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EUR/JPY Price Holds gains around 186.50 within rising wedge

  • EUR/JPY could face initial resistance around the rising wedge top at 186.90.
  • The 14-day Relative Strength Index near 60 indicates firm upside momentum without entering overbought territory.
  • The primary support lies at the nine-day EMA of 186.04.

EUR/JPY gains ground after registering minor losses in the previous day, trading around 186.50 during the Asian hours on Monday. The currency cross is keeping a bullish near-term bias as it holds above both the nine-period and 50-period Exponential Moving Averages (EMAs). The configuration of the short-term EMA above the longer-term EMA suggests a constructive trend backdrop.

Meanwhile, the 14-day Relative Strength Index (RSI) near 60 points to firm but not yet overbought upside momentum, hinting that buyers still retain control unless price slips back below the nearby averages. However, the daily chart technical analysis shows that the EUR/JPY cross is rising within a rising wedge, indicating a strong bearish reversal risk.

The EUR/JPY cross could find the primary resistance at the upper boundary of the rising wedge around 186.90. Further advances could support the currency cross to explore the region around the all-time high of 187.95, which was recorded on April 17.

On the downside, the initial support lies at the nine-day EMA of 186.04, followed by the 50-day EMA at 185.31, aligned with the lower boundary of the rising wedge. A break below the wedge put downward pressure on the EUR/JPY cross to navigate the region around the five-month low of 181.87, recorded on March 16, and the seven-month low of 180.81.

Chart Analysis EUR/JPY
EUR/JPY: Daily Chart
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Swiss Franc climbs as US Dollar falls on easing safe-haven demand

  • USD/CHF falls as easing US-Iran tensions weaken the US Dollar following a weekend pause in hostilities.
  • The Fed will likely hold rates steady in July before potential September hikes.
  • Falling Swiss 10-year bond yields, now near 0.46%, could weigh on the Swiss Franc.

USD/CHF depreciates after five days of losses, trading around 0.8150 during the Asian hours on Monday. The pair loses ground as the US Dollar (USD) declines on easing geopolitical tensions following a weekend pause in military hostilities between the US and Iran, offering a reprieve after 13 days of escalating conflict.

US halted strikes amid growing concerns over depleting interceptor supplies and a shrinking list of remaining targets within Iran. Additionally, General Dan Caine, Chairman of the Joint Chiefs of Staff, reportedly cautioned President Trump on Friday that continuing the military campaign would severely strain critical munitions reserves.

However, market participants remain cautious about potential supply disruptions after Iran-backed Houthis in Yemen claimed responsibility for attacks on Saudi Arabian facilities along the Red Sea.

Traders expect the Federal Reserve (Fed) to hold interest rates steady on Wednesday before resuming rate hikes in September, though a minority of market participants still anticipate a surprise move at this week’s meeting. Moving forward, investors are closely watching upcoming economic indicators, including advance Q2 GDP data, PCE inflation figures, and earnings reports from major US corporations, for further insight into the underlying strength of the economy.

The USD/CHF pair could rebound as falling Swiss government bond yields may weigh on the Swiss Franc (CHF). With the 10-year Swiss yield dropping near 0.46%, reduced returns on domestic fixed-income assets are prompting global investors to rotate capital toward higher-yielding foreign bonds.

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Indonesian Rupiah weakens as Bank Indonesia Governor Perry Warjiyo resigns

  • USD/IDR rises as the Indonesian Rupiah weakens following Bank Indonesia Governor Perry Warjiyo’s surprise resignation, rattling investors.
  • The pair’s upside could be restrained as the US Dollar declines, as easing US-Iran geopolitical tensions reduced safe-haven demand.
  • The Fed will likely hold rates steady Wednesday before September hikes, though some anticipate a surprise move this week.

USD/IDR has recovered its losses from the previous trading day, hovering around 18,050 during the Asian hours on Monday. The pair appreciates as the Indonesian Rupiah (IDR) faces pressure following the surprise resignation of Bank Indonesia (BI) Governor Perry Warjiyo, a move expected to rattle investors and reignite concerns over central bank independence. Senior Deputy Governor Destry Damayanti has been appointed interim governor, clarifying that Warjiyo stepped down for personal reasons.

The upside of the USD/IDR pair could be limited as the US Dollar (USD) falls sharply, as geopolitical tensions eased following a weekend pause in military hostilities between the US and Iran, offering a reprieve after 13 days of escalating conflict. However, market participants remain cautious about potential supply disruptions after Iran-backed Houthis in Yemen claimed responsibility for attacks on Saudi Arabian facilities along the Red Sea.

US halted strikes amid growing concerns over depleting interceptor supplies and a shrinking list of remaining targets within Iran. Additionally, General Dan Caine, Chairman of the Joint Chiefs of Staff, reportedly cautioned President Trump on Friday that continuing the military campaign would severely strain critical munitions reserves.

