USDJPY Technical Analysis – Just A Pullback Or A Reversal?

Forex

Technical Analysis

Summary:

The USDJPY bounced from the key 140.00 handle and pulled all the way back to the 143.50 level on positive Trump’s comments.

Fundamental Overview

The USD got a boost fromthe positive Trump’s comments on China late Tuesday. We saw the bullishmomentum holding yesterday but it started to wane as disappointing news startedto filter through.

We see stronger reactionsto positive news because of overstretched positioning, so that will likelycontinue to be the case even though in the medium term, the US Dollar should keepon depreciating as the path of least resistance for the Fed remains to cutrates.

On the JPY side, thecurrency has been driven mainly by global events rather than domesticfundamentals. Alongside the Swiss Franc, it’s been the favoured safe haven inthe currencies space and will likely continue to do so.

The negative impact onthe Japanese economy from tariffs uncertainty and the downward pressure oninflation from the surging yen will keep the BoJ on the sidelines for the timebeing.

USDJPY Technical Analysis

On the daily chart, we cansee that USDJPY bounced from the key 140.00 handle and pulled all the way backto the 143.50 level. From a risk management perspective, the sellers will havea better risk to reward setup around the major trendline to position for furtherdownside, while the buyers will look for a break higher to increase the bullishbets into the 151.00 handle next.

On the 4 hour chart, we cansee that we have a strong resistancezone around the 144.00 handle where we can find the confluenceof the previous swing levels and the minor trendline. The sellers will likelypile in around these levels with a defined risk above the trendline to positionfor a break below the 140.00 handle. The buyers, on the other hand, will wantto see the price breaking higher to increase the bullish bets into the majortrendline next.

On the 1 hour chart, we cansee that we have a minor upward trendline defining the bullish momentum on thistimeframe. The buyers will likely lean on the trendline to keep pushing intonew highs, while the sellers will look for a break lower to increase thebearish bets into new lows. The red lines define the average daily range for today.

Source: ForexLive

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Adam

Economic

Continued downturn: Q1 2025 GDP slips into negative territory

The South Korean economy has once again entered a contraction phase, with real GDP falling by 0.2% in the first quarter of 2025, as reported by the Bank of Korea. This marks a return to negative growth after three consecutive quarters of modest recovery, following a downturn observed during Q3 and Q4 of 2024. This shift was sharper than expected, even as domestic and international analysts had recently downgraded their growth forecasts for the country.

The drop in GDP highlights a cause-effect relationship where declining trade performance and internal demand weakness directly impact national output. This downturn is not merely a reflection of slowed momentum but a reversal into economic shrinkage, signaling deeper structural concerns.

Trade decline as a core driver of economic contraction

Data from the Korea Customs Service underscores the fragility of South Korea’s trade-driven economy. In Q1 2025, exports declined by 1.1%, with major sectors such as chemicals, machinery, and equipment facing substantial losses. This decline correlates strongly with broader disruptions caused by intensifying global trade tensions. At the same time, imports dropped by 2.0%, largely influenced by volatile crude oil prices and shrinking energy demand.

Here, the trend in exports and GDP shows a parallel decline, indicating a robust correlation between external trade volumes and economic performance. While not all drops in exports automatically cause GDP contractions, the magnitude and concentration of this quarter's export decline—particularly in high-value sectors—exerted a tangible drag on national output.

The ripple effect of U.S. tariffs and geopolitical headwinds

One of the major external factors compounding South Korea’s economic vulnerability is the fallout from U.S. tariff hikes and protectionist trade policies. Economists suggest that these measures have triggered cascading supply chain disruptions, reduced global demand for intermediate goods, and amplified investor uncertainty.

As South Korea remains heavily dependent on exports, particularly to the U.S. and China, the indirect effects of American tariffs are becoming increasingly pronounced. Though the direct link between U.S. tariff actions and Korean GDP cannot be simplified into linear causality, the overlapping timeframes and sectoral impacts indicate a strong correlational trend, exacerbating Korea’s existing slowdown.

Persistent downside risks and cautious recovery prospects

The unexpected dip into negative growth has sparked broader concerns about South Korea’s economic trajectory in 2025. With both internal demand and external trade facing persistent headwinds, analysts are now revisiting assumptions of a mid-year rebound. The risk of entering a deeper technical recession looms if key export sectors continue to falter.

