Forex Market Forecast for April 2023

Nick Ranga

Forex Market Forecast for April 2023

Uncertainty in the banking sector following the collapse of SVB has been the main talking point in markets in recent weeks. The focus now is on if it will push central banks to halt interest rate hikes. As of yet, the ECB, BoE, and Federal Reserve are continuing to raise rates to combat sticky inflation.

  • Could more uncertainty lead to a pause in the current hikes? Possibly, but given inflation (especially in the UK) remains elevated, we aren’t so sure.
  • The surprise inflation data from the UK in the most recent reading probably means the country will have to continue to increase interest rates. However, the BoE said in its statement that it expects inflation to fade this year, which suggests they expect to slow down hikes further after a 25bps increase.
  • While in the US, the rate of inflation is falling, it is still elevated. Chair Jerome Powell said that if the totality of the data were to indicate that faster tightening is warranted, they “would be prepared to increase the pace of rate hikes,” which would boost the dollar and impact equity markets.

US Dollar

Following a solid performance in February, the US dollar retreated again against most other major currencies in March, with the DXY currently around 102.64. There has been a lot of talk surrounding China and some other countries settling oil trades in currencies other than the dollar, fuelling talk that its status as the world reserve currency is coming to an end. However, be aware that there is more to it.

Those countries will probably convert the currency they receive into dollars due to its safe status. Even so, demand for the dollar could still be impacted. In addition, if the current risk-on sentiment continues, then the US dollar will lose more ground against its counterparts. Given the current macroeconomic environment and technical setup of the USD against other currencies, we see it continuing to weaken in April.

Key Levels

  • EURUSD: Higher – 1.1140, Lower – 1.0515
  • GBPUSD: Higher -1.2602, Lower – 1.1807
  • USDJPY: Higher – 137.30, Lower – 127.00


Inflation in the Euro area is creeping lower. Still, the ECB raised rates at its latest meeting, with ECB President Christine Lagarde stating that interest-rate increases may need to continue beyond March. This has helped push the euro higher in March, and given the current environment, the climb may continue into April. Furthermore, a Nordea Markets analyst recently stated they expect the ECB to deliver several further rate hikes in upcoming meetings. So while uncertainty is still a factor to watch out for, the current direction for April suggests higher, although, as we have seen in recent weeks, sentiment can instantly turn.

Key Levels

  • EURUSD: Higher – 1.1140, Lower – 1.0515
  • EURGBP: Higher – 0.8960, Lower – 0.8680

British Pound

While the EU and US have seen inflation continue to edge lower, the UK reading is in the double digits after rising unexpectedly. However, the BoE only raised by 25bps in its latest meeting and said they believe inflation will begin to fall. If sticky inflation persists, expect hikes to continue and the GBP to rise. Recent news surrounding a deal with the EU on Northern Ireland trade and reports that the UK has been accepted into the CPTPP should help give the pound a lift.

Key Levels

  • EURGBP: Higher – 0.8960, Lower – 0.8680
  • GBPUSD: Higher – 1.2602, Lower – 1.1807

Japanese Yen

The Bank of Japan’s Governor will change in April, with Kazuo Ueda set to take the helm. The BoJ has kept rates at 0 for an extremely prolonged period. Still, with inflation reaching a four-decade high of 4.2%, many believe the incoming governor will raise rates, marking a significant change away from the previous policy. In the last week or so, the Japanese yen has weakened as the market environment shifted to risk on. However, if the BoJ finally increases interest rates, a yen jump is expected. We will be watching for comments surrounding the topic.

Key Levels

  • USDJPY: Higher -137.30, Lower – 127.00
  • EURJPY: Higher – 146.74, Lower – 139.00

People Also Read:


Trade EURUSD with our top brokers

Broker Features Regulator Platforms Next Step
Number One Broker tickmill_logo-173% of retail CFD accounts lose money Founded: 2014
73% of retail C...
  • Well regulated
  • Ultra-fast and high leverage trading
  • Spreads as low as 0.0 pips
  • Comprehensive research tools
  • Relatively limited number of markets
  • Does not accept US traders
Blackbull LogoYour capital is at risk Founded: 2014
  • User-friendly platform with great trade-analysis tools
  • Leverage Up To 1:500
  • Spreads as low as 0.00 pips
  • Quality trade execution thanks to high-spec IT infrastructure
  • $0 minimum account opening balance
  • 26,000 tradeable instruments
  • Not available in all jurisdictions
  • Regulatory infrastructure
Your capital is at risk Founded: 2006
Europe* CFDs ar...
  • Multi-asset broker offering a wide variety of markets
  • Strong regulatory framework
  • Innovative risk management tools
  • Choice of market-leading platforms
  • Wide spreads on some markets
  • Expiry date on Demo Accounts
ASIC, FSA, FSB, MiFID MetaTrader4, Sirix, AvaOptions, AvaTrader, Mirror Trader
Between 74-89% of CFD traders lose Founded: 2010
Between 74-89 % of retail investor accounts lose money when trading CFDs
  • Low trading costs
  • Great market flow
  • Research and analysis which helps spot trades
  • Wide range of Copy and Social Trading options
  • Limited range of non-forex markets
ASIC, FCA MetaTrader 4, MetaTrader 5, cTrader
eToro Logo77% of CFD traders lose Founded: 2007
77 % of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
  • Social and Copy Trading Platform
  • Beginner Friendly
  • Risk-free Demo Account
  • Top-tier regulation
  • Limited means of raising queries
  • Withdrawal process isn’t really ‘client-focused’
ASIC, CySEC, FCA eToro Platform
XM LogoYour capital is at risk Founded: 2009, 2015, 2017
  • Low minimum deposit
  • Super- tight bid-offer spreads
  • Impressive trading platforms
  • Tier-1 regulators
  • Difficult to contact tech support
  • No Crypto
ASIC, CySEC, IFSC MT4 Terminal, MT4 for Mac, Web Trader, iPhone/iPad Trader, Droid Trader, Mobile Trader, MT5
FxPro LogoYour capital is at risk Founded: 2006
  • Very well regulated
  • Comprehensive education section
  • Fantastic customer service
  • No cryptocurrencies
  • Fees could be more competetive
CySEC, DFSA, FCA, FSB, SIA MetaTrader4, MetaTrader5, cTrader, FxPro Edge (Beta)

    Risk Statement: Trading Foreign Exchange on margin carries a high level of risk and may not be suitable for all investors. The possibility exists that you could lose more than your initial deposit. The high degree of leverage can work against you as well as for you.

    Nick Ranga logo74% of clients lose money. Capital at risk.

    - Trusted Global Market Leader
    - Online FX & CFD Trading
    - 180+  Global Markets, 84 FX pairs, 65 shares, 17 popular indices and more
    - Forex, Indices, Commodities, Equities & Bitcoin
    - Available to US traders

    Oanda Logo77% of retail CFD accounts lose money Your capital is...
    • Choose from four high-quality platforms.
    • Good trading conditions with fast execution speeds
    • Excellent research and analysis
    • Strong client protection
    • Winner of Most Popular Broker award for three consecutive years.
    • Fees and commissions are inline rather than market-leading.
    • Satisfactory rather than impressive range of instruments.
    eToro LogoYour capital is at risk

    - Trade 15 cryptocurrencies
    - Beginner friendly