EUR/USD is trading at 1.18 12:30 PM GMT on Tuesday, April 14, one hour ahead of the U.S March PPI release
The pair has managed to break above both the 200- and 100-session exponential moving averages (EMA200 and EMA100)
The daily RSI is above 65, while MACD remains supportive, and the pair is trading near the 61.8% Fibonacci retracement of the downtrend that began on January 27
Recommendation:
Position: Short EUR/USD at market price
Take Profit: 1.16646
Stop Loss: 1.18881
View:
From a technical perspective, EUR/USD has re-entered an upward trend, but the rebound—driven by growing optimism around a potential resolution of the U.S.–Iran conflict—has been unusually sharp. At the same time, conditions in global energy markets—on which Europe is more dependent than the U.S remain challenging. IEA President Fatih Birol indicated that normalization of supply from the Middle East could take up to two years due to the scale of infrastructure damage. As a result, the 61.8% Fibonacci retracement of the late-January downtrend, further reinforced by prior price reactions (February consolidation), may act as a significant resistance level for EUR/USD. Uncertainty surrounding the Strait of Hormuz is likely to persist, with Iran maintaining that the U.S. will not control this key trade route. In an escalation scenario, sentiment toward EUR/USD may gradually weaken, and even if the conflict ultimately resolves favorably for Europe, the pair could experience elevated volatility along the way. Also, multiple US macro data signals that price pressure is starting to rise across the economy, which may lead to still quite ‘hawkish’ Fed stance ahead of the summer. Technically, the daily RSI has risen to 65, while the hourly RSI stands at 79.1—both suggesting overbought conditions. Given this setup, a short position is favored, targeting 1.16646 with a protective stop at 1.18881. M
USD/JPY struggles to build on modest Asian session gains as intervention fears limit JPY losses.
The fundamental backdrop favors the USD bulls and backs the case for further gains for the pair.
The technical setup also suggests that the path of least resistance for spot prices is to the upside.
The USD/JPY pair builds on gains from the past two days and opens with a bullish gap at the start of the new week, rising to the 159.85 region during the Asian session. However, intervention fears keep a lid on any further appreciation for spot prices.
Failed US-Iran peace talks trigger a fresh wave of the global risk-aversion trade and benefit the US Dollar’s (USD) reserve currency status. Adding to this, rallying Crude Oil prices fuel inflationary fears and reaffirm hawkish US Federal Reserve (Fed) expectations, which further underpins the buck and offers support to the USD/JPY pair.
The Japanese Yen (JPY), on the other hand, is weighed down by economic concerns stemming from imported energy shocks due to the Middle East conflict. However, speculations that authorities would step in to stem further JPY weakness hold back bearish traders from placing aggressive bets and cap gains for the USD/JPY pair.
Spot prices retain a bullish bias following last week’s resilience below the 158.25-158.20 horizontal support. Furthermore, the USD/JPY pair holds comfortably above the 200-period Simple Moving Average (SMA). The Relative Strength Index (RSI) near 63 suggests firm upside momentum without yet signaling overbought conditions.
Adding to this, the Moving Average Convergence Divergence (MACD) turns increasingly positive, hinting that buyers retain control for now. The USD/JPY bulls, however, might await a sustained strength and acceptance above the 160.00 psychological mark before positioning for an extension of a three-day-old appreciating move.
On the downside, initial support is reinforced by the 200-period SMA at 158.56, which underpins the broader uptrend and would be the first level watched in the event of a corrective pullback. This is followed by the 158.25-158.20 support and the 158.00 mark, which, if broken, could turn the USD/JPY pair vulnerable.
Markets are in a jubilant mood as we lead up to the weekend. Spurred by a milder March reading of US inflation than expected, rate cut expectations are building, and stocks are rallying. Headline CPI in the US rose at a 3.4% annual rate, a hefty jump from the 2.4% rate in February, but lower than the 3.5% expected core prices rose by a 2.6% annual rate, also weaker than expected. The BLS reported that the index for energy rose by 10% in March, driven by a 21% rise in the price of gasolene.
US price growth not as bad as feared
The jump in gasolene prices accounted for three quarters of the rise in inflation last month, according to the BLS. Airline fares also rose sharply last month, but this was partly offset by a drop in medical costs and in used car prices. Today’s data suggests two things: 1, the inflationary impact from this crisis has been huge, but it is offset by weaker inflation growth elsewhere, such as a moderate increase in shelter costs, a drop in the cost of utilities and no change in food prices last month. 2, if the Strait of Hormuz is not reopened soon, then the impact on inflation could spread to food prices and to core inflation, which typically takes longer to absorb energy price shocks.
The immediate market reaction has been relief. A higher-than-expected reading for inflation could have spooked financial markets as we lead up to the weekend. Instead, this supports current expectations of a rate cut from the Federal Reserve by year end, which is boosting the market mood.
