Key Points:The BOJ may consider raising its policy rate to 1.25% in September or October.Yen intervention and expectations of higher Japanese rates are pressuring USDJPY.USDJPY could extend its correction if it remains below key technical support.
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The Bank of Japan kept its policy rate at 1% in July. It came after a 25 basis point hike in June. But the last meeting did not indicate that the tightening cycle was over. The BOJ placed more weight on the risk of the underlying inflation exceeding its 2% target.
The depreciating yen has increased the pressure for higher interest rates. It increases the costs of imported fuel, food and industrial materials. While currency intervention can slow the rate of decline, it may not eliminate the big interest rate spread between Japan and the United States. That could mean that the BOJ needs to tighten policy to counter the primary driver of yen weakness.
In my view, the BOJ may consider a policy rate increase to 1.25% in September/October. September is now the first realistic window while October remains possible if policymakers want more inflation and wage data.
BOJ Interest Rate Decision Keeps September Hike in Focus The BOJ maintained the interest rates steady with 8-1 vote. But the board member Hajime Takata supported an immediate increase to 1.25%. This means that the tightening camp is beginning to grow within the bank as evidenced by his dissent. The bond yield of the 2-year Japanese bond also rose to 1.51% following the meeting. This suggests the bond market expects the interest rates to remain higher.
Governor Kazuo Ueda gave clear warning about the cost of waiting too long. He said that the lack of action could increase the risk of inflation. The bank would also begin to discuss these risks starting with its September meeting. This guidance opens the door for a potential rate hike in September.
This message was supported by the BOJ’s July forecast. The bank added that it would consider raising the policy rate if the economy and prices evolve in line with the bank’s expectations. The bank said that the financial environment is accommodative, as real interest rates remain negative. So, a 1% policy rate might still be too low if the inflation 2%.
The next move will depend on the upcoming data about inflation, wages and currency. The strong wage data and another increase in inflation expectations could warrant a September rate increase. The yen’s depreciation again may push the BOJ into a more urgent decision. The bank could hold off until October or December if these pressures ease.
Japan Inflation and Wage Growth Support Further BOJ Rate Hikes The annual inflation rate in Japan climbed to 1.7% in June and the core inflation rate to 1.6%. Both readings are below BOJ’s target. But they are not based on current prices and take into account government energy subsidies. The BOJ is expecting the core inflation to surge to above 2% in the second half of fiscal 2026.
The producer prices suggest the future inflation. These grew 7.1% year on year in June, following 6.6% growth in May. The chart below shows a strong rise in producer prices since March 2026. Most of this increase was due to increased energy, chemical and petroleum prices. The companies could shift some of these costs back to consumers, making it more difficult for the BOJ to maintain the rates.
The wage data also indicates additional tightening. The average cash earnings grew 3.2% year on year in May.
On the other hand, the real earnings grew 1.4% year on year and continue to grow in 2026 as seen in the chart below.
At the same time, business inflation expectations increased from 2.4% to 2.7%. When wages are growing, consumers can more easily afford higher prices and when expectations are increasing, inflation is more likely to continue.
Strong demand for semiconductors, high energy prices and the weak yen may continue to weigh on inflation. These forces are in favor of transitioning to 1.25% by the end of 2026.
If these factors remain positive and continue to grow, the BOJ could hike rates further to 1.5% in early 2027. But if the oil price drops and the yen continues to strengthen, the bank may be able to take a break after its next rate increase.
USDJPY Forecast as BOJ Rate Hike Supports the Yen The hawkish BOJ and suspected currency intervention pushed the USDJPY lower. The strength in yen at the end of July has pushed USDJPY to close the month around 157.40. This is around 3% down for July and opens the door for further correction in August.
If the BOJ raises rates, then the US dollar will become less attractive relative to the yen. This may put more pressure on USDJPY on the downside.
But the difference in rates between the U.S. and Japan is still quite large. The 2-year yield in the United States was nearly 4.31%, while in Japan it was around 1.51%.
If the BOJ hikes rates and US yields drop, USDJPY may retreat to the 152-155 area. But a BOJ rate hike and another US rate increase would drag the pair back towards 160.
USDJPY Technical Analysis as Pullback Reaches Key Support USDJPY dropped after marking a high at the 164 level and closed the month below the 157 level. This means that the breakout above the 160 level, which was triggered in June 2026, failed. USDJPY still needs to consolidate below the 160-162 area.
The weekly chart below shows that USDJPY has been trending within an ascending channel pattern since the January 2023 lows. If USDJPY continues to drop below 157 next week, it will likely continue its momentum toward the 149-150 area as seen by lower support of the ascending channel pattern.
The importance of the current support zone is highlighted on the daily chart, which shows that USDJPY closed slightly below the rising trend line and the 200-day SMA.
But this was the last day of the month, which triggered strong volatility in the financial markets. This means that a recovery above 158 next week and continued upside momentum may allow the pair to rally toward the 160 area.
However, if the pair continues to drop below the 157 level, it will open the door for a continued decline toward the 152 area. This level is marked by the red dotted support line.
But the RSI indicator shows an extremely oversold condition in the short term and indicates a rebound before the next drop. A recovery above 161.50 will suggest that the bottom has formed. This bottom may allow the pair to continue upside.
In Closing The BOJ has opened the door to another interest rate hike. Rising producer prices, strong wage growth and higher inflation expectations support the tighter policy. The weak yen also increases imported inflation. In my view, the BOJ may raise the policy rate to 1.25% in September or October. It could delay the move if inflation eases or the yen continues to recover.
The higher Japanese interest rates could place further pressure on USDJPY. A continued decline below 157 may push the pair toward the 150-152 area. But the oversold conditions could trigger the short term rebound first. A recovery above 161.50 would indicate that the bottom is confirmed and the pair is ready to move higher again.
Read more: BOJ Rate Hike to 1.25% Puts Japanese Yen in Focus
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Muhammad Umair is a finance MBA and engineering PhD. As a seasoned financial analyst specializing in currencies and precious metals, he combines his multidisciplinary academic background to deliver a data-driven, contrarian perspective. As founder of Gold Predictors, he leads a team providing advanced market analytics, quantitative research, and refined precious metals trading strategies.
US Dollar Talking Points: Coming into this week there was a one-in-three chance for a rate hike at the Fed, which sounded peculiar to me as many were calling for bullish breakouts in the USD. As looked at in the webinar on Tuesday, it was the USD/JPY backdrop that mattered most and the pair reversed aggressively as allegations of US and Japanese coordination drove prices lower.
Market hopes for a rate hike from the Fed were dashed but it’s the response to that which is defining the week, at this point.
The initial pullback in USD/JPY was bid as buyers jumped in at the support I looked at in the post-Fed article. But then on Thursday night, right around the European open, selling began to show in USD/JPY. That move looks like it was intervention from Japan and reports circulating on Thursday appeared to echo that. But perhaps the larger move was in the pair around the cash equity open as USD/JPY slid aggressively around 9:30 AM and that led to circulating rumors that the New York Fed performed another ‘rate check,’ calling member banks like what happened back in January.
While the NY Fed has access to rates the act of actual calling banks can be seen as a possible precursor to an intervention. And that (allegedly) was ramped up on Friday morning as the circulating rumor was that the New York Fed was calling banks to warn that there might be action later in the day. This brought another wave of weakness as the bounce in USD/JPY was eviscerated, and the pair returned back-below the 160.00 level.
For next week this is the big theme, whether we see more profit taking and risk aversion from longs as it seems as though both sides of the pair have interested parties trying to talk the price lower.
In USD/JPY, it’s the 155 area that’s of interest for a deeper pullback or sell-off, as this was the resistance that showed after the breakout from the Takaichi election last year.
USD/JPY Daily Price Chart Chart prepared by James Stanley; data derived from Tradingview USD Despite the chaotic second half of the week the DXY basket held well with the levels looked at on Tuesday. With a couple hours until the weekly close price is testing below the 100-level in DXY but the 100.36-100.44 zone came in as lower-high resistance, and for next week, that combined with 100.65 and 100.86-101 serve as resistance for bearish continuation scenarios.
US Dollar Four-Hour Chart Chart prepared by James Stanley; data derived from Tradingview EUR/USD The Euro is a whopping 57.6% of the DXY basket, but when we consider how long and built-in that carry trade is in USD/JPY, it makes sense as to why flows there could impact the larger major market of the Euro.
That was on display this week as EUR/USD broke out of a falling wedge around the Fed, and then ran up to above the 1.1500 level as USD broke down with the USD/JPY move.
For next week, 1.1500 is now a level for bulls to defend, with 1.1469 below that and then 1.1436.
EUR/USD Four-Hour Chart Chart prepared by James Stanley; data derived from Tradingview --- written by James Stanley, Senior Market Analyst, Global Macro
Key Points:EUR/USD rebounded from session lows as traders reacted to inflation data from the EU. USD/CAD gained ground as precious metals markets pulled back.USD/JPY was extremely volatile after BoJ intervention.
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U.S. Dollar Retreats From Session Highs
DXY 310726 4h Chart U.S. Dollar Index is swinging between gains and losses as traders react to the final reading of Michigan Consumer Sentiment report. The report indicated that Consumer Sentiment increased from 49.5 in June to 55.2 in July, compared to analyst forecast of 54.0.
Currently, U.S. Dollar Index is trying to settle below the support at 99.85 – 100.00. If U.S. Dollar Index manages to settle below the 99.85 level, it will head towards the next support, which is located in the 99.25 – 99.40 range. RSI has recently moved back into moderate territory, so there is enough room to gain additional downside momentum in the near term.
EUR/USD Rebounds Above The 1.1500 Level
EUR/USD 310726 4h Chart EUR/USD rebounded from session lows as traders remained focused on inflation data from the EU. Euro Area Inflation Rate increased from 2.8% in June to 2.9% in July, in line with analyst estimates. Euro Area Core Inflation Rate increased from 2.4% to 2.5%, while analysts expected that it would remain unchanged at 2.4%.
From the technical point of view, EUR/USD continues its attempts to settle above the resistance level at 1.1510 – 1.1525. If EUR/USD manages to settle above the 1.1525 level, it will move towards the next resistance at 1.1600 – 1.1615.
GBP/USD Tests Resistance At 1.3465 – 1.3480 GBP/USD 310726 4h Chart GBP/USD is mostly flat as traders react to the UK Nationwide Housing Prices report. The report showed that housing prices increased by +0.1% month-over-month in July, in line with analyst consensus.
Currently, GBP/USD attempts to settle above the resistance at 1.3465 – 1.3480. In case this attempt is successful, GBP/USD will head towards the next resistance level, which is located in the 1.3550 – 1.3565 range.
USD/CAD 310726 4h Chart USD/CAD is moving higher as traders react to the pullback in precious metals markets. Gold pulled back below the $4050 level, while silver declined below $57.50. Other commodity-related currencies are losing some ground in today’s trading session.
If USD/CAD manages to settle below the support at 1.4010 – 1.4025, it will head towards the next support level at 1.3920 – 1.3935.
USD/JPY Stays Volatile After BoJ Intervention
USD/JPY 310726 4h Chart USD/JPY is jumping back and forth in volatile trading after yesterday’s intervention from the Bank of Japan. According to Bloomberg’s estimate, Japan spent about $53 billion to provide support to the national currency. It should be noted that Japanese officials did not confirm the intervention.
Today, traders also focused on BoJ Interest Rate Decision. Normally, the rate decision would be the key event of the week, but the massive intervention served as a more important catalyst.
The Bank of Japan left the interest rate unchanged at 1%, in line with analyst estimates. One board member voted for a hike.
In case USD/JPY settles below the support at 159.50 – 160.00, it will head towards the next support level at 157.50 – 158.00. BoJ may try to intervene again as the yen is fundamentally weak. The currency requires additional support to break the current trend. In case BoJ does not intervene, USD/JPY bulls may calm down and push USD/JPY back above the 160.00 level.
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Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.
Despite the sharp pullback across USD/JPY and the US Dollar Index (DXY), the broader bullish structure remains intact. The latest correction appears to have been driven primarily by profit-taking, renewed Bank of Japan intervention concerns, and positioning adjustments following USD/JPY's test of major long-term resistance, rather than a meaningful deterioration in the US dollar's macroeconomic outlook.
As long as Middle East tensions continue disrupting energy markets and supporting elevated crude oil prices, inflation risks remain tilted to the upside. Together with resilient US Treasury yields, these factors continue to reinforce the broader bullish outlook for the US dollar.
Several important technical structures are now being tested, helping define whether the latest pullback represents a healthy correction within the prevailing uptrend or the beginning of a broader reversal.
Key patterns in focus USD/JPY's nearly 500-point correction coincided with the lower boundary of the April 2025–July 2026 ascending channel, renewed BOJ intervention expectations, and profit-taking after the pair tested the 164 resistance zone. That resistance also aligned with one of the year's strongest technical confluence zones, including the midpoint of both the 2025–2026 and 2022–2026 ascending channels, alongside overbought momentum conditions across multiple timeframes. The correction may have allowed momentum to reset before another attempt at fresh yearly highs. The DXY also corrected alongside USD/JPY as markets reassessed Federal Reserve decision following the July meeting. Despite the pullback, the index continues to respect its year-long bullish structure above major trend support. The broader bullish dollar outlook remains valid provided: DXY holds above the 99.30–100.30 support zone. USD/JPY remains above 157.50–158.00. Middle East supply disruptions continue supporting elevated crude oil prices. I covered these scenarios in my latest bi-weekly webinar.
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USD/JPY Price Outlook: Weekly Time Frame – Log Scale
Source: TradingView
Following the nearly 500-point correction, USD/JPY is testing another major technical confluence zone.
Current support aligns with:
The April 2025–July 2026 ascending trendline. The 27.2% Fibonacci retracement of the April 2025–July 2026 advance near 158.00–157.50. Oversold momentum conditions on the daily timeframe. Weekly RSI holding above the neutral 50 level. This technical confluence follows the rejection from the 164 resistance zone, where price simultaneously tested the midpoint of both the 2022–2026 and 2025–2026 ascending channels.
Taken together, these factors continue to favor the broader bullish structure unless price records a decisive weekly close below 157.00.
Bullish Scenario A recovery above 160.60 would shift attention back toward the major resistance zone between 163.70 and 164.70, where another period of consolidation or profit-taking could emerge.
A successful breakout above this area would expose the next upside objectives near:
167 170 These correspond to the upper boundary of the April–July ascending channel.
Bearish Scenario A decisive break below 157.00 would expose the next major support levels near:
155 152 149 These levels coincide with the lower boundary of the broader 2022–2026 ascending channel and represent the next significant technical support should the current bullish structure fail.
DXY Price Outlook: Daily Time Frame – Log Scale
Source: TradingView
The recent pullback in the DXY occurred just below the critical 102.00 resistance zone, which remains the key level required to confirm another bullish breakout.
Despite the decline, price action continues to respect the ascending trendline connecting the higher lows established throughout 2026, reinforcing the broader bullish structure.
As long as the index remains above the 99.30–100.30 support zone, the long-term bullish outlook remains intact.
The daily chart therefore continues to suggest that the recent weakness represents a correction within the prevailing uptrend rather than the beginning of a broader reversal.
DXY Price Outlook: Monthly Time Frame – Log Scale
Source: Trading view
The monthly chart continues to reinforce the US Dollar Index's broader bullish structure through several important technical developments:
An ascending channel dating back to 2008 continues to support the Dollar Index's long-term uptrend. Its lower boundary, near the 95–97 zone, remains the next major support area should the DXY close below 99.30, invalidating the 2026 bullish structure. Such a move could either trigger another long-term rebound or mark the beginning of a broader structural drawdown. The DXY is currently testing a major technical confluence that includes: The neckline of a potential double-bottom pattern, positioned between the long-term 2008 ascending channel and the 2022–2026 descending channel. The midpoint of the 2022–2026 descending channel. A multi-year support and resistance zone that has repeatedly defined price action since 2023. A monthly close above 102.00 would strengthen the bullish outlook, exposing the next resistance levels at 102.80, 104.50, and ultimately 107.00, which coincides with the upper boundary of the descending channel in place since 2022.
Such a move would likely coincide with renewed geopolitical tensions, stronger inflationary pressures, or a more hawkish Federal Reserve. It would also increase downside pressure across major currencies and precious metals, potentially pushing them toward fresh yearly lows before a longer-term reversal emerges.
As long as Middle East tensions persist, crude oil prices remain supported above the $70–80 per barrel region, and dollar pairs continue to hold above their year-long bullish structures, downside risks across global markets are likely to remain elevated.
Market news from the European morning session - 31 July 2026
Headlines:
How have interest rate expectations changed after this week's events?BOJ governor Ueda says to expect to keep raising interest rates in response to economic, financial conditionsBOJ governor Ueda says will conduct monetary policy in a manner so as to not fall behind the curveBOJ leaves rates unchanged as expected. Vote was 8-1ECB's Kocher: Decisions to be based on incoming data to bring inflation back to the 2% targetEuro area inflation nudges up in July, keeps the pressure on the ECBFrench inflation accelerates in July, reaffirming the broader trend in the regionItaly July preliminary CPI +2.8% vs +2.8% y/y expectedGerman unemployment rises by slightly more than anticipated in JulySouth Korea's KOSPI extends rebound in closing stages of the week, now up 17% todayMarket update:
USD and AUD lead, CHF lags on the dayWTI crude up 0.7% to $84.20European indices mostly higher; S&P 500 futures up 0.5%US 10-year yields up 1.2 bps to 4.675%Gold down 1.1% to $4,057Bitcoin down 1.3% to $63,887As we count down to the end of the month, markets are still seeing some volatile swings in ending the week.
The rebound in tech shares continues after South Korea's benchmark KOSPI index posted near 18% gains today. And that's setting a more positive backdrop for broader markets.
European stocks are pushing modestly higher with the DAX up 0.7% and CAC 40 up 0.9%, while US futures are posting solid gains as well in looking to wrap up the week. S&P 500 futures are up 0.5% with Nasdaq futures up 1.3% currently. No hyperscaler worries this week is also helping to bolster the mood, for now at least.
Besides that, we once again had another taste of Japanese yen volatility with a suspected second round of intervention. USD/JPY recovered well from yesterday's drop to settle above 160.00 today before being shot back down to 158.55 in a jiffy during the session. It was a gradual recovery after but one that is quick to see the pair move back up by 0.3% to 160.05 currently.
At the same time, the dollar is seeing a modest bounce as well with EUR/USD down 0.3% to 1.1495 and USD/CHF up 0.5% to 0.8095 on the day.
In terms of economic data, we had euro area inflation numbers for July and they were a tad hotter than expected. That will just serve to keep the ECB on their toes ahead of a likely rate hike again in September.
In other markets, oil prices are settling just a little higher with WTI crude up 0.7% to $84.20 and 10-year Treasury yields also just a touch higher by nearly 2 bps to 4.68%. Meanwhile, gold is seen down 1.1% to $4,057 as the back and forth continues for precious metals.
