The GBPJPY pair formed more of the mixed sideways trading, due to its negative stability below the barrier at 200.40, announcing delaying the bullish attack in the current period, which increases the chances for activating the bearish correctional track, to expect attacking the support at 197.85, while breaking it will force it to suffer extra losses that might extend towards 197.20 reaching the next support at 197.85 and breaking it will force it to suffer extra losses that might extend to 197.20 reaching the next support at 196.20.
While the price success by breaching the barrier and holding above it will open the way for renewing the bullish attempts, to ease the way for achieving extra gains that might extend to 200.90 reaching 161.8%Fibonacci extension level at 202.45.
The expected trading range for today is between 197.85 and 199.80
Copper price touched $4.5950 yesterday, to approach from the initial positive target, which forces it to form sideways fluctuation, due to its neediness to the positive momentum by the stability of stochastic with the oversold level.
While the stability of the price is within the bullish track, by moving away from the extra support at $4.2600, by providing positive momentum by the moving average 55, these factors make us keep the bullish suggestion, to expect surpassing $4.6200 level and reaching the next target near $4.7500.
The expected trading range for today is between $4.4200 and $4.7500
The Euro initially did try to rally during the trading session on Wednesday but gave back gains near the 0.87 level.
The 0.87 level is a large round psychologically significant figure that a lot of people would be paying close attention to.
But when you look at the chart, you can see that we are basically in the middle of a larger consolidation area between 0.86 on the bottom and the 0.8750 level above as resistance.
As we are basically in the middle, I think this is a coin flip. But when you look at the longer term chart, we are most certainly bullish. We are testing an area that’s been important multiple times in the past. And of course, this is a market that does tend to be somewhat choppy. I suspect this is a situation where if we do pull back from here, there will be buyers underneath, especially near the 50 day EMA.
No Real Interest in Shorting. Yet.
I don’t have any interest in shorting this pair because quite frankly, I think we’re stuck in this range. But if we did break down to the 0.85550 level, then you have to somewhat at least entertain that thought. If we can break above 0.8750, then obviously that would be very bullish for the Euro. I think you’ve got a situation here where both of these currencies are starting to top out simultaneously, and it makes sense that we don’t have a whole lot of wiggle room here. 150 pips is a lot in this pair.
Remember the pip size is bigger than most other Forex pairs. And it does tend to be more of a grinder. However, once we figure out the direction we’re going, it will be explosive, because it always is in this pair, it seems. With that being said, I’m pretty neutral on this, but I am looking at pullbacks as potential buying opportunity especially near that 50-day EMA.
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
The Pound to Dollar exchange rate (GBP/USD) is holding just above 3-week lows after rebounding to 1.34, but the outlook remains fragile as traders weigh UK bond-market turmoil, looming fiscal risks, and the next moves from the Federal Reserve.
UK gilt yields have eased slightly from 27-year highs, offering temporary relief, yet confidence in the government’s fiscal strategy is shaky ahead of November’s budget.
At the same time, US jobs data and Fed policy expectations keep the dollar outlook in sharp focus, leaving GBP/USD forecasts finely balanced between further weakness and a tentative recovery.
GBP/USD Forecasts: Can the UK Bond Market Stabilise?
After sliding to lows below 1.3350 on Tuesday, the Pound to Dollar (GBP/USD) exchange rate has managed to regain the 1.3400 level, but sentiment remains notably fragile with all eyes on the UK bond market as well as the dollar and wider global market pressures.
There has been some relief in the bond market with the 30-year yield back below 5.70%, although still close to 27-year highs.
UK equity markets have also managed to secure gains on Wednesday.
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Bond markets will be watched very closely while the US labour-market data will also be a key influence this week.
UoB commented; “While the sharp drop appears excessive, there is room for GBP to weaken further to 1.3305, potentially testing the significant support level near 1.3270. This time around, to sustain the downward momentum, GBP must hold below 1.3490.
According to Scotiabank; “the latest price action is suggestive of support, stabilization, and possible recovery.
It added; “We see the potential for gains back toward the 50 day MA (1.3488) and look to a near-term range bound between 1.3350 support and 1.3450 resistance.”
National Australia Bank head of FX research Ray Attrill noted that bond-market pressures are global and not isolated within the UK.
He did, however, note UK vulnerability; “It’s probably resonating a bit more in the UK because of memories of the Liz Truss episode. I think part of the concern is that there’s an autumn statement or a budget that’s coming up.”
