Pullback Is Expected as Short-term Indicators Are Overbought

Eva Chen

Cryptocurrency

Summary:

he appeal of Bitcoin as a hedge against volatility in traditional markets is increasing.

SELL BTC-USDT

Close Time

CLOSED

88678.4

Entry Price

84705.0

91000.0

90911.9 +1357.1 +1.52%

2321.6

Pips

Loss

84705.0

91027.9

Exit Price

88678.4

Entry Price

91000.0

Fundamentals

Following President Trump's renewed calls for immediate Federal Reserve rate cuts, investors sought alternatives to the U.S. dollar, leading to an increase in Bitcoin's price. Trump's statements have demonstrably impacted Bitcoin's price dynamics.

Recent weak U.S. economic data has also amplified concerns about a potential economic slowdown, bolstering Bitcoin's appeal as a hedge against volatility in traditional markets.

The rise in Bitcoin's price underscores its sensitivity to macroeconomic indicators and political rhetoric. Market sentiment is also improving, with relevant indices rising to 47, matching the high of March 27. This signifies a shift from the fear zone to a neutral range, suggesting a promising outlook. Such a transition typically precedes sustained market strength following a correction.

Over the past seven days, the cryptocurrency market has risen by approximately 2%, largely consolidating. The cryptocurrency market capitalization has reached US$2.76 trillion, hitting the upper bound of the April range. Currently, it's noteworthy that the market has found support at the critical US$2.45 trillion level - a resistance level last year that later served as the launchpad for the rally that began in November.

This Tuesday, Bitcoin's price continued its ascent within the consolidation range of the previous week, around US$85,000. Currently, its price is on the verge of breaking through the prior high of US$88,878. However, before breaching this level, market quotes are being resisted by the 200-day SMA. A short-term pullback is expected.

Pullback Is Expected as Short-term Indicators Are Overbought_1

Technical Analysis

Technically, Bitcoin is currently trading within an ascending channel in the 1H timeframe, although the market is exhibiting overbought conditions. Consequently, bears will likely attempt to seize control, potentially driving a downward trend or a retracement to the US$86,410 level, or even lower, towards the US$84,765 range.

In the 1D timeframe, which represents a broader timeframe, Bitcoin's price action remains within an ascending channel. Therefore, bulls are targeting the recent sell-off's origin at US$95,223 or higher, with a long-term target of US$96,464.

Conversely, bears will aim to profit from a pullback towards the US$78,761 range or potentially lower, around US$72,595. However, given the current market sentiment, a significant bearish move appears unlikely. The market seems to be favoring only a minor correction.

Trading Recommendations

Trading Direction: Sell

Entry Price: 89000

Target Price: 84705

Stop Loss: 91000

Valid Until: May 7, 2025 23:55:00

Support: 87603, 86476, 85349

Resistance: 89052, 90018, 91092

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

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Warren Takunda

Economic

Summary:

The Kiwi rallies near 0.6000 but faces looming policy headwinds from RBNZ rate cut expectations.

BUY NZDUSD

Close Time

CLOSED

0.60002

Entry Price

0.62000

0.58700

0.57887 +0.00133 +0.23%

34.8

Pips

Loss

0.58700

0.59654

Exit Price

0.60002

Entry Price

0.62000

The New Zealand dollar continued its upward march against the US dollar on Tuesday, extending gains that began earlier this month, as mounting economic and political instability in the United States kept the greenback under pressure. The NZD/USD pair hovered near the key psychological level of 0.6000 during the early European trading session, bolstered by a combination of broad-based dollar weakness, strong domestic trade data, and technical bullish momentum. However, the rally may face near-term resistance as markets brace for a likely interest rate cut by the Reserve Bank of New Zealand (RBNZ) in May.

The current weakness in the US dollar is being driven primarily by intensifying concerns over Washington’s economic and political trajectory. A slew of recent developments has undermined investor confidence in the world’s largest economy. Chief among them is President Donald Trump’s renewed antagonism toward Federal Reserve Chair Jerome Powell, which has once again raised alarms over the central bank’s independence.

Trump’s latest barrage of criticism, delivered through his Truth Social platform, included warnings that unless the Fed slashes rates soon, the US economy could be headed for a sharp downturn. These remarks have stoked fears among market participants that the Fed could be forced into a politically motivated easing cycle, rather than one based on data-driven economic assessment.

