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USD/CAD steadies as weekly slide extends on Loonie strength

  • Iran ceasefire talks stalled over the weekend, with the US blockade and the Strait of Hormuz closure both in place.
  • US ISM Manufacturing PMI held at 52.7 in April, missing the 53.0 consensus, while the Prices Paid index surged to 84.6.
  • Canada’s S&P Global Manufacturing PMI jumped to 53.3 in April from 50.0 in March, returning the sector to expansion.

USD/CAD edged higher by less than 0.1% on Friday, recovering from an early-session low near 1.3560 to trade around 1.3590. The pair has shed roughly 0.6% on the week after rolling over from the 1.3700 area mid-week, and momentum has appeared sluggish close to 1.3580 as a cluster of small-bodied candles points to indecision.

The US-Iran conflict and the continued closure of the Strait of Hormuz remain the dominant drivers, keeping crude oil prices elevated and offering tailwinds to the commodity-linked Canadian Dollar. Ceasefire talks stalled over the weekend with both sides hardening their positions, and the US naval blockade of Iranian ports stays in place despite intermittent administration claims of progress that markets have largely discounted.

The US ISM Manufacturing Purchasing Managers Index (PMI) held at 52.7 in April, narrowly missing the 53.0 consensus, while the Employment Index slumped to 46.4 and the Prices Paid component surged to 84.6, the highest reading in over four years. Canada’s S&P Global Manufacturing PMI jumped to 53.3 from 50.0 in March, returning the sector to expansion. Markets now look ahead to next Friday’s heavy calendar, headlined by US Non-Farm Payrolls (NFP), with consensus pointing to 73K versus 178K previously, and Canadian employment data with the unemployment rate seen unchanged at 6.7%.

USD/CAD 5-minute chart

Chart Analysis USD/CAD

Technical Analysis

In the five-minute chart, USD/CAD trades at 1.3587, hovering just above the daily open at 1.3580, which now acts as immediate intraday support. The pair has lost upside momentum after earlier gains, while the downward sloping resistance trend line drawn from 1.3680 continues to cap the broader recovery potential. The latest Stochastic RSI reading has retreated toward lower levels, hinting at fading bullish pressure and keeping the near-term tone broadly neutral while price oscillates around the opening level.

On the downside, a clear break back below the 1.3580 daily open would expose softer intraday levels and suggest that sellers are regaining control in the very short term. On the topside, the next meaningful barrier is the descending resistance line coming from 1.3680, and only a sustained move toward that region and a subsequent break higher would start to undermine the broader corrective bias and open the way for a more convincing upside extension.

In the one-hour chart, USD/CAD trades at 1.3589, holding a mildly bearish near-term tone as it remains capped by a downward-sloping trend-line resistance coming in around 1.3680. The lack of nearby moving averages in the dataset keeps the focus on this structural barrier, while the Stochastic RSI has pushed into elevated territory above 70 recently, hinting that upside attempts could face exhaustion below the mentioned trend line.

On the topside, the immediate obstacle is the descending trend-line resistance at 1.3680, and a sustained break above this level would be needed to ease the current bearish pressure and open the way to a stronger recovery. With no clearly defined intraday supports in the provided data, any pullback from current levels would likely see traders looking to prior session lows and intraday swing points below 1.3589 for initial demand, while an inability to challenge 1.3680 would keep the pair vulnerable to further downside probing.

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AUD/USD Price Forecast: Remains bullish despite hovering around 0.7200

  • AUD/USD trades near range highs within 0.7100–0.7200 consolidation band.
  • RSI above 50 supports bullish momentum and potential breakout scenario.
  • Break above 0.7250 targets 0.7282 and 0.7300 resistance levels.

AUD/USD holds to minimal gains of 0.10% late in the North American session, yet poised to finish the week up 0.84%. At the time of writing, the pair trades above 0.7200 as the ‘bullish engulfing’ chart pattern caps the Aussie on the downside.

