USD/JPY Rallies to Two-Week High Near 149 as Strong U.S. Data Lifts Dollar

Traders' Opinions

Summary:

Very short summary: USD/JPY surged to a two-week high near 149.00 on Wednesday, boosted by upbeat U.S. employment and GDP data, with markets now closely eyeing the Fed's policy guidance amid growing rate cut speculation.

BUY USDJPY

Close Time

CLOSED

149.000

Entry Price

151.500

147.500

155.861 +0.516 +0.33%

84.9

Pips

Profit

147.500

149.849

Exit Price

149.000

Entry Price

151.500

The USD/JPY currency pair staged a decisive rebound in the American session on Wednesday, erasing earlier losses to trade at a fresh two-week high around the 149.00 handle. This renewed strength in the greenback came on the back of stronger-than-expected U.S. economic data, which fueled market optimism about the resilience of the American economy and tempered some of the recent dovish speculation surrounding the Federal Reserve's next policy moves.

At the time of writing, the U.S. Dollar Index (DXY), which tracks the performance of the greenback against a basket of major peers, was up 0.63% on the day at 99.52—marking its highest level since late May. The rally in the dollar helped push USD/JPY through a key resistance level at 148.20, with bulls now eyeing a sustained breakout above the psychologically significant 149.00 threshold.

Wednesday’s data releases provided a notable catalyst for dollar bulls. The U.S. private sector added 104,000 jobs in July, according to ADP, sharply rebounding from June’s surprising 23,000 decline and beating the consensus forecast of 78,000. While the headline number was not stellar by historical standards, the positive turnaround helped reassure investors about the labor market's underlying strength—particularly ahead of Friday’s more comprehensive nonfarm payrolls report.

Complementing the upbeat employment figures, the U.S. Bureau of Economic Analysis reported that GDP expanded at an annualized rate of 3.0% in the second quarter—well above expectations of a 2.4% increase. The robust growth print reinforced the narrative that the U.S. economy continues to outperform global peers despite higher interest rates and persistent inflationary pressures.

In my view, this data underscores the Federal Reserve's balancing act: while inflation has been cooling, the economy has yet to show significant signs of deterioration. This complicates the central bank's efforts to engineer a soft landing without overtightening policy.

Markets are now keenly awaiting the Federal Reserve’s policy statement due later in the session. The central bank is widely expected to leave interest rates unchanged following its July meeting, but traders are bracing for potential shifts in forward guidance—especially in Chairman Jerome Powell’s press conference.

According to the CME FedWatch Tool, market participants are pricing in a roughly 60% probability of a 25 basis-point rate cut at the Fed’s next meeting in September. However, today’s strong macro data may challenge that pricing, particularly if Powell strikes a more data-dependent or hawkish tone.

As a financial reporter, I find this dynamic particularly compelling. The Fed’s challenge is no longer just about inflation—it’s about managing expectations. The soft landing narrative depends not only on economic fundamentals but also on how effectively the Fed can communicate its path forward. In this sense, Powell’s tone today could carry more weight than the rate decision itself.

Technical Analysis

From a technical standpoint, USD/JPY's bounce reflects a resumption of the broader uptrend that has been in place since early 2023. After a brief intraday dip triggered by overbought signals on the Relative Strength Index (RSI), the pair found fresh buying interest near the ascending support trendline and the 50-period Exponential Moving Average (EMA50), reinforcing the bullish setup.

The pair decisively broke through the 148.20 resistance level, a key barrier that had previously capped upside attempts. If USD/JPY can sustain momentum above 149.00, the next upside targets lie at 149.50 and the psychological round number of 151.00, which has historically acted as a line in the sand for Japanese policymakers concerned about yen weakness.

TRADE RECOMMENDATION

BUY USDJPY

ENTRY PRICE: 149.00

STOP LOSS: 147.50

TAKE PROFIT: 151.50

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Eva Chen

Economic

Forex

Summary:

Following a breach of the April high at 0.8737 on Monday, the EURGBP experienced a swift retracement. However, the current market behavior suggests that the short covering is not yet complete. The exchange rate may continue its downward trajectory, with a target range of 0.8520.