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investingLive European markets wrap: Eurozone inflation ticks up in July; USD/JPY intervention again?How have interest rate expectations changed after this week's events?ECB's Kocher: Decisions to be based on incoming data to bring inflation back to the 2% targetEuro area inflation nudges up in July, keeps the pressure on the ECBItaly July preliminary CPI +2.8% vs +2.8% y/y expectedStealth intervention causes wild swings in USD/JPY; focus stays on Middle East and next US CPIGerman unemployment rises by slightly more than anticipated in JulyGold fails to extend gains as traders await the US CPI and Middle East developments BOJ governor Ueda says will conduct monetary policy in a manner so as to not fall behind the curveFrench inflation accelerates in July, reaffirming the broader trend in the region
USD/JPY struggled near 164.00 and started a fresh slide. It traded below a major bullish trend line with support at 163.30 on the 4-hour chart. Bitcoin could gain strength if it settles above the $65,650 resistance. The US GDP grew 1.5% in Q2 vs 2.1% expected. USD/JPY Technical Analysis The US Dollar failed on more than two occasions near 164.00 against the Japanese Yen. USD/JPY reacted to the downside below 163.50.
Looking at the 4-hour chart, the pair dipped below the 76.4% Fib retracement level of the upward move from the 160.49 swing low to the 163.98 high. There was also a move below a major bullish trend line with support at 163.30.
The pair even settled below the 100 simple moving average (red, 4-hour) and the 200 simple moving average (green, 4-hour).
If there are more losses, the pair could find bids near the 1.618 Fib extension level at 158.35. The next major support could be near 158.00. The main support might be 157.40. A downside break and close below 157.40 might send the pair toward 156.80. Any more losses could open the doors for a test of 155.50.
On the upside, the pair could face resistance near 161.50. The next major resistance might be 162.25 or the 200 simple moving average (green, 4-hour).
A close above 162.25 could start another steady increase. In the stated case, the bulls could aim for a move to 163.00. Any more gains might open the doors for a test of 164.00.
Looking at Bitcoin, the price started a steady increase, but it must settle above $65,650 to gain bullish momentum.
Upcoming Key Economic Events:
Chicago Purchasing Manager’s Index for July 2026 – Forecast 56.0, versus 56.7 previous. Michigan Consumer Sentiment Index for July 2026 (Prelim) – Forecast 54.0, versus 54.4 previous.
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The Japanese Yen is surging accross the board in the American session on Thursday, without a clear catalyst. This development hints that Japanese authorities may finally be intervening in foreign exchange markets following days of speculation.
At the time of press, the USD/JPY pair was down 1.8% on the day at 160.55, while EUR/JPY was losing 1.5% at 184.80, and GBP/JPY was falling 1.4% at 215.45.
Developing story, please refresh the page for updates.
Japanese Yen Price Today The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the US Dollar.
USDEURGBPJPYCADAUDNZDCHFUSD-0.35%-0.34%-1.80%-0.17%-0.76%-1.18%-0.72%EUR0.35%-0.01%-1.42%0.18%-0.43%-0.85%-0.36%GBP0.34%0.00%-1.40%0.17%-0.42%-0.84%-0.33%JPY1.80%1.42%1.40%1.60%1.00%0.56%1.09%CAD0.17%-0.18%-0.17%-1.60%-0.59%-1.01%-0.52%AUD0.76%0.43%0.42%-1.00%0.59%-0.41%0.08%NZD1.18%0.85%0.84%-0.56%1.01%0.41%0.54%CHF0.72%0.36%0.33%-1.09%0.52%-0.08%-0.54% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
USD/JPY held near 163.50 on Thursday, with the yen retreating slightly after strengthening in the previous session. The currency had been supported by a broader dollar decline following the Federal Reserve’s decision to keep interest rates unchanged.
However, three FOMC members voted in favour of a rate hike, and Fed Chairman Kevin Warsh stressed that the pause should not be interpreted as a rejection of further policy tightening. Future decisions will continue to be data-dependent.
The Bank of Japan is also expected to keep rates unchanged on Friday but is likely to signal that further hikes remain possible to contain the yen’s decline. Verbal interventions from Japanese authorities have so far provided little relief, and the BOJ has offered no clear guidance on the timing of its next move.
Geopolitical tensions have once again intensified, with media reports indicating that the United States has resumed airstrikes on Iran following attacks on American forces in the region.
Technical Analysis
On the H4 USD/JPY chart, the market is forming a consolidation range around the 163.60 level, currently extending between 163.20 and 163.89. A move higher towards 163.60 is expected, with scope for the trend to extend to 164.15 and then to 164.85. The MACD indicator supports this scenario, with its signal line above zero but pointing downwards, indicating the potential for short-term consolidation before further upside.
On the H1 chart, USD/JPY has completed a downward move to the 163.20 level. A move higher towards at least 163.60 is expected next. A breakout above this level would open the way for a continuation towards 164.15. The Stochastic oscillator confirms this scenario, with its signal line above 50 and pointing upwards towards 80, indicating short-term bullish momentum.
Conclusion USD/JPY is trading in a narrow range as markets digest the Federal Reserve’s decision to hold rates steady, despite three dissenting votes and Chairman Warsh’s insistence that the pause does not signal the end of tightening. The dollar’s modest decline after the announcement provided some relief for the yen, although the currency remains vulnerable. Attention now turns to the Bank of Japan’s policy meeting on Friday, where rates are expected to be left unchanged but with hawkish signals to support the currency. Geopolitical risks have re-emerged following reports of renewed US airstrikes on Iran. Technically, the pair appears poised for further upside towards 163.60 and beyond, with the BOJ’s guidance and intervention risks likely to determine the near-term direction.
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USD/JPY held near 163.50 on Thursday, with the yen retreating slightly after strengthening in the previous session. The currency had been supported by a broader dollar decline following the Federal Reserve's decision to keep interest rates unchanged.
However, three FOMC members voted in favour of a rate hike, and Fed Chairman Kevin Warsh stressed that the pause should not be interpreted as a rejection of further policy tightening. Future decisions will continue to be data-dependent.
The Bank of Japan is also expected to keep rates unchanged on Friday but is likely to signal that further hikes remain possible to contain the yen's decline. Verbal interventions from Japanese authorities have so far provided little relief, and the BOJ has offered no clear guidance on the timing of its next move.
Geopolitical tensions have once again intensified, with media reports indicating that the United States has resumed airstrikes on Iran following attacks on American forces in the region.
Technical analysis
On the H4 USD/JPY chart, the market is forming a consolidation range around the 163.60 level, currently extending between 163.20 and 163.89. A move higher towards 163.60 is expected, with scope for the trend to extend to 164.15 and then to 164.85. The MACD indicator supports this scenario, with its signal line above zero but pointing downwards, indicating the potential for short-term consolidation before further upside.
On the H1 chart, USD/JPY has completed a downward move to the 163.20 level. A move higher towards at least 163.60 is expected next. A breakout above this level would open the way for a continuation towards 164.15. The Stochastic oscillator confirms this scenario, with its signal line above 50 and pointing upwards towards 80, indicating short-term bullish momentum.
ConclusionUSD/JPY is trading in a narrow range as markets digest the Federal Reserve's decision to hold rates steady, despite three dissenting votes and Chairman Warsh's insistence that the pause does not signal the end of tightening. The dollar's modest decline after the announcement provided some relief for the yen, although the currency remains vulnerable. Attention now turns to the Bank of Japan's policy meeting on Friday, where rates are expected to be left unchanged but with hawkish signals to support the currency. Geopolitical risks have re-emerged following reports of renewed US airstrikes on Iran. Technically, the pair appears poised for further upside towards 163.60 and beyond, with the BOJ's guidance and intervention risks likely to determine the near-term direction.
The US dollar weakened despite three Fed officials dissenting in favour of a rate hike, as traders pushed back expectations for a second tightening cycle. With the Federal Reserve now behind us, attention turns to the Bank of Japan, where guidance rather than rates is expected to drive the next move for USD/JPY and GBP/JPY.
View related analysis:
USD/JPY Weekly Outlook: Fed, BOJ and Hormuz risks put 165 in focus FOMC Recap: Fed Holds, but Not Quite the “Hawkish Hold” Traders Expected Australian Dollar Broadly Lower as Soft CPI Reverses RBA Hike Bets US Dollar Bulls Tighten Grip, Yen Bears Pile In: FX Futures Positioning | COT Report Fed Dissent Fails to Lift the US Dollar The Fed held its interest rate target at 3.5%–3.75%, although three members dissented and called for a 25bp hike. Still, the US dollar was broadly lower as the meeting was not deemed as hawkish as many had expected. Fed funds futures still favour a September hike, although the implied timing of a second hike has been pushed back from December to March, with a probability of just 36.2%.
Given Waller said that "inflation remains elevated relative to the Committee's 2% inflation goal", a September hike seems likely unless incoming employment and inflation data weaken sufficiently. That seems unlikely. However, hikes beyond September remain uncertain and will likely hinge on inflation expectations, particularly if crude oil prices continue to rise on Middle East headlines. It is this uncertainty surrounding a second Fed hike that weighed on the US dollar, sending EUR/USD up 0.7%, GBP/USD up 0.5%, and USD/CHF down 0.7%.
Source: LSEG
BOJ Guidance Could Drive the Next Move in USD/JPY Focus now shifts to tomorrow's BOJ meeting, where policymakers are widely expected to leave the policy rate unchanged after raising it to 1.0% in June. With markets seeing little chance of another hike this week, the focus will instead be on forward guidance, whether the BOJ upgrades its growth outlook, and whether it continues to view inflation risks as skewed to the upside.
The lack of a hawkish surprise remains the most likely outcome, which could weigh on the Japanese yen. That would favour GBP/JPY and USD/JPY bulls, particularly given the strong uptrends already in place.
That said, traders should always be on guard for a surprise when the BOJ is involved, as it has a long history of catching markets off guard. A hawkish twist—whether through stronger guidance or upgraded forecasts—could send the Japanese yen sharply higher, driving pairs such as GBP/JPY and USD/JPY markedly lower.
GBP/JPY Technical Analysis: British Pound vs Japanese Yen It is not often we see such a textbook trend on a forex market like we’re witnessing on GBP/JPY. Currency markets have a tendency to move aggressively between levels – like an elevator at a shopping mall. Whereas the price action on GBP/JPY is more akin to a nicely trending stock.
The rally from the June low to July high has since witnessed a timely and shallow retracement. The overlapping nature of the daily candles to me suggests is a simple correction, and Thursday’s bullish engulfing candle around the 20-day EMA suggests that correction may now be complete. The daily close above the weekly R2 pivot (217.92) is also constructive to the near-term bullish bias, which remains in play until prices break beneath Friday’s bullish engulfing low.
The July high, 220 handle and weekly R3 pivot provide a potential resistance zone for bulls over the near term. While a break beneath yesterday’s low brings the weekly R1 pivot, last week’s VPOC and the 216.26 low into focus.
Source: ICE, TradingView
USD/JPY Technical Analysis: US Dollar vs Japanese Yen Clearly, we have another strong bullish trend on USD/JPY, though its price action is not as convincing for bulls over the near term. Prices are arguably stretched from the 20-day EMA after USD/JPY met resistance around the monthly R1 and 164 handle.
The 4-hour chart shows strong volume on the most recent candle, amid the post-FOMC US dollar selloff. If prices continue to retrace lower over the near term, bulls may be seeking evidence of support around the 163 handle, July high (162.85) or 20-day EMA (162.73). Therefore, patience may be required before assuming the swing low in in during a weak US dollar environment.
Economists say the Dollar-Yen could extend higher unless the BoJ signals faster rate hikes, with its three-month forecast at 159 now requiring several factors to align. The US Dollar traded close to 163.84 against the Japanese Yen on Wednesday, holding near its highest level of 2026 as markets awaited policy decisions from both the Federal Reserve and Bank of Japan.
USD/JPY has gained around 4.5% since the end of December and approximately 0.8% in July alone. The pair has also risen in five of the past six months, leaving the Yen under sustained pressure.
Latest — Exchange Rates:
Dollar to Yen (USD/JPY): 163.86431 (0.00%)
Euro to Dollar (EUR/USD): 1.137884 (-0.06%)
Pound to Dollar (GBP/USD): 1.328349 (-0.02%)
Rabobank says Friday’s BoJ meeting will come with one advantage: policymakers will already know the outcome of the Fed decision.
That matters because the bank believes the FOMC “may have more impact on the USD/JPY exchange rate than” the BoJ’s own announcement.
A surprise Fed hike would likely deliver another powerful Dollar boost. Rabobank does not expect that outcome, however, and says unchanged US rates could instead trigger “a little profit-taking on long USD positions”.
The Yen’s bigger test comes a day later.
Rabobank argues that recent BoJ comments may have been “specifically aimed at preparing markets for hawkish signals” from Friday’s meeting. Without them, the risk is straightforward: “an absence of hawkish signals from the BoJ this week could open the door for further upside pressure on USD/JPY”.
Image: USD/JPY year-to-date chart showing the climb from January lows near 152 towards 164 USD/JPY’s path this year helps explain why Rabobank thinks the BoJ cannot afford an ambiguous message. The pair has not simply spiked towards 164; it has rebuilt its advance in stages since May, repeatedly recovering from shallow setbacks.
That persistence is the uncomfortable part for Tokyo. Verbal warnings and earlier Ministry of Finance intervention have slowed the move at times, but neither has changed its direction for long. The chart therefore supports Rabobank’s view that intervention alone may be “too costly” when the underlying force is an appreciating US Dollar.
Rabobank notes that the MoF has not bought Yen in the open market since spending JPY11.73 trillion between late April and late May.
One explanation is cost. The bank says officials may simply consider it “too costly to push against an appreciating USD”, particularly while US rate expectations remain firm.
There are signs that Japanese policy support has had some impact. Although USD/JPY has climbed sharply, the Yen is still the fourth-best-performing G10 currency over the past three months because the Dollar has strengthened even more broadly.
Rabobank says this suggests “both the MoF’s intervention and the hawkish signals from the BoJ have had some impact in supporting the JPY”.
Near-Term USD/JPY Forecast: A Move Back to 159 Needs a Hawkish BoJ and Softer Fed Expectations Rabobank maintains a three-month USD/JPY forecast of 159, but admits that target “currently looks optimistic”.
A faster BoJ tightening cycle would help. The bank says an October rate increase, rather than waiting until December, could provide the Yen with support.
Japan’s inflation backdrop gives policymakers room to sound firmer. The BoJ has said an underlying price measure remains well above its 2% target, while wage negotiations have delivered another strong result.
Even that may not be enough on its own.
Rabobank says a move to 159 would likely require “various factors to come together”: greater reassurance over Japan’s fiscal outlook, a clearly hawkish BoJ and a decline in fears of further Fed tightening.
The final ingredient may prove decisive. As the bank puts it, “how far the JPY can recover versus the USD, if at all, is likely to be determined” by the Fed Chair’s message.
Key Points:EUR/USD pulled back as traders focused on the strong rally in the oil markets. GBP/USD moved lower as traders prepared for Fed decision. USD/JPY remained stuck near the 164.00 level.
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U.S. Dollar Moves Higher As Traders Wait For Fed Interest Rate Decision
DXY 290726 4h Chart U.S. Dollar Index gains ground as traders prepare for Fed Interest Rate Decision, which will be released soon.
Analysts expect that Fed will leave the federal funds rate unchanged. Interestingly, FedWatch Tool indicates that there is a 33.7% chance for a rate hike. As usual, forex traders are cautious ahead of the key event of the week.
U.S. Dollar Index failed to settle below the support level at 101.15 – 101.30 and rebounded towards the 101.50 level. In case U.S. Dollar Index manages to settle above 101.50, it will head towards the nearest resistance level, which is located in the 101.80 – 101.95 range.
EUR/USD Pulls Back Amid Rally In The Oil Markets EUR/USD 290726 4h Chart EUR/USD is losing ground as traders react to the strong rally in the oil markets. Oil prices are up by more than 7% as Iran attacked a U.S. base in Jordan. High oil prices will put additional pressure on the European economy and may force the Fed to be more hawkish, which is bearish for the European currency.
The nearest support level for EUR/USD is located in the 1.1350 – 1.1365 range. A successful test of this level will push EUR/USD towards the next support at 1.1285 – 1.1300. RSI is in the moderate territory, so there is plenty of room to gain additional momentum in case the right catalysts emerge.
GBP/USD Retreats Ahead Of Fed Decision GBP/USD 290726 4h Chart GBP/USD is moving lower as traders wait for Fed decision and focus on the rally in the oil markets. Traders are not ready for big moves ahead of Fed’s announcement.
In case GBP/USD settles below the 1.3280 level, it will head towards the support at 1.3250 – 1.3265. A move below the 1.3250 level will push GBP/USD towards the next support level at 1.3170 – 1.3185.
USD/CAD 290726 4h Chart USD/CAD is losing some ground despite the pullback in precious metals. Other commodity-related currencies have found themselves under pressure in today’s trading session.
If USD/CAD declines below the 50 MA at 1.4081, it will head towards the nearest support level, which is located in the 1.4010 – 1.4025 range. On the upside, a move above the resistance level at 1.4125 – 1.4140 will open the way to the test of the next resistance at 1.4235 – 1.4250.
USD/JPY Looks Ready To Test The 164.00 Level USD/JPY 290726 4h Chart USD/JPY continues its attempts to settle above the key resistance level as traders react to rising Treasury yields. The yield of 2-year Treasuries climbed above the 4.33% level, while the yield of 10-year Treasuries settled near 4.65%. Traders should note that USD/JPY will be extremely sensitive to Fed decision and comments from Fed Chair Warsh.
In case USD/JPY manages to settle above the 164.00 level, it will gain additional upside momentum and head towards the 165.00 level. USD/JPY has not tested the 165.00 level since 1986. It remains to be seen whether Bank of Japan would try to defend the yen as the Japanese currency is fundamentally weak and any attempts to break the current trend may waste reserves.
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Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.
/ / Japanese Yen Technical Outlook: USD/JPY Poised for Breakout Ahead of Fed, BOJ USD/JPY is trading within a well-defined weekly range with major event risk on tap over the next few days. Will the Fed or BOJ trigger the breakout?
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Japanese Yen Technical Outlook: USD/JPY Multi-Timeframe Analysis Michael Boutros, FOREX.com Senior Market Analyst, examines the USD/JPY outlook ahead of the Federal Reserve and Bank of Japan rate decisions, highlighting the key technical levels, Treasury yield correlation and why a break above 164 could open the path toward 165. He also explains how market positioning, Fed expectations and BOJ policy could shape the next major move for the Japanese yen.
This content was created by an affiliate of FOREX.com and represents the views and opinions of the author/speakers, not the views and opinions of Forex.com, StoneX Group Inc., or its subsidiaries. The content has not been independently reviewed by FOREX.com.
Key USD/JPY Economic Data Releases
Economic Calendar - latest economic developments and upcoming event risk.
Active Short-term Technical Charts Swiss Franc Short-term Outlook: USD/CHF Rally Presses Yearly Trend Resistance Canadian Dollar Short-term Outlook: USD/CAD Rebound Challenges the July Downtrend Australian Dollar Outlook: AUD/USD Rally Tests Make-or-Break Resistance British Pound Short-term Outlook: GBP/USD Breakout Attempts Major Trend Reversal US Dollar Short-term Outlook: USD Uptrend Faces Make-or-Break Test After CPI Gold Price Short-term Outlook: XAU/USD Bulls Try to Carve Out a Low After 30% Drop --- Written by Michael Boutros, Senior Technical Strategist
Follow Michael on Twitter @MBForex
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The US dollar continues to hold the upper hand against most major currencies ahead of the outcome of the latest Federal Reserve meeting. While the base-case scenario remains for interest rates to stay unchanged, markets are also pricing in the possibility of a rate hike. The Fed’s decision, together with its comments on inflation, economic conditions and the future path of monetary policy, could determine the direction of the US dollar over the coming weeks.
