Soft Wages and Policy Constraints Deepen Yen's Plight—Bulls May Seize the Momentum

Forex

Economic

Summary:

Japan's real wages have recorded their steepest decline since 2023, exacerbating the Bank of Japan's (BoJ) policy predicament.

BUY GBPJPY

Close Time

CLOSED

198.351

Entry Price

204.140

196.000

207.162 +0.062 +0.03%

94.5

Pips

Profit

196.000

199.296

Exit Price

198.351

Entry Price

204.140

Fundamentals

GBPJPY extended gains on Monday, reaching 197.98. Disappointing Japanese wage data exerted downward pressure on the yen, dampening expectations for further monetary tightening by the Bank of Japan (BoJ).

Nominal wages in Japan rose just 1.0% YoY in May, sharply missing the 2.4% consensus and marking the third consecutive month of deceleration. Real wages, reflecting purchasing power, fell 2.9%—the steepest decline in nearly two years and the fifth straight month of contraction.

A breakdown showed nominal wages grew 1.0%, below April's 2.0% and forecasts. While base salaries increased 2.0% and overtime pay rose 1.0%, special payments (mainly one-off bonuses) plunged 18.7% YoY, dragging overall wage growth. Nominal wages have now risen for 41 consecutive months, yet gains still lag inflation.

Officials warned the data may not fully reflect spring wage negotiations, particularly as many surveyed small firms lack unions and lag larger corporates in raising pay. Prolonged real wage compression could pressure consumer spending and complicate the BoJ's gradual policy normalization.

Market Watch: Official figures have yet to capture the full impact of this spring's record wage deals with unions. Smaller, non-unionized firms have been slower to implement hikes, delaying their effect on aggregate wage trends.

With wage growth faltering and inflation sticky, the BoJ's task grows tougher. Meanwhile, U.S.-Japan trade talks appear stalled, with Washington threatening higher tariffs on Japanese goods. Japan's economic outlook remains challenging. We still expect the BoJ to hike rates, but weak pay trends could weaken the case.

Soft Wages and Policy Constraints Deepen Yen's Plight—Bulls May Seize the Momentum_1

Technical Analysis

GBPJPY's intraday bias stays neutral-to-positive. A break below 196.28 would trigger further consolidation. However, as long as support at 193.99 holds, further upside is expected. A breach of 198.78 would target resistance at 199.79. Beyond that, gains could extend toward the 100% Fibonacci retracement of 180.00–199.79 at 204.14.

Trading Recommendations

Trading Direction: Buy

Entry Price: 197.61

Target Price: 204.14

Stop Loss: 196.00

Valid Until: July 22, 2025, 23:55:00

Support: 197.60/197.09/196.70

Resistance: 198.12/198.78/199.79

Risk Warnings and Disclaimers

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Alan

Forex

Summary:

The Euro faces a triple threat of negative factors in the short term. Furthermore, its technical indicators are currently suppressed by a downward trend line, suggesting a potential short-term downward correction.

SELL EURUSD

Close Time

CLOSED

1.17550

Entry Price

1.16400

1.18150

1.16509 +0.00083 +0.07%

40.2

Pips

Profit

1.16400

1.17148

Exit Price

1.17550

Entry Price

1.18150

Fundamentals

The current Euro faces a confluence of three bearish factors, constituting the core drivers for going short.

Firstly, the US-EU trade conflict has entered a critical showdown phase: July 9th marks the deadline for the US to impose tariffs on EU steel and aluminum (50%) and automobiles (25%). A breakdown in negotiations would directly impact manufacturing exports, which account for 14% of the Eurozone's GDP. Despite the EU signaling concessions (accepting a 10% general tariff but seeking exemptions for key industries), the US maintains a hardline stance, with market expectations for a deal falling below 40%. The US-EU trade divergence may cause the Eurozone's retail sales to decline to 1.2% in the last quarter. Against this backdrop, the EURUSD is undergoing a correction and is likely to continue its downward trend.

Secondly, the Eurozone's weak economic data continues to intensify: Germany's May retail sales fell 1.6% month-on-month (vs. an expected +0.5%), and consumer confidence plummeted to a crisis level of -20.3, reflecting the risk of a collapse in domestic demand.

Finally, the US dollar's short-term rebound momentum is strengthening: Although the US non-farm payrolls in June showed a less-than-ideal structure (with government employment accounting for 50%), the overall data supports a cooling of expectations for a Federal Reserve rate cut in July. The rise in US Treasury yields has pushed the US dollar index above a key technical level, which may further depress the EURUSD.

