The EUR/JPY pair has increased by 0.45% to 162.60 during European trading, hitting a high of 163.00. This rise comes as trade tensions between the US and the EU have eased, with President Trump delaying a proposed 50% tariff until July 9. US-EU trade discussions are ongoing after the EU asked for more time to negotiate a favorable deal by July 9. President Ursula Von der Leyen expressed hope for the talks with Trump, highlighting the EU’s readiness to move forward.

Effect of Germany’s GDP Data

The Euro received additional support from Germany’s first-quarter GDP data, revised to show a 0.4% growth, surpassing initial estimates of 0.2%. Meanwhile, the Yen is losing value, even though Japan reported a National CPI growth of 3.6% in April, which was faster than expected. In local markets, the Japanese Yen has weakened against major currencies, performing the worst against the New Zealand Dollar. The change in CPI numbers raises the possibility of an interest rate hike by the Bank of Japan in July. The Euro plays a crucial role for the 19 countries in the Eurozone, influencing trade balances and interest rates through the European Central Bank (ECB). Key economic indicators like GDP and inflation greatly affect the Euro’s value. Building on these developments, the EUR/JPY pair is currently favored by buyers, with the move toward 163.00 suggesting market participants are leaning toward the Euro in the short term. The postponement of a significant import tariff by the U.S. until early July gives markets some relief. For now, there’s reassurance that immediate disruptions to transatlantic trade have been delayed, if not eliminated. The new timeline offers just over a month of relative stability, which traders are starting to factor in.

Impact of Trade Talks and Monetary Policies

Von der Leyen’s positivity has given the Euro more room to grow, especially as her comments show both sides’ willingness to avoid further conflict. Importantly, not only is there a cooperative tone, but the timeline is also key—markets prefer predictability, and the temporary delay suggests better chances for a negotiated resolution. Any sign of progress in these trade talks could further strengthen this trend. Germany’s Q1 GDP boost to 0.4% also provides solid support for the Euro. While the difference between 0.2% and 0.4% growth may seem small, it doubles the previous estimate under current conditions. Since Germany is influential in ECB policy, stronger economic performance could lead to more discussions about normalization in Frankfurt, reducing hesitancy around tightening. Conversely, the Japanese Yen faces opposing forces. April’s national inflation was 3.6%, which should normally support the currency. However, the Yen continues to weaken due to market expectations. Despite the CPI exceeding forecasts, there’s doubt that the Bank of Japan will act quickly or decisively enough to narrow the yield gap with other currencies. Investors are focused on the July meeting, but without a change in tone or pace from Governor Ueda, interest rate differentials will keep putting pressure on the Yen. This Yen weakness isn’t just seen in EUR/JPY; it’s also noticeable against higher-yielding currencies like the New Zealand Dollar. This reflects ongoing carry flows and a narrative where the Bank of Japan seems hesitant to reduce its accommodative stance as quickly as others. The situation is not just about inflation—it also concerns the credibility and timing of future guidance. For those trading derivatives, current movements show a clear direction, but it’s not straightforward. We must analyze how options volatility responds to trade timelines and monetary policy expectations. Implied volatilities on EUR/JPY have remained fairly stable, suggesting the market is anticipating a gradual trend rather than a sharp reversal. However, if political headlines or hawkish signals from the ECB emerge, hedging costs may rise. As we approach July, traders may continue to prefer Euro longs over Yen, assuming no significant changes from Ueda or a quick rise in European inflation. If speculation about a BoJ rate hike gains momentum, shorter expiration options will react quickly as traders adjust their expectations. For now, though, the divergence story remains intact, and the options flow reflects this trend. Some traders are favoring call spreads into next month, focusing on strikes between 163.50 and 165.00, aligning with recent technical patterns. We are closely monitoring the intersection of macroeconomic data and event-driven decisions. This is all happening in a compact six-week timeframe, and markets are not known for their patience. With each data release or political remark, recalibrations start anew. Traders with exposure tied to volatility or directional swings should maintain focus on timing rather than just price levels. Create your live VT Markets account and start trading now.

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Pound Sterling has seen a slight rise, with no significant news over the weekend and no important data released today. The market is largely dismissing the possibility of a rate cut by the Bank of England at its June 19 meeting, and only minor surveys are expected this week. The pound was trading just under 1.36 last night, reaching its highest level since early 2022. There’s minor resistance at 1.3595, which might limit any short-term gains, but the upward trend seems to be stable.

