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AUD/JPY Price – Softens below 112.50, bias turns mildly bearish

  • AUD/JPY softens to near 112.20 in Wednesday’s early European session.
  • The cross maintains a mildly bearish bias in the near term, with soft RSI momentum.
  • The first upside barrier emerges at 112.32; the initial support level is located at 111.25.

The AUD/JPY cross trades in negative territory around 112.20 during the early European trading hours on Tuesday. The Japanese Yen (JPY) strengthens against the Australian Dollar (AUD) as traders are on alert for possible intervention from Japanese authorities.

Japan’s Finance Minister Satsuki Katayama said on Tuesday that the government was ready to take appropriate action against excessive currency moves. Additionally, Chief Cabinet Secretary Minoru Kihara stated that the government will work to build an economy less vulnerable to foreign-exchange volatility while remaining prepared to intervene in currency markets if necessary.

On the other hand, a hawkish tone from the Reserve Bank of Australia (RBA) might help limit the Aussie’s losses. According to the RBA Minutes from its June meeting, monetary policy needed to remain restrictive to remove excess demand in the economy. Markets were pricing only about 10 basis points (bps) of additional tightening by year-end, while pricing about 17 bps of easing by 2027, per Reuters.

Chart Analysis AUD/JPY

Technical Analysis:

In the daily chart, AUD/JPY keeps a mildly bearish near-term tone as it slips just under the 100-day Simple Moving Average (SMA) and the Bollinger Bands midline. Price holding below these clustered moving-average resistances suggests rallies are likely to meet supply overhead, while the Relative Strength Index (RSI) around 44 points to soft but not extreme downside momentum.

On the topside, initial resistance is seen at the 100-day SMA at 112.32, with the Bollinger midline around 112.62 acting as the next cap, ahead of the upper Bollinger band near 114.01. On the downside, the first noteworthy support emerges at the lower Bollinger band around 111.25, where a break would open the door to a deeper correction within the broader range.

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GBP/USD Price – Slides below 1.3250 after failing to break through 23.6% Fibo.

  • GBP/USD attracts fresh sellers on Wednesday as traders await speeches from central bank chiefs.
  • The broader technical setup favors bearish traders and backs the case for a further depreciation.
  • A sustained strength beyond the  23.6% Fibo. level is needed to back the case for any recovery.

The GBP/USD pair meets with a fresh supply during the Asian session on Wednesday and moves away from a nearly two-week high around the 1.3275 region, touched the previous day. Spot prices currently trade around the 1.3235 zone, down 0.20% for the day, as traders look to speeches from Bank of England (BoE) Governor Andrew Bailey and Federal Reserve (Fed) Chair Kevin Warsh for a fresh impetus.

From a technical perspective, the GBP/USD pair has been struggling to make it through the 23.6% Fibonacci retracement level of the May-June downfall. This comes on top of the recent repeated failures near the 200-period Simple Moving Average (SMA) on the 4-hour chart and a breakdown below the 1.3300 mark, which, in turn, favors bearish traders. However, mixed momentum indicators warrant some caution before positioning for deeper losses.

In fact, the Relative Strength Index (RSI) is hovering near 52, while the Moving Average Convergence Divergence (MACD) is showing a fading positive bias. This, in turn, hints at limited upside while the GBP/USD pair remains capped by the clustered resistance overhead. In the meantime, the key support around 1.3139 remains the key structural floor, and a clear break below would open the door for a continuation of the broader downtrend.

On the topside, immediate resistance emerges at the 23.6% Fibo. level at 1.3260, with further barriers aligned at the 38.2% retracement around 1.3335 and the 200-period SMA at 1.3360, ahead of the 50.0% retracement near 1.3396. A sustained move beyond the said barriers would start to ease the broader bearish bias and pave the way for a more convincing recovery phase. However, a failure would leave the GBP/USD pair vulnerable to slide further.

