Currency Hedger No Comments

EUR/JPY Price Forecast: Holds losses near 182.50 as bearish bias prevails

  • EUR/JPY could find initial support at the eight-month low of 179.37.
  • The 14-day Relative Strength Index near 39 indicates weak momentum.
  • The initial barrier lies at the nine-day EMA of 183.09.

EUR/JPY halts its three-day winning streak, trading around 182.50 during the early European hours on Friday. The currency cross is retaining a bearish near-term bias as spot holds below both the nine-period and 50-period Exponential Moving Averages (EMAs).

The short- and medium-term moving averages now act as layered overhead resistance, hinting at a capped tone while the 14-day Relative Strength Index (RSI) Indicator around 39 suggests weak momentum rather than outright oversold conditions.

Yen under scrutiny as Japan and US officials push back on weakness

Analysts at Scotiabank highlight that “officials (both Japanese and US) remain concerned about the level and path of the Yen, and have been determined to push back on recent weakness.” This ongoing vigilance underscores the degree of discomfort with the current USD/JPY trajectory and reinforces the sense that policymakers are closely monitoring the currency’s performance as it drifts back toward post-intervention lows.

Further intervention to support the Japanese Yen (JPY) would put downward pressure on the EUR/JPY cross to navigate the region around the eight-month low of 179.37, reached on August 3, followed by the nine-month low of 175.70.

On the upside, the EUR/JPY cross could find initial resistance at the nine-day EMA of 183.09, followed by the 50-day EMA at 184.63. Further advances above these moving averages would cause a bullish emergence and support the currency cross to explore the region around the all-time high of 187.95, which was recorded on April 17.

Chart Analysis EUR/JPY
EUR/JPY: Daily Chart

Currency Hedger No Comments

Euro flatlines amid mixed German data with all eyes on US Nonfarm Payrolls

  • EUR/USD trades flat around the 1.1520 area after pulling back from highs near 1.1560
  • German Industrial Production increased in June, but the trade surplus narrowed beyond expectations.
  • The US Dollar ticks up on hopes of Fed tightening and doubts about an upcoming peace deal in Iran

The Euro (EUR) is trading flat around 1.1520 against the US Dollar (USD) on Friday, following a mild pullback from three-week highs at 1.1560 and on track for a minor weekly decline. The US Dollar is showing a moderately stronger tone although investors remain wary of placing large directional bets, awaiting the release of July’s Nonfarm Payrolls (NFP) report, due later on the day.

Data released by the German Federal Office of Statistics on Friday revealed that Industrial Production rose 0.2% in June, down from May’s 0.7% increase, but above the 0.1% market consensus. At the same time, German Trade Balance data showed that June’s surplus narrowed to EUR 15.4 billion from an upwardly revised EUR 19.4 billion surplus in May, well beyond the EUR 17.4 billion surplus expected by the market.

Hopes of a peace deal in Iran fade

The safe-haven US Dollar is drawing support from growing doubts about a peace deal in Iran and the reopening of the Strait of Hormuz. Iranian Fars news agency reported on Thursday that Tehran would be considering a plan to ban Israeli and US vessels from the Strait, an idea which collides with the US will to keep the waterway free of tolls or restrictions of any sort,

Apart from that, the Financial Times, citing sources close to the US Federal Reserve, reported that Chairman Kevin Warsh is ready to hike interest rates as soon as September, if inflation remains persistently high, which provided additional support to the Greenback

This news heightens investors’ interest in Friday’s Nonfarm Payrolls report. Analysts at TD Securities, however, see the risks skewed to the downside. The bank argues that “both the monthly and weekly ADP data have moderated this summer after a strong start to the year,” and they anticipate that “a similar trend is likely to occur with NFP job gains.”

Currency Hedger No Comments

EUR weakens against USD amid Middle East tensions

  • EUR/USD depreciates as rising geopolitical tensions in the Strait of Hormuz disrupt global markets.
  • Market caution rises as Iran considers banning US and Israeli ships and penalizing hostile cargo until blockades lift.
  • Rebounding oil prices threaten expectations that falling energy costs would ease pressure on the ECB to cut rates.

EUR/USD extends its losses for the second consecutive day, trading around 1.1520 during the Asian hours on Friday. The currency pair faces downward pressure as the US Dollar (USD) gains strength, propelled by renewed safe-haven demand among global investors.

Escalating tensions in the Strait of Hormuz have rattled market stability and created significant skepticism regarding the reopening of this critical shipping route. Market caution remains elevated as Iran’s parliament evaluates a draft proposal that seeks to prohibit US and Israeli vessels, levy a 20% cargo penalty on hostile nations, and maintain restrictions on the corridor until the US blockade is removed.

