Forex News
- GBP/JPY fades 217.00 breakout, forming potential evening star.
- Break below 216.00 exposes 50-day and 100-day SMAs.
- Bulls must reclaim 217.00 to refocus 218.00 and 218.69.
The GBP/JPY failed to sustain the 217.00 breakout, reversing to the 216.50 area as traders faded the move, exacerbating the decline to current exchange rates. At the time of writing, the cross-pair exchanges hands with losses of 0.36%.
GBP/JPY Price Forecast: Technical Outlook
Price action shows GBP/JPY making a U-turn, opening the door to further downside. A three-candle chart pattern suggests the formation of a bearish chart pattern, the ‘evening star.’ This usually forms during a false breakout, meaning that in the short-term, the path of least resistance is down.
The first support is the psychological 216.50 and 216.00 levels. A breach of the latter will expose the 50-day Simple Moving Average (SMA) at 215.78, followed by the 100-day SMA at 215.02.
On the other hand, if GBP/JPY reclaims 217.00, the next stop would be 218.00. Once cleared, next lie the July 30 highs at 218.69 and 219.00.
GBP/JPY Price Chart – Daily
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
- NZD/USD is trading around 0.5942, little changed, as it consolidates a strong recovery from its recent lows.
- An improved risk mood, helped by reports of a US-Iran ceasefire, has supported the risk-sensitive Kiwi.
- US Initial Jobless Claims and New Zealand's ANZ–Roy Morgan Consumer Confidence are the day's data points.
NZD/USD is trading around 0.5940 on Tuesday, little changed on the day as the risk-sensitive Kiwi consolidates a strong recovery. The pair has clawed back from its recent lows, but a firm US Dollar (USD) ahead of the Jackson Hole Symposium is keeping a lid on further gains for now.
The New Zealand Dollar (NZD) has drawn support from a steadier risk backdrop. Reports of a US-Iran ceasefire that would reopen the Strait of Hormuz have lifted broader sentiment, a tailwind for growth- and risk-sensitive currencies like the Kiwi, even as safe havens such as Gold have sold off. Confirmation of the deal is still awaited, however, keeping the mood in check.
The Greenback has nudged higher ahead of the Jackson Hole gathering, and US Initial Jobless Claims seen ticking up to around 208K offer the next read on the labor market. A firm claims number, or a hawkish steer from Jackson Hole, could revive Dollar demand and pressure NZD/USD.
Domestically, New Zealand's ANZ–Roy Morgan Consumer Confidence survey for August is due later, with the previous reading at 99.3. A pickup in sentiment would reinforce the Kiwi's recent resilience.
Short-term technical analysis:
In the four-hour chart, NZD/USD trades at 0.5943, holding between the rising 100-period simple moving average (SMA) at 0.5905, which underpins the downside, and the 20-period SMA at 0.5962, which caps the topside and keeps the near-term tone mildly bearish. The Relative Strength Index (RSI) has eased to around 46, hinting at fading bullish momentum and reinforcing consolidation rather than a directional breakout as price oscillates between these key averages.
On the downside, initial support emerges at the horizontal level of 0.5932, ahead of the 100-period SMA at 0.5905, where a deeper slide would expose a more significant bearish extension. On the topside, immediate resistance is seen at 0.5946, followed by 0.5953 and then 0.5961, before the 20-period SMA at 0.5962 comes into play as a more decisive barrier; only a sustained move above this clustered zone would ease the current bearish bias.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
- USD/MXN rises as sticky PCE boosts Fed hike expectations.
- Banxico lifts growth forecast but delays inflation convergence timeline.
- USMCA uncertainty and Warsh speech shape next Peso catalysts.
The Mexican Peso loses some traction against the US Dollar on Wednesday as traders seem confident that the Federal Reserve could raise interest rates toward the end of the year, following a red-hot inflation report. The USD/MXN trades at 16.95, after reaching a daily low of 16.92.
