USDJPY TECHS: MA Studies Highlight A Dominant Uptrend

• RES 4: 152.31 High Feb 19 
• RES 3: 151.62 61.8% retracement of the Jan 10 - Apr 22 bear leg 
• RES 2: 151.21 High Mar 28 
• RES 1: 150.92 High Aug 1 
• PRICE: 147.15 @ 15:51 BST Aug 13
• SUP 1: 146.79 50-day EMA
• SUP 2: 146.62 Low Aug 5
• SUP 3: 146.40 1.0% 10-dma envelope
• SUP 4: 145.86 Low Jul 24  

USDJPY consolidated for much of last week, holding the bulk of the NFP losses. Price has bounced, but recoveries are shallow at this stage. This has allowed a previously overbought condition to unwind, and keeps the downside argument in focus. Prices are trading either side of the 147.61 20-day EMA, and the inability to build a base here will be a concern. A clear break of this support zone would undermine the recent bull theme. A break of last week’s 150.92 high would resume the uptrend.     

Chicago Fed Pres Goolsbee (2025 FOMC voter) says in a Q&A that FOMC meetings in the fall are "going to be live" but he doesn't offer much in the way of overt support for a rate cut in September. Indeed he says he's "uneasy" about the idea that tariffs have only a one-off impact on prices, and that "the hardest thing that a central bank ever has to do is try to get the timing right when there are moments of transition."

• "I'm not speaking for them, but I see my colleagues on the FOMC grappling with the same thing I'm trying to figure out, which is: Are we still on the "golden path" where the economy's doing fine and inflation is going to come back down? Or are we getting into something where the costs are going to start rising again? And then we've got to be a little uneasy."
• He won't pre-commit to how he would approach policy at the September meeting but notes "we're still going to get some PPI readings on inflation and another CPI reading on inflation before the next meeting."
• That said, he sounds unenthusiastic about developments in the latest CPI report: "If we start getting more reports like the latest one, the latest CPI, though, where the overall is inching up. And if you look at the components, services, inflation was was bad. There's no other way to describe it. And services are not obviously tied to the tariffs. So everyone's hoping that's just a blip. You know there's noise in the data. If you start to get multiple months where the components suggest that the impact of tariff inflation is not staying in its lane, then that would be more of a concern."
• He says of the labor market: "I think the state of the labor market is pretty strong." On wage growth: "faster than inflation, but it's fully consistent with 2% inflation."
• He even implies that the Fed may be in a position where it is forced to hike rates: "one risk would be we get back into an environment where costs are rising. We've been above the 2% target for four and a half years now. I was still feeling okay about that, even though we've been above for four and a half years because it was coming down. If we get into an environment where it's not coming down, we're above four and a half years and it's going the wrong way, and that's looking persistent. That would be a that would be a problem. And in my opinion, the Fed will have to act. And on the other side, if we  have a more traditional slowing of the economy and there are some warning signs in the labor market, that would no longer be the soft 
  landing, we would have we would have had the hard landing. And so I kind of think both sides of that, we've got to keep an eye on."

• RES 4: 0.8835 High May 3 2023  
• RES 3: 0.8800 Round number resistance
• RES 2: 0.8781 2.236 pro of the Mar 3 - 11 - 28 price swing
• RES 1: 0.8735/8769 High Aug 3 / High Jul 27 and the bull trigger 
• PRICE: 0.8630 @ 15:49 BST Aug 13
• SUP 1: 0.8614 50-day EMA 
• SUP 2: 0.8611 Low Jul 31 
• SUP 3: 0.8540 Low Jun 30 
• SUP 4: 0.8508 Low Jun 27

EUR/GBP corrected lower on the BoE rate decision, which sent prices through the weekly low. This weakness has persisted, with a pullback low yesterday testing the first support into the 50-day EMA of 0.8614. A clear break here would strengthen the bearish threat. More broadly, the trend set-up is bullish. Moving average studies remain in a bull-mode position highlighting a clear uptrend. Key resistance and the bull trigger is at 0.8769, the Jul 27 high.