• The USD/JPY price analysis shows escalating trade tensions between China and the US.

• Trump has threatened to impose another 50% tariff on Chinese goods.

• The BoJ might pause to assess incoming data.

The USD/JPY price analysis shows escalating trade tensions between China and the US that is sending traders to the safe-haven yen. Meanwhile, the dollar collapsed on Wednesday as analysts increased the likelihood of a US recession. 

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The turmoil from last week returned to the markets on Wednesday due to a growing conflict between China and the US. Last week, Trump imposed a total of 54% tariffs on China, dimming the outlook for the economy. As a result, China promised counter-tariffs on US imports. In response, the US president has threatened to impose another 50% tariff on Chinese goods. Such an outcome will hurt both China and the US. 

A bigger trade war between the two largest economies will likely weaken the global economy. At the same time, experts are increasing the likelihood of a US recession. The developments on Wednesday increased market panic, sending investors to the safe-haven yen. Meanwhile, the greenback dropped. 

Elsewhere, Bank of Japan governor Kazuo Ueda said the central bank would continue raising interest rates. However, he noted that this would depend on whether the economy performs. However, given Trump’s tariffs, there is a chance policymakers will pause to assess incoming data.

USD/JPY key events today

• FOMC policy meeting minutes

USD/JPY technical price analysis: Bears gear up for a new low below 145.01

On the technical side, the USD/JPY price has dropped to retest the 145.01 support level. The price trades far below the 30-SMA, showing bears are in the lead. At the same time, the RSI trades near the oversold region, indicating solid bearish momentum. 

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The first time bears met the 145.01 support, they failed to break below. As a result, bulls returned to push the price higher. However, the bullish move was brief and it paused when the price met a solid resistance zone comprising the 30-SMA and the 148.02 level. The zone allowed bears to return and retest the 145.01 support. 

A break below this level will make a lower low, continuing the downtrend. On the other hand, if the level holds firm, the price will consolidate before breaking below or bouncing higher.

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Created on April 09, 2025

• Attempts at an upward rebound for the EUR/USD currency pair still lack the momentum to confirm a bullish reversal.
• Bulls are trying to push with stability above the psychological level of 1.1000 to anticipate technical buying opportunities for the EUR/USD pair.
• The Euro price against the US Dollar is stable around the 1.0950 level at the time of writing this analysis and ahead of the release of the minutes of the last meeting of the US Federal Reserve (FOMC).

Why Did the Euro Rise Recently Despite Market Concerns?

According to forex trading, the EUR/USD pair is heading higher despite cautious investors awaiting clearer indications on how the European Union will respond to US tariffs. This follows two consecutive sessions of declines, driven by a broader retreat from riskier currencies amid escalating trade tensions and worsening concerns about global growth.

Prior to the start of trading this week, the European Commission revealed its proposal to the Trump administration for a zero-for-zero tariff elimination agreement in an attempt to avoid a trade war, with EU ministers agreeing to prioritize negotiations. However, Washington rejected the offer. Meanwhile, the European Commission also proposed imposing retaliatory tariffs of 25% on a range of US goods, in response to US President Donald Trump’s decision last month to impose tariffs on steel and aluminium.

In another context, Beijing vowed not to succumb to what it described as US “blackmail” after President Trump threatened to impose additional tariffs of 50% on Chinese goods unless China reversed its retaliatory measures by Tuesday.

Trading Tips:

Please consider that the upward path of the EUR/USD has many obstacles to confirm a bullish reversal. Monitor the performance-influencing factors well to anticipate the most suitable trading opportunities.

European Stock Indices Recover After Heavy Losses

During yesterday’s trading session and across stock trading platforms, European stock indices rebounded after their worst four-day decline since the COVID-19 pandemic, following the imposition of US tariffs. According to trading, the Stoxx Europe 600 index rose 1%, driven by gains in travel and leisure and industrial stocks, as well as a rebound in defence stocks. In contrast, telecommunications, utilities, and real estate stocks, which represent bond agents, lagged. The Greek stock market was the best performing global market outside Japan.

Among individual stock movers, Infineon Technologies AG shares fell by 3.1% after the semiconductor maker agreed to buy Marvell Technology’s automotive networking business for $2.5 billion in cash. Pandora A/S shares also declined by 3.6% after JPMorgan downgraded the jewellery maker, as tariffs cloud the outlook for the luxury goods sector.

Overall, the market turmoil caused by Trump’s sweeping tariffs has wiped out about $1.7 trillion in European benchmarks over the past three sessions, leaving the index firmly in negative territory for the year. The STOXX 600’s 14-day relative strength index is trading well below 30, indicating oversold territory.

Generally, Trump appears determined to push ahead with his agenda despite warnings from top Wall Street executives. This week, the US president threatened to impose an additional 50% tariff on China due to Beijing’s escalation and to end all talks with the country. In response, EU trade ministers have expressed their willingness to use a full range of countermeasures, including potential taxes on digital companies, in response to Trump’s tariffs.

Overall, the concern is that an escalating trade war could push the US economy into recession, with cyclical sectors such as energy, banking, and financial services bearing the brunt of the losses in Europe. Investors are trying to assess whether the market has bottomed or should prepare for further suffering.

