The relative calm of August trading is likely to fully disappear in the coming days, as traders react to more nervous sentiment and the USD/ZAR could prove very choppy.

The USD/ZAR is trading near the 17.00000 level as of this writing, as bullish speculation gets plenty of consideration.

The USD/ZAR is trading within sight of the 17.00000 with active price action abundant.  On cue in the midst of the storm created by Federal Reserve Chairman Jerome Powell on Friday, the USD/ZAR currency pair went from a low of nearly 16.71000 to 16.90000 without much hesitation. Via early transactions this morning the USD/ZAR has continued to move incrementally higher and is touching key psychological ratios near 17.00000.

17.00000 Could prove to be Lynchpin for Dynamic Movement in USD/ZAR this week

It may seem quite simple to say the 17.00000 is important psychologically, but having broken this ratio higher already in July and only last week, the USD/ZAR may start to create a group of ‘backers’ who believe the forex pair should be above this level fundamentally for the time being . Global market conditions remain nervous and last week’s Jackson Hole central bankers’ conference has done little to soothe the minds of financial houses.

Technically the 17.00000 has been punctured enough in recent memory to have created a framework of belief this level can prove vulnerable again.  If the 17.00000 level is toppled and the 17.05000 mark begins to be flirted with it could set the stage for another round of dynamic speculative buying. Only one week ago the USD/ZAR touched the 17.13600 mark. And in July the USD/ZAR traded above 17.20000.

Traders need to be prepared for the Potential of a rather Turbulent Week in the USD/ZAR

• The relative calm of August trading is likely to fully disappear in the coming days, as traders react to more nervous sentiment and the USD/ZAR could prove very choppy.
• Global conditions in Forex remain intense as a strong USD causes problems with a handful of emerging market currencies; the USD/ZAR is reflecting this whirlwind of results as it tests highs.

Speculators should not be overly ambitious in the short term.  Quick hitting trades which look for realistic targets may prove to produce the best results in the near term. If sustained trading takes place above the 17.00000 level this will spark intrigue for the USD/ZAR and could allure more bullish sentiment.

However, the USD/ZAR will need to sustain value above the 17.14000 ratio in order to build a strong surge higher which then tests July’s highs. If the USD/ZAR were to stumble to the 16.93000 to 16.87000 ratios it may be tempting as a place to ignite buying positions based on the notion more upside price movement will occur.

USD/ZAR Short Term Outlook:

Current Resistance: 17.04900

Current Support: 16.93200

High Target: 17.15800

Low Target: 16.81000

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The US dollar’s gains were temporarily halted against the other major currencies after data released yesterday showed that the slowdown in the US economy may have accelerated in August. The USD/JPY pair retreated to the support level 135.80, after gains at the beginning of the week’s trading, towards the resistance level 137.70 and settled around the 136.75 level at the time of writing the analysis.

As announced, the S&P Global PMI survey of the US economy showed a sharp decline in service sector activity, with the services PMI reading at 44.1, well below the 49.2 markets expected and July’s 47.3. A reading below 50 indicates deflation. By contrast, UK Services PMI came in at 52.5 in August, which was above expectations. The US manufacturing PMI read at 51.3, but it was lower than the 52.0 that markets had expected. The Composite PMI – which adjusts readings to better reflect the broader economy – came in at 45.0, well below expectations of 49.0 and 47.7 in July.

For its part, S&P Global said the decline in production was the fastest since May 2020 and exceeded anything recorded outside the initial epidemic outbreak since the chain began nearly 13 years ago. The data indicates that the US economy is slowing amid rising inflation and higher interest rates at the Federal Reserve.

Signs of slowdown

From a forex market perspective, another sign of a slowdown will dampen investor expectations about the number of interest rate hikes the Fed is willing to deliver over the coming months. Expectations of a rate hike in the cooldown are in turn creating headwinds for the US dollar as it leads to lower bond yields.

