Short-Term Positive Stimuli Fail to Reverse Downward Trend

Commodity

Summary:

Recent WTI crude oil prices have rebounded due to short-term positive catalysts, but the overall oversupply in the oil market persists, and the downward trend remains intact.

SELL WTI

Close Time

CLOSED

62.244

Entry Price

51.200

65.500

57.233 -0.408 -0.71%

551.0

Pips

Profit

51.200

56.734

Exit Price

62.244

Entry Price

65.500

Fundamentals

Last week, WTI crude oil rallied on optimism over U.S. sanctions on Iran and OPEC+ members' compliance with compensation production cuts. By the week's close, WTI surged over $4.

However, the actual impact of U.S. sanctions on Iran is likely limited. The latest sanctions target Chinese companies importing Iranian crude, which could temporarily reduce Iran's exports by ~300,000 b/d (15% of its total exports). However, "shadow fleets" and transshipment trade may sustain partial flows. The sanctions are more likely to trigger market sentiment fluctuations than create a material supply gap, similar to the February 2025 sanctions that drove prices up by only 3% before retreating.

Meanwhile, compensation cuts by some OPEC+ members may be insufficient to address immediate oversupply. Iraq and Kazakhstan's proposed cuts (~300,000 b/d) aim to offset prior overproduction, but compliance remains questionable. Russia's March output already exceeded quotas at 10.5 million b/d, keeping OPEC+ total supply 600,000 b/d higher than 2024 levels. Overall, an oversupply situation persists.

In summary, while short-term positives spurred a WTI rally, oversupply constraints limit upside potential, and the bearish trend remains unchanged.

Technical Analysis

Short-Term Positive Stimuli Fail to Reverse Downward Trend_1

Presented in the daily chart, WTI crude oil has broken above the $62.5 resistance level on positive sentiment, testing the next hurdle at $65.00. However, the moving average system maintains a bearish alignment, signaling an overarching downward trend. The rally's upside is likely capped.

Currently, if WTI weakens below $65.00 after a rebound, the prior downtrend will resume. In the near term, wait for the rally to peak, then prioritize selling at highs.

Trading Recommendations

Trading direction: Sell

Entry price: 62.90

Target price: 51.20

Stop loss: 65.50

Valid Until: May 5, 2025, 23:00:00

Support: 54.75/50.00

Resistance: 64.13/65.00

Risk Warnings and Disclaimers

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Warren Takunda

Economic

Summary:

The Australian Dollar (AUD) climbed against the US Dollar (USD) as global markets responded to the People's Bank of China's (PBoC) decision to hold key lending rates steady.

BUY AUDUSD

Close Time

CLOSED

0.64099

Entry Price

0.65425

0.63100

0.66520 -0.00118 -0.18%

10.2

Pips

Profit

0.63100

0.64201

Exit Price

0.64099

Entry Price

0.65425

The Australian Dollar opened the week with renewed strength, recovering from prior session losses as it rode a wave of broad-based US Dollar weakness and a modest pickup in risk sentiment. This recovery came on the back of key decisions and data points from both China and the United States, as well as growing geopolitical friction that could reshape the near-term outlook for global trade.

The People's Bank of China (PBoC) held its one-year Loan Prime Rate (LPR) unchanged at 3.10% and maintained the five-year rate at 3.60%, in a widely anticipated decision that signaled stability rather than further stimulus. While the decision itself did not shock the market, it provided reassurance that Beijing is confident in the current trajectory of its post-COVID recovery. For Australia, whose economy is heavily tethered to Chinese demand for raw materials, such as iron ore and coal, this was a subtle but meaningful vote of confidence.

However, it was not just China’s monetary stance that shaped the market narrative. Tensions between Washington and Beijing surged again after the Biden administration moved to impose tariffs on Chinese vessels docking at US ports. This escalatory move, aimed ostensibly at protecting American shipping and port security, sent shivers through global logistics and raised the specter of a new chapter in the trade war saga.