Another factor supporting the dollar is the ongoing geopolitical uncertainty in the Middle East. Despite the temporary suspension of US strikes on Iran and renewed diplomatic efforts, the risk of further military escalation remains, prompting investors to remain cautious ahead of this week’s key events. Geopolitical uncertainty continues to underpin demand for the US dollar as a safe-haven asset. At the same time, USD/JPY’s approach towards multi-year highs has increased expectations of fresh warnings from Japanese authorities and raised the risk of currency intervention. For USD/CAD, oil prices remain another important driver: weaker crude prices continue to limit support for the Canadian dollar and help preserve the pair’s bullish potential.
USD/JPY USD/JPY tested another multi-year high near 164.00 last week. Following the strong rally, the pair has entered a modest pullback. However, if the Federal Reserve delivers a more hawkish outcome or maintains its hawkish tone, the pair could extend its advance towards 165.00–165.50. A decisive move below 163.30 could trigger a deeper correction towards the 162.00–162.60 support area.
Key events for USD/JPY:
Today at 21:00 (GMT+3): US Federal Reserve interest rate decision; Today at 21:30 (GMT+3): Federal Open Market Committee (FOMC) press conference; Tomorrow at 15:30 (GMT+3): US Core Personal Consumption Expenditures (PCE) Price Index.
USD/CAD USD/CAD’s recovery following the formation of a bullish engulfing pattern has stalled near resistance at 1.4130. The pair is currently consolidating within the 1.4060–1.4130 range. A decisive break above the upper boundary of this range could pave the way for further gains towards 1.4160–1.4200. Conversely, a move below 1.4060 could lead to a retest of the recent low near 1.4000.
Key events for USD/CAD:
Today at 17:30 (GMT+3): US crude oil inventories; Today at 20:30 (GMT+3): Bank of Canada Summary of Deliberations; Tomorrow at 15:30 (GMT+3): US GDP data.
Overall, the near-term direction of both USD/JPY and USD/CAD will depend primarily on the Federal Reserve’s decision and its guidance on the future path of interest rates. A more hawkish stance could support a breakout above nearby resistance levels and reinforce the US dollar’s strength. Conversely, a more dovish message could trigger a correction in the greenback, particularly against the Japanese yen, where the proximity of multi-year highs increases the likelihood of renewed warnings from Japanese officials. For USD/CAD, oil price movements and the Bank of Canada’s Summary of Deliberations will remain important additional drivers.
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U.S. Dollar Retreats As CB Consumer Confidence Drops
DXY 280726 4h Chart U.S. Dollar Index is losing ground as traders focus on the weak CB Consumer Confidence report and react to the strong pullback in the oil markets.
CB Consumer Confidence decreased from 92.2 in June (revised from 91.2) to 90.8 in July, compared to analyst forecast of 92.3.
Today, traders also had a chance to take a look at the Case-Shiller Home Price Index report for May. The report showed that home prices increased by +1.6% on a year-over-year basis, compared to analyst consensus of +1.3%.
Oil prices pulled back by -5% amid signs of de-escalation in the Middle East. Falling oil prices pushed Treasury yields lower, which was bearish for the American currency.
Currently, U.S. Dollar Index is trying to settle below the support level at 101.15 – 101.30. In case this attempt is successful, U.S. Dollar Index will head towards the next support, which is located in the 100.50 – 100.65 range.
EUR/USD Rebounds As Oil Markets Dive EUR/USD 280726 4h Chart EUR/USD gains ground, supported by the strong sell-off in the oil markets. Falling Treasury yields provided additional support to EUR/USD. The yield of 2-year Treasuries pulled back towards the 4.26% level, while the yield of 10-year Treasuries settled below 4.60%.
EUR/USD failed to settle below the support at 1.1350 – 1.1365 and rebounded towards the 50 MA at 1.1406. In case EUR/USD settles above the 50 MA, it will get to the test of the nearest resistance level at 1.1420 – 1.1435. A move above the 1.1435 level will push EUR/USD towards the next resistance at 1.1485 – 1.1500.
GBP/USD Moves Away From Weekly Lows GBP/USD 280726 4h Chart GBP/USD is moving higher as traders focus on general weakness of the American currency.
In case GBP/USD manages to settle above the 1.3300 level, it will head towards the nearest resistance at 1.3335 – 1.3350. A move above 1.3350 will push GBP/USD towards the 50 MA at 1.3380. If GBP/USD climbs above the 50 MA, it will head towards the resistance at 1.3450 – 1.3465.
USD/CAD Pulls Back As Traders Take Some Profits Off The Table Ahead Of Fed Decision USD/CAD 280726 4h Chart USD/CAD is losing ground as traders monitor commodity markets and prepare for Fed decision, which will be released tomorrow. FedWatch Tool indicates that there is a 71.7% chance that Fed will leave the federal funds rate unchanged.
If USD/CAD stays below the 1.4100 level, it will head towards the 50 MA at 1.4073. A move below the 50 MA will push USD/CAD towards the nearest support level at 1.4010 – 1.4025.
USD/JPY Remains Stuck Below 164.00 USD/JPY 280726 4h Chart USD/JPY continues its attempts to settle above the resistance level at 163.50 – 164.00 despite falling Treasury yields. Traders ignore intraday dynamics of Treasury markets and focus on hawkish Fed policy outlook. The strong pullback in the oil markets did not provide support to the Japanese yen, which was a bearish sign for the currency.
A successful test of the resistance at 163.50 – 164.00 will push USD/JPY towards the 165.00 level. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.
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The US dollar shrugged off crude oil's sharp decline following reports of renewed US-Iran negotiations, highlighting underlying demand for the greenback ahead of this week's FOMC meeting. With markets pricing a growing chance of further Fed tightening, attention now turns to Chair Kevin Warsh's guidance and whether DXY and USD/JPY can extend their bullish trends.
Source: LSEG
US Dollar and USD/JPY Stay Supported Ahead of the FOMC Meeting Crude oil prices plunged -11.3% on Monday after the US announced it had paused its attacks on Iran, allowing room for negotiations. While President Trump has threatened strong military Iran if talks fail, markets are once again looking at it optimistically. However, it is interesting to note that the pullback on the US dollar was minimal at best, falling as little as 0.25% from the week’s open before scraping a 23-high by the day’s close.
While the Fed is expected to hold interest rates steady at this week's FOMC meeting, markets will pay close attention to Chair Kevin Warsh's comments regarding the latest flare-up in Middle East tensions. While the US and Iran are reportedly in talks and attacks have stalled, this is far from the first time. It also seems highly unlikely that any meaningful agreement will be reached, let alone signed, before the Fed meeting.
That leaves the risk of renewed inflationary pressures intact, along with credible concerns that the Fed could resume hiking interest rates if inflation proves persistent. The US dollar therefore has scope to remain supported heading into this week's interest rate decision, with post-meeting moves likely to be dictated by the perceived hawkishness of Warsh's press conference. We could also see dissenting votes in favour of a rate hike, which would likely add to any bullish reaction in the US dollar.
Fed funds futures currently imply a 55% chance of a hike in September and a 39% chance of another in December. Whether the US dollar extends its lead will likely hinge on whether Warsh validates those expectations.
This content was created by an affiliate of FOREX.com and represents the views and opinions of the author/speakers, not the views and opinions of FOREX.com, StoneX Group Inc., or its subsidiaries. The content has not been independently reviewed by FOREX.com.
US Dollar Index (DXY) Technical Analysis Last week’s bullish expansion rallied from the 10-week EMA and monthly pivot point. This hints that the prior week’s spinning top Doji – which also respected the 10-week EMA as support – could mark an important swing low above the 100 handle. 102 looks within relatively easy reach for bulls unless the Fed surprise with a neutral stance and the US and Iran finally sign a peace deal. I am not holding my breath.
But with the weekly RSI (2) trending higher with prices and nowhere near oversold, a break above 102 could also be on the cards in the coming weeks, if Middle East tensions persist and keep inflation expectations elevated.
Bullish initiation Near Cycle Highs Also note that a bullish engulfing candle formed on Monday, with its lower wick hinting at demand around 101. Prices remains above the monthly VWAP, with a break above 101.50 assuming a move to the 12 handle near the monthly R1 pivot.
Something to be mindful of is that volumes are trending lower on the weekly and daily chart. This does not suggest an imminent top, but suggests the bullish move still has its sceptics. That said, Monday’s bullish outside day saw increased volume relative to Friday and Thursday’s range expansion candle was relatively high volume and above average to show bullish initiation just below the cycle high.
Source: ICE, TradingView
The US Dollar's Strongest Market Correlations EUR/USD, GBP/USD and NZD/USD remain the strongest inverse correlations to the US dollar, reinforcing their sensitivity to broad USD moves. USD/JPY, USD/CHF and USD/SEK continue to show strong positive correlations, making them reliable proxies for USD strength. WTI crude has re-established a strong positive correlation with the US dollar, while gold's inverse relationship has weakened significantly over the past month. AUD/USD remains the outlier, with correlations close to neutral, suggesting domestic factors and China-related themes are outweighing broad USD flows.
Source: LSEG
USD/JPY Technical Analysis: US Dollar vs Japanese Yen The bullish trend on USD/JPY remains firm, and only held back by market participants who seem wary of another intervention from the MOF. Though the MOF appear to have thrown the towel in for now, conceding that they’re currently swimming against the tide of potential Fed hikes, Middle East headlines and inflationary pressures. And that could leave USD/JPY with the potential for a breakout above 164.
Traders may also want to be wary of the bearish divergence on the daily RSI within the overbought zone, but that doesn’t mean it cannot at least try for a breakout over the near term given the bullish pinbar on the daily and potential bull flag on the 4-hour chart.
Note that Monday’s low respected the weekly pivot point and the weekly R1 sits just below 164.50, a potential upside target for bulls.
U.S. Dollar Is Losing Some Ground As Durable Goods Orders Miss Estimates
DXY 270726 4h Chart U.S. Dollar Index is losing some ground as traders react to the Durable Goods Orders report. The report indicated that Durable Goods Orders increased by +0.3% month-over-month in June, compared to analyst forecast of +2.5%.
Today, traders also had a chance to take a look at the Dallas Fed Manufacturing Index report for July. The report showed that Dallas Fed Manufacturing Index improved from 0.0 in June to +1.3 in July, compared to analyst consensus of -1.
In case U.S. Dollar Index pulls back below the support at 101.15 – 101.30, it will head towards the 50 MA at 101.02. A move below the 50 MA will push U.S. Dollar Index towards the next support level at 100.50 – 100.65.
EUR/USD Gains Ground As Ifo Business Climate Exceeds Expectations EUR/USD 270726 4h Chart EUR/USD gained some ground as traders focused on the better-than-expected Ifo Business Climate report from Germany. The report indicated that Business Climate improved from 85.7 (revised from 85.6) in June to 86.6 in July, compared to analyst forecast of 86.
In case EUR/USD settles above the 1.1400 level, it will get to the test of the nearest resistance level, which is located in the 1.1420 – 1.1435 range. On the support side, EUR/USD needs to settle below the 1.1350 level to gain downside momentum in the near term. In this case, EUR/USD will head towards the next support at 1.1270 – 1.1285.
GBP/USD Tests The 1.3300 Level GBP/USD 270726 4h Chart GBP/USD is losing ground despite the strong sell-off in the oil markets. Oil prices are down by -9% amid signs of de-escalation in the Middle East.
A move below the 1.3300 level will push GBP/USD towards the support level at 1.3250 – 1.3265. RSI is in the moderate territory, so there is plenty of room to gain downside momentum in case the right catalysts emerge.
On the upside, a successful test of the resistance at 1.3335 – 1.3350 will open the way to the test of the 50 MA at 1.3406. If GBP/USD climbs above the 50 MA, it will head towards the resistance level at 1.3450 – 1.3465.
USD/CAD Attempts To Settle Above 1.4100
USD/CAD 270726 4h Chart USD/CAD is moving higher despite rising precious metals markets. Other commodity-related currencies are mixed in today’s trading session.
The nearest resistance level for USD/CAD is located in the 1.4125 – 1.4140 range. A move above the 1.4140 level will push USD/CAD towards the next resistance level at 1.4235 – 1.4250.
USD/JPY Is Stuck Below The 164.00 Level USD/JPY 270726 4h Chart USD/JPY continues its attempts to settle above the resistance level at 163.50 – 164.00 despite falling Treasury yields. The yield of 2-year Treasuries pulled back towards 4.30%, while the yield of 10-year Treasuries settled below 4.65%. Bond traders reacted to the sell-off in the oil markets.
It should be noted that forex traders remain focused on longer-term Fed policy outlook. The market expects that Fed will start a rate hike cycle to fight inflation, while the Bank of Japan would be forced to stay dovish due to the weakness of the Japanese economy.
If USD/JPY settles above the 164.00 level, it will gain additional upside momentum and move towards the 165.00 level. It remains to be seen whether BoJ is ready to intervene to provide support to the Japanese currency.
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Fed rate decision – GoldAttention this week turns to Wednesday's FOMC decision, with the Fed largely expected to leave rates unchanged at 3.50%-3.75% for a fifth straight meeting. However, oil's surge above $100 a barrel following renewed Middle East tensions has revived inflation concerns, complicating the policy outlook.
Investors will focus on Fed Chair Kevin Warsh's remarks for clues on whether a September rate hike remains under consideration. Although US inflation eased to 3.5% y/y in June, it remains well above the Fed's 2% target, while higher energy prices risk reigniting price pressures.
A hawkish message would likely support Treasury yields and USD, weighing on Gold as the opportunity cost of holding the non-yielding metal rises. Technically, the yellow metal has recovered towards 4,100 as US-Iran tensions show signs of easing, but momentum remains subdued and the 50-day SMA continues to cap upside attempts. A hawkish Fed could shift the focus back towards the psychological 4,000 floor, while a softer tone may allow the rebound to extend towards 4,200.
BoJ policy meeting – USD/JPYThe Bank of Japan is expected to keep rates unchanged at 1.00% on Friday, following June's 25bp hike to a 31-year high. However, policymakers are likely to maintain a hawkish bias as inflation risks remain elevated amid a weak yen, higher energy costs and robust AI-driven demand.
Investors continue to debate whether the next hike could come as early as September or October, particularly if inflation proves stickier than expected or yen weakness persists. Several BoJ officials have recently argued that rates should move closer to neutral levels, although political pressure from the growth-focused Sanae Takaichi administration may limit the pace of future tightening.
Meanwhile, USDJPY surged to 163.97 last week, marking a fresh 40-year high, before paring gains. Technically, the broader uptrend remains intact, with 164.50 as the next upside target. However, a hawkish BoJ surprise or renewed intervention fears from Tokyo could trigger a correction towards 162.00.
BoE policy meeting – GBP/USDThe Bank of England is widely expected to keep rates unchanged at 3.75%, marking a fifth consecutive hold. Cooling wage growth and easing inflation have reduced the urgency for further tightening. However, policymakers remain wary that renewed Middle East tensions and higher energy prices could reignite price pressures, even after UK inflation eased to 2.6% in June.
Attention will focus on the expected 7-2 vote split, with investors looking for clues on whether policymakers are becoming more concerned about energy-driven inflation risks. Markets will also monitor any discussion around the future pace of quantitative tightening as the BoE reviews its balance-sheet reduction programme.
For GBP/USD, risks remain skewed to the downside. Fiscal uncertainty persists as investors await more details about new PM Andy Burnham's policy plans, while markets continue to price a relatively firm rate outlook despite signs of a cooling economy. Any indication that the BoE is becoming more comfortable with inflation could weigh on sterling, while a more hawkish tone may help sustain the pair's current recovery from the 1.3300 area.
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The US dollar softened a bit in the early part of the Monday session, as the missiles in the Middle East have stopped, for the moment.
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EUR/USD Technical Analysis
EUR/USD trades at 1.13866, pressing the 1.1400 floor of its range below both moving averages. Source: TradingView The euro gapped higher against the US dollar and then took off as the conflict in the Middle East seems to be slowing down again. That being said, with those falling yields in America, it makes sense that the dollar lost a little bit of strength, but we’ve seen selling of the euro come back into play, which makes sense. And now it looks like we are possibly continuing this choppy and volatile negative behavior. The 1.14 level continues to be an area of interest as we are just simply bouncing around with the latest headlines.
GBP/USD Technical Analysis GBP/USD trades at 1.33125, slipping toward 1.3300 below both moving averages. Source: TradingView The British pound took off to the upside, gapped higher to kick off the session, reached the area of the 50-day EMA, and then turned around to show signs of negativity. We find ourselves sitting just above the 1.33 level again. This is an area that has been important multiple times. At this juncture, it looks like support, but if the market breaks down below there, it could lead to fresh selling. We’ll just have to wait and see. Rallies at this point continue to see selling pressure, as we have earlier this morning, based on the last week or so.
USD/JPY Technical Analysis
USD/JPY trades at 163.632, extending its climb above 163 and both moving averages. Source: TradingView The US dollar has gapped lower to kick off the trading session on Monday against the Japanese yen, but turned around to show signs of strength again as despite the fact that rates are falling in America; the interest rate differential between these two currencies is still very wide, so that boosts the carry trade. We’ve broken above massive swing highs going back to the 1980s, so it’s difficult to imagine this market’s going to turn around on a dime. And ultimately, we’re in a nice 45-degree bullish trend, so by all accounts, the chart looks just as bullish now as it did a few days ago.
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TL;DR:Will the Fed and BoJ jointly surprise markets this week? USD/JPY, already at a 40-year high above 163, faces amplified two-way risk from their combined policy signals.
Why This Week Matters More Than a Typical Central Bank Cycle Three major central bank decisions are packed into little more than 60 hours: the Federal Reserve announces policy Wednesday, the Bank of England follows Thursday, and the Bank of Japan concludes its meeting Friday. Markets are unlikely to distribute their attention evenly across all three. The Fed and BoJ have the greatest potential to reshape rate expectations, and the interaction between the two could make USD/JPY the week’s most sensitive pair.
With the pair already trading at a 40-year high, even modest surprises from either central bank could trigger an outsized reaction. That asymmetry — high positioning risk meeting high event risk — is what separates this week from routine policy meetings.
The Fed: A Unanimous Hold, But a Contested Path Ahead The Fed is universally expected to leave the federal funds target range unchanged at 3.50–3.75% on Wednesday. Reuters’ July 21 survey showed all 104 economists expecting no policy change, while futures markets assign only around a one-third probability of an immediate hike.
Yet that headline consensus masks a more important debate over the path ahead. Futures continue to price:
Roughly a 75% probability of a September hike Better than even odds of two increases before year-end That pricing is considerably more aggressive than economists’ consensus for rates to hold steady through December — a disconnect that leaves Treasury yields particularly sensitive to any signal that policymakers are growing less comfortable waiting.
What to Watch: The Voting Breakdown and Warsh’s Tone The meeting’s most important signal may not be the rate decision itself but the voting breakdown. Minutes from the previous FOMC meeting revealed several policymakers were already prepared to support an immediate rate increase before ultimately agreeing to wait for more evidence. Any rise in dissenting votes favoring tightening would give investors a concrete measure of how quickly sentiment inside the Committee is shifting.
Markets will also need to adjust to Chair Kevin Warsh’s communication style. Unlike predecessor Jerome Powell, Warsh has consistently rejected detailed forward guidance. Investors are likely to focus instead on how he characterizes labor market resilience, whether he places greater weight on inflation risk from higher oil prices, and whether he pushes back on the market’s aggressive tightening expectations.
