As we head into Wednesday, March 26, 2025, global markets are reacting to a dynamic blend of mixed consumer data from the U.S., softening confidence numbers, and anticipation of upcoming inflation and labor-related figures. After a strong performance on Monday fueled by solid PMI prints, the U.S. dollar has shown signs of slowing amid disappointing sentiment and consumer confidence data. Still, upcoming core durable goods orders and speeches from key Fed officials are expected to set the tone for the session ahead.
In the currency markets, the USD/CAD pair posted a sharp decline as softer U.S. sentiment data and firm Canadian GDP results underpinned the loonie. GBP/USD experienced a modest rebound, supported by better-than-expected U.K. CPI figures. Meanwhile, USD/JPY extended its slide, influenced by weak U.S. data and speculation of a less hawkish Fed tone.
USD/CAD
Technicals in Focus
The USD/CAD pair moved lower throughout the session, dipping to the 1.4285 region as Canadian GDP data came in line with expectations at 0.2% m/m for both January and February. The pair struggled to regain momentum amid a broader USD pullback. From a technical standpoint, the chart shows consistent lower highs and lower lows, signaling a bearish trend. Price has broken through intraday support, and current structure points toward continued selling pressure.
Trading Strategy: Bearish
Sell below 1.4300 with short-term targets at 1.4260 and 1.4230, placing stops above 1.4330. Alternatively, a reversal above 1.4330 may open the door for recovery toward 1.4360-1.4390.
GBP/USD
Technicals in Focus
The GBP/USD pair displayed resilience and rebounded strongly toward 1.2945 after posting lows around the 1.2890 zone. The bounce follows the release of better-than-expected U.K. inflation data, which printed at 2.9% y/y versus the forecasted 2.9% but improving from prior readings. Technically, the pair has formed a higher low on the chart, indicating a possible short-term shift to bullish bias. Still, resistance remains around the 1.2960 area.
Trading Strategy: Neutral to Buy
Buy above 1.2920-1.2940 with targets at 1.2965 and 1.2990, while keeping stops tight below 1.2890. Alternatively, consider short setups below 1.2890, aiming for 1.2860 and 1.2830.
USD/JPY
Technicals in Focus
The USD/JPY pair plunged sharply toward the 149.60s before stabilizing around 149.89. The decline follows weak U.S. consumer confidence numbers (92.9 vs. 94.2 expected) and market reaction to dovish Fed commentary. Technical momentum is heavily tilted to the downside, with a series of lower highs and consistent selling pressure across intraday candles. However, price has begun to consolidate, hinting at a possible pause or correction.
Trading Strategy: Neutral to Sell
Sell below 150.00 with targets at 149.60 and 149.30, using a stop loss above 150.30. Alternatively, consider long positions if price breaks back above 150.30 with potential targets of 150.70 and 151.00.
Market Outlook
Looking ahead, traders will closely monitor U.S. data on core durable goods orders and crude oil inventories, both of which are expected to influence risk sentiment and USD positioning. Comments from Fed officials, including Kashkari, may provide further clarity on monetary policy direction amid mixed signals from inflation and spending data.
In Canada, the loonie continues to benefit from stable GDP prints and rising crude oil inventories. For the British pound, attention will shift to Thursday’s Spring Forecast Statement and retail sales data, which may offer clues into the BoE’s next policy steps.
With a packed week of central bank speeches and inflation releases, the market is expected to remain highly reactive, especially as traders price in the Fed’s next move ahead of Q2.