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Japanese Yen bears turn cautious amid intervention fears as Iran deal undermines USD

  • USD/JPY bulls pause as intervention fears support the JPY amid a modest USD downtick.
  • The US-Iran peace deal optimism counters the Fed’s hawkish tilt and weighs on the USD.
  • The US-Japan rate differential should cap the JPY and help limit the downside for the pair.

The USD/JPY pair holds steady above mid-160.00s during the Asian session on Thursday, consolidating its gains registered over the past four days to the highest level since July 2024. The US Dollar (USD) pulls back following Wednesday’s hawkish Federal Reserve (Fed)-inspired rally to a fresh high since late March amid the latest optimism over a US-Iran peace deal. Adding to this, intervention fears offer some support to the Japanese Yen (JPY) and contribute to capping the currency pair.

US President Donald Trump and Iranian President Masoud Pezeshkian electronically signed a Memorandum of Understanding (MoU) aimed at ending hostilities between the two countries and reopening the Strait of Hormuz. Furthermore, Trump said that the 60-day negotiation period to reach a final agreement on Iran’s nuclear program is not a hard deadline, boosting investors’ confidence. This, in turn, prompts some USD profit-taking and turns out to be a key factor acting as a headwind for the USD/JPY pair.

Meanwhile, traders remain on high alert amid speculations that Japanese authorities will step in again to prop up the domestic currency. In fact, Japan’s top foreign exchange diplomat, Atsushi Mimura, and Finance Minister Satsuki Katayama have issued repeated warnings that Tokyo is monitoring speculative moves and remains fully prepared to curb further JPY weakness. This, along with the Bank of Japan’s (BoJ) historic rate hike to the highest since 1995, limits further JPY losses and caps the USD/JPY pair.

That said, Japan’s borrowing costs remain lower than those of peer nations, including the US. In fact, the Federal Reserve (Fed) signaled the possibility of at least one rate hike this year after leaving its benchmark overnight borrowing rate anchored in the 3.5%-3.75% range on Wednesday. The persistently wide interest rate differential with the US keeps the JPY carry trade active, suggesting that the path of least resistance for the USD/JPY pair remains to the upside, and any corrective pullback should be bought into.

Japanese Yen Price Last 30 days

The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies last 30 days. Japanese Yen was the strongest against the Canadian Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD1.21%0.91%1.16%2.66%1.98%1.53%1.81%
EUR-1.21%-0.28%-0.04%1.44%0.79%0.30%0.61%
GBP-0.91%0.28%0.26%1.73%1.05%0.60%0.89%
JPY-1.16%0.04%-0.26%1.48%0.74%0.34%0.60%
CAD-2.66%-1.44%-1.73%-1.48%-0.64%-1.12%-0.82%
AUD-1.98%-0.79%-1.05%-0.74%0.64%-0.46%-0.16%
NZD-1.53%-0.30%-0.60%-0.34%1.12%0.46%0.28%
CHF-1.81%-0.61%-0.89%-0.60%0.82%0.16%-0.28%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).

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AUD/USD Price Forecast: Eyes 0.7050 on weaker USD; 100-day SMA holds the key for bulls

  • AUD/USD attracts fresh buyers on Thursday as the US-Iran peace deal undermines the USD.
  • The hawkish RBA further benefits the Aussie, while Fed rate hike bets could limit USD losses.
  • The bearish technical setup warrants caution before positioning for any further appreciation.

The AUD/USD pair regains positive traction during the Asian session on Thursday, reversing part of the previous day’s slide to sub-0.7000 levels, or the weekly low. Spot prices currently trade around the 0.7040 region, up nearly 0.40% for the day, amid a broadly weaker US Dollar (USD).

The USD Index (DXY), which tracks the Greenback against a basket of currencies, retreats from its highest level since late March amid the latest optimism over the US-Iran deal to end the war and reopen the Strait of Hormuz. Moreover, the Reserve Bank of Australia’s (RBA) hawkish signal that further rate hikes are possible if inflation remains stubbornly elevated supports the Australian Dollar (AUD) and the AUD/USD pair. However, rising bets for an interest rate hike by the US Federal Reserve (Fed) in December might hold back the USD bears from placing aggressive bets and cap the currency pair.

From a technical perspective, this week’s repeated failures near the 100-day Simple Moving Average (SMA) support breakpoint favor bearish traders. Moreover, the AUD/USD pair holds below the 50% retracement of the March-May upswing, suggesting that rallies are more likely to be sold into while spot prices remain capped beneath these overhead levels. This negative outlook is further reinforced by bearish momentum indicators. In fact, the Relative Strength Index (RSI) is near 42, and a slightly negative Moving Average Convergence Divergence (MACD) reading hints at waning upside momentum.

