EUR/JPY Rebounds as Safe-Haven Demand Wanes, Central Banks Signal Diverging Paths

Economic

Summary:

EUR/JPY rebounds above 162.40 as risk appetite returns amid easing US-China trade tensions and dovish ECB commentary, while the Bank of Japan holds a cautious stance ahead of its policy decision.

BUY EURJPY

Close Time

CLOSED

162.400

Entry Price

164.900

161.000

181.426 +0.553 +0.31%

109.2

Pips

Profit

161.000

163.492

Exit Price

162.400

Entry Price

164.900

The EUR/JPY currency cross climbed on Tuesday, recovering from over 0.50% losses in the previous session, as improving global risk sentiment and diverging monetary policy expectations between Europe and Japan fuel renewed interest in the pair. As of the European session, EUR/JPY is trading around 162.40, bolstered by a sharp drop in demand for the Japanese Yen, which has historically served as a safe-haven asset in times of uncertainty.

This shift in sentiment comes on the heels of optimistic developments surrounding US-China trade relations. In a move that lifted market confidence, former US President Donald Trump voiced support for easing tariffs on Chinese imports, a gesture met with reciprocal action from Beijing, which announced exemptions on select US goods previously subjected to punitive duties. Although still tentative, this signals a thawing in the long-standing trade standoff between the world’s two largest economies and has injected a measure of calm into global markets.

The Japanese Yen’s weakness underscores a broader market transition away from safe-haven assets. Investors are rotating capital into risk-sensitive currencies and equities, reflective of growing hopes that trade tensions may de-escalate in the near term. The Yen, typically favored during times of geopolitical and economic stress, is seeing diminished demand as traders pivot toward higher-yielding alternatives.

Meanwhile, attention is turning to the Bank of Japan’s upcoming monetary policy meeting scheduled for Thursday. While most analysts expect the BoJ to hold interest rates steady amid lingering concerns over Japan’s fragile economic outlook, the recent uptick in inflation has introduced an element of uncertainty. Should inflationary pressures persist, the BoJ may find itself reconsidering its ultra-loose stance a move that could eventually support the Yen, though such a pivot appears unlikely in the immediate term.

Moreover, speculation is growing that a swift trade pact between the US and Japan should one materialize could embolden Japanese policymakers to entertain the idea of policy normalization. Such a move would represent a notable departure from the BoJ’s traditionally cautious tone and set it on a different trajectory than the Federal Reserve, which is increasingly expected to tilt dovish as global growth moderates.

On the other side of the currency cross, the Euro is grappling with its own set of challenges. The European Central Bank appears to be firmly committed to an accommodative stance, as reinforced by recent remarks from ECB Governing Council member Olli Rehn. Speaking on Monday, Rehn suggested that the central bank may need to push interest rates below the so-called neutral level to sustain the Eurozone’s faltering recovery.

His comments come amid a backdrop of persistent economic malaise in Europe. Earlier this month, the ECB slashed rates for the seventh time this year, a clear signal that policymakers remain concerned about the region’s vulnerability to external shocks, including ongoing geopolitical tensions and weakening global demand.

Market expectations for further rate cuts have intensified sharply in response. According to LSEG data, traders are now pricing in a 75% probability of another ECB rate cut by June up significantly from just 60% a few weeks earlier. This dovish tilt has added downward pressure on the Euro, potentially capping the upside for EUR/JPY despite broader risk-on flows.

Technical Analysis

From a technical standpoint, the EUR/JPY pair found a temporary floor near 161.90, just above the 55-day moving average. This level has emerged as a crucial support zone following Monday’s sell-off, which briefly pulled the pair below the 163.25 resistance line a level that has consistently served as a barrier to upside momentum in recent weeks.

The ability of the pair to stabilize above 161.90 suggests that bullish momentum may be reasserting itself. Analysts now anticipate a renewed push toward breaching the 163.25 resistance level. Should this breakout materialize, the path could open toward the next upside targets at 164.20 and potentially 164.90, provided market sentiment remains constructive.

