GBP/JPY fails resistance at ~198.65 post‑U.S. PMI

Economic

Forex

Summary:

On 31/07/2025, GBP/JPY repeatedly turned down near 198.65, immediately after the U.S. PMI data reinforced bullish momentum for the dollar. With the pound losing steam and yen holding firm, technical patterns suggest a corrective leg toward 196.55–197.75 is likely....

SELL GBPJPY

Close Time

CLOSED

198.550

Entry Price

197.750

198.750

207.680 -0.643 -0.31%

80.0

Pips

Profit

197.750

197.737

Exit Price

198.550

Entry Price

198.750

Overview

Following the flash U.S. PMIs, the U.S. Dollar strengthened ahead of the data release boosting DXY and pressuring GBP/JPY lower. GBP/JPY struggled to rise above 198.65, now acting as a strong resistance level. The pair has since reverted, with economies.com confirming the bearish correction bias and targeting 196.55 and 197.75 as logical downside objectives

Market Sentiment

Sentiment has flipped bearish GBP/JPY now resides below its resistance zone, and traders are positioning for further weakness. The Bank of Japan left policy unchanged at 0.50%, reinforcing yen strength amid fading pound momentum and softer UK fundamentals.

Technical Analysis

GBP/JPY fails resistance at ~198.65 post‑U.S. PMI_1

GBP/JPY declined below the 198.65 pivot confirming rejection. A breakdown beneath Fibonacci 61.8% retracement (~197.50) would cement the move toward 196.55, with further bearish targets at 197.75 if initial momentum wanes. Current form suggests a trading range 196.55–198.10, bearing a bearish outlook.

No clear Ichimoku/Stoch available, but the bearish structure aligns with triangle and channel resistance patterns observed on shorter timeframes. Price action supports continuation lower unless it reclaims 198.65 decisively.

Trading Recommendation

Entry: around 198.45–198.55, after confirming candle rejection below resistance.

TP: 197.75

Stop Loss: 198.75

Risk Warnings and Disclaimers

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Eva Chen

Commodity

Economic

Summary:

WTI and Brent futures advanced Thursday as renewed geopolitical tensions and aggressive CTA buying rippled through the energy complex. Yet position-limit constraints and a looming supply rebound are expected to cap further upside for WTI.

SELL WTI

Close Time

CLOSED

68.954

Entry Price

62.650

71.000

56.916 -0.317 -0.55%

216.1

Pips

Profit

62.650

66.793

Exit Price

68.954

Entry Price

71.000

Fundamentals

WTI crude briefly touched the psychological US$70.00/bbl mark before paring gains. The move was underpinned by President Trump’s latest ultimatum to Russia to expedite an end to the Ukraine war, reigniting fears of supply disruptions.

At the same time, Asian refiners—facing elevated premiums for Middle-Eastern sour grades—have pivoted toward U.S. barrels, pushing the WTI-Dubai arbitrage firmly into positive territory. The narrowing spread now renders delivered-WTI cargoes more competitive than regional alternatives.

Market sources confirm that Occidental recently sold a WTI cargo to Japan’s Taiyo Oil at roughly US$3.50/bbl above Dubai’s October swap, loading in the U.S. Gulf and scheduled for October arrival. The deal underscores surging export appetite for WTI and highlights the growing role of U.S. crude in Asia’s supply slate.

Arbitrage Window Opens, U.S. Crude Gains Traction in Asia_1

Technical Analysis

Technically, WTI has cleared both the US$70.00/bbl resistance and its MA100 and MA200, producing a textbook golden-cross formation that validates near-term bullish momentum.

However, the Stochastic Oscillator has already ventured into overbought territory, flagging a short-term mean-reversion risk. Fibonacci retracements show that any technical pullback would meet layered support at 68.46 (the 38.2 % retracement), 67.80 (the 50 % handle) and 67.15 (the 61.8 % golden-ratio level), each acting as a potential reload zone for dip-buyers.

Additionally, although the 14-day Relative Strength Index (RSI) is flirting with the overbought threshold, momentum gauges suggest further room to run before exhaustion, implying that the short-covering rebound could still extend.

Trading Recommendations

Trading Direction: Sell

Entry Price: 70.00

Target Price: 62.65

Stop Loss: 71.00

Valid Until: August 15, 2025, 23:55:00

Support: 70.00/70.12/71.00

Resistance: 70.00/70.12/71.00

Risk Warnings and Disclaimers

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Tank

Economic

Forex

Summary:

The Bank of Canada and the Federal Reserve both kept interest rates unchanged. With the August 1st tariff deadline approaching, investors remain cautious, fearing the U.S. may impose tariffs on Canadian exports, a factor that could further pressure the Canadian dollar.

