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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Exotic Forex Forecasts – Carry Trades and US Yields Drive Emerging Market PairsForex & Commodities Forecasts – Energy Inflation Fears Keep Yields ElevatedU.S. Dollar Gains Ground As Traders Bet On Hawkish Fed: Analysis For EUR/USD, GBP/USD, USD/CAD, USD/JPYAbout the Author
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.
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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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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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Key Points:Rising producer prices, import costs and bond yields keep another BOJ rate hike in focus.USDJPY remains bullish above 160.30, with a break above 163.70 opening the door toward 175.GBPJPY may target 220, while EURJPY could extend toward 190.50 if key support levels hold.
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The interest rate outlook for Japan remains uncertain as inflationary pressure continues to build. The producer prices are rising, import costs remain high and government bond yields have moved to multi-decade highs. These trends support the case for another Bank of Japan (BOJ) rate hike later this year. But the BOJ may still wait for stronger wage growth and increase in consumer inflation. This leaves the yen sensitive to policy signals, while USDJPY, GBPJPY and EURJPY remain technically strong.
BOJ Rate Hike Outlook Strengthens as Japan Inflation Rises Japan’s producer price index (PPI) increased by 7.1% YoY in June. This beat the market expectation of 6.8% and exceeded the upwardly revised 6.6% gain in May. The increase indicates that businesses are passing their increased input costs to customers faster than in the past. The trend could increase the consumer inflation and lead the BOJ to tighten again.
According to the data, the fuel prices increased by 22.8% while non-ferrous metal prices jumped by 39.2%. Energy prices were pushed up by the Middle East conflict while the AI material demand has lifted the metal prices. These pressures may remain high if tensions continue and supply conditions remain tight. This suggests that the BOJ may hike the interest rate in October.
A low yen is putting on a new layer of inflation. The import prices continued to rise as weak yen and higher energy costs raised the cost of imported goods. The chart below shows that Japan’s imports increased 12.5% to JPY 9,890.2 billion in May 2026. Now the BOJ must decide whether the higher import prices will spread into wages and consumer prices or remain at the wholesale level.
Japan Bond Yields Hit Multi-Decade Highs on Inflation Fears Japanese government bond yields are also pointing toward a higher interest rate environment. The 10-year JGB bond yield rose to a 2.90%, the highest rate since September 1996. It rose during nine consecutive sessions since 26 June, in response to rising oil prices, higher inflation and concerns about Japan’s fiscal health.
The strong drop in yields on Friday does not change the bullish trend. Rising yields suggest that the bond investors want greater compensation for the long term inflation risks.
The long term bond yields have increased with bigger momentum. The 20-year yield rose to 3.89%, while the 30-year yield reached 4.03%. The 40-year yield advanced to 4.055%. These moves indicate that investors are worried about the big government spending plans and that the policy may stay too loose and inflation will continue to rise.
But the shorter end of the yield curve is sending a more cautious signal. The 2-year yield reached to 1.445% and the 5-year yield reached to 1.99%. The yield gap between the 10-year and 2-year yields has increased significantly as seen in the chart below.
The steepening reflects a greater sense of inflation risk in the long end, and less confidence that the BOJ will hike soon. This suggests that BOJ may wait for stronger consumer prices and wages to increase its policy rate from 1% to 1.25%.
USDJPY Forecast: BOJ Rate Hike Risk Challenges Dollar Strength US–Japan Yield Gap Narrows as Japanese Yields Rise The interest rate outlook creates mixed environment for USDJPY. The yen should find support with higher Japanese yields and the prospect of another BOJ rate hike. A more hawkish BOJ could reduce the yield gap between Japan and the U.S. This would detract from any yen funded carry trades and may potentially lead to a lower USDJPY.
The chart below shows that the Japanese yields have increased much faster since 2022. But the U.S. yields have remained relatively high. As a result, the yield gap between the two countries has narrowed. This trend reduces the interest rate advantage of holding dollars over the yen. This may provide support for the Japanese currency. But the U.S. yields remain higher so the dollar still retains an important yield advantage.
But the low yen value still plays a crucial role in Japan’s inflation issues. As energy import prices go up, the demand for foreign currencies and the pressure on the yen increase. This might keep USDJPY high until the BOJ gives more clear indication of what it will do next. Any delay of the next rate hike would be positive for USDJPY while guidance of an October increase could trigger an import yen recovery.