AUD/USD Price Forecast: Technical outlook

From a technical perspective, the AUD/USD trades near the top of a 100-pip consolidation range between 0.7100 and 0.7200, with traders awaiting fresh catalysts. Momentum is bullish as depicted by the Relative Strength Index (RSI) sitting above its neutral level.

On the upside, the first resistance for AUD/USD is the psychological 0.7250 level. If cleared, the next stop would be the June 3, 2022, high of 0.7282 ahead of the 0.7300 area. The next area of interest would be on April 5, 2022, at 0.7661

Conversely, if AUD/USD ends the day below 0.7200, it could open the door for testing the 20-day SMA at 0.7121. Below this level is 0.7100 ─the bottom of the 100-pip range─, followed by the 50-day SMA at 0.7059

AUD/USD Price Chart – Daily

AUD/USD daily chart
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GBP/JPY Price Forecast: Buyers defend 100-day SMA as momentum weakens

  • GBP/JPY rebounds modestly after earlier sell-off likely triggered by suspected intervention by Japanese authorities.
  • Technically, the cross holds a bullish bias above key moving averages, though weakening momentum signals fading upside strength.
  • The 100-day SMA offers immediate support, while 213.50 acts as the first upside hurdle.

GBP/JPY stages a modest rebound on Friday after coming under selling pressure earlier in the day amid suspected intervention by Tokyo for a second straight day to curb excessive weakness in the Japanese Yen (JPY). At the time of writing, the cross is trading around 213.42, recovering from an intraday low of 211.81 and poised to end the week in negative territory for the first time in four weeks.

However, there has been no official confirmation of intervention by Japanese authorities so far, though officials issued a “final” warning on Thursday after USD/JPY briefly moved past the 160 level, a threshold that has previously triggered action. This move spilled across Yen crosses, with GBP/JPY posting a sharp pullback from a multi-year high near 216.60 to around 210.45 the previous day.

Although underlying fundamentals, including wide interest rate differentials between the Bank of Japan (BoJ) and other major central banks, continue to weigh on the Yen, the latest leg lower suggests near-term downside pressure on the cross as momentum indicators turn negative.

Technical Analysis:

In the daily chart, GBP/JPY holds a constructive bias while consolidating above its key trend filters. The 100-day Simple Moving Average (SMA) and the 200-day SMA sit comfortably below the spot, suggesting underlying demand despite the recent pullback.

However, momentum has cooled, with the Relative Strength Index easing toward the mid-40s and the Moving Average Convergence Divergence (MACD) slipping into negative territory, hinting that upside attempts may lack follow-through in the very near term.

On the topside, immediate resistance is located at the horizontal barrier near 214.50, where a daily close above would reopen the path toward the recent peak of 216.60 and signal renewed bullish impulse.

On the downside, initial support is provided by the 100-day SMA at 211.89, with a break there exposing deeper retracement toward the 200-day SMA at 206.74, where buyers would be expected to defend the broader uptrend.

Japanese Yen Price Today

The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the New Zealand Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD-0.19%-0.14%0.02%-0.19%-0.06%0.12%-0.11%
EUR0.19%0.04%0.18%-0.01%0.15%0.30%0.08%
GBP0.14%-0.04%0.15%-0.04%0.09%0.26%0.06%
JPY-0.02%-0.18%-0.15%-0.20%-0.08%0.07%-0.12%
CAD0.19%0.01%0.04%0.20%0.12%0.29%0.10%
AUD0.06%-0.15%-0.09%0.08%-0.12%0.16%-0.02%
NZD-0.12%-0.30%-0.26%-0.07%-0.29%-0.16%-0.20%
CHF0.11%-0.08%-0.06%0.12%-0.10%0.02%0.20%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).

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AUD/USD holds steady near recent highs ahead of expected RBA rate hike

  • AUD/USD trades near 0.7200, holding steady despite volatility linked to geopolitical risks.
  • Investors largely expect a rate hike from the Australian central bank next week.
  • The US Dollar remains broadly under pressure, limiting downside in the pair.

