Never miss a story from David Song

Subscribe to receive daily updates on publications
Please enter valid First Name
Please fill out this field.
Please enter valid Last Name
Please fill out this field.
Please enter valid email
Please fill out this field.
Please select a country

I’d like to receive information from DailyFX and IG about trading opportunities and their products and services via email.

Please fill out this field.

Your Forecast Is Headed to Your Inbox

But don't just read our analysis - put it to the rest. Your forecast comes with a free demo account from our provider, IG, so you can try out trading with zero risk.

Your demo is preloaded with £10,000 virtual funds, which you can use to trade over 10,000 live global markets.

We'll email you login details shortly.

Learn More about Your Demo

You are subscribed to David Song

You can manage your subscriptions by following the link in the footer of each email you will receive

An error occurred submitting your form.
Please try again later.

Talking Points:

- USD/JPY Losses to Persist Ahead of BoJ as U.S. Yields Remain Under Pressure.

- EUR/USD Pulls Back Ahead of ECB Meeting; New Forward-Guidance on Tap?

- Join DailyFX Currency Analyst Christopher Vecchio LIVE to Cover the ECB Meeting.

DailyFX Table





Daily Change (pip)

Daily Range (pip)







USD/JPY stands at risk for further losses as it extends the series of lower-highs carried over from the previous week, while U.S. Treasury yields remain under pressure and give back the rebound from June.

With Fed Fund Futures still highlighting a 50/50 chance for a December rate-hike, it seems as though the recent remarks from Fed Chair Janet Yellen have tamed market expectations as the central bank head argues the benchmark interest rate ‘would not have to rise all that much further to get to a neutral policy stance.’ In turn, USD/JPY may exhibit a more bearish behavior over the near-term as the Federal Open Market Committee (FOMC) is expected to retain the current policy at the next rate decision on July 26.

At the same time, the Bank of Japan (BoJ) meeting may do little to shift the near-term outlook for the dollar-yen exchange rate as Governor Haruhiko Kuroda and Co. continue to embark on the Quantitative/Qualitative Easing (QQE) Program with Yield-Curve Control.


USD/JPY Daily Chart

Chart - Created Using Trading View

  • The rebound from the June-low (108.80) may continue to unravel as the bearish trigger in the Relative Strength Index (RSI) continues to unfold, with USD/JPY clearing the monthly opening range.
  • Break/close below the near-term support zone around 111.10 (61.8% expansion) to 111.60 (38.2% retracement) opens up the next region of interest around 109.40 (50% retracement) to 109.90 (78.6% expansion) followed by the June-low (108.80), which sits just above the Fibonacci overlap coming in at 108.30 (61.8% retracement) to 108.40 (100% expansion).





Daily Change (pip)

Daily Range (pip)







EUR/USD pullback from a fresh 2017-high (1.1583), but the fresh developments comings out of the European Central Bank (ECB) may boost the appeal of the single-currency should President Mario Draghi and Co. continue to alter the outlook for monetary policy.

Even though the ECB is widely anticipated to retain the zero-interest rate policy (ZIRP) in July, the central bank may start to taper its asset-purchases over the coming months as the quantitative easing (QE) program is set to expire in December. Unless the Governing Council pushes back the deadline, the material shift in EUR/USD behavior may persist throughout the second-half of the year as ECB officials show a greater willingness to conclude the easing-cycle and note that ‘very adverse scenarios for the inflation outlook had become less likely, in particular as deflation risks had largely vanished.’

However, EUR/USD stand at risk of facing a bearish scenario if the ECB merely attempts to buy more time, and the pair consolidate over the near-term should the central bank show a greater willingness to carry the QE program into 2018.


EUR/USD Daily Chart

Chart - Created Using Trading View

  • EUR/USD appears to have made a failed attempt to test the 2016-high (1.1616) especially as the Relative Strength Index (RSI) appears to be deviating with price and struggles to push above 70; failure to close above the 1.1580 (100% expansion) hurdle raises the risk for a near-term pullback in the euro-dollar exchange rate as the momentum indicator turns around ahead of overbought territory.
  • The former resistance-zone around 1.1480 (78.6% expansion) sits on the radar going into the ECB meeting, with the next downside region of interest coming in around the 1.1400 (61.8% expansion) handle, followed by the Fibonacci overlap around 1.1330 (23.6% expansion) to 1.1350 (50% expansion).
  • Nevertheless, EUR/USD may extend the advance from earlier this month should the Governing Council layout a more detailed exit strategy, with a break of the 1.1580 (100% expansion) opening up the next topside hurdle around 1.1670 (78.6% expansion).
DailyFX Calendar

Click Here for the DailyFX Calendar

--- Written by David Song, Currency Analyst

To contact David, e-mail Follow me on Twitter at @DavidJSong.

To be added to David's e-mail distribution list, please follow this link.