USDJPY Break Above 163.70 Opens the Door to 175 From technical perspective, USDJPY is consolidating at the pivotal area of 160 to 162. The price is compressing within this region before an upside breakout. A break above this zone would likely open the door for strong surge in USDJPY toward the 175 target. This target is defined by the ascending channel pattern that extends from the 2023 lows.
The consolidation around this important region is also visible on the short term 4-hour chart. It shows that the pair is now consolidating between 160.30 and 163.70. The range is widening and prices are compressing within an ascending broadening wedge pattern. A break above 163.70 would indicate a stronger rally in USDJPY toward 166. But 160.30 remains strong support in the short term. Any correction is considered a buying opportunity for traders to push the pair higher.
GBPJPY Forecast: 218 Breakout Opens the Door to 220 Higher Japan rate expectations may also put pressure on GBPJPY. The very large interest rate differential between the United Kingdom and Japan has been good for the pound. But this advantage may weaken if the BOJ hikes the rates again to 1.25%. The higher Japanese bond yields could encourage investors to reduce carry trades and move capital back to yen.
But the pair may still be supported if Bank of England maintains higher rates or takes a conservative approach to rate cuts. Thus, GBPJPY will be reliant on both central banks’ relative directionality. The most bearish risk would be a hawkish BOJ and a softer Bank of England outlook.
GBPJPY also shows strong positive price action. This positive price action is reflected in the formation of inverted head and shoulders pattern from January 2026 to April 2026.
This bullish consolidation pattern broke higher in April 2026. After the breakout, the pair continued to rally on the strength of the pound and the weakness of the Japanese yen. The pair has already broken 216.30 and is now dropping back toward support to attract buyers. The 215.60 to 216.30 area remains strong support. A break above the 218 level would likely push the pair to further highs.
EURJPY Forecast: Bullish Trend Targets 190.50 Eurozone rate expectations are not that aggressive. Therefore, EURJPY could be more responsive to BOJ communication. If the European Central Bank pivots towards easier policy ahead of the BOJ’s next rate increase, the interest rate spread between Europe and Japan will narrow. This would provide support for the yen and increase the risk of a drop in EURJPY.
The outlook also depends on the global risk sentiments. The escalation in the conflict in the Middle East would drive up energy costs for Japan and Europe. But imported fuel needs could exert pressure on the yen in the near term for Japan. The EURJPY could hold steady ahead of the BOJ. But a clear sign that the bank will hike rates in October or at year’s end could generate a deeper pullback.
EURJPY also remains strong and is consolidating within rising trend lines. The immediate support remains at 183.50. The pair is also supported by the 200-day SMA at 182.80. If EURJPY continues higher, the immediate target remains 190.50. As long as the 180 level holds in EURJPY, the next move in the pair will likely be higher. The 50-day and 200-day SMAs are rising which indicates that any correction may attract new buyers.
Final Words The interest rate outlook in Japan remains tilted towards further tightening. The producer prices are high, import costs are increasing and bond yields are rising. These factors suggest another BOJ rate hike. But the central bank might still wait for the clear signals from wages and consumer inflation. A rate hike from 1% to 1.25% could be on the cards later this year if energy prices remain elevated and the yen remains weak.
If BOJ hints at a rate hike in October or at the end of the year, the yen could get some support. But the technical picture of USDJPY, GBPJPY and EURJPY remains bullish. A break above 163.70 in USDJPY would open the door for a rally to 175. GBPJPY might push higher towards 220 and EURJPY could head to 190.50.
Read more: Weak Jobs Data Hits Fed Hike Odds as Dollar Tests Support
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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.
USD/JPY fell to 161.67 on Friday, with the yen fully recovering its losses from the beginning of the week. Market participants are once again increasing expectations of possible intervention by Japanese authorities, following the national currency’s recent move to nearly 40-year lows.
Investors are also awaiting the release of official intervention data later this month to determine whether the Bank of Japan’s actions were behind the yen’s sharp – though brief – gains in recent weeks.
Fresh macroeconomic data has attracted additional attention. Japan’s producer prices rose 7.1% year-on-year in June, marking the fastest pace since March 2023. Cost pressures remain elevated due to the Middle East conflict and the significant weakening of the yen.
At the same time, the Japanese currency found support from lower oil prices following reports that the US and Iran intend to continue peace negotiations despite the recent escalation. The decline in oil prices prompted a retreat in both the dollar and US Treasury yields, while also easing concerns about rising import costs for Japan, which remains one of the largest buyers of Middle Eastern oil.
