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In Japan, Tokyo’s CPI core, which excludes fresh food, rose from 2.2% yoy to 2.4% yoy in March, surpassing expectations of 2.2% yoy. Even more notable was the rise in the core, core measure, which strips out both food and energy—climbing from 1.9% yoy to 2.2% yoy, signaling broader-based inflation. Headline inflation also ticked higher to 2.9% yoy from 2.8% yoy.

The key driver behind the spike was food prices, which surged 5.6% yoy, the fastest pace since January 2024. A standout was the massive 92.4% yoy jump in rice prices, the steepest rise since 1976.

Adding to the inflationary pressure was the services sector, where prices rose 0.8% yoy, up from 0.6% yoy in February. Rent prices, a key component, increased by 1.1% yoy, the sharpest rise since 1994.

The Summary of Opinions from BoJ’s March monetary policy meeting revealed growing concerns over the fallout from US trade policy, particularly the risk that new tariffs could negatively impact Japan’s real economy.

One board member warned that downside risks from the US have “rapidly heightened". I f tariff issues worsen, it could have a "negative impact" on Japan's real economy. BoJ should be “particularly cautious” when considering further interest rate hikes if trade tensions escalate.

Other members echoed similar concerns, citing elevated uncertainty from tariff threats, global supply chain disruptions, and stiff competition from low-priced Chinese products.

The tone suggests policymakers are carefully monitoring how these factors affect inflation expectations, wage growth, and investment—particularly among SMEs.

A separate opinion suggested that as underlying CPI inflation edges closer to the 2% target, BoJ should prepare to shift from accommodative to "neutral" policy.

Overall, BoJ still sees a path toward rate normalization—contingent on its inflation outlook materializing—but recent developments in global trade and domestic firm performance will dictate the pace and timing of the next move.

Full BoJ Summary of Opinions here.

Richmond Fed President Tom Barkin noted that the fast-moving policies of the new administration, particularly around tariffs, have created a “dense fog” of uncertainty. While acknowledging that recent high inflation could amplify the impact of new tariffs, he noted that the ultimate effect remains unknowable given the lack of clarity on final tariff rates and the responses of global actors.

Barkin warned that this heightened uncertainty is already weighing on sentiment. He explained that for consumers and businesses to spend and invest, "they need to have a certain level of confidence". Without that, demand may quiet, particularly as markets navigate the unknowns tied to policy shifts and geopolitical developments.

“It’s not an everyday ‘forecasting is hard’ type of fog,” he said, but rather one that demands a cautious approach—“a ‘zero visibility, pull over and turn on your hazards’ type of fog.”

In this context, Barkin reiterated that the Fed’s current moderately restrictive stance remains appropriate. “We are waiting for the fog to clear,” he concluded.

Boston Fed President Susan Collins expressed her full support for Fed to keep interest rates unchanged last week, noting that continued economic uncertainty and inflation risks warrant a cautious approach.

Collins said that with upside risks to inflation still present, it would likely be appropriate to maintain current policy settings "for a longer time". She stressed the importance of “active patience” and flexibility as Fed monitors the evolving economy.

One of the key factors now clouding the outlook is tariffs. Collins acknowledged that new tariffs will almost certainly raise inflation in the near term. However, the longer-term implications depend heavily on how other countries react and whether businesses pass costs onto consumers. These elements could determine whether the inflationary shock is temporary or more persistent.

Key insights from the week that was.

Regarding Federal Budget 2025, our bulletin and conversation with Chief Economist Luci Ellis provides a detailed view of the Government’s expected fiscal position and economic plan for the coming four years, if re-elected. Cost-of-living relief is a priority with 2024/25’s energy rebates extended to end-2025 and a ‘top-up’ tax cut planned for 2026 and 2027 alongside spending on essential services and critical infrastructure. There was also some support for SMEs and the construction sector. The bottom line for the Government’s finances from these policies and the underlying economic environment is an increase in the deficit from 1.0% of GDP in 2024/25 to 1.5% of GDP in 2025/26 after which the deficit is expected to gradually easing back to 1.1% of GDP in 2028/29. Relative to international peers, Australia’s federal debt remains comparatively low.

