• USD/JPY forecast: Holiday-thinned liquidity keeps intervention risks firmly in focus
• Softer US labour market data has weighed on the dollar, but it is unlikely to trigger a sustained decline without further evidence of economic weakness
• Markets are increasingly alert to the possibility of further action from Japanese authorities if USD/JPY resumes its climb

Dollar loses momentum – for now

The latest US employment figures have taken some of the shine off the dollar, yet the report falls short of signalling a decisive shift in the long-dollar narrative. The Fed’s policy outlook still favours a rate hike later this year, although much will depend on the direction of inflation. But the employment report was certainly not positive, given that there were also sizeable downward revisions to previous months data.  Meanwhile, the decline in the unemployment rate was flattered by a fall in labour force participation rather than stronger employment, suggesting some workers are leaving the job market altogether rather than finding new jobs.

For FX investors, the NFP report makes it difficult to justify expectations of multiple Fed tightening later this year. However, it is equally difficult to argue that it is weak enough to encourage aggressive pricing of rate cuts. Markets have trimmed some of their hawkish expectations as you’d expect and this is already reflected in the dollar falling across the board. But there is still room for investors to maintain a cautious stance ahead of the next US inflation report.

With US financial markets closed for the Independence Day holiday, trading conditions will be considerably thinner today. Reduced liquidity often exaggerates price swings and creates favourable conditions for official intervention in the foreign exchange market…

USD/JPY forecast: Japan keeps intervention threat firmly on the table

Attention now shifts back to Japan, where authorities remain highly sensitive to renewed yen weakness. The USD/JPY experienced sharp downside moves before the US employment report was released yesterday, raising fresh speculation that officials may already have stepped into the market.

Whether or not that move was intervention, the risk remains elevated over the holiday period. Historically, Japanese policymakers have often preferred periods of thinner global liquidity when carrying out currency operations, as smaller transactions can generate a greater market impact. Previous intervention campaigns have also tended to unfold over several trading sessions rather than through a single decisive move. So, don’t be surprised if they move in again today.

Still, intervention alone is unlikely to deliver lasting yen strength – as we have repeatedly seen. Without a more convincing shift in the Bank of Japan’s policy stance, particularly through stronger guidance on future interest rate increases, history suggests any gains in the yen could prove temporary. The experience following the intervention episodes earlier this year serves as a reminder that official action can slow the move, but rarely changes the longer-term direction without support from monetary policy.

USD/JPY technical analysis

The Japanese authorities were presumably already intervening before the jobs data was released yesterday. The USD/JPY took a sharp tumble earlier in the day before stabilising, then resumed its decline following the disappointing jobs report.

The pair has since been testing key support in the 160.50 to 160.70 zone, which previously acted as resistance and could now turn into support. However, if USD/JPY breaks below this area, that could tip the balance in favour of the bears, especially if Japan intervenes again or if we see broader US dollar weakness driven by further soft economic data.

Meanwhile, resistance is now located between 161.50 and 161.95. This zone previously acted as resistance before price broke above it. However, the breakout failed to hold on the retest, turning it into resistance.

The 161.95 level also marked the July 2024 high, so the pair’s inability to hold above it could prove significant. That said, we’ll have to see whether the bullish trend can reassert itself later on today, or more likely, in the days ahead.

Looking ahead: ISM PMI and FOMC meeting minutes

ISM services PMI will be released on Monday, July 6. Fed Chair Kevin Warsh avoided offering any clues on the likely direction of interest rates this week, preferring instead to reinforce the Fed’s data-dependent approach. That leaves forward-looking indicators like ISM PMI in the spotlight.

The FOMC meeting minutes for the June meeting will be released on Wednesday, July 8. Particular attention is being paid to any comments from Fed’s new Chair Kevin Warsh. After his relatively hawkish tone at the June policy meeting that sent the dollar sharply higher, markets will want to know how firm he and his FOMC colleagues are on inflation – if such clues are offered from the meeting’s minutes. So far, he’s offered little further clues on policy direction, maintaining a data-dependent approach.

— Written by Fawad Razaqzada, Market Analyst

Follow Fawad on Twitter @Trader_F_R

The EUR/USD pair trimmed part of its recent losses and settled around 1.1450 as demand for the US Dollar (USD) cooled down. On the one hand, easing concerns about the Middle East war and its consequences pushed investors away from the USD’s safety. On the other hand, tepid American data weighed on the local currency. At the end, the odds of interest rate hikes in the United States (US) dropped, making it easier for speculative interest to push the Greenback lower.

Middle East and Oil Price

Markets kicked off the week in a cautious mood amid headlines indicating some tit-for-tat attacks between the US and Iran over the weekend. The fragility of the ceasefire, however, is no news to the world and investors, while ships keep transiting the Strait of Hormuz.

