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The USDJPY pair exhibits an incomplete bullish sequence originating from the April 22, 2025 low, signaling potential for further upside. We can project the extreme target area for this rally can be projected using using the 100% to 161.8% Fibonacci extension from the April 22 low. This places the target range between 150.88 and 156.33. The ongoing rally from the May 27, 2025 low is unfolding as a double three Elliott Wave structure. This structure has two zigzag corrective structure driving the upward momentum.

From the May 27 low, wave W concluded at 148.03. A corrective pullback in wave X then followed, which bottomed at 142.67. Currently, wave Y is in progress, with internal subdivision as a zigzag pattern. From the wave X low, wave ((a)) peaked at 149.18, followed by a corrective wave ((b)) that unfolded as a zigzag. Within this structure, wave (a) ended at 147.81 and wave (b) reached 149.08. Wave (c) completed at 145.87, finalizing wave ((b)) in the higher degree. The pair has since resumed its ascent in wave ((c)), developing as a five-wave impulse.

From wave ((b)), wave (i) concluded at 148.71, with a minor pullback in wave (ii) at 147.79. In the near term, as long as the pivot low at 145.87 holds, dips are expected to attract buyers in a 3, 7, or 11-swing corrective pattern, supporting further upside toward the Fibonacci extension targets.

USDJPY – 60-Minute Elliott Wave Technical Chart:

USDJPY – Elliott Wave Technical Video:

https://www.youtube.com/watch?v=QK2AErXqDKk

Markets

The Fed’s policy rate stayed at 4.25-4.5% yesterday. It wasn’t a unanimous decision though. Two governors favoured of a 25 bps cut. Waller has repeatedly called for a July cut, citing a weaker economy and labour market than headline numbers suggest. For Bowman it was a matter of tariff inflation not realizing as much as initially feared. But for the FOMC majority it all remains to be seen and want to wait out a couple of months. The statement contained only some marginal changes. The growth assessment was downgraded from “expanding at a solid pace” to “moderating in the first half of the year”, with Powell during the press conference referring to a slowdown in consumer spending. With the July status quo, the Fed is buying time to wait and see future data rolling in. That seems to be both possible with a labour market and economy in a solid position and necessary: Powell said they are “still a ways away from seeing where things [ie tariffs impact] settle”. The Fed chair didn’t bite the bait when asked if the central bank would cut rates in September, as suggested earlier by US president Trump. US rates rallied between 4.3 and 7.3 bps in a bear flattening move. This suggests markets were at least expecting some kind of concrete clue for near-term easing. Bets for a September move fell from around 70% to <50%. All eyes are now turning to the “Labor Markets in Transition: Demographics, Productivity, and Macroeconomic Policy"-themed Jackson Holy symposium taking place August 21-23. This served in the past multiple times as an occasion to announce policy changes. The dollar extended a three-day jump against the euro and pushing the EUR/USD pair towards the 1.1431-support. The trade-weighted index tested but closed below the 100 barrier.

In overnight news, South Korea became the latest country in securing a trade deal with the US ahead of the August 1 deadline. They agreed to a 15% import levy and a Japan-like $350bn SK fund for US investments. While talks with India are ongoing, they will have a 25% rate plus a penalty for buying Russian energy starting Friday. The economic calendar for later today takes a step back after yesterday’s data flurry that included US and European GDP. The first EU member states inflation prints were also released on Wednesday with Italy, France and Germany joining the streak today. June PCE inflation in the US is up for publication too but could already be extracted from yesterday’s Q2 reading. In addition, Powell during the press conference already said (core) PCE would be 2.7%. We’re now looking at Friday’s payrolls report to validate the central bank’s relatively optimistic view and to determine (front-end) rates short-term trajectory. That will be the case for the USD as well. We are looking for EUR/USD to bottom out somewhat now but it’s the labour market report that’ll have the last say. EUR/USD 1.1431 survives for now.