Technical Analysis

As of today's European trading session, the EURUSD is trading at 1.1730 and maintaining a downward trend.

Bullish Momentum Has Temporarily Stalled, Potentially Signaling a Significant Correction_1

In the 1D timeframe, the EURUSD recently rose to the Fibonacci 0.618 extension level near 1.1810 before facing selling pressure and declining. With the high points of the candlestick chart consistently decreasing over the past five trading days, this indicates that bearish sentiment is dominating the market in the short term, and the exchange rate may undergo a more significant correction.

Bullish Momentum Has Temporarily Stalled, Potentially Signaling a Significant Correction_2

In the 4H timeframe, the recent price action of the EURUSD has established a clear downward trendline, forming resistance along the upper boundary of a descending channel. With successively lower highs and lows, the EURUSD is likely to maintain a bearish trajectory in the short term, with the initial target being a test of the 1.1620 support level.

Trading Recommendations

Trading Direction: Sell

Entry Price: 1.1755

Target Price: 1.1640

Stop Loss: 1.1815

Valid Until: July 21, 2025 23:00:00

Support: 1.1680, 1.1620

Resistance: 1.1790, 1.1810

Risk Warnings and Disclaimers

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Gerik

Commodity

Summary:

On July 7, 2025, spot gold (XAU/USD) edged lower to $3,311.09/oz, down ~0.7%, after U.S. announcements of trade deal progress and temporary tariff extensions eased safe‑haven demand....

BUY XAUUSD

Close Time

CLOSED

3305.06

Entry Price

3330.00

3295.00

4209.98 +12.07 +0.29%

133.3

Pips

Profit

3295.00

3318.39

Exit Price

3305.06

Entry Price

3330.00

Market Overview

Today, spot gold fell ~0.7% to $3,311.09/oz as U.S. President Trump noted progress on trade agreements and extended tariff deadlines to August 1, reducing immediate risk-driven

Despite this, concerns over inflation especially tied to the recent $3 trillion U.S. fiscal package and a slowdown in expected Federal Reserve rate cuts continue to support gold prices. HSBC recently raised its average gold forecast due to global uncertainty, projecting $3,215 for 2025 and $3,125 for 2026, with a broad trading range of $3,100–$3,600.

Market Sentiment

Sentiment shows caution: the easing of trade fears prompted a short-term selloff, but inflation worries and delayed rate cuts keep long-term sentiment neutral-to-bullish.

HSBC warns the rally is "toppy" with scope for a pullback before resuming upward momentum. Central bank buying remains strong, which provides a structural floor under prices.

Technical Analysis

Gold dips to $3,311 – Pullback offers potential BUY on M15 timeframe?_1

Bollinger Bands: M15 bands are narrowing, signaling low volatility and potential for a rebound from the lower band (~$3,300–3,305).

Ichimoku Cloud: Price sits just below the cloud; Tenkan below Kijun indicates short-term bearish pressure. The kumo is thin, implying limited resistance overhead.

Stochastic (5,3,3): Oscillator sits in the oversold zone (<20), showing a bullish divergence suggesting buyers could step in soon.

These conditions combined (oversold Stoch, narrowing Bollinger, thin cloud) point to a likely short-term rebound on M15 if supports hold around $3,300–3,305.

Trade Plan

Entry: BUY near $3,305 if M5/M15 candle confirms a bottom and Stoch divergence is seen.

Take Profit: $3,330–3,335, aligning with mid‑Bollinger band and short-term resistance.

Stop Loss: Place under $3,295 (~10 pips below entry) to limit risk if downward momentum resumes.

Risk Warnings and Disclaimers

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Alan

Cryptocurrency

Summary:

Bitcoin is currently locked in a battle between bulls and bears. However, with the early formation of a triple top pattern on the technical charts, short-term bearish momentum is gradually strengthening.

SELL BTC-USDT

Close Time

CLOSED

112000.0

Entry Price

99000.0

118000.0

92124.2 +2569.4 +2.87%

6000.0

Pips

Loss

99000.0

118083.0

Exit Price

112000.0

Entry Price

118000.0

Fundamentals

Recent Bitcoin price action reflects a tug-of-war between policy expectations and capital flows.