AUD/USD trades around 0.7200 on Friday at the time of writing, virtually unchanged on the day and holding near recent highs, as markets adopt a wait-and-see approach ahead of the Reserve Bank of Australia (RBA) monetary policy decision scheduled for Tuesday.

The Australian Dollar (AUD) remains slightly supported against its major peers, with investors expecting this key event. According to a Reuters poll, a strong majority of economists expect a 25 basis point rate hike, which would bring the policy rate to 4.35%. These expectations are supported by persistent inflationary pressures in Australia, with the annual Consumer Price Index (CPI) coming in at 4.6% YoY in March, still well above the central bank’s target.

Market participants will also closely watch Governor Michele Bullock’s comments for further guidance on the policy outlook, particularly as energy-related risks linked to tensions in the Middle East and uncertainty surrounding the Strait of Hormuz could continue to fuel inflationary pressures.

At the same time, the US Dollar (USD) is struggling to gain traction despite a geopolitical backdrop that usually supports safe-haven demand. Markets expect the Federal Reserve (Fed) to keep interest rates unchanged through the end of the year, although some officials, including Neel Kashkari, have highlighted the possibility of further hikes in the event of a significant inflationary shock driven by energy prices.

Geopolitical tensions still provide intermittent support to the Greenback, particularly following reports that the US administration is considering military options regarding Iran. Meanwhile, diplomatic developments suggesting that Tehran has submitted a new proposal to the United States (US) on Thursday have temporarily weighed on the US Dollar.

Investors now turn their attention to the release of the US ISM Manufacturing Purchasing Managers Index (PMI) later in the day, a key indicator for assessing economic momentum.

US Dollar Price Today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the New Zealand Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD-0.25%-0.22%-0.02%-0.14%-0.03%0.15%-0.20%
EUR0.25%0.02%0.22%0.08%0.22%0.38%0.05%
GBP0.22%-0.02%0.19%0.08%0.19%0.36%0.05%
JPY0.02%-0.22%-0.19%-0.11%-0.01%0.14%-0.16%
CAD0.14%-0.08%-0.08%0.11%0.10%0.28%-0.03%
AUD0.03%-0.22%-0.19%0.00%-0.10%0.16%-0.12%
NZD-0.15%-0.38%-0.36%-0.14%-0.28%-0.16%-0.31%
CHF0.20%-0.05%-0.05%0.16%0.03%0.12%0.31%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

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Japanese Yen gives back gains against US Dollar, ISM PMI data eyed

  • Japanese Yen falls back against the US Dollar, with the USD/JPY pair rebounding to near 156.55.
  • Japan’s FM Katayama warned of possible intervention on Thursday.
  • The Fed is largely expected to keep interest rates at their current levels by the year-end.

The Japanese Yen (JPY) gives up gains recorded in the early European trade against the US Dollar (USD) during the early North American trading session on Friday. The USD/JPY pair rebounds to near 156.55 after sliding to around 155.50, but is still marginally down.

In the early European session, a sudden spike was observed in the Japanese Yen, which was expected to be due to possible Japanese intervention in forex markets. However, there had been no official announcement regarding the same.

A stealth intervention by Japan was highly anticipated as Finance Minister (FM) Satsuki Katayama said on Thursday that they are moving closer to taking decisive action in the foreign exchange markets.

Meanwhile, the upside in the USD/JPY pair is expected to be limited as the US Dollar (USD) is broadly underperforming despite expectations that the Federal Reserve (Fed) will not cut interest rates for the entire year.

US Dollar Price Today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the Euro.