Technical Momentum

Indicators across different time frames show limited chances for corrections, with strong support during minor dips. Key support levels are between 1.3545 and 1.3550, while resistance is seen at 1.3595/00, moving up to 1.3740/50. We are witnessing a consistent rise in Sterling’s value, especially since there hasn’t been major economic or political news recently. Traders appear unconcerned about a potential interest rate cut by the Bank of England, focusing instead on improving inflation and economic strength, which enhance the appeal of Sterling. Sterling’s quiet rise to just below 1.36 marks its highest level since early 2022. This recovery, particularly in calm trading conditions, reflects market confidence in its upward direction. However, we are reaching short-term resistance around 1.3595, where price movement has started to pause. It’s common to see slight hesitations near previous highs, especially when indicators show a lack of strong momentum for a downturn. Currently, we are experiencing a minor pullback rather than a significant decline. Support levels have been tested and have held around the 1.3545–1.3550 range, allowing us to track how far selling might push prices. If this support remains intact in subsequent tests, it’s unlikely we will see a reversal soon.

Market Structure

The ongoing upward trend is backed by solid momentum indicators. Oscillators are not yet showing overextension but suggest limited room for significant pullbacks in the near term. Any softness in prices is likely to be short-lived without major impacts—at least for now. If prices break through the 1.3600 resistance level, it could open the way to the next range, estimated around 1.3740–1.3750. From a market structure perspective, the clear support and resistance levels indicate a trend being adhered to by traders. This means we should maintain our directional bias until new evidence suggests otherwise. Neutral events, such as upcoming survey data, might not derail this pattern on their own. What stands out currently is the balance between anticipated volatility and actual price movement. The absence of large price swings indicates that traders are acting in expectation rather than response. The market has largely factored out the rate cut, and unless forecasts change significantly, we might see narrow trading conditions—this could also create opportunities for price breakouts as we approach the June decision. For now, we should focus on the sustainability of momentum. Movements below 1.3545 should be approached with caution, as that could disrupt the stability that has supported the pound since late May. Until then, a focus on continued stability with a tendency for upside movement appears to be a sound approach. Create your live VT Markets account and start trading now.

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The recent EU tariff delay came after important talks among key leaders, likely due to worries about how tariffs affect US economic growth. European stocks have responded well, rising 10% this year, while the S&P has dropped 2%. The EUR/USD currency pair is showing a strong upward trend, with current gains in the low 1.14 range. Support levels are at 1.1325/50, and resistance levels are at 1.1460 and 1.1580/00.

Strong Start For EUR/USD

The EUR/USD pair had a solid start to the week, breaking past the 1.1400 mark. At the same time, the US Dollar weakened as the US-EU trade deadline was extended. Bitcoin also rose above $109,000 due to improved market sentiment following the tariff delay. Gold, however, has seen its gains capped at $3,350 per troy ounce, even after last week’s increase. With the tariff deadline pushed back, markets are experiencing less tension between the US and Europe. European stocks are benefiting from this calming atmosphere, reflected in a 10% gain this year, while US stocks have taken a step back due to concerns about domestic demand. Both technical and fundamental indicators show that the euro is gaining strength. The EUR/USD pair has climbed above 1.1400, a key level many traders were watching. It is now close to 1.1450 and testing higher resistance around 1.1580. The support area between 1.1325 and 1.1350 should hold, assuming the overall economic conditions remain stable. The dollar’s decline, due in part to softer forecasts and geopolitical issues, is helping this rise. Yields in Europe haven’t greatly increased despite the stock market rally, suggesting that stock performance isn’t currently linked to expectations for interest rates. This disconnect could lead traders to rethink volatility levels in euro-related assets. In particular, holding short gamma in euro options might feel risky right now, leaving little room for mistakes if volatility increases—especially with upcoming inflation data or remarks from policymakers.

