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Currency Talk – USD/CAD, NZD/USD, EUR/NZD

Key takeaways

  • What is the technical outlook for USDCAD, NZDUSD, and EURNZD?

This analysis from the Overbalance series aims to identify three financial instruments, analysed primarily on the daily/four-hour (D1/H4) timeframe. 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.

USDCAD

USDCAD prices have been on a downward trend since the beginning of April. The chart shows a 1:1 pattern with a range of around 80 pips. Although the latest pattern has been slightly breached, the price has not exceeded the 127.2% level, which, according to the Overbalance methodology, indicates that the downward trend remains intact. The current correction has stalled around 1.3630, where the upper boundary of the 1:1 pattern is located. Until this level is broken, the scenario of further declines remains in place.

USDCAD – H4 timeframe. Source: xStation

NZDUSD

Since 6 April, NZDUSD has been trading within a local uptrend. The lower boundary of the pattern at 0.5840 has recently been tested twice. This level was only slightly breached, but the price failed to return below the polarity of the previously negated downward pattern at 0.5828, which led to the emergence of another upward impulse. According to the Overbalance methodology, the uptrend remains in place, and the key support level remains at 0.5865, derived from the lower boundary of the green 1:1 pattern. The pattern remains valid as it has only been slightly breached but not negated.

NZDUSD – H4 chart. Source: xStation

EURNZD

Since 7 April, the EURNZD has been trading in a downtrend. The price attempted to break through the support level at 1.9969 on several occasions and eventually both broke through it and negated the 1:1 upward trend, confirming the bearish scenario. In the event of a correction, the key short-term resistance remains at 1.9930. If the downward movement continues, the lows from February and March at 1.9540 remain a potential target for selling.

EURNZD – H4 chart. Source: xStation

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Currency Talk – AUDCAD, GBPUSD, AUDUSD

Key takeaways

  • 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.

AUDUSD – H4 chart. Source: xStation

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USD/CHF remains above 0.7800 as US Dollar gains on risk-off mood

  • USD/CHF rises as the US Dollar strengthens on safe-haven demand after Trump vowed to maintain the Iran port blockade.
  • US Core PCE rose 3.2% YoY, up from 3% in February and in line with forecasts.
  • Thursday’s ZEW Swiss Expectations rose to -30.3 in April from -35.0, recovering from a six-month low.

USD/CHF inches higher after posting 1.25% losses in the previous day, trading around 0.7820 during the Asian hours on Friday. The pair gains ground as the safe-haven demand supports the US Dollar (USD) against its major peers.

Market sentiment remains cautious after Bloomberg reported on Thursday that US President Donald Trump stated he would continue the naval blockade of Iranian ports, amid concerns that the strategically important Strait of Hormuz may not reopen in the near term. Trump also criticized congressional efforts aimed at restricting his war powers, including a recent Senate proposal that was rejected earlier in the day.

On Thursday, data showed that the US Personal Consumption Expenditures (PCE) Price Index rose to 3.5% in March from 2.8% in February, in line with market expectations. On a monthly basis, the index increased by 0.7%. The core PCE Price Index, the Federal Reserve’s (Fed) preferred inflation gauge excluding volatile food and energy components, advanced 3.2% YoY, following a 3% rise in February and matching analysts’ forecasts.

Meanwhile, preliminary Gross Domestic Product (GDP) Annualized expanded by 2.0% in Q1 2026, falling short of the 2.3% market expectation but improving from the previous 0.5% growth.

On the Swiss side, the KOF Leading Indicator rose to 97.9 in April 2026 from 95.6 in March, beating the 95.9 forecast on gains in manufacturing, services, and consumption, data showed on Thursday.

Earlier this week, the ZEW Swiss Survey Expectations improved to -30.3 in April from -35.0 in March, a six-month low. More than half of respondents expect the outlook to remain stable over the next six months, while slightly over a third anticipate deterioration.

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EUR/USD nears 1.1700 despite high Eurozone inflation and low growth data

  • EUR/USD returns to levels near 1.1700 following Eurozone GDP and inflation figures.
  • The HICP accelerated to 3% in the 12 months to April.
  • The focus now shifts to the ECB’s monetary policy decision.

The Euro (EUR) is picking up against US Dollar (USD) on Thursday, returning to levels right below 1.1700 at the time of writing, despite Eurozone macroeconomic data, which has confirmed the picture of a sluggish economy and soaring inflationary pressures.

Eurozone’s Preliminary Harmonized Index of Consumer Prices (HICP) figures have shown that inflation surged to a 3% year on-on-year rate, its highest level since September 2023, from 2.6% in March and above the 2.9% anticiparted by the market consensus. Excluding food and energy prices, the Core HICP eased to a 2.2% y-o-y rate from 2.3% in March.

