USD/JPY very quiet before Fed's storm

Fed rate decision is coming very soon at 18.00 GMT. Get ready.
USD/JPY technical compression seems unsustainable as one side will have to give in.

Flavio Tosti Independent Analyst

The USD/JPY is trading at around 106.30 down 0.20% so far as the FOMC rate decision is quickly approaching. The key question will revolve around how many times the Fed will hike; three or four times in 2018? Another equally important issue will be the impact of tax cuts on the economy.

After the Fed's rate decision, the FOMC will release its monetary policy’s statement which may provide additional volatility to the USD pairs.

USD/JPY daily chart

The USD/JPY is trading in yesterday's range ahead of the rate decision. The USD/JPY is in the middle of the 105.50-107.00 range. Both the RSI and MACD are showing a positive divergence, although the RSI is still below the 50 mark. A bullish breakout will see the bulls initially targetting the 107.00 psychological level, followed by the 107.60-108.00 area which was a previous supply zone, later followed by 109.00 which is the 38.2% Fibonacci retracement from the November 2017-March 2018 downtrend. On the flip side, if bears win, support is seen at the 104.00, 102.00 and 100.00 figures.

Author

Flavio Tosti

Independent Analyst

GBP/USD defends 1.3300 after strong UK Retail Sales data

GBP/USD is defending its renewed uptick above 1.3300 in the European session on Friday, helped by stronger-than-expected UK Retail Sales data for June. The pair snaps a five-day losing streak but the upside potential could be limited amid heightened military tensions in the Middle East.

EUR/USD holds steady below 1.1400 amid Middle East tensions

EUR/USD is keeping its range below 1.1400 in European trading on Friday. Despite a brief rebound, the pair is trading with caution amid escalating conflicts in the Middle East and following the ECB's no rate change decision.

Gold sticks to intraday losses below $4,050 amid Fed hike bets, bullish USD

Gold remains under some selling pressure for the second straight day, and weakens further below the $4,050 level during the Asian session. Escalating US-Iran tensions support elevated crude oil prices, fueling inflation fears and bolstering expectations of higher-for-longer US interest rates. This helps the US Dollar preserve its strong weekly gains to a nearly one-month high, touched on Thursday, and turns out to be a key factor undermining the non-yielding bullion.

Ethereum: Derivatives interest in ETH improves, but signs of caution remain

Ethereum is hovering slightly below the $1,900 level, down 3% on Thursday following a slight expansion in derivatives interest. The top altcoin's open interest has increased to 14.60 million ETH, marking a 600K ETH increase over the past two days and its highest level since June 7.

Crypto Market Overview: Bitcoin tests 50-day EMA support – Pi Network and Sky lead losses

The broader cryptocurrency market faces headwinds with rising tensions between the US and Iran, pushing Bitcoin down to its 50-day Exponential Moving Average support around $65,135 on Friday. Under pressure, Pi Network and Sky emerge as the worst-performing crypto assets over the last 24 hours.

US Dollar mid-year outlook: Exceptional currency, exceptional risks?

The US Dollar enters the second half of 2026 in a markedly different position from a year ago. The King currency has recovered, reflecting persistent US inflation, changing expectations for Fed policy, geopolitical tensions and renewed demand for defensive assets.