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Currencies EUR/USD

EUR/USD Outlook: Gains Persevere Above 1.0400 On Weaker USD, Higher Upside Plausible

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  • March 3, 2025
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The EUR/USD currency pair makes a recovery above the 1.0400 level at the beginning of the week, boosted by a weaker US Dollar. Having rebounded off the 50% Fibonacci retracement level at around 1.0370, the currency pair exhibits signs of stabilizing, with the possibility of advancing towards the 1.0450 resistance and potentially the 1.0500 psychological mark. Yet, technical indicators are still mixed, calling for caution among bullish traders. On the downside, a break below 1.0370 may initiate further losses towards 1.0330 and 1.0300. Market sentiment continues to be driven by fears of US policies, and key resistance and support levels are important for short-term trading strategies. KEY LOOKOUTS • EUR/USD requires sustained strength above the 1.0450 resistance, which coincides with the 23.6% Fibonacci level, to validate further bullish momentum. • 50% Fibonacci retracement at 1.0370 is critical support; breaking below this might fuel selling pressure towards 1.0330 and 1.0300. • A weaker US Dollar provides EUR/USD with support, but any change in sentiment or better US data might cap the upside. • Ambiguity over US policies, such as tariffs, is still a risk driver that might fuel volatility and affect EUR/USD’s short-term direction. The EUR/USD currency pair continues to rise above 1.0400, boosted by a softer US Dollar and technical strength around significant Fibonacci levels. A sustained rally above 1.0450 may open the way for further advances towards the psychological 1.0500 level, with solid support at 1.0370 being essential to avoid downside risks. Market sentiment remains guarded, with worries about US policies, such as possible tariff proposals, contributing to the uncertainty. Traders will be keeping a close eye on these crucial technical levels and wider economic events, however, as a change in USD strength or policy stance would make the next EUR/USD direction potentially important. EUR/USD is defended at 1.0400 by a weakening USD and significant technical levels. Further advances can be expected should the pair break above 1.0450, with support standing firm at 1.0370. • The pair gains are maintained thanks to a softer US Dollar and technical support. • Breakout above the level may lead prices to the 1.0500 psychological level. • 50% Fibonacci retracement is essential support to arrest further decline. • Weaker US Dollar drives the recovery of the pair, but any change in sentiment may restrict gains. • Oscillators do not fully endorse a bullish bias, making traders cautious. • Ambiguity regarding tariff proposals and economic policy may trigger volatility. • A breakdown below 1.0370 may bring declines towards 1.0330, 1.0300, and lower supports. The EUR/USD currency pair is still underpinned by a softer US Dollar with market sentiment tilting towards optimistic caution. Economic uncertainties surrounding US policies and international trade conditions are still affecting investor sentiment. The recent USD weakness is due to the fears of economic stability and future policy changes, which have brought some comfort to the euro. As investors are realizing these events, overall economic trends and geopolitical tensions will be determinative forces in guiding the currency pair’s direction. EUR/USD Daily Price Chart Chart Source: TradingView Apart from currency flows, global market forces such as inflation patterns, central bank policies, and trade policies are major drivers to be monitored. The tariff and economic policy talks ongoing in the US provide an added layer of uncertainty, which would affect risk-taking appetite. On the other hand, investors are keeping a keen eye on the release of economic data and statements by major financial institutions, which will give us a clue on future market action. Under these conditions, a balanced strategy taking into account both economic underpinnings and geopolitics is still imperative for market players. TECHNICAL ANALYSIS EUR/USD has demonstrated strength above the 1.0400 level, with strong support at 1.0370 and strong resistance at 1.0450. The pair bounced recently off the 50% Fibonacci retracement point, hinting at a possible stabilization of price action. A continued break above the 1.0450 resistance, which coincides with the 23.6% Fibonacci level, would indicate further upside towards the psychological 1.0500 level. Momentum indicators are still contradictory, though, and warn against taking bold bullish positions. On the downside, a breakdown through 1.0370 may bring about further losses towards 1.0330 and 1.0300, underlining the significance of these technical levels in setting the direction for the next move. FORECAST EUR/USD remains above 1.0400, displaying signs of steadiness as the US Dollar falters. If the pair continues to maintain its trend, a breakout above the resistance level of 1.0450 could lead to more increases. This is also the 23.6% Fibonacci retracement level and a significant obstacle for bulls. A successful break beyond this level may propel the pair towards the 1.0500 psychological level, then the recent high of 1.0525-1.0530. Further upside, if market sentiment continues to be positive, may extend to 1.0550 and higher. On the flip side, 1.0370 is an important support level, coinciding with the 50% Fibonacci retracement. A fall below this may see enhanced selling pressure, driving the pair towards 1.0330 and 1.0300. Should bearish momentum hold, the following targets would include the 1.0285 area, with the February swing low at approximately 1.0210 afterward. A second drop would get EUR/USD to the 1.0180-1.0175 region, a two-year lows level. Levels to monitor, as any movement in USD strength or risk would trigger further downfall.