The BoJ: A Quiet Hold With a Loud Subtext Attention then shifts to Tokyo, where the BoJ is also widely expected to leave its policy rate unchanged at 1.00%. The real focus is the quarterly Outlook Report and Governor Kazuo Ueda’s assessment of whether inflation and growth data justify a faster normalization cycle.
Reuters’ latest survey found an overwhelming majority expecting no move this week but anticipating another hike before year-end, with October and December emerging as the most likely windows. Bloomberg has separately reported that some BoJ officials are becoming more receptive to accelerating the pace of tightening if persistent yen weakness keeps feeding domestic inflation.
Even without immediate action Friday, upward revisions to inflation forecasts or stronger confidence in the outlook would reinforce expectations the Bank could move sooner than markets currently anticipate.
Why USD/JPY Carries Unusually High Event Risk That combination gives USD/JPY unusually high event risk from both directions:
On the US side, the key question is whether the Fed signals an approaching rate hike On the Japanese side, investors are watching for stronger evidence that policy normalization is gathering pace A hawkish outcome from either central bank would normally move the exchange rate on its own. If both occur in the same week, the resulting repricing could be considerably larger than either event in isolation.
Positioning further amplifies that risk. USD/JPY has already climbed above 163 — its highest level in four decades — despite repeated verbal intervention from Japanese officials. Earlier currency intervention totaling JPY 11.73 trillion only stabilized the exchange rate for roughly six weeks before the broader yen selloff resumed.
ActionForex analysis suggests that experience has made markets increasingly reluctant to challenge the underlying interest-rate differential unless accompanied by a genuine shift in monetary policy — meaning this week’s decisions may prove far more influential than official rhetoric alone.
ActionForex’s Technical View on USD/JPY Technically, USD/JPY appears to have formed a temporary top at 163.97 following today’s retreat. Any correction should stay relatively shallow and brief as long as the 55 4H EMA, currently at 162.93, continues to hold.
A decisive break above 163.97 would resume the broader uptrend from 155.01 and target 138.2% projection of the 152.25-160.71 advance measured from 155.01 at 166.07.
On the downside, sustained trading below the 55 4H EMA would suggest the rally from 155.01 has entered a corrective phase. That would shift focus toward the 160.46 support cluster, which includes the 38.2% retracement of 155.01 to 163.97.
Key Takeaways The Fed is expected to hold rates at 3.50–3.75%, but futures price a 75% chance of a September hike — well ahead of economist consensus The voting breakdown and Chair Warsh’s tone on inflation and labor resilience matter more than the headline decision The BoJ is expected to hold at 1.00%, but the Outlook Report and Ueda’s language on inflation could signal an accelerated tightening timeline USD/JPY, at a 40-year high above 163, faces amplified two-sided risk if both the Fed and BoJ surprise hawkishly in the same week 163.97 is the key upside pivot; a break above targets 166.07, while a failure to hold the 55 4H EMA (162.93) opens the 160.46 support zone
ActionForex
ActionForex.com was set up back in 2004 with the aim to provide insightful analysis to forex traders, serving the trading community for two decades. We started providing only a daily and a mid-day report, now known as Action Insights. Gradually, we added a lot more in-house contents to the site. Technical Outlook section was expanded to cover more pairs. In addition to that, Top Movers, Heat Map, Pivot Point Charts and Pivot Meters, Action Bias and Volatility Charts, are tools used by traders from all over the world.
US Dollar Talking Points: The US Dollar retains a bullish look from weekly, daily and four-hour charts and next week brings the FOMC, which helped to fire the current rally back in June when they sounded more hawkish than expected. Next week also brings the BoE and BoJ, and USD/JPY has been a large component of that USD breakout of late as the pair has pushed to fresh 40-year highs.
US Dollar The FOMC rate decision in June is what finally helped USD bulls to take a big step forward and from the weekly chart, that move is still quite evident although it started to stall shortly after running into the Fibonacci level at 101.80.
Since then, the pullback retained structure as shown by a bull flag formation, and that led into topside breakout this week after the European Central Bank rate decision.
US Dollar Daily Chart Chart prepared by James Stanley; data derived from Tradingview USD Shorter-Term Going into next week we have a bullish short-term trend to go along with that bullish bigger picture backdrop and there’s a few different spots to investigate for possible higher-low support in the Dollar. Nearby is the 101.20 and 101 areas, with 100.90, 100.65 and 100.36-100.44 areas.
Of course, as usual, the big question draws down to USD counterparts as the DXY basket is simply a composition of underlying currencies, so for strength themes to continue to play, we’ll likely need to see continued weakness in markets like the Euro or Japanese Yen.
US Dollar Four-Hour Price Chart Chart prepared by James Stanley; data derived from Tradingview USD/JPY
As looked at earlier in the week the Bank of Japan is between a rock and a hard place. It’s difficult to pick between either defending the Yen or supporting growth, especially given the bigger picture for the Japanese economy with a dwindling population and the hangover of decades of deflation and disinflation.
This helps to explain why, to this point, there hasn’t been much more than band aids applied to the matter in the form of interventions which, essentially, have been long opportunities for bulls after the dust has settled.
As we go into next week the BoJ is not expected to hike but I’d be surprised if Ueda doesn’t try to address the matter in some form, as failing to do so could lead to an aggressive continuation of a slide that would force the MoF into action. And that would cost capital in the form of burning finite FX reserves to bid down a move that their own rate policy is encouraging, so more likely from here, at least in my opinion, is we hear Ueda try to sound tough on inflation without doing anything concrete.
The more attractive scenario is if it would be enough to bring a pullback without too much to reverse the trend. Of course, we have the Fed to get through before that so the way that USD markets respond there will have impact to how USD/JPY sets up into the BoJ.
From a technical basis, 162.95 was resistance as an ascending triangle built and it hasn’t yet come in as support, so this would be an ideal area to look for bullish defense. Below that, 161.81 is of note before 160.64 comes into play.
USD/JPY Daily Chart Chart prepared by James Stanley; data derived from Tradingview EUR/USD In the USD video on StoneX coming into this week, I shared my opinion that it was EUR/USD dynamics that would determine USD flows and that’s ended up as the case after the European Central Bank rate decision on Thursday.
That led to a bearish break of the bear flag in the EUR/USD pair which went along with the bullish break of the bull flag in the USD.
For next week, bears have an open door to make a move here as we have a bearish short-term setup and a bearish long-term setup, and that Thursday candle was both a bearish engulf as well as the downside break of the flag formation.
EUR/USD Daily Chart Chart prepared by James Stanley; data derived from Tradingview GBP/USD In the effort of balance, I often try to find something on the other side of the USD especially when there’s so many items pointing in a single direction. I’ve been tracking GBP/USD for USD-weakness setups and while that was attractive in early trade last week, as the pair broke out to a fresh higher-high on the US PPI report, the backdrop since has been unforgiving as USD strength has come roaring back.
For next week, there’s a BoE rate decision and that could be meaningful, particularly if Warsh sounds less hawkish than he did in June. Given the relative weakness in equities there may be reason for him to push in that direction and if that happens, I think GBP/USD could be one of the more attractive spots to look for Dollar weakness.
That said, price action on the four hour is bearish, so bulls have some work to do here if they’re going to turn this into a rally. There has been a bit of stalling around the 1.3300 but it’s 1.3390 that I would like to see come into play in order to set up that theme, after which higher-low potential could create a set up to work with.
GBP/USD Four-Hour Price Chart Chart prepared by James Stanley; data derived from Tradingview --- written by James Stanley, Senior Market Analyst, Global Macro
Key Points:EUR/USD gained some ground as traders reacted to PMI reports. GBP/USD moved higher, supported by stronger-than-expected UK Retail Sales. USD/JPY continued its attempts to settle above the resistance level at 163.50 - 164.00.
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U.S. Dollar Moves Lower As Oil Pulls Back
DXY 240726 4h Chart U.S. Dollar Index is losing ground as traders focus on the pullback in the oil markets. WTI oil declined towards the $88.00 level as traders hoped that U.S. and Iran will get back to negotiations. Falling oil prices reduced demand for safe-haven assets, which was bearish for the American currency.
Today, traders also focused on PMI reports. Manufacturing PMI declined from 53.9 in June to 53.8 in July, compared to analyst forecast of 54.3. Services PMI improved from 51.2 to 53.6, compared to analyst consensus of 51.5. Numbers above 50 show expansion.
EUR/USD Gains Gound As Euro Area PMI Reports Exceed Estimates
EUR/USD 240726 4h Chart EUR/USD attempts to rebound as traders focus on better-than-expected PMI data from the EU. Euro Area Manufacturing PMI increased from 51.4 in June to 52.0 in July, compared to analyst forecast of 51.5. Euro Area Services PMI improved from 49.4 to 51.6, compared to analyst consensus of 49.8.
The nearest support level for EUR/USD is located in the 1.1350 – 1.1365 range. In case EUR/USD manages to settle below the 1.1350 level, it will head towards the next support level at 1.1270 – 1.1285.
GBP/USD Gains Ground As UK Retail Sales Beat Estimates GBP/USD 240726 4h Chart GBP/USD is moving higher as UK Manufacturing PMI and UK Services PMI exceeded analyst estimates. Falling oil prices provided additional support to the British pound. Better-than-expected Retail Sales report served as an additional positive catalyst for GBP/USD. The report indicated that Retail Sales increased by +1% month-over-month in June.
Currently, GBP/USD is trying to settle back above the resistance level at 1.3335 – 1.3350. In case GBP/USD manages to settle above the 1.3335 level, it will head towards the 50 MA at 1.3414. A move above the 50 MA will open the way to the test of the resistance level at 1.3450 – 1.3465. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.
USD/CAD Is Mostly Flat As Traders Focus On Commodity Markets USD/CAD 240726 4h Chart USD/CAD is mostly flat despite the rebound in precious metals markets. Other commodity-related currencies are moving higher in today’s trading session.
In case USD/CAD pulls back below the 50 MA at 1.4061, it will head towards the support level at 1.4010 – 1.4025.
On the upside, USD/CAD needs to settle above the resistance level at 1.4125 – 1.4140 to have a chance to gain upside momentum in the near term. A move above the 1.4140 level will push USD/CAD towards the next resistance level at 1.4235 – 1.4250.
USD/JPY Tests Resistance At 163.50 – 164.00 USD/JPY 240726 4h Chart USD/JPY remains stuck near the 164.00 level as traders react to inflation data from Japan. Inflation Rate increased from 1.5% in May to 1.7% in June, in line with analyst consensus. Core inflation Rate increased from 1.4% to 1.6%. The report has also met analyst estimates.
From the technical point of view, USD/JPY attempts to settle above the resistance level at 163.50 – 164.00. In case USD/JPY manages to settle above the 164.00 level, it will head towards the psychologically important 165.00 level. These levels have not been tested since 1986. RSI is in the overbought territory, but there is some room to gain additional momentum in the near term.
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HomeTechnical AnalysisIntraday Analysis 24.07.2026 JPY remains under pressure
USDJPY hits multi-month high
The Japanese yen remains pressured after the pair broke to another fresh high. The bullish bias remains intact even though the pair has hit some resistance.
The bullish mood means that pullbacks have been opportunities for the buy side to stake in. The greenback is testing the next target at 163.30. Another breakout would cement the dollar’s supremacy and pave the way for a rally towards 164.00. On the downside, 162.60 is the first support, with 162.00 a critical bottom.
GBPUSD finds support
Cable was given a boost after the recent downward spiral lifted price action, after finding some support.
A fall below 1.3400 was a sign of profit-taking after bulls struggled to push back, putting a dent in the short-term mood. However, Sterling still has an edge from the intraday chart perspective. A recent bounce to prevent a test at 1.3320 has seen buyers re-enter the market with a slight uptick in bids. The brief support-turned-resistance of 1.3400 is the level to lift before cable can create an uptrend towards 1.3550. UK 100 falls from its peak
The FTSE is left licking its wounds after hitting a heavy rejection to prevent another move higher.
A push towards the previous swing high of 10760 put the bulls on the attack, before retracing. The latest downtick could continue towards 10625, should bears attract more sellers. 10550 is the next level lower should the sell-off continue.
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USD/JPY started a fresh increase above 163.20 and 163.50. A key bullish trend line is forming with support at 163.00 on the 4-hour chart. EUR/USD is struggling below the 1.1450 resistance zone. WTI Crude Oil prices rallied further above $92.00 and $92.50. USD/JPY Technical Analysis The US Dollar started a fresh increase from 162.65 against the Japanese Yen. USD/JPY cleared the key hurdle at 163.20 to enter a bullish zone.
Looking at the 4-hour chart, the pair settled above 163.20, the 100 simple moving average (red, 4-hour), and the 200 simple moving average (green, 4-hour). The pair traded as high as 163.98 and started a consolidation phase.
On the upside, the pair could face resistance near 164.00. The next major resistance might be 164.40. A close above 164.40 could start another steady increase.
In the stated case, the bulls could aim for a move to 165.00. Any more gains might open the doors for a test of 165.20. If there is a downside correction, the pair might find bids near 163.50. The first major support could be near 163.20.
The main support might be 163.00. There is also a key bullish trend line forming with support at 163.00. A downside break and close below 163.00 might send the pair toward the 100 simple moving average (red, 4-hour) at 162.30. Any more losses could open the doors for a test of 162.00.
Looking at WTI Crude Oil, the bulls remained in action, and they might soon aim for a move above the $95.00 level.
Upcoming Key Economic Events:
US S&P Global Manufacturing PMI for June 2026 (Preliminary) – Forecast 54.5, versus 53.9 previous. US S&P Global Services PMI for June 2026 (Preliminary) – Forecast 51.0, versus 51.2 previous.
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The latest trading sessions continue to show weakness in the Japanese yen. This dynamic is reflected in USD/JPY, which has gained more than 0.7% over the last 3 sessions, highlighting the loss of strength in the Japanese currency.
For now, buying pressure in the pair remains supported by the wide rate differential with the United States, which could even widen over the coming months. In addition, renewed dollar strength, driven by updates in the Middle East, has also supported the advance in USD/JPY.
If these catalysts remain in place, buying pressure in the pair could continue to be relevant over the next few trading sessions.
Is the rate differential still weighing on the yen? Over the last few months, the rate differential between the United States and Japan has been one of the main factors behind yen weakness. While the Federal Reserve maintains a reference rate of 3.75%, Japan keeps one of the lowest interest rates in the world, near 1.00%.
This difference is also reflected in the bond market. Although bonds in both countries have shown recent increases in yields, the gap remains wide. U.S. 10-year Treasury yields have already reached a new yearly high near 4.7%, while Japan’s 10-year bond yields remain much lower, around 2.7%.
Source: TradingEconomics
This dynamic continues to limit the appeal of the Japanese yen. Higher U.S. bond yields favor dollar-denominated investments over yen-denominated assets, a relationship that has remained in place for several months and has restricted demand for the Japanese currency.
What is relevant now is that this differential could widen even further. So far, there have been no major updates from the Bank of Japan pointing to a possible rate hike. In contrast, the Federal Reserve has started to reflect a higher probability of higher rates over the coming months.
According to the CME Group probability table, for the September 16 decision, there is still a dominant probability above 56% that the United States could deliver a rate hike, which would further widen the differential with Japan.
Source: CMEGROUP
As a result, if the market continues to see a stable Bank of Japan with no relevant changes, compared with a potentially more aggressive Federal Reserve, the rate differential could continue to favor the relative appeal of the dollar. This dynamic may make a sustained yen recovery more difficult and could maintain buying pressure in USD/JPY over the next few sessions.
Is Middle East becoming relevant again? New updates in the Middle East suggest that risk may be increasing not only around the Strait of Hormuz, but also in the Red Sea, following attacks carried out by Iran-backed groups from Yemen. This event adds to new U.S. military actions and reflects a scenario that still appears far from a negotiated solution in the short term.
The escalation continues to support oil prices, increase uncertainty and lift the market’s risk premium.
In this context, the U.S. dollar has started to show a renewed recovery. This is reflected in the DXY index, which measures the dollar’s strength against its main peers, and which has already moved above the 101-point area after several consecutive advances.
This suggests that, as seen in previous months, the dollar could be acting as a liquidity-driven safe-haven currency amid rising tensions in the Middle East.
Source: TradingEconomics
This dynamic is also important for the yen. If the conflict continues to escalate and the dollar maintains its strength as a safe-haven asset, the Japanese currency could struggle to regain ground consistently. For this reason, USD/JPY could continue to show buying pressure over the next few trading sessions.
Technical forecast for USD/JPY
Source: StoneX, Tradingview
Bullish trend appears unstoppable: For several months, USD/JPY has maintained a dominant bullish trend line. This structure remains the most relevant pattern on the chart, especially due to the lack of selling moves strong enough to put the main trend at risk. As long as buying pressure remains in place, this trend line could continue to act as the dominant technical reference over the next few sessions.
RSI: The RSI remains above the neutral 50 level, reflecting dominant buying impulses in the short term. However, it is also important to note that the indicator has started to form lower highs, while USD/JPY price action continues to register higher highs. This dynamic has created a possible bearish divergence, which could warn of excessive recent buying pressure and open room for potential short-term corrections
MACD: The MACD shows a histogram increasingly close to the neutral 0 area. This suggests that the strength of short-term moving averages is starting to balance out. For this reason, the indicator could also be anticipating a phase of greater neutrality on the chart over the next few sessions.
Key levels:
164.238 – Key resistance: Given the lack of relevant references from previous years, this level coincides with the 61.8% area of a trend-based Fibonacci extension. If price manages to approach this zone again, it could reinforce the buying bias and keep the bullish trend line as the dominant structure.
161.898 – Near-term barrier: This area works as an important technical reference, as it coincides with the highs recorded in previous weeks. It could also act as a tentative barrier in case of possible short-term corrections.
160.214 – Main support: This area remains the most relevant support on the chart. In addition to coinciding with recent retracements and acting as a psychological market level, it also aligns with the base of the major bullish trend line. Moves that approach this level again could put the bullish structure at risk and open room for a more relevant selling bias over the coming weeks.
Written by Julian Pineda, CFA, CMT – Market Analyst
Key Points:EUR/USD pulled back below the 1.1400 level as traders reacted to ECB Interest Rate Decision. GBP/USD moved lower as traders focused on the strong rally in the oil markets. USD/JPY tested multi-decade higher amid rising Treasury yields.
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U.S. Dollar Moves Higher Amid Rising Demand For Safe-Haven Assets
DXY 230726 4h Chart U.S. Dollar Index gains ground as traders focus on the strong rally in the oil markets and react to the better-than-expected Initial Jobless Claims report.
The report indicated that 187,000 Americans filed for unemployment benefits in a week, compared to analyst forecast of 212,000.
Oil prices gained 6.5% as Houthis attacked vessels linked to Saudi Arabia. Brent oil climbed above the psychologically important $100 level. As a result, demand for safe-haven assets increased, which was bullish for the U.S. dollar.
U.S. Dollar Index climbed above the resistance at 101.15 – 101.30 and is trying to settle above the 101.50 level. In case this attempt is successful, U.S. Dollar Index will move towards the resistance level at 101.80 – 101.95.
EUR/USD Retreats As ECB Leaves Rates Unchanged EUR/USD 230726 4h Chart EUR/USD is losing ground as traders react to ECB Interest Rate Decision. The European Central Bank left the interest rate unchanged at 2.4%, in line with analyst estimates.
Comments from ECB President Christine Lagarde showed that ECB was ready to raise rates in September due to high oil prices.