Regarding the policy situation, Donald Trump's July 7th announcement on finalizing 30%-50% tariffs targeting Japan and the EU could escalate U.S. inflation pressures if implemented, potentially reigniting Bitcoin's "inflation hedge" narrative. Conversely, policy compromise may trigger a pullback as safe-haven demand fades. Meanwhile, the U.S. House's upcoming debate on crypto tax frameworks and Trump's campaign pledge to designate Bitcoin as a "strategic national reserve asset" injects long-term policy optimism.

Capital flows indicate different directions. Institutional demand remains bifurcated with MicroStrategy continuing to accumulate BTC, while Ethereum spot ETFs saw a 219.1 million dollar inflow to confirm the stable institutional allocation. On the other hand, a 14-year-old dormant address moved 20,000 BTC (2.2 billion dollars) to indicate tremendous selling pressure.

Judging from macro environments, the Fed meeting minutes affirmed no July rate cuts, though markets expect easing cycles to begin in September. Tariff hikes may accelerate inflation (U.S. prices already face 10% tariff pressure), potentially reviving Bitcoin's 2024-style "inflation hedge" logic.

Technical Analysis

Bulls vs Bears in Tug-of-War, Will the Triple Top Break?_1

Bitcoin shows brewing breakout momentum but faces weakening bullish energy in the daily chart. Key resistance clusters around 111,000−112,000, where three failed breakouts sketch a nascent triple top. Downside support tiers lie at 107,500 and 105,000, a breakdown here could open deep correction territory.

Suggested by indicators, the daily RSI hovers in a moderate bullish area, yet momentum weakens as prices rise. MACD histogram volume contracts consecutively with signal lines converging, signaling imminent volatility.

Notably, the current rally is primarily futures-driven (spot premiums keep declining). Such divergence rarely sustains trends and may instead trigger "fakeout reversal" liquidations.

Trading Recommendations

Trading direction: Sell

Entry price: 112000

Target price: 99000

Stop loss: 118000

Valid Until: July 21, 2025, 23:00:00

Support: 107255/105100

Resistance: 110529/111963

Risk Warnings and Disclaimers

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Warren Takunda

Economic

Summary:

The Euro hit its highest level against the Japanese Yen since July 2024 on Thursday, supported by strong U.S.

BUY EURJPY

Close Time

CLOSED

170.400

Entry Price

173.000

168.500

181.174 +0.301 +0.17%

132.2

Pips

Profit

168.500

171.722

Exit Price

170.400

Entry Price

173.000

The Euro advanced further against the Japanese Yen on Thursday, pushing the EUR/JPY pair to its highest level in nearly a year, as improving global risk appetite and solid macroeconomic data fueled investor confidence. The cross climbed past 170.40 during the U.S. trading session, as markets processed stronger-than-expected U.S. labor market figures, a stabilizing Eurozone economy, and signals from the European Central Bank (ECB) that it may pause rate cuts in the near term.

The fresh upside move highlights the growing divergence in monetary policy expectations between Europe and Japan. With the ECB showing signs of caution and Japan’s central bank still treading slowly on rate normalization, the Euro has found solid ground against the Yen — a currency that continues to struggle as risk appetite improves globally.

At the heart of Thursday’s rally was a stronger-than-expected U.S. Nonfarm Payrolls (NFP) report. The U.S. economy added 147,000 jobs in June, beating forecasts for 110,000 and coming in just above May’s revised figure of 144,000. Though the headline number didn’t indicate explosive labor market strength, it was enough to ease concerns that the economy might be heading for a deeper slowdown.

The robust labor print helped lift risk appetite across global markets, prompting a rotation out of safe-haven assets like the Japanese Yen and into risk-linked currencies, including the Euro. Equity markets traded higher and bond yields firmed, reducing demand for the Yen, which typically gains during periods of geopolitical tension or economic uncertainty.

Meanwhile, recent data out of the Eurozone offered more reasons for the Euro bulls to stay confident. The final reading of the region’s Services Purchasing Managers’ Index (PMI) rose slightly to 50.5 in June, up from 50 in May and just above the preliminary estimate. The broader Composite PMI, which includes both manufacturing and services, climbed to a three-month high of 50.6 from 50.2, signaling early signs of a mild economic recovery.

