Four reasons for the rapid USD surge – Forex trading USD/JPY near 40-year highs [Video]

In today’s Market Outlook, let’s take a look at Forex trading on Gold, XAU/USD, WTI Crude Oil, USD/CAD, USD/CHF, USD/JPY, and EUR/USD.

Last night we saw some big movements in USD after the US Federal Reserve released its interest rates.

But the movement had nothing to do with yesterday’s interest rates, which were not changed.

I am always advising you to watch the FOMC Statements and the subsequent press conferences, as these can move the markets even more than the figures.

The vote among the voting members of the FOMC was 12-0 to keep rates on hold, but a poll among the 18 members showed that 9, 50%, see a rate rise in 2026.

THAT is what had USD flying higher.

The FOMC stated that inflation is well above target, and they see bringing it down as very difficult.

Also, they see continuing geopolitical risk over the Middle East because, let’s face it, the current MoU between Iran and the United States has the possibility of falling apart during the next 60 days.

We expect the Strait of Hormuz to be open soon, which will affect inflation, but there is still nothing certain in this respect.

Surprisingly, US Retail Sales were higher than predictions, which also gives the Fed the idea that lowering rates would not be prudent now.

And, all this led to optimism in USD as a safe haven and a good investment as bond yields rose, driving USD higher as well.

USDJPY is back at 160 yen, and we have to look at the weekly chart to see this level almost 2 years ago.

Keep in mind that the BoJ just raised rates, but the difference in rates is still huge and, therefore, so are the rates in bonds, driving investors back to the USD and away from JPY.

The question is now, how can we as traders take advantage of the USD spike, as it actually went in favour of the trends in most pairs?

Well, in USDCHF, we spotted a new downtrend, and yesterday’s price action went against the trend.

Keep an eye on this, as if the new downtrend continues, we may have an opportunity to trade in the new direction.

We see the stochastic oscillator overbought and turning over.

If we move out to the daily chart, we see that the current price of around 0.80 CHF, a nice round number, is a key level of resistance.

The technicals on the daily are not suggesting a reversal…yet…but let’s keep an eye on this.

If we move out to the weekly chart, we are clearly in a downtrend.

USDCAD is in the same situation as price is now at a key level that we haven’t seen since November of last year.

We have an overbought stochastic oscillator, but keep in mind that this is a weekly chart.

And, for you Fibonacci fans, we are now at the 50% level of resistance, so we need to see a break above or a bounce below.

Another factor hurting CAD is the fall in the price of WTI Crude Oil but, as we say, watch out for news on the US/Iran MoU.

XAUUSD was also affected by the spike in gold, but it seems to be rebounding.

Before going short again, we might want to wait until we see a definitive bounce to the downside, and a less unsure stochastic oscillator, even though we have a bearish MACD.