BUY USDCAD

EXP

EXPIRED

1.37000

Entry Price

1.38000

1.36500

1.37631 -0.00069 -0.05%

Pips

EXPIRED

1.36500

1.37793

Exit Price

1.37000

Entry Price

1.38000

Fundamentals

The Bank of Canada today maintained its overnight rate target at 2.75%, marking the third consecutive decision not to cut rates, in line with economists' and financial markets' expectations. From a yield perspective, the Canadian dollar (CAD) remains unattractive. Additionally, as the August 1st tariff deadline nears, investors remain wary of potential U.S. tariffs on Canadian exports, which could weigh further on the Canadian dollar.

The Federal Reserve kept its benchmark interest rate steady at 4.25%–4.50% in July, as widely expected. Although the policy statement leaned slightly dovish, the overall guidance remained neutral, with no clear signals on future policy direction. As a result, the U.S. Dollar Index (DXY) surged to a high of 99.9.

Technical Analysis

Regarding the daily chart, USDCAD shows an upward-expanding Bollinger Bands structure with diverging moving averages, a bullish signal. A golden cross is formed, alongside a bottom divergence, while prices are climbing along the upper Bollinger Band, the strongest uptrend structure. RSI is around 63, not yet overbought, suggesting further upside potential toward 1.39. Besides, prices have been rising within an uptrend channel in the 4H chart. As long as the trend channel's lower boundary holds, the uptrend is likely to continue. A break below could lead to a search for support. Notably, RSI briefly spiked to 77, entering overbought territory, which may trigger a pullback. Key support levels are the EMA200 and the lower Bollinger Band at 1.37 and 1.365, respectively. The strategy is to buy on dips.

USDCAD Rally Not Over Yet, Potential to Test 1.40 Ahead_1

USDCAD Rally Not Over Yet, Potential to Test 1.40 Ahead_2

Trading Recommendations

Trading direction: Buy

Entry price: 1.37

Target price: 1.38

Stop loss: 1.365

Support: 1.39/1.395/1.4

Resistance: 149.6/150/152.2

Risk Warnings and Disclaimers

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Alan

Commodity

Summary:

The upward momentum of gold prices was curbed as the Fed chose to hold rates unchanged at its July rate meeting, while Powell released hawkish signals.

SELL XAUUSD

Close Time

CLOSED

3312.44

Entry Price

3190.00

3340.00

4341.24 +41.85 +0.97%

158.0

Pips

Profit

3190.00

3296.64

Exit Price

3312.44

Entry Price

3340.00

Fundamentals

A new round of U.S. tariff measures heated up again this week. The Trump administration imposed tariffs on exports from Brazil and South Korea and planned to impose a 25% tariff on goods from India, while removing the exemption for small overseas parcels. It has sparked fears of renewed global trade friction. This "trade uncertainty" has increased gold's safe-haven appeal, leading to buy-backs after it fell below $3,300.

At the same time, although the Fed held interest rates steady at its July meeting, policymakers remain divided on when to start cutting rates. Most officials did not give a clear timeline for rate cuts, only saying they would "wait for more data" before taking action. This statement has delayed market expectations for rate cuts and dampened the further upward momentum of gold prices. Investors are now focusing on the June core PCE price index to be released today. If the data is less than expected or reaffirms a moderate decline in inflation, it could once again provide support for gold prices.

Technical Analysis

Has the Gold Trend Shifted as Fed Keeps Interest Rates Unchanged?_1

In the daily chart, gold tested the resistance level of 3440 on July 23 and then faced resistance and retreated. After falling below the support level of 3370, it entered a deep correction. Subsequently, it further broke through the uptrend line, indicating that the short-term trend may enter a stage of oscillating downward.

At present, it seems that the gold price rose above the support level of 3250 yesterday, showing signs of reversing its decline and stabilizing. This indicates that the support level is strong. Today, it maintains a rebound trend. However, it is facing the resistance level of 3310-3320 on the upper side, and the short-term upward pressure is gradually aggravated. If it can break through this zone, the gold price may rise to around 3350. If it is pressured and weakens at this resistance level, the gold price may continue to fall to the support level of 3250.

Trading Recommendations

Trading direction: Sell

Entry price: 3309.00

Target price: 3190.00

Stop loss: 3340.00

Expiration date: 2025-8-14 23:00:00

Support: 3267.92, 3250.00

Resistance: 3319.00, 3333.94

Risk Warnings and Disclaimers

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Tank

Economic

Forex

Summary:

The Fed held interest rates steady, with Chair Jerome Powell refraining from signaling imminent rate cuts, bolstering market confidence in the U.S. dollar. The DXY (U.S. Dollar Index) surged past 99.9, marking a multi-week high.

