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Technical outlook on USD/JPY, EUR/USD, Nasdaq [Video]

  • USDJPY charges back above 160 as traders await ISM Services PMI and FOMC minutes
  • EURUSD stays vulnerable below 20-SMA; ECB accounts and speakers in focus
  • US100 drifts sideways with a bearish bias as AI risks cloud the outlook
Youtube preview

ISM services PMI, FOMC minutes --> USDJPY

USDJPY has once again shown its resilience, quickly bouncing back above 160.00 after Friday's post-NFP sell-off. The pair has already recovered most of its decline from 160.46, putting last week's 40-year high of 162.82 back in focus as Japanese officials appear to be changing tactics by targeting speculative positions and making it more expensive to bet against the yen. Even so, the wide interest rate gap between the Fed and the BoJ, together with Japan's loose fiscal stance, continues to support the dollar.

The spotlight now shifts to Monday's ISM Services PMI, where investors will look for fresh clues on the health of the US economy after the disappointing jobs report. Wednesday's FOMC minutes will then take center stage, with markets searching for signs that policymakers are leaning toward a more hawkish stance under Kevin Warsh. On Thursday, remarks from Fed officials Williams and Logan could offer additional insight ahead of Warsh's semi-annual testimony before Congress next week.

From a technical perspective, the rebound from the 20-day SMA, confirmed by a long-tailed bullish candlestick, keeps the upside scenario alive. If the bulls manage to surge above 163.00, the rally could extend toward the 161.8% Fibonacci extension at 164.25 before testing the psychological 165.00 level. On the downside, the support area between the 20-day SMA and 160.45-161.00 remains crucial, with a break below it likely to invite fresh selling pressure.

ECB accounts --> EURUSD

EURUSD continues to trade at the mercy of the US dollar after last week's failed attempt to break above the 20-day SMA and the 1.1470 resistance zone. Although buying interest has not completely faded, the broader technical picture remains fragile. Any recovery above 1.1455 is likely to face resistance around 1.1500, followed by the 50-day SMA and the key descending trendline near 1.1630.

The Eurozone calendar is relatively light this week, shifting the focus to the ECB meeting accounts and speeches from board members Schnabel and Lane. Investors will be keen to see whether ECB president Lagarde is setting a path toward French politics after signaling that an early exit from the central bank is possible.

AI frenzy tested --> US100

Wall Street is showing signs of fatigue ahead of the Q2 earnings season, raising the risk of a deeper pullback. The US100 index remains trapped inside a symmetrical triangle after hitting a record high of 30,758 in June, while a potential head-and-shoulders pattern continues to take shape. However, the 50-day SMA near 29,250 has so far prevented a bearish breakdown.

While AI optimism continues to support technology stocks, rising competition and heavy investment are increasing pressure on the sector. Headlines suggest Nvidia’s next-generation AI rack system may be delayed until 2028, while OpenAI is reportedly considering granting a 5% stake to the U.S. government to ease political and regulatory concerns after delaying its IPO until next year. Meanwhile, companies such as Anthropic, Google and Meta could explore similar arrangements. Yet, Micron has stood out as a key beneficiary, supported by a ¥1.5 trillion investment to expand production in Japan.

This week’s FOMC minutes and Fed speakers could add further volatility. A break below 29,250, followed by a confirmation move under 28,800, would strengthen the bearish case.

Author

Christina Parthenidou

Christina joined Trading Point in May 2017. She holds a master degree in Economics and Business from the Erasmus University Rotterdam with a specialization in International economics.

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