Technical Analysis On the H4 USD/JPY chart, the market is forming a consolidation range around the 161.57 level, currently extending up to 162.62. A decline towards 161.30 is expected today, followed by a rebound to 162.62, with scope for the trend to extend to 164.15. The MACD indicator supports this scenario, with its signal line above zero and pointing firmly upwards, reflecting continued bullish momentum.
On the H1 chart, the market has completed a downward move to 161.20, with a possible extension to 161.16. A move higher towards 162.62 is expected. 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 20 and pointing upwards towards 80, indicating increasing short-term upside momentum.
Conclusion The yen has fully recovered its losses from the start of the week, supported by renewed expectations of potential Japanese intervention and lower oil prices following signs of US–Iran peace negotiations. Producer prices in Japan rose at their fastest pace since March 2023, reflecting persistent cost pressures from the Middle East conflict and currency weakness. However, falling oil prices eased concerns over Japan’s energy import costs and contributed to a retreat in the dollar and Treasury yields. Technically, USD/JPY may see further downside towards 161.30 in the near term, but the broader uptrend remains intact, with potential for a rebound towards 162.62 and beyond. The market’s focus now turns to official intervention data for confirmation of recent central bank activity.
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USDJPY (The yen) bounced against the dollar after finding resistance at the 162.75 level.
• The latest move above 162.50 has prompted some buyers to cover and could pave the way for a bearish continuation.
• A move below 162.00 would confirm the downward skew and attract more bears in the hope of a further extension.
• 161.60 is the next target lower, which could again test the firm double bottom at 160.80.
NZDUSD propels higher
The New Zealand dollar kept its composure after jumping over 100 pips in yesterday’s session.
• The pair moved higher as the recent greenback sell-off signalled an ongoing rhetoric that the Fed will cut rates soon.
• 0.5700 is the closest support to see if there is any renewed interest in the greenback.
• On the flip side, a break above 0.5780 would give the Kiwi an extension, for a charge towards the recent peak at 0.5860.
US30 finds support
The Dow remains buoyant as prices attempt to recover as many losses as possible.
• Since a confirmation bounce around 52200, a slight increase in value followed by stiff consolidation has seen a top at 52600.
• A move past the said price will provide the next bullish signal as buyers hope for a test back towards 53000.
• On the downside, 52200 is firm support, and 52000 is the bulls’ second layer of defence.
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USD/JPY started a fresh increase but struggled near 162.80. A major bullish trend line is forming with support at 161.60 on the 4-hour chart. Bitcoin could gain bullish momentum if it settles above $65,000. WTI Crude Oil prices recovered some losses before the bears appeared near $76.20. USD/JPY Technical Analysis The US Dollar gained bullish momentum after it settled above $160.80 against the US Dollar. USD/JPY even climbed above 162.00 before it faced rejection.
Looking at the 4-hour chart, the pair again struggled to surpass the 162.70 and 162.80 levels. It is now correcting some gains and might dip toward the 38.2% Fibonacci retracement level of the upward move from the 160.49 swing low to the 162.70 high.
If there are more losses, the pair might find support near 161.60. Besides, there is a major bullish trend line forming with support at 161.60, the 100 simple moving average (red, 4-hour), and the 50% Fibonacci retracement.
The first major support could be near 160.80 and the 200 simple moving average (green, 4-hour). A downside break and close below 160.80 might send the pair toward 160.00. Any more losses could open the doors for a test of 158.80.
On the upside, the bears might remain active near 162.80. The next major resistance might be 163.40. A close above 163.40 could spark a sharp increase. In the stated case, the bulls could aim for a move to 165.00.
Looking at Bitcoin, the price could start a fresh increase, but a close above $65,000 is important for upside continuation.
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Key Points:EUR/USD pulled back as traders reacted to the strong rally in the oil markets. USD/CAD moved lower despite the pullback in precious metals markets. USD/JPY gained ground, supported by rising Treasury yields.
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U.S. Dollar Moves Higher As Oil Prices Gain 5%
DXY 080726 4h Chart U.S. Dollar Index gains ground as traders prepare for the release of FOMC Minites and react to rising tensions in the Middle East.
President Trump said that U.S. could launch strikes against Iran and resume the blockade of country’s ports. Oil prices are up by more than 5% as traders react to the surprising escalation between U.S. and Iran. Rising oil prices could force Fed to be more hawkish, which is bullish for 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 head towards the next resistance level, which is located in the 101.80 – 101.95 range. RSI is in the moderate territory, so there is plenty of room to gain momentum in the near term.