SELL EURGBP

Close Time

CLOSED

0.86248

Entry Price

0.85200

0.86930

0.87303 -0.00013 -0.01%

68.2

Pips

Loss

0.85200

0.86930

Exit Price

0.86248

Entry Price

0.86930

Fundamentals

The decline in the EURGBP on Wednesday aligned with market expectations. Post-hoc analysis suggests that the UK's performance in recent trade agreements has outperformed the EU, particularly given the widespread criticism within the EU regarding U.S.-EU trade deals, which the market interpreted as bearish for the euro.

However, a deeper driver may stem from market position adjustments. The divergent fiscal and monetary policy outlooks between the Eurozone and the UK made "long EURGBP" a favored trading strategy this summer.

The latest UK employment data indicates a continued cooling of the labor market, though it has not yet weakened to the extent that would prompt a significant adjustment to the Bank of England's interest rate trajectory. Despite Governor Bailey's statement that further rate cuts hinge on more pronounced economic weakness, the overall trend still leans towards gradual quarterly rate reductions.

Nevertheless, the weakening trend in the labor market persists, potentially exerting downward pressure on the British pound. Consequently, in the short term, short positions on the pound may still hold an advantage, particularly given the limited extent of the euro's weakness, which suggests a relatively constrained downside for the EURGBP. In the medium term, the exchange rate may still maintain a fluctuating upward trend. However, in the short term, market clearing is not yet complete, with technical indicators pointing to a downside target range of 0.8520.

Focus on the Strong Support at the 0.8520 Range as the Short Covering Has Not Concluded_1

Technical Analysis

The EURGBP experienced a significant retracement on Monday after breaching the 0.8737 level (April high). Technically, the completion of the inverse head and shoulders pattern has been confirmed, and the pair is currently undergoing a correction of the upward trend initiated from 0.8354.

The intraday trend leans bearish, with the critical support level currently situated around 0.8600, which aligns with the 38.2% Fibonacci retracement of the 0.8354 to 0.8752 advance. A sustained break below this level could see further downside, with the next target range at 0.8520.

A breach above the 0.8684 short-term resistance level would alleviate the current downward pressure and restore a neutral outlook.

From a broader perspective, the rebound from the 0.8221 low has not yet demonstrated sufficient strength to signal a reversal of the long-term downtrend from the 0.9267 high in 2022. However, even if this is a typical intermediate correction, the exchange rate could still test the 61.8% retracement level of the 0.9267 to 0.8221 decline, specifically at 0.8867. As long as the 55-week SMA (currently at 0.8486) is not decisively breached, the intermediate-term uptrend remains constructive.

Trading Recommendations

Trading Direction: Sell

Entry Price: 0.8646

Target Price: 0.8520

Stop Loss: 0.8693

Valid Until: August 14, 2025 23:55:00

Support: 0.8629, 0.8619, 0.8596

Resistance: 0.8658, 0.8684, 0.8698

Risk Warnings and Disclaimers

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Alan

Forex

Summary:

Recently, the dollar has continued to strengthen due to favorable trade agreements, which in turn weighed on the GBPUSD downside. The technical analysis shows a head and shoulders top pattern, increasing the possibility of short-term bearishness.

SELL GBPUSD

EXP

EXPIRED

1.33950

Entry Price

1.31300

1.35200

1.33149 -0.00163 -0.12%

Pips

EXPIRED

1.31300

1.33050

Exit Price

1.33950

Entry Price

1.35200

Fundamentals

In the UK, the latest data showed that food inflation climbed again to 4.0% in July, the sixth consecutive month of upward movement, mainly driven by disturbances in global supplies such as meat and tea. Headline retail price inflation remains moderate, but rising food costs are pressuring consumer purchasing. This phenomenon has made the market more cautious about the UK's growth prospects and has increased the Bank of England's monetary policy dilemma.

At last month's monetary policy meeting, the Bank of England decided to keep the benchmark interest rate at 4.25% by a majority of 6 votes to 3. Meanwhile, three members voted for a 25-basis-point rate cut, reflecting internal concerns about the economic slowdown and expectations of inflation easing. The market generally expects that the Bank of England may launch the first rate cut in August or September, but if structural price pressures such as food and energy are difficult to ease in the short term, the pace of rate cuts may be delayed. In the US, bullish factors have been repeatedly reported this week. The dollar index has remained strong, rising by over 2.2% this month, approaching the 99.00 mark. This is partly due to the favorable trade agreement between the US and Europe, and partly because of a series of trade agreements signed recently between the US and Asian-Pacific countries, boosting market demand for the dollar. At the same time, although some dovish officials in the Federal Reserve still expect an interest rate cut this year, the majority of hawkish officials prefer to maintain high interest rates to combat inflation. This has made the dollar's short-term strength difficult to change.