Adding to the market volatility, rising US Treasury yields and a rebound in crude oil prices have stoked fears that the Federal Reserve might implement another interest rate hike next month. Despite these inflationary signals, the CME FedWatch Tool currently reflects a 54.5% probability of a 25-basis-point rate increase in September, down from 63.4% last week. Investors and traders are now closely eyeing the upcoming July Nonfarm Payrolls (NFP) report to gauge the health of the labor market and better anticipate the Fed’s monetary policy path.

Across the Atlantic, economic indicators in the Euro Area present a challenging backdrop. Eurozone Retail Sales unexpectedly contracted by 0.3% month-on-month in June, missing market projections for a 0.1% growth and almost completely unwinding May’s revised 0.4% gain. On an annual basis, Retail Sales rose by merely 0.7%, the weakest performance since July 2024, falling short of the expected 1.0% expansion and decelerating sharply from May’s 1.9% increase.

Furthermore, the recovery in oil prices could dampen hopes that declining energy costs would alleviate pressure on central banks to keep policy tight. Following the European Central Bank’s (ECB) decision to hold interest rates steady at its most recent meeting, markets expect only one more ECB rate hike by the end of the year, alongside a roughly 40% chance of a second increase.

Kocher flags autumn data focus as geopolitical risks cloud Euro inflation

ECB’s Kocher scores 5.6/10 on FXS Speechtracker, below the historic average of 6.3/10, pointing to a slightly less forceful tone than usual. The emphasis on how quickly geopolitical developments can alter energy prices and the inflation outlook highlights upside risks to Euro-area prices, which leans modestly hawkish despite the softer score.

The commitment that in autumn the ECB Governing Council will base decisions on incoming data to bring Euro-area inflation back to 2% on a sustainable basis reinforces a data-dependent but vigilant stance. Overall, the speech suggests a cautious hawkish bias, with Kocher keeping the door open to renewed tightening or a slower easing path if energy-driven inflation pressures re-emerge.

Currency Hedger No Comments

EUR/GBP Price Forecast: Holding below 0.8580 with dips limited so far

  • EUR/GBP eases to 0.8575 on Thursday after being rejected at the 0.8580 area.
  • Lower oil prices and positive Eurozone data are keeping the Euro downside attempts limited.
  • Failure to extend gains beyond the late-July top, at 0.8586, might give bears fresh hopes.

The Euro (EUR) nudges lower against the British Pound (GBP) on Thursday, following a three-day rally. The EUR/GBP remains capped below the late-July top of 0.8586, trading at 0.8575 at the time of writing, yet with downside attempts subdued so far. 

Eurozone data was supportive on Thursday, as German Factory Orders beat expectations with a 3.1% increase in June, largely exceeding the 0.3% market forecast, and a downwardly revised 0.3% reading in May. 

Regarding the Pound, FX strategists at Rabobank argue that “a re-pricing in policy expectations towards steady policy from the BoE this year combined with the prospect of nervousness ahead of the October budget suggests scope for downside pressure on the pound as the summer draws to a close.”

In this context, Rabobank continues to see value in the cross, stating that “we favour buying EUR/GBP on dips to the 0.8550 area,” and adding that “a break above the recent high in the 0.8588 region could increase upside potential.”

Technical Analysis: Failure to break 0.8586 might encourage bears

EUR/GBP Chart Analysis

The technical picture shows the EUR/GBP pair trading at 0.8576, with momentum indicators highlighting weaker bullish traction. The Relative Strength Index (14) is trending towards the 50 midline, while the Moving Average Convergence Divergence (MACD) indicator hovers around zero, suggesting that bullish momentum is present but tentative.

Bulls need to break the mentioned 0.8586 resistance area level (July 29, 30 highs) to confirm the positive trend and target late June lows at the 0.8605 area. Failure to do so might give fresh hopes for bears to break the August 4 and 5 lows in the 0.8560-0.8565 area and aim for the July 31 low, near 0.8540, which will be the neckline of a double top pattern.

On the downside, immediate support is seen at 0.8548, followed by additional underlying demand at 0.8529 and 0.8510, with deeper structural levels resting at 0.8419 and 0.8327. On the topside, initial resistance aligns at 0.8587, ahead of 0.8606; a sustained break above these caps would open the way toward 0.8730 and 0.8741, with higher hurdles at 0.8790 and 0.8863 likely to limit any extended advance.

Currency Hedger No Comments

EUR/JPY Price Softens below 182.00 on intervention risks, bearish outlook prevails

  • EUR/JPY declines to near 181.70 in Wednesday’s early European session.
  • The cross keeps a negative tone, with bearish RSI momentum.
  • The first upside barrier emerges at 184.90, the initial support level to watch is 181.15.

