As we head into Thursday, May 1, 2025, global markets are reacting to a series of high-impact U.S. data releases and underlying political tension in Washington surrounding budget negotiations and the looming debt ceiling. These uncertainties have added pressure to the U.S. dollar, amplifying volatility across major currency pairs.
The just-released Nonfarm Payrolls report for April came in well below expectations at 129K versus a forecast of 228K, triggering renewed concerns about the U.S. labor market. The ADP private employment report also missed by a wide margin earlier this week. With the Federal Reserve closely watching labor metrics, these numbers could influence future rate guidance, especially against a politically strained backdrop.
In the currency markets, the EUR/USD pair extended its downward trend as weak U.S. labor data was counterbalanced by stronger-than-expected U.S. factory orders. Meanwhile, USD/JPY saw aggressive bullish momentum following the Bank of Japan’s dovish stance and rising U.S. Treasury yields. USD/CAD continues to slide as falling crude inventories support the Canadian dollar, though downside pressure from U.S. job data has introduced consolidation risk.
EUR/USD
Technicals in Focus
The EUR/USD pair remained under sustained selling pressure, closing near the 1.1325 level. Despite soft U.S. jobs data, the pair failed to recover due to relative Eurozone weakness, including soft CPI and manufacturing PMIs. On the technical front, the MACD remains firmly in bearish territory, while the Stochastic Oscillator continues to move through oversold levels, suggesting temporary exhaustion. RSI is near 30, signaling the pair may be oversold in the short term.
Trading Strategy: Sell on Rebounds
Sell near 1.1340-1.1360 with targets at 1.1310 and 1.1280. Stop loss above 1.1375. Consider limited long positions only if the pair closes above 1.1375 with volume support.
USD/CAD
Technicals in Focus
The USD/CAD pair slid further to the 1.3789 area after failing to hold the 1.3860 resistance. Weak U.S. GDP and labor figures weighed on the dollar, while Canadian GDP numbers provided some support to the loonie. On the chart, the MACD is bearish with diverging histograms, while the RSI remains neutral around 45. The Stochastic Oscillator shows a mild upturn, indicating a potential corrective bounce.
Trading Strategy: Neutral to Sell
Sell below 1.3810-1.3840 with targets at 1.3765 and 1.3725. Stop loss above 1.3865. Buy only on a confirmed break above 1.3870, targeting 1.3910.
USD/JPY
Technicals in Focus
The USD/JPY pair surged to the 143.17 level, driven by a weaker yen and rising U.S. yields despite poor job numbers. The Bank of Japan’s decision to hold rates and continue yield curve control weighed on the yen. The MACD has turned sharply bullish, and the Stochastic Oscillator is nearing overbought territory. RSI is approaching 70, hinting at potential short-term resistance.
Trading Strategy: Buy the Dips
Buy above 142.80-143.00 with targets at 143.40 and 144.00. Use a stop below 142.50. Consider shorting only on a confirmed bearish divergence with a break below 142.30.
Market Outlook
With U.S. labor data continuing to surprise to the downside and political friction in Washington over fiscal policy escalating, markets are caught between economic weakness and uncertainty over legislative stability. Any disruptions to debt ceiling talks could rattle investor confidence and trigger safe-haven flows, possibly supporting the dollar short term despite soft fundamentals.
Traders will closely monitor upcoming ISM data and comments from Fed officials, particularly on how they interpret the April labor numbers in light of current inflation trends. Also, expect continued volatility in USD/JPY as Japan maintains its ultra-loose monetary policy in contrast to U.S. tightening—even if further hikes are now in question.