White House economic advisor Kevin Hassett further stirred the pot by revealing that the administration is exploring legal avenues to potentially remove Powell—a move that would represent an unprecedented breach of the Fed’s autonomy and could severely damage US financial credibility.

Adding to the uncertainty are escalating trade frictions. The White House recently imposed tariffs on Chinese cargo ships docking at American ports—a decision that could disrupt global supply chains and worsen trade flows. Beijing, a major trading partner for both the US and New Zealand, has refused to back down, maintaining a hardline stance in response to Washington’s pressure tactics.

Moreover, Trump's proposal for an investigation into imports of critical minerals has sparked fears of additional tariffs, further rattling already fragile global trade dynamics. The standoff with China, especially over high-value mineral trade, has only exacerbated concerns of a protracted slowdown in global growth.

Against this backdrop of geopolitical tension, the New Zealand dollar has found some support in its robust macroeconomic fundamentals. Data released last week revealed a sharp improvement in the country’s external sector. In March, New Zealand posted a trade surplus of NZD 970 million its highest since the onset of the COVID-19 pandemic in 2020. Exports rose an impressive 19% year-on-year, while imports increased by 12%, reflecting strong domestic and international demand.

Yet, this economic strength may not be enough to keep the Kiwi buoyed for long. The RBNZ is widely expected to cut its Official Cash Rate by 25 basis points at its next policy meeting in May. Markets have already priced in a move from 3.5% to 3.25%, with further reductions anticipated later in the year, potentially bringing the rate to 2.75% by December. The dovish tilt in RBNZ policy guidance is largely in response to cooling inflation pressures and a softening housing market.

The divergence between RBNZ's easing bias and the Federal Reserve’s more hawkish posture even under political pressure could eventually weigh on the NZD, despite its current momentum.

Technical Analysis

From a technical standpoint, NZD/USD remains in an intraday bullish phase, supported by sustained trading above the 50-period Exponential Moving Average (EMA50). The pair has shown resilience since April 9, consistently posting higher lows, and managed to alleviate overbought pressures on the Relative Strength Index (RSI) without breaking trend structure.

The Kiwi recently touched a pullback support level around 0.5971, a key area that could provide another leg higher if sustained. A break below this support, however, may trigger a retracement toward the overlap support near 0.5875 a level also aligned with the 23.6% Fibonacci retracement of the recent bullish leg.

Upside targets remain intact, with the next major resistance seen at 0.6082, which coincides with the 161.8% Fibonacci extension marking a potential take-profit zone for short-term bulls.

TRADE RECOMMENDATION

BUY NZDUSD

ENTRY PRICE: 0.6000

STOP LOSS: 0.5870

TAKE PROFIT:0.6200

Risk Warnings and Disclaimers

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Warren Takunda

Economic

Summary:

EUR/USD is holding steady near 1.1500 as political drama in the US undermines the Dollar’s credibility.

BUY EURUSD

Close Time

CLOSED

1.14900

Entry Price

1.18000

1.13000

1.16517 +0.00091 +0.08%

190.0

Pips

Loss

1.13000

Exit Price

1.14900

Entry Price

1.18000

The EUR/USD pair remains firm around the 1.1500 mark during European trading on Tuesday, as a weakening US Dollar continues to reel from political shocks stemming from President Donald Trump’s renewed attacks on Federal Reserve Chair Jerome Powell. The tension between the White House and the Fed has deepened, leading to investor concern over the credibility and independence of one of the world’s most influential central banks.

This isn’t just another routine clash between fiscal and monetary policy. Trump’s aggressive rhetoric, amplified via his TruthSocial platform, is shaking investor confidence in the institutional integrity of the Fed. On Monday, he labeled Powell as “Mr. Too Late,” accusing him of endangering the US economy by refusing to cut interest rates amid what Trump called “trending downward costs.” Trump warned of an impending economic slowdown unless immediate rate cuts are enacted, igniting concerns over political interference in monetary policy—a line traditionally respected in democratic systems.

"With these costs trending so nicely downward, just what I predicted they would do, there can almost be no inflation, but there can be a SLOWING of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW," Trump wrote.

Powell, however, has remained steadfast. The Fed Chair continues to argue for a cautious approach, advocating to maintain interest rates in the current 4.25%-4.50% range until inflationary pressures are better understood in the wake of recent fiscal shifts. His resistance to political pressure has now placed the Fed at the center of a contentious power struggle that could have sweeping consequences for the US economy and the Dollar's status as the global reserve currency.