While the manufacturing sector remains a drag, the uptick in services output and sentiment bodes well for the region’s economic outlook. In this context, the ECB’s latest meeting minutes struck a tone of cautious optimism. While acknowledging that headline inflation had returned to the 2% target in June, policymakers cited ongoing uncertainty surrounding the Euro’s 14% appreciation in 2024 and rising trade frictions — particularly from U.S. tariff measures — as reasons to hold off on additional rate cuts in July.

Some Governing Council members voiced concerns that a stronger Euro, while helpful in taming imported inflation, could dent the bloc’s competitiveness and delay recovery in the manufacturing-heavy export sector. As such, the ECB appears to be shifting from aggressive easing toward a more data-dependent stance — a development that offers fundamental support to the Euro in the near term.

Technical Analysis

From a technical perspective, EUR/JPY remains comfortably inside a well-established bullish channel, with price consolidating just under key resistance at 169.85 earlier in the session before breaking higher.

From a technical perspective, EUR/JPY continues to demonstrate robust bullish momentum. The pair remains well above its 9-day Exponential Moving Average (EMA) at 169.22 and is currently tracking the upper band of its Bollinger channel — a sign that the rally is supported by strong demand rather than mere short covering.

The Relative Strength Index (RSI) stands at 71.92, indicating overbought conditions, but not yet signaling an imminent reversal. Momentum remains clearly in favor of the bulls, with no significant resistance until the 171.09 level — the July 23, 2024 high. A clean break above that level would open the door for a potential rally toward the 172.00–173.00 zone, with the psychological 175.00 barrier a possible medium-term target.

Immediate support is located near the 9-day EMA at 169.22, followed by 167.80. A sustained move below these levels would weaken the bullish outlook, but at present, the path of least resistance remains to the upside.

TRADE RECOMMENDATION

BUY EURJPY

ENTRY PRICE: 170.40

STOP LOSS: 168.50

TAKE PROFIT: 173.00

Risk Warnings and Disclaimers

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Warren Takunda

Traders' Opinions

Summary:

The EUR/USD pair trades flat below 1.1800 on Thursday as market optimism over U.S.-Vietnam trade deals gives way to caution ahead of the U.S. Nonfarm Payrolls report.

BUY EURUSD

Close Time

CLOSED

1.17603

Entry Price

1.20000

1.17000

1.16509 +0.00083 +0.07%

60.3

Pips

Loss

1.17000

1.16999

Exit Price

1.17603

Entry Price

1.20000

The euro was treading water against the U.S. dollar on Thursday, with EUR/USD hovering just below the 1.1800 mark in a subdued session shaped by growing caution and a shift in focus to upcoming U.S. employment data. The pair, which flirted with multi-year highs earlier in the week, has stalled amid fading risk appetite, despite modestly upbeat news from both sides of the Atlantic.

At the time of writing, EUR/USD remains practically unchanged on the day, trading near 1.1790, just off the psychological 1.1800 threshold. While bullish momentum remains intact on the broader trend, short-term sentiment has been tempered by renewed geopolitical uncertainty, fragile investor mood, and heightened anticipation ahead of Friday’s U.S. jobs report — released a day early due to the Independence Day holiday.

In Europe, June’s final services Purchasing Managers’ Index (PMI) reading was revised upward to 50.5 from an initial estimate of 50.0, signaling a return to marginal expansion territory after May’s contraction. Though the improvement is a welcome sign for the eurozone’s services sector, which accounts for over 70% of regional GDP, the market’s reaction was muted.

For the euro, the revision failed to provide meaningful support as traders remain more focused on global risk cues and the direction of U.S. monetary policy. The broader narrative around the European Central Bank (ECB) is also in flux, with policymakers walking a tightrope between weak economic growth and persistent inflation, leaving the door open to potential further easing later this year — especially if global conditions deteriorate.

On the U.S. side, political developments continue to muddy the waters. On Wednesday, President Donald Trump announced a trade deal with Vietnam, initially sparking optimism that more bilateral agreements could be signed ahead of the July 9 deadline tied to broader trade negotiations. The Dollar briefly weakened on the news, as traders bet that de-escalation of trade tensions might soften the Fed’s hawkish stance.

However, sentiment quickly shifted again as reports surfaced of backlash from other Asian countries over the complexity of the U.S. tariff framework. That skepticism, combined with Trump’s ongoing attacks on Federal Reserve Chair Jerome Powell, injected volatility and uncertainty into markets.

In an unprecedented move, Trump called for Powell to "resign immediately," intensifying concerns about political interference in monetary policy. These remarks — part of a broader campaign of criticism — have added to speculation that the Fed’s independence may be under threat, potentially weakening the Dollar’s credibility as the world’s reserve currency.

