Forex. USD/JPY: The Yen retains the advantage

The EUR/GBP pair shows uncertain dynamics during the morning session, hovering near the level of 0.8530. The lack of a clear trend is explained by a balanced macroeconomic background, where positive data from the UK is offset by cautious optimism in the eurozone.The March statistics on British consumption exceeded expectations- Annual retail sales growth accelerated to 2.6% (1.8% forecast)- The base indicator (excluding fuel) increased by 3.3% year-on-yearHowever, the April Gfk consumer confidence index deteriorated to -23 points, indicating continued household concerns. The CBI's industrial orders data (-26 points) turned out to be better than expected, but export orders fell to their lowest level since September, reflecting the pressure of global trade risks.German business sentiment (IFO index) showed resilience- The current situation index rose to 86.4 points- The business climate improved to 86.9 pointsAt the same time, the IFO president warned of growing uncertainty among companies due to US tariffs. Comments by ECB representative Claes Noth highlighted the risks of slowing inflation, but retained the possibility of its acceleration in the medium term.EUR/GBP technical analysis for today- Bollinger bands signal a potential downward reversal- The MACD retains a bearish signal- The stochastic oscillator indicator in the oversold zone may limit further declineTrading recommendations- Short positions at the breakdown of 0.8519 with a target of 0.8465 (stop loss of 0.8546)- Purchases on the rebound from 0.8519 and growth above 0.8546 with a target of 0.8601 (stop loss 0.8519)

The week ends with a fairly modest volume of macroeconomic statistics, and investors' main attention is focused on the revised University of Michigan consumer sentiment data for April. The preliminary estimate has already alarmed the markets due to a new surge in inflation expectations, which increases uncertainty about the trajectory of interest rates in the United States.Inflationary signals from JapanThe published inflation data in Tokyo for April exceeded expectations: the overall indicator accelerated to 3.5% in annual terms (the previous value was 2.9%), and core inflation rose to 3.4% (against the forecast of 3.2%). The main reason was the rise in prices for a wide range of goods and services. The beginning of a new fiscal year in Japan is traditionally accompanied by a review of companies' pricing policies, and this year rising costs have become the main reason for the increase in consumer prices. Taking into account the expected acceleration of wages, the Bank of Japan is likely to continue its course towards a gradual normalization of monetary policy, unless trade restrictions from the United States turn out to be critical.US data: short-term surge in ordersIn the United States, data on durable goods orders for March turned out to be significantly higher than expected, with an increase of 9.2% compared with a forecast of 2.0%. However, such a strong result is largely due to temporary factors, in particular, a sharp increase in aircraft orders (primarily Boeing). Excluding the aviation sector, the growth in orders was minimal, which caused a weak market reaction.Comments from the Fed representativesThe speeches of representatives of the Federal Reserve System demonstrated a divergence of opinion. The head of the Federal Reserve Bank of Cleveland spoke out with harsh rhetoric, insisting on a wait-and-see attitude regarding the impact of duties on the economy. At the same time, Christopher Waller, a member of the Fed's Board of Governors, took a softer stance, not ruling out an increase in unemployment. Neel Kashkari, who heads the Federal Reserve Bank of Minneapolis, said that the US trade policy causes him concern about possible mass layoffs in the future. On Saturday, the so-called period of silence begins before the May Fed meeting. The probability of a rate change is extremely low, and the baseline scenario assumes a decrease in June with subsequent steps of 25 bps each quarter to the level of 3.00–3.25% by mid-2026.Trade tensions: China is not backing downChina made a harsh statement yesterday, demanding that the United States completely abolish unilateral tariffs as a condition for starting negotiations. Despite Washington's statements about its desire to reduce tensions, negotiations are not underway yet. Moreover, the Chinese authorities have denied any rumors about current contacts.Companies are also responding to trade instability. According to the Financial Times, Apple plans to move iPhone production for the American market from China to India as early as next year.Germany: positive surprise from the Ifo indexThe Ifo business climate index for April in Germany surprised with growth. The indicator of the current situation rose to 86.4 against the expected decline, and the component of expectations decreased only slightly to 87.4. The construction sector and services made the largest contribution to maintaining positions, while signs of pressure were recorded in the manufacturing sector, including against the background of trade barriers. However, there has not yet been a large-scale negative similar to the PMI data.Stock markets: the positive remainsU.S. stock indexes continued to rise, with stocks of cyclical and technology companies particularly strong. The Nasdaq index gained 2.7%, the S&P 500 — 2.0%, and the Dow - 1.2%. Market participants continue to ignore the current economic data, focusing on the prospects for de-escalation of the trade conflict. Signals from the United States yesterday also indicated a softening of the position.In Asia, trading opened in the "green zone", which was facilitated by rumors about a possible cancellation by China of some tariffs on American goods. Stock index futures in the United States and Europe are also showing growth on the back of positive corporate reports.Debt and foreign exchange market: fluctuations without a clear trendDuring yesterday's session, there was an increase in bond prices and a decrease in yields in both the United States and the eurozone. The US dollar weakened slightly against the euro, but managed to regain its lost ground in the early hours of Friday morning. In conditions of a shortage of important macro statistics, market participants will monitor geopolitical statements and signals from regulators.