EUR/USD Retreats Amid Worries About Hawkish Fed EUR/USD 080726 4h Chart EUR/USD is losing ground as traders focus on the strong rally in the oil markets. Demand for risk assets declined amid inflation fears, which was bearish for the European currency.
EUR/USD settled below the 50 MA at 1.1414 and is trying to settle below the 1.1400 level. If EUR/USD settles below 1.1400, it will head towards the support level, which is located in the 1.1350 – 1.1365 range.
GBP/USD Rebounds From Session Lows GBP/USD 080726 4h Chart GBP/USD is swinging between gains and losses as traders focus on geopolitical tensions and evaluate their next moves.
In case GBP/USD manages to settle above the support level at 1.3335 – 1.3350, it will head towards the next resistance, which is located in the 1.3450 – 1.3465 range.
USD/CAD 080726 4h Chart USD/CAD is losing some ground despite the strong pullback in precious metals markets. Gold is down by -1.5%, while silver pulled back by -4%. Other commodity-related currencies are mixed in today’s trading session.
In case USD/CAD stays below the 50 MA at 1.4203, it will head towards the nearest support level, which is located in the 1.4125 – 1.4140.
On the upside, a move above the 50 MA will push USD/CAD towards the resistance at 1.4225 – 1.4240. In case USD/CAD climbs above the 1.4240 level, it will head towards the next resistance, which is located in the 1.4335 – 1.4350 range.
USD/JPY Gains Ground As Treasury Yields Rise USD/JPY 080726 4h Chart USD/JPY is moving higher as traders focus on rising Treasury yields. The yield of 2-year Treasuries moved above the 4.23% level, while the yield of 10-year Treasuries settled above 4.58%. Treasury yields are rising as traders react to recent developments in the Middle East and bet on hawkish Fed. In case oil prices continue to move higher, the Japanese yen will find itself under additional pressure.
From the technical point of view, USD/JPY settled above the resistance at 161.50 – 162.00 and is moving towards multi-decade highs near 162.80. In case USD/JPY settles above the 162.80 level, it will head towards the 165.00 level. It remains to be seen whether the Bank of Japan is ready to intervene as yen’s fundamentals are extremely bearish. Previous attempts to support the yen yielded no results.
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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.
The US Dollar (USD) appreciates against the Japanese Yen (JPY) for the fourth consecutive day on Wednesday, fuelled by the resumption of hostilities in the Middle East and dovish comments from Bank of Japan (BoJ) officials. The Greenback, however, is struggling to break last week’s highs at 162.40 so far.
A new round of US strikes on Iran, in retaliation for alleged attacks from Tehran on vessels closing Hormuz earlier this week, hurt risk appetite on Wednesday. and provided some support to the safe-haven US Dollar,
The Yen, however, is suffering from weakness of its own, as BoJ monetary committee member Toichiro Asada, the dovish dissenter at June’s monetary policy meeting, said that he needs to see signs of demand-driven inflation before supporting interest rate hikes,
Technical Analysis: 162.40 is the last barrier before 40-year highs
USD/JPY trades at 162.26, maintaining its positive structure intact although bulls have been rejected at Monday's high in the area around 162.40. Four-hour charts show the Relative Strength Index (14) easing toward neutral from prior overbought readings, while the Moving Average Convergence Divergence (MACD) remains slightly positive, hinting that upside momentum is still constructive.
On the topside, horizontal resistance at 162.41 (June 6 high) is closing the path towards the 40-year high at 162.85, followed by 162.84. On the downside, initial support appears at Tuesday's low, near 161.70, ahead of the key support area of 160.50, which held bears last week.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Risk sentiment FAQs In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.
Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.
The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.
The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.
The American currency gained ground as traders focused on recent events in the Strait of Hormuz.
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U.S. Dollar Moves Higher As Oil Prices Rally
DXY 070726 4h Chart U.S. Dollar Index gains ground as traders focus on the rally in the oil markets. An LNG carrier from Qatar was hit in the Strait of Hormuz. A Saudi oil tanker also suffered damage. Iran insists that ships should go through approved routes.
The nearest resistance level for U.S. Dollar Index is located in the 101.15 – 101.30 range. In case U.S. Dollar Index manages to settle above the 101.30 level, it will head towards the next resistance, which is located in the 101.80 – 101.95 range.
EUR/USD Tests Support At 1.1420 – 1.1435
EUR/USD 070726 4h Chart EUR/USD pulled back as demand for risk assets declined after attacks on vessels in the Strait of Hormuz.
Traders also focused on the Industrial Production report from Germany. The report indicated that Industrial Production increased by +0.9% month-over-month in May, compared to analyst consensus of +0.2%.
