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ECB Governing Council member Francois Villeroy de Galhau refrained from detailing specific plans for the upcoming September 14 meeting. But he added, "I'm convinced we are close or very close to the high point of interest rates."

Also, "In our fight against inflation, maintaining rates for a sufficiently long period now counts for more than further significant rises", he said.

Villeroy also weighed in on inflation and economic growth trends, asserting that inflation passed its peak at the start of the year." He added that recent fluctuations in oil prices "should not change the underlying dis-inflationary trend." i

As for growth, Villeroy offered a measured outlook. "For the entire euro zone, we don't see a recession today," he noted. "The picture for France and the euro zone is slightly positive growth, slower growth," Villeroy added.

USDJPY finally snapped the 146.40 bar after a three week-long battle, stretching its uptrend towards the 147.70 constraining area for the first time since November 2022. Notably, this is where the pair peaked in 1998.

Despite Tuesday’s quick bounce in the price, the MACD could not climb above its red signal line. On the other hand, the RSI is hovering comfortably above its 50 neutral mark, while the stochastic oscillator has resumed its positive slope, witnessing persisting buying interest.

The upward-sloping exponential moving averages (EMA) are embracing the positive trend in the market.

If the bulls pierce through the 147.70 barricade, the next challenge could arise near the tentative ascending line from March 2023 at 149.30. The 150.00 psychological mark could come into consideration as well before traders target the 32-year high of 151.93 printed in October 2022.

On the downside, the 146.40 area could turn into a support region if the current weakness in the price continues. The 20-day EMA might also block the way down ahead of the 144.80 level. If the sell-off extends below the 50-day EMA, the next stop could be within the 140.80-141.50 zone, where the ascending trendline from March 2023 is located.

In brief, USDJPY has upgraded its 2023 bullish outlook above a tough resistance, boosting hopes for a continuation higher.

NZDUSD has been stuck in a steep downtrend after posting a fresh five-month high of 0.6410 in mid-July. Despite trading flat for the past two weeks, the pair dropped to a fresh nine-month bottom of 0.5858 in yesterday’s session before paring back some losses.

The momentum indicators are heavily tilted to the bearish side. The RSI is hovering near its 30-oversold mark, while the stochastic oscillator is also negatively charged near its 20-oversold territory.

Should the downward spike extend, the price could initially face 0.5730, which is the 78.6% Fibonacci retracement of the 0.5510-0.6536 upleg. A violation of that zone could pave the way for the October 2022 support of 0.5598. Further declines could then come to a halt at the October 2022 bottom of 0.5510.

On the flipside, bullish actions may encounter immediate resistance at the 61.8% Fibo of 0.5902. Piercing through that wall, the pair could advance towards the 50.0% Fibo of 0.6023 before the 38.2% Fibo of 0.6144 gets tested. Even higher, the 23.6% Fibo of 0.6294 might curb the pair’s upside.

Overall, NZDUSD sank to a fresh 2023 low after a hard battle around the 61.8% Fibo of 0.5902. For the bulls to regain some confidence, the price needs to reclaim that region.

EUR/USD started a fresh decline from 1.0940. USD/JPY is rising and might climb further toward the 148.80 resistance zone.

Important Takeaways for EUR/USD and USD/JPY Analysis Today

• The Euro started a fresh decline below the 1.0860 support zone.
• There is a key bearish trend line forming with resistance near 1.0760 on the hourly chart of EUR/USD at FXOpen.
• USD/JPY climbed higher above the 146.10 and 147.00 levels.
• There is a connecting bullish trend line forming with support near 147.20 on the hourly chart at FXOpen.

EUR/USD Technical Analysis

On the hourly chart of EUR/USD at FXOpen, the pair started a fresh decline from the 1.0940 zone. The Euro declined below the 1.0860 support zone against the US Dollar.

The pair even settled below the 1.0805 zone and the 50-hour simple moving average. A low is formed near 1.0707 and the pair is now consolidating losses near the 23.6% Fib retracement level of the recent decline from the 1.0808 swing high to the 1.0707 low.

On the upside, the pair is now facing resistance near the 50-hour simple moving average at 1.0760 and a key bearish trend line. It is close to the 50% Fib retracement level of the recent decline from the 1.0808 swing high to the 1.0707 low.