Standard & Poor’s Global also said material shortages, delays in delivery, rise in interest rates and strong inflationary pressures have all dampened customer demand. The Fed may be tempted to slow the pace of increases given the report that companies raised their selling prices at the weakest pace in 18 months.

This data suggests a significant slowdown in the US, provided that it tracks GDP closely. “I’m a huge fan of PMIs, but even I would have treated this recession with a pinch of salt,” says independent economist Julian Jessup. “The reason for the weakness was the sharp drop in the services index, which has only a short track record, while the alternative ISM index has held up well,” he added.

Thus, the Fed will read the PMI report with interest, but it will likely not be affected by its rate hike policy. Therefore, despite the decline of the dollar, the general premise of further strength remains.

US new home sales in July were reported to have fallen for the sixth time this year to the slowest pace since early 2016, extending a months-long slump in the housing market fueled by higher borrowing costs and declining demand. Government data on Tuesday showed that purchases of new US single-family homes fell 12.6% to a 511,000 annual pace from 585,000 in June. The median estimate in a Bloomberg survey of economists called for 575,000. Overall, the fall in July sales is the latest example of how the housing market has buckled under the weight of higher prices and higher borrowing costs. Construction has slowed, home purchase orders are down, and more buyers are pulling back from deals.

Inventories are booming amid a decline in demand, which is likely to put downward pressure on home prices in the coming months. And there were 464,000 new homes for sale at the end of the month, the most since 2008. However, 90% of them were either under construction or not yet started.

Data released last week showed that housing starts fell in July to the slowest pace since early 2021, and sales of existing homes – which make up most of the market – fell for the sixth month in a row to the lowest level in more than two years. The New Home Sales report, released by the Bureau of Statistics and the Department of Housing and Urban Development, showed that the median sales price for a new home rose 8.2% from the previous year to $439,400, the slowest pace of price increases since late 2020.

Dollar yen forecast today:

• The general trend of the USD/JPY currency pair is still bullish.
• The currency pair may remain stable around its gains until the reaction from the Jackson Hole symposium and the Federal Reserve’s hints about the future of raising US interest rates, the most important factor for the dollar in achieving its gains.
• Currently, the nearest resistance levels for the currency pair are 137.75 and 138.40, and from there to the historical peak of 140.00.

On the downside and according to the performance on the daily chart, there will be no break in the current trend without the currency pair moving towards the support levels 134.70 and 133.00, respectively.

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• The bullish retracement path of the USD/JPY currency pair this week was capped by testing the resistance level 135.50 before settling around the 135.10 level in the beginning of trading today, Thursday.
• The dollar yen gained further after the release of the minutes of the latest meeting of the US Federal Reserve. and US retail sales figures.
• US central bank officials saw signs of weakness in the US economy at their last meeting, but still described inflation as “unacceptably high” before raising the benchmark interest rate by a significant three-quarters of a point in their quest to slow price increases.

The pace of sales at US retailers was reported unchanged last month as persistently high inflation and rising interest rates forced many Americans to spend more cautiously. Retail purchases were flat after rising 0.8% in June, the Commerce Department reported, and economists had been expecting a slight increase.

However, yesterday’s report contained some positive signs: Excluding autos and auto parts, retail sales rose 0.4% in July. Lower gas prices will likely free up money for people to spend elsewhere. Gasoline sales fell 1.8%, reflecting lower pump prices. Sales of building supplies and garden equipment were halted, as were sales in electronics and hardware stores. Meanwhile, consumers remained wary of spending too much on non-essentials: sales fell 0.5% in supermarkets and 0.6% in clothing stores.

Compared to the previous 12 months, total US retail sales rose 10.3% in July.

