6 – 12 April 2026
The week of April 6–10, 2026 was defined by a sharp reassertion of USD strength following the White House’s confirmation of broad-based tariff escalation, driving the DXY materially higher across the board. EUR/USD opened the week at 1.1558 and extended losses as the ECB signalled it remains on track to cut rates toward 2.00%, while the FOMC held the federal funds rate at 3.75–4.00% with no near-term easing signal. USD/JPY pushed deeper into intervention-watch territory above 150, with the yen pressured by a widening US–Japan rate differential and rising energy import costs. AUD/USD found partial support from resilient Chinese trade data but could not withstand the broad dollar bid, finishing the week modestly lower.
EUR/USD Spot Rate: 1.1382
▼ -1.52% 🔴 Outlook: Bearish | Support: 1.1250 · Resistance: 1.1500
Week in Review
EUR/USD opened Monday at 1.1558 before a relentless dollar bid drove the pair to a weekly low of 1.1348 on Thursday, recovering marginally into the Friday close at 1.1382. The move was the largest single-week decline in EUR/USD since late February, erasing the pair’s brief recovery above 1.15. Bearish pressure was compounded by ECB officials reaffirming a rate cut to 2.00% at the upcoming meeting, widening the EUR–USD rate differential further in the dollar’s favour.
Key Drivers: ECB on track to cut deposit rate to 2.00%, reinforcing EUR-negative rate divergence versus the Fed hold at 3.75–4.00% · US tariff escalation triggered broad risk-off USD demand as safe-haven flows dominated mid-week · Flash Eurozone composite PMI input prices surged in March, stoking stagflation concerns that limit ECB flexibility
Forward Outlook
EUR/USD faces a challenging technical and fundamental setup heading into the week of April 13, with the pair now below the 1.1400 handle and momentum indicators pointing lower. The next key ECB meeting and any US–EU trade negotiation headlines will be the primary binary risk events. A confirmed ECB cut would likely push the pair toward 1.1250; any signs of US tariff de-escalation could trigger a sharp short-covering bounce toward 1.1500.
GBP/USD Spot Rate: 1.3041
▼ -1.18% 🔵 Outlook: Neutral | Support: 1.3000 · Resistance: 1.3200
Week in Review
Cable sold off in sympathy with the broader dollar rally, declining from an opening level near 1.3197 to close the week at 1.3041. The Bank of England’s continued reluctance to cut rates provided a relative cushion versus EUR/USD, limiting the pound’s weekly loss to sub-1.2%. UK GDP data released Friday showed only a marginal improvement in monthly growth, in line with expectations, which prevented a further breakdown.
Key Drivers: Broad USD strength from tariff escalation drove Cable lower despite BoE’s hawkish hold stance · Bank of England expected to keep rates unchanged, providing relative support versus EUR · UK monthly GDP print met expectations but failed to provide an upside catalyst for sterling
Forward Outlook
GBP/USD retains a relative outperformance bias within the G10 space given the BoE–ECB policy divergence, but is not immune to sustained USD strength. The pair is holding above the 1.3000 psychological floor which remains critical. A break below 1.3000 would open a move toward 1.2850; a weaker US CPI print next week could send GBP/USD back toward 1.3200.
USD/JPY Spot Rate: 151.84
▲ +1.37% 🔵 Outlook: Neutral | Support: 148.50 · Resistance: 153.50
Week in Review
USD/JPY surged from 149.74 at Monday’s open to a weekly high of 152.20 on Thursday as the tariff-driven risk-off environment paradoxically benefited the dollar over the yen, with US–Japan yield differentials remaining wide. The pair closed Friday at 151.84, firmly back in the zone that has historically prompted verbal warnings from Japan’s Ministry of Finance. BoJ commentary remained cautious, with officials reiterating gradualism on further rate normalisation amid global trade uncertainty.
Key Drivers: Persistent US–Japan interest rate differential continues to weigh on the yen despite BoJ tightening trajectory · Rising energy import costs from geopolitical tensions widening Japan’s trade deficit, pressuring JPY · Risk-off tariff shock paradoxically boosted USD more than JPY as dollar liquidity demand dominated
Forward Outlook
USD/JPY is approaching the 152–153 range where Japanese Ministry of Finance intervention risk rises materially; the 160.00 level remains the ultimate line in the sand for Tokyo. If the BoJ signals urgency on further hikes, USD/JPY could retrace sharply toward 148.00. Absent intervention or a dovish Fed pivot, the path of least resistance remains modestly higher.
