The US dollar dropped sharply after disappointing job data led to lower yields. Revisions to last month’s numbers caught the market off guard, influencing currency changes. For the EURUSD, the 100-day moving average offered support in response to the US job report. Buyers pushed the pair up from around 1.1400 to a high of 1.1558, with the 100-hour moving average acting as a support level. However, the 1.1558 level struggled to break above the 38.2% retracement, which is needed for more upward movement.

USDJPY Resistance Levels

The USDJPY fell below the 200-day moving average at 149.51 and the 50% midpoint of the 2025 range at 149.375, creating significant resistance. Prices dropped to a swing area around 148.56 and 148.73. A break below this area will draw attention to the 100-bar moving average on the 4-hour chart at 147.95. The USDCHF also tumbled after the weak job report, falling below the 100-hour moving average at 0.80856. Prices dipped towards the 50% midpoint at 0.81732 before bouncing back. The pair approached a swing area between 0.8054 and 0.80628, with the 200-hour moving average at 0.80159. Given the significant decline in the US dollar, we should prepare for ongoing weakness in the coming weeks. The jobs report for August 1st showed only 95,000 new jobs—well below the 180,000 expected—and the downward revisions suggest the Federal Reserve may need to cut rates sooner than expected. The market is now pricing in a higher chance of a rate cut before the end of 2025, a notable change from just weeks ago.

Forex Strategy Recommendations

For EURUSD, the strong support at the 100-day moving average near 1.1400 is a bullish sign. We should consider buying call options with strike prices above 1.1560, expecting a breakout soon. This is backed by recent Eurozone PMI data, which has shown surprising strength compared to the US, indicating a policy difference that benefits the Euro. The break below the 200-day moving average in USDJPY is significant, transforming former support at 149.51 into new resistance. This signals a good opportunity to buy put options, as the path forward seems lower. This aligns with the Bank of Japan’s increasingly hawkish stance seen in July, contrasting with the dovish outlook for the Fed. For USDCHF, the failure to hold above the 0.8173 level, followed by the drop below the 100-hour moving average, indicates strong selling pressure. We should consider shorting USDCHF futures or buying puts, using any rebound toward the 0.8085 level as a chance to sell. Our next key target is the support around the 200-hour moving average near 0.8016. Create your live VT Markets account and start trading now.

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