Yet, in a somewhat contradictory tone, President Donald Trump — who continues to influence economic policy discourse despite no longer holding office — announced that certain key technology products would be exempted from the proposed “reciprocal” tariffs. These exemptions primarily concern tech components produced in China, further underscoring Australia’s indirect exposure to any easing or tightening in US-China trade dynamics. Trump later noted that China had made conciliatory overtures and that he was “not looking to go higher on China tariffs,” adding a degree of market relief. He even expressed optimism that a deal could be reached in as little as three to four weeks, tempering the earlier tension with cautious hope.

The net effect was clear: risk appetite improved, and the US Dollar began to slip, dragging the US Dollar Index (DXY) down to around 98.50 — its lowest level since April 2022. The sharp decline was exacerbated by a fall in the 2-year Treasury yield, which dropped more than 1% to 3.75%, reflecting investor expectations that the Federal Reserve may soon need to pivot its policy in light of a softening economy and cooling inflation.

Indeed, the latest US Consumer Price Index (CPI) print confirmed that price pressures are moderating. Headline CPI eased to 2.4% year-on-year in March, down from 2.8% in February and below expectations of 2.6%. Core CPI, which strips out volatile food and energy components, came in at 2.8% versus a forecast of 3.0%. On a monthly basis, the headline figure dipped by 0.1%, while core prices edged up a mere 0.1%.

While disinflation is broadly welcomed by the market, it now collides with worrying signs of economic fatigue. Federal Reserve Chair Jerome Powell cautioned that the US faces the dual risk of a stagnant economy alongside stubborn inflation — a stagflation scenario that complicates policy responses. Powell’s remarks were overshadowed, however, by reports that President Trump is mulling the possibility of removing Powell from his position, reflecting growing political frustration over the Fed’s cautious approach. White House economic adviser Kevin Hassett later confirmed that the idea was under discussion, although the immediate market reaction was relatively muted.

In terms of labor market data, the picture remains mixed. Initial jobless claims for the week ending April 12 fell to 215,000 — better than expected — but continuing claims rose to 1.885 million, suggesting that while layoffs may be slowing, displaced workers are struggling to re-enter the workforce. This labor market dynamic, combined with softer inflation, suggests the Fed may face intensifying pressure to consider rate cuts sooner than previously planned.

Back in Australia, the economic signals were similarly nuanced. The unemployment rate ticked up to 4.1% in March, just shy of expectations at 4.2%, while net job creation stood at 32,200 — a healthy figure but below the forecast of 40,000. At the same time, the Westpac Leading Index’s six-month annualized growth rate eased to 0.6% in March from 0.9% in February, hinting at some softening in forward-looking momentum.

Minutes from the Reserve Bank of Australia’s (RBA) March 31–April 1 meeting revealed ongoing uncertainty around the timing of the next interest rate adjustment. While the Board flagged the upcoming May meeting as a potential opportunity to reassess policy, it emphasized that no decision had yet been made, pointing to the wide range of upside and downside risks that continue to confront the Australian economy.

Meanwhile, China delivered a strong batch of macroeconomic data, providing crucial support for the Aussie. The Chinese economy expanded by 5.4% in the first quarter of 2025, matching the growth pace seen in the previous quarter and exceeding forecasts of 5.1%. On a quarterly basis, GDP rose 1.2%, slightly below the 1.4% estimate but still resilient. Retail sales in China surged by 5.9% year-on-year, comfortably beating the 4.2% forecast and February’s 4% print. Industrial production jumped by 7.7%, far outpacing both the prior month and market expectations. For Australia, these figures serve as a strong tailwind, given the nation’s reliance on Chinese demand for its exports.

Technical Analysis

Technically, the AUD/USD pair has shifted from a protracted downtrend to a confirmed bullish reversal. The pair broke above its recent consolidation range, which had served as a resistance zone between 0.63875 and 0.64100. That zone now acts as strong support. Prices are currently trading above all key exponential moving averages (EMAs), which are aligned in a bullish formation, with each average trending upward. This technical configuration signals strong upward momentum and improves the outlook for further gains.