Market Sentiment And Volatility

The spike in Bitcoin to over $109,000 shows how quickly market sentiment can change. Various factors, including better liquidity and the delay in tariffs, contributed to this rapid move. It reflects a renewed appetite for risk across multiple asset classes, which may put pressure on traditional safe havens. Gold seems to be stuck despite last week’s upward trend. It has encountered strong resistance around $3,350 per ounce and hasn’t moved higher, even with the dollar’s pullback. This may indicate hesitation among major buyers or simply a pause after previous significant gains. For hedging purposes, its positioning appears lighter than many expected. As we move into the next couple of weeks, options pricing in currencies and metals must catch up with current price movements. Traders holding short positions on EUR or long positions on XAU may want to reconsider their strategies. It may not be necessary to exit entirely, but adjusting stops or developing protective measures is wise. Changes in strike skew and implied volatility should be analyzed carefully, as they show where risk is being priced. As the trade deadline extension impacts asset prices, currency volatility may remain elevated while equity volatility decreases. This divergence presents a trade opportunity. Focusing on relative volatility between FX and equity indices may yield selective chances, especially when using calendar spreads or vanna-based trades. Timing remains critical. If the euro continues its positive trend and breaks through resistance at 1.1460, the pace of interest rate adjustments between Europe and the US could speed up. Yield spreads haven’t fully reacted to this strength, suggesting there’s still room for short-term fluctuations. Such gaps can often result in sharp reversals during the week. The upcoming sessions provide great opportunities: being long on the euro with tight downside options, selectively holding risk in metals near resistance, and positioning short on the dollar with clear exit plans. Current price movements offer clearer signals—it’s time to act carefully and decisively. Create your live VT Markets account and start trading now.

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The Canadian Dollar (CAD) had a strong week as the US Dollar (USD) fell by 1.6% by Friday. This made the CAD one of the stronger major currencies of the week. Interestingly, there is a rare negative correlation between the CAD and US stocks, currently at -36% over the past month. Normally, the CAD would move in sync with the stock market, providing some stability against US market fluctuations.

Bank Of Canada Commentary

Bank of Canada Governor Macklem mentioned that core inflation is becoming more volatile. He indicated that several factors will influence the next interest rate decision, hinting at possible changes in the market. The USD’s drop below the 1.3745/50 level could lead to further gains for the CAD. The USD lacks strong support until it reaches the 1.34/1.35 range, which may lead to a full retracement to 1.3420. This recent shift indicates a break from usual trends. The CAD is rising while US stocks decline, reversing the typical relationship. Usually, when stocks rise, the Loonie also appreciates. Instead, we are witnessing the opposite, as shown by the -36% correlation. This suggests the CAD is now driven by different factors, possibly related to monetary expectations or demand for Canadian assets. When the usual indicators are quiet, we look to other signs. Macklem’s comments earlier in the week provided more context. While he did not give clear guidance, his mention of “increased volatility” in core inflation sounded more like a warning. When a central bank recognizes conflicting inflation pressures and states that “multiple factors” will affect its next decision, it suggests a preference for flexibility rather than strict rules. Fluctuations in inflation data might lead to unexpected changes, emphasizing the importance of upcoming data such as retail sales and labor market developments.

Volatility Pricing And Risk Appetite

Looking at price action, the USD’s decline below the 1.3745/50 level changes short-term expectations significantly. Without that support, we may now enter a wide, less competitive range in the low- to mid-1.34s. The last time prices lingered in that area was in January, where they quickly moved through. This indicates that liquidity may become uneven, potentially driving momentum in either direction. If momentum traders increase short positions on USD/CAD, reaching 1.3420 is possible, though not certain. Closing older USD positions might enhance this movement. For trading with derivatives, all of this highlights the need to focus on volatility pricing. Premiums for CAD calls may still not accurately reflect the scale and speed of currency changes, given the unusual correlations and potential shifts in local rate expectations. It’s worth considering spreads that lean towards a moderate but directional decline in USD/CAD. However, protective measures should be taken, especially with macroeconomic events like US jobs data and Canadian CPI approaching. Additionally, if risk appetite continues to wane and the CAD keeps strengthening, carry trades based on interest rate differences may not offer their usual protection. The quiet from Canadian policymakers this week could shift to more direct communication if the market anticipates rate cuts or overlooks inflation figures. This isn’t the current expectation, but we shouldn’t assume that past correlations will always hold. Finally, it’s important to recognize that positioning behavior may override technical indicators. Large investors could react more quickly to changes and not wait for traditional confirmations, leading to increased short-term volatility. The market may not fully adapt to these changes, which is something to keep an eye on. Create your live VT Markets account and start trading now.

