As we head into Tuesday, April 22, 2025, global financial markets appear poised for another dynamic session, shaped by key economic reports and ongoing central bank commentary. The U.S. dollar is in focus following disappointing U.S. Leading Index data and dovish rhetoric from Fed members. With Tokyo Core CPI and key Canadian and British retail sales figures now behind us, traders are recalibrating expectations heading into the rest of the week.
In the currency space, the EUR/USD pair surged following softer U.S. data and steady Eurozone PMI results. Meanwhile, the GBP/USD pair also climbed significantly, buoyed by stable inflation expectations and hawkish tone from BoE policymakers. Conversely, the USD/CAD experienced a volatile recovery after a sharp dip, as markets reacted to oil inventory shifts and mixed Canadian retail numbers.
EUR/USD
Technicals in Focus
The EUR/USD pair posted a strong bullish rally on Monday, climbing past the 1.1500 mark and closing near 1.1517. The pair extended gains on the back of disappointing U.S. Leading Index data and overall dollar weakness. On the chart, we see strong momentum and a parabolic rise during the early U.S. session, followed by mild retracement. The MACD shows bullish divergence, with histogram bars building upward. The RSI remains in overbought territory but hasn’t signaled reversal yet. Price action suggests continuation might be in play if momentum holds.
Trading Strategy: Buy on Dips
- Buy above 1.1490–1.1500 with targets at 1.1540–1.1570 and 1.1600, stop loss below 1.1470.
- Alternatively, sell below 1.1470 targeting 1.1440–1.1410, with stop loss above 1.1510.
GBP/USD
Technicals in Focus
The GBP/USD surged early Monday, climbing to highs near 1.3420 before consolidating in a sideways channel. The rally was supported by the continuation of bullish structure from April 18 and stable U.K. inflation expectations. The MACD remains positive, though momentum appears to be fading slightly. RSI is pulling back from overbought levels, hinting at consolidation. The pair is trading within a rising channel, and a breakout could re-test the upper bound near 1.3450.
Trading Strategy: Neutral to Buy
- Buy above 1.3360–1.3380 with targets at 1.3410–1.3440, stop loss below 1.3330.
- Sell only below 1.3320 with targets at 1.3280–1.3260, stop loss above 1.3360.
USD/CAD
Technicals in Focus
USD/CAD opened weak and continued to fall until late U.S. session, reaching lows around 1.3780 before rebounding sharply. The recovery was likely driven by position adjustments and a rise in crude oil inventories. On the chart, a bullish engulfing pattern formed near the low, suggesting buying interest. MACD is attempting a crossover from bearish to bullish, while the RSI has recovered to neutral from oversold. The pair may be forming a short-term base, but price remains below key resistance at 1.3860.
Trading Strategy: Neutral to Buy
- Buy above 1.3825–1.3840 targeting 1.3880–1.3910, stop loss below 1.3800.
- Sell below 1.3800 targeting 1.3760–1.3730, stop loss above 1.3840.
Market Outlook
Looking ahead, traders will be watching Tuesday’s BoJ Core CPI, Canada’s RMPI, and remarks from Fed’s Kashkari and ECB’s Lagarde. With the U.S. economy sending mixed signals and European PMI data stabilizing, currency markets remain data-sensitive. Sentiment could shift rapidly with updates from central bank speakers or surprise prints in inflation metrics.
Key factors to monitor:
- U.S. Treasury yields and Fed commentary
- Oil market volatility influencing CAD
- Eurozone inflation and service PMI data
- GBP resilience amid MPC speeches and soft retail prints
Expect continued two-way price action across majors as liquidity rebuilds after Monday’s market closures across the UK and Oceania.