Moreover, the recent bullish engulfing candle at the breakout point confirms buyer interest and volume strength, lending credence to the view that this recovery is not merely a short-term bounce but the beginning of a more sustainable rally. The next significant resistance lies around 0.65425, a level where traders may begin to take profits.

TRADE RECOMMENDATION

BUY AUDUSD

ENTRY PRICE: 0.64100

STOP LOSS: 0.63100

TAKE PROFIT: 0.65425

Risk Warnings and Disclaimers

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Warren Takunda

Economic

Summary:

The USD/CAD pair slumps to a six-month low near 1.3800 as political tensions in Washington rattle confidence in the U.S. Dollar.

SELL USDCAD

Close Time

CLOSED

1.38200

Entry Price

1.35000

1.39500

1.37700 0.00000 0.00%

8.8

Pips

Profit

1.35000

1.38112

Exit Price

1.38200

Entry Price

1.39500

The U.S. Dollar is under siege. On Monday, the USD/CAD currency pair extended its downside momentum, plunging to a six-month low near the psychologically significant 1.3800 mark during the European session. The move highlights a broader narrative unfolding in currency markets: investors are rapidly losing confidence in the Greenback, as political and institutional instability in Washington compounds fundamental economic concerns.

At the heart of the latest selloff is a growing threat to the Federal Reserve’s independence. Reports have surfaced that U.S. President Donald Trump is weighing the removal of Fed Chair Jerome Powell — a move that has sparked alarm across global markets. Trump's dissatisfaction with Powell stems from the Fed’s refusal to cut interest rates despite persistent political pressure and elevated inflation expectations.

This political interference is shaking the very foundation of the U.S. Dollar’s status as the world’s most trusted reserve currency. The U.S. Dollar Index (DXY), which tracks the performance of the Greenback against a basket of six major peers, has collapsed to a fresh three-year low, trading just above 98.00.

The Dollar’s fall from grace is particularly stark when viewed in the context of Trump’s historically erratic trade policy. Despite recent reassurances from U.S. Commerce Secretary Howard Lutnick, who over the weekend said that “we're confident it will work out with China,” traders remain unconvinced that Washington will deliver a stable and reliable policy path forward. Trump’s oscillating rhetoric on tariffs and trade has not only muddled the macroeconomic outlook but also compromised trust in America’s institutional consistency.

Meanwhile, north of the border, the Canadian Dollar is finding renewed strength, buoyed by fresh domestic optimism. Canadian Prime Minister Mark Carney, who is positioning himself as a fiscal stabilizer in a turbulent North American landscape, announced a plan to implement tax cuts and expand defense spending. These measures are widely viewed as an effort to reduce Canada’s economic reliance on the United States, particularly as the U.S. turns inward under Trump’s protectionist agenda.

Carney’s fiscal stimulus proposals have been well received by investors, as they signal proactive economic management and a strategic pivot away from U.S.-centric trade dependencies. The combination of Canadian policy optimism and U.S. Dollar weakness has created a perfect storm that is driving USD/CAD lower.

Technical Analysis

From a technical perspective, the USD/CAD pair is firmly entrenched in a bearish trajectory on the intraday chart. The pair has decisively broken below the critical 1.3850 support level, a key threshold that previously acted as a springboard for bullish reversals. The break is compounded by sustained price action below the 50-period Exponential Moving Average (EMA50), which continues to apply downward pressure.

Adding to the bearish sentiment, the Relative Strength Index (RSI) has recently exited overbought territory, issuing fresh sell signals that point to continued weakness ahead. Should the pair breach the 1.3600 psychological barrier, the path will likely open toward deeper support at 1.3500, followed by the September 24th low of 1.3430.

TRADE RECOMMENDATION

SELL USDCAD

ENTRY PRICE: 1.3820

STOP LOSS: 1.3950

TAKE PROFIT: 1.3500

Risk Warnings and Disclaimers

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Warren Takunda

Economic

Summary:

The USD/CHF pair crashed to levels not seen since January 2015 on Monday, weighed down by heightened fears of a U.S. recession, dovish Federal Reserve rate expectations, and renewed global trade uncertainty.