Attrill added; “I think at this stage, there’s a lack of confidence in markets that the government is willing to address effectively the scale of the budget deficit and the speed of debt buildup.”
Chancellor Reeves announced that the budget will be on November 26th.
MUFG noted that a record GBP14bn was raised in the latest 10-year Gilt syndication and added; “investors may be viewing these higher yields as attractive levels to buy.”
The bank is still cautious over the Pound outlook; “While we do not expect any crisis-type scenario in the UK, the risks from fiscal uncertainty will persist into the budget later in the year.”
Investment banks are still wary over the dollar outlook despite gains on Tuesday.
ING commented; “Rising debt concerns outside the US may have triggered some unwinding of abundant USD shorts. Still, we doubt this will provide sustainable support to the dollar ahead of key data releases and imminent Fed easing.”
Danske Bank sees limited scope for further near-term dollar selling; “Looking ahead, with roughly 90% probability priced for a 25bp Sept Fed cut, we see limited room for further downside in front-end US yields barring a major miss in Friday’s NFP report. Instead, we think risks remain tilted toward a hawkish market reaction in the weeks ahead, implying further scope for USD strength.”
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The session low of $2.96 was a higher daily low and marked a successful test of support around the anchored volume-weighted average price (AVWAP) from the 2024 trend bottom. After several failed attempts to sustain a breakout above that level, Wednesday’s bullish action cleared the AVWAP zone convincingly. It was the first day where the full range of the session was above that AVWAP. This follows a string of technical improvements beginning last Thursday with a break of the 20-Day moving average, a trendline breakout, and a move through the center line of a descending channel.
Convergence of Resistance Levels Ahead
Despite the recent bullish momentum, natural gas faces a confluence of potentially significant resistance. This includes the falling 50-Day average and two prior swing highs, all clustered between $3.15 and $3.19. The 50-Day moving average is particularly noteworthy as this marks the first test of the indicator as resistance since it failed as support in late June. The fact that the average is declining may shift resistance slightly lower, but it still represents the most important barrier to watch. A daily close above this level would be required before higher objectives can be considered.
Outlook Hinges on Trendline Reversal
A decisive move above the resistance cluster would also represent a failed breakdown from the long-term uptrend line. Traders should remain aware, however, that natural gas could continue to grind higher in the coming weeks while still trading beneath that angled uptrend line. For now, momentum favors the bulls, but the upcoming test of the 50-Day average will likely determine whether the counter-trend rally extends toward higher levels or stalls beneath resistance.
For a look at all of today’s economic events, check out our economic calendar.
The Euro to Dollar exchange rate outlook (EUR/USD) brightened on Wednesday as the exchange rate surged above 1.1650 after US job openings slumped to a four-year low, fuelling forecasts of Fed rate cuts and fresh Dollar weakness.
With EUR/USD trading up to 1.1670, investors are eyeing a test of the 1.17 resistance zone as the Dollar’s fragile outlook dominates global forex markets.
EUR/USD Forecasts: Above 1.1650
The Euro to Dollar (EUR/USD) exchange rate found support above 1.1600 on Wednesday and rallied to near 1.1650 as the dollar failed to hold gains in global markets. The 1.17 region remains a key resistance area.
Following the latest US labour-market data, EUR/USD rallied further to 1.1670 as job openings dipped to the lowest level since 2021.
According to UoB; “We expect EUR to trade with a downward bias now, but it is too early to determine whether EUR can break clearly below the major support at 1.1570. The downward bias will remain intact as long as EUR holds below 1.1700.”
According to Scotiabank; “Broader turbulence in global bond markets looks to have moderated and the overall tone appears to be stabilizing, offer the EUR some support as participants shift their focus back to fundamentals and the outlook for relative central bank policy.”
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It added; “We look to a near -term range bound between 1.1600 and 1.1700.”
According to the latest JOLTS data, job openings declined to 7.18mn for July from a revised 7.36mn previously which was below expectations of 7.38mn and the lowest reading since March 2021.
US Dollar Outlook: Fed Policy and Jobs Data in Focus
US labour-market data will continue to be watched very closely, especially given the impact on Fed policy and expectations surrounding interest rates
ING commented; “Jobs-related data now carries even greater weight after Fed Chair Jerome Powell’s de facto admission that employment risks have overtaken inflation concerns. Market attention may also sharpen on data beyond official payrolls, especially given potential credibility questions after Trump’s appointment of a new BLS chief.”
Scotiabank expects medium-term dollar losses; “We continue to think that the longer run outlook for the USD remains negative (weak fiscal policy, narrower growth and yield advantages, concerns over institutional resilience) but markets need new impetus to drive the dollar out of its current ranges.
