Several high-impact economic events over the next two days may drive notable volatility in the currency markets, particularly affecting the USD, GBP, and AUD. Thursday’s schedule includes Australia’s employment change, UK monthly GDP, and key U.S. data releases—PPI, retail sales, and unemployment claims—during the New York session. On Friday, market participants will look to the University of Michigan’s preliminary readings on consumer sentiment and inflation expectations. These releases come at a time when USDJPY continues to climb, supported by bullish technical signals and rising speculation around U.S. and Japanese currency policy coordination ahead of next week’s G7 meetings.
High Impact Economic Events
Thursday 04:30 am (GMT+3) – Australia: Employment Change (AUD)
Since establishing a low at 139.877 on April 22, USDJPY has staged a notable rebound, initiated by Japanese candlestick reversal patterns and reinforced by supportive technical indicators and chart patterns. A key development was the formation of a failure swing reversal—characterized by a higher trough at 142.346 relative to the prior low and a subsequent breakout above the 145.913 peak—signaling a shift toward an upward bias.
Price action remains firmly above the 20-period Exponential Moving Average (EMA), reflecting sustained bullish momentum. Complementing this, the Momentum Oscillator continues to trend above the 100 threshold, while the Relative Strength Index (RSI) holds well above the neutral 50 mark, highlighting persistent buying interest.
That said, a note of caution is warranted: the 20-period EMA has yet to cross above the 50-period EMA, suggesting that while the current momentum is constructive, confirmation of a more durable trend shift is still pending.
Key Resistance Levels
Should the buyers maintain market control, traders may direct their attention toward the four potential resistance levels below:
148.641: The initial resistance level is identified at 148.641, aligning with the peak from May 12.
150.653: The second price target is set at 150.653, aligning with the 423.6% Fibonacci Extension drawn from 144.022 to 141.948.
154.794: The third price objective is observed at 154.794, corresponding with the peak marked February 12.
158.866: An additional upside target is projected at 158.866, mirroring the daily high from January 1.
Key Support Levels
Should the sellers take market control, traders may consider the four potential support levels listed below:
145.913: The initial support level is estimated at 145.913, corresponding to the high point marked May 2.
144.022: The second support level is identified at 144.022, representing a peak from April 25.
141.948: A third support level is 141.948, mirroring the low point marked on April 29.
139.877: An additional downside target is seen at 139.877, reflecting a trough from April 22.
Fundamentals
U.S. officials are not including currency policy commitments in current trade negotiations, despite growing market speculation that the Trump administration favors a weaker dollar. Treasury Secretary Scott Bessent remains the sole official handling currency issues and has reiterated the U.S. strong dollar policy. However, given past rhetoric and economic goals, markets continue to price in expectations of a softer greenback. Recent gains in Asian currencies, including the Korean won and Taiwan dollar, reflect heightened sensitivity to any perceived shift in U.S. currency strategy.
On the other hand, Japanese Finance Minister Katsunobu Kato plans to meet U.S. Treasury Secretary Scott Bessent during the G7 finance meetings in Canada next week to discuss foreign exchange. While Japan and the U.S. have agreed to keep currency issues separate from trade talks, Kato indicated FX could naturally come up alongside tariff discussions. The meeting follows rising market concerns that Japan may face pressure to allow yen appreciation, especially amid President Trump’s focus on the trade deficit.
Conclusion
With a set of high-impact data releases and rising geopolitical focus on currency policy, market participants should be prepared for heightened volatility, particularly in USDJPY. The technical outlook remains bullish, though not without caution, as traders await confirmation of a sustained trend. Meanwhile, upcoming discussions between U.S. and Japanese officials at the G7 may add a layer of complexity to FX markets already sensitive to shifting economic narratives and policy signals. As such, both data and diplomacy will be critical drivers heading into the close of the week.
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