To navigate these challenges, policymakers may need to consider more aggressive fiscal stimuli or trade diversification strategies. However, the global environment—marked by protectionism, high inflation, and monetary tightening in major economies—limits the room for maneuver.

South Korea’s slip into negative growth in Q1 2025 is more than just a cyclical dip—it is a reflection of escalating external vulnerabilities and internal rigidity. The combined impact of declining exports, geopolitical trade disputes, and sluggish domestic demand is driving the economy further away from stability. Without swift and strategic intervention, the country risks entrenching itself deeper into an extended period of low growth and high uncertainty.

Source: CNBC

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Glendon

Economic

Forex

European officials say they're optimistic a trade deal can be reached with U.S. President Donald Trump, warning of significant economic harm to both Europe and the U.S. if an agreement isn't agreed and full-scale tariffs are introduced.

"I do believe an agreement can be reached, but at the same time, I do know we have lots of work that we have to do in order to get to that point," Pascal Donohoe, president of the Eurogroup and finance minister of Ireland, told CNBC on Wednesday.

"If we use the time ahead wisely, we can at least create a framework in which we can avoid measures being taken on both sides of the Atlantic that could harm ourselves, harm Europe and harm America," he said on the sidelines of the International Monetary Fund and World Bank spring meetings in Washington.

The European Union and U.S. are engaged in tense negotiations to reach a trade deal so that U.S. tariffs on EU goods announced by Trump, and EU countermeasures, can be avoided.

Trump initially imposed a 20% "reciprocal" tariff on all goods coming from the EU but paused the measures for 90 days for negotiations, lowering the duty to 10% until that time. A 25% tariff on foreign cars and steel and aluminum imports remains in place.

The EU paused its retaliatory duty targeting 21 billion euros ($24.1 billion) worth of U.S. goods "to allow time and space for EU-U.S. negotiations," the European Commission said.

Talks have not yet yielded any tangible compromises or results, European officials say, and the backdrop to discussions likely soured further on Wednesday after the EU fined U.S. tech behemoths Apple and Meta hundreds of millions of euros each for breaching the bloc's digital competition laws.

The EU insists that its trade in goods and services with the U.S. is reasonably balanced. Data from the European Commission, the executive arm of the EU, said the bloc had a trade surplus of 155.8 billion euros ($176.7 billion) with the U.S. for goods in 2023, but ran a 104 billion euro deficit on services. Overall, EU-U.S. trade in goods and services in 2023 was worth 1.6 trillion euros, according to the EU.

Machinery and vehicles make up the largest chunk of EU exports to the U.S. by product group, followed by chemicals, other manufactured goods and medicinal and pharmaceutical products.

Spain's Finance Minister Carlos Cuerpo told CNBC that any failure to reach a deal would be harmful for both Europe and the U.S., with more than 4 billion euros' ($5.1 billion) worth of trade in goods and services a day at stake.

"We need to engage in an open and frank conversation amongst the two sides of the Atlantic, because there's a lot to lose if we do not get into a fair and balanced agreement," Cuerpo told CNBC's Carolin Roth in Washington.

"There is this specific figure, of 4.5 billion euros on a daily basis across the Atlantic in terms of trade in goods and services — that's a treasure that we need to protect," he noted.

"It is [important] how we face these negotiations from the EU side, with an extended hand, to reach an agreement. But it has to be a fair agreement. Let's not forget that under the current situation, most of the tariffs that were imposed by the U.S. administration are already in place and affecting our companies."

Eelco Heinen, finance minister of the Netherlands, slammed tariffs as a taxation on goods that is "so bad for consumers" and would cause businesses to pause investment.

Major headwinds

On Tuesday, the IMF had warned that trade tariffs announced by President Donald Trump pose major headwinds for the U.S. and global economy in 2025.

In its April 2025 World Economic Outlook., the IMF forecast a U.S. growth outlook of 1.8% in 2025, down 0.9 percentage points from its January forecast. The fund also cut its global growth forecast to 2.8% this year, down 0.5 percentage points from its previous estimate.

The fund predicted a slight decline in the euro zone, forecasting that euro area GDP will hit 0.8% in 2025, before picking up modestly to 1.2% in 2026.

It singled out Spain as a bright spot in the region, stating its growth momentum "contrasts with the sluggish dynamics elsewhere," with the Mediterranean nation expected to expand its economy by 2.5% this year following an upward revision of 0.2 percentage points from the forecast made in January.