The final Euro-Zone services-sector PMI index for August was revised slightly lower to 50.5 from the flash reading of 50.7.
Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank was cautious over the outlook; “Right now, the services sector feels more like stagflation than recovery.”
Markets will continue to monitor French fiscal policy and political drama ahead of next week’s scheduled Assembly confidence vote, especially given the climate on stresses in bond markets.
Fiscal fears are liable to stifle Euro support.
Berenberg commented; “If the French public and the country’s policymakers do not muster the will to change tack, markets will eventually force them to face reality by refusing to finance the gaping fiscal gap.
It added; “We expect France to still muddle through for a few more years with a somewhat elevated risk premium. However, the tail risk of a financial crisis is no longer negligible.”
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Oil Price Price – WTI (CL=F) and Brent (BZ=F) Struggle as OPEC+ Debates Supply Hike Amid Oversupply Risks
WTI and Brent Retreat on OPEC+ Supply Fears
Oil markets entered September under renewed pressure, with WTI crude (CL=F) sliding to $63.91 per barrel and Brent crude (BZ=F) retreating to $67.57, both down more than 2% intraday. The pullback followed reports that OPEC+ members are considering raising production targets at the upcoming September 7 meeting. The group, which still has about 1.65 million barrels per day of voluntary cuts in reserve, may tap into this buffer earlier than scheduled, shifting strategy back toward market share instead of price defense. Traders see this as a bearish tilt that could push the market into surplus by late 2025 unless countered by strong demand growth.
OPEC Production Dynamics and Market Sensitivity
Fresh surveys show OPEC crude output rising by 400,000 barrels per day in August, with total group production hitting 28.55 million bpd. Saudi Arabia accounted for over half of the increase, restoring barrels previously curbed. The United Arab Emirates, Nigeria, and Libya also contributed to the month-on-month gains. Kazakhstan overshot its quota by more than 2% while Iraq boosted exports despite disputes with the Kurdistan Regional Government. These developments underscore the difficulty of enforcing compliance when oil trades above $60, incentivizing members to maximize revenues. Market reaction was swift, with Brent slipping below $68 immediately after the survey release, highlighting how even incremental OPEC supply adjustments ripple through benchmarks.
Geopolitical Pressures, Sanctions, and Russia’s Oil Strategy
Geopolitics added another layer of risk this week. A new EU-imposed price cap on Russian crude lowered the ceiling to $47.6 per barrel, down from the previous $60. Moscow has already discounted exports to India and Asia to stay competitive, with Indian refiners saving an estimated $12.6 billion in import costs so far in 2025 due to these discounts. U.S. sanctions have also intensified against networks disguising Iranian oil as Iraqi crude, constraining flows but creating alternative trade routes through Asia. While sanctions reduce headline exports from Iran and Russia, the rerouted barrels keep physical supply flowing, limiting the bullish impact.
Demand Signals and Macro Weakness
The demand side showed cracks as well. U.S. job openings fell to 7.18 million in July, below expectations of 7.37 million, feeding into recession fears and weighing on consumption outlooks. Manufacturing activity in the U.S. contracted for a sixth consecutive month, intensifying concerns about industrial oil demand. Europe’s inventories remain above seasonal averages, further dampening near-term bullish cases. China continues to absorb discounted Russian crude, shielding state-owned refiners like Petrobras from U.S. tariff fallout, but broader demand growth remains patchy outside Asia.
WTI Technical Levels and Trading Structure
WTI crude (CL=F) is testing critical technical markers. The $65 zone aligns with the 50-day moving average, acting as a battleground for bulls and bears. Tuesday’s session brought heavy volume into this area, but sellers regained control by Wednesday, showing a lack of conviction for sustained upside. Support is visible around $63.50–$64.00, while resistance sits overhead at $67. A decisive break below $63 would expose WTI to April’s low near $58, a level last tested when oversupply concerns peaked earlier this year. Brent (BZ=F) shows a similarly tight range, with $67 acting as near-term support and resistance building around $69.50–$70, where the 200-day EMA is located.
