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USD/JPY is near the best levels of the day, up 120 pips to 147.47.
The pair has been underpinned by rising Treasury yields this month and that continues to be the case today. I wrote about yields earlier and that’s worth checking out.
The market is anxious about Trump’s tariff letter to the EU but looks like it’s already concluding that it’s merely a point of negotiation, if not a charade.
Meanwhile, US economic data has been good, including the latest non-farm payrolls report. The Fed doesn’t look to be abandoning a neutral stance even if there are some concerns about employment softening. Moreover, next week we get US CPI and that could re-inflame inflation fears.
I worry about inflation in Japan as well but for now the momentum is towards a retracement in this pair. It could still run a full 10 handles to get back to inauguration day levels but the first big hurdle is the June high of 148.02 followed by the May high of 148.64. If those break on hawkish US sentiment (or Trump backing off the trade war) then it might be worth chasing.
This article was written by Adam Button at www.forexlive.com.
The EURUSD continues to find solid support in the 1.1663 to 1.1691 zone, a key technical floor that dates back to April–November 2021. The pair has repeatedly tested this area this week, with buyers stepping in on each dip, reinforcing its significance. A break below this support zone would be needed to shift the short-term bias more clearly to the downside.
On the upside, the pair has pushed back toward the 100-hour moving average (blue line, currently near 1.1713), but sellers have leaned against that level, capping momentum and keeping the price confined. The 200-hour moving average, now near 1.1745, adds another layer of resistance. For now, price action remains trapped between well-defined boundaries—support below and key moving average resistance above.
A break below support would open the door to further downside targets, including the 1.1614–1.1629 swing area, followed by the 1.1568–1.1578 zone, and then the 38.2% retracement of the May-to-July move at 1.15357.
Conversely, if buyers can push the price above both the 100-hour and 200-hour moving averages, it would shift the bias back in their favor, with the pair then targeting the upper extreme for the year, capped most recently at 1.1827.
Until we see a decisive break above resistance or below support, traders should expect more rangebound trading within this well-established technical zone.
This article was written by Greg Michalowski at www.forexlive.com.
The unemployment rate tells the story in Canada as it’s risen steadily from 4.8% in July 2022. Excluding the pandemic, it was at the highest since 2016 but ticked lower in this report despite the rising participation rate.
USD/CAD was trading at 1.3689 ahead of this report and has taken the news of Trump’s tariffs with minimal disturbance, clearly betting that it’s a bluff. On these headlines, USD/CAD fell to 1.3673 and has now continued to 1.3652 to erase the Trump tariff move.
As for the Bank of Canada, this is going to move them more-firmly to the sidelines. The market is now pricing in just 23 bps in easing this year.
Note that Canadian jobs data is fairly volatile so it’s tough to draw the conclusion that the economy is actually improving. But jobs gains were broad regionally and led by wholesale/retail trade up 34K and healthcare up 17K. Demographically, core-aged men were up 62K.
This article was written by Adam Button at www.forexlive.com.
The market isn’t taking the risk of Canadian tariff seriously. The loonie is down 0.3% today and Canada’s TSX Composite stock index is down 0.45%.
This article was written by Adam Button at www.forexlive.com.
The USDCAD spiked higher on the tariff news at the start of the day (see the spike higher on the 5-minute chart above). However, the USDCAD moved lower following stronger-than-expected Canadian jobs data. Buyers stepped in at earlier lows in the Asian session, but quickly found its footing as buyers emerged.
Technically, the pair dipped below the 100-hour moving average at 1.3675 on the decline, found support near the earlier session low. That bounce led initially to a retest of the 100-hour MA. However,, after breaking back above, sellers flipped to buyers. A second test of support on the 5-minute chart once again attracted demand, reinforcing bullish sentiment and giving buyers the confidence to push higher (see the hourly moving average overlay on the five minute chart above)
The price has now rebounded back to levels seen just before the data release, setting up a critical test. A move above 1.3700 and sustained trading above that level would open the door for further upside momentum. The next key target is the 38.2% retracement of the decline from the May high, which comes in at 1.37208. Notably, the high earlier today briefly spiked above that level following headlines about Canadian tariffs of 35%. A break and hold above 1.37208 would strengthen the bullish bias and signal a potential shift toward broader upside for USDCAD.
This article was written by Greg Michalowski at www.forexlive.com.