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EUR/USD Price Forecast – Needs breakout above 1.1825 for a fresh rally

  • EUR/USD turns sideways after rallying to near 1.1825, awaiting the resumption of US-Iran talks.
  • US President Trump says that Iran is ready to hand over its uranium enrichment.
  • ECB’s Villeroy pushes back prospects of an interest rate hike in policy announcement on April 30.

The EUR/USD pair trades subduedly near 1.1777 during the Asian trading session on Friday. The major currency pair has turned sideways after a two-week-long rally to near 1.1825 as investors await the announcement of another round of talks between the United States (US) and Iran.

S&P 500 futures are flat in the Asian trade after rising 0.26% to 7,041 on Thursday, reflecting a quiet but broadly upbeat market mood. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades marginally higher around 98.25, but looks set for a second weekly loss.

While neither the US nor Iran has announced any timeframe for the second round of talks, President Donald Trump expressed confidence, in a press briefing on Thursday, that Iran is willing to give up its uranium enrichment and surrender its nuclear ambitions. Trump also said, “We’re very close to a deal with Iran,” while warning that military actions against Tehran would resume if a deal is not closed.

On the domestic front, European Central Bank (ECB) policymaker and governor of the Bank of France François Villeroy de Galhau has pushed back hopes of an interest rate hike in the policy meeting later this month. “Focus on April hike is premature,” he said in an interview with CNBC on Thursday.

EUR/USD technical analysis

EUR/USD trades flat at around 1.1777 in the Asian trade. The pair holds a constructive near-term bullish bias as spot remains above the 20-day exponential moving average (EMA) at 1.1673, keeping recent upside progress intact after rebounding from the mid-1.15s. Momentum conditions are supportive, with the 14-day Relative Strength Index hovering around 62, suggesting persistent buying interest without yet signaling extreme overbought conditions.

On the downside, initial support is defined by the 20-day EMA at 1.1673, where a break would weaken the current advance and expose a deeper pullback toward the recent mid-1.15 consolidation area. As long as buyers defend this dynamic floor, the path of least resistance remains higher, leaving the pair biased to probe above the April 16 high of 1.1825 and extend the recovery toward the February high of 1.1929.

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USD/CHF stays near 0.7850 amid increased market caution

  • USD/CHF steadies as traders remain cautious amid uncertainty surrounding ongoing US–Iran peace deal discussions.
  • SNB March Meeting Minutes flagged rising economic uncertainty, citing the Middle East conflict as a key inflation risk.
  • The US Dollar Index gains support from safe-haven demand after Israel–Lebanon ceasefire violations.

USD/CHF moves little after two days of gains, trading around 0.7830 during the Asian hours on Friday. The pair steadies as traders adopt caution on uncertainty over US–Iran peace deal discussions.

March Meeting Minutes from the Swiss National Bank (SNB) highlighted rising uncertainty surrounding Switzerland’s economic outlook, with global developments, particularly the Middle East conflict, identified as key inflation risks.

Policymakers also noted that, amid elevated geopolitical tensions and safe-haven inflows, the SNB is likely to stay ready to intervene in FX markets to prevent an abrupt and excessive appreciation of the Swiss Franc that could threaten price stability.

The USD/CHF pair may regain its ground as the US Dollar Index (DXY) receives support from increased safe-haven demand following a CNN report that the Lebanese army recorded multiple ceasefire violations by Israel after the truce came into effect. US President Donald Trump announced on Thursday that Israel and Lebanon agreed to a 10-day ceasefire that started at 5 PM ET.

Lebanon accused Israel of carrying out “several acts of aggression,” noting that intermittent shelling has affected several villages in southern Lebanon. The army also urged residents to delay returning to southern towns and villages amid the reported ceasefire breaches.

Moreover, Washington and Tehran are expected to resume discussions over the weekend, with President Trump maintaining an optimistic tone on the chances that both sides could secure a lasting ceasefire before its expiration next week.

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NZD/USD remains subdued below 0.5900 as market caution lifts US Dollar

  • NZD/USD weakens as the US Dollar rises amid cautious sentiment ahead of weekend US–Iran talks.
  • Washington and Tehran are set to resume talks this weekend, with Trump expressing optimism about progress.
  • New Zealand’s annual food inflation eased to 3.4% in March, lowest since February 2025, after 4.5% previously.