Corporate and Institutional Reactions
Oil’s weakness is reshaping corporate strategies. Equinor (NYSE:EQNR) was downgraded by Morgan Stanley to Underweight, with the bank highlighting that if Brent averages $60 in 2026, Equinor’s free cash flow could drop to $2.7 billion, barely covering its $4 billion dividend outlay. Buybacks are unlikely under that scenario, pressuring the stock. Meanwhile, BP (NYSE:BP) and Eni (BIT:ENI) confirmed a $5 billion investment in Angola to redevelop fields after national output fell below 1 million bpd, a move aimed at shoring up long-term supply despite weak spot prices. In Iraq, BP has also launched a $25 billion project in Kirkuk, targeting an extra 50,000–100,000 bpd of production in coming years, reinforcing that supermajors are still expanding capacity even as the market debates oversupply.
Outlook and Market Balance Risks
The oil market’s balance hangs on OPEC+ decisions this weekend. If the group authorizes additional output increases beyond the 2.2 million bpd already scheduled for September, the market could enter a pronounced surplus, with inventories swelling through 2026. Conversely, renewed geopolitical escalation—from Houthis targeting tankers in the Red Sea to new Trump administration sanctions on Russia and Iran—could restore a geopolitical premium that has recently faded. With WTI trading at $63.91 and Brent at $67.57, oil remains in bearish short-term territory, but its sensitivity to political shocks and supply compliance makes the outlook highly volatile.
GBP/USD Surges Toward 1.3440 as Sterling Benefits from Strong UK Data and US Weakness
UK Macro Support Lifts GBP/USD (GBPUSD=X) From Lows
The GBP/USD (GBPUSD=X) pair bounced sharply from 1.3332 to 1.3442 after the UK Services PMI surged to 54.2 in August, its strongest reading since April 2024, beating July’s 51.8 and easing investor concerns over the government’s fiscal stability. Sterling’s rally coincided with a retreat in the US Dollar after the JOLTS job openings data revealed a sharper-than-expected fall to 7.181 million from 7.437 million in June. This labor market weakness amplified recession fears as tariffs weighed on hiring, while US factory orders contracted 1.3% month-on-month, marking the sixth consecutive monthly decline in manufacturing activity.
Bond Yields and Fiscal Concerns Shape Sterling’s Path
The rebound in GBP/USD came against a backdrop of surging UK gilt yields. Thirty-year yields briefly hit 5.695%, the highest in a quarter-century, underscoring growing investor anxiety over debt sustainability. Elevated yields raise borrowing costs, but the PMI data provided a counterweight by signaling resilient private-sector demand. The Bank of England remained cautious, with Governor Bailey emphasizing anchored inflation expectations while warning of downside job risks. BoE Governor Taylor stressed the need to keep policy restrictive until inflation sustainably returns to 2%, highlighting that the easing cycle may proceed more slowly than markets expect.
US Dollar Index and Fed Rate Cut Expectations
The US Dollar Index (DXY) hovered around 98.40, with safe-haven demand keeping it supported even as rate cut odds surged. Markets now price a 91% probability of a 25-basis-point Fed cut in September, up from 85% the prior week, with August Nonfarm Payrolls expected to deliver just 75,000 jobs and unemployment projected at 4.3%. If realized, this would add to pressure on the Fed to pivot, weighing further on the greenback and providing scope for GBP/USD to extend gains toward key resistance zones.
Technical Landscape for GBP/USD
Sterling’s rebound has positioned GBP/USD close to the 100-day SMA at 1.3450, with the 20-day and 50-day SMAs aligned around 1.3483–1.3484. A breakout above 1.3489 could unlock a move toward the 1.3500 handle, though failure to hold above 1.3400 risks exposing the 1.3330 support once again. The RSI sits in neutral territory around 42, showing limited buying pressure, but price action indicates near-term momentum has shifted in favor of the bulls.
Relative Performance Against Other Majors
Sterling’s weekly performance shows it as the strongest against the Japanese yen, with a 0.18% gain, while it has slipped against the US Dollar and euro. The GBP/USD pair’s recovery toward 1.3440 contrasts with ongoing weakness in gilt markets, where borrowing costs continue to challenge fiscal credibility. Against the euro, GBP eased 0.23%, while it lost 0.42% versus the Australian dollar, showing that sterling’s resilience is concentrated in the dollar cross.
Investor Sentiment and Risk Outlook
Despite the recovery, the broader outlook for GBP/USD remains fragile. Investors remain concerned about the UK’s fiscal path as bond yields linger near multi-decade highs. Across the Atlantic, weakness in US jobs data is fueling rate cut bets, but the dollar’s safe-haven bid remains firm amid global trade disputes and uncertainty surrounding tariffs. Traders are positioning for heightened volatility ahead of the Bank of England’s policy testimony and the upcoming US Nonfarm Payrolls report, both of which will dictate whether the pair sustains momentum above 1.3440 or resumes its slide toward 1.3300.