As discussed by Chief Economist Luci Ellis, recently announced budget measures are unlikely to materially shift the outlook for the RBA. Other data released since the RBA’s February meeting also has not provided a meaningful deviation from the recent trend. Of note this week, the Monthly CPI Indicator printed broadly as expected, the monthly trimmed mean measure ticking down from 2.8%yr to 2.7%yr in February. Last week’s labour market data was also indicative of balance between demand and supply, and the international environment is likely to be of little consequence for Australian inflation over the forecast period. Hence, we continue to expect the RBA to remain on hold next week but to cut three more times this year to 3.35% as inflation tracks back to and remains at the mid-point of the RBA’s 2-3%yr medium-term range.

Offshore, this week saw more rumours and news regarding US trade policy. New tariffs were announced on cars "not made in the United States" effective 2 April, dubbed Liberation Day by the Administration. In addition, US President Donald Trump also announced 'secondary tariffs' on countries buying oil and gas from Venezuela, also to take effect on 2 April. The rapid escalation of US protectionism has seen manufacturing sentiment retreat of late – the Richmond Fed Index for March dipped to -4pts, with new orders and employment both weaker. The drop in the Richmond Fed survey was broadly consistent with the latest readings from the Dallas and Philadelphia Fed regions, which also signalled a loss of momentum and confidence across US industry.

More broadly, core durable goods orders disappointed at -0.3% in February, continuing business investment’s poor run over the past decade, equipment investment having averaged growth of just 1.9%yr and structures only 1%yr. Of more concern for the market this week was Conference Board consumer confidence, the headline index falling to its lowest level since early 2021, and expectations at a twelve year low. Views on the labour market are more mixed amongst US households, the Conference Board employment measure remaining relatively robust after respondents to the University of Michigan’s survey showed more concern. It’s worth noting that businesses continue to pull forward imports to the US to get ahead of the imposition of tariffs. This trend has even affected Australia’s trade with the US despite our distance. US monetary policy makers’ concern over the potential inflationary consequences of tariffs also looks to be growing, St Louis Fed President Musalem this week warning that the "risks that inflation will stall above 2% or move higher in the near term appear to have increased" and that "indirect, second-round effects on non-imported goods and services could have a more persistent impact on underlying inflation".

Across the Atlantic meanwhile, the UK CPI was a touch weaker than expected in February at 0.4% (consensus 0.5%), leaving annual inflation at 2.8%yr compared to 3.0%yr in January. Core inflation edged down from 3.7%yr to 3.5%yr, but services inflation held up at 5.0%yr. While services continued to dominate the headline pulse, the share of components rising beyond the BoE's 2.0% inflation target narrowed to 54.6%. This print came ahead of the Spring Budget which saw expectations for growth cut from 2.0% in 2025 to 1.0%. Markets were keenly awaiting this release as the Autumn Budget showed that, to ensure the government is able deliver a balanced budget by 2029-30, costs can only rise by GBP9.9bn. This limited fiscal headroom has since been put under further pressure by the strong increase in Gilt yields since January. Borrowing is anticipated to be higher in the short-term, due mostly to an increase in interest costs as well as near-term policy including increased spending on defence of GBP2.2bn in 2025-26, in an effort to see defence spending hit 2.5% of GDP by 2027. The GBP9.9bn margin remains; the Office of Budget Responsibility expects the government will reach its target with 54% certainty. Net debt is still anticipated to remain just below 100% of GDP over the forecast period.

Key Highlights

• USD/JPY started a fresh increase above the 149.20 resistance.
• A key bullish trend line is forming with support at 150.00 on the 4-hour chart.
• EUR/USD tested the 1.0740 level and started a consolidation phase.
• GBP/USD could make another attempt to clear 1.3000.