At the same time, Gross Domestic Product (GDP) figures released by Eurostat revealed that economic growth slowed down to a 0.1% growth in Q1, from 0.2% in the last quarter of 2025, against expectations of a steady 0.2% growth.

These figures pose a significant challenge for the European Central Bank (ECB), which is expected to disclose its monetary policy decision later on Thursday. The bank is widely expected to leave its benchmark rate unchanged, but it will have to fine-tune its monetary policy to fight inflation without crushing an ailing growth.

The Fed moves away from monetary easing

On Wednesday, the Fed left rates on hold at the 3.50%-3.75% band, as expected, yet with the most divided committee since 1992, as three policymakers argued that the “easing bias” phrase is no longer appropriate given the spike in energy prices.

The market has priced out the chance of a Fed rate cut this year, according to the CME FedWatch Tool, and now prices in a nearly 50% chance of a rate hike in June next year. This has given US Treasury yields a fresh boost, providing additional support for the US Dollar.

Beyond that, Fed Chairman Jerome Powell, who ends his term on May 15, affirmed that he will remain at the bank as Governor, due to the legal actions taken against him by US President Donald Trump. Powell will replace Stephen Miran, who was appointed by Trump in 2025 and voted for a rate cut on Wednesday, and is likely to counter pressure from the administration on the next Chair, Kevin Warsh, to ease monetary policy.

Technical Analysis: Euro hoversa above a key support zone

EUR/USD Chart Analysis

EUR/USD remains under pressure with price action supported above a cluster of supports, above 1.1645, which held bears several times in mid-April and whose upper limit is the neckline of a bearish “Head & Shoulders” (H&S) pattern at 1.1675.

Technical indicators on the 4-hour show a neutral-to-bearish trend. The Relative Strength Index (RSI) remains below the 50 level, highlighting moderate downside pressure, and the Moving Average Convergence Divergence (MACD) remains below zero.

Bears need to breach the mentioned neckline at 1.1675 and the April 8 intraday low, in the area of 1.1645, to confirm the H&S formation. The pair might find some support at the 1.1630 area, where the 50% Fibonacci support of the March-April rally meets late March and early April highs. The 61.8% Fibonacci retracement is at 1.1583. The H&S’s measured target is coincident with the April 6 low near 1.1500.

On the topside, immediate resistance is at Wednesday’s high at 1.1720 ahead of the mentioned weekly high at 1.1755.

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Bank of England – Preview

H is for hawk The Bank of England will announce its latest policy decision at midday on Thursday. The market is expecting no change in rates from the Bank, and we expect an 8-1 vote split, with one of the noted hawks at the bank voting to increase rates.

The backdrop to this meeting is a deeply uncertain global outlook and the threat of a bigger inflation spike after another surge in the oil price, which has risen to a fresh war-time high on Thursday morning to more than $123 per barrel for Brent, as the blockade in the Strait of Hormuz looks like it will be in place for the long term and as Donald Trump mulls ending the ceasefire with Iran. We expect the BOE to remain as calm and composed as possible considering the backdrop, and to stress the uncertain outlook, however, now that the oil price is rising again and oil supply is likely to remain constrained for the long term, the BOE may find it hard to avoid straying into hawkish territory as it balances growth risks with inflation concerns.

We expect the Bank will stress the need to watch for second round inflation effects, for example wage growth. So far, the survey data does not suggest that firms are likely to raise wages, and the labor market is still soft, even if the unemployment rate fell below 5% in the 3 months to February. The latest DMP survey shows that expectations for wage growth this year are unchanged at 3.5%. The Bank may also address the increase in inflation expectations, which rose by 2.1% in March, according to the latest Citi-YouGov survey. This suggests that consumers are concerned about a 2022-style energy price shock, even if the Bank has been keen to stress that the economic backdrop is different this time.

Assessing the chance of a hawkish shock at the BOE

A hawkish shock would be a larger number of MPC members voting for a rate hike, especially since signals coming from the March data have been resilient so far. If we get a 6-3 split, then this could open the door to a June rate hike. That might sound hasty, however, an early hike could nip in the bud any threat of second round inflation effects, especially if the blockade of the Strait of Hormuz lasts for the long term and the oil price stays in triple figures.

What will the BOE do next

Although we do not expect any forward guidance from the BOE at today’s meeting, the market is convinced that the next move from the BOE is a rate hike. There is roughly an 84% chance of two rate hikes from the BOE this year, and the market expects rates to rise to 4.25% to combat the threat of rising inflation caused by the energy price spike. The market is expecting the BOE to signal that rates will remain higher for longer, and for now, UK inflation is expected to peak at 4% this year.