The next major resistance is near 1.0805. The main resistance is now near 1.0860. An upside break above 1.0860 could set the pace for another increase. In the stated case, the pair might rise toward 1.0940.

If not, the pair might resume its decline. The first major support on the EUR/USD chart is near 1.0705. The next key support is at 1.0680. If there is a downside break below 1.0680, the pair could drop toward 1.0635. The next support is near 1.0620, below which the pair could start a major decline.

USD/JPY Technical Analysis

On the hourly chart of USD/JPY at FXOpen, the pair started a decent increase from the 144.70 zone. The US Dollar gained bullish momentum above 146.10 against the Japanese Yen.

It settled above the 50-hour simple moving average and 147.00. A high is formed near 147.80 and the pair is now correcting gains. On the downside, the first major support is near the trend line at 147.20.

The next major support is near the 23.6% Fib retracement level of the upward move from the 144.44 swing low to the 147.81 high at 147.00 and the 50-hour simple moving average. If there is a close below 147.00, the pair could decline steadily.

In the stated case, the pair might drop toward the 50% Fib retracement level of the upward move from the 144.44 swing low to the 147.81 high at 146.10. The next stop for the bears may perhaps be near the 144.70 region.

Immediate resistance on the USD/JPY chart is near 147.80. The first major resistance is near 148.00. If there is a close above the 148.00 level and the RSI moves above 60, the pair could rise toward 148.80. The next major resistance is near 149.20, above which the pair could test 150.00 in the coming days.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Markets

The dollar caught all market attention yesterday. Surging against everything and everyone, the trade-weighted index closed beyond the 104.7 resistance (May high). EUR/USD (1.0722) lost the upward trading range and the next (intermediate) support at 1.0735 also succumbed. USD/JPY (147.72) finished at the highest level since November last year, bringing the October 2022/multi-decade high of 150+ ever closer again. It triggered the strongest warning from Japan’s top currency official, Masato Kanda, this morning. He said speculative moves are being seen in the market and if they continue, the government will deal with them. Last year, the government intervened several times after USD/JPY hit 145 and 150 thereafter. US yields leg higher on their first trading day of the week supported the dollar’s move. Changes varied between 7 and 9 bps across the curve with the real yield component responsible for about half of the gains. Whether or not the Fed skips a hike at the September meeting, from the recent batch of economic data it is becoming ever more clear that rates will need to stay at elevated levels for quite some time. Markets are coming to terms with that. German yields rose 2.2-5.5 bps. Equities felt some pressure from rising (real) yields. WS closed with minor losses up to 0.56% (DJI). Oil prices surged to (above) $90/b (Brent) after the Saudis and Russia extended their voluntary production cuts through end this year (see below).

Japan’s verbal intervention offers the yen some respite but it’s unconvincing. USD/JPY loses a few ticks to 147.34. The US dollar in general is trading marginally softer after yesterday’s impressive run. EUR/USD consolidates around the 1.0735 support/resistance zone. USD/CNY is less than an inch away from the multi-year highs seen intraday in November 2022. Another record strengthening bias in this morning’s fixing failed to do anything for the yuan. Equities in the Asian-Pacific region trade mixed with Japan marginally outperforming. US yields lose a few bps.

Bank of England governor Bailey appears before parliament today. We’ll be looking closely to what he has to say about monetary policy going forward. Headline CPI has eased sharply in recent months but core inflation remains sticky. EUR/GBP has been trapped between a 0.85/0.87 sideways trading range since June with the pair currently nearing the lower bound again. Other features on the eco calendar are the Fed’s Beige Book and the US services ISM. Consensus expects more or less a stabilization at 52.5. That would underscore the ongoing US eco resilience, offering a floor below US yields as well as the dollar in a daily perspective. For another leap higher, in particular US yields above the current cycle highs, we might need green light from next week’s August CPI.

News and views

According to data published by the Australian Bureau of Statistics this morning, Australian GDP rose 0.4% in the April-June quarter. Activity was 2.1% higher compared to the same quarter last year. The economy grew 3.4% over 2022-23. Q1 activity was upwardly revised from 0.2% Q/Q to 0.4% Q/Q. Growth was mainly driven by investment and exports. Consumption growth rose a modest 0.1% Q/Q with a limited 0.1% contribution to growth. Household saving to income fell for the seventh consecutive quarter to 3.2 per cent. Government expenditure rose 0.4%. Net trade contributed 0.8 ppts, with a rise in exports (+4.3%) partly offset by a smaller increase in imports (+0.7%). Total public investment increased 8.2%. New private investment increased 1.6%. Dwelling investment fell 0.2% as increased activity in the construction of apartments and townhouses was offset by a continued decline in demand for renovations. Changes in inventories was the predominant detractor from GDP growth. Yesterday, the Reserve Bank of Australia left its policy rate unchanged as it assess the decline in inflation. The Aussie dollar stabilizes close to recent low at near AUD/USD 0.638.