NZD/USD remains subdued for the second successive day, trading around 0.5890 during the Asian hours on Friday. The pair weakens as the US Dollar (USD) edges higher, supported by cautious market sentiment ahead of the upcoming meeting between the United States (US) and Iran scheduled for the weekend.

However, discussions between Washington and Tehran are anticipated to resume over the weekend, with US President Donald Trump adopting an optimistic stance on the likelihood that both nations could secure a permanent ceasefire before its expiration next week.

President Trump said on Thursday that he had held conversations with Lebanese President Joseph Aoun and Israeli Prime Minister Benjamin Netanyahu. He added that Israel and Lebanon have agreed to implement a 10-day ceasefire, which took effect at 5 PM ET.

In New Zealand, annual Food Inflation moderated to 3.4% in March from 4.5% previously, marking the first decline in three months and the lowest reading since February 2025. On a monthly basis, the Food Price Index declined by 0.6%, following a prior 0.1% decrease.

Meanwhile, UOB economist Ho Woei Chen evaluated China’s stronger Q1 2026 Gross Domestic Product (GDP) data and its policy implications. Despite real GDP expanding by 5.0% YoY, the team maintains its 2026 growth projection at 4.7% amid external headwinds and subdued domestic demand. Robust economic activity alongside contained inflation diminishes the likelihood of near-term rate cuts, with only a modest 10-basis-point easing now expected in Q3 2026. Any shifts in China’s economic outlook could influence the New Zealand Dollar (NZD), given the close trade relationship between China and New Zealand.

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CAD receives support from higher oil prices

  • USD/CAD slips as the commodity-linked Canadian Dollar strengthens amid a modest rise in oil prices.
  • Lebanon’s army recorded multiple Israeli ceasefire violations after the truce took effect.
  • The US Dollar Index gains support from safe-haven demand amid cautious sentiment ahead of weekend US–Iran talks.

USD/CAD remains subdued for the fifth consecutive day, trading around 1.3700 during the Asian hours on Friday. The pair inches lower as the commodity-linked Canadian Dollar (CAD) edges higher amid a slight increase in oil prices, given Canada’s status as the largest crude exporter to the United States (US).

West Texas Intermediate (WTI) Oil price holds gains near $90.00 per barrel at the time of writing. Crude oil prices receive support from supply concerns, which could be attributed to the market caution surrounding the United States (US)-Iran ceasefire talks.

CNN reported on Friday that the Lebanese army said that it recorded multiple ceasefire violations by Israel after the truce went into effect. Lebanon accused Israel of committing “several acts of aggression,” saying intermittent shelling has impacted several villages in southern Lebanon. The army urged citizens to delay returning to southern towns and villages in light of the alleged ceasefire violations.

US President Donald Trump said on Thursday that he had spoken with Lebanese President Joseph Aoun and Israeli Prime Minister Benjamin Netanyahu, adding that Israel and Lebanon agreed to a 10-day ceasefire that began at 5 PM ET.

However, the downside of the USD/CAD pair is restrained as the US Dollar Index (DXY) receives support from increased safe-haven demand amid market caution ahead of the upcoming meeting between the United States (US) and Iran scheduled for the weekend.

Washington and Tehran are expected to resume their discussions over the weekend, with President Trump expressing optimism that both nations could secure a permanent ceasefire before it expires next week.

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AUD bulls retain control amid US-Iran diplomacy efforts, hawkish RBA

  • AUD/USD stalls the previous day’s modest pullback from the 0.7200 neighborhood.
  • The Israel-Lebanon ceasefire and Iran diplomacy hopes underpin the risk sentiment.
  • The hawkish RBA also supports the Aussie, albeit a modest USD uptick caps gains.

The AUD/USD pair holds steady above mid-0.7100s during the Asian session on Friday and for now, seems to have stalled the previous day’s modest pullback from its highest level since June 2022. Spot prices remain on track to register strong weekly gains amid a supportive fundamental backdrop.

