This week’s trading landscape is shaped by a series of high-impact economic events and lingering geopolitical uncertainty, particularly around the upcoming U.S. tariff announcement scheduled for April 2. Key data releases—including U.S. labor market figures, Swiss inflation, and Canadian employment numbers—are expected to provide fresh insights into the global economic outlook. Meanwhile, market sentiment remains cautious, with traders seeking clarity on U.S. trade policy and its potential ripple effects on major currencies such as the euro and yen. Against this backdrop, EURJPY continues to show signs of technical strength, though momentum appears to be moderating.
The EURJPY pair has maintained a well-defined upward trajectory since establishing a low at 154.783 on January 28, consistently registering higher highs and higher lows—a classic indication of sustained bullish momentum. The rally found interim resistance at 164.175 on March 18, where the emergence of candlestick reversal patterns pointed to fading buying pressure and growing investor hesitation.
More recently, the inability of the pair to establish a new high above 163.354 suggests that bullish momentum may be stalling, raising the prospect of a corrective move or a potential trend reversal. Despite this, price action remains supported above both the 20-period and 50-period Exponential Moving Averages (EMAs), underscoring continued bullish dominance for now.
Momentum indicators broadly support this view. The Momentum Oscillator remains above the key 100 level, signaling ongoing upside bias, while the Relative Strength Index (RSI) holds above 50, confirming the persistence of positive momentum.
Taken together, while underlying bullish conditions remain structurally intact, the presence of technical fatigue implies that downside risks should not be discounted.
Key Resistance Levels
Should the buyers maintain market control, traders may direct their attention toward the four potential resistance levels below:
162.294: The initial resistance level is established at 162.294, which mirrors the weekly Pivot Point, PP, calculated using the standard methodology.
163.354: The second price target is set at 163.354, reflecting the peak formed on March 27.
164.175: The third price objective is observed at 164.175, corresponding to the daily high from March 13.
165.255: An additional upside target is projected at 165.255, mirroring the weekly resistance, R3, estimated using the standard Pivot Points methodology.
Key Support Levels
Should the sellers take market control, traders may consider the four potential support levels listed below:
160.726: The initial support level is seen at 160.726, corresponding to the trough marked March 20.
159.222: The second support level is estimated at 159.222, representing the weekly support, S3, estimated using the standard Pivot Points methodology.
158.371: The third support level is identified at 158.371, reflecting the 61.8% Fibonacci Retracement drawn from the low point, 154.73, to the high point, 164.175.
154.783: An additional downside target is 154.783, mirroring the trough marked February 28.
Fundamentals
European market optimism has dimmed ahead of expected U.S. tariffs set for April 2, overshadowing gains from Germany’s defense-driven spending plans. Investors are scaling back risk exposure, leading to a pullback in equities, a rebound in demand for safe-haven bonds, and a dip in the euro after its recent rally. Sectors tied to economic growth—such as autos, travel, and consumer goods—have seen notable declines, reflecting broader caution as the region braces for potential trade disruptions.
On the other hand, the Japanese yen extended its gains as investors flocked to safe-haven assets ahead of looming U.S. tariffs, while weak U.S. manufacturing and labor data added to concerns about economic growth. The euro, after a strong first quarter, eased slightly as tariff uncertainty dampened sentiment and fueled expectations of European rate cuts despite Germany’s fiscal expansion. Both currencies reflected broader market caution, with traders reluctant to take on risk ahead of April 2’s policy announcement.
Conclusion
As markets brace for the April 2 U.S. tariff announcement, a cautious tone prevails across major asset classes. The EURJPY remains technically bullish but is showing early signs of momentum fatigue, suggesting the potential for near-term volatility. With key economic indicators set to be released midweek—including U.S. labor data and inflation readings from Switzerland and Canada—traders will be closely watching for signals that could shape central bank expectations and currency flows. In the meantime, the euro and yen continue to reflect the broader unease, underscoring the importance of managing risk amid a highly event-driven environment.
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