Inflation Affecting US Economic Activity

American consumers, whose spending accounts for nearly 70% of US economic activity, remained mostly resilient even as year-round inflation neared four-decade highs, growing economic uncertainty and rising costs for mortgages and money borrowing. However, public spending has weakened, increasingly turning towards things like groceries, and away from less important things like electronics, furniture, and new clothes. The government’s monthly report on retail sales covers about a third of all consumer purchases and does not include spending on most services, from plane prices and apartment rentals to movie tickets and doctor visits. In recent months, Americans have shifted their purchases away from physical goods and more toward travel, hotel accommodations and plane rides.

Inflation continues to be a severe struggle for many families. Although gasoline prices have fallen from their highs, food, rent, used cars and other necessities are becoming much more expensive, exceeding any wage increases that most workers have achieved. Despite the US labor market, which remains strong, the US economy contracted in the first half of 2022, raising fears of a possible recession. Growth has been weakening largely as a result of higher interest rates by the Federal Reserve, which are intended to calm the economy and tame high inflation.

US Dollar Against Japanese Yen Forecast

On the daily chart, technical indicators are heading higher, which provides the momentum for the USD/JPY currency pair. Besides, the momentum factors for the stronger US dollar, which is still a safe haven, and the economic performance of the United States supports the path of tightening the Fed’s policy, and we do not forget that the dollar pair Yen headed towards its highest in 25 years and was the closest to testing the psychological peak of 140.00. Technical indicators have not yet reached overbought levels, so no profit-taking is expected.

On the downside, the closest support levels for the dollar pair are 134.20 and 133.00, respectively. The US dollar will be affected today by the announcement of the Philadelphia manufacturing index, the number of jobless claims, and then the US existing home sales.

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After sharp selling last week, the USD/JPY currency pair was pushed towards the 131.73 support level. The bulls are trying to return the currency pair on its stronger upward path with gains that extended to the resistance level 133.90, and with the expectation of more stimulus, it settled around the 133.25 level at the time of writing the analysis.

According to the economic analysis, the USD/JPY currency pair is trading influenced by the announcement of the preliminary US consumer confidence index in Michigan for the month of August, better than expected at 55.1 versus expectations at 52.5. On the other hand, last week’s initial US jobless claims outperformed the expected 263K with a lower statistic of 262K, while the PPI for July matched expectations of 7.6% (annualized).

The US Consumer Price Index excluding food and energy for the month of July fell both from expectations (year-on-year) and (monthly) at 6.1% and 0.5%, respectively, by 5.9% and 0.3%. The general CPI for this period also came in below expectations in both cases. Economic data last week indicated that every official measure of US inflation was either slowing or declining in July, while separate measures of producer prices and import costs also surprised to see declines in the recent period. Meanwhile, a New York Fed survey showed expectations of future inflation falling on all horizons last month, and a significant University of Michigan survey indicated that expectations fell on all but the longer horizons.

In Japan, bank lending for July beat the expected change (y/y) by 1.4% with a change of 1.8%. On the other hand, the seasonally adjusted current account balance for June exceeded the estimate of -703.8 billion yen with -132.4 billion yen.

USD/JPY Technical Analysis

In the near term and according to the performance on the hourly chart, it appears that the USD/JPY is trading within an ascending channel formation. This indicates a significant short-term bullish momentum in the market sentiment. Therefore, the bulls will look to extend the current move of gains towards 133.88 or higher to 134.26. On the other hand, the bears will look to pounce on pullbacks around 133.05 or lower at 132.54.

In the long term and according to the performance on the daily chart, it appears that the USD/JPY pair is trading within the formation of a sharp descending channel. This indicates a strong long-term bearish bias in market sentiment. Therefore, the bears will target long-term profits at around 131.75 or lower at the 129.30 support. On the other hand, the bulls – the bulls – will look to pounce on profits at around 135.55 or higher at the 138.07 resistance.

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The pair will likely continue rising as buyers target the next key resistance point at 0.7200.

Bullish View

• Buy the AUD/USD and set a take-profit at 0.7200.
• Add a stop-loss at 0.7000.
• Timeline: 1-2 days.