"This reflects a large carryover from better-than-expected outturns in 2024 and reconstruction activity following floods," the IMF said.

These were the fund's "reference forecasts" for global economic growth and inflation, which is based on data available as of April 4 — including the U.S.' "reciprocal" tariffs but excluding subsequent developments like the 90-day pause on higher rates.

Source: CNBC

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Adam

Political

Economic

Short-term impact of U.S. tariff policy on global economic performance

According to the IMF’s latest World Economic Outlook, the sharp increase in U.S. import tariffs under President Donald Trump is fueling an environment of heightened uncertainty, which is reverberating across global markets. The U.S. economy, projected to grow by 2.8% in 2024, is now expected to slow to just 1.8% in 2025. This sharp downward revision follows the announcement of tariff hikes that pushed average U.S. import duties to their highest level in a century.

The relationship between rising tariffs and lower economic growth appears to be causal. Higher import costs are eroding business competitiveness and raising domestic prices, which in turn suppresses consumer demand — a trend the IMF observed even before the latest tariffs were formally announced.

How U.S. trade policies are affecting other global economies

Major economic regions — including North America, Asia, and Europe — are increasingly vulnerable to economic shocks stemming from the U.S.'s unpredictable and unilateral trade measures. Retaliatory tariffs imposed by trading partners are further escalating tensions and triggering disruptions across global supply chains.

The IMF stresses that no region stands to gain from sustained protectionist policies. Both short-term and long-term consequences are projected to be negative. The parallel trends of rising tariffs and falling growth worldwide reflect a strong correlation, though in many cases, policy uncertainty itself is also an independent variable dragging down economic momentum.

Macroeconomic risk from political interference in monetary policy

In addition to trade measures, political pressure on the Federal Reserve is adding to the volatility. President Trump recently criticized Fed Chairman Jerome Powell and pushed for rate cuts, despite inflation being projected to rise. The IMF has now revised its inflation forecast for the U.S. to 3% in 2025, up from the previous 2%.

Cutting interest rates under rising inflation and higher tariffs could provide a short-term boost in demand but may also deepen inflationary pressures. The link between policy instability and inflation expectations shows a strong correlation, as both investment and consumption behaviors are shaped by shifting expectations.

Strategic outlook: Restoring trade clarity through multilateral cooperation

The IMF underscores that the path to recovery lies in de-escalating trade tensions and forging clear, stable trade agreements. Rebuilding trust in the global trading system is crucial to sustaining economic growth, especially as economies remain fragile in the post-shock recovery phase.

In a press briefing, IMF Chief Economist Pierre-Olivier Gourinchas emphasized that the world may be entering a "new era," where long-standing global economic frameworks are being redefined. But to avoid a prolonged cycle of protectionism, major economies must implement consistent and cooperative trade policies.

As the global economy struggles to regain stability, the U.S.'s aggressive trade measures and pressure on central bank independence are undermining macroeconomic confidence. The ripple effects of rising tariffs extend beyond immediate trade impacts, weakening the very foundations of global growth. The IMF’s warning is clear: without swift policy adjustments, the current direction could backfire on the U.S. economy and jeopardize fragile global recovery efforts.

Source: Reuters

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Michelle

Economic

Forex

The dollar took a breather on Thursday, following a sharp bounce after U.S. PresidentDonald Trumpbacked away from threats to fire Federal Reserve Chair Jerome Powell and his administration opened the door to a softer stance on China tariffs.

After dipping below 140 yen on Tuesday, the dollar has rebounded off major chart support and was last at 142.75 yenon Thursday.

It caught an extra boost when Treasury Secretary Scott Bessent said the U.S. did not have a specific currency target in mind, ahead of talks with his Japanese counterpart. Bessent has also said the current de-facto embargo on U.S.-China trade was unsustainable, while cautioning that the U.S. would not move first in lowering its levies of more than 100% on Chinese goods.

The dollar has recovered from a 3-1/2 year low of $1.1572 per euro, but encountered a little selling in the Asia morning to steady around $1.1338.

It is clear, by now, that no other currency is as sensitive to trade headlines as the dollar, said ING currency strategist Francesco Pesole in a note to clients.

"We still think the balance of risks remains skewed to the downside for USD in the near term, but we don't expect a repetition of the one-way traffic in dollar selling we have witnessed of late," he said.

"That said, EUR/USD remains almost entirely a function of USD moves. And another leg higher above $1.15 remains possible should fears about the Fed's independence take centre stage again."