News & Views

The Bank of Japan kept the policy rate unchanged at 0.5% this morning. It slightly upgraded the growth outlook for fiscal year 2025 (through March 2026) to 0.6% while keeping the forecasts for the two years after unchanged. Core inflation (ex. fresh food) for FY 2025 got a significant bump to 2.7% from 2.2%. Inflation forecasts for 2026 and 2027 were lifted to 1.8% and 2%. Risks for growth remain tilted to the downside but uncertainty diminished from being “extremely high” to “high”. Price risks meanwhile are seen as generally balanced, to be compared to the downside risks for 2025 and 2026 it cited in the previous outlook report. This suggests the central bank is moving closer to another rate hike. Money market pricing didn’t budge a lot with a 25 bps increase priced in for about 80% by the end of the year. The Japanese yen creeps higher against an overall weaker USD. USD/JPY trades near 148.9.

The Banco do Brasil held rates steady at 15% at yesterday’s policy meeting. The first and widely expected hold interrupted a sequence of seven hikes that raised the Selic rate a cumulative 4.5 ppts. The BdB said it’ll remain at 15% for the foreseeable future amid above-target inflation (5.3% in June vs a 3% +/- 1.5 ppt target) due to public spending and a near record-low unemployment rate. Inflation is expected to remain too high at least through 2027Q1. Tariff-related uncertainty over trade strengthens the central bank’s cautious stance. US President Trump on Wednesday delayed the implementation of a 50% levy by seven days (beyond the August 1 deadline). He also listed hundreds of products to be exempted from tariffs. The Brazilian real welcomed that by erasing much of the earlier losses. USD/BRL closed at 5.57 and has yet to react to the BdB’s policy decision.

Daily Pivots: (S1) 197.48; (P) 197.96; (R1) 198.46; More...

The breach of 197.41 support suggests that GBP/JPY's fall from 199.967 short term top is already correcting the rally from 184.53. Intraday bias is mildly on the downside for 193.99 cluster support (38.2% retracement of 184.35 to 199.96 at 193.99). For now, risk will stay on the downside as long as 199.96 resistance holds, in case of recovery.

In the bigger picture, price actions from 208.09 (2024 high) are seen as a correction to rally from 123.94 (2020 low). The pattern might still extend with another falling leg. But in that case, strong support should be seen from 38.2% retracement of 123.94 to 208.09 at 175.94 to contain downside. Meanwhile, decisive break of 208.09 will confirm long term up trend resumption.

Daily Pivots: (S1) 170.13; (P) 170.85; (R1) 171.24; More...

Intraday bias in EUR/JPY stays on the downside at this point. Fall from 173.87, as a correction to rally form 161.06, is in progress for 38.2% retracement of 161.06 to 173.87 at 168.97. Strong support should emerge from 55 D EMA (now at 168.68) to contain downside and bring rebound. On the upside, above 171.52 minor resistance will turn intraday bias neutral first.

In the bigger picture, considering current strong momentum as seen in the rally from 154.77, corrective pattern from 175.41 could have already completed. Decisive break there will confirm long term up trend resumption. Next target is 61.8% projection of 124.37 to 175.41 from 154.77 at 186.31. However, rejection by 175.41, followed by firm break of 55 D EMA (now at 168.69) will delay this bullish case.

Daily Pivots: (S1) 0.8598; (P) 0.8628; (R1) 0.8645; More...

Intraday bias in EUR/GBP remains on the downside at this point. Fall from 0.8752 is seen as correcting the rise form 0.8354 for now. Deeper decline could be seen through 38.2% retracement of 0.8354 to 0.8752 at 0.8600. But strong support might emerge from 55 D EMA (now at 0.8576) to bring rebound. On the upside, above 0.8684 minor resistance will turn intraday bias neutral first. However, sustained trading below 55 D EMA will raise the chance of near term bearish reversal.

In the bigger picture, the structure from 0.8221 medium term bottom are not impulsive enough to suggest that it's reversing the down trend from 0.9267 (2022 high). But even if it's a correction, further rise is expected to 61.8% retracement of 0.9267 to 0.8221 at 0.8867. This will remain the favored case as long as 55 W EMA (now at 0.8486) holds.