Currently, EUR/USD is trying to settle below the support level at 1.1350 – 1.1365. In case this attempt is successful, EUR/USD will head towards the next support level at 1.1270 – 1.1285.
GBP/USD Tests New Lows As Oil Prices Rally GBP/USD 230726 4h Chart GBP/USD is under pressure as traders focus on the potential impact of high oil prices. Demand for risk assets declined, which was bearish for the British pound.
From the technical point of view, GBP/USD moved below the support level at 1.3335 – 1.3350 and is trying to settle below the 1.3300 level. If GBP/USD manages to settle below 1.3300, it will head towards the support at 1.3250 – 1.3265. RSI has just moved into oversold territory, but there is enough room to gain additional momentum in the near term.
USD/CAD 230726 4h Chart USD/CAD is mostly flat as traders react to developments in commodity markets. Precious metals markets suffered a sell-off while oil markets soared. Other commodity-related currencies pulled back in today’s trading session.
Today, traders also focused on the Retail Sales report from Canada. The report showed that Retail Sales increased by +0.4% month-over-month in June, in line with analyst estimates.
If USD/CAD manages to settle back above the 1.4100 level, it will head towards the nearest resistance level, which is located in the 1.4125 – 1.4140 range. A move above the 1.4140 level will open the way to the test of the resistance at 1.4235 – 1.4250.
USD/JPY Tests Multi-Decade Highs USD/JPY 230726 4h Chart USD/JPY tests new highs as traders focus on rising Treasury yields. The yield of 2-year Treasuries climbed towards the 4.35% level, while the yield of 10-year Treasuries settled near 4.70%. Rising oil prices serve as a major negative catalyst for the Japanese yen as Japan’s economy is dependent on energy imports.
Currently, USD/JPY is trying to settle above the 164.00 level. In case USD/JPY manages to settle above 164.00, it will head towards the 165.00 level. It should be noted that RSI is in the overbought territory, so the risks of a pullback are rising.
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Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.
Key Points:EUR/USD gained some ground ahead of tomorrow's ECB decision.USD/CAD moved lower as precious metals markets rallied. USD/JPY remained stuck near the 163.00 level.
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U.S. Dollar Index Is Stuck Near Resistance At 101.15 – 101.30
DXY 220726 4h Chart U.S. Dollar Index is losing some ground despite rising Treasury yields. The yield of 2-year Treasuries settled above 4.30%, while the yield of 10-year Treasuries moved above 4.65%. Oil prices continue to move higher, but U.S. dollar does not get additional support.
From the technical point of view, U.S. Dollar Index is stuck below the resistance level at 101.15 – 101.30. In case this attempt is successful, U.S. Dollar Index will head towards the next resistance level, which is located in the 101.80 – 101.95 range.
EUR/USD Attempts To Rebound Ahead Of ECB Decision
EUR/USD 220726 4h Chart EUR/USD gains some ground ahead of ECB Interest Rate Decision, which will be released tomorrow. Analysts expect that ECB will leave the interest rate unchanged at 2.4%. The deposit facility rate is expected to remain unchanged at 2.25%.
In case EUR/USD manages to settle above the resistance level at 1.1420 – 1.1435, it will head towards the next resistance level, which is located in the 1.1500 – 1.1515 range. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.
GBP/USD Pulls Back As Traders Focus On UK Inflation Data GBP/USD 220726 4h Chart GBP/USD is losing ground as traders focus on inflation data from the UK. Inflation Rate declined from 2.8% in May to 2.6% in June, compared to analyst forecast of 2.7%. Core Inflation Rate remained unchanged at 2.6%, while analysts expected that it would drop to 2.5%.
The nearest support level for GBP/USD is located in the 1.3335 – 1.3350 range. A move below the 1.3335 level will open the way to the test of the next support level at 1.3250 – 1.3265.
On the upside, GBP/USD needs to settle above the 1.3400 level to have a chance to gain upside momentum in the near term. If GBP/USD climbs above 1.3400, it will head towards the 50 MA at 1.3424. A move above the 50 MA will push GBP/USD towards the resistance at 1.3450 – 1.3465.
USD/CAD 220726 4h Chart USD/CAD pulled back as traders focused on the rally in precious metals markets. Gold climbed towards the $4150 level, while silver moved towards the psychologically important $60.00 level. Other commodity-related currencies are losing ground in today’s trading session.
If USD/CAD declines below the 50 MA at 1.4075, it will move towards the support level, which is located in the 1.4010 – 1.4025 range.
On the upside, a successful test of the resistance at 1.4125 – 1.4140 will push USD/CAD towards the resistance level at 1.4235 – 1.4250.
USD/JPY Is Stuck Near 163.00 USD/JPY 220726 4h Chart USD/JPY settled near the 163.00 level as traders worried about potential interventions from the Bank of Japan.
Today, traders also had a chance to take a look at the Exports report from Japan. The report indicated that Japan’s Exports increased by +19.3% year-over-year, compared to analyst consensus of +18.6%.
In case USD/JPY settles above 163.00, it will head towards the 165.00 level. RSI has recently moved back into moderate territory, so there is plenty of room to gain additional upside momentum in case the right catalysts emerge.
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Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.
USD/JPY has finally broken higher after weeks of compression, with easing bearish sentiment towards the Japanese yen adding fuel to the rally. While the US dollar led the move, the technical backdrop also favours further upside for GBP/JPY, although crude oil prices remain a key variable for CAD/JPY bears.
Source: LSEG
View related analysis:
US Dollar Bulls Lose Momentum, Commodity FX Defies Positioning | COT Report Australian Dollar Outlook: AUD/USD Bulls Hold the Edge Ahead of Jobs Data Nasdaq Could Look to KOSPI for Directional Clues Beyond Earnings Canadian Dollar Slides as Soft CPI and Trump Tariffs Lift USD/CAD USD/JPY Leads as Japanese Yen Weakness Keeps GBP/JPY and CAD/JPY in Focus It only seemed a matter of time before volatility erupted on USD/JPY, given the compression pattern beneath its 39-year high. Momentum ultimately broke to the upside, helped by a strong session for the US dollar amid the latest flare-up in Middle East tensions.
As noted in this week’s COT report, net-short exposure to the Japanese yen has moved away from a sentiment extreme. That removes some pressure from bearish yen positions and gives the USD/JPY breakout more breathing room. The question now is whether other currencies, such as the British pound or Canadian dollar could also take advantage of the weaker yen.
Source: CFTC (COT), LSEG
For traders wanting a deeper understanding of futures positioning, I’ve also published a guide on how to read and interpret weekly COT data in forex markets.
USD/JPY Tests Trendline Resistance After Breakout Regular readers will know I am not an advocate of trendlines, but I concede they deserve attention from time to time. In this case, a trendline projected from the January high coincides with Tuesday's high, making it a valid interim resistance level. It is also one that could break, given the strength of the move out of the compression pattern.
The monthly R1 pivot (163.72) and 165.30 may be the next resistance levels for bulls if the trendline breaks. That said, prices appear stretched on the 1-hour chart, while bearish RSI divergences have formed in overbought territory, raising the potential for a near-term pullback. Bulls could look to buy dips within Tuesday's range, with 163 potentially providing support.
Source: ICE, TradingView
GBP/JPY Bulls Eye 219 as British Pound Holds the Advantage The GBP/JPY uptrend on the daily chart speaks for itself, with bullish momentum accelerating from the June low. Prices have retraced to the 10-day EMA and the monthly R2 pivot, while Tuesday's wide-legged doji has caught my eye as it hints at a swing low forming within a strong uptrend.
Price action on the 1-hour chart appears corrective, given the overlapping nature of the decline. Moreover, elevated volumes accompanied the swing low, reinforcing my suspicion of bullish accumulation above 217.50. GBP/JPY is now attempting to form a higher low around the 218.00 handle and the weekly pivot point.
Ultimately, my near-term bias for the British pound against the Japanese yen remains bullish while prices hold above Tuesday's low, with a move to 219.00 as the minimum upside target. Note the July 2007 low at 219.036 and the 219.61 high as additional resistance levels ahead of the weekly R1 pivot just below 220.00.
Source: ICE, TradingView
CAD/JPY Reversal Pattern Faces Crude Oil Headwind The daily chart shows an evening star pattern (a three-bar bearish reversal) forming around the 116.00 handle, warning that a top may be in place. Tuesday's small bullish inside day represents a lacklustre attempt by bulls to reclaim lost ground, and the fact it closed around the monthly R1 pivot suggests CAD/JPY could be gearing up for another leg lower.
However, rising crude oil prices are a fly in the ointment for CAD/JPY bears. As a major oil exporter, Canada typically benefits from higher crude oil prices, which can underpin the Canadian dollar against the Japanese yen. If crude oil continues to rally, it could support CAD/JPY, or at least make life more difficult for bears. Conversely, if Middle East tensions ease and crude oil prices retreat, it could pave the way for the next leg lower in CAD/JPY.
A break below the weekly pivot point (115.31) would bring the weekly S1 level and monthly pivot point into focus near 114.50.
US Dollar Talking Points: It’s been a bullish response in the USD after last week’s webinar, when the Dollar was pulling back following CPI data. As looked at then, the response to the pullback or counter-trend criteria would be telling for forward-looking trend, and that’s held true across USD/JPY as well with the pair pushing up to fresh 40-year highs. To sign up for next week’s webinar, the following link will allow for registration: Click here to register.
This week’s webinar continues nicely from last weeks as the prior week’s theme was responsiveness to counter-trend criteria, and this week shows strong continuation in both USD and USD/JPY bullish trends.
US Dollar Daily Price Chart Chart prepared by James Stanley; data derived from Tradingview
As looked at coming into this week, the big question around the DXY basket is the Euro, which will see an ECB rate decision on Thursday morning. At this point, EUR/USD clings to a bearish trend but the past few weeks has built a bullish channel, making for a bear flag formation. At the time of the webinar the support side of that formation was being tested around the 1.1402 Fibonacci level. That has since been tested through and the question at this point is whether sellers can run the move into the close of the daily bar, or whether we end up with another higher-low ahead of the rate meeting on Thursday.
EUR/USD Daily Chart Chart prepared by James Stanley; data derived from Tradingview USD/JPY The driving force behind USD flows at the moment is the USD/JPY pair that’s pushed up to fresh 40-year highs. Next week brings a BoJ meeting but the bigger question is whether the Bank of Japan really wants to do what would be needed to narrow the rate discrepancy in the pair. That could bring a big risk to Japanese businesses and that could produce political turmoil for Japanese policymakers, which is at least part of the reason why the breakout has been as forceful as it has been since last October.
Chasing such a move is a challenge. Instead, patience and waiting for pullbacks so that the trend can re-assert itself, such as what was looked at in last week’s webinar or in the Monday article before that, could be a more reasonable way of approaching the matter.
USD/JPY Four-Hour Chart Chart prepared by James Stanley; data derived from Tradingview --- written by James Stanley, Senior Market Analyst, Global Macro
Japanese Yen Technical Forecast: USD/JPY Weekly Trade Levels A month-long contraction in USD/JPY has resolved higher, restoring upside momentum into the yearly highs. The breakout has pushed price toward a major technical resistance cluster just overhead. Weekly momentum has reached its strongest level since January, reinforcing the broader bullish outlook. A sustained weekly close above resistance is needed to fuel the next major leg of the advance Intervention risk remains a key wildcard as traders look ahead to next week's FOMC decision and June PCE inflation report. Resistance 163.33, 164 (key), 169- Support 161.95, 160.74 (key), 157.70-158.08 USD/JPY has broken out of a contracting July opening range to trade at fresh yearly highs, shifting the focus back to a major technical resistance cluster just overhead. The pair spent much of the month consolidating within an increasingly compressed range before buyers regained control and cleared the upper boundary earlier today. Price is now approaching the next major upside objective, where trendline resistance converges with key Fibonacci extension targets. With weekly momentum at its strongest level since January and nearing overbought territory, the reaction at this barrier could determine whether the breakout fuels another leg higher or gives way to a deeper corrective pullback. Battle lines are drawn on the USD/JPY weekly technical chart.
Review my latest Weekly Strategy Webinar for an in-depth breakdown of this Yen setup and more. Join live on Monday’s at 8:30am EST.
Japanese Yen Price Chart – USD/JPY Weekly
Chart Prepared by Michael Boutros, Sr. Technical Strategist; USD/JPY on TradingView
Technical Outlook: In my last Japanese Yen Technical Forecast we noted that USD/JPY had broken to fresh yearly highs into the start of the month and that, “From a trading standpoint, look to reduce long exposure / raise protective stops on a rally towards 163.33- losses should be limited to 160.74 IF price is heading higher on this stretch with a close above 164 ultimately needed to fuel the next major leg of the advance.” USD/JPY failed to sustain the advance that week with price reversing more than 1.4% to register an intraweek low at 160.48 before stabilizing.
Nearly four weeks later, USD/JPY is now within striking distance of the 1.618% extension of the 2025 advance at 163.33. Note that basic trendline resistance extending off the yearly highs converges on this level over the next few weeks- look for a reaction there IF reached. Subsequent resistance is eyed just higher at the 1.618% extension of the yearly opening range breakout at 164. A breach / close above this threshold is needed to fuel the next major leg of the rally with the next major technical consideration eyed at the 1.618% extension of the January advance near 169-proper.
Initial weekly support rests with the 2024 high at 161.95 with medium-term bullish invalidation steady at the 2024 high-week close (HWC) and the April high at 160.73/74. Losses below this threshold would suggest a more significant high is in place and threaten a deeper correction towards uptrend support at the 2025 / January high-week closes (HWC) at 157.70-158.08.
Bottom line: USD/JPY is approaching technical resistance at fresh yearly highs, and the focus is on possible inflection off this level in the days ahead. Note that weekly momentum has now reached its highest level since January (near 67) and a stretch into overbought alongside a breach above this resistance barrier would likely reinforce / sustain this rally. From a trading standpoint, the outlook remains unchanged and losses would need to be limited to 160.74 IF price is heading higher on this stretch with a weekly close above 164 needed to fuel the next major leg of the rally.
The threat of official intervention remains a key risk for USD/JPY, with Japanese authorities retaining the option to step into the market at any time to stem excessive yen weakness. Meanwhile, the U.S. economic calendar is relatively quiet ahead of next week's FOMC rate decision and the release of June PCE inflation data. Watch the weekly close for confirmation of the broader directional bias and ensure all open exposure is managed with well-defined risk parameters. Review my latest Japanese Yen Short-term Outlook for a closer look at the near-term USD/JPY technical trade levels.
USD/JPY Key Economic Data Releases
Economic Calendar - latest economic developments and upcoming event risk.
Active Weekly Technical Charts Euro (EUR/USD) Swiss Franc (USD/CHF) Gold (XAU/USD) British Pound (GBP/USD) Australian Dollar (AUD/USD) US Dollar Index (DXY) Canadian Dollar (USD/CAD) Bitcoin (BTC/USD) --- Written by Michael Boutros, Senior Technical Strategist
Key Points:GBP/USD pulled back despite the better-than-expected UK Unemployment Rate report. USD/CAD gained ground as traders ignored the rally in precious metals markets. USD/JPY tested the 163.00 level as traders focused on rising Treasury yields.
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U.S. Dollar Moves Higher Amid Rising Demand For Safe-Haven Assets
DXY 210726 4h Chart U.S. Dollar Index gains ground as traders react to rising oil prices. WTI oil moved above the $84.00 level amid rising tensions in the Middle East. Demand for safe-haven assets increased, which was bullish for the U.S. dollar.
Treasury yields are moving higher as bond traders bet that high oil prices will force Fed to raise rates. The yield of 2-year Treasuries climbed above the 4.25% level, while the yield of 10-year Treasuries settled above 4.63%. Rising Treasury yields provided additional support to the American currency.
Currently, U.S. Dollar Index is trying to settle above the resistance at 101.15 – 101.30. In case this attempt is successful, U.S. Dollar Index will move towards the resistance level at 101.80 – 102.00.
EUR/USD Attempts To Settle Below The 1.1400 Level EUR/USD 210726 4h Chart EUR/USD is mostly flat as traders focus on the Euro Area ZEW Economic Sentiment Index report. The report indicated that Economic Sentiment increased from 9.5 in June to 23.4 in July, compared to analyst forecast of 11.2.
If EUR/USD stays below the support level at 1.1420 – 1.1435, it will head towards the next support, which is located in the 1.1350 – 1.1365 range. RSI is in the moderate territory, so there is plenty of room to gain momentum in the near term.
GBP/USD Retreats As Pullback Continues GBP/USD 210726 4h Chart GBP/USD remains under pressure as traders stay focused on first moves of new UK Prime Minister and react to the UK Unemployment Rate report. The report indicated that Unemployment Rate remained unchanged at 4.9% in May, compared to analyst forecast of 5.0%.
The nearest support level for GBP/USD is located in the 1.3335 – 1.3350 range. If GBP/USD manages to settle below the 1.3335 level, it will head towards the next support at 1.3250 – 1.3265.
USD/CAD Gains Ground Amid Rising Treasury Yields USD/CAD 210726 4h Chart USD/CAD is moving higher as traders focus on rising Treasury yields and ignore the rally in precious metals markets. Gold moved above the $4050 level, while silver settled above $59.00. Other commodity-related currencies are mixed in today’s trading session.
In case USD/CAD stays above the 50 MA at 1.4083, it will move towards the resistance at 1.4125 – 1.4140. A successful test of the resistance at 1.4125 – 1.4140 will open the way to the test of the next resistance level at 1.4235 – 1.4250.
USD/JPY Tests Multi-Decade Highs USD/JPY 210726 4h Chart USD/JPY is trying to settle above the 163.00 level as traders ignore intervention risks and focus on the fundamental weakness of the Japanese currency.
Rising Treasury yields put significant pressure on the Japanese yen due to the ultra-dovish policy of the Bank of Japan. High oil prices serve as an additional bearish catalyst as Japanese economy is dependent on energy imports. A combination of higher Treasury yields and rising oil prices pushed the Japanese yen towards multi-decade lows.
In case USD/JPY settles above the 163.00 level, it will head towards the 165.00 level. RSI is in the overbought territory, but there is enough room to gain additional momentum in the near term. Potential BoJ interventions are the key risk for the bulls.
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Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.
Markets struggled to settle on a single narrative today as investors weighed conflicting geopolitical headlines alongside a range of regional developments. Reports that mediators had proposed a 10-day ceasefire between Washington and Tehran initially offered hope that last month’s Memorandum of Understanding could be revived. Those hopes were tempered, however, by market chatter that US President Donald Trump may reject the proposal, leaving traders reluctant to make large directional bets.
That uncertainty was enough to lift Brent crude back above $91 a barrel, helping Dollar edge higher alongside a modest rise in US Treasury yields. Still, the broader market reaction remained restrained. Without confirmation from either side, investors were unwilling to fully embrace either a de-escalation or renewed escalation scenario, leaving most major asset classes confined to relatively narrow ranges.
The stronger oil price nevertheless carries broader implications for foreign exchange. Rising energy costs risk feeding inflation expectations and keeping upward pressure on Treasury yields, a combination that has historically supported Dollar against Yen. With the US 10-year yield back above 4.6%, USD/JPY is once again approaching levels associated with the Yen’s weakest point in 40 years.
The timing is notable. Japanese authorities did not intervene during Monday’s holiday, despite the combination of closed domestic markets and thinner-than-usual liquidity providing an opportunity to catch speculative positioning off guard. With that window now behind them, market participants may increasingly test Tokyo’s tolerance for further Yen weakness if oil prices continue to rise and Treasury yields extend their advance.