Physical and verbal skirmishes continue, but as long as Oil prices come down, it seems market players are far from concerned about the war. And it has its logic: lower Oil prices mean easing inflationary pressures and, hence, decreased odds for economic turmoil. In the US, it also means that the Federal Reserve (Fed) may not need to hike interest rates.

By the end of the week, the barrels of Brent and West Texas Intermediate (WTI) crude trade at pre-war levels, reflecting the ‘normalization’ of vessels’ traffic through the critical sea passage. It seems that as long as the Strait is open, market participants will bet against mounting risk and hence move into higher-yielding assets.

As a note of color, there has been no clear progress in negotiations between the US and Iran, and Pakistani mediators were just able to inform that the next meeting between the two countries will be scheduled “at the earliest possible time.” Tehran is now focused on a massive funeral for the former Supreme Leader, Ayatollah Ali Khamenei, who was killed at the beginning of the war on February 28. His funeral will last until July 9, and talks are unlikely to resume before that date.

Cautious yet confident European authorities

European Central Bank (ECB) President Christine Lagarde started the week praising Europe’s resilience, noting it means rate hike effects on the economy are more contained, and that the ECB “can raise rates to address inflation without fear it becomes a source of financial stress.” Lagarde later noted that risks are more broadly balanced “than a few weeks ago” and that the European Union (EU) is not in stagflation, while speaking at a policy panel at the ECB Forum on Central Banking 2026 that took place in Sintra, Portugal.

Data somehow backed her words, as annual inflation in Germany, as measured by the change in the Consumer Price Index (CPI), softened to 2.3% in June, according to preliminary estimates, from 2.6% in May. The Harmonized Index of Consumer Prices (HICP) in the same period printed at 2.4%, down from the 2.7% posted in the previous month.

The preliminary estimate of the Euro area annual HICP came in at 2.8% in June, below the previous reading of 3.2% and lower than the anticipated 3%. Finally, the core annual HICP printed at 2.4%, lower than the prior 2.6%.

As Middle East tensions eased and inflation cooled, the odds for additional interest rate hikes in the Eurozone decreased, with market players now looking for a prolonged hold.

United States Federal Reserve

The US macroeconomic calendar revolved around employment, and news were not good. The ADP Employment Change report showed that the private sector added 98K new jobs in June, below the previous 122K. Also, US-based employers announced 45,849 job cuts in June, down 53% from the 97,006 cuts announced in May, according to the Challenger Job Cuts report. The big miss came from the Nonfarm Payrolls (NFP) report released on Thursday, as the country added a measly 57K new jobs in June vs the anticipated 110K and the previous May reading of 129K (downwardly revised from 172K). The report also showed that the Unemployment Rate declined to 4.2% from 4.3%.

Other than employment data, the country released the June ISM Manufacturing Purchasing Managers’ Index (PMI), which printed at 53.3, below the 54 expected but still indicating business expansion for the sixth consecutive month. The Price sub-index edged sharply lower, from the 82.1 posted in May to 73, a sign of easing inflationary pressures.

Meanwhile, Fed Chair Kevin Warsh participated in the ECB Central Banking forum and delivered some interesting comments. He reiterated that forward guidance is not in his book and that the focus is on price stability. US policymakers will decide on rates in four weeks’ time, according to Warsh. “When we get into that room and shut the door, we’re going to have a good debate,” Warsh added.

A softer labor market, easing inflationary pressures, and the absence of any other clues on future monetary policy played against the Greenback, with odds of a rate hike edging sharply lower after the release of the NFP report.

What’s next in the docket

The new week starts with the EU releasing May Retail Sales and the US delivering the June ISM Services PMI. The Federal Open Market Committee (FOMC) will unveil the Minutes of the latest meeting on Wednesday, while Germany will publish the final estimate of the June HICP on Friday. The calendar also includes some other figures that could provide clues on the actual health of major economies.

Also, as central banks’ decisions are now one month away, policymakers from both shores of the Atlantic will hit the wires, and their words will be scrutinized in search of monetary policy clues.

EUR/USD Technical Outlook:

The weekly recovery is far from changing the EUR/USD pair’s technical picture, which still shows that bears are in control. Furthermore, the advance met sellers around a long-term static resistance area near 1.1470, which is also an inflection point. As long as it is clearly below it, the odds are on sellers’ side.

In the daily chart, EUR/USD maintains a bearish near-term bias as spot holds below the 20-day, 100-day and 200-day Simple Moving Averages (SMAs) at 1.1470, 1.1623 and 1.1654, respectively. The Momentum indicator lacks directional strength but holds below its midline, while the Relative Strength Index (RSI) indicator hovers around 43, suggesting downside pressure persists but has lost strength. Still, the moving averages setup is likely to contain attempts to advance further while suggesting lower lows are still possible.

Bigger time frames also reflect sellers’ dominance, as in the weekly chart, EUR/USD maintains a bearish bias. The pair develops far above the 100- and 200-week SMAs at roughly 1.1296 and 1.1001, but remains capped by the 20-week SMA at 1.1611. The pair’s slide from recent highs, together with a 14-week RSI hovering near 42 and a negative 14-week Momentum reading, tilts risks toward further consolidation while leaving the door open for additional slides.