The EUR/JPY cross trades in negative territory around 181.70 during the early European trading hours on Wednesday. The Japanese Yen (JPY) strengthens against the Euro (EUR) as traders remain on alerts for further intervention from Japanese authorities following the coordinated intervention between the United States (US) and Japan.

Traders will closely monitor the developments surrounding US-Iran talks. Axios reported that the US, Iran, and Oman are closing in on an interim deal to reopen the Strait of Hormuz, with Washington aiming for a Wednesday announcement.

The source added that the agreement under discussion sets up a 60-day temporary arrangement between Oman and Iran in the critical waterway. Fresh optimism over the Middle East could improve risk sentiment and provide some support to the riskier asset, such as the EUR against the JPY.

Yen outlook seen hinging on growth rather than faster BoJ hikes

Societe Generale argues that the policy rate path alone is unlikely to deliver a sustained recovery in the Yen. Analysts there stress that “more, or faster BoJ rate hikes won’t solve the problem either, unless the Japanese growth outlook makes them appear realistic,” underscoring their view that a credible improvement in Japan’s growth prospects is a prerequisite for any meaningful policy tightening to support the currency.

Chart Analysis EUR/JPY

Technical Analysis: Negative outlook of EUR/JPY remains intact

In the daily chart, EUR/JPY keeps a bearish near-term tone as spot holds below the 20-day simple moving average (SMA) from the Bollinger Bands and the 100-day SMA, which now act as a tight resistance cluster overhead. Price is sliding toward the lower Bollinger Band while the Relative Strength Index (14) at 34.77 stays close to oversold territory, hinting that downside pressure persists but may be approaching a fatigue zone.

On the topside, initial resistance is aligned at the Bollinger mid-line/20-day SMA near 184.90, followed by the 100-day SMA at 185.10. A decisive daily close above this level would be needed to ease the current downside bias, with the upper Bollinger Band up at 188.65 as a more distant barrier. 

On the downside, the lower Bollinger Band around 181.15 offers the first notable support, and a clear break beneath it would expose the February 12 low of 180.81, en route to the 180.00 psychological level. 

Currency Hedger No Comments

Euro flatlines above 1.1500 as traders turn cautious ahead of US JOLTS Job Openings data

  • EUR/USD trades flat near 1.1505 in Tuesday’s early European session. 
  • Hot Eurozone inflation report adds to an already strong case for another ECB rate hike. 
  • Traders await the US JOLTS Job Openings data on Tuesday ahead of the July employment report.

The EUR/USD pair holds steady around 1.1505 during the early European trading hours on Tuesday. Markets remain cautious ahead of the US JOLTS Job Openings data, which is due on Tuesday. On Friday, the attention will shift to the crucial US July jobs report.

Eurozone inflation ticked up in July, bolstering the case for a rate hike from the European Central Bank (ECB). The headline Eurozone inflation rose to 2.9% YoY in July from 2.8% in June, in line with expectations, Eurostat data showed last week. Meanwhile, the core Eurozone inflation accelerated to 2.5% YoY in July versus 2.4% prior, above the consensus of 2.4%. 

Financial markets are betting on more than two ECB rate hikes, with moves fully priced in by October and April, according to Reuters. 

The US employment data will be the highlight later on Friday, which could offer some hints about the health of the labour market and US interest rate path. Economists expect Nonfarm Payrolls (NFP) to increase by 83,000 in July, while the Unemployment Rate is projected to rise to 4.3% during the same period. In case of stronger-than-expected outcomes, this could lift the Greenback in the near term. 

Markets have priced in nearly a 64.7% chance of a US rate hike in September, down from about 77% before the July Fed meeting, according to the CME FedWatch tool.

Fed decision seen as key driver for EUR/USD direction into September

Strategists at ING emphasise that the path for EUR/USD in the coming weeks hinges largely on the Federal Reserve. They argue that “the bigger and more lasting driver of the EUR/USD trend will be the Fed’s September decision,” which “remains unresolved,” leaving this week’s US data as a crucial catalyst. ING notes that the incoming figures will “have a big say if we end the week pressing 1.1615/20 resistance or trading back below 1.15,” underscoring how sensitive the pair remains to shifts in Fed expectations.

Technical Analysis: EUR/USD remains capped below the key 100-day SMA

Chart Analysis EUR/USD

In the daily chart, EUR/USD retains a bearish near-term bias as spot remains capped beneath the 100-day Simple Moving Average (SMA). Price holds above the 20-day Bollinger SMA, but proximity to the upper Bollinger band suggests upside attempts are constrained within a tightening volatility envelope. The Relative Strength Index (14) at 58.9 stays below overbought territory, hinting at fading bullish momentum rather than a decisive trend reversal.

