• The Euro has fallen pretty significantly against the Japanese yen during the trading session on Tuesday as we continue to see a lot of noisy behavior.
• I think ultimately this is a situation where traders have to understand the fact that this is a very risk appetite sensitive pair.
• Keep in mind that the Euro is considered to be much riskier than the Japanese yen.

Therefore, if we have a sudden “risk off” move, typically this pair will fall. You do get paid to hang on to this via swap. And I think we are going to continue to see buyers willing to jump in because of this fact.

And in fact, given the fact that we are right at the previous consolidation area, somewhere in this general vicinity, I think you will start to see buyers jumping back in. I have no interest shorting the euro against the Japanese yen anytime soon, at least not until we break down below the 165 yen level, which is over three handles away. To the upside, the 170 yen level is an area that could cause a little bit of resistance, but quite frankly, we have broken above a major resistance barrier. And now I think we will eventually find ourselves much higher that where we are now.

The Longer Term Target Could Be Much Higher

Eventually, we may find ourselves all the way up at the 175 yen region. All things being equal, this is a market that I think continues to be very noisy, but this pullback I think opens up the possibility of offering a little bit of value, which is exactly what this pair has needed over the last couple of weeks. So, with this, I’m bullish. I’m either waiting for a bounce or a break to the upside.

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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.

• GBP/USD moves sideways slightly above 1.3600 on Wednesday.
• The pair could struggle to extend its weekly rally in case markets turn cautious.
• The technical outlook suggests that the bullish stance remains unchanged in the near term.

Following a late Monday rally, GBP/USD preserved its bullish momentum on Tuesday and reached its highest level since January 2022 near 1.3650. The pair stays relatively quiet early Wednesday and fluctuates in a narrow band slightly above 1.3600.

Risk flows continued to dominate the action in financial markets in the first half of the day on Tuesday as investors cheered news of the Iran-Israel ceasefire. As a result, the US Dollar (USD) struggled to find demand and allowed GBP/USD to push higher.

In the American session, Federal Reserve Chairman Jerome Powell’s cautious comments on policy-easing helped the USD find a foothold. Powell told the House Financial Services Committee that they are not in a rush to cut rates, noting that they expect a meaningful increase in inflation this year because of tariffs.

Meanwhile, Bank of England (BoE) Governor Andrew Bailey told the Lords Economic Affairs Committee on Tuesday that they are starting to observe labor market softening. Additionally, BoE Deputy Governor Dave Ramsden said that if evidence becomes stronger that inflation will undershoot the target, they can speed up rate cuts. Although these comments failed to trigger an immediate market reaction, they might be contributing to GBP/USD’s indecisive action midweek.

The economic calendar will not feature any high-impact macroeconomic data releases later in the day. Hence, investors could react to changes in risk perception. In case Wall Street’s main indexes correct lower following Tuesday’s risk rally, the USD could gather strength and make it difficult for GBP/USD to hold its ground.

GBP/USD Technical Analysis

The Relative Strength Index (RSI) indicator on the 4-hour chart holds above 60, suggesting that the bullish bias remains intact. On the upside, 1.3630 (static level) aligns as an immediate resistance level ahead of 1.3700 (static level, round level) and 1.3740 (static level).

Looking south, support levels could be seen at 1.3580 (static level), 1.3530 (100-period Simple Moving Average) and 1.3500 (static level, round level).

• The US dollar found itself rather soft against the Japanese yen during trading on Tuesday, as we have broken below the ¥146 level quite drastically.
• I think ultimately, we are looking at this as a scenario where we are just simply going to move on the idea of risk appetite and where that is going.
• The market is likely to continue to pay close attention to the ¥145 level, which is where we crashed into and started to find a little bit of buying pressure.

Technical Analysis

The technical analysis for this pair is starting to flatten out a bit, as we had previously been so horribly negative. With this being the case, the market is likely to continue to see buyers underneath, especially if we get anywhere near the ¥142 level, an area that has been important a couple of times. If we were to break down below that level it would be a bit surprising to me, but it of course is possible.