The US Dollar Index (DXY), which measures the Greenback against a basket of major currencies, recently dipped to a fresh three-year low near the 98.00 handle, and market participants are finding few reasons to expect a quick recovery. Investors fear that undermining the Fed’s autonomy could deteriorate the US’s financial credibility on the global stage.

Adding fuel to the fire, Trump has reportedly explored the possibility of removing Powell before the end of his term a legally murky area that, if pursued, could trigger a constitutional crisis and further destabilize financial markets. While legal experts argue that Trump’s ability to oust Powell is limited, the mere threat is enough to rattle sentiment and drive capital away from US assets.

Across the Atlantic, the Euro is trading with cautious optimism. The European Central Bank (ECB) is widely expected to cut interest rates in June, with dovish sentiment increasing due to persistent downside risks to inflation and a deteriorating economic outlook. Analysts at Citi, for example, forecast Eurozone inflation at 1.6% in 2026 and 1.8% in 2027 both below the ECB’s 2% target.

In a recent press conference following the ECB’s seventh rate cut in the current easing cycle, President Christine Lagarde acknowledged that the Eurozone’s economic trajectory is “clouded by uncertainty,” citing weakening business investment and ongoing global trade disruptions.

The ECB is walking a delicate line aiming to provide monetary stimulus while avoiding further Euro weakness that could stoke imported inflation. But with global trade turmoil threatening to weigh on Europe’s export-heavy economy, more cuts are likely on the horizon.

Back in the US, Trump’s volatile trade policy isn’t helping the Dollar’s case. The former president recently announced a 90-day suspension on executing reciprocal tariffs, a move interpreted by markets as a tactical pause in an ongoing trade war rather than a meaningful de-escalation. The US-China conflict continues to cast a long shadow, with American importers bearing the brunt of higher tariffs—a cost that will ultimately be passed onto consumers, eroding household purchasing power and potentially stalling domestic demand.

The US Dollar’s traditional role as a safe-haven asset is now under threat. Political meddling, erratic trade policy, and looming inflationary risks are tarnishing the appeal of the Greenback, driving investors toward alternative stores of value, including the Euro.

Technical Analysis

From a technical standpoint, EUR/USD continues to trade within a clearly defined ascending channel, forming a pattern of higher highs and higher lows—an indicator that bullish momentum remains intact. After breaking out above the key 1.1480–1.1500 resistance zone, the pair is now consolidating just above the trendline, as if coiling for another upward thrust.

Immediate resistance is seen at 1.1566, followed by 1.1701 if the bullish breakout materializes. Both the 34-period and 89-period exponential moving averages (EMAs) are trending upward, confirming a structurally sound medium-term uptrend.

On the hourly chart, the pair has entered a sideways consolidation phase, but with price action holding firmly above the EMA50 and the Relative Strength Index (RSI) flashing oversold signals, a bounce from current levels looks increasingly likely. The formation of bullish overlapping signals strengthens the case for a continuation of the rally.

TRADE RECOMMENDATION

BUY EURUSD

ENTRY PRICE: 1.1490

STOP LOSS: 1.1300

TAKE PROFIT: 1.1800

Risk Warnings and Disclaimers

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Warren Takunda

Commodity

Summary:

Gold prices surged to an all-time high of $3,500 as escalating political pressure on the Federal Reserve and a weakening U.S. dollar fueled safe-haven demand.

BUY XAUUSD

Close Time

CLOSED

3460.00

Entry Price

3640.00

3330.00

4201.57 +3.66 +0.09%

1300.0

Pips

Loss

3330.00

3318.40

Exit Price

3460.00

Entry Price

3640.00

Gold (XAU/USD) surged to a fresh record high of $3,500 in early Asian trading on Tuesday, notching more than 10% in gains for the month of April. While prices have since cooled to around $3,467 on profit-taking at the psychological barrier, the yellow metal remains firmly in bullish territory, reflecting deepening investor anxiety over the direction of U.S. monetary policy and political interference in the central bank.

After a relatively muted start to the week amid lingering Easter holiday effects, markets roared back to life Tuesday, with gold emerging as the undisputed safe-haven champion. Reduced liquidity during Good Friday and Easter Monday led to subdued activity, but as full trading resumed, traders quickly repositioned in favor of the precious metal.