USDEURGBPJPYCADAUDNZDCHF
USD-0.16%-0.08%-0.05%-0.11%0.07%0.27%-0.13%
EUR0.16%0.08%0.11%0.03%0.25%0.42%0.03%
GBP0.08%-0.08%0.02%-0.03%0.15%0.32%-0.02%
JPY0.05%-0.11%-0.02%-0.06%0.12%0.27%-0.07%
CAD0.11%-0.03%0.03%0.06%0.17%0.36%0.00%
AUD-0.07%-0.25%-0.15%-0.12%-0.17%0.18%-0.16%
NZD-0.27%-0.42%-0.32%-0.27%-0.36%-0.18%-0.36%
CHF0.13%-0.03%0.02%0.07%-0.00%0.16%0.36%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

According to the CME FedWatch tool, the odds of the Fed keeping interest rates unchanged in the current range of 3.50%-3.75% by the year end is 83.6%.

In Friday’s session, investors will focus on the US ISM Manufacturing Purchasing Managers’ Index (PMI) data for April, which will be published at 14:00 GMT. The US ISM Manufacturing PMI is expected to come in higher at 53.0 from 52.7 in March.

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EUR/USD nears weekly highs at 1.1755 as the US Dollar falters

  • EUR/USD extends gains on Friday, approaching weekly highs, at 1.1755.
  • Another alleged Yen intervention has hit the US Dollar on a holiday-thinned market.
  • The Euro bounced up on Thursday amid hot Eurozone inflation and a hawkish hold by the ECB.

The Euro (EUR) has turned positive against a weaker US Dollar (USD) on Friday, and is trading at 1.1742 at the time of writing, a few pips short of the top of the weekly trading range, at 1.1755. An alleged intervention by Japanese authorities, presumably the second in the last two days, hit the USD/JPY earlier on Friday, hammering the Greenback in thinned Labour Day trading.

The USD/JPY dropped nearly 200 pips in a matter of seconds at the early European session, in a move that reverberated throughout the market, sending the US Dollar lower across the board. The EUR/USD, which hitherto was featuring moderate losses, resumed its positive trend from Thursday’s lows at 1.1655.

The pair regained lost ground on Thursday, as investors prioritised the hot Eurozone inflation figures over the weakening Gross Domestic Product (GDP) figures. Later on, the European Central Bank (ECB) delivered a “hawkish hold,” keeping interest rates unchanged but hinting at a rate hike in the near term.

The ECB’s stance was reaffirmed by the Bundesbank president and committee member, Joachim Nagel, who said on Friday that the baseline scenario entails a more restrictive monetary policy and flagged the possibility of a rate hike in June.

Meanwhile, the situation in the Middle East remains stalled. The US and Iran have continued exchanging threats, with the Strait of Hormuz entering its third month of blockade and no credible plan to reopen it at sight. Oil prices are above the key $100, with Brent Oil at $113.94 at the time of writing, a very painful level for Eurozone Crude-importing economies, which will, highly likely, weigh on the Euro in the long run.

Technical Analysis: EUR/USD keeps looking for direction around 1.1700

EUR/USD Chart Analysis

From a technical perspective, the EUR/USD remains trapped within a broadly 100-pip range, with support above 1.1650 holding bears and upside attempts limited below 1.1750.

Technical indicators on the 4-hour chart are showing an improving momentum. The Relative Strength Index (RSI) reaches the 60 level, and the Moving Average Convergence Divergence (MACD) is showing a widening green histogram, suggesting that the bullish momentum is gathering pace.

Bulls, however, would need to break the mentioned 1.1755 resistance (April 27 high) to confirm that the bearish correction from 1.1850 highs has been completed. Further up, the April 20 high near 1.1790 is likely to test the Euro’s recovery ahead of April’s peak, right below 1.1850.

Bears, on the other hand, are struggling to extend dips below a cluster of supports between 1.1675 and the April 8 intraday low, near 1.1645. A confirmation below here would clear the way to the 61.8% Fibonacci retracement of the early April rally, at 1.1580, and the April 2 and 3 low, near 1.1500.

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USD/JPY: Intervention buys time as risks persist – MUFG

MUFG’s Derek Halpenny argues that recent Japanese authorities’ action around the 160 level in USD/JPY likely reflects renewed intervention, with the move seen as buying time for the BoJ and government as they face Middle East uncertainty and domestic cost-of-living concerns. He warns that with yen shorts less extended and global yields rising, USD/JPY could rebound quickly if energy prices or geopolitical risks escalate.

