Weekly Forex Outlook: April 28 – May 2, 2025
As we enter the final week of April, the forex market is poised for significant movements driven by key economic data releases, central bank decisions, and ongoing geopolitical tensions. Traders should prepare for potential volatility, particularly in USD, JPY, EUR, and commodity-linked currencies.
🔍 Key Economic Events This Week
United States
JOLTS Job Openings (April 29): The U.S. labor market remains a focal point, with analysts expecting a slight decrease from 7.57 million to 7.48 million openings. A higher-than-expected reading could bolster the USD.
First-Quarter GDP (April 30): Preliminary data is anticipated to show moderate growth, providing insight into the economic resilience amid trade policy uncertainties.
ISM Manufacturing PMI (May 1): A slight decline from 50.3 to 50.1 is forecasted, indicating continued expansion but at a slower pace.
Eurozone
ECB Policy Meeting (April 30): With the eurozone’s first-quarter GDP growth at a modest 0.2%, ECB officials have expressed concerns over rising risks from the ongoing trade war with the United States. This may influence future monetary policy decisions.
Japan
Bank of Japan Meeting (May 1): The BOJ is expected to maintain its policy rate at 0.5%, citing risks to the fragile economy, particularly from U.S. tariffs. Governor Kazuo Ueda has indicated potential future rate hikes if economic recovery and inflation near the 2% target persist.
📉 Currency Pair Outlooks
USD/JPY
The USD/JPY pair remains sensitive to U.S.-Japan trade discussions and central bank policies. The yen’s depreciation has been a concern for Japanese policymakers, with the BOJ intervening when the pair surpassed ¥160.
The euro faces downward pressure due to structural weaknesses in the eurozone economy and expectations of continued ECB rate cuts. Analysts suggest the euro could approach or fall below parity with the dollar in the latter half of the year.
GBP/USD
The British pound shows resilience but faces limitations due to inflationary pressures and overvaluation. Its trajectory may be influenced by global trade dynamics.
📊 Technical Analysis Highlights
USD Index (DXY): The DXY has broken key resistance levels, with potential to climb further. A strong close above 108.00 could open a path toward 112.00 and levels not seen since 2002.
EUR/USD: Trading below the 200-day SMA at 1.0868 suggests a bearish outlook. Support levels are at 1.0760 and 1.0700, while resistance is at 1.0868 and 1.0933.
🌐 Geopolitical Considerations
U.S. Trade Policies: President Trump’s aggressive trade policies, including steep tariffs, have unnerved both American consumers and businesses. These moves have led to increased import costs, reduced investor confidence, and a notable decline in market indicators like the dollar, Treasury bonds, and the stock market.
Global Safe-Haven Demand: Heightened geopolitical conflicts, such as the Russia-Ukraine conflict and tensions in the Middle East, may continue to drive investors toward the U.S. dollar, which is widely seen as a safe-haven asset.
📌 Conclusion
This week presents a critical juncture for forex markets, with pivotal economic data and central bank decisions on the horizon. Traders should remain vigilant to developments in U.S. trade policies, ECB and BOJ meetings, and key economic indicators that could influence currency movements.
Stay informed and adjust your trading strategies accordingly to navigate the potential volatility in the forex market.