USD/MXN drifts high as US inflation offsets Banxico’s stronger growth outlook
The Greenback recovered as the Core PCE in July came aligned with estimates and matched June’s reading of 3.3% YoY. Following suit, the PCE headline reading for the same period held steady at 3.7% YoY for the second straight month, exceeding forecasts of 3.6%.
Both readings revealed that the disinflation process stalled and increased the chances of seeing higher interest rates in the US. Money markets had priced in a 74% chance of a 25-basis-point (bps) interest rate increase at the July meeting, according to Prime Terminal.
US Durable Goods Orders —which comprise goods meant to last three years or more—rose by 1.1% in July, exceeding forecasts and June’s 0.5% reading, boosted by transportation equipment.
Across the southern border, the Bank of Mexico (Banxico) released its Quarterly Report for Q2 2026, in which the institution updated its forecasts for several economic indicators.
Regarding economic growth, Banxico expects GDP to rise from 1.1% to 1.5%. Meanwhile, headline inflation is projected to converge to the 3% goal by Q4 2027, a slower pace than in the previous report, the central bank revealed.
Regarding core inflation, is forecast at 3.5%, up from 3.4% and is also expected to reach Banxico’s 3% goal towards the end of 2027. In the meantime, the central bank noted that economic activity continues to slow down due to uncertainty surrounding the review of the USMCA.
Ahead, the US economic docket will feature Initial Jobless Claims on Thursday, followed by the Chair Kevin Warsh's speech at the Jackson Hole Symposium.
USD/MXN Price Forecast: Technical outlook
In the daily chart, USD/MXN trades at 16.9563, extending the pullback and holding below the cluster of simple moving averages (SMA) grouped around 17.3219, which keeps the near-term bias bearish. Price remains well under a medium-term descending resistance trend line drawn from 18.1651, while the Relative Strength Index (RSI) at 31.65 hovers just above oversold territory, hinting at weakening downside momentum but not yet signaling a reversal.
On the topside, initial resistance is located at the triple SMA area near 17.3219, where a daily close above would be needed to ease immediate selling pressure. Further up, the descending trend structures strengthen the cap, with the medium-term line around 18.1651 followed by a longer-term downtrend reference near 21.0808, leaving the pair exposed to fresh lows as long as it trades beneath these levels and lacks clearly defined support nearby.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Mexican Peso FAQs
The Mexican Peso (MXN) is the most traded currency among its Latin American peers. Its value is broadly determined by the performance of the Mexican economy, the country’s central bank’s policy, the amount of foreign investment in the country and even the levels of remittances sent by Mexicans who live abroad, particularly in the United States. Geopolitical trends can also move MXN: for example, the process of nearshoring – or the decision by some firms to relocate manufacturing capacity and supply chains closer to their home countries – is also seen as a catalyst for the Mexican currency as the country is considered a key manufacturing hub in the American continent. Another catalyst for MXN is Oil prices as Mexico is a key exporter of the commodity.
The main objective of Mexico’s central bank, also known as Banxico, is to maintain inflation at low and stable levels (at or close to its target of 3%, the midpoint in a tolerance band of between 2% and 4%). To this end, the bank sets an appropriate level of interest rates. When inflation is too high, Banxico will attempt to tame it by raising interest rates, making it more expensive for households and businesses to borrow money, thus cooling demand and the overall economy. Higher interest rates are generally positive for the Mexican Peso (MXN) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken MXN.
Macroeconomic data releases are key to assess the state of the economy and can have an impact on the Mexican Peso (MXN) valuation. A strong Mexican economy, based on high economic growth, low unemployment and high confidence is good for MXN. Not only does it attract more foreign investment but it may encourage the Bank of Mexico (Banxico) to increase interest rates, particularly if this strength comes together with elevated inflation. However, if economic data is weak, MXN is likely to depreciate.
As an emerging-market currency, the Mexican Peso (MXN) tends to strive during risk-on periods, or when investors perceive that broader market risks are low and thus are eager to engage with investments that carry a higher risk. Conversely, MXN tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.
- USD/JPY holds modest gains, supported by a broadly stronger US Dollar ahead of the Jackson Hole Symposium.