On the topside, initial resistance is at the 1.1470 area, reinforced by the 20-day SMA near it. The next significant resistance comes in a handful of pips above 1.1600, with the 100-day SMA around 1.1623 and the 200-day SMA at 1.1650. The EUR/USD would need to clearly break above this area to ease the broader bearish tone. The recent multi-week low at 1.1324 is the immediate support, closely followed by the 100-week SMA at 1.1296. An extension below the latter exposes the psychological 1.1000 threshold.

(The technical analysis of this story was written with the help of an AI tool.)

Intraday bias in EUR/GBP stays on the downside at this point. Fall from 0.8863 should target 61.8% retracement of 0.8221 to 0.8863 at 0.8466 at next. On the upside, above 0.8601 minor resistance will turn bias neutral first. But risk will stay on the downside as long as 0.8686 resistance holds, in case of recovery.

In the bigger picture, current development suggests that rise from 0.8221 (2024 low) has completed at 0.8863, just ahead of 38.2% retracement of 0.8221 (2024 low) to 0.8863 (2025 high) at 0.8618. Deeper fall would be seen back to 0.8201 (2022 low). For now, outlook will be neutral at beast as long as 0.8863 hold.

2026.07.03 2026.07.03
GBP/USD: Elliott Wave Analysis and Forecast for 03.07.26–10.07.26

Alex Geutahttps://www.litefinance.org/blog/authors/alex-geuta/

Major Takeaways

• Main scenario: Once the correction is completed, consider short positions below the level of 1.3467 with a target of 1.3050–1.2936. A sell signal: the correction ends and the price holds below 1.3467. Stop Loss: above 1.3510, Take Profit: 1.3050–1.2936.
• Alternative scenario: Breakout and consolidation above the level of 1.3467 will allow the pair to continue rising to the levels of 1.3660–1.3870. A buy signal: the level of 1.3467 is broken to the upside. Stop Loss: below 1.3425, Take Profit: 1.3660–1.3870.

Main Scenario

Consider short positions below 1.3467 with a target of 1.3050–1.2936 once the correction is completed.

Alternative Scenario

Breakout and consolidation above 1.3467 will allow the pair to continue rising to the levels of 1.3660–1.3870.

Analysis

On the weekly time frame, an ascending wave of larger degree (A) of B is developing. Within it, wave 1 of (A) has formed, and a downward correction has been completed as wave 2 of (A). The third wave 3 of (A) appears to be unfolding on the daily chart. Within it, wave i of 3 has formed, and bearish correction ii of 3 is developing. On the H4 time frame, wave (c) of ii is developing. Within it, wave iii of (c) has formed, and a local correction is unfolding as wave iv of (c). If the presumption is correct, GBP/USD will continue to decline to 1.3050–1.2936 after the correction is over. The level of 1.3467 is critical in this scenario as a breakout above it will enable the pair to continue rising to the levels of 1.3660–1.3870.

This forecast is based on the Elliott Wave Theory. When developing trading strategies, it is essential to consider fundamental factors, as the market situation can change at any time.

Price chart of GBPUSD in real time mode

2026.07.03 2026.07.03
USD/JPY: Elliott Wave Analysis and Forecast for 03.07.26–10.07.26

Alex Geutahttps://www.litefinance.org/blog/authors/alex-geuta/

Major Takeaways

• Main scenario: Consider long positions from corrections above 159.83 with a target of 165.00–170.00. A buy signal: the price holds above 159.83. Stop Loss: below 159.30, Take Profit: 165.00–170.00.
• Alternative scenario: Breakout and consolidation below 159.83 will allow the asset to continue declining to the levels of 158.90–158.00. A sell signal: the level of 159.83 is broken to the downside. Stop Loss: above 160.35, Take Profit: 158.90–158.00.

Main Scenario

Consider long positions from corrections above 159.83 with a target of 165.00–170.00.

Alternative Scenario

Breakout and consolidation below 159.83 will allow the pair to continue declining to the levels of 158.90–158.00.

Analysis

On the weekly time frame, an ascending third wave of larger degree 3 has formed, a downward correction has been completed as the fourth wave 4, and the fifth wave 5 is developing. On the daily chart, the third wave of smaller degree (3) of 5 appears to be developing, with wave 3 of (3) forming as its part. Wave i of 3 has formed on the H4 chart, and wave ii of 3 has presumably been completed as a local correction. If the presumption is correct, USD/JPY will continue to rise to 165.00–170.00 within wave iii of 3. The level of 159.83 is critical in this scenario as a breakout below it will enable the asset to continue declining to the levels of 158.90–158.00.

This forecast is based on the Elliott Wave Theory. When developing trading strategies, it is essential to consider fundamental factors, as the market situation can change at any time.

Price chart of USDJPY in real time mode