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Analysis of the Impact of Trump’s Tariffs on Global Trade – April 5, 2025
Explore the impact of Trump’s tariffs on global trade with in-depth analysis and trading signals – April 5, 2025 on fxadv.com.
Introduction
Welcome to our daily analysis on fxadv.com, where we provide free and accurate content to empower forex traders. Today, April 5, 2025, we turn our attention to a pressing issue shaking global markets: the impact of Trump’s tariffs, recently imposed on over 60 countries. These tariffs, ranging from a minimum of 10% to as high as 54% on nations like China, have sparked widespread debate and concern among economists and traders. In this analysis, we’ll explore the economic effects of these tariffs on global trade, focusing on major currency pairs like USD/JPY, and provide precise trading recommendations to help you navigate the resulting volatility. Whether you’re looking for buy or sell opportunities, you’ll find the tools you need to make informed trading decisions. Let’s get started!
Why Are Trump’s Tariffs Significant?
Trump’s tariffs are not just an economic policy—they’re a political and economic tool aimed at reshaping global trade dynamics. On April 2, 2025, U.S. President Donald Trump announced sweeping tariffs on imports, including 20% on the European Union, 24% on Japan, and 54% on China, with the goal of reducing the U.S. trade deficit and bolstering domestic industries. However, this policy has raised fears of a global trade war, as countries like China, Canada, and Mexico have retaliated with counter-tariffs. The World Trade Organization estimates that these tariffs could shrink global goods trade by 1% this year. Moreover, they impact commodity prices, supply chains, and currency valuations, making them a critical focus for forex traders.
Technical Analysis of USD/JPY
Let’s examine the USD/JPY pair, which is significantly affected by trade tensions between the U.S. and Japan. Japan, a major investor in the U.S., faces a 24% tariff, impacting the yen’s value against the dollar. Today, the pair is trading around 146.20, showing notable volatility following the tariff announcement.
- Support and Resistance Levels:
- Key Support: 145.50 (a previous correction level), with additional support at 145.00.
- Key Resistance: 146.80 (a strong psychological level), with higher resistance at 147.50.
- Technical Indicators:
- Moving Average (MA50): At 145.80, supporting the uptrend.
- Relative Strength Index (RSI): At 58, indicating moderate bullish momentum.
- Average Directional Index (ADX): At 25, confirming the strength of the uptrend.
- Patterns and Candlesticks:
- A “Double Bottom” pattern at 145.00 in recent weeks supports the bullish trend.
- A strong bullish candle in the last session suggests continued momentum.
- Historical Examples:
- In March 2025, the pair surged from 144.50 to 146.50 following dollar strength news, gaining 1.5% in two days.
Economic News Impact
On April 5, 2025, the tariffs announced by Trump on April 2 began affecting markets. China retaliated by raising tariffs on U.S. goods by 15%, while Canada imposed counter-tariffs worth 155 billion Canadian dollars. These developments led to a 7% drop in oil prices, as China’s demand for oil weakened due to a slowing economy. In the U.S., rising prices of imported goods are expected to fuel inflation, potentially prompting the Federal Reserve to maintain high interest rates, which could support the dollar in the short term.
Trading Recommendations
Based on the technical analysis and economic news, here are the trading recommendations for USD/JPY on April 5, 2025:
| Trade Type | Entry Point | Take Profit | Stop Loss | Risk/Reward Ratio |
|---|---|---|---|---|
| Buy (Green) | 146.20 | 146.80 | 145.50 | 1:2 |
| Sell (Red) | 145.80 | 145.00 | 146.50 | 1:1.5 |
- Buy Scenario:
- Condition: Continued bullish momentum with RSI above 55.
- Sell Scenario:
- Condition: A decline with weak U.S. data.
- Risk Management: Risk no more than 1-2% of your capital per trade.
Practical Tips
- Monitor news related to international reactions to the tariffs, as they may trigger sharp volatility.
- Use pending orders to enter at specified levels.
- Ensure your platform is updated for live prices.
- Avoid trading during major economic announcements if you’re a beginner.
- Test the strategy on a demo account first.
Conclusion
In conclusion, Trump’s tariffs, which began implementation on April 5, 2025, pose a significant challenge to global trade, with expectations of rising inflation and slowing economic growth. For USD/JPY, we anticipate a continued uptrend toward 146.80, supported by dollar strength. Stay updated with our daily analyses on fxadv.com, where we provide free and accurate content. Share your thoughts in the comments, and subscribe to our newsletter for live updates. See you tomorrow for a new analysis, and happy trading!
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