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USD/JPY – Yen rises on safe-haven flows

The Japanese yen is rallying on Monday, boosted by safe-haven flows, while gold pushed to fresh record highs amid the uncertainties surrounding Trump’s trade tariffs.

Markets are increasingly nervous ahead of Wednesday's announcement. I'm particularly concerned after comments from President Trump over the weekend, where he warned that essentially all countries will be slapped with duties this week.

The end of the week is extending gains from Friday after U.S. data showed that core PCE, the Fed's preferred gauge for inflation, rose more than expected last month, while consumer spending remained weak. The data fueled fears of stagflation ahead of Trump's trade tariff announcements, which could increase price pressures further while slowing the economy.

The US dollar meanwhile is trading around the 104 mark ahead of a big week for U.S. economic data with non-farm payrolls due on Friday.

Any sense that the labor market is starting to weaken could pull the greenback lower.
 

USD/JPY Forecast – technical analysis

USD/JOY’s recovery from 146.95 ran into resistance at the 200 SMA and rebounded lower. The price fell to test the 158.60 low.

Failure to rise above the 200 SMA combined with the RSI below 50 keeps sellers in control. However, a break below 148.60 is needed to extend the bearish trend towards 147.00. A break below here creates a lower low.

Buyers would need to retake the rise above the 200 SMA around 151.50 to create a higher high.

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DAX tumbles ahead of trade tariff announcements and German inflation figures

The German DAX is trading over 1% lower, falling to a 2-month low on the last trading day of March as the markets brace for President Trump's reciprocal trade tariffs, which will be announced on April the 2nd. Details surrounding the tariffs remain unclear; however, Trump said over the weekend that he intends to impose duties on essentially all of the US's trading partners. These comments dashed hopes that the tariffs would be less severe than initially feared.

The trade tariffs also follow Trump's announcement of 25% tariffs on car imports into the US.

German carmakers are in focus, as they have sent more vehicles to the US than any other country. The auto trade tariffs could result in around 30% of those companies' projected 2026 operating earnings being wiped out. Manufacturers such as Porsche and Mercedes-Benz could boost prices or shift more production to the US.

Data from the eurozone inflation figures are in focus and are expected to show that the CPI eased on a monthly basis to 0.3%, down from 0.4%. On an annual basis, inflation eased to 2.3% yesterday.

The ECB is expected to cut interest rates again by 25 basis points at the April meeting, following a 25-basis-point reduction in March. After that, the outlook becomes less certain; however, there is a sense that concerns over growth may prevail if Trump implements harsh tariffs.
 

 DAX forecast – technical analysis

The DAX has extended its decline from its record high of 23,477 reached mid-March, taking out support at 22,580 and the 50 SMA. This combined with the RSI below 50 keeps sellers hopeful of further downside.

The price is testing support of the mid-point of the rising channel and round number 22k. Sellers will look to break below here to extend the bearish trend to 21,500 and the lower band of the falling channel.

Should support at 22k hold, buyers would look to rise above the 50 SMA at 22,400 to bring 22,900 into focus.

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