On the topside, immediate resistance emerges at the 50% retracement around 0.7054, followed by the 100-day SMA near 0.7085 and the 38.2% Fibonacci retracement at 0.7106, with a stronger barrier further up at the 23.6% level around 0.7171. On the downside, initial support is defined by the 61.8% Fibo. level at 0.7002, with deeper cushions at the 78.6% level around 0.6928 and the prior swing low near 0.6834, where buyers would be expected to show more interest if the decline extends.

AUD/USD daily chart

Chart Analysis AUD/USD

US Dollar Price Today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Canadian Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD-0.20%-0.19%-0.05%-0.01%-0.36%-0.44%-0.14%
EUR0.20%0.01%0.17%0.18%-0.16%-0.29%0.06%
GBP0.19%-0.01%0.13%0.15%-0.17%-0.28%0.03%
JPY0.05%-0.17%-0.13%0.06%-0.32%-0.44%-0.10%
CAD0.01%-0.18%-0.15%-0.06%-0.36%-0.49%-0.14%
AUD0.36%0.16%0.17%0.32%0.36%-0.12%0.22%
NZD0.44%0.29%0.28%0.44%0.49%0.12%0.35%
CHF0.14%-0.06%-0.03%0.10%0.14%-0.22%-0.35%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

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Chart of the Day – A New Era at the Fed and the Hawkish Shadow of the ECB. EUR/USD at a Turning Point

EURUSD starts today’s session in a noticeably tense yet somewhat uneven atmosphere, where the market lacks a single dominant narrative. On one side, investors are already looking ahead to the evening and the Federal Reserve’s decision, which could set the tone for the US dollar over the coming weeks. On the other side, Europe refuses to fade into the background, as fresh inflation data once again highlights that the ECB story and its future policy response to price pressures remain unresolved.

In practice, EURUSD is trading in an environment where no clear narrative has taken control. Market participants are simultaneously trying to price in the Fed, the ECB, and the widening divergence between them, which naturally increases volatility and means that any new impulse can quickly shift the balance of forces. In such a setup, the currency pair becomes particularly sensitive to changes in expectations, especially on a day filled with major macroeconomic events.

Source: xStation5

What is driving EURUSD today? Kevin Warsh’s debut and the Fed credibility test

Today’s Federal Reserve meeting carries special significance as it is the first under the leadership of Kevin Warsh. Markets are almost fully aligned in expecting interest rates to remain unchanged in the 3.50–3.75% range, but the decision itself is not the key focus. Far more important will be the tone of communication and how the new Fed Chair outlines the future path of monetary policy. Warsh takes control at a time when US inflation remains sticky and the economy continues to show relative resilience, limiting room for an early policy easing cycle. This makes today’s message potentially a directional signal for the entire Fed cycle. Even a subtle shift toward a more hawkish stance could strengthen the US dollar and add downward pressure on EURUSD.

Europe: inflation in line with forecasts, but pressure persists

On the European side, today brought the final release of May HICP inflation. The reading of 3.2% year on year came in exactly in line with consensus expectations, which helps stabilize short-term market positioning. However, it does not change the broader picture, where inflation remains elevated compared to last year. This keeps price pressures firmly on the radar of the European Central Bank. Particular attention continues to be drawn to persistent core inflation and the services component, both of which still show no clear disinflationary trend.

ECB and rising risks of further tightening

The lack of any positive surprise in inflation data leaves the ECB in a challenging position. After its recent rate hike, markets are once again reassessing whether the tightening cycle is truly over. If price pressures in services remain elevated and core inflation fails to meaningfully ease, the European Central Bank may be forced into another move later this year. Such a scenario limits the downside potential for the euro and acts as an important counterbalance to US dollar strength.

Market picture: tension between two central banks

EURUSD remains a market driven by two opposing narratives. On one side, investors are focused on the Fed and its impact on US dollar valuation. On the other, persistent inflation in Europe continues to support cautious expectations regarding the ECB. In this environment, markets become highly sensitive to central bank communication, while the technical structure of price action reinforces the sense of a fragile equilibrium, vulnerable to sharp shifts.