The expected trading range for the session is seen between 161.85 and 163.25, with a general bias favoring the bulls. A confirmed break above 163.25 would reinforce the positive technical structure and signal the resumption of the broader uptrend.

TRADE RECOMMENDATION

BUY EURJPY

ENTRY PRICE: 162.40

STOP LOSS: 161.00

TAKE PROFIT: 164.90

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:

WTI remains under pressure as US-China trade frictions, looming supply increases from OPEC+, and progress in Iran nuclear talks dampen investor appetite. Technical setup signals potential for further downside.

SELL WTI

Close Time

CLOSED

60.800

Entry Price

55.000

64.000

58.600 -1.209 -2.02%

108.3

Pips

Profit

55.000

59.717

Exit Price

60.800

Entry Price

64.000

West Texas Intermediate (WTI) crude oil continues to face significant headwinds, with prices hovering just above a one-and-a-half-week low during Tuesday’s Asian session. Currently trading in a tight range near $61.75 per barrel, WTI has struggled to attract buyers amid escalating global concerns. Mounting uncertainty surrounding the US-China trade war, an expected increase in output from the OPEC+ alliance, and signs of progress in the Iran nuclear deal have all combined to apply broad-based pressure on the commodity.

Market participants are increasingly cautious, with oil bulls notably absent despite a broadly weaker US dollar. The combination of macroeconomic and geopolitical headwinds has cast a shadow over oil’s near-term outlook, with sentiment remaining fragile as investors brace for a potential breakdown below key technical support levels.

At the core of the current bearish sentiment is the persistent uncertainty in US-China trade negotiations. While sporadic statements from both sides hint at potential progress, the lack of a definitive resolution continues to rattle markets. The two economic giants are deeply entrenched in a tit-for-tat tariff war that has already weakened global manufacturing activity and raised fears of a broader economic slowdown. For crude oil, which thrives on robust industrial demand and international trade, the implications are profound.

The threat of demand destruction is real. As the world’s two largest economies engage in prolonged economic sparring, the ripple effects are evident across energy markets. Investors are increasingly pricing in the possibility of a global recession a scenario that would severely curb fuel consumption across industries, transportation, and logistics.

Adding to the demand-side gloom is a re-emergence of supply-side risks. Several members of the OPEC+ alliance are reportedly pushing for a faster pace of production hikes for a second consecutive month in June. The group, which includes both OPEC and its allies led by Russia, had earlier committed to gradually unwind the record output cuts instituted during the pandemic. However, the recent calls to accelerate the process signal growing internal pressure to reclaim market share even at the cost of lower prices.

This shift in tone from OPEC+ coincides with rising optimism around a possible revival of the 2015 Iran nuclear agreement. If the deal materializes, the lifting of US sanctions could pave the way for the return of up to 1 million barrels per day of Iranian crude to global markets. Such an influx, in a market already battling demand-side anxieties, would further tilt the balance toward oversupply.

Combined, these factors paint a troubling picture for crude bulls: while demand expectations are being downgraded, supply forecasts are being revised upwarda classic recipe for lower prices.

Ordinarily, a weaker US dollar would provide some relief to dollar-denominated commodities like oil. However, even the broadly bearish sentiment surrounding the greenback has failed to lift crude prices. This decoupling signals just how pervasive the negative oil sentiment has become—investors are focusing more on fundamental oversupply and demand destruction risks than on currency tailwinds.

The USD's weakness stems from increasing market bets that the Federal Reserve may be nearing the end of its tightening cycle, or potentially even pivoting in the medium term. Still, without a corresponding improvement in risk appetite or macroeconomic indicators, oil markets remain vulnerable to further downside.

Technical Analysis

From a technical perspective, WTI crude is showing signs of further deterioration. Prices are currently testing an overlap resistance near $62.04 a level that previously served as support but now acts as a ceiling. A failure to break above this threshold could trigger renewed selling pressure.