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Currencies USD/JPY

USD/JPY Crosses 150: Japanese Yen Weakens as Policy Uncertainty and Fed Expectations Bite

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  • February 28, 2025
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The Japanese Yen (JPY) has continued to depreciate against a relatively stronger US Dollar (USD), with USD/JPY breaking above the 150.00 level as uncertainty over monetary policies grips markets. Japan’s smaller fiscal budget and falling bond yields have put additional pressure on the Yen, though hopes for additional Bank of Japan (BoJ) rate hikes could cap its decline. In the meantime, investors are waiting for the US Personal Consumption Expenditure (PCE) Price Index, which may impact the Federal Reserve’s (Fed) rate policy and decide on the next step for USD/JPY. Technically, the pair is still in consolidation mode, with major resistance at 150.30 and nearby support around 149.00. The wider picture indicates the possibility of an extension of losses, yet any upside breakout would propel the pair towards the 152.40 level, a significant 200-day Simple Moving Average (SMA) resistance. KEY LOOKOUTS • The 150.30 resistance point remains important, with a breakdown below 149.00 potentially to extend losses towards the 147.00 level. • The Japanese government’s budget reductions might act to soften the Yen, yet BoJ’s resolve to raise rates might act as long-term support. • Merchants look to the PCE Price Index for hints about the Fed’s next step, affecting USD strength and USD/JPY direction. • Risk-off sentiment can increase demand for the safe-haven Yen, slowing USD/JPY gains even as the Dollar is stronger overall. The USD/JPY currency pair is still at a critical crossroads as traders balance Japan’s fiscal reforms with the Bank of Japan’s (BoJ) possible rate hikes, in addition to waiting for major US economic releases. The budget cutting of the Japanese government and decreased bond yields have been pressuring the Yen, but hopes of more monetary tightening from the BoJ might soften its fall. On the other hand, the US Dollar is strong as it awaits the release of the Personal Consumption Expenditure (PCE) Price Index, which might shape Federal Reserve policy and determine the next direction for USD/JPY. Technical analysis points to major resistance at 150.30, with a breakaway possibly taking the pair to 152.40, while support is close at 149.00. Market sentiment, especially a move towards risk-off trades, can also influence movement of the pair in the next few sessions. The USD/JPY currency pair is trading close to the 150.00 level as Japan’s fiscal policy and BoJ’s rate hike chances are compared with US economic indicators. The US PCE Price Index to be released next will have implications for Fed policy, which may affect the Dollar’s strength and Yen’s performance. The significant resistance is 150.30, while the important support lies at 149.00. • The US Dollar gains as the Japanese Yen loses strength, taking USD/JPY higher than the psychological level. • The government spending cuts and decreased bond issuance exert pressure on the Yen, regardless of BoJ’s possible interest rate hikes. • Investors also expect additional BoJ tightening that will cap excessive Yen weakening even with weaker economic data. • The next US PCE Price Index will play a pivotal role in determining the Federal Reserve’s next step. • The crucial resistance is 150.30, while the support is 149.00, with the possibility of losses to 147.00 in case of breaching. • A risk-off sentiment may underpin the Yen as a safe-haven currency, offsetting some USD strength. • Hawkish Fed rhetoric and inflation worries imply minimal near-term rate cuts, maintaining the USD strong against the JPY. The Japanese Yen remains under pressure as market participants weigh Japan’s economic policies against global monetary trends. The latest move by the government to slash its fiscal budget and cut back on bond issuance has created alarm over economic growth and financial health. The Bank of Japan (BoJ) is, however, sticking with its gradual policy shifts, expecting interest rate rises to persist as inflation edges near the central bank’s 2% target. Even as Tokyo’s Consumer Price Index (CPI) figures slowed down, BoJ Deputy Governor Shinichi Uchida reiterated the bank’s position, laying stress on the consistent uptick in core inflation. Japan’s industrial production has, however, been in decline, reflecting economic weakness that may go on to shape policy actions in the future. USD/JPY Daily Price Chart Chart Source: TradingView On the international side, investors are watching US economic data closely, especially the upcoming Personal Consumption Expenditure (PCE) Price Index, which is the Federal Reserve’s preferred inflation metric. Recent US economic data has continued to point to persistent inflationary pressures, and it implies that the Fed will keep its restrictive policy going for a more extended period of time. Policy-makers have signaled that they will maintain interest rates firm to contain inflation, and hence there is careful market sentiment. Furthermore, worry about possible inflationary threats due to future policies of the US government provides a further source of uncertainty. With traders waiting for fresh economic reports, the general market outlook remains focused on the policies of the central banks as well as the economic performance in Japan and the US. TECHNICAL ANALYSIS USD/JPY continues in a state of consolidation, with the significant levels determining its short-term path. The currency pair has been fluctuating around the 150.00 psychological level, and the immediate resistance is located around 150.30, coinciding with the weekly high. A clean break above this might unleash additional upward momentum, and the 150.90–151.00 zone could be a possible target. To the downside, robust support is noted at 149.00, with a breakdown below this level leaving the pair vulnerable to further losses in the direction of the 148.60–148.55 area. Overall trend indicates that the pair continues in a bearish consolidation pattern after its retracement from the multi-month high of around 159.00 during the early part of the year. Oscillators on the daily chart are still in negative ground, which means that selling pressure continues, and unless there is a breakout, the overall outlook still supports a downside bias. FORECAST USD/JPY may break above the crucial resistance at 150.30, with the possibility of further increases. A long-term move above this level may lead to short-covering, pushing the pair to the 150.90–151.00