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President Trump has delayed a decision on 50% tariffs on EU imports until July 9th. This has slightly boosted market confidence, leading to stronger European stocks and US equity futures, though Chinese markets faced losses as local electric vehicle stocks dropped. The USD has weakened but remains above earlier lows, while the New Zealand Dollar is performing strongly. The Japanese Yen and South Korean Won lagged overnight. The Bloomberg dollar index is at its lowest since December 2023. Treasury Secretary Bessent said that the decline is due to stronger other currencies rather than a weaker USD. With a public holiday in the US, trading volume is expected to be low today. The DXY index may stabilize intraday, but a weak close on Friday suggests further losses may be coming.

Financial Market Impacts

The Euro/Dollar is consolidating around 1.1380, as the tariff decision delay keeps it in check. The Pound/Dollar remains positive near 1.3550 due to improved market sentiment. Gold is holding steady above $3,330 per ounce, with limited potential for gains. Bitcoin has rebounded to $109,000, benefiting from the tariff delay. Trump’s decision to postpone the tariff talks until July 9th has calmed the markets, which were prepared for more dramatic news. This brings some clarity, allowing European and US stock futures to recover slightly. The overall volatility has eased, reducing the defensive demand for now. In Asia, a decline in Chinese electric vehicle stocks has affected regional indices, indicating potential shifts in domestic consumption or concerns about subsidies. However, this pressure did not significantly impact commodities or cross-asset risk, leading to more targeted opportunities in equity-linked derivatives instead of broader indices. The USD has eased but remains steady above recent lows. The mix of global currencies, particularly the stable New Zealand Dollar, has contributed to this trend. Bessent emphasized that this situation is more about stronger currencies elsewhere rather than stark USD weakness. The Kiwi has benefited from favorable yield and domestic data, even on a quiet trading day.

Future Market Considerations

This softness in the Dollar, combined with lower trading volumes, puts the DXY index in a crucial position. The weak Friday close indicates more potential losses ahead. This suggests traders are still adjusting their long-term currency positions, particularly with changing central bank outlooks. If USD selling continues, we may first see this reflected in options before affecting spot markets, so it’s something to monitor closely this week. For the Euro/Dollar, price movements are showing little direction, staying around 1.1380. The tariff delay keeps uncertainty in play, which may delay potential breakouts. Currently, volatility pricing leans toward reversion rather than establishing clear trends. The Pound is holding strong above 1.3550, indicating renewed confidence from market flows and stabilizing expectations for UK data. Gold’s price has remained steady above $3,330 per ounce, reflecting cautious optimism. While it’s not losing value, gaining further is proving challenging. Any increase in gold prices appears closely linked to interest rate perspectives rather than broader market fears. Gamma positioning for gold has remained stable, indicating short-term gains may be limited. Bitcoin’s quick rebound to $109,000 was sharp but not chaotic. Relief from the tariff delay gave the cryptocurrency some breathing space after several days of tight trading. This kind of rapid recovery is often driven by the unwinding of leveraged shorts. However, sustained growth will depend more on overall market acceptance than on this single issue. In the upcoming weeks, traders will need to balance short-term reactions against the longer-term impacts of structural policy changes, like trade decisions, on asset valuations. Staying flexible is crucial, as the risks and rewards of holding onto firm positions amid ongoing policy uncertainties are imbalanced. The options market is starting to factor in more event-driven risks beyond simple volatility measures, which may lead to more strategic opportunities than just directional plays. As we approach July 9th, we anticipate that demand for short-term protection will remain high, especially in FX and commodities. Without more clarity, short-term implied ranges are unlikely to tighten. Meanwhile, closely watching high-beta currency pairs and the volatility in credit-sensitive assets may provide better predictions for the future than waiting on daily headlines. Create your live VT Markets account and start trading now.

