The US dollar initially pulled back a bit during the trading session, but we have that FOMC meeting the next day on Wednesday. So, I don’t know if we will break out to the upside. It’s possible that maybe we do, but I certainly don’t want to throw a bunch of money into the market ahead of a significant announcement that’s going to move everything.
So, with that, I think you have to look at this as a market that, quite frankly, will more likely than not find itself in a more of a buy on the dip type of scenario. Now, the FOMC and the Federal Reserve could do or say something to upset the apple cart as it were, but any pullback from here, as long as we can stay above the 146 yen level, I look at it as value.
AUD/USD Technical Analysis
The Australian dollar continues to plunge and it is getting interesting, but we need to get below the 200 day EMA for me to start shorting. Otherwise, we could just bounce right back into this channel that we’ve been stuck in for what seems like a lifetime.
This is a pair that has been very difficult to trade, in the sense that it’s been such a grind and not much of a trend, although it definitely ended up trend, but it’s been a fight the whole way. With this, I’m waiting to see if we bounce from this area here to start buying. Otherwise, I’m looking forward to break down below the 200-day EMA and offering a nice shorting opportunity.
For a look at all of today’s economic events, check out our economic calendar.
Natural gas price formed head and shoulders pattern in its last trading, to keep fluctuating near the neckline level at $3.050 level, forming a significant threat for the upcoming trading, while breaking the neckline and providing negative closes below it, will confirm its move to a new strong bearish station that might push it to suffer deep losses that begin from its reach $2.710 and $2.380.
While the price success to settle above the neckline and its rally in the near period trading above $3.600 will cancel the chances for changing the main bullish track to begin forming strong bullish attack, to target $3.830 and $4.050, therefore, we recommend the neutrality for today and monitoring the price behavior to avoid any losses that might be caused by changing the main track.
The expected trading range for today is between $3.000 and $3.2200
Copper price is under negative pressures, which forces it to provide bearish correctional trading, but its stability above the support at $5.3200 forms the main factor to confirm the continuation of the positivity in the near and medium period trading, therefore, we will keep waiting for gathering the positive momentum to motivate it to target $5.7100, then wait to reach the next main target near $5.9700.
Note that the price decline below the mentioned support and holding below it, so that will confirm delaying the bullish scenario, to begin providing strong bearish correctional trading, to expect reaching $5.0650, then reach the next support base at $4.7200 level.
The expected trading range for today is between $5.4000 and $5.7100
Copper price is under negative pressures, which forces it to provide bearish correctional trading, but its stability above the support at $5.3200 forms the main factor to confirm the continuation of the positivity in the near and medium period trading, therefore, we will keep waiting for gathering the positive momentum to motivate it to target $5.7100, then wait to reach the next main target near $5.9700.
Note that the price decline below the mentioned support and holding below it, so that will confirm delaying the bullish scenario, to begin providing strong bearish correctional trading, to expect reaching $5.0650, then reach the next support base at $4.7200 level.
The expected trading range for today is between $5.4000 and $5.7100
Copper price is under negative pressures, which forces it to provide bearish correctional trading, but its stability above the support at $5.3200 forms the main factor to confirm the continuation of the positivity in the near and medium period trading, therefore, we will keep waiting for gathering the positive momentum to motivate it to target $5.7100, then wait to reach the next main target near $5.9700.
Note that the price decline below the mentioned support and holding below it, so that will confirm delaying the bullish scenario, to begin providing strong bearish correctional trading, to expect reaching $5.0650, then reach the next support base at $4.7200 level.
The expected trading range for today is between $5.4000 and $5.7100
Copper price is under negative pressures, which forces it to provide bearish correctional trading, but its stability above the support at $5.3200 forms the main factor to confirm the continuation of the positivity in the near and medium period trading, therefore, we will keep waiting for gathering the positive momentum to motivate it to target $5.7100, then wait to reach the next main target near $5.9700.
Note that the price decline below the mentioned support and holding below it, so that will confirm delaying the bullish scenario, to begin providing strong bearish correctional trading, to expect reaching $5.0650, then reach the next support base at $4.7200 level.
The expected trading range for today is between $5.4000 and $5.7100
The Pound to Dollar exchange rate (GBP/USD) has struggled to hold gains above 1.3450 as a firmer USD, boosted by the latest US-EU trade deal and upcoming Fed policy signals, weighs on near-term sentiment, though long-term forecasts, including from Wells Fargo, still point to a move towards 1.37 by end-2025.
The Pound-to-Dollar rate briefly hit 1.3450 in Asia on Monday before a retreat to test 1.3400 as the US currency gained net support following the US-EU trade deal.
Pound Sterling settled around 1.3430 as it attempted to resist a firm dollar and Sterling did have a firm tone on the crosses with net gains across most major pairs, notably the Euro.
ING sees the risk of further losses for the pair amid a firm US currency; “GBP/USD looks more vulnerable. Here, we favour a retest of decent support at 1.3370, below which losses can accelerate – perhaps all the way to 1.3150 if the US data/FOMC event risk this week is dollar positive enough.
According to UoB; “From here, we expect GBP to trade with a downward bias, but it is too early to determine if GBP can reach the major support at 1.3365.”
Wells Fargo sees scope for GBP/USD gains to 1.37 by the end of 2025 before a relapse to 1.30 by the end of 2026.
Overall risk appetite held firm with overall volatility grinding lower which helped underpin the Pound in global markets.
MUFG commented; “The biggest risk of market volatility that could undermine the positive FX carry momentum will come at the end of the week – with the release of the non-farm payrolls report.”
According to ING; “there is a huge amount of macro data and central bank action this week, which we think can provide some support to the dollar.