On the upside, if we can break back above the ¥146 level, then I think we have the possibility of a move back to the 200 Day EMA, essentially where we had peaked during the trading session on Monday.

If we were to break above that 200 Day EMA and by extension, the ¥148 level, the market would more likely than not really start to take off, perhaps targeting the crucial ¥150 level. Anything above there opens of a longer-term “buy-and-hold” type of scenario. While I don’t necessarily expect that to happen easily, it is something that’s very realistic if we get a sudden run to the US dollar. The interest rate differential continues to favor the US dollar against the Japanese yen, so I don’t like shorting this pair, unless it is for a very short term move. I think we are in the midst of trying to find the longer term bottom, which of course is very noisy.

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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 Euro has rallied against the US dollar during early trading on Tuesday, as the world waited for the congressional testimony from Jerome Powell.
• All things being equal, the market is just simply continuing the move that it has made previously, so I don’t know that there’s a whole lot to talk about here.
• It’s just a simple continuation play, which is focused on the 1.16 level, an area that has been important multiple times, and I do think that if we can break a significant amount of distance above there, then we could get something going.

Otherwise, I think this is a market that will continue to be very noisy, with the massive amount of support at 1.13 underneath worth paying attention to. If we were to break down below there, then it would change a lot of things.

Right now I just don’t see a reason to think that things will change drastically enough to send the market below the 1.13 level, unless we get some type of major escalation in the Middle East, which has seen a cease-fire between the Iranians and the Israelis, which is more helpful for “risk on behavior”, which typically works against the value of the US dollar. We should be careful to make that assumption though, because a lot will come down to whether or not the US is starting to grow again.

Watching Closely

I’m watching closely to see if we can get a daily close above the 1.1650 level, because if we do, that could end up being a very bullish sign for this pair. However, I also recognize that this is a market that tends to be very noisy and grinds a lot, especially when you have a lot of geopolitical risks out there that could come into the picture in cause absolute chaos. Short-term dips are very possible and very likely, but the art necessarily reasons to start shorting the market at this juncture. I believe it is a scenario that continues to favor the overall back and forth choppiness that we have seen, and I also recognize that range bound traders will continue to be drawn to this stagnant, yet slightly bullish market.

Ready to trade our EUR/USD daily forecast? Here’s a list of some of the top forex brokers in Europe to check out.

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.

Copper price failed to breach the $4,8900 level, which represents an extra obstacle against the attempts to resume the bullish attack, forcing it to provide sideways fluctuation near $4.8600, attempting to gather the required positive momentum.

Therefore, we will keep waiting for achieving the required breach, to open the way towards recording more of the gains that begin at $5.0300 and $5.1300, while the failure to breach might increase the chances of forming a temporary negative rebound, to expect targeting $4.7500 level before any attempt to achieve any of the suggested bullish targets. 

The expected trading range for today is between $4.8200 and $4.9000

Trend forecast: Sideways until achieving the breach

Copper price failed to breach the $4,8900 level, which represents an extra obstacle against the attempts to resume the bullish attack, forcing it to provide sideways fluctuation near $4.8600, attempting to gather the required positive momentum.

Therefore, we will keep waiting for achieving the required breach, to open the way towards recording more of the gains that begin at $5.0300 and $5.1300, while the failure to breach might increase the chances of forming a temporary negative rebound, to expect targeting $4.7500 level before any attempt to achieve any of the suggested bullish targets. 

The expected trading range for today is between $4.8200 and $4.9000

Trend forecast: Sideways until achieving the breach

EUR/USD Analysis Summary Today

• Overall Trend: Bullish.
• Today’s EUR/USD Support Levels: 1.1550 – 1.1430 – 1.1300.
• Today’s EUR/USD Resistance Levels: 1.1660 – 1.1730 – 1.1800.