- Tokyo Consumer Price Index data is due on Thursday, with both the headline and ex-food-and-energy measures expected to hold near 2%.
- Easing Gulf tensions have trimmed safe-haven demand for the Yen.
USD/JPY trades around 159.40 on Wednesday, holding onto modest gains as a firmer US Dollar (USD) keeps the pair underpinned. The Dollar is broadly bid ahead of the Jackson Hole Symposium.
Reports of a United States (US)-Iran ceasefire that would reopen the Strait of Hormuz have trimmed demand for traditional safe havens, weighing on Gold and sapping some of the Japanese Yen's (JPY) appeal even as broader sentiment stays cautious pending confirmation of the deal.
The Yen's immediate focus is Tokyo's August inflation report, due on Thursday. Both the headline Tokyo Consumer Price Index (CPI) and the measure excluding food and energy are expected to hold around 2% year on year.
Short-term technical analysis:
In the 4-hour chart, USD/JPY trades at 159.33, holding a constructive bullish tone as it stands above both the 20-period Simple Moving Average (SMA) at 159.16 and the 100-period SMA at 158.86. The cluster of nearby supports around 159.16–159.26 cushions the pair after this week’s advance, while the Relative Strength Index (RSI) near 56 reinforces steady upward momentum without yet signaling overbought conditions.
On the topside, immediate resistance appears at 159.37, followed by the recent horizontal cap at 159.43, where buyers may pause or trim exposure. On the downside, initial support is seen at the horizontal level of 159.26, ahead of the 159.16 floor that aligns with the 20-period SMA, while deeper demand is suggested by the 100-period SMA at 158.86 should corrective pullbacks extend.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Chris Turner at ING notes USD/CNH is consolidating after last week’s sharp decline, as investors hesitate to buy Renminbi with the PBoC slowing lower USD/CNY fixings and US–Iran sanctions risks in focus. ING’s base case remains for a gently offered Dollar and USD/CNY edging lower towards 6.70 over coming months.
Consolidation with gradual CNY gains
"After a sharp run lower last week, USD/CNH is consolidating this week. Two factors may be discouraging investors from buying the renminbi at these levels. The first is that the People's Bank of China (PBoC) seems to be slowing the pace of lower fixings in USD/CNY, perhaps expressing some displeasure over the pace of renminbi gains recently."
"The second is some fears that the new round of US sanctions on Iran will upend the economic détente between the US and China. We think it is probably too early to expect any US sanctioning of any major, state-sponsored Chinese entity relating to Iran trade, but the market will be watching."
"Currently, our base case assumes a gently offered dollar environment and USD/CNY edging lower towards 6.70 over the coming months."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Scotiabank strategists Shaun Osborne and Eric Theoret describe the Japanese Yen (JPY) as quiet, extending a tight consolidation as markets gradually price a 25 bp Bank of Japan (BoJ) hike for September 18. Hawkish BoJ messaging is providing some support via spreads, while traders assess the tone for potential further tightening into 2027. For USD/JPY, the chart shows a flat range between support at 158.00 and resistance in the mid/upper-159s.
Yen steady with BoJ tightening in view
"The yen is quiet and extending its tight consolidation from last Thursday."
"Fundamental releases have been limited and messaging from the BoJ has remained hawkish, managing expectations for a 25bpt hike at the September 18 meeting."
"Markets are gradually pricing in a hike, offering scope for additional nearterm support via spreads."
"Messaging will be key as market participants assess policymakers’ tone and consider the prospect of additional tightening later this year and into 2027."
"For USD/JPY, the chart offers a flat range with movement roughly bound between support at 158.00 and resistance in the mid/upper-159s."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
On Wednesday, the Bank of Mexico (Banxico) released its Quarterly Report for Q2 2026, in which it revised its forecasts for economic growth and inflation.
For 2026, Banxico revised up its growth forecast from 1.1% to 1.5%, but it delayed inflation convergence to its 3% goal from the second quarter of 2027 to the last quarter of the same year.