SELL USDCHF

Close Time

CLOSED

0.80900

Entry Price

0.78000

0.82300

0.79582 +0.00060 +0.08%

140.0

Pips

Loss

0.78000

0.82301

Exit Price

0.80900

Entry Price

0.82300

The U.S. Dollar opened the week under heavy pressure, as the USD/CHF pair tumbled to its lowest level in over a decade, sliding below the mid-0.8000s in the first half of Monday’s European session. The decline marks a significant technical and psychological breakdown for the pair, sending a clear signal that bearish momentum has taken firm control. What began as a quiet consolidation over the past week quickly erupted into a sharp sell-off, as the pair crashed through critical support levels, solidifying the view that the path of least resistance is now firmly to the downside.

At the heart of the move lies a confluence of fundamental drivers. Global markets remain rattled by trade-related uncertainty, with investors growing increasingly wary of the long-term implications of U.S. President Donald Trump’s erratic trade policy maneuvers. The president’s unpredictable announcements, including tit-for-tat tariff threats and escalating rhetoric, have reignited fears of a full-blown global trade war. These concerns are having a pronounced impact on investor sentiment, as equity markets across major regions display a cautious, risk-averse tone.

As risk appetite continues to wane, the Swiss Franc is once again emerging as a preferred destination for capital seeking shelter from volatility. The Franc’s reputation as a stable, reliable safe-haven asset has only grown stronger in this environment, attracting inflows from both institutional and retail investors alike. The CHF’s rally has been further bolstered by its relative insulation from the chaos affecting other G10 currencies, positioning it as a prime beneficiary of market defensiveness.

Compounding the pressure on USD/CHF is the mounting concern over the trajectory of the U.S. economy. Analysts and investors alike are increasingly pricing in the likelihood of a recession as soft economic data continues to roll in. The combination of a cooling labor market, tepid consumer demand, and slowing industrial output has cast a long shadow over America’s near-term outlook. In this fragile context, markets are bracing for a return to policy easing from the Federal Reserve.

Market expectations for Federal Reserve policy have shifted dramatically in recent weeks. Despite Fed Chair Jerome Powell’s hawkish remarks last week—where he suggested that the central bank remains in a position to hold rates steady pending greater clarity—investors are betting otherwise. Futures markets are now fully pricing in the possibility of at least 100 basis points of rate cuts through 2025, a sharp contrast to the Fed’s stated patience. The U.S. Dollar Index (DXY), which tracks the greenback against a basket of major currencies, has slumped to its lowest reading since April 2022 as a result, reflecting broad-based bearish sentiment toward the dollar.

This macroeconomic backdrop has created fertile ground for a technical breakdown in USD/CHF, and the charts are now confirming what the fundamentals have been suggesting for weeks. The pair had been coiling within a bearish triangle pattern, repeatedly posting lower highs while clinging to a key support level near 0.8098. Monday’s move finally breached that base decisively, as a surge in bearish volume overwhelmed buyers and drove the pair into fresh multi-year lows.

Technical Analysis

Technically, the picture is unequivocally bearish. USD/CHF has remained below the 200-period exponential moving average, underscoring the strength of the downtrend. The most recent attempt to break through the falling resistance line of the triangle was swiftly rejected near the 34 EMA band, which served as a cap on bullish momentum. That rejection triggered a sharp influx of sell orders, driving prices lower in a high-volume move. At the same time, the Relative Strength Index (RSI) has remained firmly below 50 during the entirety of the consolidation, offering a steady confirmation of underlying bearish pressure.

As the pair plunged through the former support at 0.8098 now converted into resistance—it printed a new low of 0.8068, confirming a fresh lower low in the ongoing downtrend. The technical implication is clear: what was once a floor has now become a ceiling, and traders are increasingly looking for confirmation of a "break and retest" setup to capitalize on further declines. A potential retest of the 0.8098 to 0.8114 zone in the coming sessions could provide short sellers with another entry point, provided the bearish momentum remains intact.