Key takeaways

  • Today’s EURUSD session is shaped by two opposing forces that broadly offset each other
  • The Fed remains the primary driver for the US dollar and could set the tone for the coming period
  • Europe continues to face persistent inflation with no clear signs of meaningful easing
  • The market remains in a wait-and-see mode with no dominant narrative
  • The key resolution will likely come only after the evening Fed decision and press conference
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United Kingdom CPI inflation holds steady in April: What 2.8% means for British Pound

The United Kingdom (UK) headline Consumer Price Index (CPI) climbed 2.8% over the year in May, compared to a rise of 2.8% in April, the data released by the Office for National Statistics (ONS) showed on Wednesday. The UK inflation reading was well above the Bank of England’s (BoE) 2% inflation target.

The core CPI (excluding volatile food and energy items) rose 2.6% year-over-year (YoY) in the same period, compared to April’s 2.5% print and came in softer than the forecast of 2.7%.

Meanwhile, the monthly UK CPI arrived at 0.2% in May versus a rise of 0.7% reported in April, below the market consensus of 0.4%.

The British Pound (GBP) attracts some sellers in an immediate reaction to the UK inflation report. At the time of writing, the GBP/USD pair is trading 0.05% lower on the day to trade at 1.3420.

Pound Sterling Price Today

The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the weakest against the Swiss Franc.

USDEURGBPJPYCADAUDNZDCHF
USD-0.04%0.02%-0.08%0.03%0.12%0.19%-0.22%
EUR0.04%0.06%-0.02%0.06%0.15%0.26%-0.17%
GBP-0.02%-0.06%-0.09%0.03%0.13%0.19%-0.20%
JPY0.08%0.02%0.09%0.10%0.19%0.22%-0.10%
CAD-0.03%-0.06%-0.03%-0.10%0.09%0.16%-0.21%
AUD-0.12%-0.15%-0.13%-0.19%-0.09%0.09%-0.29%
NZD-0.19%-0.26%-0.19%-0.22%-0.16%-0.09%-0.38%
CHF0.22%0.17%0.20%0.10%0.21%0.29%0.38%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).

What do United Kingdom CPI inflation data mean for the British Pound?

The UK CPI is a measure of consumer price inflation, the rate at which the prices of goods and services bought by households rise or fall. This figure is one of the most important economic indicators for the GBP because it measures inflation and plays a key role in the Bank of England’s (BoE) monetary policy decisions.

Hotter-than-expected CPI Inflation suggests stronger price pressures in the economy. Traders may expect the BoE to keep interest rates higher-for-longer or consider additional rate hikes.

On the other hand, softer-than-expected outcomes may indicate easing price pressures in the UK economy. Markets could increase their bets on future BoE rate cuts.

Technical Analysis: GBP/USD maintains a neutral outlook in the near-term 

Chart Analysis GBP/USD

In the daily chart, GBP/USD holds just above the Bollinger middle band, while still capped by the 100-day simple moving average (SMA). This configuration suggests a neutral near-term bias, with price consolidating inside the Bollinger envelope rather than trending. The Relative Strength Index (RSI) at roughly 50 hints at balanced momentum, leaving the pair dependent on a break outside this nearby band-and-MA corridor to define the next directional move.

On the topside, initial resistance emerges at the 100-day SMA around 1.3460, with the Bollinger upper band near 1.3498 forming a secondary barrier if buyers extend the recovery. On the downside, immediate support is seen at the Bollinger middle band around 1.3420, ahead of a deeper cushion at the Bollinger lower band close to 1.3345, where a break would expose a broader corrective phase.

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Indian Rupee remains flat as risk-on mood weighs on US Dollar

  • The Indian Rupee holds ground as oil prices continue to ease.
  • Indian shares opened higher but edged lower as caution grew ahead of the US Fed policy decision.
  • Traders expect a hawkish tone from Fed Chair Kevin Warsh during his first policy meeting on Wednesday.

The Indian Rupee (INR) holds ground after two days of gains against the US Dollar (USD) on Wednesday. However, the upside potential for the USD/INR pair could be capped in the near term as downward pressure on the Indian Rupee eases, supported by declining global oil prices.

Following recent policy interventions by the Reserve Bank of India (RBI), economists have notably upgraded their forecasts for the nation’s balance of payments. Most analysts now anticipate a small surplus, marking a sharp reversal from previous projections of a substantial deficit.

However, the true extent of any Rupee rally will ultimately hinge on the central bank’s comfort level. Experts suggest the RBI may strategically leverage the currency’s strength to pare down its massive foreign exchange forward book, which saw short-dollar positions balloon to a record $104 billion in March during efforts to defend the INR.