On the topside, immediate resistance aligns with the upper Bollinger band near 1.1535, ahead of the more significant 100-day SMA barrier at 1.1570, which continues to define the broader bearish cap on the pair. On the downside, initial support emerges at the current price pivot zone around 1.1510, followed by the mid-Bollinger baseline at 1.1435, while a deeper slide would expose the lower Bollinger band support near 1.1335.

Currency Hedger No Comments

EUR/JPY Price Forecast: Trades near 181.50 after rebounding from eight-month lows

  • EUR/JPY may fall toward the immediate support at the eight-month low of 179.37.
  • The 14-day Relative Strength Index at 32.97 signals dominant downside momentum.
  • The initial resistance lies at the nine-day EMA at 183.62.

EUR/JPY gains ground after three days of losses, trading around 181.50 during the Asian hours on Tuesday. The currency cross is maintaining a bearish near-term tone as it holds beneath both the nine-day and 50-day Exponential Moving Averages (EMAs).

The EUR/JPY cross is retreating away from recent highs, while the 14-day Relative Strength Index (RSI) at 32.97 hovers just above oversold territory, hinting that downside momentum is still dominant but nearing stretched conditions.

The EUR/JPY cross may retest the initial support at the eight-month low of 179.37, reached on August 3. Further support lies at the nine-month low of 175.70.

On the upside, the EUR/JPY cross could rise toward the nine-day EMA at 183.62, followed by the 50-day EMA at 184.90. Further advances above these moving averages would cause a bullish emergence and support the currency cross to explore the region around the all-time high of 187.95, which was recorded on April 17.

Yen positioning seen shifting after Japan-US intervention

Strategists at Rabobank highlight that “JPY net shorts had climbed to their highest levels since 2024 last week,” just before the “concerted intervention from the MoF and the US Treasury to stem the weakness in the JPY.” The bank argues that this official action “suggests that positioning is likely to be sharply changed in the next data release,” but cautions that “it is too early to assess whether Japan’s fundamentals have strengthened sufficiently to allow the JPY to hold better levels vs. the USD in the spot market over the medium-term.”

(The story was corrected on August 4 at 03:45 GMT to say in the title that EUR/JPY rebounds from eight-month lows and not highs.)

EUR/JPY: Daily Chart
Currency Hedger No Comments

Euro pares gains as traders seek clarity on US-Iran talks, Fed monetary policy

  • EUR/USD trades in a narrow range as traders await clarity on US-Iran negotiations.
  • Strong US manufacturing data and a stabilizing US Dollar cap the Euro’s upside.
  • Upcoming US employment data could shape expectations for the Fed’s next policy move.

EUR/USD trades in a narrow range on Monday as traders await clarity on US-Iran negotiations, while signs of stabilization in the US Dollar following the recent intervention-led weakness cap the Euro’s upside.

At the time of writing, the pair trades around 1.1515 after reaching an intraday high of 1.1558, its highest level since June 17.

US President Donald Trump said over the weekend that he had called off a planned strike on Iran, with negotiations expected to begin on Monday. However, Iranian Foreign Ministry spokesperson Esmaeil Baghaei said Tehran is not currently holding talks with Washington. The conflicting headlines keep geopolitical uncertainty alive and leave market sentiment cautious.

Traders also assess the latest business activity data from both sides of the Atlantic. The US ISM Manufacturing Purchasing Managers’ Index (PMI) rose to 55.6 in July from 53.3 in June, beating expectations of 54.0 and marking its highest reading since May 2022. The sector expanded for a seventh consecutive month following ten months of contraction.

Meanwhile, the Eurozone Manufacturing PMI improved to a three-month high of 51.9 from 51.4 in June, although it fell short of the market forecast of 52.0. The stronger-than-expected US reading offers some support to the US Dollar.

The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades around 99.84 after rebounding from an intraday low of 99.42, its weakest level since June 15.

Dollar outlook darkens as Fed caution and US-Japan action sap confidence

Economists at DBS argue that “the greenback’s trajectory looks bleak in August after stumbling badly at the end of July,” with a combination of policy and geopolitical factors leaving the Dollar exposed. They highlight “the confluence of a Fed seemingly reluctant to hike, coordinated US-Japan currency interventions, and a cooling geopolitical landscape in the Middle East” as key forces that “keep the USD vulnerable.”

DBS notes that “Fed Chairman Kevin Warsh has unsettled investors who had amassed long USD positions betting on his hawkish credentials.” Instead of signalling that rates may rise, “Warsh used the July 28-29 FOMC meeting to focus on institutional reforms, especially scaling back forward guidance.”

Attention now turns to upcoming US employment data for fresh clues on the Fed’s policy path. The JOLTS Job Openings report is due on Tuesday, followed by ADP Employment Change on Wednesday and Nonfarm Payrolls (NFP) on Friday.