Bearish View

• Set a sell-stop at 0.7050 and a take-profit at 0.6970.
• Add a stop-loss at 0.7100.

The AUD/USD price soared to the highest level since June 10th of this year after the latest American consumer inflation data. It rose to a high of 0.7110, which was about 6.1% above the lowest level this year.

US Inflation Eases

The AUD/USD price jumped sharply after the US consumer inflation data. According to the Bureau of Labor Statistics (BLS), the headline CPI dropped from 1.3% to 0.0% in July. This decline translated to a year-on-year increase of 8.5%, which was lower than the previous 9.1%.

Core inflation also declined from 0.7% to 0.3%, which was lower than the median estimate of 0.5%. As a result, it remained at 5.9% on an annualized basis. Additional data showed that real earnings rose by 0.5% from the previous -0.9%.

Inflation dropped because of the falling oil prices. Brent and West Texas Intermediate (WTI) has dropped from the year-to-date high of over $135 to below $100. At the same time, gasoline prices declined from the year-to-date high of $5 to a low of $4.

Analysts expect that inflation will continue falling considering that the price of other commodities has also dropped. Lumber has dropped to the lowest level in months. The same is true with others like iron ore and copper.

Therefore, the AUD/USD pair rose since investors expect that the Federal Reserve will slow down on its rate hike policies. It has already hiked by 225 basis points this year and analysts believe that it will hike by 50 basis points in the September meeting.

There will be no economic data from Australia on Thursday. Therefore, focus will be on the upcoming US producer price index (PPI) data. Economists expect the data to show that PPI dropped from 11.3% to 10.4% in July.

AUD/USD Forecast

The four-hour chart shows that the AUD/USD pair rose to a high of 0.7108 after the strong American inflation data. As it rose, it moved above the important resistance level at 0.7048, which was the highest point on August 1. It has managed to move above the 25-day and 50-day moving averages and the first resistance of the standard pivot point.

Therefore, the pair will likely continue rising as buyers target the next key resistance point at 0.7200. A drop below the support at 0.7050 will invalidate the bullish view.

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The USD/JPY currency pair started from the support level of 130.40 to the resistance level of 135.50 on Friday, after the announcement that US job numbers were stronger than all expectations. It removed many of the expectations of a recession in the US economy in light of high aggressive US interest rate by the Federal Reserve. The USD/JPY closed the week’s trading, stable around the 134.98 level. Following the weekend’s data, the bulls may find the opportunity to run further higher.

Commenting on the US data. Richard Flynn, managing director at Charles Schwab UK, said US employment data looks solid, but looking a little deeper reveals a mixed picture of the job market. “While US unemployment is still very low, the reason may be low labor force participation rather than the booming economy,” he added. Investors will realize that the unemployment rate is a lagging indicator that was always low at the start of a recession. And in fact, the broader economic indicators have weakened recently.”

If the market approaches this view, the possibility of a dollar rally may stop. However, the same report showed wage growth of 0.5% month-on-month in July and an annual growth rate of 5.2%. For his part, says economist Knut A. DNB Markets’ Magnussen: “Wage growth is higher than what would be consistent with an inflation rate of 2%, and a strong case for further rate hikes going forward.” Paul McKelle, FX analyst at HSBC, said: “We think the Fed is not done hiking yet while global growth momentum is clearly deteriorating. Therefore, we are updating our forecast to increase the upside in the US dollar.”

HSBC has therefore updated its dollar forecast at its mid-year currency review, and is now looking for the GBP/USD exchange rate to end 2022 at 1.17, down from the previous forecast of 1.22. The EUR/USD is expected to end the year at 0.96, down from the previous forecast of 1.0.