The recent rally is not merely technical—it is fundamentally rooted in escalating political drama in Washington, D.C., and mounting skepticism about the Federal Reserve’s autonomy. U.S. President Donald Trump’s latest salvo against Fed Chair Jerome Powell has added a combustible mix of politics and policy confusion to an already jittery market environment.

In one of his most provocative critiques yet, President Trump publicly labeled Fed Chair Jerome Powell a “loser” and signaled his intent to replace him if re-elected. Trump accused Powell of deliberately lowering interest rates under President Biden, only to resist doing the same now. Reports indicate that Trump is actively seeking avenues to oust Powell and install a more dovish figure at the helm of the central bank—one who would rapidly cut rates.

This has spooked markets. The notion of political interference in the Fed’s decision-making process—a cornerstone of U.S. monetary stability—has prompted a rapid reassessment of risk across asset classes. Treasury yields have risen, the U.S. Dollar Index (DXY) has slumped to its lowest level since 2022, and investors are now increasingly wary of the long-term credibility of U.S. assets.

According to Jefferies, gold may now be “the only true safe-haven asset left,” as faith in U.S. Treasuries erodes under the weight of political uncertainty, trade tensions with China, and the worsening fiscal situation in Washington.

“With the recent selloff in U.S. Treasuries, and a view that Treasuries are inextricably tied to tariffs, a trade war with China, and the U.S. fiscal situation, we believe gold is the only true safe-haven asset left,” Jefferies analysts said in a Tuesday note.

Technical Analysis

From a technical standpoint, gold remains deeply bullish. Tuesday’s rally to $3,500 came amid strong buying momentum, though some cooling is now visible. Prices have retraced to around $3,440–$3,467 in early European trading as buyers pause to reassess. However, the pullback is modest, and there is little indication of a deeper correction at least for now.

The broader uptrend remains intact, driven by a collapsing dollar, declining faith in U.S. Treasuries, and heightened geopolitical and economic risks. The recent price action is also consistent with a classic bullish continuation setup. Gold has been forming higher highs and higher lows, maintaining structure within an ascending channel. Only a break below the channel’s lower boundary would shift the short-term outlook toward caution.

Key support is seen near $3,420 and $3,390, with resistance now sitting firmly at the psychological $3,500 level. The Relative Strength Index (RSI) is in overbought territory, but momentum indicators have not yet signaled a full reversal.

TRADE RECOMMENDATION

BUY GOLD

ENTRY PRICE: 3460

STOP LOSS: 3330

TAKE PROFIT: 3640

Risk Warnings and Disclaimers

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Alan

Forex

Summary:

GBPJPY is poised to face downward pressure amid divergent monetary policy expectations. Heightened expectations of an interest rate cut by the Bank of England (BoE) contrast with rising prospects for a rate hike by the Bank of Japan (BoJ), potentially weakening the pound against the yen.

SELL GBPJPY

Close Time

CLOSED

187.704

Entry Price

181.100

190.200

206.610 -0.490 -0.24%

249.6

Pips

Loss

181.100

190.207

Exit Price

187.704

Entry Price

190.200

Fundamentals

United Kingdom:

The UK's March Consumer Price Index (CPI) registered a YoY increase of 2.6%, marking the second consecutive month of deceleration and falling short of the market consensus of 2.7%. The core CPI, which excludes volatile food and energy prices, rose 3.4% YoY, in line with expectations but still indicative of elevated underlying inflationary pressures. This data has further solidified market expectations for a BoE rate cut in 2024, with interest rate futures now pricing in a 68% probability of a 25 basis point reduction in May.

Wage growth in the UK also showed signs of moderation. Average weekly earnings, excluding bonuses, increased by 5.6% YoY in February, below the anticipated 5.7%. Retail sales data for March revealed a YoY increase of only 0.9%, highlighting a lack of momentum in domestic consumer demand and exacerbating downward pressure on the pound.

Japan:

Japan's core CPI, which excludes fresh food prices, climbed to 3.2% YoY in March, surpassing the Bank of Japan's 2% inflation target for the third consecutive year. The persistent overshooting of the inflation target has intensified market speculation that the BoJ may tighten monetary policy sooner rather than later.

Additionally, geopolitical tensions and the escalation of the US-China trade dispute have heightened global supply chain concerns, prompting a surge in safe-haven flows into the yen. As a traditional safe-haven currency, the yen's appeal has significantly strengthened amid deteriorating risk sentiment, further bolstering its value.

