As we head into Wednesday, March 5, 2025, global markets are positioned for a session of heightened volatility following key economic data releases and central bank events. The U.S. dollar remains in the spotlight as investors digest the latest labor market figures and prepare for upcoming Fed speeches and economic reports.
In the currency markets, EUR/USD surged, breaking key resistance levels following the ECB Interest Rate Decision, which cut rates to 2.65% from 2.90%. The euro gained strength despite the rate cut as traders focused on the ECB’s cautious tone regarding future policy adjustments. Meanwhile, the U.S. dollar weakened after disappointing economic data, including a decline in job growth and mixed ISM services data.
GBP/USD saw a strong rally, climbing past 1.2780, supported by robust U.K. PMI data and increased expectations that the Bank of England will maintain a cautious stance on rate adjustments. AUD/USD exhibited significant volatility but managed to recover, as risk sentiment improved and the Australian economy showed resilience despite global uncertainties.
EUR/USD
Technicals in Focus
EUR/USD experienced a strong bullish move, closing near 1.0597 after rebounding sharply. The euro’s gains were driven by the ECB’s rate decision and a softer U.S. dollar as traders reassessed Federal Reserve policy expectations.
- The MACD indicator is bullish, showing continued upward momentum.
- The Stochastic Oscillator is in overbought territory, suggesting the possibility of a short-term pullback before further gains.
- The 14-day RSI is trending higher but remains below extreme levels, leaving room for additional upside.
Trading Strategy: Neutral to Buy
- Buy above 1.0580-1.0560 with targets at 1.0620-1.0650 and 1.0680-1.0700, with a stop loss below 1.0530.
- Alternatively, consider selling below 1.0530 with targets at 1.0500-1.0470, with stops above 1.0580.
GBP/USD
Technicals in Focus
GBP/USD surged to 1.2785, extending its gains as the pound benefited from positive U.K. PMI data and a broadly weaker U.S. dollar.
- The MACD remains bullish, signaling continued upward pressure.
- The Stochastic Oscillator is in overbought territory, suggesting a possible retracement before further gains.
- The 14-day RSI confirms strong momentum but remains below extreme levels.
Trading Strategy: Neutral to Buy
- Buy above 1.2760-1.2730 with targets at 1.2800-1.2830 and 1.2870-1.2900, with a stop loss below 1.2700.
- Alternatively, consider selling below 1.2700 with targets at 1.2670-1.2640, with stops above 1.2760.
AUD/USD
Technicals in Focus
AUD/USD showed significant volatility, closing near 0.6241 after recovering from earlier losses. The pair’s movement was driven by shifting risk sentiment and economic resilience in Australia.
- The MACD is turning positive, suggesting increasing bullish momentum.
- The Stochastic Oscillator is in neutral territory, leaving room for further upside.
- The 14-day RSI is moving higher, indicating a bullish bias.
Trading Strategy: Neutral to Buy
- Buy above 0.6230-0.6200 with targets at 0.6270-0.6300 and 0.6330-0.6350, with a stop loss below 0.6180.
- Alternatively, consider selling below 0.6180 with targets at 0.6150-0.6120, with stops above 0.6230.
Market Outlook
Looking ahead, traders will be closely watching Fed speeches and economic releases, including ISM Non-Manufacturing PMI and ADP Nonfarm Employment Change, which could influence market sentiment and drive volatility in the U.S. dollar.
In the Eurozone, the ECB’s policy stance will remain a key factor, with President Lagarde’s commentary expected to shape expectations for future rate adjustments. The Bank of England’s outlook is also a focus, as policymakers assess economic conditions before making further monetary decisions.
Overall, markets remain highly reactive to central bank policies and economic data, with potential for sharp movements across major currency pairs as traders position themselves accordingly.