Japanese Yen: Upside risks after sharp rebound against US Dollar – UOB

FXStreet Insights Team FXStreet

UOB’s Quek Ser Leang highlights that USD/JPY’s unexpected plunge to 160.62 has shifted the short-term bias lower, even as oversold conditions suggest scope for a rebound within 160.80–161.90 intraday. Over one to three weeks, further downside toward 160.00 is possible only if the pair closes below 160.60, with strong resistance now around 162.45.

Oversold bounce within broader downside risk

"24-HOUR VIEW: The following are excerpts from our update yesterday: “There has been a slight increase in downward momentum, and the bias for USD today is tilted to the downside. That said, any decline is likely to be contained within a range of 162.20/162.75. USD is unlikely to break clearly below 162.20.” We did not expect the steep selloff that sent USD to a low of 160.62. USD rebounded from the low to close at 161.09 (-0.90%). The rebound from deeply oversold conditions suggests USD is unlikely to weaken further. Today, USD could rebound further, but this time around, any advance is likely to be contained within a range of 160.80/161.90."

"1-3 WEEKS VIEW: Tracking our positive USD view from the middle of last month, we indicated two days ago (01 Jul, spot at 162.60) that “the risk remains on the upside, and the next level to watch is 163.00.” USD subsequently rose to 162.83, but in a sudden move yesterday, it plunged below our ‘strong support’ level at 161.80 (low was 160.62). While the sharp decline suggests further downside risk, USD must close below 160.60 before a move to 160.00 can be expected. The likelihood of USD closing below 160.60 will remain intact as long as 162.45 (‘strong resistance’ level) is not breached."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

AUD/USD: Next on the upside is 0.7000

AUD/USD leaves behind Monday’s downtick and trades with marked gains, approaching the critical 0.7000 yardstick ahead of the opening bell in Asia on Wednesday. The pair’s solid performance follows the Greenback’s fresh downward trend amid cooling geopolitical tensions and caution ahead of the US CPI data.

USD/JPY extends retreat below 158.50 as intervention risks loom

USD/JPY is dropping below 158.50 in the Asian session on Tuesday, snapping a two-day winning streak and pulling back from an over two-week top touched the previous day, despite Japan's soft PPI inflation print. Bulls turn cautious amid speculation that authorities will step in to prop up the Japanese Yen, which, in turn, weighs on the pair.

Gold: Bears struggle to breach below $4,150

Gold now gives away its initial gains and resumes its decline, revisiting the $4,160 region per troy ounce on Tuesday. The precious metal’s pullback comes despite the fresh downward trend in the Greenback in combination with a mixed performance of US Treasury yields across the board and easing tensions on the geopolitical front.

HYPE falls to $80 as ETF outflows and flat volume weigh on Hyperliquid

Hyperliquid (HYPE) declines 4% on Tuesday, briefly touching $80 as perpetual volumes stay flat and institutional interest decreases. Perpetual volume on the platform saw a modest increase last week from $41.5 billion to $42.5 billion. The metric matters because 99% of fees Hyperliquid captures from trading volume flow toward token buybacks.

S&P 500 earnings just hit a record. The AI data centre bill hasn't landed yet

S&P 500 companies are on track for a third straight quarter of earnings growth above 25%, according to FactSet. Their profit margin hit 17% in the April-June quarter, the highest in FactSet data going back to 2009. The cash behind those earnings has been shrinking for two years, and almost all of the shrinkage is in the handful of companies building data centres for artificial intelligence (AI).

Has Bitcoin really escaped the macro forces it was built to fight?

Over 17 years ago, Satoshi Nakamoto designed Bitcoin (BTC) on the back of a global financial crisis as an alternative to the global monetary system outside the control of central banks, governments and traditional intermediaries. This raises a key question: has Bitcoin really become independent of the macroeconomic forces it was built to challenge?