- For a short period, the bulls succeeded in pushing the USD/JPY currency pair towards the 150.00 psychological resistance level, which would support the bulls' control over the trend, but the bulls did not find more momentum.
- Therefore, the USD/JPY pair moved downwards again towards the 148.18 support level and closed the week's trading stable around the 149.30 level.
- Recently, the currency pair reacted to signals from global central bank officials regarding tightening or not, in addition to the reaction to the expansion of US trade wars.
The Path of US Tariffs
On April 2, 2025, the United States plans to implement a series of reciprocal tariffs aimed at aligning US import duties with those imposed by its trading partners. For example, if a country imposes a 20% tariff on US goods, the US will retaliate with a similar 20% tariff on imports from that country.
However, Trump also stated that he will impose tariffs on countries that impose a value-added tax – which is equivalent to sales tax in the US. It is clear that VAT is not an import tax, as it does not discriminate against domestic or foreign products and services. The fact that this falls within a specific scope indicates that Trump is looking to impose large tariffs on a range of packages to increase revenue for the US Treasury in his attempt to reduce the country's growing deficit.
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Be cautious as the USD/JPY pair is affected by several factors, and the upward reversal still has a lot of work to do to confirm it.
US Stock Markets Attempt to Recover Losses
During the last trading session of the past week and through stock trading companies' platforms, US stock indices on Wall Street shook off a weak start and closed slightly higher, ending a four-week losing streak. According to trading, the S&P 500 index rose by 0.1%. The index ended the week with gains of 0.5%. It is still down 4.8% so far this month. At the same time, the Dow Jones Industrial Average achieved slight gains of 0.1%, while the Nasdaq Composite Index rose by 0.5%.
According to performance, technology stocks, which were the heaviest in the market at the start of trading, rebounded to recover a large portion of the declines in other sectors of the S&P 500. This sector has been the focus of most of the intense selloffs the market has seen recently, reversing its gains that led the market during the previous year. These stocks are among the most valuable on Wall Street and have significant impacts on market performance.
According to stock prices, Apple shares rose about 2%, while Microsoft shares rose 1.1%. Nvidia, a major technology company, fell 0.7%. Meanwhile, Micron Technology shares fell 8% to record the largest decline among S&P 500 stocks.
In general, US stocks have been declining steadily for weeks due to uncertainty about the direction of the US economy. The trade war between the US and its major trading partners threatens to exacerbate inflation and harm consumers and businesses alike. Inflation remains stubbornly above the Fed's 2% target, and tariffs could hinder the Fed's efforts to lower the inflation rate.
USD/JPY Technical Analysis and Expectations Today:
According to the daily chart performance, the general trend for the USD/JPY currency pair is still at the beginning of an upward reversal. As we mentioned before, moving above the 150.00 psychological resistance will motivate the bulls to move strongly upward. The next peaks on that time frame will be 150.90, 151.70, and 152.60, respectively. Conversely, and on the same time frame, the 147.70 support level will remain the most important for a new control of the bears and the evaporation of recent upward hopes.
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