BoJ action seen as time-buying move

“The five-big figure drop in USD/JPY is far too big a move on just rhetoric and the report from the Nikkei that intervention took place points strongly to intervention.”

“What this intervention does is provide some time for the BoJ to assess the uncertainties related to the conflict in the Middle East. There was an understandable reluctance to hike this week due to the lack of clarity and that reluctance coupled with the Fed being more hawkish opened up scope for a de-stabilising yen sell-off, possibly next week when Japan will be on vacation for Golden Week – Monday through Wednesday next week is a Japan holiday.”

“But with yen shorts not as extensive as in past intervention episodes there is a danger that this action does not have a lasting impact. An escalation in the conflict and/or a further rise in energy prices could see USD/JPY rebound quickly.”

“MoF yen-buying intervention in Oct 2022 and July 2024 were successful for a period as the action coincided with or was soon followed by a decline in US yields. At the time of the intervention in Apr/May 2024 US yields did not decline and intervention was required again by July.”

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Pound Sterling edges down, remains broadly firm amid hawkish BoE prospects

  • The Pound Sterling ticks lower but is broadly upbeat amid expectations of a BoE interest rate hike in the near term.
  • BoE’s Bailey calls for a possible interest rate hike to avoid second-round effects of inflation from emerging.
  • The US Dollar trades with caution ahead of the US ISM Manufacturing PMI data for April.

The Pound Sterling (GBP) ticks lower against its major currency peers, trading marginally down to near 1.3590 against the US Dollar (USD) during the European trading session on Friday. However, the British currency is broadly upbeat amid the speculation that the Bank of England (BoE) will deliver an interest rate hike in upcoming policy meetings.

Pound Sterling Price Today

The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the weakest against the Japanese Yen.

USDEURGBPJPYCADAUDNZDCHF
USD-0.02%0.06%-0.05%-0.03%0.20%0.32%-0.02%
EUR0.02%0.07%-0.04%-0.03%0.22%0.32%-0.01%
GBP-0.06%-0.07%-0.11%-0.09%0.12%0.27%-0.06%
JPY0.05%0.04%0.11%0.00%0.23%0.32%0.02%
CAD0.03%0.03%0.09%-0.01%0.22%0.34%0.03%
AUD-0.20%-0.22%-0.12%-0.23%-0.22%0.11%-0.21%
NZD-0.32%-0.32%-0.27%-0.32%-0.34%-0.11%-0.31%
CHF0.02%0.00%0.06%-0.02%-0.03%0.21%0.31%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).

Hawkish BoE prospects are backed by remarks from BoE Governor Andrew Bailey, in a press conference after the policy meeting on Thursday, pointing to hiking interest rates before elevated energy prices-driven inflation starts showing second-round effects.

“A prolonged spike in energy prices could lead to a higher bank rate,” BoE’s Bailey said, adding, “It would be a mistake to wait to see the second-round effects before acting because then it would be too late,” Reuters reported.

In the policy meeting, the BoE left interest rates unchanged at 3.75%, as expected, for the third meeting in a row. Out of the nine members-led Monetary Policy Committee (MPC), BoE Chief Economist Huw Pill dissented from the decision to hold interest rates, and voted in favor of an interest rate hike.

The United Kingdom (UK) Consumer Price Index (CPI) data for March showed that the headline inflation accelerated to 3.3% Year-on-Year (YoY).

Meanwhile, the US Dollar (USD) trades cautiously even as the Federal Reserve (Fed) is expected to hold interest rates at their current levels for the entire year. According to the CME FedWatch tool, the odds of the Fed keeping interest rates unchanged in the current range of 3.50%-3.75% by the year end is 83.6%.

In Friday’s session, investors will focus on the US ISM Manufacturing Purchasing Managers’ Index (PMI) data for April, which will be published at 14:00 GMT.