EUR/USD Technical Analysis Today:

According to the performance on the daily chart, the EUR/USD currency pair is still at the beginning of a bullish reversal. On the daily chart, bulls need to push towards higher peaks for confirmation, and the most likely move for the EUR/USD price is towards the resistance levels of 1.1020 and 1.1150, respectively. As I mentioned before, from the last and highest level, technical indicators, led by the MACD and RSI, will begin to move towards strong overbought levels. Conversely, on the same time frame, the support level of 1.0880 will remain a threat to the current bullish reversal.

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Platinum price provided a new positive close above the support base at $895.00, increasing the chances for activating the bullish rally, especially, that stochastic is attempting to provide positive momentum by surpassing the oversold level.

We expect platinum price’s rally toward $935.00, and the continuation of the positivity will reinforce the chances for attacking the extra barrier at $950.00, while reaching below the mentioned support and holding below it will cancel the bullish suggestion, to begin forming strong bearish waves that might push it to decline toward $880.00 and $858.00.

The expected trading range for today is between $905.00 and $950.00

Trend forecast: Bullish 

April 8, 2025 – Written by Tim Boyer

STORY LINK Pound Sterling to Euro Forecast Slashed to 1.1765 in 3 Months at Goldman Sachs

The Pound is trading marginally lower against the Euro on Tuesday, with the GBP/EUR exchange rate currently quoted at 1.16497.

Equity markets recovered slightly from intra-day lows on Monday, but there was fresh selling around the Wall Street open and remained firmly in the red with sentiment very fragile.

The FTSE 100 index was 4.75% lower on the day and close to 12-month lows.

There was further very choppy trading with the Pound to Dollar (GBP/USD) exchange rate sliding to 1-month lows just below 1.2800.

According to Scotiabank, “there doesn’t appear to be any clear support ahead of the lower 1.27s.”

The Pound to Euro exchange rate (GBP/EUR) extended losses to trade at fresh 7-month lows around 1.1685.

Goldman Sachs has cut its 3-month GBP/EUR forecast to 1.1765 from 1.2050.

From here, two key elements will be the impact on economies and whether equity-market stresses spread to other crucial instruments.

ING noted that there has been evidence of increased dollar demand; “Three-month cross-currency basis swaps, a derivative that reflects non-U.S. demand for dollars, shot to their strongest level for the euro and the pound since late 2023.”

It commented that a further shift; “would be a sign of trouble and could briefly send the dollar higher before the Fed is forced to step in.”

ING also added; “Important now will be whether heavy equity losses and credit spread widening uncover some skeletons in the closet, just as the US Treasury sell-off exposed the poor hedging decisions of Silicon Valley Bank in March 2023.”

There has certainly been an important impact on confidence.

This was illustrated by the Euro-Zone Sentix confidence index which slumped to -19.5 for April from -2.9 previously.

According to Sentix; “Trump’s tariff hammer sends the sentix economic indices plummeting globally. The overall index for the eurozone falls by 16.7 points to -19.5 points, its lowest level since October 2023. The euphoria for the economy in Germany / EU from the previous month has evaporated. In particular, economic expectations for the eurozone are falling at a record pace.”

The US confidence index also plunged for the second successive month with the lowest reading since October 2008.

There will still be uncertainty whether the slide in sentiment will translate into weaker growth or recession.

According to Capital Economics, “even if tariff rates are negotiated down to the 10% baseline, investors can expect lower global growth, elevated US recession risks and a Fed that’s constrained by the higher inflation that these levies will fan.”

There has been a shift in interest rate expectations. Traders now see over a 60% chance of a May cut and a 97% chance by mid-year with at least four cuts this year

Markets also consider a Bank of England May cut is inevitable and are pricing in at least two further cuts this year.

Commerzbank pointed to difficulties in setting policy for the Federal Reserve; “It has to manoeuvre between the recession rock and the inflation hard place. This is a significant difference to ‘normal’ recession phases, in which the Fed was able to concentrate on one task.”

The bank added; “If it can’t, a recession typically turns out to be more severe. And the recovery is slower. This should be kept in mind when thinking about the USD reactions. The US dollar has been a ‘safe haven’ mainly because the US has usually recovered from recessions faster than other major developed economies. This time it could be different.”

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Trade Tensions Add Pressure to the Dollar

Recent US trade policy decisions are increasing uncertainty. The US plans to collect tariffs from 86 countries, a move that’s raising concerns among investors.

While some governments are asking for exceptions, the US appears to be pushing forward with the plan. This has made traders more cautious, leading to reduced demand for the US dollar.

Yields Are Rising—but So Are Concerns

The rise in Treasury yields reflects growing investor demand for protection against uncertainty. But even as yields climb, the dollar is struggling. The reason?

Traders are nervous about how trade tensions and weaker global growth might affect the US economy.

Inflation Data and Fed Minutes Could Shift the Outlook

Markets are waiting for two key updates this week: US inflation numbers and the Federal Reserve’s meeting minutes. These will help clarify if and when the Fed might cut interest rates.

Right now, there’s a 60% chance of a rate cut in May, but most traders expect the first cut to happen in July. Overall, more than 100 basis points in cuts are priced in by year-end.