EUR/JPY Climbs Above 170 on U.S. Jobs Surprise, Eurozone Optimism

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

182.929 +0.318 +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

1.17394 +0.00011 +0.01%

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

208.323 +0.079 +0.04%

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.

Trading Recommendations

Trading Direction: Buy

Entry Price: 195.69

Target Price: 202.13

Stop Loss: 194.00

Valid Until: July 18, 2025 23:55:00

Support: 195.34, 194.57, 194.01

Resistance: 196.85, 197.57, 198.18

Risk Warnings and Disclaimers

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Alan

Forex

Summary:

GBP/JPY currently finds itself at a dynamic equilibrium where excessive panic selling of the pound meets persistent weakness in JPY policy shifts. Short-term bearish catalysts have been fully released, resonating with technically oversold conditions, creating an event-driven tactical window for long positions.

BUY GBPJPY

Close Time

CLOSED

196.578

Entry Price

201.500

195.200

208.323 +0.079 +0.04%

47.6

Pips

Profit

195.200

197.054

Exit Price

196.578

Entry Price

201.500

Fundamentals

The GBP faced systemic selling pressure yesterday, primarily driven by a market confidence crisis triggered by the UK's new fiscal policies. Chancellor Rachel Reeves' welfare reform bill raised concerns over fiscal discipline abandonment, causing the 10-year UK gilt yield to surge nearly 4% to 4.61% – its sharpest single-day growth in years. Though yield spikes typically support currencies, this instead amplified fears about Britain's widening deficit, sparking broad GBP selling. Prime Minister Starmer publicly backed Reeves, but political uncertainty continues to hinder confidence recovery.

Regarding the monetary policy, BoE committee member Taylor signaled potential "five interest rate cuts this year," suggesting the benchmark rate could drop to 2.75%-3.00%, significantly below current levels. This expectation is already priced in. Should today's US NFP data underperform, the US dollar's weakness may indirectly catalyze a GBP rebound, realizing the pessimism-exhausted effect.

While the JPY initially found support from BoJ member Hajime Takata’s rate-hike hints, newly appointed policymaker Kazuyuki Masu emphasized " the BOJ shouldn't be in a rush to raise rates," delaying policy normalization. Simultaneously, Trump's threat to impose 30%-35% tariffs on Japanese cars suppressed the safe-haven demand for JPY. Improving global risk appetite (e.g., sustained US equity rallies) further eroded JPY's appeal, indirectly aiding GBP/JPY bulls.

Technical Analysis

Tactical Positioning for Oversold Rebound as Pessimism Exhausted _1

The daily chart shows GBP/JPY printing successively higher highs and lows, confirming a clear uptrend. Moving averages exhibit a bullish alignment, reinforcing trend sustainability.

On the 4-hour chart, yesterday's plunge pushed RSI into oversold territory, amplifying short-term technical rebound requirements.

Current price action indicates GBP/JPY's retreat tested but respected the rising trendline during European trading hours today. The subsequent recovery confirms effective trendline support, signaling exhaustion of bearish momentum and continuation of the uptrend.

Upside targets include testing the 199.70 resistance initially, potentially reaching the psychological 200.00 level. A sustained break above 200.00 could extend gains toward 202.00.

Trading Recommendations

Trading direction: Buy

Entry price: 196.50

Target price: 201.50

Stop loss: 195.20

Valid Until: July 17, 2025, 23:00:00

Support: 195.35/194.01

Resistance: 199.70/200.00

Risk Warnings and Disclaimers

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Manuel

Central Bank

Economic

Summary:

The price recently closed above the 100-period moving average at 1.3651, which, if maintained, could pave the way for a bullish continuation toward the next resistance level at 1.3768

BUY GBPUSD

Close Time

CLOSED

1.36300

Entry Price

1.37650

1.35500

1.33707 -0.00148 -0.11%

16.0

Pips

Profit

1.35500

1.36460

Exit Price

1.36300

Entry Price

1.37650

U.K. Prime Minister Keir Starmer and his government have failed to meet their welfare-cutting targets, which were a key part of their budget proposals aimed at regaining control over the UK’s government finances. PM Starmer has also left the possibility of tax increases on the table, sparking backlash from both the markets and political critics. This has led to growing speculation of more governmental instability in the U.K., with many anticipating that PM Starmer will soon begin reshuffling his cabinet to consolidate and maintain control of his party amid a challenging economic environment.

