5 Dynamic Forex Trade Ideas for Tariff Truce Global FX markets are resetting after Monday’s euphoric rally sparked by the 90‑day US‑China tariff truce. The knee‑jerk surge in risk assets pushed the USD to a one‑month high, lifted high‑beta crosses such as AUD/JPY and CAD/JPY, and left policy‑sensitive majors (EUR, GBP) nursing losses. Heading into Tuesday’s US CPI release, the dominant narrative has shifted from “recession risk” to “policy patience”: the Federal Reserve’s hawkish pause, Bank of Japan officials flagging conditional scope to resume hikes, and the ECB openly preparing additional easing. Volatility is being repriced accordingly: dollar call‑skew has ticked higher, while safe‑haven premiums in JPY and CHF are beginning to erode. Against that macro backdrop—and after the overnight pull‑back in the greenback as traders square ahead of the data—five currency pairs present the clearest blend of technical exhaustion and macro catalysts to justify high‑conviction, short‑duration ideas. 5 Dynamic Forex Trade Ideas for Tariff Truce: # Pair Bias & Entry Zone Initial Stop 1st Target Risk/Reward Core Rationale 1 USD/JPY SELL 148.00 – 148.20 (recent spike into major supply) 148.90 146.20 ≈ 2.5 : 1 Price has stretched >3‑σ above 20‑DMA and is stalling just under the 2014 trend‑line extension. 61.8 % Mar‑Apr retrace (146.85) already satisfied; momentum divergence on 4‑h RSI & Fed‑CPI risk favour mean‑reversion. Any softer US CPI print or verbal jawboning from Japanese authorities could accelerate a squeeze lower. 2 EUR/GBP SELL 0.8410 – 0.8420 (re‑test of broken channel floor) 0.8450 0.8330 ≈ 2.7 : 1 Euro underperforms on dovish‑ECB rhetoric; UK jobs report only mildly soft. Cross capped by 9‑DMA & descending trend‑line. ZEW pop failed to lift EUR, confirming relative‑strength shift to GBP. 3 CAD/JPY BUY 105.70 – 105.90 (bull flag breakout) 104.80 108.00 ≈ 2.2 : 1 Tariff truce + firmer crude keep CAD bid while JPY remains soft. Pair cleared descending‑channel top; 4‑h MACD turns positive. Upside void until Sept‑24 swing high near 108. 4 CHF/JPY SELL 176.00 ± 15 pips (triple‑top / weekly pivot) 177.20 172.50 ≈ 2.9 : 1 All‑time‑high zone coincides with weekly R2; risk‑on backdrop drains demand for CHF safe‑haven while BoJ headlines hint at eventual rate‑normalisation → skew favours pull‑back. Bearish divergence on daily Stochastics reinforces case. 5 EUR/USD SELL 1.1110 – 1.1130 (minor bounce) 1.1180 1.0950 ≈ 2.6 : 1 Pair broke 100‑DMA & 4‑h channel; UOB/ING both flag room to 1.1055/1.0945. US CPI risk still dollar‑supportive; ECB review keeps policy‑easing narrative alive. Oversold, but no base yet—sell rallies into prior support‑turned‑resistance. Conclusion The 90‑day tariff pause has given markets their first genuine dose of “good” geopolitical news in months, unleashing a sharp—but still fragile—reflation bid. Behind the headlines, however, three structural forces continue to steer FX price action: Policy patience, not pivot: The Fed’s hawkish hold, the ECB’s reluctance to tighten further, and the BoJ’s conditional path to renewed hikes create asymmetric rate‑differential pressures that still favour the USD over the EUR and keep the JPY pinned unless genuine intervention risk resurfaces. Selective safe‑haven retreat: As recession odds are marked down, defensive flows into CHF and JPY are fading. That reversal is most visible where yield and commodity tailwinds are strongest—CAD/JPY and CHF/JPY—and where crowded euro longs are now being unwound. Data‑dependence at the point of impact: Tuesday’s US CPI, Wednesday’s German data run, and a barrage of Fed speakers will validate—or quickly nullify—the tariff‑relief rally. High‑conviction trades must, therefore, combine tight technical timing with clear macro catalysts and disciplined risk‑to‑reward metrics. The five setups highlighted—selling rallies in USD/JPY and EUR/USD, fading strength in EUR/GBP, buying dips in CAD/JPY, and shorting extremes in CHF/JPY—each exploit these themes within well‑defined chart structures and ≥ 2:1 reward profiles. Should US inflation surprise on the soft side, dollar shorts and JPY rebound trades will move fastest; a hotter print would likely extend the USD’s carry advantage and accelerate the unwind in haven crosses. Either way, the next 24–48 hours will test whether Monday’s risk surge was a genuine inflection point or merely an over‑enthusiastic relief rally. Positioning with clarity on entry, exit, and rationale ensures traders capture the opportunity—while respecting the speed with which sentiment can shift in a tariff‑driven, data‑sensitive market. Check out more Forex Trade Setups on our forex page. 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