Fed’s hawkish tilt

Today’s BOE meeting follows Wednesday night’s Fed meeting. The Fed did not change policy, but it is worth noting that its policy decision was the most divided since 1992. On the back of the Fed meeting, traders now see a rate hike as more likely than a rate cut for this year, following the Fed’s hawkish hold on Jerome Powell’s last meeting as chair. There is now an 11% chance of a hike from the Fed this year, up from 5% prior to the meeting. The Fed did not change the language used in its statement at this meeting, which suggests that cuts could still be on the cards for US interest rates. However, Powell suggested that this language could be adapted in future if elevated oil prices persist and three Fed governors opposed the current language used in the statement.

The market reacted to the hawkish tone at the Fed. The Dow Jones slumped 250 points, the dollar ticked higher and US stock index futures are also pointing to losses for the S&P 500 on Thursday. We think that the market reaction to the BOE meeting is likely to be mostly felt in the bond market. UK 2-year yields rose by 8 bps on Wednesday, and yields are higher by 26bps in the past month. The 2-year yield is now trading at 4.55%, so a lot of BOE hawkishness is already priced into UK bonds. We think that the oil price is more important for the direction of UK yields and sentiment towards UK assets more generally. UK stocks have slipped behind their US counterparts in recent weeks, and until there is a rotation out of US tech stocks and into defense names like BAE Systems and Rolls Royce, we could see the UK index may continue to struggle.

Chart 1: FTSE 100 and the S&P 500

Source: XTB

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Chart of the Day: Yen breaks beyond 160 as the market tests the limits of the “red line”

USDJPY has decisively broken through the psychological 160 level, reaching new multi-month highs and entering territory that was until recently treated as an informal red line for Japanese authorities. Importantly, the breakout has not been met with any strong verbal pushback from the Ministry of Finance, which the market interprets as a growing tolerance for further yen weakness, at least in the short term. This move is not happening in isolation. It reflects the classic combination of two dominant macro forces: a persistently wide interest rate differential and mounting pressures within Japan’s real economy, which are becoming increasingly difficult to ignore.

Source xStation5

What is driving USDJPY? Fed and BOJ stable rates, diverging narratives

Both the Federal Reserve and the Bank of Japan left interest rates unchanged, which in itself was not a surprise for markets. The key focus, however, was on communication nuances that further widened the divergence between the two economies. The Fed remains relatively hawkish, emphasizing the resilience of the US economy and a lack of urgency to pivot toward rate cuts. As a result, the dollar continues to benefit from higher yields and the sustained attractiveness of carry trade strategies. On the other side, the BOJ remains cautious, trying to balance the end of ultra-loose monetary policy with the risks of tightening too quickly. However, it is becoming increasingly clear that the issue is no longer only imported inflation driven by commodities, but also yen weakness itself, which is now amplifying domestic price pressures.

Japan trapped in a cost and commodities squeeze

Japan’s economic fundamentals are sending increasingly mixed signals. Retail sales suggest some resilience in consumer demand, while industrial production disappointed in March, partly due to supply chain disruptions and rising cost pressures linked to global commodity tensions. Particularly important is the situation around the Strait of Hormuz, which continues to elevate risks for global oil and gas flows. For Japan, a heavily import-dependent energy economy, this translates into higher production costs and a deteriorating trade balance. In this context, reports of a possible return of energy subsidies during the summer highlight the government’s attempt to cushion cost pressures, although such measures appear more like short-term stabilization tools rather than a structural response to persistent yen weakness.

160 as a psychological level and a test of market patience

The break above 160 is not purely a technical move. It represents a direct test of Japan’s tolerance threshold for currency weakness. Historically, these levels have been associated with heightened sensitivity from authorities, yet the lack of immediate reaction is encouraging the market to probe further. At this stage, the balance of forces remains tilted toward fundamentals. A persistently wide US–Japan rate differential continues to support capital flows into the dollar, while weak Japanese industrial data and commodity-driven pressures leave the BOJ with little room to tighten policy aggressively in the near term.

Outlook

The current USDJPY move increasingly resembles a classic carry trade driven environment, where fundamentals and momentum reinforce each other. Unless there is a meaningful shift in BOJ policy or a more forceful intervention from the Ministry of Finance, the path of least resistance remains higher. The key question is no longer whether 160 would be broken, but how long the market will continue testing the absence of intervention and where the true line in the sand ultimately lies.

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Currency Talk – EUR/GBP, EUR/AUD, AUD/USD

Key takeaways

  • What is the technical outlook for EURGBP, EURAUD, and AUDUSD?