Regarding core inflation, the Mexican institution expects the Consumer Price Index (CPI) to rise from 3.4% to 3.5% in the fourth quarter. It also acknowledged that economic activity is showing signs of weakness due to uncertainty surrounding the review of the USMCA trade agreement.
Key highlights:
HEADLINE INFLATION SEEN CONVERGING TO 3% TARGET IN Q4 2027 (NOT Q2)
FORECASTS 2026 GDP GROWTH AT 1.5% VERUSUS 1.1% IN PREVIOUS QUARTERLY REPORT
FORECASTS 2027 GDP GROWTH AT 2.0% VERSUS 2.1% IN PREVIOUS REPORT
FORECASTS AVERAGE ANNUAL HEADLINE INFLATION IN Q4 2026 AT 3.5% VERSUS PREVIOUS ESTIMATE OF 3.5%
FORECASTS AVERAGE ANNUAL CORE INFLATION IN Q4 2026 AT 3.5% VERSUS PREVIOUS ESTIMATE OF 3.4%
NATIONAL ECONOMY CONTINUES TO EXPERIENCE A PERIOD OF WEAKNESS AND FACES A COMPLEX EXTERNAL ENVIRONMENT SUBJECT TO SIGNIFICANT GEOPOLITICAL RISKS
FORECASTS AVERAGE ANNUAL CORE INFLATION IN Q4 2027 AT 3.0% VERSUS PREVIOUS ESTIMATE OF 3.0%
FORECASTS AVERAGE ANNUAL HEADLINE INFLATION IN Q4 2027 AT 3.0% VERSUS PREVIOUS ESTIMATE OF 3.0%
NATIONAL ECONOMY CONTINUES TO EXPERIENCE A PERIOD OF WEAKNESS WITH UNCERTAINTY SURROUNDING THE USMCA ANNUAL REVIEW PROCESS PROCESS
BALANCE OF RISKS FOR ECONOMIC GROWTH IS BALANCED TO THE DOWNSIDE
BALANCE OF RISKS FOR INFLATION REMAINS SKEWED TO THE UPSIDE, DRIVEN BY PERSISTENT CORE INFLATION, TRADE DISRUPTIONS, GEOPOLITICAL TENSIONS, CLIMATE SHOCKS, COST PRESSURES AND POSSIBLE PESO DEPRECIATION
REVISION TO THE 2026 GDP FORECAST STEMS FROM STRONGER-THAN-ANTICIPATED ECONOMIC ACTIVITY GROWTH IN THE SECOND QUARTER
Banxico FAQs
The Bank of Mexico, also known as Banxico, is the country’s central bank. Its mission is to preserve the value of Mexico’s currency, the Mexican Peso (MXN), and to set the monetary policy. To this end, its main objective is to maintain low and stable inflation within target levels – at or close to its target of 3%, the midpoint in a tolerance band of between 2% and 4%.
The main tool of the Banxico to guide monetary policy is by setting interest rates. When inflation is above target, the bank will attempt to tame it by raising rates, making it more expensive for households and businesses to borrow money and thus cooling the economy. Higher interest rates are generally positive for the Mexican Peso (MXN) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken MXN. The rate differential with the USD, or how the Banxico is expected to set interest rates compared with the US Federal Reserve (Fed), is a key factor.
Banxico meets eight times a year, and its monetary policy is greatly influenced by decisions of the US Federal Reserve (Fed). Therefore, the central bank’s decision-making committee usually gathers a week after the Fed. In doing so, Banxico reacts and sometimes anticipates monetary policy measures set by the Federal Reserve. For example, after the Covid-19 pandemic, before the Fed raised rates, Banxico did it first in an attempt to diminish the chances of a substantial depreciation of the Mexican Peso (MXN) and to prevent capital outflows that could destabilize the country.