Overall, the increasing likelihood of a BoE rate cut in May is expected to weigh on the pound, while the rising probability of a BoJ rate hike is anticipated to provide a tailwind for the yen, potentially widening the spread between the two currencies.

Technical Analysis

Short-Term Trend Likely to Lean Downward_1

From a technical perspective, the GBPJPY exchange rate remains entrenched within a well-defined descending channel on the daily chart, with the prevailing trend firmly skewed to the downside.

After initially finding support at the lower boundary of the channel, the price staged a rebound but was subsequently capped by resistance at the psychological level of 190.00. The sustained inability to breach this resistance level has led to a gradual erosion of bullish momentum, suggesting that the market may be poised for another leg lower.

On the downside, the initial target for further depreciation is likely to be the previous low at 184.37. Should this level be convincingly breached, the downside trajectory could extend further, with the potential for the exchange rate to probe towards the 180.00 mark.

Trading Recommendations

Trading Direction: Sell

Entry Price: 187.80

Target Price: 181.10

Stop Loss: 190.20

Valid Until: May 06, 2025, 23:00:00

Support: 184.37/180.00

Resistance: 188.76/190.00

Risk Warnings and Disclaimers

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Manuel

Central Bank

Economic

Summary:

The price appears to be gaining traction and could extend its upward move toward the 0.9430 area, provided it avoids a downside break below the recent lows.

BUY EURCHF

Close Time

CLOSED

0.93197

Entry Price

0.94300

0.92200

0.93627 -0.00035 -0.04%

31.5

Pips

Profit

0.92200

0.93512

Exit Price

0.93197

Entry Price

0.94300

The European Union (EU) is reportedly weighing adjustments to its methane regulations for U.S. liquefied natural gas (LNG) as part of an effort to smooth trade relations, according to Reuters. The European Commission is said to be refining its proposal ahead of trade negotiations with the United States, seeking to defuse tensions and potentially stave off a new round of tariffs proposed by former President Donald Trump. Both parties have hinted that energy cooperation could serve as a cornerstone of a broader trade agreement.

In parallel, the European Central Bank (ECB) has now delivered six consecutive interest rate cuts, marking the seventh reduction since its easing cycle began in June 2024. With inflation in the eurozone continuing to edge closer to the ECB’s 2% target, investors are increasingly pricing in the potential for additional policy accommodation. Broader concerns about external shocks and a weakening global growth backdrop have further solidified the rationale for maintaining an accommodative monetary stance.

In its latest statement, the ECB reaffirmed that disinflation remains on track, but carefully avoided committing to a specific rate path. Instead, the central bank emphasized its data-dependent approach, pledging to reassess conditions meeting by meeting in light of what it described as a climate of “exceptional uncertainty.” Much of that uncertainty, officials noted, stems from the unpredictable nature of Trump’s evolving trade agenda, which continues to cast a shadow over Europe’s export-driven economy.

During her press conference, ECB President Christine Lagarde expressed concern that escalating global trade tensions could undermine eurozone growth, primarily by eroding export demand. Exports remain a critical pillar of the euro area economy, and any sustained drag could delay the region’s recovery.

Additional commentary from Governing Council member François Villeroy de Galhau suggested that inflationary risks related to global trade conflicts appear muted—possibly even skewing to the downside. Meanwhile, ECB policymaker Madis Müller explained that the latest 25-basis-point cut was largely a response to declining energy prices and increased tariff-related pressure. He also noted that interest rates have ceased being a restrictive factor for the economy, as underlying indicators continue to show gradual, if uneven, improvement. However, Müller warned that ongoing global fragmentation could eventually exert upward pressure on prices, especially if supply chains become more localized.

While Swiss markets remained closed for Easter Monday, the Swiss franc (CHF) gained strength in early trading. Mounting U.S.-China trade tensions have reignited fears of a global slowdown, prompting investors to seek refuge in safe-haven assets such as the franc. Interestingly, President Trump has temporarily exempted certain key tech products, many of which are manufactured in China, from the latest round of proposed reciprocal tariffs—a move seen by some as an attempt to ease market nerves.

Meanwhile, Switzerland’s trade surplus widened significantly to CHF 6.35 billion in March, up from CHF 4.8 billion in February—marking the largest monthly surplus since October 2024. The expansion was fueled by a 12.6% surge in exports, outpacing a 10.4% rise in imports, and further underscoring the strength of external demand. Price Action Suggests EURCHF Could Extend Its Recovery Rally_1

Price Action Suggests EURCHF Could Extend Its Recovery Rally_1

Technical Analysis

The EURCHF currency pair is currently showing signs of a bullish rebound after respecting a long-term ascending trendline. On April 11, the pair recorded a recent low near 0.9220, but since then, bears have failed to push the price to fresh lows. This inability to break down suggests a potential shift in momentum, with bulls slowly regaining control.