AUD/USD Spot Rate: 0.6187
▼ -0.98% 🔴 Outlook: Bearish | Support: 0.6150 · Resistance: 0.6300
Week in Review
AUD/USD retreated from 0.6248 at the Monday open, pressured by the USD tariff-driven rally, but outperformed most G10 peers thanks to supportive Chinese economic data including a solid trade balance print and improving manufacturing PMI readings. The pair found bids near 0.6160 mid-week before recovering to close at 0.6187. Australia’s commodity export exposure to China remains a key structural support but was insufficient to offset the broad dollar bid this week.
Key Drivers: Broad USD strength from US tariff announcements drove AUD/USD lower despite resilient China macro data · Chinese trade balance and manufacturing PMI data beat expectations, limiting AUD downside · RBA rate path uncertainty, with markets reassessing the pace of any further easing, capped AUD losses
Forward Outlook
AUD/USD remains sensitive to the US–China trade policy narrative; any escalation in tariffs targeting Chinese goods would disproportionately weigh on the Australian dollar given its terms-of-trade linkage. Technically the pair is holding above 0.6150 support; a break would expose 0.6000. Stabilisation in Chinese risk appetite and commodity prices could support a recovery toward 0.6300.
EUR/GBP Spot Rate: 0.8728
▼ -0.29% 🔴 Outlook: Bearish | Support: 0.8650 · Resistance: 0.8820
Week in Review
EUR/GBP drifted modestly lower across the week, reflecting the well-established BoE–ECB policy divergence that continues to favour sterling on the cross. The pair traded in a tight 0.8710–0.8775 range with limited volatility as both currencies were primarily driven by their respective USD dynamics rather than intra-European factors. The ECB’s commitment to cutting rates toward 2.00% while the BoE holds steady remains the dominant structural force on this cross.
Key Drivers: ECB expected to cut rates to 2.00% versus BoE on hold, maintaining sterling’s yield advantage over the euro · Lack of major UK-specific data surprises kept EUR/GBP in a contained range through the week · Cross flows from USD-driven G10 moves provided limited directional impetus on the pair
Forward Outlook
EUR/GBP is biased lower in the near term as long as the BoE–ECB rate gap widens. The next ECB decision is the key event risk; a 25bp cut as expected could push the cross toward 0.8650. Upside risk would come from a sharper-than-expected UK economic deterioration or hawkish ECB surprise, which appears unlikely given current inflation and growth dynamics.
⚠️ Risk Events — Next Week
| Event | Date | Impact | Affected |
|---|---|---|---|
| ECB Interest Rate Decision | 2026-04-17 | high | EUR, GBP, EUR/GBP, EUR/USD |
| US CPI Inflation Data (March) | 2026-04-14 | high | USD, EUR/USD, GBP/USD, USD/JPY, AUD/USD |
| Bank of Japan Policy Meeting Minutes | 2026-04-14 | medium | JPY, USD/JPY |
| UK Employment and Wage Data | 2026-04-15 | medium | GBP, EUR/GBP, GBP/USD |
| China Q1 GDP and Retail Sales | 2026-04-16 | high | AUD, CNH, AUD/USD |
| US Retail Sales (March) | 2026-04-16 | medium | USD, EUR/USD, GBP/USD |
Analyst Note
The week of April 6–10 confirmed a regime shift back toward USD dominance driven by tariff-shock risk aversion and the FOMC’s unambiguous hold at 3.75–4.00%, with EUR/USD losing over 150 pips from its Monday open of 1.1558. The ECB–BoE policy divergence continues to be the most reliable structural trade in G10 FX, keeping EUR/GBP biased lower and GBP/USD relatively more resilient than cable bears anticipated. Traders should treat USD/JPY levels above 152.00 with caution given elevated Japanese Ministry of Finance intervention risk, as history shows verbal and direct action can trigger 300–500 pip reversals within days.
This report is for informational purposes only and does not constitute financial advice. Published by Elven Financial Research.