As we begin the week on Monday, April 7, 2025, global markets are entering a period of heightened sensitivity driven by key central bank speeches, inflation data, and evolving risk sentiment. With major CPI figures, jobless claims, and GDP data scheduled throughout the week, forex traders are positioning themselves carefully. Additionally, the approach of the Eid holidays may lead to thinner liquidity and unexpected volatility, particularly in emerging and Asia-Pacific currencies.
In the currency markets, EUR/USD saw sharp swings driven by inflation expectations and eurozone PMI results. GBP/USD extended its losses as UK economic data continued to disappoint, while NZD/USD remained under heavy pressure following a dovish tone from the Reserve Bank of New Zealand and weak business confidence data.
EUR/USD
Technicals in Focus
The EUR/USD pair exhibited a rollercoaster ride last week, with a strong bullish run early on quickly unwound by aggressive selling pressure late in the session. The pair currently trades near the 1.0962 level. Despite some intraday rebounds, the broader structure suggests bearish dominance.
MACD histograms are gradually crossing below the zero line, signaling potential downward momentum. The Stochastic Oscillator is beginning to reverse from oversold territory, hinting at a possible short-term bounce. The RSI is mildly bearish and remains below the 50 mark, supporting further downside potential.
Trading Strategy: Neutral to Sell
Sell below 1.0980–1.0950 with targets at 1.0910–1.0880 and 1.0840, with stops above 1.1000.
Alternatively, consider long positions only above 1.1000, with upside targets at 1.1030–1.1060, and stops below 1.0950.
GBP/USD
Technicals in Focus
GBP/USD continued its downward march, breaking several intraday support zones and closing near 1.2898 after a failed recovery attempt. Market reaction to the Halifax House Price Index and weakening business sentiment contributed to sterling’s softness.
The MACD remains firmly bearish, and the Stochastic Oscillator is in the oversold range, though with no clear crossover yet. RSI is also below 40, suggesting that sellers maintain control, but a technical pullback is possible.
Trading Strategy: Sell on Rallies
Sell below 1.2920–1.2940 with downside targets at 1.2870–1.2840 and 1.2800, stop above 1.2970.
Alternatively, a break above 1.2970 could trigger a bullish correction toward 1.3010–1.3040 with tight stops.
NZD/USD
Technicals in Focus
The NZD/USD pair saw a steep decline, reaching lows around 0.5595 after a series of lower highs and lower lows on the 5-minute chart. Bearish pressure intensified after the RBNZ rate hold and disappointing confidence figures.
MACD is deeply negative with widening histograms, confirming bearish momentum. The Stochastic Oscillator is rebounding from oversold territory, suggesting the potential for a minor relief rally. RSI hovers near 30, showing the pair is still in oversold territory.
Trading Strategy: Neutral to Sell
Sell below 0.5620–0.5600 with targets at 0.5560–0.5540, and a stop above 0.5650.
Alternatively, consider buying only above 0.5650 for short-term trades, with targets at 0.5690–0.5720, stops below 0.5610.
Market Outlook
This week’s focus shifts toward U.S. inflation data, especially the Core CPI and CPI readings due Thursday, which could further define the Federal Reserve’s stance. U.S. jobless claims, the Fed’s balance sheet update, and multiple FOMC member speeches may also inject volatility into dollar pairs.
In the U.K., GDP and manufacturing data will guide sterling traders, while BoE credit data might influence interest rate expectations. Eurozone inflation reports and ECB commentary will be closely monitored for EUR signals. The Kiwi and Aussie dollars may stay reactive to global risk sentiment and upcoming central bank comments.
With Eid holidays approaching mid-week, expect lower liquidity and possible erratic price moves during the Asian and Middle Eastern sessions.
Overall, the forex market enters the week with a cautious tone, watching central banks, inflation prints, and the ripple effects of the holiday period.