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Currencies NZD/USD

NZD/USD Steady around 0.5700, Traders Keep an Eye on US NFP and Fed Policy Cues

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  • February 7, 2025
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NZD/USD stays firm around 0.5700 as market players remain cautious of the US Nonfarm Payrolls (NFP) release which is expected to have an influence on the monetary policy decisions by the Federal Reserve. The US Dollar keeps up its rebound momentum with support coming from a jump in Treasury yields, pushing the Dollar Index DXY toward 107.70. Market sentiment is fragile due to rising risk aversion with all these uncertainties about global trade. But ongoing discussions about tariffs by US and China could offer some comfort. Further, the Reserve Bank of New Zealand is going to slash 50 basis points in February and put further pressure on Kiwi Dollar. KEY LOOKOUTS US Nonfarm Payrolls, which would shape monetary policy at the Fed, would impact the NZD/USD pairs volatility. • The Greenback’s rebounding, with a boost from the Treasury yields and economic data, may put upward pressure on NZD/USD if risk aversion increases. • Markets are pricing in 92% of a 50 basis-point rate cut in February, which can weigh on the New Zealand Dollar. • Risk sentiment may shape the movement of NZD/USD as US and Chinese leaders discuss potential rollbacks of tariffs. NZD/USD remains in a cautious range as traders await the US Nonfarm Payrolls (NFP) data, which could significantly impact the Federal Reserve’s monetary policy stance. The US Dollar continues to recover, bolstered by rising Treasury yields and stronger economic data, pressuring the Kiwi Dollar. Meanwhile, global risk sentiment remains fragile with trade uncertainties continuing, though the discussions between the US and China regarding potential rollbacks of tariffs might bring some comfort. The Reserve Bank of New Zealand is also expected to cut its rates by 50 basis points in February, adding more downside risks to NZD/USD as the market has priced in a high probability of further easing. NZD/USD remains range-bound ahead of the US Nonfarm Payrolls (NFP) data that may impact the Federal Reserve policy. The greenback has managed to regain ground, buoyed by Treasury yields, and has been exerting pressure on the Kiwi Dollar. Expectations of a 50 basis point rate cut in February by the RBNZ are also affecting NZD/USD. • A US Nonfarm Payrolls report is expected to impact the Fed’s monetary policy and trigger market volatility. • Greenback trades are regaining strength on the back of rising treasury yields with DXY approaching 107.70. • Markets are expecting that in February, there will be a 50-point rate cut; it will give pressure on New Zealand Dollar. • Increased risk aversion due to trade and economic insecurity is impacting upside momentum for NZD/USD pairs. • The 2-year and 10-year Treasury yields are at 4.22% and 4.44%, supporting the US Dollar against risk-sensitive currencies such as the Kiwi. • Market sentiment and the movement of NZD/USD may be influenced by the discussions between US and Chinese leaders regarding the possible rollbacks of tariffs. • NZD/USD is still relatively subdued following the weak performance of the previous session, failing to gain bullish momentum due to a cautious market outlook. NZD/USD stands at the levels around 0.5700 and is currently flat as participants take a wait-and-see approach before US Nonfarm Payrolls (NFP) arrives and is known to impact Federal Reserve monetary policy prospects. Meanwhile, the Dollar index continues rallying due to upward momentum in the Treasury yields; it has also pushed the Dollar Index towards levels around 107.70. Risk sentiment remains fragile as the world continues to be uncertain about global trade, especially on the US-China front, though potential tariff rollbacks may help alleviate some of the pain. Moreover, the latest US Initial Jobless Claims were higher than anticipated, which added another layer of uncertainty to the market. NZD/USD Daily Price Chart TradingView Prepared by ELLYANA Another reason the Kiwi Dollar is in a tough situation is that it is expected the Reserve Bank of New Zealand, RBNZ, will announce a 50 basis point rate cut in February, taking interest rates to 3.75%. With market expectations at a 92% probability of additional monetary easing, NZD/USD may suffer from increased pressure on the downside. The weak price action exhibited by the pair is due to investors waiting for key economic data that will steer short-term price action. US Treasury yields continue to climb, adding further strength to the US Dollar, which restricts NZD/USD’s recovery from the previous session’s losses. TECHNICAL ANALYSIS NZD/USD is trading near 0.5680, unable to make a sustainable rally as it was capped by the resistance area of 0.5700. The pair remains below the 50-day and 200-day Exponential Moving Averages (EMA), suggesting a bearish trend. A break below the immediate support at 0.5660 could be extended further lower toward 0.5620. A decisive move above 0.5700 may push the pair further to the next resistance at 0.5745. The RSI is near the neutral 50 level, showing a lack of strong momentum in either direction. Traders will carefully monitor the US NFP releases for breakouts or further drops in NZD/USD. FORECAST NZD/USD will drop further if NFP data strengthen the case of a hawkish Federal Reserve which pushes the Dollar higher. Higher Treasury yields after a strong job report will add to the views of prolonged periods of higher interest rates, with NZD/USD falling towards key support 0.5660. If the bearish momentum is maintained, the next target could be 0.5620, with further declines towards the psychological level of 0.5600 in an extended selloff. Expectations of a 50 basis-point rate cut by the Reserve Bank of New Zealand (RBNZ) in February could keep the Kiwi Dollar under pressure in the near term. On the positive side, if US economic data disappoints and weakens the US Dollar, NZD/USD might recover above 0.5700. A softer NFP report might fuel speculation of an earlier-than-expected policy shift by the Federal Reserve, which would reduce the strength of the Dollar. The pair could test resistance at 0.5745, and further gains may extend toward 0.5780. Any positive news in US-China trade relations, such as the rollbacks of tariffs, will enhance risk sentiment and

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Currencies

USD/CAD Consolidates Above 1.4300: Will the Rectangle Pattern Hold or Break?

