USD/JPY fell almost 5% towards May’s low near 155 after reports that the US and Japan intervened to support the yen, while renewed hopes of US–Iran negotiations added to pressure. The pair has dropped below its 200-day simple moving average for the first time in nearly a year, shifting the technical bias lower. Attention is on Friday’s US nonfarm payrolls: consensus points to 83k jobs growth in July, with unemployment edging up to 4.3% and average hourly earnings steady at 3.5% y/y, as ADP and ISM PMIs set the tone beforehand. A softer print could pull the pair towards 153.95 and then 151.80-152, while payrolls above 100k may help it retake 157.80, with 158.30 the next level.
EUR/USD is testing a resistance zone after a rally, with eurozone retail sales the key local release following July inflation’s rebound and renewed pricing of a 25bps ECB hike as soon as September. A break above 1.1560 opens 1.1600-1.1630, while a slip below 1.1500 targets 1.1420 and then 1.1350-1.1365. Gold has moved sideways for a fifth week in a symmetrical triangle near June lows; upside levels are 4,135-4,200 and the 50-day SMA, then 4,340, while downside risk sits at 3,950-4,000 if US data strengthens rate-hike expectations.
USD/JPY Dynamics and Trade Strategies
We are closely watching the USD/JPY pair as it has slipped below its 200-day simple moving average (SMA) near 155 following recent joint interventions by the US and Japan. For derivative traders, this shift suggests that bears are currently in control, but caution is highly recommended. Historical data from similar interventions, such as Japan’s estimated 5.5 trillion yen ($35 billion) spending spree in July 2024, shows that these policy-driven moves can quickly reverse if the Bank of Japan does not follow up with clear rate-hike signals.
This Friday’s upcoming US nonfarm payrolls (NFP) report will be the next major catalyst for volatility. We recommend setting tight stop-loss orders around the 157.80 level, as a stronger-than-expected payroll growth above 100k could quickly push the pair back above its 200-day SMA. Conversely, if the job numbers miss expectations and align with a weaker private ADP report, we expect a breakdown toward the key support level of 153.95.
EUR/USD and Gold: Breakout Setups and Risk Levels
In the eurozone, we are preparing for potential breakout strategies on the EUR/USD, which is currently testing a crucial resistance trendline near 1.1560. Although the European Central Bank has tried to downplay inflation, unexpected upticks in recent Eurozone CPI data have kept September rate hike bets alive, supporting the Euro. If the US dollar weakens post-NFP, we should look to buy on a confirmed break above 1.1560 targeting the 1.1630 region.
Meanwhile, gold has been consolidating inside a tight symmetrical triangle, hovering near June lows as higher bond yields cap its upward momentum. Despite temporary geopolitical relief in the Middle East, we suggest traders wait for a decisive breakout before taking large leverage positions. A clean move above the 50-day SMA could rapidly open the doors to the 4,340 resistance level, while a drop below 3,950 would signal a deeper bearish correction.