TRADE RECOMMENDATION

SELL USDCHF

ENTRY PRICE: 0.8090

STOP LOSS: 0.8230

TAKE PROFIT: 0.7800

Risk Warnings and Disclaimers

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Manuel

Central Bank

Economic

Summary:

The transition from support to resistance suggests the potential for a trend reversal, particularly if price action confirms a rejection from this zone.

SELL AUDCAD

Close Time

CLOSED

0.88500

Entry Price

0.85750

0.89700

0.91596 -0.00156 -0.17%

13.4

Pips

Profit

0.85750

0.88366

Exit Price

0.88500

Entry Price

0.89700

The Bank of Canada (BoC) has adopted a more cautious and restrained tone, shifting from its earlier “moderate” outlook to a measured “wait-and-see” approach. This shift comes amid growing uncertainty surrounding evolving U.S. trade policies under former President Donald Trump, which continue to weigh heavily on the global and Canadian economic outlooks.

During its latest Monetary Policy Report, the BoC outlined two distinct future scenarios, both of which reflect the profound level of uncertainty currently influencing policy decisions:

Optimistic scenario: If trade tensions are resolved diplomatically and tariffs are removed through negotiations, Canada would likely face a temporary slowdown in growth. Under this outlook, inflation could dip to 1.5% before gradually returning to the central bank’s 2% target.

Pessimistic scenario: In the event of a prolonged trade war, Canada could slip into a more severe economic recession, with inflation peaking above 3% by mid-2026 before eventually stabilizing.

In light of these contrasting possibilities, the BoC chose to hold its key interest rate steady at 2.75%, breaking a streak of seven consecutive rate cuts that began in June 2024. The decision underscores the bank’s intention to pause and evaluate unfolding developments before committing to a new policy path.

BoC Governor Tiff Macklem emphasized this stance during the press conference, stating, “We will proceed with caution and provide fewer forward-looking signals than usual until there is greater clarity.” He further noted that recent data point to a marked slowdown in business investment and household spending, largely attributed to the lingering effects of U.S.-imposed retaliatory tariffs.

Meanwhile, on the other side of the globe, the Reserve Bank of Australia (RBA) continues to tread carefully as well. The minutes from the RBA's March 31–April 1 meeting reveal a similarly uncertain outlook regarding the timing of the next interest rate move. While the May meeting was highlighted as a potential opportunity for policy review, the Board was quick to clarify that no decisions have been preemptively made.

The RBA emphasized that both upside and downside risks remain relevant for Australia’s economy and inflation path. This balanced view is supported by recent mixed data. The unemployment rate rose slightly to 4.1% in March, just below the 4.2% market expectation. However, the employment change figure of 32.2K came in below the 40K consensus, hinting at a possible loss of momentum in job creation.

Furthermore, the Westpac Leading Index—a key indicator of short- to medium-term economic trends—slowed to 0.6% in March from 0.9% in February. This decline highlights the fragile state of the Australian economy and supports the RBA’s deliberate, data-dependent policy stance. Bearish Momentum Could Regain Control as RSI Diverges_1

Bearish Momentum Could Regain Control as RSI Diverges_1

Technical Analysis

The AUDCAD pair has rebounded significantly from its recent local low of 0.8438, reaching a short-term peak of 0.8880 on April 15. This level represents a notable resistance zone, previously acting as support and now being tested from the other side. The transition from support to resistance suggests the potential for a trend reversal, particularly if price action confirms a rejection from this zone.

Adding to the confluence, the 100- and 200-period moving averages sit just above the current level at 0.8929 and 0.8965, respectively. This leaves a 30–40 pip buffer zone for price to make a limited upside attempt before encountering heavier resistance.

One key technical signal pointing to a potential bearish shift is the bearish RSI divergence. While price has failed to post a new high relative to the previous swing, the RSI has climbed to a fresh local peak, suggesting weakening bullish momentum. This type of divergence often precedes a trend reversal or at least a corrective move, especially when combined with strong resistance levels.

If the RSI divergence plays out and price begins to roll over, a resumption of bearish momentum could emerge, with downside targets aligned with previous support zones or near-term moving averages.