The speculation that Starmer might dismiss his finance minister, Rachel Reeves, sent 10-year bond yields soaring to 4.681%, a 25 basis point increase, marking their highest level since October 2022, when the mini-budget by Liz Truss shook the markets. Meanwhile, there is increasing speculation that Reeves will need to either raise taxes or cut spending plans in the upcoming Autumn Budget.

In the U.S., trade negotiations continue, while President Donald Trump's "One Big Beautiful Bill" remains in limbo. Trump has also once again criticized Federal Reserve Chairman Jerome Powell, calling for his immediate resignation.

In June, U.S. private payrolls fell for the first time in over two years, signaling potential headwinds for the upcoming employment report and contributing to the U.S. dollar’s decline. Data from Automatic Data Processing, Inc. (ADP) released on Wednesday showed that private-sector payrolls decreased by 33,000 in June, following a downward revision of May’s increase to 29,000. This figure was well below the market consensus of 95,000.

Economists expect Thursday’s report to show a modest increase of 110,000 nonfarm jobs in June. Additionally, the Unemployment Rate, the ISM Services PMI, and weekly initial jobless claims will be released, providing further insights into the labor market.

Furthermore, House Republicans have raised concerns over delays in the tax vote, with Andy Harris, leader of the House Freedom Caucus, casting doubt on Trump’s proposed bill. He stated, “It could take another week to get this right,” adding, “I don’t think it’s ready for July 4th.”

The White House revealed that Trump will meet with members of the Freedom Caucus and multiple Republican groups from the House, according to a senior administration official.

Meanwhile, Trump announced a trade deal with Vietnam, under which U.S. goods could be exported with zero tariffs, while the U.S. imposed a 20% tariff on Vietnamese goods and a 40% duty on reexports. Bullish Correction Looks Imminent After Recent Sell-Off_1

Bullish Correction Looks Imminent After Recent Sell-Off_1

Technical Analysis

GBP/USD has dropped sharply to the 1.3570 level, where it found support from the 200-period moving average on the 2-hour chart. From this level, GBP/USD has begun to recover and stabilize, suggesting that this support could pose a challenge for further downward momentum. The price recently closed above the 100-period moving average at 1.3651, which, if maintained, could pave the way for a bullish continuation toward the next resistance level at 1.3768, near the local high.

Additionally, the RSI dropped sharply, forming a clear divergence, with the RSI reaching a low of 24, entering oversold territory. This indicates that the downward momentum may be losing strength temporarily, which could trigger a rally. Furthermore, the 1.3590 level would act as strong support, coinciding with the 200-period moving average. On the other hand, a strong break below this level would invalidate the bullish setup, opening the door for further losses.

Trading Recommendations

Trading direction: Buy

Entry price: 1.3630

Target price: 1.3765

Stop loss: 1.3550

Validity: Jul 11, 2025 15:00:00

Risk Warnings and Disclaimers

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Manuel

Central Bank

Economic

Summary:

If the price fails to break through the trendline, we could see the start of a new bearish impulse from this area.

SELL USDJPY

Close Time

CLOSED

143.497

Entry Price

142.700

144.100

155.814 +0.255 +0.16%

60.3

Pips

Loss

142.700

144.182

Exit Price

143.497

Entry Price

144.100

The U.S. continues to negotiate trade deals while President Donald Trump’s “One Big Beautiful Bill” remains pending approval. In the meantime, Trump has once again criticized Federal Reserve Chairman Jerome Powell, calling for his immediate resignation.

Meanwhile, comments from Bank of Japan (BoJ) Governor Ueda have added to the narrative of reduced aggressiveness, as remarks from the European Central Bank’s (ECB) Sintra forum hinted at patience regarding rate hikes. Short-term interest rate markets are pricing in no change at the BoJ’s meeting on July 31, with a 15-basis-point hike expected by year-end.

On the trade front, Japan’s Chief Cabinet Secretary Yoshimasa Hayashi stated on Tuesday, "Japan will not do anything that sacrifices the agricultural sector in trade talks with the U.S."