The Overbalance analysis aims to identify three financial instruments, analyzed primarily on the daily/four-hour (D1/H4) timeframe. The analysis uses only the Overbalance methodology, which helps determine where a trend may continue or where it may reverse. Today’s analysis covers three instruments, evaluated solely in terms of 1:1 correction structures. EURGBP From March 20 through the end of the month, EURGBP traded in an uptrend, but the subsequent correction turned into a stronger downtrend. After the 1:1 upward pattern was negated at the 0.8693 level, the declines accelerated. Currently, the 0.8693–0.8688 zone represents key resistance. Only a return of the price above this zone could shift the balance of power on the chart. For now, the base scenario remains a decline toward the lows at 0.8617.

EURGBP – H4 timeframe. Source: xStation EURAUD From March 11 through the end of the month, the EURAUD pair was in an uptrend; however, the largest corrective pattern was subsequently negated at the 1.6680 level, which was then tested from the opposite side. Since then, we have observed the development of a downtrend. The largest current corrective pattern (marked in red) defines a key resistance level at 1.6470. According to the Overbalance methodology, as long as the price remains below this level, the downtrend remains in effect.

EURAUD – H4 timeframe. Source: xStation AUDUSD Since late March, the AUDUSD pair has been in an uptrend. Recently, the exchange rate has twice tested support at the 0.7015 level, which corresponds to the lower boundary of the 1:1 pattern. As long as this level holds, the uptrend remains intact. It is worth noting, however, that another test of this zone could weaken it, increasing the risk of it being broken and thus triggering a larger downward correction.

AUDUSD – H4 chart. Source: xStation

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AUD/USD – Bullish USD to cap recovery from 0.7100/two-week low

  • AUD/USD stages a modest recovery from a two-week low, around 0.7100, touched on Wednesday.
  • The Fed’s hawkish tilt and Iran tensions continue to underpin the USD, warranting caution for bulls.
  • The technical setup suggests that any further move up is likely to be sold into and remain capped.

The AUD/USD pair gains some positive traction during the Asian session on Thursday and recovers a part of the previous day’s heavy losses to the 0.7100 mark, or a two-week low.

Expectations that the Reserve Bank of Australia (RBA) will stick to its hawkish stance counter China’s mixed official PMIs and turn out to be a key factor offering some support to the Australian Dollar (AUD). The US Dollar (USD), on the other hand, sticks to its positive tone near the highest level since April 13 on the back of persistent geopolitical uncertainties stemming from stalled US-Iran peace talks. Furthermore, diminishing odds for any further policy easing by the US Federal Reserve (Fed) underpin the USD and should cap the upside for the AUD/USD pair.

From a technical perspective, spot prices have repeatedly failed to find acceptance above the 0.7200 mark and have oscillated in a range over the past two weeks or so. Meanwhile, the overnight slide confirms a breakdown below the 0.7130-0.7125 confluence – comprising the 100-period Simple Moving Average (SMA) on the 4-hour chart and the 23.6% Fibonacci retracement level of the recent recovery from the year-to-date low touched in March. This, in turn, favors the AUD/USD bears, suggesting that the move higher might now be seen as a selling opportunity.

Moreover, the Relative Strength Index (RSI) holds around 40 and hints at modest bearish momentum. Meanwhile, the Moving Average Convergence Divergence (MACD) is in negative territory but flattening, suggesting downside pressure is softening rather than accelerating.

In the meantime, immediate resistance emerges at the 23.6% Fibonacci retracement at 0.7131, with a stronger barrier at the recent cycle high near 0.7223. On the downside, initial support aligns with the 0.7100 mark ahead of the 38.2% retracement at 0.7074. This is followed by the 50.0% level at 0.7027 and deeper supports at the 61.8% and 78.6% retracements at 0.6981 and 0.6915, respectively, where buyers would likely attempt to slow any extended pullback.

(The technical analysis of this story was written with the help of an AI tool.)

AUD/USD 4-hour chart

Chart Analysis AUD/USD

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 Euro.

USDEURGBPJPYCADAUDNZDCHF
USD0.11%0.00%0.00%-0.04%-0.11%-0.08%-0.01%
EUR-0.11%-0.07%-0.13%-0.16%-0.21%-0.17%-0.10%
GBP-0.01%0.07%-0.02%-0.08%-0.12%-0.09%-0.02%
JPY0.00%0.13%0.02%-0.06%-0.11%-0.13%-0.04%
CAD0.04%0.16%0.08%0.06%-0.08%-0.06%0.04%
AUD0.11%0.21%0.12%0.11%0.08%0.04%0.12%
NZD0.08%0.17%0.09%0.13%0.06%-0.04%0.08%
CHF0.00%0.10%0.02%0.04%-0.04%-0.12%-0.08%

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)