OCBC Bank strategists Sim Moh Siong and Christopher Wong observe that USD/KRW has consolidated after sharp declines over the past eight sessions, with exporter and month-end US Dollar (USD) selling offset by a firmer USD tone and foreign equity outflows. They suggest South Korean Won (KRW) support remains intact but the pace of appreciation may moderate, as focus turns to the Bank of Korea (BoK) meeting, US data, Jackson Hole and month-end flows.
KRW strength likely to consolidate
"USD/KRW consolidated overnight after trading sharply lower for most of the past 8 sessions."
"Exporter and month-end USD selling continued to provide support, but this was offset by a modestly firmer USD tone and sizeable foreign equity outflows (week-to-date -USD5.1bn). "
"The price action suggests that while the broader KRW support remains intact, the pace of the recent move may be showing tentative signs of moderation."
"Focus now turns to Thursday’s BoK meeting. Stronger growth and still-firm core inflation keep the case for further tightening alive, but the recent KRW appreciation and tighter financial conditions may also give policymakers some room to pause after July’s hike."
"Beyond the BoK, a busy US data calendar, Jackson Hole and month-end flows could also make for more two-way trading into the end of the week."
"USD/KRW last at 1384 levels. Daily momentum is flat while RSI is near oversold conditions. Some consolidation likely for now. Support at 1375, 1365 levels. Resistance at 1390, 1397 levels"
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Geoff Yu at BNY highlights that EM EMEA equities have outperformed, with strong buying in Poland, South Africa and Turkey since before the July Fed meeting, despite weaker regional currencies and bonds. He stresses that U.S. equity diversification is not an EM beta trade and that EM equity flows remain driven by country‑specific and sectoral factors rather than a uniform U.S. debasement theme.
Regional flows driven by specifics
"EM EMEA is the regional equity outperformer. Over the past week – covering the Treasury buyback announcement – our flow data indicate Poland, South Africa and Turkey were in the top five of best-bought equity markets. Our data show that this isn’t a one-week story, as the region has been strongly bought since right before the July Fed meeting."
"EM EMEA markets are diverse, which means it’s important not to read a common narrative into the data. If low USD real rates or general weakness in global real rates is a driver, then Poland, South Africa and Turkey do offer some duration lift, as well as dividend yields."
"U.S. equity diversification isn’t an EM play. As stated above, cross-border holdings of U.S. equities have improved. There is only room for additional flow on the margins and in a highly selective manner."
"We don’t see a uniform “U.S.” theme in EM equity flows. If the market were to push for “debasement,” EM Americas should be the prime beneficiary due to much heavier commodity exposure. This was the case in Q1 in markets such as Brazil and Peru, with the latter benefiting significantly from the surge in silver prices."
"We continue to target better performance in high-carry EM duration as a hedge against dollar risk, whereas EM equities will need to rely on idiosyncratic factors and a broader shift in asset allocation preferences."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- USD/JPY rises for the third day, testing weekly highs near 160.00.
- Flat 100-day SMA keeps buyers cautious below psychological resistance.
- A break below 159.00 exposes 158.88 and deeper downside support.
The USD/JPY pair drifts higher for the third straight day on Wednesday, up a modest 0.11% as buyers reaffirm their control over price action despite uncertainty over another round of intervention by Japanese authorities. The pair trades at 159.38 at the time of writing.
USD/JPY Price Forecast: Technical outlook
USD/JPY trades at weekly highs, though a flattish 100-day Simple Moving Average (SMA) caps upside at 159.98. This suggests buyers remain skeptical of achieving higher prices, as the 160.00 barrier remains intact, since the pair cleared that level on July 31.
The Relative Strength Index (RSI) shows that momentum remains neutral, meaning that neither buyers nor sellers are secure from opening fresh directional bets.
For a bullish continuation, USD/JPY must surpass the 100-day SMA and the 160.00 figure. Once cleared, buyers could challenge the 50-day SMA at 160.92, ahead of 161.00.
Conversely, if USD/JPY falls below 159.00, a move towards the 200-day SMA at 159.39 is on the cards. The next support emerges at the 159.00 milestone, before the pair aims for the August 7 daily low of 158.88.
USD/JPY Price Chart – Daily
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
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