The price appears to be gaining traction and could extend its upward move toward the 0.9430 area, provided it avoids a downside break below the recent lows. Notably, this upside level aligns with a zone of previous price congestion and lies just below the 100-period and 200-period moving averages, currently positioned at 0.9373 and 0.9470, respectively.

Furthermore, the 50% Fibonacci retracement of the previous downtrend intersects around the 0.9425 mark, adding to the confluence of resistance in that area. This enhances the likelihood that any ongoing pullback may continue climbing toward that cluster of key technical levels.

The Relative Strength Index (RSI) is currently hovering around 56, indicating a neutral stance. While not yet in overbought territory, the indicator suggests there’s still room for the rally to stretch further, especially in the absence of strong bearish catalysts. As long as price remains supported above its recent lows and continues to hold the ascending trendline, the pair could remain tilted to the upside in the near term.

Trading Recommendations

Trading direction: Buy

Entry price: 0.9321

Target price: 0.9430

Stop loss: 0.9220

Validity: Apr 30, 2025 15:00:00

Risk Warnings and Disclaimers

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Eva Chen

Economic

Forex

Summary:

USDJPY has recorded a fifth consecutive weekly decline, with prices falling to the vicinity of 140.47 on Monday. Japan's core CPI, which rose by 3.2% YoY has further bolstered market expectations for a potential rate hike by the Bank of Japan (BOJ), thereby fueling the yen's appreciation.

SELL USDJPY

Close Time

CLOSED

141.700

Entry Price

138.150

145.000

154.912 -0.433 -0.28%

330.0

Pips

Loss

138.150

145.000

Exit Price

141.700

Entry Price

145.000

Fundamentals

Following the long weekend, the yen sustained its bullish momentum against the US dollar on Monday. Japan's inflation rate continues to exceed the target set by the Bank of Japan (BOJ), while concerns over a potential global economic recession triggered by trade wars persist. These factors have collectively dampened investor sentiment and driven capital towards the safe-haven Japanese yen.

On Monday, Japan's Ministry of Internal Affairs and Communications reported that the core CPI (excluding fresh food) increased by 3.2% YoY in March, accelerating from the previous month's 3.0% and aligning with market expectations. This marks the third consecutive year that the rate has surpassed the BOJ's 2% target. The core CPI excluding food and energy also rose more sharply, from 2.6% to 2.9%. While the overall CPI inflation rate eased slightly from 3.7% to 3.6%, which indicates that inflation remains persistently high.

The most notable aspect of the inflation data was the significant surge in rice prices, which skyrocketed by 92.5%, marking the fastest rise since records began in 1971. This surge was driven by a combination of factors, including crop failures due to extreme heat in 2023 and panic buying by consumers following earthquake warnings last year. This marks the sixth consecutive month that rice inflation has hit a record high.

In response, the Japanese government has intervened by releasing over 210,000 tons of rice from its reserves and plans to auction an additional 100,000 tons this month to stabilize supply.

Apart from food, household durable goods prices rose by 6.5%, up from 5.4% in February. Energy prices, although still elevated, have seen a slight decline from 6.9% to 6.6%.

Additionally, due to market turbulence related to tariffs, market expectations for the BOJ to raise interest rates by at least 25 basis points this year have increased. Investors currently anticipate two rate hikes in Japan by December. Previously, despite data showing an acceleration in consumer price index (CPI) inflation, the market was highly skeptical about returning to the pre-tariff levels. The probability of a 25 basis point rate hike in June was as high as 80%. Currently, the yen appears to be attracting some safe-haven flows, with the USDJPY exchange rate falling to its lowest level since September.

Technical Analysis

USDJPY has extended its downward trend today, with intraday movements remaining biased to the downside. A break above the recent downtrend channel would signal an acceleration of the decline. The current decline began at 151.27 (a Summation AB=CD pattern), and is expected to extend below the 139.57 support level.

On the upside, a breach of the minor resistance at 144.07 would turn the intraday trend neutral again. However, as long as the 151.20 resistance level holds, the overall trend will remain bearish.