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  • February 7, 2025
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The USD/CAD pair remains in a consolidation phase above the 1.4300 level, forming a rectangular pattern that keeps traders uncertain about its next move. The pair continues trading below the nine- and 14-day EMAs, which reinforces a bearish sentiment with weak short-term momentum. The 14-day RSI is also below the 50 mark, indicating persistent negative pressure. The immediate support stands at 1.4300, and there is a possible drop to 1.4280 if bearish momentum continues to strengthen. On the other hand, a breakout towards 1.4530 may be determined by the resistance at 1.4372 (nine-day EMA) and 1.4381 (14-day EMA). A breakout above or below these key levels will probably define the next direction for USD/CAD. KEY LOOKOUTS • A breakdown beneath the key level might strengthen the impulse towards the bears and thrust USD/CAD to a psychological support level around 1.4200. • Breaking above 14-day EMA will likely revert the mood to being bullish and take prices towards the rectangle’s top boundary at 1.4530. • The 14-day RSI remains below the 50-bar mark, indicating weak momentum and favoring the downside in the short run as well. • A breakout above the nine- and 14-day EMAs could trigger bullish sentiment, supporting an upward move towards 1.4530. The USD/CAD pair remains at a critical juncture as it consolidates within a rectangular pattern, with traders closely monitoring key technical levels. The immediate support at 1.4280 is crucial, as a break below this level could accelerate bearish momentum toward 1.4200. On the other hand, there is resistance at 1.4381 marked by the 14-day EMA, which is the important barrier for buyers, and a breakout above this level may drive the pair up to 1.4530. The 14-day RSI stands below the 50 mark, strengthening weak momentum and downside risks. Further, the crossing of the nine- and 14-day EMAs can also be an indicator of the shift in the sentiment. It would then be very important to observe a break-out beyond the same. The USD/CAD pair is consolidating in a rectangular pattern. There is a significant support at 1.4280 and resistance at 1.4381. A move below may add more strength to the bears, while a move above the EMAs could create a rally to 1.4530. Traders must keep an eye on the RSI and EMA crossover for a possible change in trend. • A move below this level may add more bearish pressure, pushing the USD/CAD toward the psychological support at 1.4200. • The 14-day EMA is a very strong resistance point. A close above would see the pair pushing toward 1.4530. • The USD/CAD pair remains under the nine- and 14-day EMAs, and momentum remains weak with the selling pressure continuing. • The 14-day Relative Strength Index is also below the 50 mark and strengthens the bears while also implying that buying is weak. • The pair is consolidating within a rectangular range and a break in either direction would most likely set the next trend. • The pair hovers about the psychological support level; trading above it sustainably could limit downside risks. • A breach of the nine- and 14-day EMAs could easily shift the sentiment bullish and signal potential upside momentum. USD/CAD is still consolidating within a rectangular pattern and is showing very weak short-term price action by not being able to break down or break out with a clear directional bias. The important level at 1.4280 acts as key support and if it breaks down then it may accelerate down towards the psychological level of 1.4200. Again, the currency pair still trades below the nine and 14-day EMAs while maintaining a bearish sentiment. The 14-day RSI consolidates below the 50 mark, further indicating continued selling pressure. Traders are closely monitoring whether the pair will hold above 1.4300 as this psychological level could serve as an anchor for a potential rebound. USD/CAD Daily Price Chart TradingView Prepared by ELLYANA Resistance levels on the upside include the nine-day EMA at 1.4372 and then the 14-day EMA at 1.4381. A breakout above these levels would strengthen short-term momentum and drive USD/CAD towards the rectangle’s upper boundary at 1.4530. The EMA crossover will be a good trend reversal indicator as a decisive move above will shift sentiment bullish. Until then, the pair remains in consolidation mode, with traders waiting for a strong breakout to determine the next major move. The rectangular range remains intact, making it essential to monitor both support and resistance levels for a clearer market direction. TECHNICAL ANALYSIS USD/CAD indicates consolidation within a rectangular pattern, highlighting market indecision. The pair remains below the nine- and 14-day EMAs, reinforcing a bearish sentiment with weak short-term momentum. The 14-day RSI stays below the 50 mark, signaling continued selling pressure and a lack of strong buying interest. Immediate support is at 1.4280, and a breakdown below this level could push the pair toward the psychological 1.4200 zone. On the upside, resistance at 1.4372 (nine-day EMA) and 1.4381 (14-day EMA) remains crucial, with a breakout above these levels potentially triggering an upward move toward 1.4530. Traders should watch for a decisive move beyond these levels to determine the next trend direction. FORECAST The USD/CAD pair has a potential upward move if it will break above these key resistance levels. The immediate overhead will be at the nine-day EMA at 1.4372 and the 14-day EMA at 1.4381. A breakout above these levels may show renewed bullish momentum that could continue to propel the pair to the upper boundary of the rectangle at 1.4530. Additional strength in the U.S. dollar or a recovery in crude oil prices affecting the Canadian dollar can drive further advances. If the bullish mood is strengthened, USD/CAD may target the next psychological resistance at 1.4600, which can give traders opportunities to go long. On the downside, the first support level is at 1.4300, but a critical lower boundary is at 1.4280. A break below this level could intensify selling pressure, pushing the pair toward the psychological support at 1.4200. Further bearish momentum, supported by

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Currencies USD/JPY

Japanese Yen Rises on BoJ Rate Hike Bets: Can USD/JPY Hold Above 153.00?