Technical Analysis

Is the Head and Shoulders Top Pattern Formed, and Has the Trend Reversed?_1

In the daily chart, GBPUSD has fallen through the 60-day SMA since falling back from the high of 1.3788. Meanwhile, the 10-day SMA and 20-day SMA are down through the 60-day SMA to form a dead cross, which is exerting pressure on the exchange rate.

At present, the candlestick in the GBPUSD daily chart has formed a head and shoulders top pattern. The trend in the short term may be more inclined to fall, but the RSI indicator has returned to around 39, indicating that it has entered the oversold zone. There may be a rebound demand in the short term. It is recommended to wait for the rebound to end and then go short at highs.

Trading Recommendations

Trading direction: sell

Entry price: 1.3395

Target price: 1.3130

Stop loss: 1.3520

Expiration date: 2025-08-13 23:00:00

Support: 1.3307, 1.3110

Resistance: 1.3400, 1.358

Risk Warnings and Disclaimers

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Tank

Commodity

Economic

Forex

Summary:

The escalation of gold tariff risks raises concerns about silver demand; negotiations between China and the U.S. remain inconclusive, making it unlikely for silver to gain fundamental support from its industrial dual-use characteristics.

SELL XAGUSD

EXP

EXPIRED

38.500

Entry Price

37.300

39.000

57.703 -0.614 -1.05%

Pips

EXPIRED

37.300

36.607

Exit Price

38.500

Entry Price

39.000

Fundamentals

Although the trade truce between the U.S. and the EU temporarily alleviated geopolitical tensions, persistent tariffs continue to threaten global industrial demand—a critical component of silver consumption. The majority of EU exports to the U.S. still face a 15% tariff, with inflation concerns and trade uncertainties remaining prevalent. The UK- U.S. agreement's 10% tariff lock-in indicates that elevated costs may remain entrenched across the supply chain. Given the ongoing lack of consensus in U.S.-China negotiations, silver's industrial dual-use properties may struggle to provide fundamental support. The Federal Reserve's policy decision announced today will be pivotal for silver's price trajectory. While a rate cut is not expected, any signs of a dovish shift could weaken the dollar and bolster precious metals. Conversely, a hawkish stance or an upward revision of interest rate expectations could further depress gold and silver prices.

Technical Analysis

The silver 4H timeframe indicates a consolidation with a downward bias, with Bollinger Bands exhibiting a triple contraction pattern pointing downward. Currently, the price is trending below the EMA12, and a bullish crossover in MACD could signal a potential rebound towards the middle Bollinger Band around 38.5, followed by further decline. Failure to break above EMA12 may result in a direct decline towards approximately 37.3. In the 1H timeframe, MACD is crossing below the zero-axis, forming a death cross, which is a strong bearish reversal signal. The price is oscillating within a range bounded by the upper and lower Bollinger Bands, forming a consolidation zone, while RSI shows a double top pattern, suggesting a high probability of a breakout to the downside tonight. Therefore, the current trading strategy is to go short at the highs.

Dark Clouds Loom Overhead! Silver Prices May Crash!_1

Dark Clouds Loom Overhead! Silver Prices May Crash!_2

Trading Recommendations

Trade Direction: Sell

Entry Price: 38.5

Target Price: 37.3

Stop Loss: 39

Support: 37.5, 37.2, 37

Resistance: 38.3, 38.5, 39

Risk Warnings and Disclaimers

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Tank

Commodity

Forex

Summary:

As the Federal Reserve is set to announce its interest rate decision on Wednesday, markets expect rates to remain within the 4.25%-4.50% range. However, Fed Chair Jerome Powell's remarks could signal future policy direction, with a dovish tone potentially triggering a strong rebound in gold.

BUY XAUUSD

Close Time

CLOSED

3309.77

Entry Price

3330.00

3300.00

4178.21 -19.70 -0.47%

97.7

Pips

Loss

3300.00

3299.94

Exit Price

3309.77

Entry Price

3330.00

Fundamentals

With the Federal Reserve's rate decision due Wednesday, markets anticipate rates will stay between 4.25% and 4.50%. Yet, Fed Chair Jerome Powell's speech may hint at future policy shifts, and a dovish stance could fuel a significant rally in gold. Meanwhile, U.S. President Donald Trump's reciprocal tariffs are set to take effect on Friday. These geopolitical developments could sway investor sentiment across risk assets, and gold may react sharply based on market perceptions of risk and inflation.

