Facts: EURGBP bounced off the 1:1 structure at 0.8647 The pair is trading below the 100-period exponential moving average foram H1 interval Recommendation: Trade: Short position on EURGBP at market price Target: 0.8620, 0.8611 Stop Loss: 0.8655
Opinion: EURGBP has been trading in a downward trend recently. Taking a look at the H1 internal, we can see that the pair bounced off the key resistance, signaling a potential bearish trend resumption. The resistance at 0.8647 is marked with the upper limit of 1:1 structure. In addition the price sits below the 100- period moving average. According to the Overbalance strategy, as long as the price sits below the 0.8647 resistance, one should expect the price to continue to fall. Taking this into account, we recommend going short EURGBP at market price with two targets: 0.8620 and 0.8611. We also recommend placing a stop loss at 0.8655. Source: xStation5
What is the technical outlook for AUD/CAD, GBP/USD and AUD/USD?
This analysis from the Overbalance series aims to identify three financial instruments, analysed primarily on the daily/four-hour timeframe (D1/H4). The analysis utilises only the Overbalance methodology, which helps to identify points where a trend may continue or where a reversal may occur. Today’s analysis covers three instruments, assessed solely in terms of 1:1 correction structures. AUDCAD After several tests, the AUDCAD exchange rate has broken through the key support level at 0.9755, which, according to the Overbalance methodology, paves the way for a deeper downward correction. A potential target for the downside is the 0.9610 level, where the lower boundary of the large 1:1 pattern is located. Currently, the 0.9755 level is acting as resistance, and only a sustained return of the price above this zone could restore the bullish scenario.
AUDCAD – H4 timeframe. Source: xStation GBPUSD Since the beginning of April, GBPUSD has been trading within a local uptrend, supported by the 1:1 bullish pattern highlighted in green. The key support level remains at 1.3488. A potential bounce at this point could lead to the generation of another upward impulse. Conversely, a break below this level would open the way for a decline towards 1.3360, where the polarity of the previously broken downward pattern lies.
GBPUSD – H4 chart. Source: xStation AUDUSD The AUDUSD pair remains in an uptrend. Recently, the pair reached a new local high, followed by a rapid correction. Should this correction deepen, the key support level is 0.7121, derived from the lower boundary of the 1:1 pattern. As long as this level holds, the base case scenario remains a continuation of the upward trend.
USD/INR appreciates as the US Dollar gains on increased risk aversion amid Middle East concerns.
Modi’s BJP won a third term in Assam and captured opposition stronghold West Bengal in a key election.
India’s forex reserves fell from $728.5 billion, while equity outflows hit $19 billion in March and April.
USD/INR extends gains for the third successive day, trading around the fresh record high of 95.40, during the Asian hours on Tuesday. Traders will likely observe India’s HSBC Composite and Services Purchasing Managers’ Index (PMI) data to be released on Wednesday.
The USD/INR pair appreciates as the US Dollar (USD) strengthens on safe-haven demand following Iran’s attack on the United Arab Emirates (UAE). CNBC reported Monday that the UAE was targeted by Iranian drones and missiles, while the US said it destroyed Iranian boats in the Strait of Hormuz. US President Donald Trump warned that Iran would be “blown off the face of the earth” if it targets US ships protecting commercial vessels passing through the Strait of Hormuz.
The Indian Rupee (INR) faced challenges as an overnight surge in crude oil prices dampened investor sentiment. Oil prices, however, have since declined as concerns over immediate supply disruptions eased, with the United States (US) Navy taking steps to reopen the crucial Strait after Iran attempted to close it. Maersk, a Danish shipping and logistics company, later confirmed that its Alliance Fairfax, a US-flagged vehicle carrier, exited the strait under US military escort.
Indian Prime Minister Narendra Modi’s Bharatiya Janata Party (BJP) clinched a third straight term in Assam and captured opposition stronghold West Bengal in a key election.
On Monday, HSBC Manufacturing Purchasing Managers’ Index (PMI) in India came in at 54.7 for April, revised down from the preliminary 55.9 but higher than 53.9 in the prior month. Both output and new orders continued to expand, though growth remained subdued relative to levels seen over the past three and a half years.
Foreign institutional investors (FII) turned net buyers of Indian equities on Monday after nine consecutive days of selling, with inflows totaling 28.36 billion rupees ($298 million). Domestic institutional investors (DII) bought local shares worth 47.64 billion rupees, marking their seventh straight session of purchases, per Reuters.
Stock-specific moves linked to earnings are also expected to remain in focus. Nifty 50 constituents Larsen & Toubro, Mahindra and Mahindra, and Hero MotoCorp are scheduled to announce their quarterly results later in the day.