We are eyeing a potential downside extension toward $55.00, which aligns with a swing-low support zone and coincides with the 61.8% Fibonacci retracement level an area that often attracts buying interest in oversold conditions. However, a clean break below this zone could open the door to deeper declines, especially if macro conditions continue to deteriorate.

Brent crude, WTI’s international counterpart, is also exhibiting technical weakness. A double bottom pattern formed during a recent bullish correction has now failed to deliver upside momentum, with prices sinking below the 50-day Exponential Moving Average (EMA50). The breach reinforces the bearish scenario and suggests that further downside may be imminent unless a fundamental catalyst shifts the narrative.

TRADE RECOMMENDATION

SELL WTI

ENTRY PRICE: 60.80

STOP LOSS: 64.00

TAKE PROFIT: 55.00

Risk Warnings and Disclaimers

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Alan

Commodity

Summary:

The current market for gold is characterized by a tug-of-war between bulls and bears, although several factors continue to support a bullish outlook.

BUY XAUUSD

Close Time

CLOSED

3313.42

Entry Price

3525.00

3250.00

4186.38 -11.53 -0.27%

634.2

Pips

Loss

3250.00

3245.68

Exit Price

3313.42

Entry Price

3525.00

Fundamentals

The current gold market is at a critical juncture, characterized by a tug-of-war between bulls and bears. Fundamental factors are intertwined with short-term correction pressures and long-term structural support. Although geopolitical risks have somewhat subsided, the potential for underlying conflicts continues to inject a risk-aversion premium into gold prices. The Russia-Ukraine situation, against the backdrop of a 72-hour temporary ceasefire declared by Putin during the Victory Day celebrations, appears relatively stable. However, the intensity of military confrontations between the two sides has not diminished, and increased battlefield engagement suggests that the implementation of a ceasefire agreement remains uncertain. The Middle East situation also exhibits a "cooling and heating" pattern. While the U.S.-Iran nuclear talks may resume on May 3, Iran's strategy of prior consultation with Europe indicates the complexity of the negotiation process. Furthermore, the fluctuating progress of the hostage agreement between Israel and Hamas suggests that geopolitical "black swan" risks have not been entirely eliminated.

Furthermore, the interplay of trade policies has emerged as a novel variable impacting market dynamics. The Trump administration, on one hand, has signaled a firm stance with potential tariff adjustments, while simultaneously, through Treasury Secretary Bessent, has offered expectations of a preliminary trade agreement within the coming weeks. This policy oscillation has amplified market concerns regarding the stability of global supply chains.

In addition, it is noteworthy that market speculation suggests a partial waiver of tariffs on U.S. goods by China. Although this news provided temporary relief, the imposition of tariffs by the U.S. on emerging markets such as India, coupled with political pressure from German Chancellor-designate Merz to eliminate all tariffs, indicates that the specter of protectionism persists. Consequently, the value of gold as a hedge against policy risks continues to be emphasized.

Technical Analysis

A Short-term Tug-of-War Is Expected, with Mid-term Bullish Outlook_1

In the 1D timeframe, despite the recent deep correction from the historical high of 3500 to 3260, a decline exceeding US$200, the overall trend for gold remains bullish. The alignment of the SMAs further corroborates a bullish outlook for gold's mid-to-long-term trajectory.

A Short-term Tug-of-War Is Expected, with Mid-term Bullish Outlook_2

In the 4H timeframe, gold has tested the 3260 support level three times during the previous correction, without a definitive breach, indicating a robust short-term support level at this juncture.

Currently, gold is exhibiting a range-bound fluctuation between 3260 and 3370 in the short term. On the upside, a decisive breach of the 3370 resistance level would likely initiate further upward movement, with the initial target being a retest of the historical high at 3500. Conversely, a breach below the 3260 support level could trigger a downward movement, potentially leading to a test of the 3240 support level, or even a decline to 3160.

