken economic activity and inflationary pressures, creating the prerequisites for lowering the interest rate to zero as early as June. At the same time, it is worth noting that the US share of Swiss exports is a significant 19%, which makes the country vulnerable to trade shocks.The dollar index is showing moderate strengthening and has reached 102.50. Paradoxically, the initiatives of the Trump administration are putting pressure not only on trading partners, but also on the US domestic economy. A recent statement by Chicago Fed President Austin Goolsbee confirmed the Fed's cautious approach - the regulator does not plan to rush to change rates, preferring to wait for new data. As a result, market expectations for policy easing dropped from 60% to 33% in May.USD/CHF technical analysis for todayThe technical picture shows that the pair continues to move within the descending channel of 0.8500-0.8760. The indicators give mixed signals: the Alligator remains bearish, while the Awesome Oscillator indicator shows signs of correction in the negative zone.Trading recommendationsUnder the current conditions, two scenarios are possible.Sales become relevant when the pair is fixed below 0.8550 with the prospect of moving towards 0.8400. We will set the protective stop loss at 0.8630.For purchases, it is necessary to overcome the resistance of 0.8630, which will open the way to testing the upper limit of the 0.8760 channel. In this case, we will place the stop loss at 0.8550.