Away from geopolitics, Sterling was under pressure as investors continued to digest Prime Minister Andy Burnham’s decision to name John Healey as Chancellor. Opinions were divided over the implications. Supporters argue the appointment signals a commitment to fiscal discipline and respect for bond markets, while critics believe it undermines assumptions that a fiscally conservative figure would restrain the government’s broader agenda. Until greater policy clarity emerges, confidence in UK assets may take time to recover.
Trade policy also stayed on the radar as US and Mexican officials prepared to begin a third round of bilateral talks aimed at revising the USMCA, following Washington’s decision earlier this month not to renew the regional trade agreement while simultaneously imposing fresh duties on Canada. Although the negotiations are unlikely to generate immediate market moves, they reinforce that North American trade policy remains an evolving source of uncertainty.
For the day so far, Australian Dollar outperformed major peers, followed by Euro and New Zealand Dollar. Sterling lagged behind all other major currencies, with Yen and Swiss Franc also weaker, while Dollar and Canadian Dollar traded in the middle of the performance table.
AUD/USD Breaks Higher, but Jobs Data Will Decide Whether Rally Lasts AUD/USD climbed to a four-week high as broad US Dollar weakness, improving risk sentiment and a rally in copper prices combined to lift the Australian Dollar. However, the move has so far been driven largely by external factors rather than domestic fundamentals. Attention is now firmly on Australia’s June employment report, which is expected to play a decisive role in shaping expectations for an August RBA rate hike and determining whether the breakout can develop into a sustained rally. Read More.
USD/CAD Climbs as Trump Expands Tariffs Beyond USMCA Protections USD/CAD advanced after the Trump administration announced a new round of 50% tariffs on selected Canadian imports, but the market reaction reflected more than the immediate trade impact. Investors viewed the measures as further evidence that Washington is increasingly willing to bypass USMCA protections by invoking alternative legal authorities, reinforcing the perception that US-Canada trade tensions are becoming structural. While Canada’s response has so far remained measured, the risk of reciprocal tariffs could deepen the economic headwind for Canada and keep pressure on the Canadian Dollar. Read More.
German ZEW Sentiment Jumps to One-Year High as Recovery Hopes Strengthen German investor confidence strengthened sharply in July, with the ZEW Economic Sentiment Index climbing to its highest level in five months as optimism over exports, domestic demand and economic reforms continued to build. While assessments of current conditions remain weak, they also improved modestly, suggesting the recovery is gradually broadening. The survey also showed confidence improving across the Eurozone, although ZEW warned that the Iran conflict and elevated oil prices remain significant risks to the region’s economic outlook. Read More.
UK Wage Growth Holds Steady as Payroll Employment Continues to Weaken The latest UK labour market report reinforced the picture of a gradual cooling rather than a sharp slowdown. Payroll employment continued to soften, while wage growth remained stable at its weakest pace since 2020. Although the unemployment rate held steady and claimant growth came in well below expectations, moderating earnings should provide further reassurance to the Bank of England that domestic inflation pressures are easing. Read More.
New Zealand CPI Hits 4.1% as Fuel Costs Reinforce RBNZ Challenge New Zealand’s annual inflation accelerated to 4.1% in the second quarter as higher petrol and fuel prices drove the strongest increase in consumer prices. While the headline reading came in slightly above the RBNZ’s own forecast, the details showed imported inflation remained the primary driver, with tradeable inflation reaching 4.9% compared with 3.4% for non-tradeable inflation. The report keeps pressure on the RBNZ to remain vigilant, but policymakers will be focused on whether higher energy costs begin spilling over into broader domestic inflation before deciding whether further tightening is needed. Read More.
USD/JPY Daily Outlook USD/JPY is still staying below 162.83 despite today’s rally. Intraday bias remains neutral. Consolidations from 162.83 could extend with another fall. But in that case, but downside should be contained by 38.2% retracement of 155.01 to 162.83 at 159.84. On the upside, firm break of 162.83 will extend the larger up trend to 164.34 projection level.
In the bigger picture, rise from 139.87 (2025 low) is seen as another rising leg of the long term up trend. Next target is 61.8% projection of 139.87 to 159.44 from 152.25 at 164.34. For now, outlook will remain bullish as long as 155.01 support holds, even in case of deep pullback.
ActionForex.com was set up back in 2004 with the aim to provide insightful analysis to forex traders, serving the trading community for two decades. We started providing only a daily and a mid-day report, now known as Action Insights. Gradually, we added a lot more in-house contents to the site. Technical Outlook section was expanded to cover more pairs. In addition to that, Top Movers, Heat Map, Pivot Point Charts and Pivot Meters, Action Bias and Volatility Charts, are tools used by traders from all over the world.
Key Points:EUR/USD pulled back as traders focused on rising Treasury yields. GBP/USD moved lower as traders waited for first moves of new UK Prime Minister. USD/CAD gained ground as Canada's Inflation Rate missed analyst estimates.
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U.S. Dollar Moves Higher At The Start Of The Week
DXY 200726 4h Chart U.S. Dollar Index gains ground as traders focus on rising Treasury yields. The yield of 2-year Treasuries climbed above the 4.22% level, while the yield of 10-year Treasuries settled near 4.60%. Treasury yields are moving higher as bond traders worry that rising oil prices will create inflationary pressure.
U.S. Dollar Index managed to settle above the 50 MA at 100.86 and is trying to settle above the 100.00 level. In case this attempt is successful, U.S. Dollar Index will move towards the resistance at 101.15 – 100.30. A successful test of this level will open the way to the test of the next resistance at 101.80 – 101.95. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.
EUR/USD Pulls Back As Germany’s PPI Meets Estimates
EUR/USD 200726 4h Chart EUR/USD pulled back as traders focused on Producer Prices report from Germany. The report showed that PPI increased by +1.8% year-over-year in June, in line with analyst consensus.
Currently, EUR/USD is trying to settle below the support at 1.1420 – 1.1435. In case this attempt is successful, EUR/USD wil move towards the next support level, which is located in the 1.1350 – 1.1365 range.
GBP/USD Retreats As Traders Wait For First Moves From New PM GBP/USD 200726 4h Chart GBP/USD is losing ground as traders react to political developments in the UK. New Prime Minister Andy Burnham promised to bring a new economic model for the UK, but markets remain skeptical. His predecessors also pledged to boost UK finances, but their attempts yielded no results.
In case GBP/USD manages to settle below the 50 MA at 1.3424, it will head towards the nearest support at 1.3335 – 1.3350. On the upside, GBP/USD needs to settle back above the resistance at 1.3450 – 1.3465 to have a chance to gain upside momentum in the near term.
USD/CAD Rebounds As Canada’s Inflation Rate Drops To 2.8% USD/CAD 200726 4h Chart USD/CAD moved away from recent lows as traders focused on inflation data from Canada. Inflation Rate declined from 3.2% in May to 2.8% in June, compared to analyst forecast of 2.9%. Core Inflation Rate decreased from 2.2% to 2.1%, while analysts expected that it would remain unchanged at 2.2%. The lower-than-expected inflation report put pressure on the Canadian dollar. Other commodity-related currencies are gaining ground in today’s trading session.
If USD/CAD settles above the 1.4050 level, it will head towards the 50 MA at 1.4095. A move above the 50 MA will open the way to the test of the resistance level at 1.4125 – 1.4140.
USD/JPY Moves Higher As Treasury Yields Rise
USD/JPY 200726 4h Chart USD/JPY gains ground, supported by rising Treasury yields. However, traders remain cautious as the yen is trading near multi-decade lows. Traders worry that BoJ may intervene to provide support to the national currency.
USD/JPY needs to settle above the 162.80 level to gain additional upside momentum in the near term. In this case, USD/JPY will head towards the 165.00 level.
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Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.
US Dollar Technical Analysis: Last week could’ve been much worse for the USD given the below-expected CPI and PPI prints, but so far it’s held support at prior resistance. USD/JPY retains bullish breakout potential and that’s probably one of the more attractive bullish majors for the USD this week, while GBP/USD retains bullish potential itself setting up as one of the more attractive for USD-weakness. The big part of the DXY basket is in view this week with the ECB rate decision and EUR/USD has seen the sell-off stall over the past few weeks, with 1.1500 as a major barrier level on pullback scenarios.
This content was created by an affiliate of FOREX.com and represents the views and opinions of the author/speakers, not the views and opinions of Forex.com, StoneX Group Inc., or its subsidiaries. The content has not been independently reviewed by FOREX.com.
USD Last week was one of those episodes where it could’ve went very differently for the US Dollar, as below-expected CPI and PPI highlighted less urgency for the rate hikes that have been priced in for later this year.
That has not come to pass, however, as the Tuesday and Wednesday pullback led to a rally in the Greenback, and so far this week, that move has continued. From the weekly chart below we can see the DXY basket holding support at prior resistance and this again points to bullish technical structure.
For this week, the big item is the European Central Bank rate decision and the EUR/USD pair remains in an unsettled place, as the bearish trend and fresh lows have been on pause for the past few weeks, but buyers have seemingly been unable to prod for re-test of the 1.1500 handle. That will likely be the big driver for the USD for this week.
US Dollar Weekly Price Chart Chart prepared by James Stanley; data derived from Tradingview EUR/USD In last week’s USD webinar, I looked at three different resistance areas in EUR/USD, and so far the most nearby has held the highs at 1.1469. But the bigger question is whether there’s now enough motivation from bears to finally break through to a fresh low, as that’s been the lacking component going back to late-June and while the daily chart looks messy, the weekly chart highlights this well. This is why we have the old saying in charting of ‘when in doubt, zoom out.’
EUR/USD Weekly Chart Chart prepared by James Stanley; data derived from Tradingview EUR/USD Daily From the daily chart we can see that counter-trend motive well and while messy, this can be argued as a bear flag type of formation given the bullish counter-trend grind over the past few weeks.
Given the ECB meeting on the calendar, this would seem opportune time for the larger trend to present itself, which would point to further DXY strength as the Euro is a whopping 57.6% of the DXY basket. The next resistance level up, the price that bulls have not wanted to encroach upon yet since breaking below a moth ago, is at the 1.1500 level.
EUR/USD Daily Chart Chart prepared by James Stanley; data derived from Tradingview USD/JPY The Japanese Yen is the second largest component of the DXY basket and the Japanese Yen weakness theme remains as a big part of the relative strength in the USD. At this point, the USD/JPY pair holds an ascending triangle formation, which is a bullish breakout formation that points to the possibility of topside breakouts and trend continuation.
As looked at last week, the 165 level is the next major level up and that’s a price that hasn’t traded in USD/JPY since 1986. But – central to that bullish reaction in DXY after PPI and CPI was a similar outing in USD/JPY, and I had looked at this possibility on Monday, highlighting that trend traders could view that weakness as opportunity, which so far they have.
USD/JPY Daily Price Chart Chart prepared by James Stanley; data derived from Tradingview GBP/USD While the EUR/USD sell-off has stalled over the past few weeks but the pair showing an inability to climb above 1.1500, GBP/USD has sprung into what could be argued as a bullish trend given a recent higher-high.
I looked into the pair last week and highlighted three support areas. The first of those areas has so far helped to hold the lows around 1.3450. The second, just below, spans from a Fibonacci level at 1.3390 up to 1.3400, and the third is a prior swing around 1.3325.
For those looking to take bearish stances on the USD this stands out as one of the more attractive major pairs currently available.
GBP/USD Daily Price Chart Chart prepared by James Stanley; data derived from Tradingview --- written by James Stanley, Senior Market Analyst, Global Macro
The Japanese Yen has struggled to build on recent gains despite expectations for further Bank of Japan policy tightening, but MUFG believes investors are overlooking a structural shift that could provide significant long-term support for the currency.
The US Dollar to Japanese Yen exchange rate (USD/JPY) traded close to recent cyclical highs on Friday, with the Yen remaining under pressure from higher oil prices and resilient US economic data.
Latest — Exchange Rates:
Dollar to Yen (USD/JPY): 162.4012 (+0.01%)
Euro to Dollar (EUR/USD): 1.143775 (-0.06%)
Pound to Dollar (GBP/USD): 1.345377 (-0.17%)
MUFG argues that the Yen's recent weakness masks an important structural change in Japanese investment behaviour, as the Government Pension Investment Fund (GPIF) and other institutional investors steadily increase allocations to domestic assets.
"We would still argue that it marks a notable turning point from the Abenomics era."
The bank believes Japan is gradually reversing the policies introduced more than a decade ago, when pension funds were encouraged to reduce domestic bond holdings in favour of overseas and riskier assets.
"There is though some evidence that flows have already started to shift."
MUFG highlights a sustained increase in purchases of Japanese government bonds by trust banks since 2021, noting that the GPIF's domestic bond allocation has already risen from 23.9% at the end of fiscal 2019 to 26.9% today.
If allocations eventually move towards 31%, MUFG estimates that could generate around ¥12 trillion of additional demand for Japanese government bonds, even before allowing for future growth in the pension fund.
Near-Term Japanese Yen Forecast: BoJ Rate Hike Could Accelerate the Trend MUFG believes the Bank of Japan now has an opportunity to reinforce this shift towards domestic investment.
"The BoJ now needs to show it is not constrained by the government."
With household inflation expectations at their highest level since 2006, the bank argues that a September interest rate increase would strengthen confidence that policymakers remain committed to normalising monetary policy.
"Hiking in September would be the best way to do that and would go some way to helping turn the yen stronger."
While geopolitical tensions in the Middle East and higher oil prices continue to support the US Dollar in the near term, MUFG believes Japan's evolving pension investment strategy represents a significant longer-term positive for the Yen that markets have yet to fully price in.
US Dollar Talking Points: The USD retains a bullish lean from daily and weekly charts and that has held over the past week despite below-expected inflation data on Tuesday and Wednesday. As looked at in the Tuesday webinar, the response to counter-trend stimuli is telling for trend construction, and the question for next week is whether EUR/USD bears can make a push-lower as the pair has stalled just below the 1.1500 handle. The true test of trend is what happens in the face of counter-trend stimuli. Do bulls come in to defend the higher-low, looking at the sell-off as opportunistic? Or do they cut bait and run, allowing for further support breaks and an opening door for reversal potential.
We had such a scenario this week in the USD, where both CPI and PPI printed below expectations. Markets are still primed for rate hike potential into the end of the year and that’s helped to keep the USD in a bullish spot from both weekly and daily charts.
US Dollar Weekly Chart Chart prepared by James Stanley; data derived from Tradingview With US rate hike expectations still holding despite that below-expected CPI and PPI data, USD/JPY retains breakout potential.
I looked into this one in-depth on Monday, highlighting the fact that a below-expected inflation print could allow for pullback, which is what happened. And then buyers jumped on the bid which further highlights bullish continuation potential as there’s now been a continuation of higher-lows.
At this point, buyers haven’t yet wanted to test beyond the 163 level, and that’s helped to create a symmetrical triangle which normally is a non-directional formation. But given the prior trend, that triangle points to a bull pennant formation, which retains a topside bias for continuation scenarios and this remains my most attractive venue for USD-strength.
USD/JPY Daily Price Chart Chart prepared by James Stanley; data derived from Tradingview EUR/USD For next week, I think EUR/USD carries a lot of weight for the USD and in-turn, major FX pairs. There’s an ECB rate decision on Thursday and since the breakdown in the pair in late-June, there’s been stalling over the past few weeks. So far, we’ve had a hold of resistance around 1.1469, but the higher-lows that have built over the past few weeks suggest that the move is already well priced-in and I think ideally, a counter-trend move with a test up to or around 1.1500 could make for a more attractive backdrop for bears.
There’s the risk of a short-squeeze type of scenario, as well, so I want to circle a deeper resistance zone in that event and for that, there’s a prior support-turned-resistance area running from 1.1576 up to 1.1613.
EUR/USD Daily Chart Chart prepared by James Stanley; data derived from Tradingview GBP/USD For USD-weakness, I’m still in favor of GBP/USD and the pair put in another fresh high this week even as the USD held support at prior resistance. For next week, it’s UK CPI on Wednesday that’s the big focal point and I had looked into the pair in the Wednesday article, with GBP/USD having since held support at the ‘s1’ area on the chart, around 1.3450.
Deeper support remains around the 1.3390 Fibonacci level up to the 1.3400 zone, and then the 1.3325 level is the ‘s3’ and if bulls can’t hold prices above that, then USD-strength has probably taken over and the breakout USD/JPY would be a more attractive venue to track that theme, in my opinion.
GBP/USD Daily Price Chart Chart prepared by James Stanley; data derived from Tradingview --- written by James Stanley, Senior Market Analyst, Global Macro
Key Points:GBP/USD remains under pressure as pullback continues. USD/CAD attempts to settle below the support at 1.4010 - 1.4025.USD/JPY remains stuck near the 162.50 level.
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U.S. Dollar Continues To Rebound As Traders Focus On Consumer Sentiment Data
DXY 170726 4h Chart U.S. Dollar Index gains ground as traders focus on the better-than-expected Michigan Consumer Sentiment report. The report indicated that Michigan Consumer Sentiment increased from 49.5 in June to 54.4 in July, compared to analyst forecast of 51.
Today, traders also had a chance to take a look at housing market data. Housing Starts increased by +19% month-over-month in June, compared to analyst forecast of 0%. Building Permits decreased by -3%, while analysts expected that they would drop by -0.7%.
U.S. Dollar Index settled above the support at 100.50 – 100.65 and is moving towards the 50 MA at 100.90. In case U.S. Dollar Index manages to settle above the 50 MA, it will move towards the resistance level at 101.15 – 101.30.
EUR/USD Is Mostly Flat Ahead Of The Weekend EUR/USD 170726 4h Chart EUR/USD is stuck near the support level at 1.1420 – 1.1435 as traders focus on U.S. economic data. Industrial Production increased by +0.1% month-over-month in June, compared to analyst consensus of +0.2%.
In case EUR/USD manages to settle below the 1.1420 level, it will head towards the next support, which is located in the 1.1350 – 1.1365 range. On the upside, a move above the 1.1450 level will push EUR/USD towards the resistance at 1.1500 – 1.1515.
GBP/USD Remains Under Pressure GBP/USD 170726 4h Chart GBP/USD tested new lows as pullback continued. Traders focused on the rally in the oil markets, which was triggered by rising tensions in the Middle East.
If GBP/USD stays below the 1.3450 level, it will head towards the 50 MA at 1.3413. A move below the 50 MA will open the way to the test of the support level at 1.3335 – 1.3350. RSI remains in the moderate territory, so there is plenty of room to gain momentum in the near term.
On the upside, a successful test of the resistance at 1.3450 – 1.3465 will open the way to the test of the next resistance level at 1.3535 – 1.3550.
USD/CAD Tests Support At 1.4010 – 1.4025
USD/CAD 170726 4h Chart USD/CAD is losing ground as traders focus on rising gold and silver prices. Other commodity-related currencies are mixed in today’s trading session. There are no important economic reports scheduled to be released in Canada today, so traders will stay focused on general market sentiment.
USD/CAD continues its attempts to settle below the support at 1.4010 – 1.4025. If USD/CAD manages to settle below the 1.4010 level, it will head towards the next support, which is located in the 1.3915 – 1.3930. RSI has moved back into moderate territory, but there is some room to gain additional downside momentum in the near term.