India’s foreign exchange reserves have declined from a peak of $728.5 billion, while equity outflows reached $19 billion across March and April. Nevertheless, the Reserve Bank of India (RBI) has stated that it remains comfortable with reserve levels sufficient to cover 11 months of imports, though recent policy discussions highlight renewed urgency to strengthen buffers amid ongoing capital outflows.
USD/INR trades around 95.40 at the time of writing on Tuesday. The technical analysis of the daily chart indicates a potential for a bullish emergence as the pair is testing the upper boundary of the rectangular channel.
However, the USD/INR pair retains a bullish near-term bias as price holds above the nine-day and 50-day Exponential Moving Averages (EMAs). The 14-day Relative Strength Index (RSI) at 66.7 points to firm positive momentum edging toward overbought territory, suggesting upside pressure persists while leaving the pair vulnerable to bouts of consolidation if buyers lose traction.
The USD/INR pair is testing the upper boundary of the rectangle, followed by the all-time high of 95.40, which was recorded on May 4. On the downside, the initial support lies at the nine-day EMA of 94.71. A break below the short-term average would lead the pair to test the 50-day EMA at 93.20, followed by the lower rectangle boundary around 92.50 and a seven-week low of 92.14.
(The story was corrected on May 5 at 6:10 GMT to say in the first paragraph to say that the HSBC PMI data will be released on Wednesday, not Tuesday.)
USD/INR: Daily Chart
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 Australian Dollar.
USD
EUR
GBP
JPY
CAD
AUD
NZD
INR
USD
0.04%
0.06%
0.00%
-0.02%
0.16%
0.10%
0.14%
EUR
-0.04%
0.00%
-0.02%
-0.03%
0.12%
0.06%
0.25%
GBP
-0.06%
-0.00%
-0.04%
-0.08%
0.10%
0.07%
0.09%
JPY
0.00%
0.02%
0.04%
-0.01%
0.15%
0.11%
0.30%
CAD
0.02%
0.03%
0.08%
0.00%
0.16%
0.11%
0.32%
AUD
-0.16%
-0.12%
-0.10%
-0.15%
-0.16%
-0.04%
0.15%
NZD
-0.10%
-0.06%
-0.07%
-0.11%
-0.11%
0.04%
-0.01%
INR
-0.14%
-0.25%
-0.09%
-0.30%
-0.32%
-0.15%
0.01%
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).
Commerzbank’s Michael Pfister argues that recent strength in the Pound (GBP) is unlikely to last, as ambitious Bank of England (BoE) rate expectations and renewed political risks weigh on the outlook. The bank forecasts EUR/GBP rising towards 0.89 in coming weeks, while GBP/USD is seen gradually appreciating over the longer term, with current Pound levels not expected to be revisited until 2027.
BoE repricing and UK politics threaten Pound
“Of the G10 currencies, the pound is one of only five to have posted a positive performance since the start of the war, alongside the four major commodity exporters. This surprising performance is based on two factors: the Bank of England (BoE) is expected to respond very decisively, and the political risk premium was priced out in early March. However, we doubt the sustainability of these factors, which is why we expect the pound to weaken in the coming months.”
“Instead of anticipating two rate cuts by the end of the year, the market has at times priced in more than three rate hikes. This massive correction naturally gave the pound a strong boost.”
“We doubt that the Bank of England will meet these expectations.”
“The BoE may raise rates once, but the focus is likely to shift back to rate cuts in the second half of the year. If the market moves in this direction as well, the GBP gains driven by ambitious rate expectations will likely be priced out again.”
“Given the ambitious BoE expectations and the ongoing political risks, we believe there is a strong possibility that the pound will come under pressure again in the coming weeks. Although EUR/GBP is now trading close to the 0.86 level again, if the local elections yield a poor result for Labour, the exchange rate is likely to trend towards 0.89.”
“Nevertheless, political risks are unlikely to persist indefinitely, so we expect a recovery to begin in the second half of the year. But the current level is unlikely to be reached again until 2027.”
Societe Generale strategists note AUD/USD has pulled back after the Reserve Bank of Australia (RBA) delivered a third 25bp hike to 4.35% while signalling a pause. The pair is drifting below 0.7150 despite earlier reclaiming its 50‑DMA, with risk sentiment and the RBA’s data‑dependent stance expected to guide direction around key 0.7060 and 0.7225 levels.