USD/JPY Economic Analysis

The USD/JPY currency pair is traded primarily influenced by the results of US economic data. On Friday, the US economy recorded a positive number of US net jobs at 528 thousand for the month of July, which is more than double the target of 250 thousand. The US economy also recorded a noticeably low unemployment rate of 3.5%, down from 3.6% in June, and ahead of estimates of 3.6%. Average hourly wage growth for July rose 5.2% year-on-year, while also posting a sequential growth of 0.5%. In comparison, the market expected growth rates of 4.9% and 0.3%, respectively. Earlier in the week, initial and continuing jobless claims missed estimates.

From Japan, the preliminary headline economic index for June fell short of expectations at 101.2 with a reading of 100.6. On the other hand, Japan’s total household spending for June grew 3.5% (y/y), ahead of the median estimate of 1.5%. Employment cash earnings for the period exceeded 2.1%, up 2.2% year-over-year.

USDJPY Technical Analysis:

In the near term and according to the performance on the hourly chart, it appears that the USD/JPY is trading within an ascending channel formation. This indicates a significant short-term bullish momentum in market sentiment. Therefore, the bears will target short-term profits at around 134.36 or lower at 133.76. On the other hand, the bulls will look to extend the current rally towards 135.57 or higher to 136.20.

In the long term and according to the performance on the daily chart, it appears that the USD/JPY is trading within the formation of a sharp descending channel. This indicates a strong long-term bearish momentum in the market sentiment. Therefore, the bears will look to extend the current path of decline towards 133.05 or lower to 130.67. On the other hand, the bulls will target long-term profits at around 137.24 or higher at 139.38.

For three trading sessions in a row, the bulls are moving at the price of the USD/JPY currency pair to the upside until the US jobs numbers are announced tomorrow, Friday. This will be the strongest driver of the US dollar pairs for this week’s trading. The rebound gains for the dollar-yen pair brought it to the level of 134.55 before settling around the level of 133.85 at the time of writing the analysis. The rebound came from the support level 130.40, which confirmed the break of the bullish trend.

Expectations of a US interest rate hike continue to support record gains for the US dollar in the currency market. In this regard, James Bullard, President of the Federal Reserve Bank of St. Louis, said he favored a strategy of raising interest rates “from the front,” and reiterated that he wanted to end the year at 3.75% to 4% to tackle the hottest inflation in four decades. “We still have some ways to go here to get to tight monetary policy,” Bullard added in an interview with CNBC. “I’ve argued now that with the hotter inflation numbers in the spring, we should get to 3.75% to 4% this year.” Deciding whether you want to do this at a particular meeting, or another is a great question. I loved the front loading. I think it enhances our anti-inflation qualifications.”

All in all, Fed chairs, including Pollard’s speech this week, emphasized that US inflation at a 40-year high has not yet slowed, and pushed against the perception that the US central bank was heading towards a less aggressive phase of monetary tightening. Last week, Federal Reserve Chairman Jerome Powell cited the FOMC’s forecast that the Fed will raise US interest rates to 3.4% at the end of the year and 3.8% in 2023.

“We’re going to have to see compelling evidence via the headline and other measures of core inflation that all come down convincingly before we’re able to feel like we’re doing enough,” Bullard added. He later added that the Fed may have to keep interest rates “higher for a longer period” to see a broad-based slowdown in price growth.

Financial markets are pricing rate cuts as soon as the first half of 2023, and some investors took Powell’s comments at last week’s press conference as a sign that the Fed could soon become less aggressive. Overall, the Federal Reserve raised US interest rates by 75 basis points for the second consecutive meeting, and Powell said that another increase of this size would be possible in September. He did not provide specific guidance for the future and said that future price increases will be data-driven and will be determined in one meeting after another.

Bullard also said he agreed with Powell’s view that the United States is not in a recession, noting that strong job growth is more convincing than the negative two quarters of GDP seen by some as a sign of slackening. Bullard said he expects growth in the second half of the year. “We’re not in a recession right now,” he added, and “with all the job growth in the first half of the year, it’s hard to say there was a recession.”