The main market event this week is undoubtedly Thursday’s Nonfarm Payrolls (NFP) report, released a day early due to the U.S. holiday. Following Wednesday’s surprisingly weak ADP employment print, the risk is skewed to the downside for the Dollar. A disappointing NFP number would likely reinforce expectations of a Fed rate cut in the coming months, potentially as early as the next FOMC meeting.

Given the fragile state of global risk sentiment and the Fed's recent messaging that rate policy will remain "data dependent," Friday's figures could act as a major pivot point for the greenback. A softer-than-expected reading would likely push EUR/USD decisively above 1.1800, with the next target seen near 1.2000 — a level that also coincides with key technical resistance and a psychological milestone.

Technical Analysis

From a technical standpoint, EUR/USD continues to trade within a well-defined short-term uptrend. The pair remains above its 50-day exponential moving average (EMA), reinforcing the underlying bullish structure. Price action is following a clear impulsive wave pattern, with analysts suggesting that wave “3” of a larger bullish cycle is still unfolding.

While RSI indicators are showing signs of overbought conditions, suggesting potential for a pause or shallow correction, there is no immediate signal of trend reversal. The pair has been consolidating just beneath resistance, a behavior consistent with bullish continuation patterns.

The upward impulse is far from exhausted. I believe wave “3” at both the higher and lower degrees is in its final stages, and the zone around 1.2000 represents an attractive level where this move could culminate. This level not only marks a critical psychological barrier but could also trigger profit-taking and technical resistance. However, if breached, it would open the path for a much deeper rally into uncharted territory not seen since early 2018.

TRADE RECOMMENDATION

BUY EURUSD

ENTRY PRICE: 1.1760

STOP LOSS: 1.1700

TAKE PROFIT: 1.2000

Risk Warnings and Disclaimers

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Eva Chen

Forex

Economic

Summary:

The Purchasing Managers' Index (PMI) data indicates that the UK service sector is expanding at its quickest pace since August of the previous year. The final Japanese composite PMI registered at 51.5, suggesting a fragile economic recovery due to subdued demand.

BUY GBPJPY

Close Time

CLOSED

197.433

Entry Price

202.130

194.000

207.162 +0.062 +0.03%

187.9

Pips

Profit

194.000

199.312

Exit Price

197.433

Entry Price

202.130

Fundamentals

During Thursday's Asian and European trading sessions, the GBPJPY traded cautiously around 196.50, following a weekly low near 195.40 the previous day. The asset showed upward momentum from the prior day, driven by economic activity in both the UK and Japan, which supported the GBPJPY's overall rise.

PMI surveys released on Thursday indicated that UK service sector activity expanded at its fastest pace in nearly a year in June, while service price inflation slowed to its lowest rate in almost four years. This outcome is likely to be viewed favorably by the Bank of England (BOE).

The final UK Services PMI for June increased to 52.8 from 50.9 in May. Price increases in the services sector were the lowest since February 2021. The BOE is closely monitoring service sector prices to assess inflationary pressures within the economy. Investors widely anticipate that the BOE will cut interest rates again in August, following a pause in June.

Japan's private sector posted moderate growth in June, with the final PMI services index rising to 51.7 from 51.0 in May, and the composite index rising to 51.5 from 50.2 in May. The latest data suggests that the economy has continued to expand, but that the momentum of growth has weakened from the first quarter.

Despite a second consecutive month of modest growth in new business, demand conditions remain subdued, and new export orders continue to decline. Businesses are struggling to gain momentum amidst uncertainties surrounding U.S. tariffs.

Concurrently, inflationary pressures persist. Companies are reporting "robust cost pressures," partially due to increased staffing. These costs are being passed on through a rapid increase in output prices, despite weak demand.

Bias Remains Bullish Following a Short-term Correction, and Bullish Outlook Will Remain Unchanged if Key Support Holds_1

Technical Analysis

The GBPJPY's intraday movement is currently exhibiting a neutral rebound, with potential consolidation below 198.87. Further retracement remains a possibility, but a bullish outlook is maintained as long as the 193.99 support level holds.

A breach of 198.78 would resume the advance from 184.35 towards the 199.79 resistance. A break above this resistance would target the 100% projection of the 180.00 to 199.79 range, with a final objective at 204.14.