Key supports and RBA-driven outlook
“Three hikes and done, receive the front end in Australia? Not so fast. The third rate increase today by the RBA puts the CRT at 4.35% but this is below the new higher projection of 4.7% for Dec-26 (raised from 4.2% in February). In other words, the central bank is holding powder in reserve to tighten at least once more. The rate then stays at 4.7% through 2027 and 1H-28. Core inflation peaks at 3.8% in 2Q and then drifts down to 3.1% by the end of this year, to 2.6% in 2027 and 2.5% in 1H-28. Headline CPI falls back from 4.0% in Dec-26 to 2.4% by mid-2027. “
“Governor Bullock sounded more neutral this time in her comments, prompting the receiving interest in the front end and bull steepening in 2s/10s. The further crystallisation of upside risks to inflation and inflation expectations will determine if rates are hoisted again to 4.6%, probably in August or September. A pause in June looks a done deal. The statement highlighted the risk of second-round effects across goods and services. Governor Bullock reiterated that the Board has no predetermined path and will remain data-dependent, ruling nothing in or out.”
“AUD/USD reclaimed its 50‑DMA in April and subsequently staged a strong rebound. However, the pair has struggled to establish itself beyond the March peak, carving out an interim high near 0.7225; this points to a lack of steady upward momentum.”
“A period of consolidation cannot be ruled out. Defence of the 50‑DMA around 0.7060 is crucial for continuation of the up move. A break above 0.7225 may lead to a larger uptrend.”
The pound traded slightly above $1.35, retreating from last week’s two-month high of $1.366, as investors turned their attention to Britain’s municipal elections on Thursday, with polls indicating Prime Minister Keir Starmer’s Labour Party could suffer a notable setback. Meanwhile, oil prices remained near four-year highs amid ongoing Middle East tensions, with the US and Iran locked in a dispute over control of the Strait of Hormuz. Markets are pricing in nearly three quarter-point rate hikes from the Bank of England this year. Yet, uncertainty persists after the BoE kept rates unchanged, citing the broad economic fallout from the Iran conflict. Governor Andrew Bailey called the decision a “difficult judgement call,” cautioning that delaying action until inflationary pressures are evident could lead to a late response.
The Swiss franc traded around 0.78 per USD, near record highs, as investors evaluated the Swiss National Bank’s policy outlook following the latest inflation data. Ongoing safe-haven flows also lent support. Swiss inflation rose to 0.6% in April, its highest level in 16 months, driven by rising energy costs linked to the war in the Middle East. The increase marked a second consecutive acceleration and pushed the headline inflation rate above the 0.5% average projected by the SNB for this year and 2027 at its last policy meeting in March. Although the central bank expects the spike in costs to be temporary, with minimal change to medium-term price pressures, this offers breathing space for policymakers, who were previously confronting subdued inflation before the Iran war, driven by the strength of the franc. SNB Chairman Martin Schlegel said last month that higher energy prices should lift inflation further in coming quarters, while growth is likely to remain subdued in the near term.
USD/CHF gains ahead of Switzerland’s April Consumer Price Index data release scheduled for Tuesday.
Swiss SVME PMI rose to 54.5 in April, marking a second consecutive month of expansion.
The US Dollar strengthens on safe-haven demand after Iran’s drone and missile attacks on the UAE.
USD/CHF holds ground for the third consecutive day, trading around 0.7840 during the Asian hours on Tuesday. The Swiss Federal Statistical Office is set to release the April Consumer Price Index (CPI) data later in the day.
On Monday, the Swiss SVME – the Manufacturing Purchasing Managers’ Index (PMI) climbed to 54.5 in April from 53.3 previously, beating expectations of 52.0. This marked a second straight month of expansion and the strongest reading since October 2022. Sentiment in Swiss manufacturing improved despite ongoing volatility in the Middle East.
The USD/CHF pair appreciates as the US Dollar (USD) advances on increased risk aversion following Iran’s attack on the United Arab Emirates (UAE). CNBC reported Monday that the UAE was targeted by Iranian drones and missiles, while the US said it destroyed Iranian boats in the Strait of Hormuz. US President Donald Trump warned that Iran would be “blown off the face of the earth” if it targets US ships protecting commercial vessels passing through the Strait.
Iran’s Foreign Minister Abbas Araghchi said the current situation in the Strait of Hormuz shows “clearly that there is no military solution to a political crisis.” “As talks are progressing with Pakistan’s gracious effort, the US should be cautious about being pulled back into a quagmire by ill-wishers. The same applies to the UAE,” Araghchi wrote in a post on X. “Project Freedom is Project Deadlock,” he added.
The Greenback strengthens as Treasury yields rise alongside expectations that the Federal Reserve (Fed) may need to lift interest rates to curb inflation. Minneapolis Fed President Neel Kashkari said Sunday that additional rate hikes cannot be ruled out, especially as inflation risks remain elevated due to higher energy prices linked to the Iran conflict.
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