As we head into Wednesday, March 19, 2025, global markets are positioned for a session that could see heightened volatility, driven by a series of significant economic data releases. The U.S. dollar remains the focal point as traders react to recent data and prepare for upcoming reports, particularly the Federal Reserve’s interest rate projections and the Bank of Japan’s monetary policy stance.
In the currency markets, the EUR/USD pair saw notable upward movement, breaking above key resistance levels as investors responded to a weaker U.S. economic outlook. The euro found support from improved ZEW Economic Sentiment data and anticipation surrounding the European Central Bank’s next moves.
Meanwhile, the USD/JPY pair faced strong selling pressure, reflecting a weakening yen following the Bank of Japan’s interest rate decision and policy statement. The yen lost ground against the dollar as markets interpreted BoJ’s stance as dovish.
The GBP/USD pair extended its gains, rising above the 1.30 level, buoyed by strong U.K. labor market data and hawkish remarks from the Bank of England. Traders are closely monitoring upcoming BoE guidance for further direction.
EUR/USD
Technicals in Focus
The EUR/USD pair continued its bullish trend, currently trading around 1.0946. The recent move above 1.0900 suggests increased momentum for buyers, as the pair finds support from stronger-than-expected Eurozone economic data. On the technical front, the MACD indicator remains in positive territory, suggesting continued buying pressure. The Stochastic Oscillator is approaching overbought levels, signaling the possibility of a near-term correction. The 14-day RSI remains above 50, reflecting bullish sentiment.
Trading Strategy: Neutral to Buy
- Buy above 1.0940-1.0920 with targets at 1.0970-1.1000 and 1.1020-1.1050, with a stop loss below 1.0880.
- Alternatively, sell below 1.0880 with targets of 1.0850-1.0820, with stops above 1.0940.
USD/JPY
Technicals in Focus
The USD/JPY pair faced a sharp decline, trading near 149.32 after hitting session highs above 149.90. The yen weakened amid the BoJ’s dovish stance, but technical indicators suggest potential stabilization. The MACD has crossed into negative territory, confirming bearish momentum. The Stochastic Oscillator is in oversold territory, signaling the potential for a corrective bounce. The 14-day RSI remains below 50, reinforcing a bearish outlook.
Trading Strategy: Neutral to Sell
- Sell below 149.40-149.20 with targets at 149.00-148.70 and 148.30-148.00, with a stop loss above 149.80.
- Alternatively, buy above 149.80 with targets at 150.20-150.50, with stops below 149.40.
GBP/USD
Technicals in Focus
The GBP/USD pair surged past the 1.3000 level, reaching a high of 1.3008, fueled by strong U.K. labor data and hawkish expectations from the BoE. The MACD indicator remains in positive territory, suggesting further upside potential. The Stochastic Oscillator is in overbought territory, warning of possible consolidation. The 14-day RSI is holding above 60, supporting continued bullish momentum.
Trading Strategy: Neutral to Buy
- Buy above 1.3000-1.2980 with targets at 1.3030-1.3060 and 1.3090-1.3120, with a stop loss below 1.2950.
- Alternatively, sell below 1.2950 with targets at 1.2920-1.2890, with stops above 1.3000.
Market Outlook
Looking ahead, all eyes remain on the Federal Reserve’s interest rate decision and economic projections, which could dictate the next major moves in the forex market. The U.S. Core CPI and jobless claims will also be closely watched for further insights into the inflationary landscape. Meanwhile, BoJ’s policy adjustments continue to influence yen volatility, with traders assessing the implications of a potentially prolonged accommodative stance.
The euro remains supported by Eurozone inflation data and ECB commentary, while GBP/USD movements will largely depend on BoE guidance and U.K. economic releases.
Overall, volatility is expected to remain elevated, with traders positioning themselves ahead of key central bank events and economic indicators.