Daily Forex Market Overview – April 07, 2025

The forex market kicked off the week on April 7, 2025, with heightened volatility as traders digested fresh geopolitical developments, a slew of upcoming economic data, and continued speculation around central bank policies. Risk sentiment was notably impacted by intensifying U.S.-China trade tensions, sending ripples across global markets and favoring safe-haven currencies.

🔥 Key Market Drivers Today

📉 Escalating U.S.-China Trade War

The global spotlight is firmly on the intensifying trade standoff between the U.S. and China. Over the weekend, Washington imposed new sweeping tariffs on Chinese technology and manufacturing goods. In retaliation, Beijing slapped 34% tariffs on a broad range of U.S. exports, raising fears of a deeper economic slowdown. As a result, investor appetite for risk assets has waned, bolstering safe-haven demand.

📊 Economic Data in Focus

• U.S. CPI (due later this week): Markets are bracing for the March CPI report, expected to show persistent inflationary pressures. February’s unexpected downside surprise has kept rate-cut hopes alive.

• Eurozone Retail Sales (released today): Posted a weaker-than-expected -0.6% MoM, indicating sluggish consumer demand.

• BoE and Fed Speakers: Remarks from FOMC members and the Bank of England’s Huw Pill later today may provide clues on monetary policy trajectory.

🏦 Central Bank Developments

• The Bank of England held interest rates steady at 4.75% last week but warned of sticky inflation and economic stagnation.

• The Federal Reserve continues to signal a cautious approach, with markets pricing in a 50/50 chance of a rate cut by mid-year.

• The Swiss National Bank remains active in FX markets, intervening to curb excessive franc strength amid risk aversion.

💱 Major Currency Pair Updates

EUR/USD – Bearish Bias Below 1.0610

• Last Price: 1.0540

• Support: 1.0470, 1.0330

• Resistance: 1.0610, 1.0800

• The euro came under pressure following disappointing Eurozone data and persistent risk aversion. The ECB’s dovish posture amid rising geopolitical stress is weighing on the pair.

• Outlook: Further downside is likely if 1.0470 is breached, with parity in play on sustained weakness.

GBP/USD – Holding Ground Amid BoE Stalemate

• Last Price: 1.2645

• Support: 1.2585, 1.2440

• Resistance: 1.2800, 1.3045

• Sterling is trading in a tight range as traders await clarity from the BoE. Inflation concerns and stagnation risks are capping upside momentum.

• Outlook: Range-bound trading expected; a break above 1.2800 could trigger a move toward 1.30+ levels.

USD/JPY – Yen Strengthens on Risk Aversion

• Last Price: 149.30

• Support: 147.50, 145.20

• Resistance: 150.80, 156.60

• The Japanese yen is benefiting from safe-haven demand as equity markets slide and recession concerns grow.

• Outlook: A sustained move below 149.00 could open the door to 147.50; upside potential hinges on risk sentiment reversal.

USD/CHF – Swissy Gains Amid Global Jitters

• Last Price: 0.8980

• Support: 0.8950, 0.8900

• Resistance: 0.9000, 0.9050

• The franc is attracting safe-haven flows despite SNB efforts to weaken the currency to aid exports.

• Outlook: Strength likely to persist as long as global uncertainty remains high.

AUD/USD – Weak on China Concerns

• Last Price: 0.6545

• Support: 0.6500, 0.6450

• Resistance: 0.6625, 0.6700

• The Aussie dollar is under pressure due to trade war fallout and weaker commodity demand expectations.

• Outlook: Bias remains bearish unless China-U.S. tensions ease significantly.

📈 Market Sentiment & Trading Strategy

Risk aversion remains the dominant theme today. Equity markets are under pressure globally, and forex flows are skewing toward safe-haven currencies. With high-impact economic data (CPI, PPI, Fed minutes) scheduled later this week, traders should remain cautious and watch for:

• Volatility around inflation prints.

• Hawkish/dovish pivots in central bank tone.

• Continued developments in global trade disputes.

🔮 Trader Outlook

• Short-Term Traders: Favor defensive plays (buy JPY, CHF) on dips amid risk-off mood.

• Swing Traders: Watch for confirmation on EUR/USD breakdown or GBP/USD breakout.

• Event Traders: Prepare for CPI-driven volatility in USD crosses later this week.