Traders expect the Federal Reserve (Fed) to hold interest rates steady on Wednesday before resuming rate hikes in September. However, a minority of market participants still anticipate a surprise move at this week’s meeting. Moving forward, investors are closely watching upcoming economic indicators, including advance Q2 GDP data, PCE inflation figures, and earnings reports from major US corporations, for further insight into the underlying strength of the economy.

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Australian Dollar gains as Mideast tensions ease, RBA rate expectations rise

  • AUD/USD rises as falling oil prices and a pause in the Middle East conflict weigh on the US Dollar.
  • US military caution and depleted interceptor supplies help curb further escalation with Iran for now.
  • Strong Australian June employment data boosts expectations of another RBA rate hike following upcoming inflation reports.

AUD/USD extends its gains for the second consecutive trading day, hovering near 0.7000 during the Asian hours on Monday. The pair appreciates as the US Dollar (USD) declines alongside a sharp drop in oil prices. This movement followed the United States (US) decision to refrain from striking Iran over the weekend, paired with Tehran suspending its own retaliatory strikes.

The brief US-Iran pause came after 13 days of escalating conflict. However, market participants remain cautious about potential supply disruptions as Iran-backed Houthis in Yemen claimed responsibility for attacks on Saudi Arabian facilities along the Red Sea.

While the US did not officially disclose its reasons for halting the strikes, reports suggest growing concerns over depleting interceptor supplies and a shortage of remaining targets within Iran. Additionally, General Dan Caine, Chairman of the Joint Chiefs of Staff, reportedly cautioned President Trump on Friday that continuing the campaign would severely strain critical munitions reserves.

Beyond geopolitical developments, investors are bracing for the upcoming Federal Reserve (Fed) policy meeting. The Fed is widely expected to hold interest rates steady on Wednesday before resuming rate hikes in September, though a minority of market participants still anticipate a surprise move at this week’s meeting.

Meanwhile, strong June employment data out of Australia has reinforced expectations of further monetary tightening by the Reserve Bank of Australia (RBA), which has already raised rates three times this year. Investors are now closely watching the June and Q2 inflation figures due later this week, as persistent price pressures continue to dominate the local outlook.

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Japanese Yen gains as oil prices fall after US-Iran strike pause

  • USD/JPY drops as lower oil prices boost the Yen after the US and Iran paused strikes.
  • Japanese PM Sanae Takaichi’s approval rating fell in July to a term low, weighed down by rising living costs.
  • US military caution and depleted interceptor supplies help curb further escalation with Iran for now.

USD/JPY remains subdued for the second successive day, trading around 163.60 during the Asian hours on Monday. The pair depreciates as the Japanese Yen (JPY) receives support from lower oil prices after the United States (US) decision to refrain from striking Iran over the weekend, paired with Tehran suspending its own retaliatory strikes. Japan remains heavily dependent on Middle Eastern oil imports, making its economy particularly sensitive to supply disruptions and swings in crude prices.

Japanese Prime Minister Sanae Takaichi’s approval rating fell in July to its lowest point since she took office last year, driven by rising living costs. The slump intensifies pressure on Takaichi, whose expansionary economic policies have driven up bond yields and pushed the Yen to four-decade lows, according to a Yomiuri newspaper report on Sunday.

The USD/JPY pair loses ground as the US Dollar (USD) falls as risk aversion eases on the brief US-Iran pause, which came after 13 days of escalating conflict. However, market participants remain cautious about potential supply disruptions as Iran-backed Houthis in Yemen claimed responsibility for attacks on Saudi Arabian facilities along the Red Sea.

Reports suggest that the US halted strikes amid growing concerns over depleting interceptor supplies and a shortage of remaining targets within Iran. Additionally, General Dan Caine, Chairman of the Joint Chiefs of Staff, reportedly cautioned President Trump on Friday that continuing the campaign would severely strain critical munitions reserves.

On the policy front, the Fed is widely expected to hold interest rates steady on Wednesday before resuming rate hikes in September, though a minority of market participants still anticipate a surprise move at this week’s meeting. The Bank of Japan (BoJ) is also expected to hold rates on Friday.

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Euro climbs beyond 1.1400 as renewed Iran diplomacy hopes undermine safe-haven USD

  • EUR/USD kicks off the new week on a positive note as US-Iran diplomacy hopes weigh on the USD.
  • Falling oil prices ease inflation fears and temper Fed rate hike bets, further undermining the buck.
  • Traders, however, seem hesitant as the focus remains on the crucial FOMC policy meeting this week.

The EUR/USD pair builds on a modest bullish gap opening and climbs back above the 1.1400 mark during the Asian session on Monday. The intraday move up is sponsored by a broadly weaker US Dollar (USD), weighed down by renewed optimism over a diplomatic resolution to end a five-month-old US-Iran war.

