Weekly technical outlook: EUR/USD, USD/JPY, AUD/USD [Video]

Eurozone CPI inflation --> EUR/USD

With the market on edge over whether the White House will grant sector-specific exemptions when US reciprocal tariffs take effect on April 2, traders will first focus on the Eurozone’s flash CPI inflation data for March. Headline inflation is expected to hold steady at 2.3% y/y, while core inflation, which excludes volatile energy and food prices, is forecast to tick down to 2.5% y/y from 2.6% previously.

Weaker-than-expected inflation prints may not necessarily weigh on the euro, as markets are already pricing in a 25bps rate cut at the ECB’s upcoming policy meeting on April 17. Moreover, unless the EU secures more favorable trade terms from the US, inflation concerns could keep feeding bullish sentiment for EURUSD.

Technically, the pair resumed its bullish bias after bouncing off the 1.0735 level, setting its sights on the five-month high of 1.0935. A break above the psychological barrier of 1.1000-1.1050 could reinforce bullish momentum, potentially leading to a test of the August-September 2024 double top area of 1.1175-1.1200.

RBA policy meeting -->AUD/USD

The Reserve Bank of Australia (RBA) takes center stage during Tuesday’s Asian session. With only one rate cut delivered so far, the RBA is widely expected to keep rates on hold as there is uncertainty surrounding US tariffs and the Australian federal election on May 5 looms. Instead, traders will be keen to gauge how long the pause in rate cuts will last, as futures markets are currently pricing in nearly three reductions by year-end.

On the FX front, AUDUSD has lacked clear direction since its February rally to 0.6400. Its repeated failure to reclaim the 20- and 50-day simple moving averages (SMAs) near 0.6300 has shifted momentum in favor of the bears. If sellers manage to breach the critical support zone around 0.6225, downside pressure could intensify.

US jobs data --> USD/JPY

The US economic calendar heats up this week, headlined by Friday’s crucial nonfarm payrolls (NFP) report. Before that, traders will watch Tuesday’s ISM manufacturing PMI and Thursday’s non-manufacturing PMI for further clues on economic sentiment.

For the third consecutive month, job growth expectations remain subdued, with forecasts calling for a modest 140k increase versus February’s 150k. The unemployment rate is expected to hold steady at 4.1%, while average hourly earnings could edge down to 3.9%.

While these figures wouldn’t necessarily trigger alarm bells over labor market strength, any sharper-than-expected employment slowdown, or an uptick in the unemployment rate, could fuel concerns over the economic impact of tariff threats on hiring plans. Notably, federal layoffs have yet to surface in the data, meaning upcoming reports could still reflect latent weakness. A softer labor market print would heighten pressure on the Fed to cut rates sooner, increasing the likelihood of a rate cut in May.

If the data underwhelms and the ISM PMI figures reinforce economic pessimism, USDJPY may extend its decline. The 148.00 level is likely to act as initial support, with further downside risks pointing toward the 146.30-147.00 range. A sustained break below this zone could reactivate the broader downtrend from January’s peak, bringing the 145.00 level next into play.