As we head into Monday, 17 March 2025, global markets are positioned for a session that could see heightened volatility, particularly in response to key economic data and central bank policies. The Japanese yen remains a focal point, as traders digest the latest Bank of Japan (BoJ) interest rate decision and policy outlook. Meanwhile, the U.S. dollar continues to react to shifting economic data, while the euro and British pound are responding to developments in their respective regions.
USD/JPY
Technicals in Focus
The USD/JPY pair has been trending higher, with the yen showing continued weakness following the BoJ’s decision to hold rates at 0.50%. A brief retracement was seen after initial bullish momentum, but the overall trend suggests that the pair remains in an uptrend. The MACD is indicating slight bullish momentum, while the Stochastic Oscillator suggests overbought conditions, hinting at a potential corrective pullback.
Trading Strategy: Neutral to Buy
- Buy above 148.60–148.80 with targets at 149.00–149.30, with a stop loss below 148.30.
- Sell below 148.30 with targets at 147.90–147.50, with stops above 148.80.
EUR/USD
Technicals in Focus
The EUR/USD pair experienced a strong rally before facing resistance around the 1.0910 level, leading to a slight retracement. This move was supported by the recent Eurozone CPI data, which met expectations at 2.6% YoY, and the ZEW Economic Sentiment report, which showed a moderate improvement. The RSI remains neutral, while the MACD indicates a potential continuation of bullish momentum if the pair holds above 1.0875.
Trading Strategy: Neutral to Buy
- Buy above 1.0880–1.0900 with targets at 1.0930–1.0950, with a stop loss below 1.0860.
- Sell below 1.0860 with targets at 1.0830–1.0810, with stops above 1.0900.
GBP/USD
Technicals in Focus
The GBP/USD pair remains volatile but has shown signs of a potential rebound following a dip toward 1.2910. The Bank of England’s monetary policy decision, which saw rates remain unchanged at 4.50%, has contributed to some indecisiveness in the market. The MACD suggests weak bullish momentum, and the Stochastic Oscillator is recovering from oversold levels, hinting at a possible continuation of the rebound.
Trading Strategy: Neutral to Buy
- Buy above 1.2930–1.2950 with targets at 1.2980–1.3000, with a stop loss below 1.2900.
- Sell below 1.2900 with targets at 1.2870–1.2850, with stops above 1.2950.
Market Outlook
Looking ahead, the key focus for the week will be on:
- The Federal Reserve’s economic projections and interest rate decision, which will drive U.S. dollar sentiment.
- Japan’s trade balance and BoJ policy implications, as the yen remains under pressure.
- UK labor market data and BoE policy expectations, which could impact GBP movements.
- Eurozone sentiment and CPI figures, which may shape ECB expectations moving forward.
Overall, the market is expected to remain highly sensitive to central bank commentary and economic data, with potential for increased volatility as traders position themselves ahead of key releases