The forex market on April 4, 2025, is experiencing heightened volatility driven by a mix of economic data releases, central bank statements, and geopolitical developments. Key currency pairs, including EUR/USD, GBP/USD, USD/JPY, and USD/CHF, are responding to shifting market sentiment amid global economic uncertainty and policy adjustments by major central banks. Below is a detailed analysis of today’s market movements and key factors affecting trading.
EUR/USD: Euro Gains as Dollar Weakens Post U.S. Data
The EUR/USD pair has surged above 1.1100, benefiting from weaker U.S. economic data and hawkish comments from European Central Bank (ECB) policymakers. The pair gained momentum after the U.S. nonfarm payrolls (NFP) report came in lower than expected, raising speculation that the Federal Reserve may hold off on further rate hikes. Meanwhile, Eurozone inflation data indicated a slight increase, reinforcing expectations that the ECB may maintain higher interest rates for longer.
Technical Levels
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Resistance: 1.1150, followed by 1.1200
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Support: 1.1050, with strong buying interest near 1.1000
Outlook: If U.S. economic data continues to weaken, EUR/USD could extend its gains toward 1.1200 in the coming sessions.
GBP/USD: Pound Holds Gains Amid Strong UK Economic Data
The GBP/USD pair is trading above 1.3100, marking its highest level since October 2024. A combination of strong UK services PMI data and broad-based U.S. dollar weakness has supported the pound. Additionally, the Bank of England (BoE) has maintained a cautious stance on monetary policy, keeping expectations of a potential rate hike in Q2 2025 alive.
Technical Levels
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Resistance: 1.3185, with further upside toward 1.3300
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Support: 1.3050, followed by 1.2985
Outlook: The pair remains in a bullish trend, and if the BoE maintains a hawkish outlook, GBP/USD could continue its upward trajectory toward 1.3300.
USD/JPY: Yen Strengthens as Risk Sentiment Shifts
The USD/JPY pair has fallen sharply below 110.50, reflecting a shift in risk sentiment and increasing demand for safe-haven assets. The Japanese yen has strengthened due to growing concerns over U.S.-China trade tensions and disappointing U.S. employment data. Additionally, the Bank of Japan (BoJ) has hinted at reducing bond purchases, leading to speculation that Japan’s ultra-loose monetary policy may gradually shift.
Technical Levels
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Resistance: 111.00, followed by 112.00
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Support: 110.00, with a further decline possible toward 108.50
Outlook: If risk sentiment remains cautious and U.S. data continues to disappoint, USD/JPY may see further downside pressure, with the potential to test 108.50 in the near term.
USD/CHF: Swiss Franc Strengthens on Safe-Haven Demand
The USD/CHF pair has dropped below 0.9200, as investors move into safe-haven currencies amid increased market uncertainty. The Swiss National Bank (SNB) has remained neutral on policy, allowing the franc to appreciate as risk aversion spreads across global markets.
Technical Levels
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Resistance: 0.9300, followed by 0.9400
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Support: 0.9150, with the next major level at 0.9100
Outlook: If geopolitical tensions persist and risk sentiment remains weak, USD/CHF could continue lower toward 0.9100.
Key Events Impacting the Market
1. U.S. Nonfarm Payrolls (NFP) Report
The U.S. added 140K jobs in March, significantly below the 180K consensus estimate. This weaker-than-expected report has sparked concerns about a slowing labor market, reducing expectations for additional Fed rate hikes in 2025.
2. Central Bank Announcements
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Federal Reserve: Officials have signaled a more cautious approach to rate hikes amid growing economic uncertainty.
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ECB: Policymakers remain committed to tightening policy if inflationary pressures persist.
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Bank of England: The BoE’s hawkish stance has supported GBP/USD, as traders anticipate one more rate hike in 2025.
3. Geopolitical Developments
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U.S.-China Trade Tensions: New trade restrictions imposed by the U.S. on Chinese tech firms have fueled risk-off sentiment, benefiting safe-haven currencies like JPY and CHF.
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Eurozone Economic Data: Positive economic indicators from Germany and France have boosted confidence in the euro.
Market Sentiment & Trading Outlook
With risk sentiment turning cautious, traders are favoring safe-haven currencies like the Swiss franc and Japanese yen. The U.S. dollar remains under pressure following weak economic data, leading to stronger gains for EUR/USD and GBP/USD.
Short-Term Strategy for Traders
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Bullish on EUR/USD above 1.1100 with targets at 1.1200
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Bullish on GBP/USD above 1.3100 with targets at 1.3300
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Bearish on USD/JPY below 110.50 with downside targets at 108.50
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Bearish on USD/CHF below 0.9200, with support at 0.9100
Long-Term Considerations
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If the Federal Reserve signals a pause in rate hikes, the U.S. dollar could see further downside.
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Continued geopolitical tensions and trade disputes may drive further demand for safe-haven assets.
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Inflation trends will play a key role in determining central bank policy shifts, affecting forex volatility.
Conclusion
The forex market remains highly dynamic on April 4, 2025, with major currency pairs responding to U.S. economic data, central bank policies, and geopolitical risks. The euro and pound are gaining strength against the dollar, while safe-haven assets like the yen and Swiss franc are in demand. Traders should remain vigilant, focusing on key support and resistance levels and market sentiment shifts for potential trading opportunities in the coming days.