Indian equity indexes hold gains on Wednesday despite the prevailing market caution ahead of the US Federal Reserve’s (Fed) upcoming policy decision. The US central bank is widely expected to maintain its cautious “wait-and-see” stance, keeping benchmark interest rates steady within the 3.50% to 3.75% range.

Nevertheless, market participants remain highly attentive, as traders expect Fed Chair Kevin Warsh to adopt a more hawkish tone during his first policy meeting later in the day. This cautious domestic sentiment follows a mixed session on Tuesday, where institutional data from the NSE revealed that foreign institutional investors sold shares worth INR 749.18 crore, while domestic institutional investors made modest purchases worth INR 6 lakhs.

Broader market sentiment also faces headwinds from lingering global uncertainties and geopolitical frictions. Industry experts express widespread skepticism regarding a swift economic rebound, warning that shipping and energy exports could take several weeks to fully recover from recent disruptions. Complicating the global outlook further, the Iran-backed group Hezbollah stated in Lebanon that Iran would likely refuse a final nuclear agreement unless Israel withdraws from Lebanese territory, adding a layer of geopolitical risk that continues to keep investors on edge.

West Texas Intermediate (WTI) oil price extends losses for the fifth successive day, trading around $75.20 per barrel at the time of writing. Crude oil prices declined as anticipation grew over a looming United States (US)-Iran peace deal that could significantly boost global supply.

The US and Iran are scheduled to sign an interim agreement in Switzerland this Friday, which would grant Tehran broad economic incentives and allow the immediate resumption of Iranian oil exports. Furthermore, international tankers are expected to resume safe transit through the strategic Strait of Hormuz once the pact officially takes effect.

Technical Analysis: USD/INR trades near 94.50 above descending triangle bottom

USD/INR flattens after two days of losses, trading around 94.40 at the time of writing. The technical analysis of the daily chart suggests that spot price sits just slightly above the lower boundary of the descending triangle, indicating the “drumroll” moment of the pattern.

The flat lower boundary represents a major demand zone where buyers have historically stepped in to stop the bleeding. When the spot price hovers just above it, the market is testing whether those buyers still have the cash and the will to defend that floor.

The USD/INR pair maintains a bearish near-term tone as it holds below both the nine-day and 50-day Exponential moving averages (EMAs). The clustering of these EMAs above the spot hints at a capped market, while the 14-day Relative Strength Index (RSI) around 40 suggests weak momentum, reinforcing the risk of further downside as long as price remains suppressed beneath these moving averages.

The immediate support lies at the lower boundary of the descending triangle around 94.30, while the initial resistance lies at the 50-day EMA of 94.73, followed by the nine-day EMA at 94.90.

USD/INR: Daily Chart
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EUR/JPY – Could rebound toward 186.50 as bullish bias prevails

  • EUR/JPY cross may rise toward the all-time high of 187.95.
  • The 14-day Relative Strength Index near 60 indicates solid upward momentum.
  • The primary support appears at the nine-day EMA of 185.66.

EUR/JPY depreciates after three days of gains, trading around 186.20 during the Asian hours on Wednesday. The currency cross holds a constructive bullish bias as it remains above both the nine-day and 50-day Exponential Moving Averages (EMAs). This positioning suggests the recent advance is supported by underlying demand.

The 14-day Relative Strength Index (RSI) near 60 hints at firm but not yet overextended upside momentum. Additionally, the technical analysis of the daily chart suggests the EUR/JPY cross is remaining within the ascending channel pattern, suggesting an ongoing bullish bias.

The EUR/JPY cross may explore the region around the all-time high of 187.95, recorded on April 17, followed by the upper boundary of the ascending channel around 188.30.

On the downside, the primary support lies at the nine-day EMA of 185.66, followed by the 50-day EMA of 185.18. A break below these moving averages would cause a bearish shift, exposing the lower boundary of the ascending channel near 184.70. Further declines could push the EUR/JPY cross to test its nearly four-month low of 181.87, recorded on March 16, with further declines targeting the six-month low of 180.81, reached on February 12.

Chart Analysis EUR/JPY
EUR/JPY: Daily Chart

Euro Price Today

The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the weakest against the Swiss Franc.

USDEURGBPJPYCADAUDNZDCHF
USD-0.03%-0.01%-0.08%0.02%0.05%0.01%-0.13%
EUR0.03%0.01%-0.06%0.03%0.08%0.08%-0.10%
GBP0.01%-0.01%-0.06%0.03%0.11%0.05%-0.08%
JPY0.08%0.06%0.06%0.08%0.12%0.05%-0.02%
CAD-0.02%-0.03%-0.03%-0.08%0.04%-0.00%-0.11%
AUD-0.05%-0.08%-0.11%-0.12%-0.04%-0.02%-0.13%
NZD-0.01%-0.08%-0.05%-0.05%0.00%0.02%-0.11%
CHF0.13%0.10%0.08%0.02%0.11%0.13%0.11%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).