Trading Recommendations

Trading Direction: Buy

Entry Price: 3315.00

Target Price: 3525.00

Stop Loss: 3250.00

Valid Until: May 1, 2025 23:00:00

Support: 3305.07, 3260.00

Resistance: 3370.00, 3500.00

Risk Warnings and Disclaimers

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Manuel

Central Bank

Economic

Summary:

These moving averages have repeatedly acted as a dynamic resistance zone, reinforcing downward momentum whenever the price approaches them.

SELL EURCHF

Close Time

CLOSED

0.93840

Entry Price

0.92600

0.94600

0.93887 +0.00225 +0.24%

29.6

Pips

Profit

0.92600

0.93544

Exit Price

0.93840

Entry Price

0.94600

Concerns about inflation appear to have largely faded for now, and tomorrow’s release of the ECB’s Survey of Inflation Expectations at the one- and three-year horizons may further ease market nerves. Consensus anticipates a decline in both measures. However, the European Central Bank might also be growing uneasy with the euro’s strength. The trade-weighted nominal euro index has reached record highs, appreciating by about 4% year-over-year. In a world where global demand is fragmenting and shrinking, a strong currency is hardly ideal for an export-driven economy.

Markets are currently pricing in a 25-basis-point rate cut at the ECB’s next policy meeting on June 5, with a total of approximately 65 basis points of easing expected by the end of the year.

This week, the preliminary release of the Eurozone CPI, scheduled for Friday, is the main economic highlight. Meanwhile, the ECB speakers’ calendar is quite full. Recent comments from Governing Council members, including Knot and Villeroy, have been notably dovish, pointing toward disinflationary forces gaining momentum.

François Villeroy de Galhau, ECB policymaker and governor of the Banque de France, said on Monday that the central bank "still has room for rate cuts in Europe." He also emphasized that although the region is navigating through a period of significant economic uncertainty, there is no evidence of renewed inflationary pressures, nor does he anticipate a recession in France or the broader euro area. He added that U.S. protectionist policies, such as those promoted by Trump, seem to be failing.

Separately, ECB Chief Economist Philip Lane stated that while a 25-basis-point move is possible, it should not always be seen as the default. He refrained from committing to a specific path for interest rates. In addition, the ECB is reportedly considering adjustments to its monetary policy framework to allow more flexible responses to price shocks amid an increasingly volatile global environment. This topic will be discussed during an informal retreat in Portugal on May 6–7.

Last Thursday, ECB policymaker and Governor of the Bank of Finland, Olli Rehn, also highlighted downside risks to inflation, suggesting that current conditions could lead to medium-term inflation projections falling below the ECB’s 2% target.

Meanwhile, the Swiss franc’s recent strength against the euro has triggered speculation that the Swiss National Bank (SNB) might step in to intervene in the FX market or even reconsider its stance on negative interest rates. The sharp appreciation of the franc has fueled deflationary pressures in Switzerland, raising the prospect that the SNB may revisit the idea of reintroducing negative rates. However, the central bank is proceeding more cautiously now, mindful of avoiding political backlash, particularly from Washington. Bearish Setups Emerging Near Major Moving Averages_1

Bearish Setups Emerging Near Major Moving Averages_1

Technical Analysis

EUR/CHF staged an upward move after reaching a local low of 0.9224 on April 10, climbing until it encountered resistance near the 100- and 200-period moving averages, located at 0.9469 and 0.9416, respectively. These moving averages have repeatedly acted as a dynamic resistance zone, reinforcing downward momentum whenever the price approaches them. Adding to the confluence, the 0.50–0.618 Fibonacci retracement levels also align closely with the moving averages. If EUR/CHF fails to break through these barriers to the upside, it could trigger a fresh bearish wave targeting the 0.9259 area.

