USD/JPY Technical Analysis

The US dollar has skyrocketed against the Japanese yen, although it does seem to be finding a little bit of trouble around the 148 yen level. But nonetheless, remember, people get paid to hold this currency pair. So not only were we forming a bottoming pattern around the 140 yen level, but you were collecting swap along the way. Now that some of the trade tensions seem to be disappearing, it makes perfect sense that this pair would rally.

This pair does tend to rally with risk appetite and risk appetite, according to the stock markets at least, which has gone through the ceiling during the trading session. So, I expect an attempt to get back to the 200 day EMA before it’s all said and done, with the occasional pullback offering buying opportunities.

AUD/USD Technical Analysis

The US dollar has strengthened against the Australian dollar a bit, as the Aussie initially tried to rally in celebration of perhaps Chinese growth due to the trade deal, only to turn around and fall as the US dollar has strengthened against almost everything. At this point, I’m watching the 0.635 zero level because if we break significantly below there, we are going much lower.

On the other hand, if we turn around and take out the 0.65 level to the upside on a daily close, then I think the Aussie has a chance of going all the way to 0.67 followed by 0.69. Remember though, the Australian dollar is highly levered to China, so we’ll have to see how that plays out.

For a look at all of today’s economic events, check out our economic calendar.

• Despite the strength of the US dollar against other major currencies following signals of an imminent trade agreement between China and the United States, the British Pound is showing remarkable resilience against the US dollar’s gains.
• At the beginning of trading this week, and across licensed currency trading company platforms, the GBP/USD pair is moving around the 1.3255 level at the time of writing this analysis, with its highest point being the 1.3298 resistance level.
• As is evident, the Pound is displaying strong resilience, as the trade deal between Britain and the United States will remain a positive factor for the strength of the currency pair.

Meanwhile, the GBP exchange rate is trading with positive momentum and is expected to continue its gains this week. Also, its gains come on the back of news that the United States and China have made progress towards a new trade agreement in weekend talks held in Geneva. This progress is crucial in boosting global investor confidence, which is a major driver for the British Pound. According to the latest developments, Chinese Vice Premier He Lifeng stated that the talks represent an “important first step” towards reaching a new trade agreement. He added, “Once announced, it will be good news for the world.”

Overall, the signs of progress were not expected so quickly, given the significant deterioration in relations between the United States and China following President Donald Trump’s imposition of large tariffs. Investors welcomed the progress made on Monday, which led to a rise in global stock markets amid “risk-on” trading.

Trading Tips:

We still advise buying the Pound Sterling against the US dollar from every downward level, but without risk and while monitoring the factors affecting the performance of the currency pair.

Looking at the economic calendar, the United Kingdom releases highly important wage and employment data on Tuesday, which often triggers volatility. Wages are expected to remain high, preventing the Bank of England from accelerating the pace of interest rate cuts. The Bank provided a more cautious-than-expected assessment of its performance in the May Monetary Policy Report last week, defying expectations that it might have paved the way for another interest rate cut in June.

Technical Analysis for the GBP/USD pair today:

As clearly shown on the performance of the GBP/USD currency pair on the daily timeframe chart, the situation is neutral, with a balance between bear and bull control over the direction. Despite the recent selling, the 14-day Relative Strength Index (RSI) has not reached the midline, giving hope for sustained upward movement. However, the MACD indicator for the 12.26 closing is leaning downwards. Bear control over the Sterling against the US dollar will strengthen if it moves towards the support levels of 1.3190 and 1.3080, respectively. Conversely, over the same time frame, the 1.3400 resistance will remain the most important for bulls to control and prepare for stronger upward breakouts.

Decisively, we expect the pound to remain stable against the US dollar until markets and investors react to the announcement of US inflation figures, which will impact expectations for the future policies of the US Federal Reserve.

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• At the start of the US inflation week, the upward rebound gains for the USD/JPY currency pair continue, reaching the 146.28 resistance level, the highest for the pair in a month.
• Investors abandoned buying the Japanese Yen as a safe haven, as optimism about US-China trade negotiations led to a decline in demand for safe-haven assets.
• The USD/JPY pair’s gains will face another important event during this week’s trading, with the release of the US inflation reading, which strongly influences market expectations for the future policies of the US Federal Reserve.

Over the past weekend, officials from both countries indicated progress, with US representatives praising an agreement aimed at reducing the trade deficit, while Chinese leaders described the outcome as an “important consensus.” Meanwhile, US Trade Secretary Howard Lutnick stated that the basic 10% tariff on other countries will “likely remain in place for the foreseeable future.” Investors also closely monitored the ongoing trade talks between the US and Japan, with Tokyo seeking to reach an agreement by June. Domestically, Japan recorded a current account surplus of 3.45 trillion yen in March, following a record surplus of 4.06 trillion yen in February.

Trading Tips:

Obviously, the upward shift in the USD/JPY pair requires an end to the trade dispute between the United States and global economies. Furthermore, failure to do so could lead to renewed selling of the currency pair.

Positive Investor Sentiment Lifts Japanese Stock Prices:

During today’s trading and across stock trading company platforms, the Japanese Nikkei 225 stock index rose by 0.2% to reach 37,600 points, while the broader Topix index rose by 0.4% to reach 2,744 points, marking its highest level in six weeks. This increase came as the US indicated “tangible progress” in trade negotiations with China over the weekend in Switzerland. The US highlighted its efforts to reduce its trade deficit, while Chinese leaders affirmed reaching an “important consensus.”