Currently, EUR/USD is trying to settle below the support level at 1.1420 – 1.1435. This support level has already been tested several times and proved its strength. In case EUR/USD manages to settle below the 1.1420 level, it will get to the test of the 50 MA at 1.1410. A move below the 50 MA will open the way to the test of the support level at 1.1350 – 1.1365.
GBP/USD Retreats Amid Falling Demand For Risk Assets GBP/USD 070726 4h Chart GBP/USD is losing ground as traders focus on general strength of the American currency.
From the technical point of view, GBP/USD failed to settle above the 1.3400 level and pulled back towards 1.3370. The nearest support level for GBP/USD is located in the 1.3335 – 1.3350 range.
If GBP/USD declines below the 1.3335 level, it will head towards the 50 MA at 1.3285. In case GBP/USD manages to settle below the 50 MA, it will move towards the next support level at 1.3250 – 1.3265.
USD/CAD Tests The 1.4200 Level
USD/CAD 070726 4h Chart USD/CAD remains stuck below the resistance at 1.4225 – 1.4240 as traders focus on the strong rally in the oil markets. Gold and silver are losing ground, which is bearish for the Canadian currency. Other commodity-related currencies are moving lower in today’s trading session.
If USD/CAD settles below the 50 MA at 1.4204, it will head towards the support level at 1.4125 – 1.4140. RSI is in the moderate territory, so there is plenty of room to gain additional downside momentum in case the right catalysts emerge.
On the upside, USD/CAD needs to settle above the resistance level at 1.4225 – 1.4240 to gain upside momentum in the near term. A move above 1.4240 will push USD/CAD towards the next resistance at 1.4335 – 1.4350.
USD/JPY Remains Stuck Near Key Resistance Level USD/JPY 070726 4h Chart USD/JPY is losing some ground as traders react to the Household Spending report from Japan. The report indicated that Household Spending increased by +3.7% month-over-month in May, compared to analyst forecast of +1.4%. On a year-over-year basis, USD/JPY declined by -0.4%, compared to analyst consensus of -2.5%.
The technical picture remains unchanged as USD/JPY is trying to settle above the resistance level at 161.50 – 162.00. If USD/JPY settles above the 162.00 level, it will move towards recent highs near 162.80. A move above the 162.80 level will push USD/JPY 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.
The Pound to Dollar (GBP/USD) exchange rate traded in a narrow range on Monday as easing UK political uncertainty offset renewed demand for the US Dollar following last week's sharp selloff.
At the time of writing, GBP/USD was trading at $1.3352, little changed on the day.
Latest — Exchange Rates:
Pound to Dollar (GBP/USD): 1.335559 (+0.03%)
Euro to Dollar (EUR/USD): 1.141696 (-0.17%)
Dollar to Yen (USD/JPY): 162.33951 (+0.61%)
DAILY RECAP:
The US Dollar attracted support on Monday as US markets reopened following the long Independence Day weekend.
The ‘Greenback’ seemed to have entered oversold conditions following its sharp losses in the wake of last week’s non-farm payrolls report, which reported an unexpectedly large slowdown in job creation.
Therefore, some price-conscious investors were willing to buy the dip, lifting the US Dollar.
Meanwhile, the latest ISM services PMI printed in line with expectations, easing from 54.5 in May to 54 in June. Although this was a slight softening of activity, it still represented a healthy expansion in the US services sector.
Meanwhile, the Pound (GBP) held strong on Monday as investors continued to scale back the political risk premium that has weighed on Sterling in recent weeks.
With MP Andy Burnham widely expected to become the next Prime Minister, markets appear increasingly confident that the UK will avoid a lengthy and disruptive Labour leadership contest.
Burnham has moved to reassure investors since launching his leadership bid, pledging to maintain the government’s existing fiscal rules while also outlining ambitious plans to support the economy.
This has been well received by GBP investors, with Sterling finding support as concerns over UK political instability continue to recede.
Near-Term GBP/USD Forecast: US Employment Data to Support the Dollar? Looking forward, high-impact data is thin on the ground on Tuesday, with the US weekly ADP employment change figure being the only release of note. This mid-tier data could support the US Dollar, if it reports healthy growth in US private employment.
Elsewhere, market risk appetite could influence the pairing. The safe-haven US Dollar would likely benefit if the market mood sours, while the increasingly risk-sensitive Pound could attract support if sentiment brightens. Any shifts in risk appetite could see GBP/USD waver.