Markets optimistic about peace talks
Some concrete economic data that quantifies the effect of the war as being less onerous than first anticipated, combined with hopes for successful peace talks is helping US stocks to extend their longest winning streak this year. Rather than selling stocks on a Friday in case of an escalation of the conflict in the Middle East over the weekend, the market is willing to ‘give peace a chance.’
Stocks have strong week, as dollar reverses course
The dollar is weaker across the board on Friday after the lower-than-expected US inflation print, which is boosting hopes of a rate cut from the Fed. However, the bond market is less enthusiastic, and bonds are selling off across Europe after Forties crude from the North Sea reached a fresh record high above $147 per barrel. Until the Strait of Hormuz is fully open and Gulf energy infrastructure is operational, the bond market is likely to trade with a more cautious tone compared to stocks.
Stocks are on course for their best weekly performance of the year so far, as you can see below, and this has been spurred by the market’s conviction that President Trump will continue with a ceasefire and the conflict in the Middle East is now at its end stages. The Trump reversal index is now back at levels last reached before the war started. The market is pricing for a positive outcome from the negotiations between the US and Iran this weekend, below, we assess potential outcomes from this weekend’s talks and their impact on financial markets:
Peace talks, assessing the potential outcomes
1, Positive outcome: The two sides agree to reopen the Strait of Hormuz, which leads to an immediate reopening of the waterway. An even better outcome would be one without tariffs to pass through the Strait. The oil price is likely to fall back to pre-war levels for Brent, between $75 and $80 per barrel, stocks could surge and bonds will also rally, leading to another sharp decline in global bond yields. We believe there is a low probability, 30% or less, of this perfect outcome happening straight away.
2, Moderate outcome: The negotiations end without a deal, but more talks are expected. The prospect of prolonged negotiations could knock sentiment at the start of next week, but any weakness could fade if there are continued pledges to work towards a lasting peace. While stocks may extend this week’s rally, a high oil price could stymie further gains, especially if there is no concrete plans to reopen the Strait of Hormuz. We think that this is the most likely outcome and think there is a 70-80% chance that further talks will be needed.
3, Negative outcome: The talks fail, both sides walk away and the bombing in Iran and around the Gulf resumes. This could see the oil price reach fresh highs above $120 per barrel for Brent, stocks will tank and bond yields will surge. We believe that this is also a low probability outcome, with 10-15% chance.
Overall, the outcome of negotiations are the main focus for markets as we end the week.
Chart 1: S&P 500, weekly performance chart 1 year
Source: XTB and Bloomberg
The material on this page does not constitute financial advice and does not take into account your level of understanding, investment objectives, financial situation or any other specific needs. All information provided, including opinions, market research, mathematical results and technical analyzes published on the Website or transmitted To you by other means, it is provided for information purposes only and should in no way be construed as an offer or solicitation for a transaction in any financial instrument, nor should the information provided be construed as advice of a legal or financial nature on which any investment decisions you make should be based exclusively To your level of understanding, investment objectives, financial situation, or other specific needs, any decision to act on the information published on the Website or sent to you by other means is entirely at your own risk if you In doubt or unsure about your understanding of a particular product, instrument, service or transaction, you should seek professional or legal advice before trading. Investing in CFDs carries a high level of risk, as they are leveraged products and have small movements Often the market can result in much larger movements in the value of your investment, and this can work against you or in your favor. Please ensure you fully understand the risks involved, taking into account investments objectives and level of experience, before trading and, if necessary, seek independent advice.
This analysis from the Overbalance series aims to identify three financial instruments, analyzed primarily on the daily/four-hour (D1/H4) timeframe. The analysis relies solely on the Overbalance methodology, which helps determine points where a trend may continue or where a reversal might occur. Today’s analysis covers three instruments, evaluated solely in terms of 1:1 correction structures.
GBPUSD The GBPUSD price has broken its downward trend by rising above the 1.3360 level, which, according to the Overbalance methodology, paves the way for a larger upward correction or even a trend reversal. Currently, the 1.3360 level—the upper boundary of the negated 1:1 geometry—serves as key support. Conversely, for a return to the downtrend, the price would also need to fall below the 1.3315 level, where the lower boundary of the local 1:1 uptrend pattern is located.
GBPUSD – H4 chart. Source: xStation
AUDNZD The AUDNZD pair has been in an uptrend for quite some time. The latest correction was exactly the same size as the previous ones, marked by the green rectangle. We are currently observing a local corrective move. If the correction continues, key support based on the Overbalance methodology is at the 0.6992 level, where the lower boundary of the 1:1 pattern is located. As long as the price remains above this level, the uptrend remains in effect.