The U.S. Dollar Index (DXY) initially surged yesterday but sharply retreated overnight, ultimately breaking below the key 99 level today. The primary reason lies in differing interpretations of the EU-U.S. agreement (including statements from relevant officials). Key uncertainties revolve around tariffs on pharmaceuticals, chemicals, and aircraft, as well as potential quotas on specific metals and products. Thus, until trade war dynamics clarify, the DXY is expected to remain range-bound.

Technical Analysis

On the daily chart, gold has formed a triangular consolidation pattern, with MACD bullish histogram bars shrinking for three consecutive sessions, which is a bearish divergence signal. Meanwhile, RSI hovers at the neutral 47 level, suggesting short-term consolidation or a downward trend. The 4H chart indicates a golden cross below the 0-axis, with the signal line and the MACD line approaching the 0-axis. Meanwhile, gold consolidates horizontally around the EMA12, signaling a potential rebound. A likely next target is the Bollinger Band midpoint and EMA50 at 3,338 and 3,346, respectively. If the breakout is strong enough to surpass 3,346 and 3,350, further upside toward 3,380 is possible. Conversely, failure to break higher could lead to a drop below the 3,300 support level, with the next key support around 3,280. Therefore, buying on dips is recommended.

Dollar Breaks Below Key 99 Level - Major Turning Point for Gold?_1

Dollar Breaks Below Key 99 Level - Major Turning Point for Gold?_2

Trading Recommendations

Trading direction: Buy

Entry price: 3310

Target price: 3330

Stop loss: 3300

Support: 3310/3300/3280

Resistance: 3338/3346/3380

Risk Warnings and Disclaimers

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Manuel

Economic

Central Bank

Summary:

BUY GBPUSD

Close Time

CLOSED

1.33661

Entry Price

1.36200

1.32300

1.33149 -0.00163 -0.12%

136.1

Pips

Loss

1.32300

1.32295

Exit Price

1.33661

Entry Price

1.36200

On Tuesday evening, U.S. Treasury Secretary Scott Bessent stated that the United States and China will continue discussions aimed at upholding a tariff truce ahead of the deadline set for two weeks from now. The final decision on any potential extension, however, will rest with President Donald Trump. These ongoing trade talks with China remain clouded by uncertainty, which could weigh on the U.S. Dollar (USD) against the Canadian Dollar (CAD).

Meanwhile, the Federal Reserve is widely expected to leave its benchmark interest rate unchanged in the 4.25% to 4.5% range, where it has stood since December. According to the CME’s FedWatch tool, market participants are pricing in a nearly 97% chance of no change in interest rates during the July meeting.

Traders will closely monitor the FOMC’s policy statement and the press conference by Fed Chair Jerome Powell, as they may offer forward guidance on the future path of interest rates. A cautious tone from Fed officials, particularly in light of lingering trade uncertainties, could help contain any short-term downside pressure on the Dollar.

At the same time, rising inflationary pressures continue to erode household purchasing power. A survey by the Confederation of British Industry (CBI) released on Monday showed that retail sales declined for the tenth consecutive month in July. However, the pace of decline eased slightly compared to June, with the index improving to -34 from -46 previously.

“Firms report that elevated pricing pressures — driven largely by rising labor costs — alongside persistent economic uncertainty, are continuing to weigh on household demand. This has been a key contributor to declining sales volumes since October 2024,” CBI analysts noted.

Expectations surrounding domestic interest rates are offering some degree of support, as markets have scaled back their projections for further easing by the Bank of England. While a 25 basis point rate cut for August 7 is nearly fully priced in, market participants are reassessing the extent of additional easing by year-end, with expectations softening by around five basis points over the past week.

Recent CFTC positioning data revealed a notable shift in sentiment toward the British Pound (GBP), as a previously bullish net long position of $2.4 billion has now flattened to a more neutral stance. Confluence of Signals Hints at a Potential Rebound in GBPUSD_1

Confluence of Signals Hints at a Potential Rebound in GBPUSD_1

Technical Analysis

GBPUSD recently retreated to test the 200-period moving average at 1.3334 on the 12-hour chart, from which it has shown a modest bounce. If the pair can hold above this key level, a renewed upward move could unfold, potentially targeting the 1.3500 area — a region that also coincides with the 100-period moving average.

