Client Portal
  1. FX Outlook
  2. Daily FX Report

Daily FX Report

Read disclaimer

Back to reports

Authors
Daria Efanova

Daria Efanova Head of Research

Contact research

Labour & PMI Data Releases Set to Steer Market Momentum

EUR / USD - The Pair Eyes Key Breakout

EUR/USD experienced a moderate upward momentum during the day, primarily driven by weaker-than-expected US job opening data, which has led to a pullback in the US dollar. This has provided support for the euro as it approaches the 1.0400 level, although markets remain cautious. A successful break above this level could see the euro targeting resistance levels at 1.04192 and potentially 1.04659, while failure to maintain its position could lead to downward pressure towards support levels at 1.02711 and 1.02109.

The ongoing uncertainty regarding the US's implementation of tariffs on various economies, including the European Union, is weighing on the EUR/USD prospects. Moreover, the prevailing divergence between the ECB and the Fed's monetary policy path presents challenges for the pair to rise significantly in the long term. Although recent inflation data from the eurozone surprised the markets, it was insufficient to shift attention away from the ECB's dovish stance for 2025, as economic growth prospects remain the main concern.

From the technical standpoint, resistance levels at 1.0400 and the 50 DMA at 1.0416 are robust. Today's US labour and PMI releases are crucial for guiding the dollar. Specifically, the market expects the ADP figures to increase from 122,000 to 150,000 in January, indicating a strengthening labour market. Any results that deviate from market expectations could introduce volatility for the pair and are essential for assessing the dollar's outlook today.

Overall, we expect resistance at the 50 DMA to remain robust in the meantime, capping EUR/USD gains. 

USD / JPY - Testing Key Support Levels

USD/JPY weakened slightly during the day, nearing a strong support level of 153.50, which has been resilient in recent days.  Recent US economic data, particularly the weaker-than-expected JOLTs Job Openings report, has led to a pullback in the US dollar, weakening the pair. Despite this, the interest rate differential continues to support the US dollar against the yen over the longer term, suggesting that buying on dips remains a viable strategy.

Geopolitical factors, including the upcoming meeting between Japanese Prime Minister Shigeru Ishiba and US President Donald Trump, could influence the USD/JPY pair, although significant changes in trade relations are not anticipated. Additionally, foreign investment activities in Japan, such as KKR's tender offer for Fuji Soft, could impact the yen's valuation and, consequently, the USD/JPY rate. Markets will monitor these events to help gauge the outlook for USD/JPY.

From a technical standpoint, USD/JPY faces resistance near the 50-day moving average at 155.01, capping potential gains unless there is a strong fundamental trigger. Meanwhile, the 200-day moving average at 152.81 provides a significant support level. Overall, USD/JPY is expected to continue experiencing choppy volatility, remaining mostly rangebound.

GBP / USD - Cautiously Optimistic Despite BOE's Dovishness

GBPUSD edged higher yesterday, primarily due to the weakness of the US dollar, which has been affected by disappointing economic data such as the JOLTs Job Openings report. This has led the pair to test resistance levels around 1.2485 to 1.2500. The broader market sentiment is also influenced by geopolitical developments, including recent tariff announcements and subsequent delays, adding volatility to the GBPUSD during the day.

The upcoming Bank of England meeting is a significant focus, with expectations of a 25-basis-point rate cut aimed at addressing sluggish inflation and supporting economic growth in the UK. Despite this, the British pound has shown resilience, partly due to hopes of avoiding new trade tariffs. 
Technical analysis indicates a rising bullish sentiment, particularly evident from the increasing lower shadow of the candle, which suggests that the market is rejecting prices below the 1.2400 level. However, for a positive outlook on the pair, the resistance at 1.2505 must be breached first.

Overall, the outlook for GBP/USD remains cautiously optimistic, contingent on upcoming economic data and the BOE's decision. 

Economic Calendar

05022025

Contents

Disclaimer

This is a marketing communication. The information in this report is provided solely for informational purposes and should not be regarded as a recommendation to buy, sell or otherwise deal in any particular investment. Please be aware that, where any views have been expressed in this report, the author of this report may have had many, varied views over the past 12 months, including contrary views.

This report was prepared with the assistance of artificial intelligence.

A large number of views are being generated at all times and these may change quickly. Any valuations or underlying assumptions made are solely based upon the author’s market knowledge and experience.

Please contact the author should you require a copy of any previous reports for comparative purposes. Furthermore, the information in this report has not been prepared in accordance with legal requirements designed to promote the independence of investment research. All information in this report is obtained from sources believed to be reliable and we make no representation as to its completeness or accuracy.

This report is not subject to any prohibition on dealing ahead of the dissemination of investment research. Accordingly, the information may have been acted upon by us for our own purposes and has not been procured for the exclusive benefit of customers. Sucden Financial believes that the information contained within this report is already in the public domain. Private customers should not invest in these products unless they are satisfied that the products are suitable for them and they have sought professional advice. Please read our full risk warnings and disclaimers.

Sign up to get the latest market insights

We will email you each time a new report has been published.

You might also be interested in...

FX

The EURUSD pair has been under significant selling pressure in recent weeks, driven by an increasingly divergent economic trajectory between the European and US economies. This divergence, compounded by growing political and fiscal uncertainties, is creating additional challenges for central banks in both regions as they grapple with the fast-changing economic environment. With budget issues in France and Germany, along with Trump assuming office in January, what is the outlook for EUR/USD in the coming months?
FX Monthly Report - Euro Focus
Metals

As we enter Q4 2024, several trends from the previous quarter continue to persist. The central banks began their interest rate cutting cycles, with the Fed initiating a 50bps cut at its first meeting. The ECB is on a similar path, but it is facing strong pressures to cut due to the weakening performance of the Eurozone, which is creating a larger yield differential compared to the US. In China, authorities are aiming to stimulate the economy through fiscal and monetary policy measures; however, they are struggling to restore market confidence, particularly in the construction sector. These factors, combined with the upcoming US elections in November, create a strong likelihood of increased volatility. In this report, we will examine the potential trajectories for base, ferrous, and precious metals in the final months of the year.
Quarterly Metals Report
Coffee Fields Beat The Heat W

Brazil remains a dominant player in the coffee market, with farmers leveraging high domestic prices to maintain strategic selling practices despite wider dollar-based discounts. Nonetheless, challenging weather conditions throughout the growing season are casting a shadow over Brazil's coffee prospects. Understanding these dynamics is essential for making informed decisions as we move forward. Read our coffee crop update, with commentary on recent price activity, and coffee market forecasts to take advantage of market movements. 
Coffee Crop Update - Beat the Heat
UK Economy Outlook 2025

UK Economy - 2025 Outlook
Electric Vehicles Report Image 2024

This report provides a comprehensive analysis of the EV market, with a particular focus being on supply chain analysis through mining, battery cell production, and sales of EVs. Additionally, we examine the implications of EV-specific tariffs, assessing their impact on cross-border trade, manufacturing costs, and company competitiveness.
Electric Vehicle and Battery Material Report - December 2024
Back to top

Subscribe

Select all the reports you wish to sign up for and submit your details below

Thank you for subscribing.

You should receive a confirmation email shortly. Please check your spam /junk mail folder if not received within a few minutes.

Do not forget to click the link in the confirmation message, otherwise, you will not receive any of our future emails.

This field is required
This field is required
This field is required
This field is required

Please note that we cannot email subscribers in the European Economic Area (EEA) or Switzerland, except for journalists.

(Please note that we cannot email subscribers in the European Economic Area (EEA) or Switzerland, except for journalists.)
You must agree to our terms and conditions before submitting the form
* Mandatory fields