The Federal Reserve will announce its interest rate decision on Wednesday with strong expectations that rates will be held at 4.50%.
ING expects a mixture of solid data and residual inflation concerns will influence the decision.
It added; “This should leave the majority of the Federal Reserve comfortable in their patient position on interest rates (FOMC meeting on Wednesday) and see a further pricing out of the prospects of a September Fed rate cut.”
Markets remain very confident that the Fed will leave rates at 4.50%. There is the possibility of dissenting votes from Waller or Bowman and the guidance from Chair Powell will be watched very closely, especially given political pressure from the Administration.
According to Scotiabank; “For the statement, we note the risk of dovish dissents from both members of the board of governors as well as the regional Fed presidents.”
Rabobank commented; “US data release will be overshadowed by an FOMC decision. Has Trump’s visit to the Federal Reserve changed Powell’s mind? Have the recent trade deals – which bring lower tariffs than perhaps feared? And if not, will Powell’s reluctance to back a rate cut change Trump’s mind about letting the Fed Chair sit out his term?
It added; “Our US strategist expects the FOMC to stay on hold a little while longer, as they try to gauge the impact of tariffs on the US economy.”
According to MUFG; “Recent trade deals will be welcomed by the Fed as they help to dampen downside risks to growth and upside risks to inflation. We expect Chair Powell to continue to signal that they want to assess economic data over the summer to better determine the best path for policy going forward while sticking to plans to resume rate cuts later this year if inflation doesn’t surprise to the upside.”
ING also considers that the US Dollar is not an attractive funding currency, limiting potential selling pressure.
Like this piece? Please share with your friends and colleagues:
International Money Transfer? Ask our resident FX expert a money transfer question or try John’s new, free, no-obligation personal service! ,where he helps every step of the way,
ensuring you get the best exchange rates on your currency requirements.
Register now to be able to add articles to your reading list.
” aria-hidden=”true”>
Quick overview
USD/JPY closed the week at 147.67, supported by rising US yields and a dovish stance from the Bank of Japan.
Cooling inflation in Japan allows the BoJ to maintain negative rates, contrasting with the Fed’s hawkish approach.
Technically, USD/JPY is testing resistance at 147.72, with potential targets of 149.06 and 150.27 if it breaks above.
The upcoming central bank meetings could lead to significant volatility in the USD/JPY pair.
USD/JPY closed the week at 147.67. The yen is still on the back foot as global risk appetite and rising US yields continue to favor the US dollar. Traders are now focused on next week’s central bank decisions with both the Federal Reserve and Bank of Japan meetings on the calendar—keeping policy divergence front and center.
Rising Yield Gap and Cooling Inflation Boosts USD/JPY
The greenback is getting support from the Fed’s higher for longer rate strategy which is in contrast to the BoJ’s super dovish stance. Japan’s July Tokyo CPI dropped to 2.9% from 3.1% so inflation may be cooling. The slower inflation gives the BoJ more room to delay any shift away from negative rates.
In contrast the Fed is expected to re-affirm its hawkish tone with resilient US data and sticky core inflation. This widening interest rate differential is keeping the yen under pressure and fueling further upside in USD/JPY.
USD/JPY Technical Outlook: Momentum Builds But Resistance Looms
From a technical standpoint USD/JPY is at 147.65 testing the 50-SMA at 147.72 on the 4-hour chart. Price is still in a rising wedge so bullish but also looks exhausted.
Support zones: 147.00, 145.84 (trendline support), 144.25
Price bounced off the wedge lower trendline so buyers are still in control. But RSI has turned down from 56.81 so momentum is waning. Above 147.72 could unlock 149.06 and then 150.27, below 147.00 could expose 145.84.With both the Fed and BoJ announcing next week USD/JPY is set for big moves. The Fed is expected to hold rates steady and signal caution while the BoJ may downplay inflation risks.
As long as the interest rate gap is wide and Japanese inflation is soft the bias is for the dollar. But watch out for any surprises from the BoJ which could get the pair out of the range.
In summary:
USD/JPY is bullish above 147.00
Above 147.72 targets 149.06 and 150.27
Near term risk is below 147.00 for 145.84
Arslan Butt
Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.
His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.
His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
The US dollar has rallied a bit during the early hours on Monday, breaking above the 200 day EMA, and now it looks like we’re trying to get to the 149 level. This is an area that I think we could be looking at as a major barrier and if we can break the 149 yen level, then 151 yen would be your next target. Short-term pullbacks are probably buying opportunities, but we do have a Bank of Japan meeting here in the next few days, so I’d be very cautious with this pair right now, although I still like the idea of buying.
AUD/USD Technical Analysis
The Australian dollar has fallen pretty significantly against the US dollar, but at this point in time, we are looking at the 50 day EMA sitting just below as well as the bottom of this channel. So, I think you’ve got a situation where the buyers may come back sooner or later, not necessarily right away, but if the pattern holds, we’re just simply going to test the lower part of the channel and see yet another bounce. I don’t really like shorting this pair until we get below the 200 day EMA, but truthfully buying it is a bit torturous as well. It’s just grinding ever so slowly higher.
For a look at all of today’s economic events, check out our economic calendar.
Platinum price ended the correctional trading by testing the extra support at $1381.00, forming a confirmation key for the continuation of the positive continuation, attacking the barrier at $1420.000 level, to find an exit for resuming the bullish attempts.
Stochastic begins to provide positive momentum by its repeated stability above 20 level, which makes us wait for breaching the current barrier and holding above it, to ease the mission of targeting $1458.00 level, and surpassing it will provide a chance for achieving new gains that might extend to $1480.00 and $1507.00.
The expected trading range for today is between $1390.00 and $1458.00