Daily Pivots: (S1) 1.7699; (P) 1.7743; (R1) 1.7771; More...

EUR/AUD's break of 0.7717 support revives that case rise from 1.7245 has completed at 1.8094. Corrective pattern from 1.8554 should now be in the third leg. Intraday bias is back on the downside for 1.7459 support first. Firm break there will solidify this case and target 1.7245 low. On the upside, though, above 1.7785 minor resistance will turn intraday bias neutral again first.

In the bigger picture, price actions from 1.8554 medium term top are seen as a corrective pattern. While deeper pullback might be seen, downside should be contained by 38.2% retracement of 1.4281 (2022 low) to 1.8554 at 1.6922 to bring rebound. Up trend from 1.4281 is expected to resume at a later stage.

Daily Pivots: (S1) 0.9286; (P) 0.9300; (R1) 0.9310; More....

Intraday bias in EUR/CHF stays neutral at this point. On the downside, decisive break of 0.9292 support will bring deeper decline to retest 0.9218 low. On the upside, above 0.9361 will suggest that corrective pattern from 0.9445 has completed, and target 0.9428/45 resistance zone.

In the bigger picture, while downside momentum has been diminishing as seen in W MACD, there is no sign of bottoming yet. EUR/CHF is still staying below 55 W EMA (now at 0.9424) and well inside long term falling channel. Outlook will stay bearish as long as 0.9660 resistance holds. Break of 0.9204 (2024 low) will confirm resumption of down trend from 1.2004 (2018 high).

Daily Pivots: (S1) 1.1346; (P) 1.1459; (R1) 1.1518; More...

Intraday bias in EUR/USD remains on the downside for the moment. Fall from 1.1829, as a correction to rally from 1.0176, is in progress for 38.2% retracement of 1.0176 to 1.1829 at 1.1198. On the upside, above 1.1571 minor resistance will turn intraday bias neutral and bring consolidations first, before staging another decline.

In the bigger picture, rise from 0.9534 long term bottom could be correcting the multi-decade downtrend or the start of a long term up trend. In either case, further rise should be seen to 100% projection of 0.9534 to 1.1274 from 1.0176 at 1.1916. This will remain the favored case as long as 1.1604 support holds.

Daily Pivots: (S1) 1.3183; (P) 1.3284; (R1) 1.3341; More...

Intraday bias in GBP/USD remains on the downside at this point. Fall from 1.3787, as a correction to rise from 1.2099, is in progress. Deeper decline should be seen to 100% projection of 1.3787 to 1.3363 from 1.3587 at 1.3163. On the upside, above 1.3385 minor resistance will turn intraday bias neutral again first.

In the bigger picture, up trend from 1.3051 (2022 low) is in progress. Next medium term target is 61.8% projection of 1.0351 to 1.3433 from 1.2099 at 1.4004. Outlook will now stay bullish as long as 55 W EMA (now at 1.3045) holds, even in case of deep pullback.

Daily Pivots: (S1) 148.39; (P) 148.96; (R1) 150.12; More...

Intraday bias in USD/JPY remains on the upside for the moment. The break of 149.17 resistance suggests that rise from 139.87 is resuming. Further rally should be seen to 100% projection of 139.87 to 148.64 from 142.66 at 151.43, which is close to 151.22 fibonacci level. On the downside, below 147.79 minor support will turn intraday bias neutral again.

In the bigger picture, price actions from 161.94 (2024 high) are seen as a corrective pattern to rise from 102.58 (2021 low). Decisive break of 61.8% retracement of 158.86 to 139.87 at 151.22 will argue that it has already completed with three waves at 139.87. Larger up trend might then be ready to resume through 161.94 high. In case the corrective pattern extends with another fall, strong support is expected from 38.2% retracement of 102.58 to 161.94 at 139.26 to bring rebound.