Copper Price Analysis: HG=F Rides Dollar Weakness, Scrap Battles, and Construction Demand
Copper (HF=F) has once again become the focal point of the industrial metals trade, with prices on the London Metal Exchange holding just under the symbolic $10,000 per ton level and COMEX futures settling at $4.598 per pound, equivalent to $10,137 per ton. On September 2, three-month copper on the LME slipped fractionally to $9,882 per ton, while the most-traded Shanghai Futures Exchange contract traded at 79,660 yuan ($11,137), reflecting a narrow pullback after weeks of strength. Despite short-term hesitation linked to trade war concerns and a firmer U.S. dollar, copper remains supported by steady Chinese demand, institutional accumulation, and tightening long-term supply prospects.
Macro Drivers: Fed Policy, Dollar Dynamics, and Chinese Demand
Expectations that the U.S. Federal Reserve could cut interest rates at its September meeting have weighed heavily on the dollar, supporting copper’s resilience. The dollar index climbed 0.2% to 97.873, putting pressure on commodities, yet copper’s dip remained shallow as China’s August PMI showed the fastest expansion in five months, driven by strong new orders. China continues to account for over 50% of global copper consumption, with visible demand rising nearly 10% year-over-year in H1 2025, according to Zijin Mining Group. This consumption trend, even amid patchy macro data, has prevented a deeper correction in copper despite broader trade frictions.
Technical Picture for HG=F and Resistance Levels
Copper’s breakout above its four-week consolidation phase in late August pushed LME contracts to $9,928 per ton, marking the start of a new uptrend that is still technically intact. Resistance remains firm at $10,200–$10,300 per ton, where selling has capped upside multiple times this year. On the downside, immediate support sits near $9,700, a level highlighted in late August forecasts, with a deeper floor at $9,300 if profit-taking accelerates. Technical traders argue that only a sustained close above $10,300 would unlock the pathway toward $11,000, last seen in early 2022.
European Scrap Tensions and China’s Buying Spree
A parallel story is developing in the copper scrap market. Chinese imports of European copper scrap rose 3.5% year-over-year in the first seven months of 2025, totaling more than 204,000 tons, creating severe shortages for German and EU smelters. German Economy Minister Katherina Reiche has publicly warned that large smelters are “no longer getting raw materials,” as Chinese buyers consistently outbid European competitors. Scrap represents a critical piece of the copper equation, requiring 85% less energy to process than primary ore and forming the backbone of Europe’s circular economy plans. With LME prices already volatile between $9,000–$10,000 per ton, the loss of scrap supply could further tighten European manufacturing chains, particularly in automotive and electrical equipment.
Structural Deficit Risks and Mining Supply Constraints
The supply gap looms large over copper’s medium-term outlook. Average ore grades have fallen from 1.6% in 1900 to just 0.6% today, according to USGS, raising extraction costs and slowing output growth. Chile’s Codelco, the world’s largest producer, continues to struggle with higher costs from deeper mining, while new large-scale projects face 15–20 year development timelines. Years of underinvestment in exploration during periods of weak prices mean the pipeline of future mines is thin. The International Energy Agency projects global copper demand will rise from 25.2 million tonnes in 2023 to 30.1 million tonnes by 2030, driven primarily by electrification, EV infrastructure, and renewable energy projects. This sets the stage for a structural deficit in the late 2020s.
Impact on Construction Costs and U.S. Market Dynamics
In the U.S., copper has become a central driver of rising construction costs. National building costs climbed 2.7% in Q2 and 5.4% year-over-year, with Milwaukee posting a sharper 4.5% quarterly increase. Copper pipe prices rose 20% over two years, while copper wire added 10%, contributing to a 6.7% YoY construction cost spike in the region. Data center construction is a key demand driver, supported by growth in cloud and AI infrastructure. At the same time, tariffs on Canadian lumber have surged to 35%, lifting other material costs and magnifying copper’s role in total project budgets. Contractors report “hyper awareness” of copper prices as volatility threatens to derail project margins.
Investor Positioning and Industrial Implications
The current environment has drawn investor attention to copper producers and project developers. Companies like Axo Copper, Nicola Mining, and American West Metals are advancing exploration in anticipation of a market squeeze. At Axo’s La Huerta project in Jalisco, drill results have shown up to 7.4% copper over 7.6 meters, highlighting high-grade potential at a time when new supply is scarce. Investors comparing copper to uranium note similarities with the 2018–2020 period when weak prices masked future deficits, only for prices to later deliver triple-digit returns.