SELL USDJPY

Close Time

CLOSED

149.300

Entry Price

148.400

149.600

155.086 -0.728 -0.47%

30.0

Pips

Loss

148.400

149.600

Exit Price

149.300

Entry Price

149.600

Fundamentals

The DXY extended its rally for a fifth consecutive session, breaching 99.9 and posting a monthly gain exceeding 3% —its highest level in over five weeks. This momentum stems from the Fed's latest policy decision: despite market hopes for dovish cues, the central bank maintained rates while Powell emphasized a cautious approach to easing, withholding a clear timeline. The resulting uncertainty has reinforced the dollar's appeal.

Meanwhile, the Bank of Japan (BoJ) is expected to revise its 2025 fiscal year inflation forecast upward to 2.5% (unchanged from prior 2.5%) in its quarterly outlook report, while retaining projections of 1.7% and 1.9% for 2026 and 2027, respectively.

Market participants anticipate the BoJ may signal a 25bps rate hike by late 2025 , but such a move could exacerbate the yen's recent weakness, given its already subdued momentum.

Technical Analysis

Weekly Chart: USDJPY remains in a corrective rebound phase, with the MACD golden cross converging toward the zero line, suggesting further upside potential. The RSI at 53 (neutral) and progressively higher lows support the bullish bias. Key resistance levels locate at 152.2 (weekly Bollinger upper band) and the 155 trendline extension.

4-Hour Chart: Price retreated after failing to sustain above 149, indicating near-term pressure. The MACD histogram shows weakening momentum, while the RSI's double-top pattern hints at a pullback risk.

Critical supports: 148.3 (4-hour Bollinger midline) and 146.6 (EMA200). A hold above 148.3 may revive bullish attempts toward 150; a break below targets 146.6.

Given the technical overextension and bearish divergences, shorting on rallies is favored for today's session.

Trading Recommendations

Trading Direction: Sell

Entry Price: 149.3

Target Price: 148.4

Stop Loss: 149.6

Support: 148.3/147.96/146.7

Resistance: 149.6/150/152.2

Risk Warnings and Disclaimers

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Manuel

Commodity

Central Bank

Summary:

A strong bullish reaction from that level could initiate a fresh upward leg, continuing the broader bullish trend.

BUY XAUUSD

EXP

EXPIRED

3270.00

Entry Price

3390.00

3230.00

4341.24 +41.85 +0.97%

Pips

EXPIRED

3230.00

3369.70

Exit Price

3270.00

Entry Price

3390.00

U.S. Federal Reserve Chair Jerome Powell made it clear on Wednesday that the central bank will not take government financing needs into account when determining interest rate policy. During the press conference following the latest Federal Open Market Committee (FOMC) meeting, Powell emphasized that the Fed’s sole responsibility is fulfilling its dual mandate from Congress—maintaining price stability and supporting a strong labor market.

Under this legal obligation, Powell stressed, “We don't consider the fiscal needs of the federal government. No central bank in an advanced economy does that, and it would not be appropriate for us to do so.” He added that factoring in fiscal pressures would compromise the Fed’s credibility and its independence in pursuing monetary policy objectives.

Economists widely agree that any central bank that prioritizes keeping government borrowing costs low, rather than controlling inflation, risks losing its ability to act independently and effectively. Such a shift would likely erode confidence in the institution and undermine its capacity to anchor inflation expectations.

Powell’s remarks came after the Fed decided to keep its benchmark interest rate unchanged in a target range of 4.25% to 4.50%. Policymakers continue to assess how recent shifts in government trade policies and tax structures are influencing economic performance, as markets increasingly anticipate a potential rate cut in September.

On the macroeconomic front, the U.S. economy posted a strong rebound in the second quarter of 2025, growing at an annualized pace of 3%, after contracting by 0.5% in Q1. The result exceeded expectations of a 2.4% expansion, signaling renewed momentum.

Meanwhile, the preliminary Core Personal Consumption Expenditures (PCE) Price Index rose 2.5% from the previous quarter, slightly above the projected 2.4%, though still lower than the 3.5% recorded in Q1. The broader PCE inflation measure declined to 2.1% from 3.7%, and the GDP Price Index eased to 2.0%, below the estimated 2.4%, suggesting continued disinflationary trends.

Labor market data also surprised to the upside. The ADP employment report for July revealed that the U.S. private sector added 104,000 jobs, well above expectations of 78,000 and a sharp rebound from June’s revised decline of 33,000.