USD/JPY Technical Analysis

The US Dollar started a fresh increase above 148.80 against the Japanese Yen. USD/JPY even cleared the 150.00 resistance zone to enter a positive zone.

Looking at the 4-hour chart, the pair settled above the 150.00 level, the 100 simple moving average (red, 4-hour), and the 200 simple moving average (green, 4-hour). The pair remains supported and aims for more gains above 151.20.

On the upside, the pair is facing resistance near the 151.50 level. The next major resistance is near the 152.00 level. The main resistance is now forming near the 152.50 zone.

A close above the 152.50 level could set the tone for another increase. In the stated case, the pair could even clear the 153.20 resistance.

On the downside, immediate support sits near the 150.20 level. The next key support sits near the 150.00 level. There is also a key bullish trend line forming with support at 150.00 on the same chart. Any more losses could send the pair toward the 149.20 level.

Looking at EUR/USD, the pair corrected gains, tested 1.0740, and might struggle to start a recovery wave above the 1.0850 resistance.

Upcoming Economic Events:

• US Personal Income for Feb 2025 (MoM) - Forecast +0.4%, versus +0.9% previous.
• US Core Personal Consumption Expenditure for Feb 2025 (MoM) - Forecast +0.3%, versus +0.3% previous.

Hello traders. Welcome to another ‘blue box’ post where we discuss the recent trade setup that Elliottwave-forecast members traded. In this post, the spotlight will be on the GBPCAD currency pair.

In the long term, GBPCAD is developing as a bearish market within a proposed diagonal structure. The Supercycle degree wave (I) was completed in May 2010, followed by a bounce for wave (II), which ended in November 2015. From that point, wave (III) moved lower and completed in October 2022. Notably, waves (I), (II), and (III) are all 3/7 swing structures, supporting our proposed long-term diagonal structure for members. Diagonals are often composed of five sub-waves, with each wave subdivided into three waves.

Currently, the rally from October 2022, where wave (III) ended, is unfolding as another three-swing sequence. Therefore, we can classify this rally as wave (IV). However, it appears that wave (IV) is an incomplete corrective sequence. Based on projections, wave (IV) could extend to at least 1.96 – 2.08.

We prefer trading along the path of an incomplete sequence. With this in mind, we advised members to buy pullbacks in 3, 7, or 11 swings, while keeping invalidation levels intact at each stage. Let’s now discuss the latest setup we shared with members.

GBPCAD Elliott Wave Trade Setup – 27th March 2025

At the January 2025 low, wave ((2)) of (1) of c of (IV) was completed. From this low, an impulsive sequence began, forming wave (1) of ((3)). Within wave (1) of ((3)), a pullback for wave 4 of (1) started in March 2025 after the pair reached its highest price since July 2016.

We planned to buy from the extreme of wave 4 of (1), provided it completed a 3-swing or 7-swing pullback—also known as zigzag and double zigzag structures, respectively. As the pullback for wave 4 of (1) approached its extreme, we shared the H4 chart below with members

The chart above highlights the Blue Box where we expected members to enter long positions. We anticipated that wave 4 would complete in this zone, providing support for wave 5 of (1).

If the price rallied as expected, we advised members to take partial profit at 1.8530 and move the remaining position to breakeven. This strategy allowed for preparation in case wave 4 developed into a double correction. However, if an impulsive move emerged for wave 5, we planned to take the second profit at 1.9050.

GBPCAD Elliott Wave Trade Setup – 27th March 2025

Later, on March 27, 2025, GBPCAD rallied from the Blue Box, as anticipated. The price surpassed the first target at 1.8530, allowing traders to take partial profit and adjust the stop on the remaining position to breakeven.

With this risk-free setup, traders could shift their focus to other opportunities while still anticipating further profits on this pair. This was a high-confidence setup, carefully analyzed and executed. This approach exemplifies how we apply Elliott Wave theory in our service.

