Created on April 17, 2025

• Currency traders failed to achieve an upward rebound for the USD/JPY currency pair; its slight gains did not exceed the 143.27 level, and it quickly returned to its stronger downward path, despite strong US retail sales figures.
• USD/JPY trading is stabilizing around the 141.66 level at the time of writing the analysis, paving the way for a more violent downward move.

Why does the USD/JPY continue to move strongly downward?

According to Forex market trading, the Japanese Yen’s gains against other major currencies increased, with the widespread weakness of the US dollar continuing. Growing concerns about the economic repercussions of a potential new round of US tariffs contributed to the decline of the US dollar. In the latest development in trade policy, US President Donald Trump ordered an investigation into the possibility of imposing tariffs on all essential US metal imports, much of which comes from China. This move has increased investor anxiety, adding pressure on the dollar. Meanwhile, attention is shifting to upcoming trade talks between Japan and the United States, as Tokyo is striving for the complete abolition of Trump’s tariffs.

On the Japanese front, traders absorbed data showing an eight-month high in Japanese manufacturing sector confidence for April. However, the outlook remains cautious amid ongoing concerns about US trade policy.

Trading Tips:

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The Future of the Bank of Japan’s Policy Amid Trump’s Tariffs

In this regard, Bank of Japan Governor Kazuo Ueda stated in an interview with the Sankei newspaper that the BOJ may consider taking policy action if US tariffs harm the Japanese economy. He added, “Taking policy action may become necessary,” noting that the risks posed by US President Trump’s trade actions have approached the “bad scenario” anticipated by the central bank.

The governor acknowledged that recent developments are already affecting business and household confidence. While the Board still plans to raise interest rates at an “appropriate pace,” Ueda stressed the importance of assessing the economic impact of US tariffs without prejudging them. He added that domestic food price inflation is likely to decline, real wages are expected to rise mid-year, and that upside and downside risks remain regarding inflation expectations.

The Bank of Japan will hold a monetary policy meeting from April 30 to May 1, where it will also release updated economic forecasts.

USD/JPY Technical analysis and Expectations Today:

Dear reader, as clearly shown on the daily chart, the overall trend for the USD/JPY currency pair remains bearish. Also, the return to the vicinity of the current support at 141.60 signals a deeper downward move. The psychological support at 140.00 will be an easy target for the bears, and until it moves towards or away from it. Furthermore, technical indicators have moved towards strong oversold zones, as is the case with signals from the MACD, RSI, and other momentum indicators. Therefore, we recommend buying USD/JPY from the vicinity of the support levels 140.90, 140.00, and 139.20 respectively, with future targets at 143.20 and 145.00 respectively, and the stop-loss remains below the 138.00 support.

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• EUR/USD declines toward 1.1350 after posting gains on Wednesday.
• The ECB is widely anticipated to lower key rates by 25 basis points.
• The technical outlook points to a loss of bullish momentum in the near term.

EUR/USD gained traction and registered its highest daily close since February 2022 at 1.1400 on Wednesday. The pair corrects lower toward 1.1350 early Thursday as investors await the European Central Bank’s (ECB) monetary policy announcements.

The broad-based US Dollar (USD) weakness helped EUR/USD push higher on Wednesday as reports suggesting that the United States (US) President Donald Trump was planning to use ongoing tariff negotiations to pressure US trading partner to isolate China fed into fears over a deepening trade conflict.

The ECB is widely anticipated to lower key rates by 25 basis points (bps) following the April policy meeting. Since the ECB will not be releasing revised economic projections this time, investors will scrutinize the statement language and comments from President Christine Lagarde in the post-meeting press conference.

Earlier in the week, Bloomberg reported that the European Union (EU) was expecting a bulk of the tariffs imposed by the US to remain in place after little progress was made in talks on Monday. In case the ECB puts more emphasis on upside risks to inflation because of tariffs, rather than the growth outlook, markets could assess that as a hawkish tone. In this scenario, the Euro is likely to preserve its strength.

On the flip side, the Euro could struggle to find demand if the ECB, or President Lagarde, reaffirms confidence in the ongoing disinflation process and hints at a continuation of policy-easing.