In bond markets, the U.S. 10-year Treasury yield held near 4.33% on Wednesday, consolidating after a steep drop in the prior session. The 30-year yield (US30Y) hovered around 4.86%, as investors turned cautious ahead of the Fed’s policy statement. Could Gold Repeat Its Bullish Rebound from Support?_1

Could Gold Repeat Its Bullish Rebound from Support?_1

Technical Analysis

XAUUSD dipped intraday, briefly touching a low near $3,270, approaching the 200-period moving average on the 12-hour chart, currently sitting at $3,264. The 100-period moving average remains higher at $3,342. If gold manages to rebound from this zone, which has previously triggered two significant upward moves, a similar bullish reaction could emerge. Should this support level hold, the price may aim for the next resistance near $3,393.

The RSI has dropped to 35.3, rapidly approaching oversold territory but not quite there yet. This suggests there could be room for one final downward leg to test the 200-period MA. A strong bullish reaction from that level could initiate a fresh upward leg, continuing the broader bullish trend. However, a decisive break below the support would likely lead to deeper losses for XAUUSD.

Trading Recommendations

Trading direction: Buy

Entry price: 3270

Target price: 3390

Stop loss: 3230

Validity: Aug 08, 2025 15:00:00

Risk Warnings and Disclaimers

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Manuel

Forex

Economic

Summary:

This divergence adds weight to the case for a trend reversal, increasing the likelihood of a recovery from current levels.

BUY EURGBP

Close Time

CLOSED

0.86309

Entry Price

0.86950

0.85850

0.87782 -0.00007 -0.01%

64.1

Pips

Profit

0.85850

0.86953

Exit Price

0.86309

Entry Price

0.86950

Economic data from the euro area showed that the region’s GDP expanded by 1.4% year-over-year in Q2 2025, slightly below the 1.5% growth seen in the first quarter. In Germany, quarterly GDP rose from 0% to 0.4%, suggesting a modest pickup in Europe’s largest economy.

German retail sales for June also provided some upside surprise, increasing by 1.0% month-on-month after a sharp decline of -1.6% in May, and beating market expectations for a 0.5% rise. Meanwhile, the European Central Bank’s latest Consumer Expectations Survey indicated that inflation in the eurozone is projected to continue its downward trajectory over the next 12 months.

In terms of international trade, the U.S. and the European Commission, led by President Ursula von der Leyen, reached a landmark agreement. Under the new deal, the U.S. will impose a fixed 15% tariff on a broad range of EU exports—including automobiles, machinery, and consumer goods. This marks a significant increase from the 1.2% average tariff rate seen in 2024.

In return, the EU has pledged to purchase $750 billion worth of U.S. liquefied natural gas (LNG) over the next three years and to invest $600 billion in key American sectors such as energy, defense, and manufacturing. According to EU Trade Commissioner Maroš Šefčovič and sources from the European Commission speaking to Politico, the $600 billion investment will be entirely funded by private companies, with no direct financial involvement from the EU government.

On the UK side, shifting interest rate expectations have offered some support to the British Pound. While markets are still pricing in a 25-basis-point rate cut from the Bank of England on August 7, expectations for further easing by year-end have softened slightly, with forecasts retreating by around five basis points over the past week.

Recent CFTC data showed a reduction in bullish positioning, as the previously net-long GBP position of $2.4 billion has now flattened, reflecting a more neutral market stance. Divergence and Oversold RSI May Invite Buyers Back_1

Divergence and Oversold RSI May Invite Buyers Back_1

Technical Analysis

EUR/GBP has recently pulled back toward the 200-period moving average on the 4-hour chart, currently located at 0.8613. This level coincides with a key support zone near 0.8600, and a firm hold above this area could pave the way for a potential rebound. If bullish momentum builds from this base, price action may target the next resistance at 0.8697, with the 100-period moving average at 0.8662 serving as an intermediate hurdle. A close above the latter would likely accelerate the move higher.

Notably, the RSI has dropped to 30, a level traditionally associated with oversold conditions. This suggests that bearish pressure may be fading. Furthermore, the RSI is forming a bullish divergence relative to price, as it reaches oversold levels not seen since the pair began its previous upward leg. This divergence adds weight to the case for a trend reversal, increasing the likelihood of a recovery from current levels.

Should bullish signals hold, long positions from the current support zone could be favored. However, a decisive break below 0.8580 would negate the bullish setup and could open the door to deeper losses.

Trading Recommendations

Trading direction: Buy

Entry price: 0.8628

Target price: 0.8585

Stop loss: 0.8695

Validity: Aug 08, 2025 15:00:00

Risk Warnings and Disclaimers

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