EUR/USD Trading Signals:

• Buy EUR/USD from the support level of 1.1490 with a target of 1.1720 and a stop-loss at 1.1400.
• Sell EUR/USD from the resistance level of 1.1680 with a target of 1.1400 and a stop-loss at 1.1790.

EUR/USD Technical Analysis Today:

For the second consecutive day, the EUR/USD price is moving strongly upward, driven by improved investor and market sentiment. At the time of writing, gains have reached the 1.1660 resistance level, near the pair’s highest point in three and a half years. The positive momentum for currency prices increased after US President Donald Trump announced on Truth Social that Israel and Iran had agreed to a temporary ceasefire, starting Monday midnight Washington time, following US-ordered airstrikes on Iranian nuclear facilities.

Trump stated that the agreement aims to end the conflict permanently, calling it a “12-day war.” He praised both nations for their “resilience, courage, and intelligence” in reaching the agreement. According to Reuters, an Iranian official confirmed Tehran’s acceptance of the US-brokered deal, though Israel has not yet commented.

Trading Tips:

Dear TradersUp follower, despite the gains, it’s best to continue selling the EUR/USD, but without risk, and to closely monitor the factors affecting currency prices.

Recent EUR/USD gains have strongly pushed technical indicators upwards. The 14-day RSI (Relative Strength Index) is around a reading of 65 and still has some room and gains before reaching overbought territory. At the same time, the MACD (Moving Average Convergence Divergence) lines continue to confirm bullish dominance. Overbought conditions for technical indicators might occur as bulls push the EUR/USD pair towards the 1.1720 and 1.1800 resistance levels, respectively.

Today’s bullish momentum for EUR/USD will react to the announcement of German IFO Business Climate Index readings at 11:00 AM Egypt time, followed by anticipated statements from European Central Bank (ECB) President Lagarde at 4:00 PM Egypt time. On the US side, US Consumer Confidence readings will be announced at 5:00 PM Egypt time, and simultaneously, there will be new statements from Federal Reserve Chair Jerome Powell.

Will the euro rise against the US dollar in the coming days?

According to forex market experts’ forecasts, the direction of exchange rates will depend on crude oil prices and their rate of increase, subsequent risk-off pressures, and potential escalation. The US Dollar Index (DXY) was slightly stronger last week, but in light of recent developments, the US currency might see further strength, as its safe-haven attributes perform better. Therefore, energy prices and the scope of Iran’s response will be a key focus in the short term, with the Strait of Hormuz being a major component.

Currency experts commented on recent events that if the Strait of Hormuz becomes unnavigable, it would constitute an unprecedented negative supply shock in energy markets, at least in recent history. At this stage, they view the risks as relatively low, and from their perspective, the closure of the Strait of Hormuz is Iran’s last resort, as it would inevitably lead to a strong US military response, and because its domestic economy relies on it. However, desperate times lead to desperate measures, and if Iran’s Supreme Leader Ali Khamenei feels he has nothing left to lose, he might choose to risk everything.

On another note, Federal Reserve Chair Powell will testify before Congress this week following last week’s monetary policy decision, all of which are influential factors on the direction of the EUR/USD price in the coming days.

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• USD/JPY is stuck in a safe haven standoff with no clear winner.
• With central banks cautious and Middle East risks simmering, a breakout could hinge on geopolitics.
• All eyes on 148—can bulls push through, or will the range hold yet again?
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On the currency pair, where both components are considered so-called safe havens, we’re observing a tug-of-war with no clear advantage for either side. On one hand, central banks remain passive, having left interest rates unchanged during their June meetings. On the other hand, the market is clearly uncertain about developments in the Middle East. Under these conditions, we may see a prolonged sideways trend—although a resumption of the conflict in the Middle East could spark increased volatility, not only in this market but also in the market. Beyond military developments, attention should also be paid to the ongoing Washington–Tokyo trade agreement negotiations, which, according to official statements, have not led to any breakthroughs at this stage.