Forecast of the dollar against the Japanese yen:

Before the announcement of the number of US jobless claims and US trade balance figures. On the daily chart below, the USD/JPY price is trying to return to the vicinity of the general bullish trend. This may happen if the bulls move in the currency pair towards the resistance levels 134.60 and 136.00, respectively. On the other hand, and as I mentioned in the recent technical analyses, it will be important to break the psychological support level of 130.00 to turn the general trend into a bearish one.

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Gold futures extended their gains since the start of trading this week. Gold prices were the closest to testing the psychological top of 1800 dollars an ounce. The price of the yellow metal moved towards the resistance of $ 1788 an ounce before settling around the level of $ 1765 an ounce at the time of writing the analysis. The gains in the gold market came amid a weak US dollar and lower Treasury yields. However, with the US Federal Reserve expected to ease its tightening efforts, investors are once again flocking to gold and investors are covering their shorts.

All in all, the price of gold is up about 5% over the past week, but it’s still down about 2% since the start of 2022 to date. At the same time, the price of silver, the sister commodity of gold, is taking a breather. Silver futures fell to $20.29 an ounce. The price of the white metal is also up about 8% over the past week, although it has remained down about 12% so far this year.

What do gold’s gains mean?

The price of the yellow metal tried to record its fifth win in a row, which is the best performance since April. Surprisingly, things are not just about the economy that underpins gold’s gains. Commenting on the performance, Ravi Boyadjian, chief investment analyst at XM, wrote: “Risk sentiment took a big hit on Tuesday as it emerged that US House Speaker Nancy Pelosi was on her way to Taiwan, defying China’s strong advice not to visit the disputed region.”

This has alarmed global financial markets as it may reduce the bilateral relationship between Beijing and Washington.

The gains were likely to be capped by a stronger dollar. The US dollar index (DXY), which measures the performance of the US currency against a basket of currencies, rose 0.5% to 105.97, from an opening at 105.45. A stronger profit value is usually a bad thing for dollar-priced commodities because it makes them more expensive to buy for foreign investors. Another factor affecting the gold market was the treasury bond market mixed in performance, with the 10-year bond yield rising two basis points to 2.625%. The spread between the 2- and 10-year notes has widened to -35 basis points. Higher bond yields increase the opportunity cost of holding non-yielding bullion.

In other metals markets, copper futures fell to 3.507 dollars a pound. Platinum futures rose to $905.50 an ounce. Palladium futures fell to $2,149.50 an ounce.

Overall, the price of gold rose to its highest level since early July as investors braced for a stormy period in US-China relations with House Speaker Nancy Pelosi heading to Taiwan. The precious metal often benefits from bouts of geopolitical turmoil, and Pelosi’s trip adds to the tailwinds that helped gold rebound from its 15-month low. The reversal of the rising dollar and growing concerns about the global economy also helped bullion prices.

Today’s XAU/USD Gold Price Forecast:

So far, bulls’ attempts to control the price of XAU/USD are still valid, and stability above the $1,780 resistance is important to anticipate the next psychological top $1,800 an ounce. Skipping it will increase the technical purchases of gold and complete the bullish rebound. The price of gold may witness some relative stability until the US jobs numbers are announced by the end of the week. Gold can be bought from every descending level, and the closest support levels for gold are currently 1758 and 1740 dollars, respectively.

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The pair will likely continue rising as buyers target the second resistance level at 1.2415.

Bullish View

• Buy the GBP/USD pair and set a take-profit at 1.2420.
• Add a stop-loss at 1.2200.
• Timeline: 1-2 days.

Bearish View

• Set a sell-stop at 1.2225 and a take-price at 1.2150.
• Add a stop-loss at 1.2320.

The GBP/USD price continued its bullish trend as investors refocused on the upcoming interest rate decision by the Bank of England (BoE). It also rallied as the US dollar and bond yields continued falling. The pair rose to a high of 1.2295, which was the highest level since June 28th of this year. It has risen by more than 4.22% from the lowest point this year.