USD/JPY Stays Close To Multi-Decade Highs USD/JPY 170726 4h Chart USD/JPY remains stuck near the 162.50 level as traders focus on dynamics of Treasury yields. The yield of 2-year Treasuries climbed above the 4.16% level, while the yield of 10-year Treasuries settled below 4.55%.
Traders are cautious amid worries about potential interventions from the Bank of Japan. However, BoJ’s interventions failed to provide support to the yen in 2026. In case USD/JPY manages to settle above the 162.80 level, it will gain additional upside momentum and head towards the 165.00 level.
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Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.
Japanese Yen Technical Forecast: USD/JPY Short-term Trade Levels USD/JPY has spent the past three weeks consolidating within the monthly opening range after defending multi-month trend support. The broader uptrend remains intact while above key support, but the narrowing range points to a potential breakout in the days ahead. A close above the monthly high would confirm an upside range break and shift the focus toward the next major resistance objectives. Failure to hold nearby support would invalidate the May advance and increase the risk of a broader trend reversal. With a light economic calendar, geopolitical developments and intervention rhetoric remain the primary catalysts for the next directional move. Resistance 162.57, 162.84 (key), 163.33 - Support 161.69/95 (key), 161.33, 160.37/74 USD/JPY USD/JPY closes week at an increasingly important technical juncture after spending the past three weeks consolidating within the July opening range. The pullback from the monthly highs found support at a key confluence zone, preserving the broader uptrend while allowing the pair to work off overextended conditions. With price now trading within a narrowing range, traders will be looking for a breakout to provide the next directional signal. Battle lines drawn on the USD/JPY short-term technical charts.
Review my latest Weekly Strategy Webinar for an in-depth breakdown of this Yen setup and more. Join live on Monday’s at 8:30am EST.
Japanese Yen Price Chart – USD/JPY Daily
Chart Prepared by Michael Boutros, Sr. Technical Strategist; USD/JPY on TradingView
Technical Outlook: In my last Japanese Yen Short-term Outlook, we noted USD/JPY was trading within a range, “just below resistance. Look for the breakout to offer guidance here in the days ahead. From a trading standpoint, losses would need to be limited to 160.37 IF price is heading higher on this stretch with a close above 162 needed to fuel the next major leg of the advance.” The range broke higher the following week with USD/JPY stretching to an intraday high at 162.84 before reversing sharply into the start of the July. The decline bounced off confluent support early in the month with price registering an intraday low at 160.48 before rebounding.
The monthly opening range remains preserved heading into the close of the week with price consolidating just above multi-month uptrend support. The focus is on a breakout next week to offer guidance here with the outlook still constructive while within this formation.
Japanese Yen Price Chart – USD/JPY 240min
Chart Prepared by Michael Boutros, Sr. Technical Strategist; USD/JPY on TradingView
Notes: A closer look at Japanese Yen price action shows USD/JPY continuing to contract below the objective monthly open at 162.57. Ultimately, a breach / close above the monthly high at 162.84 is needed to validate a breakout of the July opening range with subsequent resistance objective eyed at the 1.618% extension of the 2025 advance at 163.33 and the 1.618% extension of the yearly opening-range at 164. Both levels of interest for possible topside exhaustion / price inflection IF reached.
Initial support rests with the 2024 high-day close (HDC) / high at 161.69/95- losses below this threshold would invalidate the May uptrend and expose the 61.8% retracement of the monthly range at 161.33. Key support remains at 160.37/74- a region defined by the 61.8% extension of the January rally, the objective monthly low, and the 2024 high-week close. A break / daily close below this threshold would suggest more significant high is in place and a larger trend reversal is underway.
Bottom line: USD/JPY has been consolidating within the monthly range, just above uptrend support, for the past three-weeks. Look for a potential breakout bias next week. From a trading standpoint, losses would need to be limited to 161.69 IF price is heading higher on this stretch with a daily close above 162.84 needed to fuel the next major leg of the advance.
The economic docket is rather light next week, and the traders will be focused on a steady drip of headlines regarding the war with Iran and the transit access to the Strait of Hormuz. Keep in mind the intervention threat here remains and exposure on Yen crosses should be approached with caution here. Review my latest Japanese Yen Weekly Forecast for a closer look at the longer-term USD/JPY technical trade levels.
Key Economic Data Releases
Economic Calendar - latest economic developments and upcoming event risk.
Active Short-term Technical Charts British Pound Short-term Outlook: GBP/USD Breakout Attempts Major Trend Reversal US Dollar Short-term Outlook: USD Uptrend Faces Make-or-Break Test After CPI Euro Short-term Outlook: EUR/USD Coils Above Critical Support- Decision Time Gold Price Short-term Outlook: XAU/USD Bulls Try to Carve Out a Low After 30% Drop Canadian Dollar Short-term Outlook: USD/CAD Coils Below Resistance—Breakout Looms Australian Dollar Outlook: AUD/USD Holds Major Support—Reversal Risk Builds Swiss Franc Short-term Outlook: USD/CHF Overbought Rally Tests Major Resistance --- Written by Michael Boutros, Senior Technical Strategist
USD/JPY steadies after registering minor gains in the previous day, trading around 162.40 during the Asian hours on Friday. The currency pair is maintaining a bullish near-term bias as it holds above both the nine-period and 50-period Exponential Moving Averages (EMAs). The location of prices over these key averages suggests buyers remain in control
Additionally, the daily technical analysis indicates that the USD/JPY pair is remaining within an ascending channel pattern, suggesting a prevailing bullish bias. The 14-day Relative Strength Index (RSI) around 59.8 stays in positive territory without yet signaling overbought conditions, hinting at sustained but measured upside pressure.
The USD/JPY pair could find initial resistance at the 40-year high of 162.84, which was reached on July 1. Further advances would support the pair to approach the upper boundary of the ascending channel around 164.50.
On the downside, the immediate support lies at the nine-day EMA of 162.22, followed by the lower boundary of the ascending channel around 162.00. A sustained break below the channel would expose the 50-day EMA at 160.85. Further declines below the medium-term moving average would cause a bearish emergence and put downward pressure on the pair to navigate the region around the four-month low of 155.04, recorded on May 6.
USD/JPY: Daily Chart(The technical analysis of this story was written with the help of an AI tool. Know more.)
Japanese Yen Price Today The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the Australian Dollar.
USDEURGBPJPYCADAUDNZDCHFUSD-0.07%0.03%-0.03%-0.06%0.12%0.03%-0.11%EUR0.07%0.11%0.04%0.00%0.20%0.10%-0.04%GBP-0.03%-0.11%-0.07%-0.11%0.08%0.00%-0.16%JPY0.03%-0.04%0.07%-0.04%0.15%0.04%-0.08%CAD0.06%0.00%0.11%0.04%0.20%0.10%-0.04%AUD-0.12%-0.20%-0.08%-0.15%-0.20%-0.11%-0.24%NZD-0.03%-0.10%-0.00%-0.04%-0.10%0.11%-0.14%CHF0.11%0.04%0.16%0.08%0.04%0.24%0.14% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
USD/JPY started a fresh increase above 162.00 and 162.20. A major bullish trend line is forming with support at 161.90 on the 4-hour chart. EUR/USD again failed to gain strength for a move above 1.1475. GBP/USD rallied above 1.3450 before it faced sellers near 1.3560. USD/JPY Technical Analysis The US Dollar remained supported above 161.50 against the Japanese Yen. USD/JPY gained strength for a fresh move above 162.00.
Looking at the 4-hour chart, the pair surpassed the 61.8% Fibonacci retracement level of the downward move from the 162.70 swing high to the 161.28 low. The pair even settled above 162.20, the 100 simple moving average (red, 4-hour), and the 200 simple moving average (green, 4-hour).
On the upside, the pair could face strong resistance at 162.70. The next major resistance might be 162.85. A close above 162.85 could start a steady increase. In the stated case, the bulls could aim for a move to 163.50.
If there is a downside correction, the pair might find support near 162.00. There is also a major bullish trend line forming with support at 161.90.
The first major support could be near 161.30 and the 200 simple moving average (green, 4-hour). A downside break and close below 161.30 might send the pair toward 161.00. Any more losses could open the doors for a test of 160.00.
Looking at EUR/USD, the pair attempted a fresh increase, but the bears are still active near the 1.1475 resistance zone.
Upcoming Key Economic Events:
US Import Price Index for June 2026 (MoM) – Forecast -0.7%, versus +1.9% previous. US Export Price Index for June 2026 (MoM) – Forecast -0.4%, versus +1.3% previous. US Industrial Production for June 2026 (MoM) – Forecast 0.2%, versus 0.1% previous. Michigan Consumer Sentiment Index for July 2026 (Prelim) – Forecast 51.0, versus 49.5 previous.
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Key Points:GBP/USD pulled back as traders reacted to economic reports from U.S. and UK. USD/CAD made an attempt to settle below the support level at 1.4010 - 1.4025.USD/JPY gained ground amid rising Treasury yields.
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U.S. Dollar Moves Higher As Traders React To Economic Data
DXY 160726 4h Chart U.S. Dollar Index gains ground as traders react to the Retail Sales report. The report indicated that Retail Sales increased by +0.2% month-over-month in June, in line with analyst estimates. Retail Sales Ex Autos declined by -0.2%, compared to analyst forecast of -0.1%.
Today, traders also had a chance to take a look at the Initial Jobless Claims report. The report indicated that 208,000 Americans filed for unemployment benefits in a week, compared to analyst consensus of 217.000. The report showed that labor market remained in decent shape, which was bullish for the U.S. dollar.
NAHB Housing Market Index decreased from 36 (revised from 35) in June to 34 in July, compared to analyst forecast of 35.
U.S. Dollar Index climbed above the support at 100.50 – 100.65 and is trying to settle above the 100.75 level. In case this attempt is successful, U.S. Dollar Index will head towards the 50 MA at 100.92. A move above the 50 MA will open the way to the test of the resistance at 101.15 – 101.30.
EUR/USD Retreats As Traders Take Profits After Recent Rebound EUR/USD 160726 4h Chart EUR/USD pulls back as traders focus on economic reports from the U.S. Pending Home Sales declined by -5.4% month-over-month in June, compared to analyst forecast of -0.5%.
The nearest support level for EUR/USD is located in the 1.1420 – 1.1435 range. A successful test of this level will open the way to the test of the next support, which is located in the 1.1350 – 1.1365 range.
GBP/USD Pulls Back As UK Industrial Production Misses Estimates GBP/USD 160726 4h Chart GBP/USD is losing ground as traders focus on UK GDP report. The report showed that UK GDP increased by +0.1% month-over-month in May, in line with analyst consensus.
Manufacturing Production increased by +0.1% month-over-month in May, compared to analyst forecast of -0.2%. Industrial Production decreased by -0.5%, while analysts expected that it would drop by -0.1%.
In case GBP/USD manages to settle below the support level at 1.3450 – 1.3465, it will head towards the 50 MA at 1.3400. A move below the 50 MA will open the way to the test of the next support level at 1.3335 – 1.3350.
USD/CAD Tests Support At 1.4010 – 1.4025 USD/CAD 160726 4h Chart USD/CAD is mostly flat despite the strong pullback in precious metals markets. Gold declined below the psychologically important $4000 level, while silver tested strong support at $56.00. Other commodity-related currencies are losing some ground in today’s trading session.
Currently, USD/CAD is trying to settle below the support at 1.4010 – 1.4025. In case USD/CAD settles below the 1.4010 level, it will move towards the next support level at 1.3915 – 1.3930. RSI is close to the oversold territory, but there is enough room to gain additional downside momentum in the near term.
USD/JPY Gains Ground As Treasury Yields Rebound USD/JPY 160726 4h Chart USD/JPY is moving higher as traders react to the rebound in Treasury yields. The yield of 2-year Treasuries moved above the 4.17% level, while the yield of 10-year Treasuries climbed above 4.58%.
USD/JPY is moving towards multi-decade highs near the 162.80 level. In case USD/JPY manages to settle above 162.80, it will gain additional upside momentum and head towards the 165.00 level.
If you’d like to know more about how to trade forex, please visit our educational area.
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Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.
Key Points:GBP/USD rallied as traders reacted to U.S. PPI data. USD/CAD moved lower despite the pullback in precious metals markets. USD/JPY was mostly flat as traders ignored falling Treasury yields.
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U.S. Dollar Pulls Back As PPI Misses Estimates
DXY 150726 4h Chart U.S. Dollar Index is moving lower as traders react to Producer Prices report. The report indicated that Producer Prices decreased by -0.3% month-over-month in June, compared to analyst forecast of 0%. Core PPI increased by +0.2%, while analysts forecasted that it would grow by +0.4%.
Today, traders also had a chance to take a look at the NY Empire State Manufacturing Index report. The report showed that NY Empire State Manufacturing Index improved from 5.70 in June to 15.60 in July, compared to analyst consensus of 8.8.
Currently, U.S. Dollar Index is trying to settle below the support level at 100.50 – 100.65. In case this attempt is successful, U.S. Dollar Index will move towards the next support, which is located in the 99.75 – 99.90 range.
EUR/USD Remains Stuck Near The 1.1435 Level EUR/USD 150726 4h Chart EUR/USD is moving higher despite the weaker-than-expected Industrial Production report. The report indicated that Industrial Production decreased by -0.2% month-over-month in May, compared to analyst forecast of +0.2%.
The technical picture remains unchanged as EUR/USD is stuck near the resistance level at 1.1420 – 1.1435. If EUR/USD manages to settle above the 1.1435 level, it will head towards the resistance at 1.1500 – 1.1515.
GBP/USD Tests New Highs GBP/USD 150726 4h Chart GBP/USD rallied as traders reacted to the softer-than-expected U.S. PPI data and remained focused on U.S. CPI report, which was released yesterday.
GBP/USD climbed above the resistance level at 1.3450 – 1.3465 and is trying to settle above the 1.3500 level. In case this attempt is successful, GBP/USD will move towards the next resistance, which is located in the 1.3535 – 1.3550 range. It should be noted that RSI has moved into overbought territory, so the risks of a pullback are increasing.
USD/CAD 150726 4h Chart USD/CAD is moving lower despite the pullback in precious metals markets. Gold declined below the $4050 level, while silver settled below $57.00. Other commodity-related currencies are also moving higher in today’s trading session.
The nearest support level for USD/CAD is located in the 1.4010 – 1.4025 range. A successful test of this level will open the way to the test of the next support at 1.3915 – 1.3930. RSI is in the oversold territory, but there is some room to gain additional downside momentum in the near term.
On the upside, a move above the 1.4080 level will push USD/CAD towards the resistance level at 1.4125 – 1.4140.
USD/JPY Is Flat As Traders Ignore Falling Treasury Yields USD/JPY 150726 4h Chart USD/JPY is mostly flat despite the pullback in Treasury yields. The yield of 2-year Treasuries declined below the 4.15% level, while the yield of 10-year Treasuries settled near 4.55%.
Traders stay bullish due to the ultra-dovish policy of the Bank of Japan. The market believes that BoJ cannot raise rates without putting too much pressure on the Japanese economy.
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Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.
/ / Japanese Yen Technical Outlook: USD/JPY Coils Below 2024 High Resistance USD/JPY is contracting within the monthly range just below major resistance at multi-year highs. Battle lines drawn as intervention fears loom.
15/07/2026
7/15/2026 1:02:00 PM
Japanese Yen Technical Outlook: USD/JPY Multi-Timeframe Analysis USD/JPY has failed to close above the 2024 swing high for a third straight week, keeping Bank of Japan intervention risk in play. Michael Boutros, Senior Market Analyst at FOREX.com, breaks down the multi time frame setup and the exact levels that would confirm a breakout or a deeper reversal.
This content was created by an affiliate of FOREX.com and represents the views and opinions of the author/speakers, not the views and opinions of Forex.com, StoneX Group Inc., or its subsidiaries. The content has not been independently reviewed by FOREX.com.
Key USD/JPY Economic Data Releases
Active Short-term Technical Charts US Dollar Short-term Outlook: USD Uptrend Faces Make-or-Break Test After CPI Euro Short-term Outlook: EUR/USD Coils Above Critical Support- Decision Time Gold Price Short-term Outlook: XAU/USD Bulls Try to Carve Out a Low After 30% Drop Canadian Dollar Short-term Outlook: USD/CAD Coils Below Resistance—Breakout Looms Australian Dollar Outlook: AUD/USD Holds Major Support—Reversal Risk Builds Swiss Franc Short-term Outlook: USD/CHF Overbought Rally Tests Major Resistance --- Written by Michael Boutros, Senior Technical Strategist
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U.S. Dollar Pulls Back As Inflation Rate Misses Estimates
DXY 140726 4h Chart U.S. Dollar Index is losing ground as traders react to CPI report. The report indicated that Inflation Rate decreased from 4.2% in May to 3.5% in June, compared to analyst forecast of +3.8%. Core Inflation Rate pulled back from 2.9% to 2.6%, while analysts expected that it would drop to 2.8%.
Lower-than-expected inflation data put material pressure on the American currency as traders reduced bets on hawkish Fed. However, the strong rally in the oil markets may raise prices again, so it remains to be seen whether the pullback in inflation is sustainable.
The nearest support level for U.S. Dollar Index is located in the 100.50 – 100.65 range. In case U.S. Dollar Index manages to settle below the 100.50 level, it will head towards the next support, which is located in the 99.75 – 99.90 range.
EUR/USD Tests Resistance At 1.1420 – 1.1435 EUR/USD 140726 4h Chart EUR/USD moved higher as traders focused on U.S. inflation data. In the EU, traders had a chance to take a look at the Wholesale Prices report from Germany. The report indicated that Wholesale Prices declined by -0.7% month-over-month in June, compared to analyst forecast of +0.5%.
From the technical point of view, EUR/USD continues its attempts to settle above the resistance level at 1.1420 – 1.1435. In case EUR/USD climbs above the 1.1435 level, it will head towards the next resistance at 1.1500 – 1.1515. RSI remains in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.
GBP/USD Moves Higher As Traders Reduce Bets On Hawkish Fed GBP/USD 140726 4h Chart GBP/USD gained ground, supported by U.S. CPI report. Traders bet that Fed will be less hawkish as inflation has started to calm down. Traders also focus on comments from Fed Chair Warsh. He said that CPI decline did not mean that Fed accomplished its mission.
In case GBP/USD pulls back below the 50 MA at 1.3376, it will head towards the nearest support level at 1.3335 – 1.3350. A successful test of of this level will open the way to the test of the next support at 1.3250 – 1.3265.
On the upside, GBP/USD needs to settle above the resistance at 1.3450 – 1.3465 to have a chance to gain additional upside momentum in the near term.
USD/CAD Tests New Lows
USD/CAD 140726 4h Chart USD/CAD is losing ground as lower-than-expected U.S. CPI data provided material support to commodity markets. Other commodity-related currencies are also moving higher in today’s trading session.
USD/CAD settled below the previous support at 1.4125 – 1.4140 and is trying to settle below the 1.4050 level. In case this attempt is successful, it will head towards the next support at 1.4000 – 1.4025.
USD/JPY Moves Lower As Treasury Yields Fall USD/JPY 140726 4h Chart USD/JPY is losing some ground as traders focus on the pullback in Treasury yields. The yield of 2-year Treasuries declined towards the 4.20% level, while the yield of 10-year Treasuries settled below 4.60%.
A move below the support level at 161.50 – 162.00 will push USD/JPY towards recent lows near the 160.50 level. It should be noted that USD/JPY failed to gain strong downside momentum as traders worried that rising oil prices will put pressure on Japan’s economy.