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Royal Bank has a strong reputation in the Zacks Banks – Foreign sector thanks to its consistent earnings performance. In the last two quarters, the bank achieved an average earnings surprise of 7.76%. In the latest quarter, Royal Bank was expected to earn $2.28 per share but surprised everyone by reporting $2.55 per share, an 11.84% jump. The previous quarter also saw a positive surprise, with earnings of $2.25 per share against an estimate of $2.17, giving a 3.69% surprise. Current estimates for Royal Bank are improving, showing a positive Earnings ESP (Expected Surprise Prediction). Stocks with a positive Earnings ESP and a Zacks Rank of #3 (Hold) or higher typically do better than expected. Royal Bank’s Earnings ESP is currently +1.49%, indicating that analysts feel positive about the bank’s upcoming earnings. The next earnings report is expected on May 29, 2025. A positive Earnings ESP combined with a high Zacks Rank suggests that another earnings beat may be on the horizon. It’s important to note that a negative Earnings ESP doesn’t mean a company will miss earnings; it simply makes predictions less accurate. Checking a company’s Earnings ESP before results can help in making informed investment choices. This method aids in spotting stocks worth considering before their earnings reports. This article highlights how Royal Bank has consistently outperformed earnings estimates, known as an “earnings beat.” Over the last two quarters, it has surpassed Wall Street estimates by an average of nearly 8%. Analysts had expected $2.28 per share, but Royal Bank delivered $2.55—almost a 12% difference. Such consistent performance attracts attention. In the prior quarter, the bank reported $2.25 against an expectation of $2.17, translating to a smaller but still important 3.69% beat. This consistency is particularly significant in an industry where analysts are often conservative. It shows that Royal Bank has exceeded expectations twice in a row. At the moment, signs are looking optimistic again. The Earnings ESP metric helps track the difference between the most accurate estimate and the general consensus. Royal Bank currently has an ESP of +1.49%, indicating that top forecasts are slightly above the average expectations. Historically, when stocks have a positive ESP and favorable rankings—like a Zacks Rank of 3 or better—they usually perform well around earnings reports. With the May 29 earnings release approaching, there could be more opportunities for positioning. Although ESP does not guarantee outcomes, an upward trend alongside analyst rankings is a pattern worth noting. A negative ESP can still lead to surprises, but it usually complicates predictions. Monitoring analyst sentiment isn’t just about keeping up with headlines; it’s about assessing whether the recent momentum continues. A well-timed strategy based on forecast differences could provide advantages before announcements. Small changes in ESP, like the current rise to +1.49%, should be observed over the coming weeks. An increase in analyst outlook close to the reporting date suggests that estimates are being revised based on updated models or market conditions. These changes, even if small, can influence trading strategies, especially for those looking at short-term movements. Given the previous quarter’s results and the trend in estimates, it may make sense to track updates more closely. The data suggests that further changes from consensus projections are possible. Instead of betting on outcomes, being prepared for market reactions is the real benefit of understanding current sentiment. Of course, disciplined execution remains essential. Traders focused on derivatives might want to rethink their volatility assumptions or adjust strike prices if implied volatility starts to change before May 29. Opportunities like this don’t often last long—being prepared is key.

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The US Dollar is expected to test 7.1650 against the Chinese Yuan, but it’s unlikely to reach strong support at 7.1500. The outlook for the dollar is negative, with a slight chance of a longer-term decline. Recently, the US Dollar dropped to 7.1720, down by 0.46%. This decrease may stabilize soon, with resistance levels at 7.1870 and 7.1980. The stronger support level does not seem to be a concern right now.

1-3 Week Forecast

In the next 1-3 weeks, the US Dollar may fluctuate between 7.1850 and 7.2450. As long as it stays below 7.2070, the trend is likely to move downward, potentially reaching 7.1500. The recent drop in the Dollar-Yuan pair shows a small decline, closing weekly at around 7.1720 after falling almost half a percent. Resistance levels near 7.1870 and 7.1980 could cap any rebounds. Selling pressure hasn’t been strong, but weaknesses are still present, especially if 7.2070 holds. Recent trading shows that sellers are acting on strength rather than pushing major breaks lower, indicating that bullish momentum is fading. Looking ahead, we expect sideways movement to continue between approximately 7.1850 and 7.2450. The upper limit does not indicate a breakout is likely unless momentum increases. Until 7.2070 is decisively broken upwards, any upward shifts are expected to face resistance. This level marks the line between temporary pullbacks and a more consistent upward trend.

Longer-Term Outlook

For longer-term traders, the downside trend suggests a growing discomfort with Dollar strength. While 7.1500 remains a key support level, it is still some distance away from the current stabilization price. Entering positions at this level may be premature unless market volatility rises significantly. Resistance levels are clearer than support, making it less likely we’ll see an upward breakout. Currently, technical signals do not indicate strong upward momentum. We advise treating any rebounds within the prevailing range as chances to reassess positions, rather than signals for major reversals. It’s wise to keep positions light and set clear levels, ideally outside the range between 7.1850 and 7.2070. The chances of significant movement are low without new indicators, so attention to data releases or policy comments could be more important than typical technical analysis. In summary, momentum has weakened. Unless prices can push convincingly beyond the 7.2070 mark, the general outlook is negative. We will adjust our positions accordingly. Create your live VT Markets account and start trading now.