The Australian and New Zealand dollars were similarly off recent peaks - although not all that much.

The Aussie, after briefly breaching $0.64 this week, was at $0.6355 and Commonwealth Bank strategist Joe Capurso said it could test resistance around its 50-day moving average at $0.6286 as worries about global growth persist.

The New Zealand dollarheld on at $0.5951.

Sterlingand the Swiss franceach steadied after a sharp retreat, leaving sterling at $1.3263 and the Swissy at 0.8290 per dollar.

China's yuanwas a touch weaker at 7.2980 per dollar.

In crypto markets, bitcoin has followed U.S. stocks and run higher even against a rebounding dollar. It hovered at $92,732 in Asia. Trump's meme coin surged overnight after the online promotion of a gala dinner with the president for the top 220 buyers of the $TRUMP coin.

Source: Reuters

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Glendon

Commodity

Economic

China–U.S. Trade War

Gold prices rose sharply in Asian trade on Thursday, rebounding from recent losses as doubts over a deescalation in the U.S.-China trade war persisted, while a new Russia-Ukraine clash also buoyed haven demand.

Gold had fallen from record highs this week after U.S. President Donald Trump raised the prospect of eventually reducing steep trade duties on China. But a lack of clarity on Trump’s comments, coupled with less optimistic statements from other officials, made gold’s fall short-lived.

Traders remained cautious towards the dollar and Treasuries, keeping gold and the Japanese yen as the main sources of safe haven.

Spot gold rose 1.3% to $3,331.34 an ounce, while gold futures expiring in June rose 1.4% to $3,341.25/oz by 01:37 ET (05:37 GMT).

JP Morgan forecast that spot prices could rise as high as $4,000/oz by next year.

Gold remains near record high amid steady haven demand

Spot prices remained in sight of a $3,500/oz record high hit earlier this week, as traders still remained largely biased towards bullion as a haven.

This trend was furthered by a sharp drop in the dollar in recent weeks, amid heightened uncertainty over the U.S. economy and a bitter trade war between Washington and Beijing.

Trump said this week that he could eventually lower his steep, 145% tariffs on China. But he said that such a move would be contingent on China coming to the negotiating table- a scenario Beijing has shown little interest in carrying out.

China retaliated with 125% tariffs against the U.S., and has shown few signs of backing down.

Comments from other members of the Trump administration also undermined optimism over a U.S.-China deescalation. Treasury Scott Bessent warned that trade talks with China could be a slog, and that the U.S. would likely need to first cut tariffs before engaging with Beijing.

Traders remained on edge over the potential impact of Trump’s tariffs, even as a report suggested he could offer some exemptions to automakers. But the dollar and Treasuries took little support from this.

Other precious metals were mixed on Thursday, but were sitting on some gains against a softer dollar in recent weeks. Platinum futures rose 0.1% to $979.75/oz, while silver futures fell 0.4% to $33.390/oz.

Among industrial metals, benchmark copper futures on the London Metal Exchange fell 0.1% to $9,371.35 a ton, while U.S. copper futures steadied at $4.8348 a pound.

Russia-Ukraine ceasefire talks waver, Moscow attacks Kyiv

Safe haven demand was also furthered by signs of increased friction in U.S.-brokered ceasefire discussions over Russia and Ukraine, especially as Moscow launched a deadly drone and missile attack on Kyiv on Wednesday.

This came as Trump lashed out against Ukrainian President Volodymyr Zelenskiy over his objection to Russia’s 2014 occupation of Crimea.

Trump’s Vice President JD Vance warned that the U.S. could exit ceasefire discussions, while several top-level U.S. officials dropped out of ceasefire talks in London this week.

Source: Investing

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FastBull Featured

Daily News

[Quick Facts]

1. Trump considers partial tariff exemptions for automakers

2. Beige Book: “Tariffs” were mentioned 107 times! The economic outlook has deteriorated significantly in many regions

3. Knot: A neutral policy stance is appropriate as shocks continue to unfold

4. March U.S. new home sales surge, surpassing forecasts, led by gains in the South

5. U.S. tariff revenue surges over 60% in April, reaching at least US$15 billion

[News Details]

Trump considers partial tariff exemptions for automakers

According to the Financial Times, President Trump is contemplating exemptions from certain stringent tariffs for automotive manufacturers, representing a concession following recent lobbying efforts by industry executives amidst the ongoing trade war. However, the 25% tariff on all imported finished vehicles will remain in effect. Another 25% tariff on automotive components will also be retained, with an effective date of May 3. Despite the prior exclusion of automotive products from "reciprocal" tariffs with major trading partners, U.S. automakers are currently seeking further exemptions.

