JPY: USD/JPY - Drifts Lower As The USD Bid Loses Some Steam

• RES 4: 1.4328 1.764 proj of the Mar 9 - 31 - May 1 price swing
• RES 3: 1.4292 61.8% Retracement Feb’25 - Jan’26 downleg
• RES 2: 1.4264 1.618 proj of the Mar 9 - 31 - May 1 price swing   
• RES 1: 1.4248 High Jun 24
• PRICE: 1.4197 @ 16:07 BST Jun 26
• SUP 1: 1.4145 Low Jun 22  
• SUP 2: 1.4036 20-day EMA
• SUP 3: 1.3903 50-day EMA
• SUP 4: 1.3837 Low Jun 3 

A strong impulsive bull cycle in USDCAD remains intact and this week’s gains strengthen the bull theme. The move higher paves the way for a climb towards 1.4292, the 61.8% Fibonacci retracement of the Feb ’25 - Jan ’26 downleg. Note that the trend remains in overbought territory. A corrective pullback would allow this condition to unwind. The first important support to watch lies at 1.4036, the 20-day EMA. 

Next week's key scheduled US data/events:

• US macro focus turns to Thursday’s nonfarm payrolls report for June, a day earlier than usual owing to the Independence Day holiday. New Fed Chair Kevin Warsh made it clear that the Fed’s focus is on price stability and sounded less concerned about any conflict with what’s been a resilient labor market. That could limit market reaction to the NFP report although we thought the same ahead of last month’s May release only for a far stronger than expected set of payrolls figures to spark a sizeable hawkish reaction.
• Early consensus currently looks for a 113k increase in nonfarm payrolls in June after the 172k in May, albeit with a more similar pace for private payrolls at 124k after 120k.
• The unemployment rate meanwhile could hold at a rounded 4.3% for a fourth consecutive month, most recently at 4.30% in May for still close to the 4.34% averaged in 3Q25 ahead of the government shutdown that sparked some volatility.
• Higher frequency indicators such as the weekly ADP pulse and jobless claims have pointed to some softening compared to a month ago although they are still at relatively solid levels. One area that will continue to be watched is the concentration of payrolls growth –private payrolls ex health & social assistance increased 73k in May along with a three-month average of 100k although food & drinking places have been carrying this somewhat along with transportation & warehousing.
• The Fed's Warsh will also appear in a panel on Wednesday at the ECB’s Sintra Forum along with BoE's Bailey, ECB's Lagarde and the BoC's Macklem. On the evidence of last week's press conference, it didn't sound like he was an advocate of the next move being a cut to say the least. Most of the content was very much hawkish, in contrast to some expectations that he would hew to a more dovish view than the median of the FOMC even if he didn't express an outright directional view on policy. He was however highly reluctant to offer any guidance whilst also focusing on five task forces looking at various areas of potential reform.
• We again watch for any Supreme Court ruling in the Fed Governor Cook case with potential for a decision on Monday or later in the week ahead of the long weekend. SCOTUS Justices sounded skeptical of the government’s case in the January oral hearing, and prediction markets imply only a small chance (~5% on Kalshi) she will leave the Fed this year.