EUR/USD Technical Analysis

The Relative Strength Index (RSI) indicator on the 4-hour chart retreated slightly below 60 and EUR/USD declined to test the 20-period Simple Moving Average, reflecting a loss of bullish momentum.

On the downside, 1.1280 (static level) aligns as first support level below 1.1230 (lower limit of the ascending channel) and 1.1200-1.1190 (static level, 50-period SMA). Looking north, resistances could be spotted at 1.1400 (static level, mid-point of the ascending channel), 1.1470 (static level) and 1.1500 (round level).

The GBPJPY pair activated the negative attack in yesterday’s trading, achieving the initial negative target by hitting 187.55 level, then it rebounded to settle above 38.2%Fibonacci correction level at 188.00, to gather the required negative momentum to confirm the continuation of the bearish trend in the upcoming trading.

In general, the bearish scenario would remain valid if the trading settled below the main resistance at 189.90, as confirming breaking 188.00 level makes us expect targeting new negative stations, and 186.50 level represents the next target for the negative trading, while the attempt of breaching the mentioned resistance will cancel the bearish suggestion in the near trading, as there is a chance for achieving some gains by the price rally towards 190.50 initially.

The expected trading range for today is between 186.50 and 189.20

Trend forecast: Bearish

The GBPJPY pair activated the negative attack in yesterday’s trading, achieving the initial negative target by hitting 187.55 level, then it rebounded to settle above 38.2%Fibonacci correction level at 188.00, to gather the required negative momentum to confirm the continuation of the bearish trend in the upcoming trading.

In general, the bearish scenario would remain valid if the trading settled below the main resistance at 189.90, as confirming breaking 188.00 level makes us expect targeting new negative stations, and 186.50 level represents the next target for the negative trading, while the attempt of breaching the mentioned resistance will cancel the bearish suggestion in the near trading, as there is a chance for achieving some gains by the price rally towards 190.50 initially.

The expected trading range for today is between 186.50 and 189.20

Trend forecast: Bearish

• The GBP/USD forecast shows a strong pound despite downbeat UK inflation figures.

• Consumer inflation in the UK increased by 2.6%, softer than the forecast of 2.7%.

• Market participants are waiting to see the state of consumer spending in the US.

The GBP/USD forecast shows strong bullish sentiment despite downbeat UK inflation figures. The pound rose to new highs on Wednesday as the dollar resumed its decline amid economic uncertainty. Meanwhile, market participants were looking forward to the US retail sales report for monetary policy clues. 

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Data on Wednesday revealed that consumer inflation in the UK increased by 2.6%, softer than the forecast of 2.7%. At the same time, it declined from the previous reading of 2.8%. The poor numbers led to an increase in Bank of England rate cut expectations. The likelihood of a rate cut in May rose from 80% to 86%. 

However, economists believe inflation will rebound in April. At the same time, BoE policymakers have cautioned that it is too early to judge the impact of Trump’s tariffs on inflation. As a result, the pound barely reacted to the news. 

Meanwhile, the dollar remained fragile as the outlook for the US economy dimmed. Trump’s tariff moves have discouraged investors from holding US assets. As a result, the greenback has lost some of its safe-haven appeal. Market participants are waiting to see the state of consumer spending in the US. The sales report will shape the outlook for Fed rate cuts.

GBP/USD key events today

• US core retail sales m/m
• US retail sales m/m
• Fed Chair Powell speaks

GBP/USD technical forecast: Higher high signals a strong uptrend

On the technical side, the GBP/USD price has made a higher high, strengthening the bullish bias. It has broken past the 1.3200 resistance level and is trading well above the 30-SMA. Meanwhile, the RSI has entered deeper into the overbought region, indicating solid bullish momentum. 

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GBP/USD has sustained a solid bullish rally without any significant pullbacks to the 30-SMA. However, bulls are getting exhausted. The price is making much smaller candles and is approaching the 1.272 Fib extension level. 

This level might be a strong hurdle that will trigger a pullback. Such an outcome would allow the price to retest the recently broken 1.3200 key level. However, the bullish bias will remain as long as the price stays above the SMA.

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