FOREX fundamental analysis for EUR/USD on April 25, 2025It seems that investors got what they wanted – Donald Trump softened his rhetoric, and the markets responded with growth. Interestingly, the dynamics of the US dollar and the S&P 500 are now showing a positive correlation – the strengthening of the US currency is accompanied by an increase in stock indices. This creates an unusual situation for EUR/USD, where the direction of movement can now be predicted by analyzing stock market sentiment.The paradox of monetary policyPreviously, any hints of the Fed easing policy instantly weakened the dollar. Today, on the contrary, the "dovish" statements of officials are supported by the greenback. For example, Christian Waller admits that the Fed may ignore the temporary spike in tariff inflation by focusing on cooling the labor market. And Cleveland Fed President Beth Hammack does not rule out a rate cut as early as June.The growth of American stocks reduces the demand for defensive assets, including the euro. However, Deutsche Bank warns: structural factors continue to work against the dollar. Trump's tariffs, fiscal stimulus in Europe, and declining confidence in U.S. assets could push EUR/USD to 1.30 in the future.Corporate America's problemsA weak dollar is hitting the profits of S&P 500 companies – only a third of them earn significant income abroad. The rest are suffering from rising import prices and declining domestic purchasing power. This limits the potential for a further rally in the index.EUR/USD trade prospectsThe pair may enter a consolidation phase in the near future. The rules of trading from forex levels define the following key levels with a focus on the uptrend:- Purchases on the rebound from the 1.1285, 1.1240 and 1.1180 supports- A breakout of the 1.1400 resistance as a signal for the resumption of the uptrendConclusionAlthough a short–term correction of EUR/USD is possible against the background of market optimism, structural factors such as capital outflow from the United States and fiscal risks preserve the long–term growth potential of the pair. Investors should prepare for increased volatility ahead of the Fed's decisions and the development of trade negotiations.

In Thursday's Asian session, the GBP/USD currency pair is showing a moderate correction, trading near the 1.3285 mark, after steady growth since the beginning of the month. The decline in quotations is due to weak UK macroeconomic statistics published the day before.The latest data on business activity indices in the UK for April turned out to be worse than market expectations. The indicator of activity in the manufacturing sector decreased from 44.9 to 44.0 points, reaching the lowest level in the last few years. For the first time since the beginning of the year, the services sector went below the growth level, dropping from 52.5 to 48.9 points, while the composite index fell to 48.2 points. Given this dynamic, which is related, among other things, to the effect of the trade tariffs imposed by the United States, market participants are anticipating the likelihood of monetary policy easing by the Bank of England at the next meeting.An additional factor of uncertainty was the negotiations between US Treasury Secretary Scott Bessant and British Chancellor of the Exchequer Rachel Reeves. According to Bloomberg, London is counting on an agreement that will provide an easing of some tariffs, in particular in agriculture, and a reduction in the tax on digital services.US currency: moderate correction after volatilityThe dollar index (USDX) adjusted to the level of 99.40 against the background of a multidirectional fundamental picture, retreating from local highs. Despite this, the real estate sector in the United States continues to show signs of recovery: the number of building permits increased from 1,459 to 1,467 million in March, and new home sales jumped to 724 thousand, reaching their highest since September, indicating an increase in consumer demand in this segment.Technical analysis of GBP/USD for todayOn the daily timeframe, the GBP/USD pair is trading below the upper limit of the ascending channel, which runs in the range of 1.3350–1.2900. Distribution accumulation indicators indicate a possible weakening of the upward momentum.The EMA of the alligator indicator is approaching the signal line, and the Awesome Oscillator histogram shows a series of decreasing bars, but remains in the positive zone.Trading recommendationsWe are considering sales with a steady decline and consolidation of the price below the level of 1.3220 with benchmarks in the area of 1.3000. We plan to place the stop loss at 1.3300.To form long positions, it is worth waiting for the growth and consolidation of quotes above 1.3330 with the potential to move to 1.3520. It is advisable to set the stop loss at 1.3250.