The announcement of a ceasefire between Israel and Lebanon fuels hopes for a US-Iran peace deal and remains supportive of the upbeat market mood. This, along with the Reserve Bank of Australia’s (RBA) hawkish outlook, continues to act as a tailwind for the Aussie. In fact, RBA Deputy Governor Andrew Hauser said earlier this week that the central bank is focused on preventing any lift in medium-term inflation expectations, reaffirming bets for further policy tightening in 2026. The current market pricing suggests a 65% chance of a rate hike in May, which, in turn, is seen as a key factor supporting the AUD/USD pair.

Meanwhile, Finance Ministers from the Group of Seven (G7) emphasized the urgent need to limit the economic repercussions of an ongoing Middle East conflict. Furthermore, the instability in the Strait of Hormuz keeps a lid on the optimism led by potential US-Iran peace talks. This assists the safe-haven US Dollar (USD) in preserving the previous day’s modest recovery gains from its lowest level since late February and might cap the AUD/USD pair. Hence, it will be prudent to wait for some follow-through buying before positioning for the resumption of the pair’s uptrend witnessed over the past three weeks or so.

Any meaningful USD appreciation, however, seems elusive in the wake of diminishing odds for a rate hike by the US Federal Reserve (Fed). Traders might also refrain from placing aggressive directional bets and opt to wait for another round of talks between the US and Iran, possibly this weekend. Nevertheless, the aforementioned supportive fundamental backdrop suggests that the path of least resistance for the AUD/USD pair is to the upside, and any corrective pullback is more likely to be bought into. Traders now look forward to speeches from influential FOMC members, which will drive the USD and provide some impetus.

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JPY softens on Middle East uncertainty; official warns of FX intervention

  • USD/JPY gains ground to near 159.35 in Friday’s Asian session. 
  • Trump said the next meeting between the US and Iran might take place over the weekend.
  • Japan’s Katayama hinted at the JPY intervention after talks with the US counterpart. 

The USD/JPY pair gathers strength around 159.35 during the Asian trading hours on Friday. The pair extends the rally for the third consecutive day amid uncertainty in the Middle East. However, heightening intervention warnings from Japanese officials might cap the upside for USD/JPY. 

US President Donald Trump said on Thursday that Israel and Lebanon agreed to a 10-day ceasefire. The uncertainty in the Middle East remains high as the Lebanese army stated on Friday that it recorded multiple ceasefire violations by Israel after the truce went into effect at midnight local time on Friday. Rising tensions in the Middle East could boost the US Dollar (USD) against the Japanese Yen (JPY).

Traders will closely monitor a second round of negotiations between the US and Iran that could take place this weekend. Earlier on Thursday, Trump expressed optimism about the possibility that the US and Iran could clinch a permanent ceasefire ahead of its expiration next week. 

Intervention fears from Japanese authorities could underpin the JPY and create a tailwind for the pair. Japan’s Finance Minister Satsuki Katayama said on Thursday that she’s held close discussions on foreign exchange issues with US Treasury Secretary Scott Bessent and that authorities are prepared for “bold” action if needed.

Earlier Friday, Bank of Japan (BoJ) Governor Kazuo Ueda said that a decision on how soon to raise interest rates must take into account the fact that the nation’s real interest rate is low. He added that Japan is facing rising inflation from a “negative supply shock,” which is more difficult to rein in with monetary policy than inflation driven by strong demand.

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Pound Sterling declines as BoE hike bets ease

  • GBP/USD stays pressured as traders trim BoE hike bets amid optimism of easing Middle East tensions.
  • BoE’s Bailey said that the central bank won’t rush rate decisions amid the energy shock from the Iran conflict.
  • Lebanon’s army recorded multiple Israeli ceasefire violations after the truce took effect.

GBP/USD loses ground for the third successive day, trading around 1.3520 during the Asian hours on Friday. The Pound Sterling (GBP) remains under pressure as traders pare back expectations for a Bank of England (BoE) rate hike, amid increasing optimism that tensions in the Middle East may be easing.