Brent oil this morning is trading near the $90 p/b mark as Saudi Arabia and Russian extended established production cuts not only on a monthly basis but towards the end of the year. Saudi Arabia since July additionally removed 1 mln barrels a day from the oil market. Russian recently applied a 300k bpd export cut. The move risks reigniting global inflationary pressures. Brent oil has rebounded from levels near $70 p/b in spring this year and is again nearing price levels recorded about a year ago potentially halting the downward contribution from a lower oil price to (headline) inflation.

Daily Pivots: (S1) 184.54; (P) 185.16; (R1) 186.25; More...

Intraday bias in GBP/JPY stays neutral for the moment as sideway trading continues. On the upside, above 186.04 will argue that larger up trend is ready to resume through 186.75. On the downside, however, break of 183.51 will bring deeper correction to 55 D EMA (now at 182.11).

In the bigger picture, up trend from 123.94 (2020 low) is in progress. Next target is 195.86 (2015 high). This will remain the favored case as long as 176.29 support holds, even in case of deeper pull back.

Daily Pivots: (S1) 157.96; (P) 158.23; (R1) 158.66; More....

Intraday bias in EUR/JPY remains neutral as sideway trading continues. On the downside, break of 156.85 will turn bias back to the downside for 55 D EMA (now at 156.42) and below. On the upside, break of 159.75 will resume larger up trend instead.

In the bigger picture, rise from 114.42 (2020 low) is in progress. Next target is 100% projection of 124.37 to 148.38 from 139.05 at 163.06. Sustained break there will pave the way to retest long term resistance at 169.96. This will remain the favored case as long as 151.39 support holds, even in case of deep pull back.

Daily Pivots: (S1) 0.8512; (P) 0.8545; (R1) 0.8565; More...

Intraday bias in EUR/GBP stays mildly on the downside at this point. Deeper fall would be seen to retest 0.8491 low. Firm break there will resume larger down trend. On the upside, above 0.8609 resistance will bring another rebound. But in any case, outlook will stay bearish as long as 0.8667 resistance holds.

In the bigger picture, the down trend from 0.9267 (2022 high) is seen as part of the long term range pattern from 0.9499 (2020 high). Further decline is in favor as long as 0.8667 resistance holds. Break of 0.8491 will resume the fall towards 0.8201 (2022 low).

Daily Pivots: (S1) 1.6704; (P) 1.6799; (R1) 1.6906; More...

Intraday bias in EUR/AUD stays neutral first, with focus on 1.6887 resistance. Firm break there should confirm that correction from 1.7062 has completed at 1.6647. Further rally should be seen through 1.7062 to 1.7377 projection level. On the downside, break of 1.6647 will extend the correction lower instead.

In the bigger picture, the rise from 1.4281 (2022 low) is in progress. Next target is 100% projection of 1.5254 to 1.6785 from 1.5846 at 1.7377. For now, outlook will stay bullish as long as 1.5846 support holds, even in case of deep pull back.

Daily Pivots: (S1) 0.9521; (P) 0.9537; (R1) 0.9552; More...

Intraday bias in EUR/CHF remains neutral as range trading continues above 0.9513. With 0.9601 resistance intact, larger down trend is still in favor to continue. On the downside, break of 0.9513 support will confirm this bearish case and target 0.9407 low. Nevertheless, break of 0.9601 resistance will turn bias back to the upside for stronger rebound to 0.9646 resistance and above.

In the bigger picture, medium term outlook is staying bearish as the pair is capped well below falling 55 W EMA (now at 0.9839). Down trend from 1.2004 (2018 high) is in favor to continue. Sustained break of 0.9407 will target 61.8% projection of 1.1149 to 0.9407 from 1.0095 at 0.9018. For now, this will remain the favored case as long as 0.9670 support turned resistance holds, in case of strong rebound.