The RSI recently peaked near 60, not yet in overbought territory, but suggesting that the latest rally has been quite vigorous. The current price area around 0.9369 also marks a critical support zone. A strong break below this level could open the door to another leg lower.

Trading Recommendations

Trading direction: Sell

Entry price: 0.9384

Target price: 0.9260

Stop loss: 0.9460

Validity: May 08, 2025 15:00:00

Risk Warnings and Disclaimers

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Manuel

Forex

Economic

Summary:

If buyers reemerge around this zone, we could see a fresh bullish reversal, with potential for a move toward the 150.52 area

BUY USDJPY

Close Time

CLOSED

142.280

Entry Price

150.520

139.500

155.886 +0.541 +0.35%

69.0

Pips

Profit

139.500

142.970

Exit Price

142.280

Entry Price

150.520

Over the weekend, U.S. Treasury Secretary Scott Bessent stated that trade agreement negotiations with several Asian countries are actively underway. Additionally, U.S. Secretary of Agriculture Brooke Rollins commented that the Trump administration is engaging in “daily conversations” with China regarding tariffs.

However, China responded on Monday, clarifying that it is currently not involved in any active trade negotiations with the United States. Chinese officials reiterated their stance that no side wins in a tariff war and emphasized that discussions should be conducted on the basis of mutual respect.

On the data front, the University of Michigan’s consumer sentiment report, released last Friday, showed a slight improvement compared to the preliminary figures, likely reflecting the temporary pause in tariff escalations by President Trump. Nonetheless, the report highlighted ongoing weaknesses, with a notable deterioration in both current conditions and future expectations. Particularly concerning was the sharp rise in inflation expectations: the 1-year inflation outlook surged to 6.5% in April, up from 5.0% in March, and has nearly doubled since January. Policymakers are expected to take careful note of this trend, as it increasingly signals broad-based inflation fears rather than merely partisan divides.

Meanwhile, the optimism that U.S. trade policies could ultimately lead to a reduction in global tariffs appears to be fading. Analysts at Standard Chartered noted that multilateralism continues to erode under the Trump administration, with the World Trade Organization (WTO) sidelined and free trade agreements facing prolonged and uncertain negotiations. Adding to the downside risks, the persistence of trade uncertainty is increasingly seen as a threat to global growth prospects.

There are no scheduled Federal Reserve speakers this week, as the institution has entered its blackout period ahead of the Federal Open Market Committee (FOMC) meeting and rate decision set for May 7.

According to the CME FedWatch Tool, the probability of a rate cut at the upcoming May FOMC meeting stands at just 8.9%, with a 91.1% likelihood of no change. However, for the June meeting, market pricing suggests a roughly 61.9% chance of a rate cut, indicating growing expectations for policy easing as the year progresses.

Attention is also turning toward the Bank of Japan’s (BoJ) meeting this Friday, which carries notable significance. Although an immediate rate hike is not expected, stronger-than-anticipated inflation readings and broader disruptions to global trade could shape the BoJ’s future policy guidance. Expectations for a rate increase have now been pushed toward later in the year, with market participants eyeing a potential window between September and December. Buyers Could Step In to Defend Key Support Levels_1

Buyers Could Step In to Defend Key Support Levels_1

Technical Analysis

USD/JPY has extended its decline from the high of 144.05 reached on April 25, dropping to a session low of 141.98. The pair is now approaching key support at 141.74—a level that previously marked the beginning of a significant upward movement. If buyers reemerge around this zone, we could see a fresh bullish reversal, with potential for a move toward the 150.52 area. On the downside, the next major support lies at 139.64, a level not seen since July 2023, which could encourage buyers to step in as the pair tests a new multi-month low.

Meanwhile, the 100- and 200-period moving averages are positioned at 151.15 and 149.94, respectively, providing ample room for a recovery should bullish momentum build. These moving averages align closely with the 0.50–0.618 Fibonacci retracement zone, adding further confluence to the upside targets.