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Japanese yen volatility has returned as traders unwind record short positions ahead of US CPI. With USD/JPY testing major resistance below 163 and intervention risks lingering, futures positioning suggests gains may become harder to come by. Here are the key USD/JPY and AUD/JPY trade setups to watch.
View related analysis:
Yen Bears Capitulate, US Dollar Nearing Sentiment Extreme? | COT report Australian Dollar Outlook: AUD/USD Bounce Losing Steam Ahead of US CPI Gold Price Outlook: Bulls Weigh the Odds of Another Bounce Above $4,000 How to Read the COT Report to Track Forex Market Sentiment Japanese Yen Short Covering Puts USD/JPY at a Critical Juncture Japanese Yen Volatility Returns Ahead of US CPI Volatility has perked up for the Japanese yen over the past few weeks, and it has cut both ways. A market-led selloff heading into the 2 July non-farm payrolls (NFP) report saw USD/JPY fall by as much as 200 pips before recouping those losses over the following four days. On Friday, USD/JPY fell more than 100 pips on reports that Japan's largest pension fund had been instructed to purchase domestic assets.
This is quite a significant development because it suggests Japan is exploring alternative ways of supporting the yen besides traditional currency intervention. It could prove a shrewd approach, allowing policymakers to avoid swimming against the tide while the Federal Reserve maintains a hawkish stance and US economic data continues to outperform.
Source: ICE, TradingView
Yen Gains May Be Harder to Come By I think the bigger takeaway is that easy gains on USD/JPY may be harder to come by, but that is not the same as saying the pair cannot move higher. The combination of traders remaining wary of potential intervention, alongside efforts to support the yen without directly intervening, could allow USD/JPY to grind higher while keeping volatility elevated. Put another way, the broader uptrend may remain intact, but traders should expect more frequent bouts of two-way price action.
With USD/JPY testing resistance ahead of today's US inflation report, traders are on high alert for either a bullish breakout or a sharp reversal. Markets continue to price in a hawkish Fed, so it may not take much of a downside CPI surprise to shake the market from these elevated levels, particularly as Japanese yen bears continue to capitulate in the futures market.
Japanese Yen Futures Positioning: USD/JPY COT Report I have been warning for several weeks about the potential sentiment extreme in Japanese yen futures. Gross short positions had climbed to record highs among both asset managers and large speculators, while long positions also edged higher despite the yen's persistent downtrend (USD/JPY uptrend). That pushed net-short exposure close to two-year highs for both groups of traders.
However, the latest Commitment of Traders (COT) report showed a clear reduction in bearish positioning last week. Gross short exposure was cut by a combined 48.8k contracts across both trader groups, falling 11.6% among large speculators and 12.7% among asset managers. Long positions increased only marginally, making this a story of short covering rather than fresh bullish conviction.
The conditions are not yet in place for a sustained yen rally, but if bearish traders continue heading for the exit, gains on USD/JPY may become harder to come by than they have been over recent months.
Source: CFTC (COT), CME, LSEG
USD/JPY Technical Analysis: US Dollar vs Japanese Yen The 1-hour chart shows a decent uptrend from Monday's low. Prices are testing the weekly R1 pivot point while remaining above their daily, weekly and monthly VWAPs. We could see an early breakout attempt during today's session towards the cycle highs, although traders should note the July VPOC at 162.69, which aligns with last week's high and could provide resistance.
Bulls may also want to tread carefully around the cycle highs and take note of the pre-NFP price action, as it could trigger another pre-emptive pullback. Even so, several support levels are clustered around 162, including the 2024 high, the weekly pivot point and Monday's VPOC.
It could then come down to the US inflation report to determine whether we see a meaningful breakout or a deeper pullback. While a hot CPI report could tempt bulls to push above 163, I suspect the bigger move may come from a softer-than-expected print. That could see USD/JPY rotate lower within its recent choppy range between 160 and 162.50.
Ultimately, I suspect CPI will need to surprise decisively to the upside for any breakout above 163 to prove sustainable.
Source: ICE, TradingView
This content was created by an affiliate of FOREX.com and represents the views and opinions of the author/speakers, not the views and opinions of FOREX.com, StoneX Group Inc., or its subsidiaries. The content has not been independently reviewed by FOREX.com
AUD/JPY Technical Analysis: Australian Dollar vs Japanese Yen Compared with USD/JPY, volatility remains lower on AUD/JPY. Yet it has caught my attention because it presents several clusters of support and resistance that could provide attractive trading setups. It also partially removes some of the event risk associated with the US inflation report.
The daily chart shows prices oscillating between the 50-day and 100-day EMAs. Momentum has turned slightly lower from last week's high and monthly pivot point, while Monday's shooting star signals a failed attempt to retest Friday's doji high.
Even if prices spike above last week's high, the June VPOC sits at 113.09 and could provide resistance, followed by the May VPOC at 113.48. While 112 may offer initial support, a break below that level brings the 100-day EMA into focus, near the Ministry of Finance (MOF) intervention low.
USD/JPY Talking Points: USD/JPY has broken above and held above the 160 level and of late it’s been the 161.95 level that’s been of contention. USD/JPY has been one of the more attractive majors for USD-strength and I retain that view as we trade into the second half of the year. For this week it’s all about CPI, and a hot reading here could stoke rate hike potential in the US which could further prod USD-strength and, in turn, USD/JPY gains. For a while now my favored major pair for USD-strength is USD/JPY, and that remains in force as we trade into the second half of the year. At this point USD/JPY is on the verge of fresh 40-year highs and the next obvious waypoint along the way is the 165.00 handle that was last in-play back in 1986.
USD/JPY Monthly Price Chart Chart prepared by James Stanley; data derived from Tradingview As inflation forces have continued to uptick in the US the disparity between American and Japanese monetary policy keep that as a major theme, and I think there’s quite a bit of misunderstanding amongst retail traders around the background for such a move. Even this morning on social media I had someone remark that Japanese policymakers wouldn’t allow for the USD/JPY spot rate to push past 163, for a few different reasons.
But what I think is often missed is the fact that it’s a free market and that’s not entirely up to just one or two decision makers, and the going price is the going price as that’s what’s determined by the market with known facts at a given point in time. Yes, those facts can change, but the true reason for the trend and the rationale for why price is above 160.00 is the disparity between rate regimes of the two nations.
Japan has been hesitant to hike rates too quickly as that threatens to not only choke off growth, but to invite back the disinflation or even deflationary symptoms that have plagued the nation for much of the past thirty-plus years. So while they could effectively hike rates to strengthen the Yen, there’s consequences that they likely don’t want to deal with of that avenue.
If US rates are at 3.5% and Japanese rates at 1.0%, there’s opportunity there, as a hedge fund can go to a Japanese bank and borrow at a low rate and then invest that capital elsewhere at a higher rate, pocketing the spread. The only problem at that point is they’re essentially long Yen which risks whatever spread might exist.
The types of market players to exploit this disparity aren’t usually the type that just sit in a hedge, so they’ll try to be pragmatic about it, looking to buy dips or bid support rather than just chasing breakouts to offset the risk of a weakening Yen. This rate disparity invites a reason for demand to stick around, through short-term market cycles, such as we’ve seen for the past few years.
Well, Why Don’t They Just Intervene? This is where I think a lot of the retail confusion comes from, as interventions can obviously bring counter-trend moves such as we’ve seen multiple times in the past few years. But they are far from a panacea, and really, they’re a contortion of logic and financial drive.
As noted above as long as there’s disparity investors are being incentivized to borrow cheaply from Japan and then invest elsewhere to pocket the spread. USD/JPY is just more of a representation of that as an investor doesn’t want to take on the currency risk so they offset that with a hedge.
For those investors, intervention can be a desirable thing, as it makes the hedge cheaper and allows for the longer-term trend to continue from a more advantageous entry point. But for the intervening nation, that stop run amounts to burning finite capital reserves to produce a pullback that didn’t last.
So, perhaps the primary hope for intervention, considering that Japanese policymakers likely want to avoid up-ending their growth projections by aggressively hiking rates, is that US inflation calms or slows down to the point where that rate differential can narrow with US rate cuts, or at the least, slower US rate hikes.
This is what happened back in 2022. It is not what is happening right now.
USD/JPY Weekly Price Chart Chart prepared by James Stanley; data derived from Tradingview Tactical Strategy and Short-Term Dynamics The benefit of longer-term charts such as the monthly and weekly varieties shown above is they have a tendency to downplay or mute much of the noise that’s ever-present on shorter-term charts.
Oftentimes there can appear a disconnect between the two, but if reconsidered from a different perspective this can also be seen as possible opportunity, similar to how a hedge fund holding a hedge position in USD/JPY for a carry trade might look at the matter. The big item around the US Dollar this week is an incoming CPI print. If this comes out hot, logically, odds can build for a possible rate cut from the Fed this year, which has helped the USD to stay relatively strong.
That CPI print is unpredictable, just as price is; but – if it does come out below expectations and we see odds for a rate hike temper a bit, that could create a pullback, and this pullback is where the opportunity may show for a trader looking at the big picture. There’s a few contingencies that must be considered, however, as even the reaction to that unpredictable CPI print is also unpredictable.
On a big picture basis the prior resistance zone of 158.88-160.00 would be an attractive area for support to show from prior resistance. That’s quite far from price, however, and there’s already been a couple of higher-lows above that area, so if it does come into play we’d probably need to see a slow CPI print and perhaps even some Fed-speak talking up rate cut potential. While this might seem like an outlier, we have to keep in mind that Kevin Warsh was just nominated by President Trump with a keen eye on rate cuts ahead of mid-terms. So, it’s a possibility that must be considered.
Above that, at 160.73, we have a spot of prior resistance that’s already shown as support. For a deeper pullback scenario, this would be the ideal spot for bulls to step in, disallowing for a re-test of the big figure at 160.00. This would illustrate some optimism from buyers in responding to a dip if they don’t even allow for prices to drop all the way to the psychological level.
And on that note, 161.95 should be considered, as this was the high back in 2024 and it’s since come in as resistance which bulls are still battling with today. This would be a nearby and shorter-term area of support, but if the trend remains strong and those ‘big picture’ bulls remain on the sidelines looking to take advantage of short-term weakness to bid long-term strength, that’s a spot of support potential that could possibly be worked with.
USD/JPY Daily Chart Chart prepared by James Stanley; data derived from Tradingview
Key Points:EUR/USD pulled back as traders reacted to the strong rally in the oil markets. USD/CAD was mostly flat as traders focused on the pullback in precious metals markets. USD/JPY climbed towards the 162.50 level amid rising Treasury yields.
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U.S. Dollar Gains Ground As Oil Prices Rally
DXY 130726 4h Chart U.S. Dollar Index gains ground as traders focus on geopolitical developments. President Trump said that U.S. will impose a naval blockade on Iranian ports. He added that U.S. will become a “guardian” in the Strait of Hormuz and would charge fees at a rate of 20% on all cargo shipped.
Currently, U.S. Dollar Index is trying to settle above the resistance level at 101.15 – 101.30. In case this attempt is successful, U.S. Dollar Index will move towards the next resistance level, which is located in the 101.80 – 101.95 range.
EUR/USD Retreats As Traders Bet On Hawkish Fed
EUR/USD 130726 4h Chart EUR/USD pulled back as traders focused on the strong rally in the oil markets. Brent oil gained 5% as the flow of oil through the Strait of Hormuz would drop after U.S. decision to impose a naval blockade on Iran. Most likely, Iran will try to attack vessels passing through the Strait without the country’s permission.
EUR/USD failed to settle above the resistance at 1.1420 – 1.1435 and pulled back towards the 1.1400 level. If EUR/USD manages to settle below the 1.1400 level, it will head towards the nearest support, which is located in the 1.1350 – 1.1365 range. RSI is in the moderate territory, so there is plenty of room to gain additional downside momentum in case the right catalysts emerge.
GBP/USD Pulls Back Amid Rising Geopolitical Tensions GBP/USD 130726 4h Chart GBP/USD moved lower as traders worried that rising oil prices will force the Fed to raise rates sooner rather than later, which would be bullish for the American currency.
In case GBP/USD declines below the 50 MA at 1.3366, it will get to the test of the support at 1.3335 – 1.3350. A move below the 1.3335 level will open the way to the test of the next support level at 1.3250 – 1.3265.
USD/CAD Remains Stuck Near Support At 1.4125 – 1.4140 USD/CAD 130726 4h Chart USD/CAD continued its attempts to settle below the support at 1.4125 – 1.4140 despite the strong pullback in precious metals markets. Gold declined towards the psychologically important $4000 level, while silver pulled back below $58.00. Other commodity-related currencies were mixed in today’s trading session.
If USD/CAD settles below the 1.4125 level, it will move towards the support level at 1.4010 – 1.4025. On the upside, USD/CAD needs to stay above the 1.4140 level to have a chance to gain upside momentum in the near term. In this case, USD/CAD will head towards the 50 MA at 1.4185. A move above the 50 MA will push USD/CAD towards the resistance at 1.4225 – 1.4240.
USD/JPY Gains Ground As Treasury Yields Rise
USD/JPY 130726 4h Chart USD/JPY is moving higher as traders focus on rising Treasury yields. The yield of 2-year Treasuries moved above the 4.25% level, while the yield of 10-year Treasuries settled above 4.60%.
If USD/JPY stays above the support level at 161.50 – 162.00, it will move towards recent highs near the 162.80 level. In case USD/JPY manages to settle above 162.80, it will gain additional upside momentum and head towards the 165.00 level. It remains to be seen whether Bank of Japan is ready to provide support to the Japanese yen.
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Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.
USD/JPY gains ground after two days of losses, trading around 162.00 during the Asian hours on Monday. The currency pair is keeping a bullish near-term bias as spot holds above both the nine-period and 50-period Exponential Moving Averages (EMAs).
Additionally, the daily technical analysis indicates that the USD/JPY pair is remaining within an ascending channel pattern, suggesting a prevailing bullish bias. Meanwhile, the 14-day Relative Strength Index (RSI) has eased back toward the mid-50s, suggesting the latest consolidation is working off previous overbought conditions without yet undermining the broader uptrend.
The USD/JPY pair could find initial resistance at the 40-year high of 162.84, which was reached on July 1, followed by the upper boundary of the ascending channel around 164.00.
On the downside, the immediate support lies at the nine-day EMA of 161.98, followed by the lower boundary of the ascending channel around 160.80, followed by the 50-day EMA at 160.58. A break below the channel would expose the four-month low of 155.04, recorded on May 6.
USD/JPY: Daily Chart(The technical analysis of this story was written with the help of an AI tool. Know more.)
Japanese Yen Price Today The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the weakest against the US Dollar.
USDEURGBPJPYCADAUDNZDCHFUSD0.10%0.14%0.18%0.00%0.31%0.06%0.04%EUR-0.10%0.03%0.07%-0.10%0.22%-0.00%-0.04%GBP-0.14%-0.03%0.07%-0.14%0.20%-0.03%-0.03%JPY-0.18%-0.07%-0.07%-0.18%0.14%-0.08%-0.08%CAD-0.01%0.10%0.14%0.18%0.32%0.12%0.11%AUD-0.31%-0.22%-0.20%-0.14%-0.32%-0.18%-0.19%NZD-0.06%0.00%0.03%0.08%-0.12%0.18%-0.01%CHF-0.04%0.04%0.03%0.08%-0.11%0.19%0.00% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
Crude oil prices rose at the start of the week after President Trump said the ceasefire was over and fighting had started again. Stock markets fell, while USD/JPY moved back toward recent highs. Later in the week, the U.S. agreed to continue talks with Iran, which caused oil prices to fall again.
There was little major economic data during the week, so markets focused on the Federal Reserve meeting minutes. The minutes showed that a few officials thought interest rates could be raised, but they still supported keeping rates unchanged. This was close to what markets expected, so the reaction was limited.
In Japan, Finance Minister Katayama said the government may encourage the GPIF and other pension funds to invest more in Japanese assets. She also spoke about gradual interest rate rises and more government bond products for households. These comments supported the yen and Japanese stocks, while higher-than-expected producer prices showed that inflation remains a concern.
Markets This Week U.S. Stocks The Dow fell from record highs early in the week as oil prices rose after fighting restarted in the Middle East. However, the uptrend stayed in place as the U.S. and Iran continued talks, helping the index close above its 10-day moving average. Buying short-term dips may remain the easier strategy, although higher-than-expected U.S. inflation data could create a chance to sell this week. Resistance levels are at 53,000, 53,500 and 54,000. Support is seen at 52,000, 51,000, 50,000, 49,500 and 49,000.
Japanese Stocks The Nikkei continued to move lower as investors took profits and higher oil prices worried the market. However, the index recovered late in the week after Finance Minister Katayama encouraged more investment in Japanese stocks. With selling pressure still strong near 70,000, range trading may remain the best approach this week. Resistance is seen at 70,000, 71,000, 72,000, 73,000, 74,000 and 75,000, while support is at 67,500, 66,500 and 65,000.
USD/JPY USD/JPY tested recent highs early in the week as oil prices moved higher. The pair then fell after the Japanese government called for pension funds to invest more in domestic assets, raising the possibility of less investment overseas. The close below the 10-day moving average is bearish, but higher U.S. interest rates should continue to support the pair unless Japanese authorities intervene. Range trading still appears to offer the best opportunities in the short and medium term. Resistance is at 162.00, 162.50, 163.00 and 165.00, while support is seen at 161.00, 160.50, 160.00, 159.00, 158.00, 157.00, 156.00, 155.50 and 155.00.
Gold Gold struggled to move higher early in the week as a stronger U.S. dollar weighed on the market. Prices later returned to the 10-day moving average, which provided support. With U.S. inflation data due this week, gold may stay volatile, creating range-trading opportunities between $4,000 and $4,200. Resistance is at $4,200, $4,300, $4,400, $4,500, $4,600 and $4,665, while support is at $4,100, $4,050, $4,000, $3,900, and $3,800.
Crude Oil Oil rose quickly after President Trump announced renewed fighting with Iran, but the market still expects a positive result from negotiations. Resistance held near $75, and although the recent downtrend has ended, large gains still look unlikely. Range trading between $67.50 and $75 may be the best short-term strategy. Resistance is at $75, $80, $85, $90, $95 and $100, while support is at $67.50, $65, and $60.
Bitcoin Bitcoin continued its recent recovery as buyers returned to the market. Resistance held near $65,000 and volatility remained low, but with the 10-day moving average now rising, buying on weakness may be a better strategy than range trading this week. Resistance is at $65,000, $75,000, $80,000, $85,000, and $90,000, while support is at $60,000, $55,000 and $50,000.
This Week’s Focus Monday: U.S. OPEC Meeting Tuesday: Australia NAB Business Confidence, Japan Industrial Production, China Trade Balance, U.S. CPI Wednesday: Japan Reuters Tankan Index, China GDP, Industrial Production and Chinese Unemployment Rate, E.U. Industrial Production, U.S. PPI and Beige Book Thursday: U.K. GDP and Industrial Production, E.U. Trade Balance, U.S. Retail Sales and Pending Home Sales Friday: E.U. Current Account and CPI, U.S. Housing Starts, Industrial Production and Michigan Consumer Sentiment Several important U.S. reports are due this week, including CPI, PPI, retail sales and consumer confidence. Traders will watch them for clues about when U.S. interest rates may rise. News about talks between the U.S. and Iran will also be important for oil and other markets, while traders will watch for more action from Japan to support the yen.
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