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  • February 5, 2025
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The Japanese Yen (JPY) remains bullish against the US Dollar (USD), having touched a one-month high due to increasing prospects of a rate hike by the Bank of Japan (BoJ). Strong growth in real wages and picking up the pace of inflation in Japan argue for more monetary tightening than possible rate cuts from the Federal Reserve due to slowing US job market data. Therefore, the divergence of policy outlook reduces the Japan-US rate differential, enhancing demand for the JPY. However, risk-on sentiment and the potential for US tariffs on Japan in its imports curtail further upside. Traders have now pivoted to the US ADP report and ISM Services PMI for intraday market guidance, and USD/JPY is due to challenge the 153.00 level and key technical supports. KEY LOOKOUTS • Stretched real wages and inflation in Japan strengthens prospects for additional BoJ rate increases, underpinning the Japanese Yen against the US Dollar. • A weakening US job market increases the likelihood of Fed rate cuts, which will further narrow the Japan-US rate gap and put pressure on the USD/JPY pair. • Investors are cautious as potential US trade tariffs on Japan may affect economic relations, adding uncertainty to JPY’s bullish momentum. • The USD/JPY pair is capped at 154.00, and a break below 153.00 may lead to further downside, testing the 100-day SMA near 152.45. The Japanese Yen managed to remain strong against the US Dollar even as expectations for a Bank of Japan rate hike continue, found being supported by rising real wages and inflation. However, weakening US job market data fuels speculation of Federal Reserve rate cuts and tightens the Japan-US rate differential, adding further downward pressure on USD/JPY. However, it remains capped by risk-on sentiment and concerns over potential US trade tariffs on Japan. At these levels, with the pair toying with 153.00, traders are being cautious, and now market participants are looking for key US economic data – first, the ADP report followed by ISM Services PMI, to give them further direction. The Japanese Yen is still gaining on the US Dollar due to BoJ rate hike expectations and the narrowing Japan-US rate differential. However, risk-on sentiment and potential US trade tariffs on Japan limit further gains. Traders now focus on key US economic data for short-term direction. • Rising real wages and inflation in Japan strengthen the case for further monetary tightening, boosting the Japanese Yen. • Poor US job data raises the prospect of cuts in Federal Reserve rates, narrowing the Japan-US rate differential and putting pressure on the USD. • The pair is trading at the 153.00 handle, and a break below could send it to the 100-day SMA around 152.45. • Market optimism about trade negotiations between the US, Canada, and Mexico limits the safe-haven appeal of the Yen. • Investors remain cautious as Japan is likely to be a part of US tariffs, which may affect the economic relationship and market sentiment. • Traders will look for the ADP employment report and ISM Services PMI for short-term guidance in the USD/JPY pair. • On the upside, immediate resistance lies at 154.00. Further upside would face resistance at 154.75 and 155.25. The level of 153.00 acts as a strong support. The Japanese Yen (JPY) maintains its bullish stance against the US Dollar (USD), driven by growing expectations of a Bank of Japan (BoJ) rate hike. Recent data showing a rise in Japan’s real wages and accelerating inflation reinforce the case for further monetary tightening, supporting the Yen’s appreciation. To date, weakening US job market data, including this week’s dismal JOLTS report, that fuels speculation the Federal Reserve would cut rates and that the two central banks pursue different policy stances, in a way cuts the Japan-US rate differential down, making JPY more interesting and weighing upon the USD/JPY which now hovers near the major 153.00 level. USD/JPY Daily Price Chart TradingView Prepared by ELLYANA Despite the JPY’s strength, risk-on sentiment and worries over potential US trade tariffs on Japan prevent a stronger rally. Investors are careful because US President Donald Trump’s tariff policies can eventually target Japan, given the latter’s significant trade surplus with the US. Moreover, the potential trade breakthrough between the US, Canada, and Mexico has eased trade war concerns, and this has further reduced safe-haven demand for the Yen. Traders now look to additional key US data such as ADP employment and ISM Services PMI for further market directions. Technical, a break below 153.00 level would push USD/JPY closer to the area of the 100-day Simple Moving Average (SMA) at 152.45, while resistance is still the 154.00 level, with higher areas of resistance quoted at the 154.75 and 155.25. TECHNICAL ANALYSIS The USD/JPY pair continues to trade under considerable bearish pressure, trading just above the key 153.00 level. A strong breakdown below this level will lead to additional downward momentum to the 100-day Simple Moving Average near 152.45, and enhance the bearish sentiment. Daily chart oscillators are turning south but still lack overbought readings, thus allowing for some additional losses. The nearest strength will be around the psychological barrier of 154.00. Beyond this lies a pair of obstacles at 154.75 and 155.25. A continuation move above these levels could invalidate the bearish scenario and shift short-term direction toward buyers, likely targeting the 155.50-156.00 zone. FORECAST Even though there is some short-term bearish momentum, there are some very important resistance zones that can initiate a short-term rebound if violated. The major resistance level can be found around the psychological area of 154.00. A sustained move above this level could fuel a short-covering rally, driving the pair towards the 154.75-155.00 region. Further bullish momentum could drive the pair to challenge the 155.25-155.30 resistance zone, a crucial pivot point that, if decisively broken, could shift the near-term trend in favor of buyers. Beyond this level, the next upside target would be the 156.00 region, provided market sentiment supports a stronger USD recovery. Expectations of further Bank of Japan (BoJ) tightening remain