The RSI currently stands at 39, slightly tilted downward but still well above oversold territory. Should the 141.74 support fail to hold and a strong downside break occur, a further decline toward the 139.64 support could be on the horizon.

Trading Recommendations

Trading direction: Buy

Entry price: 142.12

Target price: 150.52

Stop loss: 139.50

Validity: May 08, 2025 15:00:00

Risk Warnings and Disclaimers

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Adam

Forex

Summary:

As of April 29, 2025, the AUD/JPY currency pair is trading around 91.74, down slightly from the intraday high of 92.05 and the low of 91.24. The market is in a consolidation mode, with investors awaiting clearer signals from Australian and Japanese economic data, as well as the Reserve Bank of Australia (RBA) interest rate decision next week....

BUY AUDJPY

Close Time

CLOSED

91.601

Entry Price

92.500

91.200

103.237 +0.069 +0.07%

40.1

Pips

Loss

91.200

91.198

Exit Price

91.601

Entry Price

92.500

Market Overview

AUD/JPY is currently trading in a narrow range, reflecting investor hesitation ahead of key economic events. The possibility that the RBA will keep interest rates higher for longer is weighing on the Australian dollar, while the Japanese yen is supported by safe-haven sentiment amid global economic uncertainty.

Market psychology

Market sentiment indicators show investors are cautious, with trading volumes slightly down and price volatility low. Investors are waiting for clearer signals from economic data and the RBA's interest rate decision to determine the next direction of this currency pair.

Technical analysis

AUD/JPY is currently trading in a narrow range, reflecting investor hesitation_1

Bollinger Bands (20,0,2): Price is hovering near the middle band of the Bollinger Bands, indicating that the market is in a consolidation state. Price moving above or below the upper/lower band may signal a new trend.

Ichimoku Kinko Hyo (9,26,52): The price is near the Kumo cloud, indicating an unclear trend. A price move above the cloud would be a positive signal, while a fall below the cloud could signal a downtrend.

Stochastic Oscillator (5,3,3): The Stochastic indicator is in the neutral zone, indicating that the market has no clear overbought or oversold signals.

Trading Recommendations

Entry (First): 91.60 – 91.80

Take Profit: 92.50

Stop Loss: 91.20

Risk Warnings and Disclaimers

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Adam

Forex

Economic

Summary:

As of April 29, 2025, the EUR/AUD currency pair is trading around 1.7797, reflecting investor hesitation ahead of key economic events ahead. The market is in a consolidation mode, with investors awaiting clearer signals from economic data and interest rate decisions from the European Central Bank (ECB) and the Reserve Bank of Australia (RBA) in the coming period...

BUY EURAUD

Close Time

CLOSED

1.77606

Entry Price

1.78500

1.77500

1.75723 +0.00456 +0.26%

10.6

Pips

Loss

1.77500

1.77495

Exit Price

1.77606

Entry Price

1.78500

Market Overview

EUR/AUD is currently trading in a narrow range, reflecting investor hesitation ahead of key economic events. The possibility of the ECB maintaining its current monetary policy while the RBA may adjust interest rates is creating uncertainty in the market. In addition, economic data from both regions will also influence the direction of this currency pair.

Market psychology

The market sentiment indicator shows investor caution, with trading volumes slightly down and price volatility low. Investors are waiting for clearer signals from economic data and interest rate decisions from the ECB and RBA to determine the next direction of this currency pair.

Technical analysis

Stochastic Oscillator (5,3,3): The Stochastic indicator is in the neutral zone, indicating that the market has no clear overbought or oversold signals.

Trading Recommendations

Entry (First): 1.7760 – 1.7800

Take Profit: 1.7850

Stop Loss: 1.7750

If the price breaks above the Ichimoku cloud and the upper band of the Bollinger Bands, it will be a positive signal for an uptrend. Conversely, if the price falls below the cloud and the lower band of the Bollinger Bands, a downtrend can be confirmed.

Risk Warnings and Disclaimers

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