These concessions signify an initial victory for the automotive sector and another retreat by Trump from his most aggressive tariff positions. Sources indicate that current negotiations primarily focus on streamlining the taxation process, such as relaxing the rules of origin requirements for automotive components. This policy adjustment reflects the Trump administration's pragmatic response to specific industry pressures while upholding the core tenets of its "America First" trade policy.

Beige Book: “Tariffs” were mentioned 107 times! The economic outlook has deteriorated significantly in many regions

In the Federal Reserve's Beige Book released on Wednesday, the term "tariffs" was cited 107 times, more than double the frequency in the previous report. "Uncertainty," in various forms, appeared 89 times. Economic activity showed minimal change since the last report, yet uncertainty surrounding international trade policies was a recurring theme across reports. Only five regions reported modest economic expansion, three indicated stable activity, and the remaining four noted a slight contraction.

Overall, both leisure and business travel have declined, with a decrease in international tourism in certain regions. Housing sales have increased, and many regions continue to experience low inventory levels. Net loan demand has remained flat or slightly increased, while non-financial services demand has decreased in some regions. Transportation activity has seen a modest uptick. Manufacturing performance is mixed, with two-thirds of the regions reporting little to no change or a decline in manufacturing activity. The energy sector has experienced a slight expansion. Agricultural conditions are relatively stable across multiple regions. The outlook has significantly deteriorated in several regions, driven by increased economic uncertainty, particularly concerning tariffs.

Prices have risen across all regions, with most indicating that businesses anticipate accelerated input cost growth due to tariffs. Many businesses have received notifications from suppliers regarding cost increases. Businesses report they have added tariff surcharges or shortened pricing terms due to trade policy uncertainty. Most businesses expect to pass additional costs to customers. Profit margins are reportedly being squeezed due to rising costs.

Knot: A neutral policy stance is appropriate as shocks continue to unfold

During his Wednesday speech, ECB Governing Council member Knot stated that a rate cut to stimulate the economy is unwarranted, given the uncertain medium-term effects of recent economic shocks. While the pace of disinflation may exceed prior forecasts, he noted that the implications of trade friction and increased European defense and infrastructure spending remain "far from clear." He stated, "This suggests that, overall, a policy rate that is neither accommodative nor restrictive remains viable. In any case, we will maintain a medium-term focus and strive to formulate a policy that sustainably keeps inflation near the 2% target level, with confidence not only at the baseline but also across a range of scenarios."

March U.S. new home sales surge, surpassing forecasts, led by gains in the South

U.S. new home sales experienced a significant increase last month, driven by a slight decrease in mortgage rates and ongoing sales incentives designed to stimulate the spring selling season. Data released Wednesday revealed that new single-family home sales rose by 7.4% to a seasonally adjusted annual rate of 724,000 units in March, primarily fueled by a surge in sales within the South. This performance exceeded the expectations of all economists surveyed. Sales in the South reached their highest pace in nearly four years, building on the modest growth observed in February following adverse weather conditions earlier in the year. Sales also increased in the Midwest, while the West and Northeast regions saw declines.

U.S. tariff revenue surges over 60% in April, reaching at least US$15 billion

According to data released Wednesday by the U.S. Department of the Treasury, U.S. tariff revenue surged over 60% in April, reaching at least US$15 billion, as President Trump's tariff measures took effect. This would establish a new monthly record in dollar terms, based on the aggregated data. The latest figures primarily reflect the tariffs paid by major importers and brokerage firms in April for imported goods that arrived at U.S. ports in March. Approximately two-thirds of importers pay tariffs monthly on the 15th business day of the following month. Treasury data indicates that tariff and other excise tax revenues on specific goods will total at least US$15.4 billion in April.

During his Wednesday speech, European Central Bank Governing Council member Villeroy stated that the impact of U.S. President Trump's tariff actions on Eurozone prices remains uncertain, potentially exerting downward pressure overall.

He further indicated that there are currently no inflationary risks in Europe, and in terms of bringing inflation back to the 2% target, "mission accomplished" is nearly the case, as he mentioned in his speech at the Atlantic Council on Wednesday. "The significant slowdown in wage growth is another piece of evidence," he added.