GBP/USD 4-hour chart

Chart Analysis GBP/USD
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New Zealand Dollar Languishes Near 7-Month Low

The New Zealand dollar slipped to $0.566 on the first trading day of July, hovering near its lowest level in seven months amid a firm US dollar, while investors assessed the Reserve Bank’s interest rate outlook. Markets continue to price in a rate hike from the RBNZ next week, although analysts have become more divided on whether such a move is necessary given the recent decline in oil prices. Meanwhile, latest data showed business confidence improved in June, suggesting the economy may be holding up better than earlier feared. Although local economists still expect a contraction in the second quarter, they anticipate a recovery thereafter as fuel and other costs ease. The kiwi dropped 5.2% in June, marking its largest monthly fall since December 2024, and declined 1.2% in the second quarter.

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Indian Rupee Extends Losses

The Indian rupee hovered around 94.7 per dollar, extending its recent losses as rising US Treasury yields strengthened the greenback and weighed on Asian currencies. Higher bond yields dampened demand for emerging-market assets, while renewed dollar buying and weaker regional currencies kept pressure on the rupee. Market sentiment remained cautious after stronger-than-expected US labor market data reinforced expectations that the Federal Reserve could keep interest rates higher for longer. Investors are now awaiting additional US employment data for further clues on the Fed’s policy outlook. Meanwhile, higher oil prices added another headwind for the currency, as firmer crude prices typically increase India’s import bill and demand for dollars. Oil gained support after a Qatari official said US envoys in Doha would not hold high-level talks with Iran, casting doubt on near-term diplomatic progress and reducing expectations of a potential increase in Iranian oil supplies.

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South Korean Won Weakens Toward 17-Year Low

The South Korean won weakened to around 1,557 per dollar, approaching its weakest level since March 2009 near 1,560 touched earlier in June, as persistent foreign selling of local equities and broad demand for the US dollar weighed on the currency. Overseas investors remained net sellers of Korean stocks for an eighth consecutive session, extending a wave of capital outflows as global funds trimmed exposure to Korean technology shares. The won also came under pressure from a firmer US dollar after stronger-than-expected US labor market data pushed Treasury yields higher and reinforced expectations that the Federal Reserve could raise interest rates later this year. Meanwhile, South Korea reported record trade data for June, with exports surging 70.9% year-on-year to $102.25 billion, marking the first time monthly shipments exceeded $100 billion. The trade surplus widened to a record $36.15 billion, as semiconductor exports nearly tripled to $44.82 billion on robust AI-driven demand.

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Offshore Yuan Falls on China Growth Concerns

The offshore yuan weakened to around 6.79 per dollar on Monday, reversing gains from the previous session as renewed concerns over China’s economic outlook weighed on sentiment. A private survey showed that the Manufacturing PMI eased to a three-month low of 51.7 from 51.8 in May. The reading followed stronger-than-expected official data showing the Manufacturing PMI rising to 50.3 in June from 50.0 in May, above forecasts of 50.1. Sentiment was also weighed down by an assessment from Goldman Sachs, which noted a more cautious tone among local clients regarding China’s near-term growth outlook, alongside concerns over weak consumer confidence, persistent labor market pressures, and the prolonged property downturn. The yuan’s weakness came even as the PBOC set the daily midpoint at 6.8067 per dollar, its strongest fixing in more than three years. Meanwhile, the EU’s trade chief and China’s commerce minister began talks in Brussels aimed at easing trade tensions.

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Technical Analysis – EUR/USD

Since mid-April, the EUR/USD pair has been trending downward. Recently, new lows were set and the March lows were broken, confirming the dominance of the supply side. We are currently observing a local upward correction. The price is approaching a key short-term resistance level at 1.1430, where, among other things, the lows from mid-March of this year are located.

This is the first zone where increased selling activity may emerge. If the 1.1430 level were to be broken through on a sustained basis, the next significant resistance level would be around 1.1466, where the upper boundary of the 1:1 geometry and the 100-period moving average—marked in blue on the chart—are located. A bounce off both the 1.1430 and 1.1466 levels could trigger another downward wave.

Only a sustained break above the 1.1466 zone could invalidate the current setup and increase the chances of a larger upward correction. For now, however, the base case scenario remains a continuation of the downtrend.

EURUSD – H4 timeframe. Source: xStation5