Should we be wary of the upside potential of the U.S. dollar, which has strengthened since the end of the long holiday weekend?

Should we be wary of the upside potential of the U.S. dollar, which has strengthened since the end of the long holiday weekend?

08.07.2025

In yesterday’s U.S. currency trading, the dollar reached its strongest level in U.S. trading hours following the holiday break. The USD/JPY pair rose by approximately 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 US 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-period EMA on the hourly chart. On the 4-hour chart, it is also rebounding and rising, just as on the hourly chart, and on the daily chart, it has hit a new high for the year. The price has recovered to its highest level since December 30, 2024.We will need to watch for any upward momentum in the pound 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 policy rate decision and statement at 13:30, Japan’s Economic Watchers Survey at 14:00, RBA Governor Block’s press conference at 14:30, Germany’sGerman trade balance at 11:00 PM, remarks by German Bundesbank President Nagel and the Canadian Ivey PMI at 11:00 PM, a U.S. 3-year Treasury auction at 2:00 AM, and U.S. consumer credit data at 4:00 AM. We should remain cautious about the upside potential of the U.S. dollar, which has strengthened following the long holiday weekend.

Past Market Reports

1. 17.04.2026New

   Will the market wait and see how much further the U.S. dollar can rise against the yen?

2. 16.04.2026New

   Will the weakening Swiss franc recover? Attention is turning to price movements during European trading hours.

3. 15.04.2026New

   Market participants are likely keeping a close eye on the upside potential of the euro, which has risen against the U.S. dollar

4. 14.04.2026New

   Should we keep an eye on remarks by key figures in the U.S. and try to gauge the direction of currency strength?

5. 13.04.2026New

   Market participants are likely watching for signs of a rebound in the Canadian dollar, which fell against the U.S. dollar following the release of employment figures

6. 10.04.2026

   Will the weakening Swiss franc continue to strengthen against the yen, or should we wait and see?

7. 09.04.2026

   Will the U.S. dollar, which has fallen against the yen, continue its downward slide, or should we wait and see how the market moves?

8. 08.04.2026

   Should we keep an eye on the upside for European currencies that have risen against the U.S. dollar?

9. 07.04.2026

   Market participants may be wary of further downside potential for the U.S. dollar, which has weakened amid concerns over the situation in Iran

10. 06.04.2026

    Investors should be wary of sudden spikes in volatility while major markets are closed