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Currencies USD/JPY

Japanese Yen Resilience Amid Trump’s Trade Tariffs and BoJ Rate Hike Bets

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  • February 3, 2025
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The Japanese Yen (JPY) staged a bit of resilience against the US Dollar (USD), pulling out from its multi-day low even as fears continue to simmer on US President Trump’s proposed trade tariffs. While the widening US-Japan rate differential and global risk-off sentiment weigh on the Yen, bets for further rate hikes by the Bank of Japan (BoJ) and rising inflation in Tokyo provide some support. However, fears about the economic fallout from new tariffs imposed on Canada, Mexico, and China, coupled with broad USD strength, continue to limit the Yen’s potential. The BoJ’s ongoing discussions about tightening monetary policy and the narrowing interest rate gap with other economies play a pivotal role in the Yen’s recovery, but its future remains tied to upcoming US macroeconomic data, particularly the Nonfarm Payrolls (NFP) report. KEY LOOKOUTS • The Bank of Japan’s potential interest rate hikes could provide crucial support to the Japanese Yen amidst global uncertainties. • New trade tariffs imposed by the Trump administration on Canada, Mexico, and China could weigh on global markets, making the JPY vulnerable to economic spillover. • The continued convergence in interest rates between the United States and Japan continues to have a smoothing effect on the upside potential of the USD/JPY pair. • The global risk-off sentiment, induced by geopolitics and macroeconomic uncertainty, may further enhance the safe-haven status of the Japanese Yen. The Japanese Yen (JPY) has been experiencing mixed pressures lately in trading. The potential interest rate hikes from the Bank of Japan (BoJ) offer some support, but global uncertainty is still present. The narrowing US-Japan yield differential keeps the USD/JPY pair in check, but the Yen remains vulnerable to concerns about the economic impact of US President Trump’s trade tariffs on Canada, Mexico, and China. With stronger US Dollar tariffs added to that mix, it will continue weighing down on the Yen’s bullish moment. Yet the safe haven status of JPY is still in place given global risk-off, and more specifically, some data from the United States economy would be seen such as Nonfarm Payrolls for further guidance to the currency pair. The Japanese Yen is supported by Bank of Japan rate hike bets and safe-haven demand amidst global uncertainty, though concerns over US trade tariffs and a strong US Dollar cap its upside potential. Key US economic data, including the Nonfarm Payrolls report, will likely influence future price action for USD/JPY. • The Bank of Japan’s discussions on further rate hikes provide some support to the Yen despite global challenges. • Added pressure from Trump’s new tariffs on Canada, Mexico, and China limits Yen’s bullish side. • Continuation of the broad-based USD strength continues weighing on the Yen and supports the positive bias on USD/JPY. • Geopolitical and economic risks globally are spurring a risk-off mood; this is seen in the enhanced demand for the Yen as a safe haven currency. • Japan and US have an interest rate differential that helps cap the upside of the pair USD/JPY. • Inflation is rising in Tokyo, and expectations for a hike in BoJ policy support it. The pressure on the Yen has been alleviated a little. • For the next decision in USD/JPY, the upcoming US economic reports are very important, especially Nonfarm Payrolls. The Japanese Yen is facing support and pressure due to various reasons, both at the global level and domestically, in the Forex market. Another hand that perhaps because of increasing inflation in the Tokyo region, the Bank of Japan may increase interest rates. Safe-haven demand amidst global uncertainty also acted as a minor recovery catalyst for the Yen against the US Dollar. However, the imposition of new trade tariffs by US President Trump on Canada, Mexico, and China is continuing to weigh on the Yen on fears of further deleterious impact on the global economy, pushing up the economic instability and curbing gains in the Yen. USD/JPY Daily Price Chart Sources: TradingView Prepared by ELLYANA The interest rate differential continues to narrow between Japan and the US as the former has kept the policy rate at zero, limiting the upside of USD/JPY. Although the US Dollar is generally strong, the Yen finds some refuge in its status as a safe haven and bears the risk-off sentiment. While attention in the markets focuses on major US economic releases-the most impactful perhaps will be the Nonfarm Payrolls-the direction of the USD/JPY pair will largely be guided by whether the US economy remains resilient or if global trade tensions mount further pressure on risk assets. TECHNICAL ANALYSIS Technical analysis is a methodology applied in forex and other financial markets to determine the future course of price movement by studying the historical data primarily through charts and technical indicators. The traders try to find potential entry and exit points by concentrating on patterns, trends, and market signals like support and resistance levels, moving averages, and candlestick formations. Unlike fundamental analysis, which focuses on economic data, technical analysis considers that all the information is incorporated into the price, making it a very powerful tool for the short-term trading strategy. Therefore, by noticing recurring price patterns and trends, traders can be better informed about their decisions as well as handle risk better. FORECAST Japanese Yen will see some near-term upswings with expectations of continued rate hikes by the Bank of Japan (BoJ). Tokyo’s inflation increased at its fastest pace in almost a year. In this light, the BoJ may also look to continue the tightening of monetary policy and is likely to continue supporting the Yen. In any case, safe-haven demand for the Yen is also unlikely to lose any steam with heightened global geopolitical tensions and risk-off sentiment. If there is further weakness in the US Dollar such as losing significant strength within disappointing US economic data, or trade tensions rise higher, the Yen might appreciate further. That would put pressure on the USD/JPY pair from its upper side, mainly when and if it breaks the important support levels. In contrast, the Yen

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Currencies EUR/USD

EUR/USD Falls Amid US Dollar Strength and Market Uncertainty: Fed-ECB Policy Decisions in Focus