Trading Recommendations

Trading direction: Sell

Entry price: 0.8850

Target price: 0.8575

Stop loss: 0.8970

Validity: Apr 28, 2025 15:00:00

Risk Warnings and Disclaimers

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Manuel

Forex

Central Bank

Summary:

Despite this pullback, the pair has been unable to establish new lows, indicating that selling momentum may be waning.

BUY EURAUD

Close Time

CLOSED

1.78666

Entry Price

1.84200

1.73500

1.76437 +0.00319 +0.18%

7.2

Pips

Profit

1.73500

1.78738

Exit Price

1.78666

Entry Price

1.84200

The minutes from the Reserve Bank of Australia's (RBA) March 31–April 1 meeting reflected ongoing uncertainty about the timing of the next interest rate adjustment. While the Board viewed the upcoming May meeting as a logical juncture to reassess monetary policy, officials were careful to emphasize that no decisions had been made in advance. The statement noted that both upside and downside risks remain in play for the Australian economy and the inflation trajectory, suggesting that policy decisions will remain finely balanced in the months ahead.

Labor market figures also offered a mixed view. Australia’s unemployment rate inched up to 4.1% in March, slightly better than market expectations of 4.2%, yet still indicative of some slack in the job market. Meanwhile, the change in employment came in at 32.2K, falling short of the 40K consensus forecast, signaling a possible cooling in hiring momentum.

Adding to the cautious tone, the Westpac Leading Index, which provides insight into the likely direction of economic growth over the next three to nine months, slowed to 0.6% in March, down from 0.9% in February. This deceleration highlights the fragile nature of Australia’s current economic outlook and reinforces the RBA’s measured approach.

At the same time, the European Central Bank (ECB) has now carried out six straight rate cuts—marking its seventh since beginning its easing cycle last June. With eurozone inflation gradually trending toward the ECB’s 2% target, market participants have increasingly anticipated further policy accommodation. Concerns about external shocks and a weakening global economy have only strengthened the case for continued monetary stimulus.

In its latest statement, the ECB acknowledged that disinflation remains well on track, but stopped short of committing to a predetermined interest rate path. Instead, the central bank reaffirmed its cautious, data-driven stance, committing to a meeting-by-meeting evaluation amid what it described as “exceptional uncertainty.” This uncertainty, according to ECB officials, is closely tied to former U.S. President Donald Trump’s shifting trade policies.

ECB President Christine Lagarde added during her press conference that rising global trade tensions are likely to drag on eurozone growth by hampering exports—one of the bloc’s most important economic drivers. Her remarks signaled an elevated level of concern regarding the region’s vulnerability to global headwinds.

Additional insight came from Governing Council member François Villeroy de Galhau, who noted that inflationary risks linked to trade disputes appear limited and may even lean to the downside. Meanwhile, fellow ECB policymaker Madis Müller explained that the latest 25-basis-point rate cut was primarily driven by falling energy costs and increasing tariff pressure. Müller emphasized that interest rates no longer pose a drag on eurozone activity and observed that key economic indicators are gradually moving in a more favorable direction. However, he cautioned that a more fragmented global economy could still add upward pressure on prices over time. A Fresh Bullish Wave May Be Brewing from the Pullback_1

A Fresh Bullish Wave May Be Brewing from the Pullback_1

Technical Analysis

EURAUD peaked at a local high of 1.8557 on April 9 before entering a corrective phase that found a floor around 1.7384. Despite this pullback, the pair has been unable to establish new lows, indicating that selling momentum may be waning. This opens the door for a potential bullish rebound, especially as the price is now testing the 100-period moving average, which sits near 1.7748 on the 4-hour chart. The pair has previously found upward momentum from this dynamic support level, and if the zone continues to hold over the coming sessions, we could see another leg higher toward 1.8427.

The Relative Strength Index (RSI) recently dipped to a local low of 39. While this is not technically in oversold territory, it’s worth noting that during strong uptrends—like the one EURAUD experienced recently—RSI often reverses from higher levels. This suggests that bullish momentum could resume at any moment.