The Relative Strength Index (RSI) has declined to 32, approaching oversold territory. This could provide an opportunity for buyers to regain control, especially if price stability is confirmed above current levels. However, should this support zone fail to hold and the pair breaks decisively lower, a new bearish wave could drive the price down toward the 1.3200 area.

Trading Recommendations

Trading direction: Buy

Entry price: 1.3358

Target price: 1.3620

Stop loss: 1.3230

Validity: Aug 08, 2025 15:00:00

Risk Warnings and Disclaimers

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Manuel

Central Bank

Economic

Summary:

This potential role reversal could be a bullish signal, suggesting that a new upward move may be developing from this area.

BUY EURAUD

Close Time

CLOSED

1.77383

Entry Price

1.78800

1.76300

1.75606 +0.00339 +0.19%

38.8

Pips

Profit

1.76300

1.77771

Exit Price

1.77383

Entry Price

1.78800

Australia’s second-quarter inflation data, due early Wednesday, is expected to show further easing in price pressures, reinforcing expectations for an interest rate cut by the Reserve Bank of Australia (RBA) in August. Headline CPI is projected to rise by 0.8% quarter-on-quarter, slightly below the 0.9% increase recorded in Q1. On an annual basis, inflation is anticipated to ease to 2.2% from 2.4%, suggesting that the RBA may soon have more room to adjust its policy stance.

For the month of June, the monthly CPI is expected to remain unchanged at 2.1% year-over-year. Meanwhile, the RBA’s preferred measure of core inflation—the trimmed mean CPI—is forecast to hold steady at 0.7% on a quarterly basis, with the annual rate easing modestly to 2.7% from 2.9%. If these figures come in weaker than anticipated, they could solidify market expectations of a rate cut at the upcoming August 12 meeting. In fact, money markets are already pricing in nearly a 90% chance of a 25 basis point reduction.

However, a stronger-than-expected inflation print could delay the RBA’s decision, potentially giving the Australian Dollar a temporary lift as markets reassess the likelihood of imminent easing.

On the European front, the latest Monthly Consumer Expectations Survey from the European Central Bank revealed that inflation in the euro area is expected to continue trending lower over the coming year.

In global developments, a newly announced trade agreement between Donald Trump and European Commission President Ursula von der Leyen could have far-reaching implications. Under the deal, the U.S. will impose a flat 15% tariff on a broad range of EU exports, including cars, machinery, and consumer goods—a significant increase from the 2024 average tariff rate of just 1.2%.

In return, the European Union has agreed to purchase $750 billion worth of U.S. liquefied natural gas (LNG) over the next three years and to channel $600 billion in private investment into key U.S. sectors such as energy, defense, and manufacturing. According to EU Trade Commissioner Maroš Šefčovič and officials cited by Politico, the European Commission itself will play no direct role in raising the $600 billion, as the capital is expected to come exclusively from private firms. Support Zone Could Ignite a New EURAUD Rally_1

Support Zone Could Ignite a New EURAUD Rally_1

Technical Analysis

EURAUD recently dipped toward the 1.7705 level, a price that previously acted as resistance and may now be transforming into support. This potential role reversal could be a bullish signal, suggesting that a new upward move may be developing from this area. The pullback follows the pair's climb to a local high of 1.8096 on July 6. While the overall trend remains tilted to the downside, the Relative Strength Index (RSI) is now sitting at 36—approaching oversold territory—which may invite renewed buying interest and help ease the selling pressure.

Initial upside targets lie at 1.7813, followed by the 1.7886 level, should momentum build. Meanwhile, the 100- and 200-period moving averages—currently at 1.7854 and 1.7832, respectively—are converging. A bearish crossover between the two could confirm a continuation of the broader downtrend. However, if the price manages to rebound from current levels, it might not only avoid the crossover but also reapproach the moving averages, in line with the tendency of prices to return to key mean levels over time.

Trading Recommendations

Trading direction: Buy

Entry price: 1.7735

Target price: 1.7880

Stop loss: 1.7630

Validity: Aug 08, 2025 15:00:00

Risk Warnings and Disclaimers

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