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  • January 28, 2025
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EUR/USD fell sharply to around 1.0420 after the US dollar gained strength amid a risk-off environment fueled by a global sell-off in technology and data center stocks. The safe-haven appeal of the Greenback has surged on account of uncertainty regarding US Treasury Secretary Scott Bessent’s proposed universal tariff plan and the impending monetary policy decisions from the Federal Reserve and the European Central Bank (ECB). The Fed is expected to hold interest rates unchanged while the ECB is expected to cut its Deposit Facility rate by 25 bps, with a rather dismal Eurozone economic outlook. Investors are closely monitoring Fed Chair Jerome Powell’s press conference and ECB President Christine Lagarde’s comments for future policy guidance and potential impacts of US tariffs. Key technical levels for EUR/USD include support near 1.0266 and resistance around 1.0630, with the pair trading cautiously near its 50-day EMA at 1.0456. KEY LOOKOUTS • The market will be looking to the Federal Reserve’s interest rate decision and the European Central Bank’s expected 25 bps rate cut for direction. • The US Dollar Index (DXY) shoots up to nearly 108.00, with global risk-off sentiment influencing EUR/USD and promoting cautious trading in the currency pair. • The uncertainty over the proposed 2.5% universal tariff hike is fueling market volatility and affecting global trade dynamics and the economic outlook of the Eurozone. • Key support for EUR/USD lies near 1.0266, while resistance is at 1.0630, with the pair struggling to hold above its 50-day EMA around 1.0456. EUR/USD continues to face pressure, falling near 1.0420 as the US Dollar strengthens on safe-haven demand amid a global sell-off in technology stocks and uncertainty over US Treasury Secretary Scott Bessent’s proposed universal tariff hike. Market participants are focused on this week’s monetary policy decisions, with the Fed likely to hold rates steady and the European Central Bank most likely to cut its Deposit Facility rate by 25 basis points due to the latest sluggish Eurozone economy. The two most important items investors are following are Fed Chair Jerome Powell’s and ECB President Christine Lagarde’s press conferences for insight into future monetary policy and the effect Trump’s tariff plan will have on the global economic outlook. Key technical levels, which include support at 1.0266 and resistance near 1.0630, will set the course of EUR/USD in the short term. EUR/USD falls to around 1.0420 as the US Dollar gains strength in a risk-off environment and global market sell-offs. Investors are looking for Fed and ECB policy decisions for future direction. Key support is at 1.0266, while resistance is near 1.0630. • The pair fell sharply to around 1.0420 as the US Dollar gained strength in a risk-off environment. • The DXY jumped to 108.00 as global sell-offs in technology and data center stocks have amplified the ‘Safe Haven’ appeal. • The Feds are expected to keep interest rates unchanged. Focus is on the Jerome Powell ‘Press Conference’ for future guidance. • The European Central Bank is expected to cut its Deposit Facility rate by 25 bps due to the poor Eurozone economic outlook. • Uncertainty over US Treasury Secretary Scott Bessent’s proposal for a 2.5% universal tariff hike adds to market volatility. •EUR/USD struggles near the 50-day EMA of 1.0456, with key support at 1.0266 and resistance around 1.0630. • Markets remain cautious, closely monitoring global economic policies and central bank decisions for future market direction. EUR/USD has declined sharply to around 1.0420 after the US Dollar went on a risk-off rally with global sell-offs in technology and data center stocks. The DXY rallied to 108.00 and was also inspired by the safe-haven trend due to some increased market uncertainty. The world is still watching monetary policy announcements from the Federal Reserve and the European Central Bank. While the Fed is anticipated to keep their interest rates where they are now, markets eagerly await Jerome Powell’s press conference for any forward guidance. On the other hand, the ECB is expected to lower its Deposit Facility rate by 25 basis points, reflecting poor Eurozone economic performance and inflationary pressures returning to target. EUR/USD Daily Chart TradingView Prepared by ELLYANA The uncertainty surrounding a universal tariff plan by US Treasury Secretary Scott Bessent for a 2.5% hike and later increase has only added to market volatility. As a result of the plan, alongside weak investor sentiment, the Euro lost its grounds. According to key technical levels, it can be determined that EUR/USD is supporting at 1.0266, however, resistance stays at 1.0630. The pair now trades near the 50-day EMA that stands at 1.0456. As markets await clarity from central banks and potential impacts of the US tariff plan, cautious trading is likely to persist, leaving EUR/USD vulnerable to further fluctuations. TECHNICAL ANALYSIS EUR/USD is struggling to maintain momentum above the 50-day Exponential Moving Average (EMA), which currently trades near 1.0456. The pair has failed to sustain gains above the key resistance level of 1.0530, signaling bearish pressure. On the flip side, critical support is observed around 1.0266 where the January 20 low locates, which further supports bearishness following the downward-sloping trend from the September 2024 high that recorded 1.1209. The14-day Relative Strength Index (RSI) is situated below the crucial hurdle of 60.00, indicating the trend is generally sideways with a bearish bias. A drop below 1.0390, the 20-day EMA, would accelerate the bears, while a strong breakout above 1.0630 would be required to allow bulls to take over. FORECAST If EUR/USD is to recover now, it needs to break above the immediate resistance level 1.0530, which has acted as a stubborn barrier in last few sessions. Once this level breaks away from the pair’s back, it will then open the way up towards the December 6th high of 1.0630. If it succeeds in breaking this strong resistance area, the pair may sustain further buying on board, targeting the psychological level of 1.0700. The stock market reaction of positive ECB developments, such as a less dovish tone from President Christine Lagarde, will be more fuel