US Dollar Sell-Off

The GBP/USD pair continued its bullish trend as the US dollar continued falling. The dollar index has droopped from last week’s high of $109.30 to the current $105.7. This decline is mostly because of the ongoing feeling that the Federal Reserve will not be as hawkish as expected.

Last week, the Fed decided to hike interest rates by 0.75%, bringing the year-to-date increase to 225 basis points. The bank will also continue reducing its balance sheet. At the same time, the committee warned that it will continue hiking interest rates in a bid to fight the soaring inflation.

However, analysts now believe that the Fed will not be as hawkish as expected because of the performance of the economy. Data published last week revealed that new and existing home sales declined sharply in June.

Worse, additional data showed that the country sank to a recession in the second quarter as it contracted by 0.9%. As a result, the yield of the 10-year bond year government bonds dropped to 2.66% while the 30-year fell to 2.90%.

The next key catalyst for the GBP/USD pair will be the upcoming American JOLTs data. Economists expect the data to show that the number of vacancies dropped from 11.25 million in June to 11 million in July.

On the bigger picture, the next key catalyst to watch will be the upcoming Bank of England interest rate decision and the US jobs data.

GBP/USD Forecast

The four-hour chart shows that the GBP/USD pair formed an inverted head and shoulders pattern in July. In price action analysis, this pattern is usually a bullish sign. The pair has managed to move above the 25-day and 50-day moving averages. As the pair rose, it moved to the first resistance of the standard pivot point.

Therefore, the pair will likely continue rising as buyers target the second resistance level at 1.2415. A drop below the support level at 1.2200 will invalidate the bullish view.

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The most important events in the Forex market last week were in favor of the continued strength of the US dollar in the market, and the currency pair USD/JPY launched towards the resistance level 136.56, near its highest in 24 years, and settled around the level of 136.00 at the beginning of this week’s trading. The minutes of the last meeting of the US Federal Reserve and US job numbers are still in favor of the path of aggressive US interest rate hikes throughout 2022 to contain record US inflation.

Overall, any further upward revision by the market of US interest rate expectations will do nothing but amplify analysts and economists’ recent concerns about recession risks in the US and the global economy, a risk many recently described as rising.

According to economic analysis, the USD/JPY currency pair is being traded affected by important and unexpected events. Japan was hit by a major tragedy on Friday following the assassination of former Japanese Prime Minister Shinzo Abe. The geopolitical turmoil did not help the Japanese yen, which continued to slide against the dollar. Besides, the Eco Watchers survey for June beat the current forecast of 52.4 with a reading of 52.9, but missed the forecast of 51.6 with a reading of 47.6.

From the US, the US non-farm payrolls performance for June exceeded expectations at 268 thousand jobs with 372 thousand jobs recorded, while the US unemployment rate was in line with estimates at 3.6%. On the other hand, average hourly wage growth improved by 5.2% (y/y), beating the estimate of 5% while also matching the (mo) forecast of 0.3%. Earlier in the week, US initial jobless claims and continuing claims missed estimates. The ISM Services PMI exceeded expectations of 54.5 with a reading of 55.3, while the vertical sectors associated with it came in below expectations.

USD/JPY Forecast

In the near term and according to the performance on the hourly chart, it appears that the USD/JPY is trading within an ascending channel formation. This indicates a significant short-term bullish momentum in market sentiment. Therefore, the bulls will target short-term profits at around 136,474 or higher at the resistance of 136,978. On the other hand, the bears will target the possibility of a pullback at around 135,625 or lower at 135.153.

In the long term and according to the performance on the daily chart, it appears that the USD/JPY is also trading within an ascending channel formation. This indicates a significant long-term bullish momentum in market sentiment. Therefore, the bulls will look to extend gains by targeting profits at around 138,088 or above at the resistance of 140.349. On the other hand, the bears can target long-term profits at around 134,268 or lower at the 132.085 support.