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Trade Negotiations Timeline

Donald Trump recently announced that he would impose 50% tariffs on EU goods starting June 1 due to stalled negotiations, claiming EU discrimination. However, after talks with the President of the European Commission, these tariffs were postponed until July 9 to allow for further discussions. The delay of reciprocal tariffs by 90 days and positive dialogue with the UK and China has eased market worries. Still, the threat of a trade war lingers, with Trump’s EU tariffs much higher than previously indicated. The UK-US trade deal, while criticized, now looks more promising than potential deals with the EU. As the tariff deadline approaches, uncertainty remains, but there’s hope for a deal by July 9. Although previous tariffs are paused, it’s unclear what has been settled. Continued negotiations may lead to more market fluctuations, especially as the 90-day delay nears its conclusion. While Trump’s tariff delay offers temporary relief, the risk is still present. The 50% tariff rate surprised many due to its steep rise from usual levels, indicating a negotiation strategy rather than a final decision. This suggests an effort to apply pressure — it’s more than just trade; it’s about leverage. The move to delay until July 9, following talks with the Commission President, gives a brief window. Any developments before then will likely show positioning rather than a true agreement. The postponement of reciprocal measures from the EU for 90 days indicates that both sides are cautious of escalation, yet not fully confident in their discussions.

Market Reactions and Strategies

Markets first reacted with relief, but then slowly realized the underlying issues remain unresolved — they’ve just been postponed. Traders in derivatives markets should see this delay as a pause, not a resolution. Volatility is expected to increase as the new deadline approaches. Risk spreads could widen again, especially in sectors closely related to auto or manufacturing exports. Recent coordination with China and the UK explains why the market hasn’t experienced a broader correction. Their agreements — or at least the perception of progress — have helped stabilize sentiment. However, the trading relationship with the EU still carries significant weight. There’s a deeper interconnection across industries, and past disruptions in this area have affected a wider range of asset classes, creating uncertainty in allocation. For those dealing with options or futures linked to eurozone sectors, this delay presents a chance to reassess margin exposure while there is less pressure on order books. However, the future path will likely be influenced by headlines. Any hints of retaliation from either side should not be ignored, as they often foreshadow rapid pricing changes. We have seen this before. In 2018, nominal announcements quickly became concrete actions, and central banks’ resistance did not fully counteract the pricing distortions that followed. Those exposed to EU-US differentials, especially in equities, should analyze how these mechanisms worked back then. Patterns are re-emerging now, with even more aggression in the starting figures. It’s important not to assume that the extension signals a softer stance. Tariffs of this magnitude are significant threats. Fluctuations in risk-on signals across sectors like energy, aerospace, and agri-business often stem from slight changes in trade talks. As we approach July, implied volatility on related contracts is likely to increase. Although repositioning might be premature before July 9, now is the time to refine hedging strategies instead of waiting. It’s better to secure protection early than scramble for liquidity when news breaks. Create your live VT Markets account and start trading now.

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The US Dollar may weaken against the Japanese Yen, with analysts watching a key range between 142.10 and 143.45. A crucial level is at 141.70, which currently offers strong support. If it breaks, further declines could happen. Recently, the US Dollar fell to a low of 142.41, which was unexpected as many anticipated stability. However, there hasn’t been a significant increase in selling pressure, suggesting the Dollar may stabilize unless it drops below essential support.

Resistance Levels

There’s noted resistance at 144.00, down from a previous level of 145.05. If this resistance breaks, the Dollar’s weakness might stabilize, but the overall outlook still leans towards potential decline. Though oversold conditions could lead to temporary consolidation, ongoing monitoring is essential. Currently, the Dollar has dropped more than expected against the Yen, going below levels where consolidation was anticipated. The move to 142.41 has not resulted in increased selling, indicating that downside momentum is contained for now. Support at 141.70 is significant. It has held in the past, showing it plays an important role beyond just the chart. If this level fails, traders should reassess their positions. While we haven’t seen major selling yet, that could change quickly if the Dollar weakens further. Weaker exchange rates might attract buyers when the market is saturated. However, any plans to buy near or just below the 142.10–143.45 range should focus on how the 141.70 level reacts. Without clear signs of strength there, buyers may enter too early. There’s no need to rush given the short-term volatility.