Bank of Japan Remains With Cautious Stance

At the ’s latest meeting earlier this month, interest rates were once again left unchanged. This stance may come as a surprise, given that inflation has remained above the Bank’s defined target for more than three years. One symbolic example is the price of rice, which rose by more than 100% year-on-year in May. In response, the Japanese government decided to release strategic reserves of the commodity in an effort to curb price increases. However, this move is likely to have only a short-term impact (similar to previous BOJ interventions in the foreign exchange market) and is far from sufficient over the longer term.

Figure 1: Inflation Dynamics in Japan

Japan’s monetary policy officials continue to express concern about the pace of , especially amid uncertainty regarding the outcome of U.S. trade negotiations. According to BOJ Governor Ueda’s latest statement, the Bank is prepared to raise interest rates further in the coming months. However, this seems more like verbal intervention than a firm signal of concrete action.

At its June meeting, the effectively maintained the status quo—retaining its broadly hawkish stance but leaving the door open for possible rate cuts in September, depending on the development of the tariff war. Meanwhile, several dovish voices have emerged in recent days suggesting that another cut could come as early as July. Among these are Michelle Bowman and Christopher Waller. Bowman was recently nominated by Donald Trump to serve as Vice Chair for Supervision at the Federal Reserve. Her views may align closely with those of the current President, who has made it clear he supports steep interest rate cuts.

Key Resistance on USDJPY Defended

The latest bullish push on the USDJPY pair led to a test of a key resistance zone in the 148 yen per dollar region. However, any attempt to break above this level was quickly met with a strong wave of selling pressure, keeping the pair locked in a medium-term consolidation.

Figure 2: Technical Analysis of USDJPY

The next directional move will likely depend on whether the pair eventually breaks out of the 143–148 yen per dollar range—and in which direction.

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• GBP/JPY retraces to near 197.35 after revisiting an almost six-month high around 198.20.
• Lower Oil price has strengthened the demand of the Japanese Yen.
• Upbeat flash UK PMI data for June has supported the Pound Sterling.

The GBP/JPY pair corrects slightly to near 197.35 during European trading hours on Tuesday after revisiting an almost six-month high around 198.20 the previous day. The cross faces slight selling pressure as the Japanese Yen (JPY) gains due to a sharp decline in the Oil price, following the Israel-Iran ceasefire.

The Japanese currency underperformed its peers on Monday after Iran threatened to close the Strait of Hormuz, which led to a sharp increase in the Oil price. Given that the Japanese economy addresses its Oil requirements from imports, higher energy prices diminish the Japanese Yen’s appeal.

Meanwhile, the Pound Sterling trades higher against its major peers, except Asia-Pacific currencies, due to upbeat preliminary United Kingdom (UK) S&P Global Purchasing Managers’ Index (PMI) data for June released on Monday. The data showed that the Composite PMI grew at a faster-than-expected pace due to outperformance in both the manufacturing and the service sector activity.

The Service PMI grew expectedly to 51.3, higher than 50.9 in May. While the Manufacturing PMI declined to near 47.7 but at a slower-than-anticipated pace.

GBP/JPY retraces after a breakout of the Ascending Triangle formation on a daily timeframe, which leads to wider ticks and heavy volume on the upside. The horizontal resistance of the above-mentioned chart pattern is plotted from the May 14 high around 196.41, while the upward-sloping trendline is placed from the May 22 low of 191.90.

Upward-sloping 20-day Exponential Moving Average (EMA) around 195.50 suggests that the near-term trend is bullish.

The 14-day Relative Strength Index (RSI) breaks above 60.00. A fresh bullish momentum would emerge if the RSI holds above that level.

The pair could extend its upside towards the psychological level of 200.00 and the 23 July 2024 high of 203.16 after breaking above Monday’s high of 198.20.

On the flip side, a downside move by the pair below the May 6 low of 190.33 will expose it to the March 11 low of 188.80, followed by the February 7 low of 187.00.

GBP/JPY daily chart