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Currencies USD/JPY

USD/JPY Catches a Hold, Holding Steady Despite Hawkish BoJ Expectations and Tariff Concerns: Key Levels to Watch

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  • January 28, 2025
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The Japanese Yen has been failing near a daily low against the US Dollar. In early European trading, the USD/JPY pair reaches close to 156.00. Hawkish expectations from the Bank of Japan help keep losses to JPY to some extent due to potential policy tightening and pay hikes support. Meanwhile, renewed US President Donald Trump tariff threats on the varied industries with US Treasury yields rebounding strengthen USD, and JPY is weakly positioned compared with the lower yielding ones. Markets look for guidance with the incoming US macro data along with two days of the FOMC Federal Reserve meet scheduled. USD/JPY charts are technically biased southward and, hence, this pair faces critical resistance in 156.00 and immediate support nearby 155.00. KEY LOOKOUTS • Hawkish signals from the Bank of Japan, including continued rate hikes and policy adjustments, could be supportive of the Japanese Yen and limit its losses against the US Dollar. • Proposed tariffs by President Trump on key industries, including pharmaceuticals and metals, are likely to raise market volatility and impact USD/JPY movements through their influence on inflation and bond yields. • The Federal Reserve’s policy decisions during its two-day meeting will play a critical role in shaping the USD’s trajectory and the overall direction of the USD/JPY pair. • Key resistance around 156.00 and support near 155.00 will guide traders, with a break below 154.50 signaling potential further downside for the USD/JPY pair. The USD/JPY pair remains under focus as the Japanese Yen struggles near daily lows amid diverging monetary policies and global economic uncertainties. Hawkish expectations from the Bank of Japan, including potential rate hikes and policy adjustments, help limit JPY losses despite modest USD strength fueled by rebounding US Treasury yields and President Trump’s renewed tariff threats on various industries. Market participants are eyeing key technical levels, with resistance around 156.00 and support near 155.00, while awaiting critical US macroeconomic data and the outcome of the Federal Reserve’s FOMC meeting. These factors will likely determine the pair’s next directional move in the coming sessions. The USD/JPY pair hovers near daily lows as rebounding US Treasury yields and Trump’s tariff threats continue to bolster the USD, and hawkish BoJ expectations limit JPY losses. Market participants will watch for further cues from the outcome of the FOMC meeting. • Japanese Yen fails against US Dollar; pairs are seen nearing 156.00 on back of rebounding US Treasury yields and tariff threats by Trump. • This kind of sign by the Bank of Japan, including rate hikes and fostering wage growth, caps losses for JPY. • Fresh tariff threats by President Trump on pharmaceuticals and metals increase volatility in the market and make USD rise. • Traders are most likely to wait for cues from the monetary policy decision of the Federal Reserve to see what happens with USD and the overall market. • Durable Goods Orders, Consumer Confidence Index, and the Richmond Manufacturing Index will shed some light on US economic outlook • Resistance levels are located near 156.00, with the immediate support levels around 155.00 and a break below 154.50 would push the pair towards further losses • The pair is still under pressure due to differences in policy directions between BoJ and Fed along with global uncertainty. The USD/JPY pair remains close to daily lows. The Japanese currency is under considerable pressure against the greenback due to diverging monetary policies and surging global economic uncertainties. Positive support for the Yen comes through the hawkish outlook of the Bank of Japan, which implies rate hikes or policy adjustments. However, the US Dollar holds firm as the Treasury yields begin to rebound and President Trump’s threat to impose fresh tariffs on pharmaceuticals and metals may reactivate inflationary forces. Traders are following these reports closely as they create market sentiment and push volatility for the currency pair USD/JPY Daily Chart TradingView Prepared by ELLYANA Focus, meanwhile, would be on crucial US macro data, which is a mix of Durable Goods Orders, the Consumer Confidence Index, and the Richmond Manufacturing Index. Together, they may give clues as to the prospects of the US economy. This will also help determine the trend of the dollar as the Fed concludes its two-day FOMC meeting. On the technical side, resistance for USD/JPY is observed at 156.00, and immediate support is located around 155.00. A strong break below 154.50 would likely mean a continuation of the downside pressure, keeping traders alert for any directional guidance in the following sessions. TECHNICAL ANALYSIS USD/JPY is trading within a critical range. Resistance is located near the 156.00 level, which is also aligned with the trend-channel support breakpoint now turned into resistance. The next zone in concert with the supply from 156.60 to 156.70 might cap further movements upwards. Psychologically speaking, the zone between 155.00 on the downside should work as support with the next horizon zone situated from 154.55 down to 154.50, along with the zone for 154.00. Continued breakdown through such levels will definitely reinforce the view of further falling and bring further declines into 153.70 and beyond and potentially 153.30 and perhaps 153.00. Oscillators on the daily chart are showing negative traction and suggesting that USD/JPY’s path of least resistance in the short term could be lower. FORECAST The pair might have only limited upside to it as it gets close to some key resistances near 156.00 and the supply zone at 156.60-156.70. Drivers to the upside will include rebounding US Treasury yields and continued US Dollar strength, with President Trump’s tariff policies and inflationary pressures being the biggest culprits. Strong US economic data or a more hawkish tone from the Federal Reserve in the FOMC meeting also could fuel additional demand for USD, pushing the pair higher. However, these gains will likely be capped by the divergent policy expectations between the Bank of Japan and the Federal Reserve. The USD/JPY pair faces immediate support near the 155.00 psychological level, followed by critical zones at 154.55-154.50 and the 154.00 mark. A break below these

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