Market Strategy

Resistance around 144.00 has firmed, creating a ceiling that might be tested if the market stabilizes. The previous level of 145.05 is now out of reach, which is important. Regaining 144.00 doesn’t guarantee momentum has shifted but could indicate that weak positions are being cleared. In that case, it’s crucial to watch for a consolidation phase with a clear direction, especially on hourly closes. From our perspective, we should also monitor how USDJPY performs not just at the boundaries of this short-term channel but around volume-weighted averages that often matter in these conditions. A solid break combined with increased volume could quickly change positioning. Until we see that, and with uncertainty in direction, it’s wise to approach rallies with caution and view dips as short-term unless the 141.70 support is convincingly broken with high volume. Focus on reactions, not anticipations, for timing decisions. Create your live VT Markets account and start trading now.

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The US Dollar is struggling to break past the 0.8225 resistance level while inside a downward channel. This suggests that bears are in control, with a key focus on holding above the 0.8200 support level. Although there has been some positive sentiment lately due to a pause on European tariffs, the Dollar is still having trouble against the Swiss Franc. Concerns about US fiscal policy are influencing this trend, especially as the Senate discusses tax legislation. At the moment, the US Dollar shows mixed strength against major currencies, performing best against the Japanese Yen. Its performance against others is fluctuating: it is down by -0.12% compared to the Euro, -0.23% against the British Pound, and up by 0.27% compared to the Canadian Dollar.

Technical Outlook Suggests Bearish Trend

The technical analysis for USD/CHF indicates ongoing lower highs and lows, marking a bearish trend. With the 4-hour RSI below 50, bulls have failed twice to surpass the 0.8225 resistance, which hints at a possible retest of the 0.8200 support. If 0.8200 breaks, the next target could be around 0.8170, and then the 161.8% retracement level at 0.8150. If bulls manage to break above 0.8225, attention could shift to 0.8270. Investors should do their own research before making financial decisions. This information is for educational purposes and may include forward-looking statements. Errors might exist, and there’s a risk of losing some or all of your investment. The US Dollar continues to face selling pressure within its downward channel. Despite attempts to recover, sellers are maintaining control. Every effort to exceed 0.8225 has failed, reflecting a lack of demand for higher prices at this point. This resistance level is well defended, especially since bulls have been turned away without much challenge. Technically, the downward pattern is quite clear, reflecting lower highs and lower lows. This trend often signifies that the downward movement is not over yet. The RSI staying under 50 shows that the momentum is not leaning towards buyers.

Concerns Over US Fiscal Policy

There is renewed downward pressure around the 0.8200 mark. If this level breaks, the next support could be around 0.8170, potentially leading to further declines toward 0.8150. The 161.8% Fibonacci level is significant and often acts as a point for taking profits or strong market reactions. This weakness persists even with a generally positive risk sentiment, which is surprising. The market welcomed the pause on European tariffs, but this hasn’t helped the Dollar in this pair. The underlying weakness is driven by concerns over US fiscal policy, particularly regarding tax directions. Ongoing Senate discussions have left some investors anxious about Washington’s ability to maintain stability. The Dollar’s strength is not consistent. It is performing well against the Yen, mainly due to the ongoing yield gap and the Bank of Japan’s dovish stance. However, it’s losing a bit against other currencies. A decline of -0.12% against the Euro or -0.23% against the British Pound might seem minor daily, but collectively, these drops indicate weakening support. The small gain of +0.27% against the Canadian Dollar seems more linked to oil prices and growth expectations than overall strength. For those planning their positions, the current trend direction is crucial. There isn’t much indication of a strong reversal unless the 0.8225 level is broken and maintained. If 0.8200 gives way, there’s a risk of further declines towards lower extension targets. This situation requires careful monitoring, especially during low-liquidity times when movements can be more pronounced. When analyzing these trends, it’s wise to consider price changes in context with the broader market—taking into account the risk sentiment overall. The disconnect between the recent tariff news and currency movements suggests deeper issues, possibly related to policy uncertainty. For now, price action shows that confidence is not currently leaning towards the Dollar in this pairing. Create your live VT Markets account and start trading now.

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