As we head into Tuesday, March 25, 2025, global markets remain cautious yet active as traders digest a slew of PMI readings, sticky inflation signals, and central bank remarks. The U.S. dollar has gained ground, buoyed by firm S&P Global PMI data and rising inflation expectations. Meanwhile, volatility remains a key theme amid a packed economic calendar and ongoing central bank commentary.
In the currency markets, the USD/JPY pair saw a strong upside breakout late in the session, driven by broad-based dollar strength and sustained weakness in the yen. Market sentiment favored the greenback following robust U.S. data and hawkish commentary from Federal Reserve officials.
The GBP/USD pair struggled to maintain earlier gains, retreating after U.K. manufacturing PMI data disappointed and broader dollar strength kicked in. The pair continues to show signs of consolidation amid mixed macroeconomic drivers.
Meanwhile, the USD/CAD pair posted a modest rebound, reversing earlier losses following Canadian GDP data. However, overall sentiment for the loonie remains mixed as crude oil prices stabilize and U.S. data dominates market sentiment.
USD/JPY
Technicals in Focus
The USD/JPY pair experienced a sharp breakout to the upside, climbing from the 149.80 area to above 150.60 by session’s end. The bullish momentum was fueled by strong U.S. PMI data and ongoing yield divergence between the U.S. and Japan. The candlestick structure on the M5 chart reveals a breakout rally followed by a consolidation at higher levels—suggesting a potential continuation move.
Trading Strategy: Buy Bias
Buy above 150.60 with targets at 150.90 and 151.20. Stop loss below 150.30. Alternatively, short below 150.30 with downside targets at 149.90 and 149.50, stops above 150.60.
GBP/USD
Technicals in Focus
GBP/USD traded in a wide range, rising briefly above 1.2960 before reversing back to near 1.2918. The pair failed to sustain its highs following disappointing U.K. PMI numbers and broad-based USD strength. The M5 chart shows sharp intraday swings, with price action now leaning toward a bearish bias as lower highs and lower lows begin to form.
Trading Strategy: Neutral to Bearish
Sell below 1.2920–1.2940 with targets at 1.2890 and 1.2860. Stop loss above 1.2965.
Alternatively, buy above 1.2965 with upside targets at 1.3000–1.3030, stops below 1.2920.
USD/CAD
Technicals in Focus
The USD/CAD pair reversed earlier losses, bouncing off support near 1.4295 and closing around 1.4321. The pair struggled to find direction earlier in the day amid Canadian GDP results that met expectations, before tracking U.S. dollar strength into the U.S. session. The chart shows a recovery structure with higher lows forming, signaling possible continued upside if momentum persists.
Trading Strategy: Neutral to Buy
Buy above 1.4320 with targets at 1.4350 and 1.4375. Stop loss below 1.4290.
Alternatively, sell below 1.4290 with targets at 1.4260 and 1.4230, stops above 1.4320.
Market Outlook
Looking ahead, the focus now shifts to Tuesday’s U.S. housing data, S&P/CS HPI, and comments from FOMC members. Markets will also monitor Japanese monetary policy meeting minutes for any hints on the BoJ’s future direction.
Key data scheduled for later in the week includes U.S. durable goods orders, Canada’s wholesale sales, and core PCE inflation figures, which will likely be the next major catalyst for USD volatility.
With inflation expectations ticking higher and PMI data suggesting persistent economic resilience in the U.S., traders should remain alert to policy shifts and interest rate narratives coming out of central banks. The potential for increased volatility remains elevated as markets reposition.