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AUD/USD – Consolidates above 0.7050; 100-day SMA holds the key ahead of Fed

  • AUD/USD remains on the back foot for the second straight day, though it lacks follow-through.
  • The RBA’s hawkish tilt supports the Aussie, while the US-Iran peace deal undermines the USD.
  • Traders seem hesitant ahead of the crucial FOMC rate decision amid a bearish technical setup.

The AUD/USD pair trades with a negative bias for the second straight day, though it lacks bearish conviction and holds above the 0.7050 level through the Asian session on Wednesday amid mixed cues.

The Reserve Bank of Australia (RBA) maintained a hawkish hold on Tuesday and warned that further rate increases are possible if inflation remains stubbornly elevated, which acts as a tailwind for the Australian Dollar (AUD). Furthermore, an interim US-Iran peace agreement undermines the safe-haven US Dollar (USD) and supports the AUD/USD pair. Traders, however, seem hesitant and opt to wait for the highly anticipated FOMC policy decision before placing fresh directional bets.

The AUD/USD pair keeps a bearish near-term tone 0.7085-0.7090 confluence – comprising the 100-day Simple Moving Average (SMA) and the 38.2% Fibonacci retracement of the May-June downfall. Adding to this, momentum oscillators hint that a short-term downward trend is still in play. The Relative Strength Index (RSI) is near 43, while the Moving Average Convergence Divergence (MACD) line remains below zero and the signal line, with the histogram remaining slightly negative.

On the topside, the immediate hurdle is clustered around the 0.7085-0.7090 confluence, with further barriers seen at the 50% level at 0.7124 and the 61.8% retracement at 0.7159. A sustained break above these would be needed to ease the current bearish pressure and expose the 78.6% retracement at 0.7209 and the swing high near 0.7272. On the downside, initial support is aligned with the 23.6% Fibo. at 0.7046, ahead of the monthly low near 0.6976, where a break would reinforce the broader decline.

(The technical analysis of this story was written with the help of an AI tool.)

AUD/USD daily chart

Chart Analysis AUD/USD
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AUD/JPY – Constructive bias prevails above 113.00, but neutral RSI spurs consolidation

  • AUD/JPY edges lower to near 113.25 in Wednesday’s early European session. 
  • BoJ hiked interest rates by 25 bps to 1.00%, while RBA held rates steady at 4.35% at their June policy meeting. 
  • The cross keeps bullish vibe, but further consolidation cannot be ruled out in the near term with neutral RSI momentum. 
  • The first upside barrier emerges at 113.58; the initial downside target to watch is 113.23.  

The AUD/JPY cross trades in negative territory around 113.25 during the early European session on Wednesday. The Japanese Yen (JPY) edges higher against the Australian Dollar (AUD) after the Bank of Japan (BoJ) raised interest rates to their highest level in more than three decades. 

The BoJ decided to raise the short-term interest rate by 25 basis points (bps) to 1.0% from 0.75% after concluding the two-day monetary policy review meeting on Tuesday, as widely expected. 

According to the Monetary Policy Statement, the board member will continue to increase the policy rate in response to developments in economic activity, prices and financial conditions.

On the other hand, the Reserve Bank of Australia (RBA) decided to leave the Official Cash Rate (OCR) unchanged at 4.35% after its June monetary policy meeting on Tuesday. This is a pause following three consecutive 25 basis points (bps) rate hikes earlier this year. Despite leaving the interest rate unchanged, the board members signaled that further rate hikes might be necessary to achieve its goals.

Chart Analysis AUD/JPY

Technical Analysis:

In the daily chart, AUD/JPY holds a constructive bias as spot remains above the 100-day Simple Moving Average (SMA) while pressing into the Bollinger Bands’ upper half. The 14-period Relative Strength Index (RSI) around 48 hints at consolidative rather than overbought conditions, suggesting any pullbacks could stay contained above underlying trend support.

On the topside, a sustained break over the Bollinger SMA middle band at 113.58 would open the door toward the Bollinger upper band resistance near 114.90. On the downside, initial support aligns with the recent pivot zone around 113.23, followed by the Bollinger lower band at 112.25 and then the 100-day SMA near 112.00, where a deeper retreat would need to find buyers to maintain the prevailing upward bias.