However, US Trade Secretary Howard Lutnick indicated that the basic 10% tariffs on other countries are expected to remain in place “for the foreseeable future.” Investors also monitored the ongoing trade negotiations between the US and Japan, with Tokyo aiming to finalize a potential agreement by June. According to trading, gains were led by the shares of major companies included in the index, including Kawasaki Heavy Industries (up 3.9%), Disco Corp (2.5%), Fujikura (1.8%), Advantest (4%), and IHI Corp (1%).

Japan’s Services Sentiment at Lowest in Over 3 Years:

According to an official announcement today, Japan’s services sector index fell to 42.6 points in April 2025, from 45.1 points in the previous month, marking its lowest level since February 2022 and the fourth consecutive month of decline. The household budget trends index in housing-related sectors decreased, but it increased in the food and beverage sector. The corporate trends index also declined, affected by the non-manufacturing sector’s decrease. Employment also saw a decline during this period. Meanwhile, the economic outlook index fell to 42.7 points in April, its lowest level in four years, from 45.2 points in March, reflecting increasing concerns about the impact of US trade policy and persistent cost pressures.

USD/JPY Technical analysis and Expectations Today:

According to recent trading, the USD/JPY pair continues to trade above the 100-hour moving average by a few levels. Last Friday’s decline helped the currency pair recover from the overbought condition of the 14-hour Relative Strength Index. In the short term, bears will target selling moves towards the support level of 145.60, then to the support of 145.00, respectively. Conversely, bulls will look to capitalize on upward rebounds with gains to the resistance level of 146.30, then to the resistance of 146.85, respectively.

In the long term, according to the performance on the daily chart, the USD/JPY pair is trading within a descending channel. However, the 14-day Relative Strength Index recently rebounded to avoid moving into oversold levels. Therefore, bulls will target extended rebounds at the resistance level of 147.50, then to the psychological resistance of 150.00, respectively. Conversely, over the same time frame, bears will seek to capitalize on the current wave of declines to move towards the support level of 143.00, then to the psychological support of 140.00, respectively.

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EUR/USD Analysis Summary Today

• Overall Trend: Within a descending channel formation.
• Today’s Euro/Dollar Support Levels: 1.1180 – 1.1100 – 1.1060.
• Today’s Euro/Dollar Resistance Levels: 1.1280 – 1.1360 -1.1400.

EUR/USD Trading Signals:

• Buy EUR/USD from the support level of 1.1130 with a target of 1.1360 and a stop-loss at 1.1050.
• Sell EUR/USD from the resistance level of 1.1340 with a target of 1.1160 and a stop-loss at 1.1410.

EUR/USD Technical Analysis Today:

A downward price gap affected the EUR/USD currency pair at the start of trading this important week, with losses extending to the 1.1183 support level, the lowest for the pair in a month, before stabilizing around the 1.1220 level at the time of writing this analysis. The Forex market was affected at the beginning of the US inflation week by signals from trade talks between China and the United States. Trump confirmed “significant progress” in US-China trade talks – but a final agreement remains uncertain.

According to the movement of technical indicators, EUR/USD trading on the daily timeframe chart indicates the formation of a reverse descending channel, and the 1.1130 support will remain important for strong and continuous bear control over the currency pair’s direction. With the recent losses, the 14-day Relative Strength Index (RSI) strongly pushed to break the midline, confirming the bearish shift. It has more room for larger losses before reaching the oversold zone. At the same time, the MACD lines confirm the downward movement, with the blue line significantly preceding the orange line.

Trading Tips:

Keep in mind that the EUR/USD trend is entering a new downward phase, which will be confirmed soon. Monitor the factors influencing the forex market to find the best trading opportunities.

The EUR/USD currency pair is not anticipating any important economic data during today’s Monday trading session, neither from the Eurozone nor the United States. Accordingly, the currency pair will move within narrow ranges until confirmation of trade agreements between global economies to avoid wider trade wars that threaten the future of global economic recovery. On the economic front, US inflation figures will remain the most prominent focus for currency traders this week.

The Future of the US/China Trade Agreement:

In this regard, US President Donald Trump enthusiastically tweeted about the recent trade discussions with China in Switzerland, describing them as “friendly but constructive” and noting “significant progress.” While this optimism from Trump can be viewed positively, leading market participants to anticipate positive outcomes for stocks and risk-sensitive currencies, investors and traders should exercise caution. On the one hand, Trump’s optimistic tone may reflect genuine achievements, which could lead to significant benefits for American companies and reduce trade tensions. If this development proves true with concrete details, it will have a significant positive impact on market sentiment. However, it can be reasonably assumed that a trade agreement has not yet been finalized, as such a crucial achievement would likely be accompanied by a definitive announcement or confirmation from other official channels.

Historically, optimistic statements from leaders – especially Trump – have sometimes preceded difficult negotiations that did not immediately lead to final agreements. Therefore, Trump’s message may primarily aim to shape positive market sentiment rather than indicate a completely finalized agreement.

Therefore, investors and traders in financial markets should anticipate further negotiations and detailed announcements from US and Chinese officials. Until a firm and solid agreement is reached, maintaining prudent risk management remains essential amid potentially volatile trade headlines.

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