AUDNZD – H4 timeframe. Source: xStation
USDCHF USDCHF prices have been trending downward for quite some time, but since late January we have seen a dynamic upward correction. Currently, the price has rebounded from a key resistance level at 0.8042, where the upper boundary of the largest 1:1 pattern is located, which, according to the Overbalance methodology, may signal a return to the downtrend. For this scenario to be confirmed, the price should sustainably fall below the 0.7902 level, where the lower boundary of the smaller pattern is located. In that case, a acceleration of the decline toward recent lows would be possible. Conversely, a break above the 0.8042 level would open the way for further gains.
USDCHF – H4 timeframe. Source: xStation
The material on this page does not constitute financial advice and does not take into account your level of understanding, investment objectives, financial situation or any other specific needs. All information provided, including opinions, market research, mathematical results and technical analyzes published on the Website or transmitted To you by other means, it is provided for information purposes only and should in no way be construed as an offer or solicitation for a transaction in any financial instrument, nor should the information provided be construed as advice of a legal or financial nature on which any investment decisions you make should be based exclusively To your level of understanding, investment objectives, financial situation, or other specific needs, any decision to act on the information published on the Website or sent to you by other means is entirely at your own risk if you In doubt or unsure about your understanding of a particular product, instrument, service or transaction, you should seek professional or legal advice before trading. Investing in CFDs carries a high level of risk, as they are leveraged products and have small movements Often the market can result in much larger movements in the value of your investment, and this can work against you or in your favor. Please ensure you fully understand the risks involved, taking into account investments objectives and level of experience, before trading and, if necessary, seek independent advice.
GBP/USD consolidates around 1.3400 as Israel’s continued attacks on Lebanon renew Middle East war uncertainty.
Iran’s Qalibaf warns that the US has violated three clauses of the 10-point proposal.
Investors await the US CPI data for March, which will be released on Friday.
The Pound Sterling trades in a tight range around 1.3400 against the US Dollar (USD) during the Asian trading session on Thursday. The GBP/USD pair consolidates as investors doubt over the sustainability of the ceasefire between the United States (US) and Iran on early Wednesday in the wake of continued attacks by Israel on Iran-backed Hezbollah in Lebanon.
In response, Iran’s parliament speaker and chief negotiator, Mohammad Bagher Qalibaf, said in a post on X, formerly known as Twitter, that it would be “unreasonable” to continue permanent ceasefire talks with the US as it has violated three clauses of the 10-point proposal so far.
This has renewed fears of a prolonged war in the Middle East, weighing on risk-sensitive assets. As of writing, S&P 500 futures are down 0.2% to near 6,770. Meanwhile, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades marginally higher to near 99.05.
On the macro front, investors await the US Consumer Price Index (CPI) data for March, which will be released on Friday. The data is expected to show that the headline CPI grew at a faster pace of 3.3% Year-on-Year (YoY) against the prior reading of 2.4%.
GBP/USD technical analysis
GBP/USD trades sideways around 1.3400 in Thursday’s Asian session. The pair holds a modest bullish bias as spot remains above the 20-day Exponential Moving Average (EMA) at 1.3325, suggesting downside attempts would be absorbed near that dynamic floor.
The 14-day Relative Strength Index (RSI) near 54 leans slightly positive, hinting that buyers retain the near-term initiative while momentum improves gradually.
On the downside, immediate support is located at the 20-day EMA around 1.3325, where a break would weaken the constructive tone and expose a deeper pullback. With no nearby technical resistances from the provided dataset, further gains would likely meet selling interest at prior swing highs on the broader chart, though the current structure leaves the path of least resistance tilted to the upside as long as price holds above the 1.3325 area.
NZDUSD gained as much as 2.00% following the RBNZ decision, supported both by the more hawkish tone of the central bank and the global move after the de-escalation of US–Iran tensions. The kiwi reached around 0.5844 (currently 0.5824). Investors interpreted the decision as a hawkish pause. The RBNZ emphasized that if inflationary pressure spreads beyond energy and begins to affect wages, pricing behavior, or inflation expectations, decisive and rapid rate hikes may be necessary.
The core message from the RBNZ is that the inflation outlook has worsened, even if growth conditions have not improved. The bank indicated that the conflict in the Middle East has significantly altered the outlook through supply chain disruptions and rising oil and fuel prices, which will translate into higher inflation in the short term. Official forecasts point to inflation at 3.0% in March and 4.2% in June, above the 1–3% target range, with key transmission channels including transport, airfares, and food.
At the same time, the RBNZ does not want to overreact to what may be a temporary supply shock. The bank stressed that the situation differs from 2022, as demand in the economy is currently much weaker and spare capacity should limit second-round inflation effects. This is important because domestic activity remains weak: GDP growth is minimal, financial conditions have tightened, and mortgage rates have increased. In other words, the RBNZ faces a difficult trade-off between rising inflation and a still fragile recovery.