Verdict on Copper (HG=F) Outlook
With HG=F trading around $9,882–$10,137 per ton, the market remains caught between macro headwinds from trade policy and a strong long-term bullish setup built on supply deficits, China’s scrap acquisitions, and electrification demand. Technical levels at $10,300 are crucial to breaking higher, while downside risks hinge on dollar strength and profit-taking. The evidence from demand, constrained supply, and construction cost pressures indicates that copper retains a bullish profile. Despite short-term volatility, the imbalance between growing consumption and limited new supply argues in favor of further upside, positioning copper as a Buy on weakness and a core industrial metal play heading into 2026.
USD/JPY Holds Near 149.00 as Traders Brace for US Jobs Data and Japan’s Political Strain
The USD/JPY pair is locked in heavy volatility around the 148.70–149.00 zone, a region that has repeatedly capped rallies this summer. Wednesday’s session saw the exchange rate climb to 149.14 before paring gains, leaving traders preparing for decisive moves around the upcoming U.S. Nonfarm Payrolls report and shifting Japanese political dynamics. The dollar has held firm despite softer Treasury moves, supported by speculation that the Federal Reserve may keep rates elevated longer, while the yen remains under pressure from surging JGB yields and government uncertainty.
Fed Policy Expectations Anchor Dollar Moves Against JPY
Markets continue to price in a 91% chance of a Fed rate cut in September, yet the pace of easing remains contested. CME FedWatch futures still point to 55 basis points of cuts by year-end, but a stronger labor market print could force repricing closer to 25–50 bps. July’s JOLTS report already showed job openings falling to 7.18 million from 7.44 million, underscoring slowing demand for labor, but Friday’s NFP is forecast to show only 75,000 new jobs with unemployment climbing to 4.3%. A weaker reading would validate dovish expectations and weigh on USD/JPY, while resilience in job creation could push the dollar higher and revive the case for policy patience.
Japan’s Political Tensions Deepen Yen’s Vulnerability
On the yen side, domestic factors are adding weight. Reports of the Secretary General of the ruling party preparing to resign have stoked uncertainty around Prime Minister Shigeru Ishiba’s leadership, raising fears of a destabilized policy front. Long-term JGB yields surged to 3.29%, the highest in decades, reflecting market concerns about fiscal sustainability. Yet despite higher yields, the yen continues to weaken, suggesting global investors still prefer carry trades against the Japanese currency as the BoJ maintains ultra-loose policy. Without a clear commitment from the BoJ to tighten further, political instability compounds yen weakness, leaving USD/JPY tilted toward the upside in the near term.
Technical Levels Define USD/JPY Range Before Breakout
Technically, USD/JPY has been locked in a tight one-month range, with resistance at 148.70–148.95 and support anchored near 146.20–146.60. A sustained close above 148.95 would target 150.30 and 150.92, with a break there exposing the March high at 151.31 and longer extensions toward 151.60. On the downside, failure to defend 147.10 risks a slide back to 146.22, the August low. Momentum indicators show mixed signals: the RSI is hovering in overbought territory near 70, reinforcing the need for a corrective pullback, while both the 50-day SMA at 147.15 and 200-day SMA at 147.70 slope positively, maintaining a bullish medium-term structure. Traders are watching for whether NFP or political shocks provide the catalyst for a clean breakout.
Investor Sentiment and Carry Trades Sustain Dollar Advantage
Carry trade dynamics remain in favor of the dollar, with U.S. yields still comfortably above Japan’s near-zero policy rates. The widening yield gap, combined with expectations that the Fed will be slower to cut than previously thought, continues to underpin USD/JPY demand at dips. Speculative positioning shows hedge funds maintaining net long exposure to the pair, while retail traders remain net short, a contrarian indicator that often supports further upside. However, intraday volatility is expected to spike around job reports and wage data, requiring disciplined risk management.
Key Catalysts Ahead for USD/JPY
The remainder of the week holds multiple triggers: U.S. ADP private payrolls, ISM Services PMI, and Jobless Claims precede Friday’s Nonfarm Payrolls. Japan will release wage growth data, which, if stronger than expected, could temper yen weakness by reviving hopes of gradual BoJ tightening. Until then, USD/JPY is likely to trade within the 147.00–149.50 band, with any breakout dictating the September trend. Political instability in Tokyo adds another unpredictable layer that could exacerbate yen volatility if Ishiba faces mounting calls to step down.