Should the pair break below the 100-period moving average, however, attention will shift to the 200-period moving average, which aligns closely with key support around 1.7384. This would mark the next important area for a potential bullish defense or a deeper retracement if breached.

Trading Recommendations

Trading direction: Buy

Entry price: 1.7867

Target price: 1.8420

Stop loss: 1.7350

Validity: Apr 28, 2025 15:00:00

Risk Warnings and Disclaimers

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Manuel

Forex

Central Bank

Summary:

The key support level to monitor lies near 1.5852. If this area remains intact, the pair could bounce higher, resuming its bullish trajectory.

SELL EURCAD

Close Time

CLOSED

1.58520

Entry Price

1.55860

1.59700

1.61650 +0.00031 +0.02%

52.5

Pips

Profit

1.55860

1.57995

Exit Price

1.58520

Entry Price

1.59700

The European Central Bank (ECB) has now implemented six consecutive interest rate cuts—its seventh since launching an easing cycle in June. Market expectations had strongly leaned toward further monetary accommodation, as eurozone inflation appears to be steadily approaching the ECB’s 2% target by the end of the year. Meanwhile, concerns over external shocks to an already fragile economy have further reinforced the case for continued stimulus.

In its policy statement, the ECB acknowledged that the disinflationary trend remains well underway, but refrained from outlining any preset interest rate path. Instead, it reiterated a cautious, data-driven, and meeting-by-meeting approach, citing “exceptional uncertainty”—a term the ECB has linked directly to former U.S. President Donald Trump’s evolving tariff policies.

During the post-decision press conference, ECB President Christine Lagarde highlighted how the sharp escalation in global trade tensions is likely to hinder euro area growth, particularly by weighing on exports. Her remarks underscored the central bank’s growing concern over international headwinds.

Further commentary came from ECB Governing Council member François Villeroy de Galhau, who said the inflation risk arising from trade tensions seems limited for now and may even tilt to the downside. Meanwhile, policymaker Madis Müller attributed the latest 25-basis-point rate cut to falling energy prices and rising tariff pressures. He also emphasized that monetary policy is no longer restraining economic activity in the eurozone, with key indicators now moving in a more favorable direction—though a more fragmented global economy could ultimately push prices higher.

At the same time, the Bank of Canada (BoC) has shifted its stance from a “moderate” outlook to a more cautious “wait-and-see” position, as policymakers assess the impact of evolving U.S. trade policies under former President Donald Trump.

“We will proceed with caution and provide fewer forward-looking signals than usual until there is greater clarity,” stated BoC Governor Tiff Macklem.

He noted that recent data increasingly point toward a notable slowdown in business investment and household spending, largely driven by continued uncertainty around U.S.-imposed retaliatory tariffs. A Pullback Toward the Trendline Could Trigger a Bearish Setup_1

A Pullback Toward the Trendline Could Trigger a Bearish Setup_1

Technical Analysis

On the 4-hour timeframe, EURCAD remains in a sustained uptrend, with price consistently finding support upon retracing to the 200-period moving average. This moving average currently aligns with an ascending trendline, further increasing the technical significance of that region. A correction toward this confluence zone could present either a new opportunity for bulls to reload or a potential break lower should support fail to hold.

The key support level to monitor lies near 1.5852. If this area remains intact, the pair could bounce higher, resuming its bullish trajectory. On the other hand, a firm breakdown below this level could signal a shift in market sentiment, leading to further downside movement.

Both the 100-period and 200-period moving averages—currently positioned around 1.5615 and 1.5585, respectively—align closely with horizontal support at 1.5586, which could serve as the next key downside target. A move into this zone might attract buyers once again, especially if oversold conditions begin to emerge.

Alternatively, a decisive breakout above recent highs would confirm a new local higher high, potentially accelerating bullish momentum and opening the door to further upside extension.

Trading Recommendations

Trading direction: Sell

Entry price: 1.5852

Target price: 1.5586

Stop loss: 1.5970

Validity: Apr 28, 2025 15:00:00

Risk Warnings and Disclaimers

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