Therefore, the decision was perceived as hawkish despite no rate hike. The committee considered more preemptive action to prevent inflation expectations from becoming unanchored but ultimately chose to wait for more data. There are also growing expectations that July could be the first possible timing for rate hikes if inflation pressures persist.
The market backdrop further strengthened the NZD move. The two-week US–Iran ceasefire triggered a strong risk-on move — US500 futures rose around 2.5%, oil prices declined, and the dollar weakened. This supported cyclical currencies, with the NZD standing out thanks to an additional domestic catalyst. At the time of writing, NZDUSD is gaining 1.67%.
The material on this page does not constitute financial advice and does not take into account your level of understanding, investment objectives, financial situation or any other specific needs. All information provided, including opinions, market research, mathematical results and technical analyzes published on the Website or transmitted To you by other means, it is provided for information purposes only and should in no way be construed as an offer or solicitation for a transaction in any financial instrument, nor should the information provided be construed as advice of a legal or financial nature on which any investment decisions you make should be based exclusively To your level of understanding, investment objectives, financial situation, or other specific needs, any decision to act on the information published on the Website or sent to you by other means is entirely at your own risk if you In doubt or unsure about your understanding of a particular product, instrument, service or transaction, you should seek professional or legal advice before trading. Investing in CFDs carries a high level of risk, as they are leveraged products and have small movements Often the market can result in much larger movements in the value of your investment, and this can work against you or in your favor. Please ensure you fully understand the risks involved, taking into account investments objectives and level of experience, before trading and, if necessary, seek independent advice.
Facts: The price bounced off the upper limit of 1:1 structure at 1.9255 GBPAUD sits below the 100-period moving average form H4 interval
Recommendation: Trade: Short position on GBPAUD at market price Target: 1.8765, 1.8518 Stop: 1.9475
Opinion: Looking at the GBPAUD chart at the H4 interval, one can see that the price bounced off the key resistance today. The price bounced off the resistance marked with the upper limit of 1:1 structure at 1.9255. According to the Overbalance strategy, as long as the price sits below the aforementioned resistance, the main trend remains downward. In addition the price sits below the 100-period moving average from the H4 interval which also confirms the bearish scenario. We recommend going short GBPAUD at market price with two targets: 1.8765 and 1.8518. We also recommend placing a stop loss order at 1.9475 Source: xStation5
EUR/USD pierces the range top at 1.1570 amid a brighter market mood.
Eurozone Services PMI has been revised slightly higher in March.
Investors hold their breath ahead of Trump’s deadline for destroying Iran.
The Euro (EUR) has brushed off previous weakness to extend its recovery against the US Dollar (USD) to reach fresh weekly highs above 1.1570 on Tuesday’s European morning session. The market sentiment has improved, with European equities turning positive after a negative opening, and Eurozone services activity revised up, which has provided some support for the common currency.
Eurozone HCOB Services Purchasing Managers’ Index (PMI) has been revised to 50.2 on Tuesday from the 50.1 preliminary reading, although it remains significantly below February’s 51.9 reading. Among country members, Spain’s services activity stands out with a 53.3 reading, although France’s services contracted for the third consecutive month, and Germany’s expansion was revised down to 50.9 from preliminary estimations of 51.2.
Investors’ appetite for risk remains limited as the US deadline to Iran draws closer. US President Donald Trump reiterated his threats on Monday, warning Tehran that the US could destroy a country tonight if the Strait of Hormuz is not reopened before Tuesday, at 8 PM Easter Time (00:00 GMT on Wednesday).
Previously, the US and Iran rejected the 45-day ceasefire proposal offered by Pakistan, and Tehran came out with an alternative plan, considered “significant” by Trump but not good enough.
Before that, the European Central Bank’s (ECB) Governing Council member, Dimitar Radev, affirmed that it is still “too early” to say whether the bank will hike rates in April, as they might need some data amid the elevated level of uncertainty.
Technical Analysis: Pushing against the range top
The EUR/USD has turned higher, with technical indicators in the 4-hour chart suggesting an incipient bullish momentum. The Relative Strength Index (RSI) nears 60 after having remained flat around the 50 level, and the Moving Average Convergence Divergence (MACD) histogram is popping up above zero, although the MACD line remains practically flat.
A confirmation above the near-term channel’s top, at the 1.1570 area, would expose the late March and early April highs, in the area between 1.1630 and 1.1640. Further up, the March 10 high, at 1.1667, emerges as a plausible target.
Immediate support emerges at the 1.1505 area, which held bears on April 2 and 6. A confirmation below here would expose the March 30 and 31 lows near 1.1440, ahead of the multi-month lows, at 1.1411 hit in mid-March.
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