BoE Governor Andrew Bailey told BBC News on Thursday that the central bank is “not going to rush to judgments” on interest rate increases as global policymakers navigate an energy price shock driven by the Iran conflict. Bailey noted that while higher oil and gas prices will feed into inflation, other factors make rate decisions “very, very difficult.”

BoE policymaker Megan Greene said in a Bloomberg TV interview on Wednesday that markets were justified in scaling back bets on rate hikes following last month’s surge. Greene indicated that the current market pricing, suggesting two or fewer rate increases this year, is “about right.”

The GBP/USD pair also declines as the US Dollar (USD) edges higher, supported by increased safe-haven demand following a CNN report that the Lebanese army recorded multiple ceasefire violations by Israel after the truce came into effect. US President Donald Trump announced on Thursday that Israel and Lebanon agreed to a 10-day ceasefire that started at 5 PM ET.

Lebanon accused Israel of carrying out “a number of acts of aggression,” noting that intermittent shelling has affected several villages in southern Lebanon. The army also urged residents to delay returning to southern towns and villages amid the reported ceasefire breaches.

However, market sentiment could improve as Washington and Tehran are expected to resume discussions over the weekend, with President Trump maintaining an optimistic tone on the chances that both sides could secure a lasting ceasefire before its expiration next week.

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Trade of the day: GBPCHF (16.04.2026)

Facts

  • GBPCHF pair moved back above the 14-day exponential moving average (EMA14; light purple) yesterday, despite a brief dip below 1.058 during the early session.
  • One week Risk Reversal indicator has reached its highest level since July 2024.
  • RSI is currently oscillating between 50 and 60.

Recommendation

  • Long Position (BUY) at market price in GBPCHF
  • Target Prices (Take Profit): 1.06340 (TP1), 1.06645 (TP2)
  • Stop Loss (SL): 1.05400

Source: xStation5

Opinion

The GBPCHF sell-off triggered by the outbreak of conflict in the Middle East capped months of Sterling weakness, driven by growth concerns and expectations of UK rate cuts. Approximately one week after the US and Israeli strikes on Iran, the pair initiated an upward trajectory. This shift is supported by the UK’s significant exposure to surging natural gas prices, which increases the risk of an inflationary rebound and a return to interest rate hikes.

Following a correction earlier this week, the pair is gradually rebounding, confirming the ongoing trend. While the UK still faces a high risk of stagflation, today’s GDP data (+0.5% m/m; exceeding the Reuters consensus of 0.1%) has somewhat cooled recession fears amid energy price inflation. Growing optimism is also reflected in the options market: the 1-week Risk Reversal is at its highest since July 2024, indicating a decrease in hedging demand against Sterling declines (i.e., fewer PUT options).

Sterling should remain supported against the Franc in the short term, regardless of further developments in the Strait of Hormuz. In an escalation scenario, concerns over energy price pressure would exert symmetrical pressure on the Bank of England to resume rate hikes (the market currently prices one 25 bps hike for September). Conversely, de-escalation would reduce fears of economic stagnation and dampen demand for safe-haven assets, including the Franc. It is worth noting that the Franc also lost ground against the Dollar in March, suggesting it was not the primary choice for investors seeking a “safe harbor” for capital.

Methodology

This recommendation was prepared based on a technical analysis of the GBPCHF chart and a fundamental analysis of the respective economies (focusing on UK monetary policy).

  • Directional Bias: Established using moving averages, price action, and market expectations regarding central bank responses to the Middle East conflict.
  • Exit Strategy: Target and Stop Loss levels were determined using Fibonacci retracements of the latest downward leg, Bollinger Bands, and Price Action. TP1: Set at the 78.6% Fibonacci level, coinciding with the upper Bollinger Band on the 14-day interval. TP2: Set at the resistance level established between February 2nd and 3rd. Stop Loss: Placed at the 50% Fibonacci level, which coincides with the lower Bollinger Band and the 50-day EMA.
  • TP1: Set at the 78.6% Fibonacci level, coinciding with the upper Bollinger Band on the 14-day interval.
  • TP2: Set at the resistance level established between February 2nd and 3rd.
  • Stop Loss: Placed at the 50% Fibonacci level, which coincides with the lower Bollinger Band and the 50-day EMA.