Earlier, Japan’s Agriculture Minister Shinjirō Koizumi emphasized, “We will continue working with various ministries to maximize Japan’s national interests in the context of trade negotiations with the U.S.”

The BoJ’s Tankan survey revealed that business confidence among Japan’s major manufacturers improved for the first time in two quarters during the April-June period. Additionally, businesses expect consumer prices to stay above the central bank’s 2% target for the next five years.

Further details revealed that companies anticipate consumer prices to increase by 2.4% over the next three years and by 2.3% annually over the next five years. This highlights growing inflationary pressures in Japan, which may necessitate further rate hikes from the BoJ and could provide a solid boost to the Japanese yen during the Asian session. A New Downward Leg Could Begin from Resistance_1

A New Downward Leg Could Begin from Resistance_1

Technical Analysis

USD/JPY is currently in a strong uptrend, which recently reached a local low at 142.68. From this low, the price has retraced to the 100-period moving average, now located at 143.99. This level could act as significant resistance, potentially pushing USD/JPY lower again. Given that this area aligns with the local highs, it could mark the top of a descending channel, suggesting that USD/JPY could head back toward the local lows.

On the other hand, USD/JPY has reached the 66.85 level on the RSI, approaching overbought territory. This signals potential divergence, with the RSI making higher highs while the price remains pressured to the downside. This divergence suggests that the bullish momentum may be waning. If the price fails to break through the trendline, we could see the start of a new bearish impulse from this area.

Trading Recommendations

Trading direction: Sell

Entry price: 143.50

Target price: 142.70

Stop loss: 144.20

Validity: Jul 10, 2025 15:00:00

Risk Warnings and Disclaimers

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Eva Chen

Economic

Commodity

Summary:

Saudi Arabia's crude oil exports have surged amid OPEC+ leadership's competition for market share.

SELL WTI

Close Time

CLOSED

66.158

Entry Price

62.690

67.900

57.233 -0.408 -0.71%

174.2

Pips

Loss

62.690

67.900

Exit Price

66.158

Entry Price

67.900

Fundamentals

Saudi Arabia is exporting crude oil at the fastest pace in over a year, as the OPEC+ leader continues its strategy to regain global oil market share.

Preliminary tanker tracking data compiled by various agencies indicates that Saudi Arabia's crude oil exports increased by 441,000 barrels per day in June, reaching 6.36 million barrels per day, a rise of approximately 7%. This surge in exports coincides with OPEC+'s accelerated plan to restore oil production, which benefits consumers.

The data shows that crude oil shipments in the Persian Gulf and its key chokepoint, the Strait of Hormuz, have remained unimpeded, despite electronic interference affecting regional shipping due to the conflict between Israel and Iran. This trend may indicate a future pattern: actual export growth has surpassed OPEC+ agreement expectations during a period when domestic air conditioning demand in Saudi Arabia typically suppresses crude oil exports. As the alliance considers further production increases, the country may release a larger proportion of its supply after the summer.

Investors should monitor geopolitical developments and inventory data, as these fundamental factors often drive significant price fluctuations in the energy market.

Market Still Has Room to Fall as Supply Discharge Stacks Up with Technical Suppression_1

Technical Analysis

Following a significant correction from its recent peak of US$77.00, WTI crude oil has been trading within a narrow consolidation range, hovering around US$65.39. Market prices have found some support near a crucial level that recently curbed selling pressure.

The energy commodity appears to be stabilizing after testing key technical levels. Price action suggests a potential, albeit limited, recovery.

A clear support zone exists for WTI crude oil near the current level of US$65.50, which constitutes the recent bottom of the decline. This level, coinciding with prior swing lows, is a critical juncture in determining the next price movement.

Sustained breaches below the current level could trigger further downside momentum, while a successful hold could initiate a rebound. The breakdown of this consolidation pattern could equate to the prior decline, approximately US$3.

The Stochastic Oscillator is currently in a neutral zone, suggesting that momentum could shift in either direction. The Relative Strength Index indicates that the commodity has not yet entered oversold territory, but the oscillator has stabilized and appears to be forming a bottom. This suggests that selling pressure may be waning, which, if confirmed by volume support, could lay the groundwork for a counter-trend rally.

However, in terms of trading, we are not bullish on the price increase, as the head and shoulders top pattern has not fully played out, and we recommend continuing to go short at the highs.