Welcome to Vestrado’s weekly analysis. This article is written to help you understand the latest market movements in major currencies and commodities. Whether you’re new to forex market or already trading, this guide is clear, practical, and helpful — made especially for Vestrado users like you.
Fundamental Analysis
Australian Dollar (AUD)
Two key factors influence AUD movements this week:
- US Dollar Index Correlation
The AUD has a strong 30-day correlation with the US Dollar Index, currently around 0.75. This is the highest since mid-2024 and nearly double the level at the end of January. - AUD-CAD Correlation
AUD also shows a consistent correlation with the Canadian dollar, between 0.65 and 0.85 over the past four months. This reflects similar responses to commodity prices and global risk sentiment.
AUD is closely tied to the US dollar and Canadian dollar. If you’re trading AUD, track both the USD and CAD for better timing and market direction.
Japanese Yen (JPY)
JPY tends to move with US bond yields, especially the 10-year yield.
- The Bank of Japan (BOJ) is tightening slowly.
- The US Fed is pausing its easing cycle.
- The correlation between JPY and the 10-year US yield is stronger than that with the 2-year spread.
The JPY weakens when US 10-year yields rise. Keep an eye on US bond movements when trading JPY.
Euro (EUR)
The euro is facing several headwinds:
- Trade War Impact
Although uneven, the trade war still puts pressure on the eurozone economy. - Capital Outflows
After a record year of investment in US equities by Europeans, capital is now flowing out. This reduces support for the euro.
Watch for continued outflows from US assets and risk of slower eurozone growth. EUR may remain under pressure short-term.
British Pound (GBP)
GBP is reacting more to changes in the US 2-year yield than to its domestic Gilt rates.
- For 2.5 years, GBP had a negative correlation with the US 2-year yield.
- Recently, this shifted to a strong inverse correlation near -0.88.
GBP is strongly influenced by US yield movements. The stronger the dollar, the weaker the pound tends to be.
Canadian Dollar (CAD)
CAD is becoming more sensitive to US interest rate expectations and global risk appetite.
- The 30-day inverse correlation with US 2-year yields reached -0.50 at the end of March — the most inverse since early 2020.
- CAD’s link to risk sentiment (S&P 500) has weakened, now near 0.10, compared to 0.50 late last year.
CAD is tracking both yield trends and investor risk appetite. When confidence is low, CAD may weaken even without oil price drops.
US Dollar (USD)
The USD is driven by macro forces, mainly the trade war and political strategy.
- Trade War Uncertainty
The market is caught between fears of higher prices and weaker economic growth. Most participants are more worried about growth. - White House Strategy
The shift in focus from stock markets to bond yields may reflect a plan that accepts short-term economic disruption for long-term goals.
Two big questions remain:
- Are the tariffs a negotiation tactic or part of a long-term onshoring strategy?
- Will sharp stock market drops cause the Fed to cut rates again — the so-called “Fed Put”?
The USD is strong, but vulnerable to sudden shifts. Watch out for unexpected Fed responses or new trade developments.
Technical Analysis
USD/JPY H4 Technical Outlook
The pair is showing signs of a bullish retracement after a recent strong decline.
Key Levels:
- Resistance: 146.900
Price may retrace up to this level before resuming the dominant downtrend. - Support: 144.900
If bearish momentum continues, price may drop back to this support area.
Trading Strategy:
- Watch for rejection or breakout around 146.900 for potential short entries.
- Monitor 144.900 for possible bounce or breakdown to determine new trend direction.
Trend Bias:
Bearish unless the price breaks and closes above the 146.900 resistance.
XAU/USD (Gold) H4 Technical Outlook
Gold is currently in a pullback phase after reaching a recent high.
Key Levels:
- Support: 3020.00
A retracement toward this zone could offer a buying opportunity if price shows signs of reversal. - Resistance: 3090.00
This is a key area to watch for bearish pressure or trend continuation.
Trading Strategy:
- Look for long setups near 3020.00 if bullish confirmation appears.
- Consider short positions if price fails to break above 3090.00.
Trend Bias:
Bullish unless price breaks and closes below the 3020.00 support level.
What You Should Focus On This Week
Volatility is still high, and major currencies are moving based on bond yields, US policy, and global risk sentiment. For traders on Vestrado, this week presents a mix of opportunity and risk.
- AUD and CAD are reacting to the US dollar and global risk.
- JPY and GBP are closely tied to US bond yields.
- EUR is sensitive to capital flows and recovery expectations.
- Gold remains in an uptrend unless support breaks.
Understanding these moves will help you plan your trades better and reduce guesswork.
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Stay tuned for next week’s update. Trade safe, trade smart, trade with Vestrado.