Germany: Ifo Index and expectationsToday, the key indicator in the eurozone will be the publication of the German Ifo index, which investors are carefully comparing with yesterday's PMI data. Of particular interest is the component of expectations present in the Ifo and absent in the PMI, as it is able to better reflect the impact of trade conflicts, in particular, between the United States and China.USA: moderately positive signals and political noiseDespite weak regional reports from the Fed, the index of business activity in the US industry unexpectedly rose to 50.7, surpassing expectations of 49.1. At the same time, the services sector weakened to 51.4, but remained above the threshold of stagnation. The composite index decreased from 53.5 to 51.2, which still indicates moderate growth. The weakening of export orders in both sectors was offset by steady domestic demand: new orders increased in industry, while they decreased slightly in the service sector.However, against the background of macroeconomic statistics, the political factor has become more active again. There were reports that it was the ministers of finance and trade, Bessent and Latnik, who dissuaded the president from firing Fed Chairman Powell. Bessent also commented on the situation regarding trade negotiations with China, saying that a full-fledged agreement may take 2-3 years, and the resumption of dialogue is impossible without reducing tariffs, which now reach 145% on Chinese goods and 125% on American goods. The possibility of tariff cuts of up to 50% is being discussed on the sidelines, but the White House has not yet confirmed these rumors. This news caused cautious optimism and increased the probability of a deal with China to 38% from 34% previously.An additional boost to the market was given by information from the Financial Times, according to which the US administration may consider the possibility of partially exempting automakers from import duties after appropriate lobbying efforts by the industry.Eurozone: weakness in the service sectorThe combined eurozone business activity index fell to 50.1 in April, while the drop in the services sector to 49.7 was unexpected. On the contrary, the manufacturing PMI showed positive dynamics, exceeding forecasts and reaching 48.7. Despite this, pressure on the ECB towards additional easing remains, especially since the price components also indicate a weakening of the inflationary pressure. The employment rate in the service sector, however, remains positive at 50.8, which mitigates the negative effect of the decline in the overall index.The update of the ECB wage index also indicates a slowdown in wage growth in 2025, which strengthens the case for lower rates. According to current expectations, the deposit rate may be lowered to 1.5% by September 2025.UK: alarming signs of stagflationThe PMI figures for April in the UK turned out to be worse than expected across the board. The composite index fell to 48.2, signaling a reduction in business activity. The indices for services and production were 48.9 and 44.0, respectively. At the same time, there is an increase in both incoming and outgoing prices, and employment continues to decline. This combination indicates the risk of a stagflationary scenario, which significantly complicates the task of the Bank of England in terms of monetary policy.Energy market: uncertainty over OPEC+ quotasOil prices fell by 2% after reports that several OPEC+ countries called for an additional increase in production in June, similar to the decision taken in May. Kazakhstan, in turn, stated that it was not ready to compensate for the excess production of the previous period with cuts. Eight OPEC+ countries will meet on May 5 to discuss the future quota. Due to continued pressure on prices in the second quarter, the average Brent price is expected to be around $70 per barrel, with a subsequent recovery to $85 in the fourth quarter.Stock markets: rising amid political optimismBuyers prevailed on stock markets, despite contradictory macro data. Cyclical sectors led the way, both in the USA and in Europe. The market continues to live under the influence of paradoxes: rising bond yields, a strengthening dollar, and a simultaneous rally in risky assets. The profitable reports of the companies also added to the positive. Indices in the USA ended the day with growth: Dow +1,1%, S&P 500 +1,7%, Nasdaq +2,5%, Russell 2000 +1,5%. However, Asia has been showing a decline since this morning, and futures for the United States and Europe also point to a correction amid cooling political optimism.Bonds and the foreign exchange market: caution returnsWhile Finance Minister Bessant acknowledged the excesses of the current tariffs on Chinese goods, he emphasized the strategic task of redefining U.S. global economic relations. His speech cooled the euphoria of the markets: the yield on 10-year US Treasury bonds rebounded from daily lows and reached 4.39%, indicating an increase in expectations for inflation and interest rates.

FOREX Fundamental analysis for EUR/USD on April 24, 2025It seems that the stock market reaction has forced the US administration to soften its position. The sharp drop in the S&P 500 after the introduction of new tariffs on Independence Day and criticism of the Fed forced Donald Trump to publicly deny rumors about the possible dismissal of Jerome Powell. This episode clearly demonstrates how sensitive the White House is to market signals.The recent pullback of the main currency pair was caused not so much by macroeconomic data from Europe as by market insiders about a possible easing of US trade policy towards China. According to the Wall Street Journal, the administration is considering the possibility of reducing duties from the current 145% to 50-66%, as well as introducing a differentiated approach to various categories of goods.Although officials later denied these reports, the market has already reacted with the growth of the S&P 500 and the strengthening of the dollar. The historical precedent of a 90-day tariff deferral suggests that such leaks often anticipate real political decisions.European rhetoric and the problems of the dollarStatements by European officials about the secondary role of the euro against the dollar, as well as comments by the head of the Bundesbank on the importance of the treasury market for the global financial system, contributed to the short-term weakening of the single currency. However, such statements were probably dictated by tactical considerations on the eve of negotiations with Washington.The US administration's attempts to "fix" trade imbalances through tariff policy create a paradoxical situation. On the one hand, Washington declares assistance to China in rebalancing the economy (according to Finance Minister Bessent), on the other, such a policy undermines confidence in the dollar as a reserve currency.EUR/USD trade prospectsDespite the current correction, structural factors as well as trend indicators continue to support the pair's growth potential. A rebound from key support levels in the area of 1.1285, 1.1240 and 1.1180 can be considered as an opportunity to enter long positions.ConclusionWhile short-term political maneuvers cause increased volatility, long-term structural changes in the global trading system continue to put pressure on the position of the US dollar. The current EUR/USD correction is likely to be temporary before the resumption of the main uptrend.

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.