The US paused its bombing campaign following 13 consecutive nights of strikes on Iranian targets late on Friday, prompting Tehran to suspend its retaliatory attacks against Washington’s allies in the Middle East. US ambassador to the United Nations (UN) Mike Waltz said that while forces remained locked and loaded, President Donald Trump wants to give negotiations a little bit of room. This, in turn, boosts investors’ sentiment and undermines the safe-haven Greenback.

Meanwhile, the easing in hostilities triggers a sharp fall in crude oil prices and eases inflationary concerns, tempering US Federal Reserve (Fed) rate hike expectations. This turns out to be another factor that drags the USD Index (DXY), which tracks the buck against a basket of currencies, away from the vicinity of the monthly high retested last week. Traders, however, might refrain from placing aggressive bets on the EUR/USD pair ahead of the key central bank event risk.

The US central bank is scheduled to announce its policy decision at the end of a two-day meeting on Wednesday. Traders will look for fresh cues about the future policy path, which will play a key role in influencing the near-term USD price dynamics. Apart from this, the focus will be on further developments surrounding the Middle East crisis, which would further drive the USD demand and produce some meaningful trading opportunities around the EUR/USD pair.

According to TD Securities, the FOMC is expected to leave policy steady, with the bank stating, “We expect the FOMC to keep rates unchanged.” The team acknowledges that “higher oil prices driven by Middle East tensions have increased inflation risks and strengthened the case for a rate hike,” but they argue that “more evidence is needed to win majority support.” In their view, “hawkish momentum is building,” yet Chair Warsh is “unlikely to provide guidance,” and they anticipate “two dissents from Hammack and Logan.”

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British Pound strengthens beyond mid-1.3300s vs weak USD amid fresh Iran diplomacy hopes

  • GBP/USD attracts strong follow-through buying on Monday amid a broadly weaker USD.
  • US-Iran diplomacy hopes and receding Fed rate hike bets undermine the safe-haven buck.
  • Traders might refrain from placing aggressive bets ahead of the FOMC meeting this week.

The GBP/USD pair builds on Friday’s modest bounce from a three-week low and gains strong follow-through positive traction at the start of a new week. This marks the second straight day of a positive move and lifts spot prices above mid-1.3300s during the Asian session amid a broadly weaker US Dollar (USD).

The USD Index (DXY), which tracks the Greenback against a basket of currencies, moves away from the vicinity of the monthly high, retested last week, amid reviving hopes for a diplomatic resolution to end a five-month-old US-Iran conflict. In fact, the US paused its bombing campaign following 13 consecutive nights of strikes on Iranian targets late on Friday, prompting Tehran to suspend its retaliatory attacks against Washington’s allies in the Middle East.

US ambassador to the United Nations (UN) Mike Waltz said that while forces remained locked and loaded, President Donald Trump wants to give negotiations a little bit of room. Traders were quick to unwind some of the geopolitical risk premium, undermining the safe-haven buck. Moreover, the latest developments trigger a sharp fall in oil prices and ease inflation fears, tempering US Federal Reserve (Fed) rate hike bets and further weighing on the Greenback.

Meanwhile, restricted shipping traffic through the Strait of Hormuz and the Bab el-Mandeb Strait helps limit losses for oil prices. USD bears might also refrain from placing aggressive bets and opt to wait for the outcome of the highly-anticipated two-day FOMC meeting on Wednesday. Investors will look for more cues about the Fed’s policy path, which, along with geopolitical developments, will drive the USD and provide some meaningful impetus to the GBP/USD pair.

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Canadian Dollar advances as easing risk aversion lifts US Dollar

  • USD/CAD slips as easing US-Iran geopolitical tensions reduced safe-haven demand and sparked a market risk-on rally.
  • Despite a brief US-Iran pause, markets fear supply disruptions following Houthi attacks on Saudi Red Sea facilities.
  • Falling oil prices could weigh on the commodity-linked Canadian Dollar.

USD/CAD depreciates after posting minor gains in the previous trading day, hovering around 1.4080 during the Asian hours on Monday. The pair loses ground as the US Dollar (USD) falls sharply on easing geopolitical tensions following a weekend pause in military hostilities between the US and Iran.

The brief US-Iran pause came after 13 days of escalating conflict. However, market participants remain cautious about potential supply disruptions as Iran-backed Houthis in Yemen claimed responsibility for attacks on Saudi Arabian facilities along the Red Sea.

Reports suggest that the US halted strikes amid growing concerns over depleting interceptor supplies and a shortage of remaining targets within Iran. Additionally, General Dan Caine, Chairman of the Joint Chiefs of Staff, reportedly cautioned President Trump on Friday that continuing the campaign would severely strain critical munitions reserves.

On the policy front, the Fed is widely expected to hold interest rates steady on Wednesday before resuming rate hikes in September, though a minority of market participants still anticipate a surprise move at this week’s meeting.

The downside of the USD/CAD pair is restrained as the commodity-linked Canadian Dollar (CAD) could struggle on lower oil prices. West Texas Intermediate (WTI) oil price opened at a bearish gap, down by over 5%, trading around $84.50 per barrel at the time of writing.