EURGBP: ⬇️ Sell

• EURGBP broke support area
• Likely to fall to support level 0.8300

EURGBP currency pair recently broke the support area between the key support level 0.8350 (which has been reversing the price from the start of March) and the 38.2% Fibonacci correction of the upward wave 2 from the end of February.

The breakout of this support area accelerated the active impulse wave iii of the higher impulse waves 3 and (3).

Given the strongly bullish sterling sentiment, EURGBP currency pair can be expected to fall to the next support level 0.8300.

Silver: ⬆️ Buy

• Silver broke resistance area
• Likely to rise to resistance level 34.80

Silver recently broke the resistance area between the key resistance level 34.20 (top of the previous impulse wave i) and the resistance trendline of the daily up channel from January.

The breakout of this resistance area accelerated the active impulse wave iii of the higher impulse waves 3 and (C).

Given the clear daily uptrend, Silver can be expected to rise to the next resistance level 34.80 (former multi-month high from October) – from where the downward correction is likely.

• GBP/JPY has been trending upward since February 7, fueled by Yen weakness and GBP strength.
• A symmetrical triangle pattern on the daily chart suggests a potential breakout and bullish rally, possibly to 222.00.
• Key support levels are 194.00, 193.50, 192.00, while resistance levels are 197.50, 198.96, 200.00.

The GBP/JPY is one of the more volatile currency pairs and usually provides ample movement and potential opportunities.

In the past few weeks, Yen weakness and resurgent GBP have led the pair higher since bottoming out on February 7 at around the 187.00 handle.

This came about despite increased hopes of further Bank of Japan (BoJ) rate hikes later this year. Bank of Japan (BoJ) Governor Kazuo Ueda said on Wednesday that the central bank will keep raising interest rates if the economy and prices grow as expected. Additionally, strong wage increases for the third year in a row are fueling hopes for more rate hikes by the BoJ.

Meanwhile developments across the pond in the UK suggest further rate cuts may be in offing after the Office for National Statistics reported on Wednesday that the UK's main inflation rate (CPI) rose 2.8% in February compared to a year ago, down from 3.0% in January. This was lower than the 2.9% economists had predicted. Core inflation, which removes changes in food and energy prices, increased by 3.5% in February, less than the 3.7% seen in January and below the expected 3.6%.

All in all its supposed to read a weaker GBP as rate cuts are expected and JPY strength as rate hikes are planned. However this is not how price action has developed over the past few weeks.

Price action and chart patterns are hinting at a major bullish rally for GBP/JPY so let us see what the charts look like.

Technical Analysis - GBP/JPY

GBP/JPY Daily Chart, March 27, 2025

Source TradingView

From a technical standpoint, GBP/JPY on a daily timeframe has staircased its way higher since February 7.

The pair has been trading in a massive symmetrical triangle pattern with a breakout today looking likely.

Trading triangle patterns requires patience, however there is definitely a setup brewing.

A daily candle close above the triangle pattern will be the signal for triangle pattern setup based on the rules. However given the fickle nature of markets in recent times, there is a possibility of a short-term pullback and for that we need to take a look at the H4 chart for potential areas of interest to pay attention to.

GBP/USD Four Hour Chart, March 27, 2025

Source TradingView

Dropping down to a four-hour chart and we have just printed fresh highs which could lead to a potential pullback.

However, there is also the possibility that the pair rises further before any pullback comes to fruition.

The period 14 RSI is also just short of being in overbought territory.
OAU-PRS-236-MarketPulse-variant1-Square

A pullback to the March 26 low around the 193.50 handle may provide bulls with an even better entry following the triangle breakout. If this level fails to hold, a deeper pullback toward the swing low at 192 may be in the offing.

Either way if the triangle pattern does play out, the potential move could take GBP/JPY to highs of around 222.00, last reached before the global financial crisis in December 2007.

A mega move if there ever was one.

Support

• 194.00
• 193.50
• 192.00
• 190.00

Resistance

• 197.50
• 198.96
• 200.00
• 201.65