Should We Be Wary of the Upside Potential for the U.S. Dollar, Which Has Been Gaining Ground Since the End of the Long Holiday?

Should We Be Wary of the Upside Potential for the U.S. Dollar, Which Has Been Gaining Ground Since the End of the Long Holiday?

08.07.2025

In yesterday’s U.S. currency trading, the U.S. dollar reached its strongest level in U.S. trading hours following the long weekend. The USD/JPY pair rose by about 2 yen, from 144.232 to 146.246. A “band walk” was observed along the +2σ line of the hourly Bollinger Bands.On the 4-hour chart, the RSI rose to 72. On the daily chart, the pair broke decisively above the consolidation range in the 145-yen level. We will need to monitor the direction closely to see if the U.S. dollar’s momentum holds.

Among European currencies, the pound was the second-strongest after the U.S. dollar. The GBP/JPY pair rose from 196.772 to 199.001. It rebounded from the 200 EMA on the hourly chart. On the 4-hour chart, it also rebounded and rose, just as it did on the hourly chart, and on the daily chart, it hit a new high for the year.The price has recovered to its highest level since December 30, 2024. We will need to remain vigilant regarding the pound’s upside potential against the yen during today’s European trading session.

Today’s economic indicators include Japan’s balance of payments at 8:50, Australia’s NAB Business Confidence Index at 10:30, the RBA’s policy rate decision and statement at 13:30, Japan’s Economic Watchers Survey at 14:00, and at 14:30, thePress Conference by RBA Governor Block, at 15:00 Germany’s Trade Balance, at 23:00 Remarks by German Bundesbank President Nagel and Canada’s Ivey Purchasing Managers’ Index, at 26:00 the U.S. 3-Year Treasury Auction, and at 28:00 U.S. Consumer Credit Balances.We should remain cautious about the upside potential of the U.S. dollar, which has been firming since the end of the long holiday weekend.