Market Sector Scanner: U.S. Jobs Data and Rumoured Yen Intervention

The Federal Reserve, Bank of England, and Bank of Japan all left interest rates unchanged during the week. U.S. economic data was mostly weaker than expected, with Durable Goods Orders, Consumer Confidence, and GDP growth all coming in below forecasts. In Japan, the Tokyo Consumer Price Index rose 1.9% in July, slightly above the expected 1.8%. The Japanese yen strengthened sharply at the end of the week after reports that Japanese authorities intervened in the currency market, with speculation that the United States also took part in a rare coordinated effort to support the yen.

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Market Outlook

Forex Market

USD/JPY

Last Week Recap
USD/JPY fell sharply at the end of last week following reports that the Bank of Japan, and possibly the U.S. Federal Reserve, intervened to support the Japanese yen. Earlier in the week, both the Bank of Japan and the Federal Reserve left interest rates unchanged. However, both central banks signalled that inflation remains a concern, keeping the possibility of further rate hikes in the months ahead.

Technical Picture
The sharp decline into Friday's close has left USD/JPY looking heavily oversold on the charts. However, technical indicators are currently taking a back seat to fundamentals, as traders focus on the possibility of further intervention and any comments from Japanese authorities. Expect volatility to remain elevated while uncertainty persists.

Outlook This Week
USD/JPY appears significantly oversold after Friday's sharp sell-off, increasing the potential for a short-term rebound early this week. Many traders and analysts still believe the longer-term outlook remains supportive of a weaker yen, suggesting buying opportunities may emerge if intervention fears ease. However, the risk of further intervention remains high, so traders should use appropriate stop-loss orders, reduce position sizes if necessary, and avoid chasing volatile price moves.

GBP/JPY

Last Week Recap
GBP/JPY tested higher early last week after the Bank of England kept interest rates unchanged. However, reports of Japanese currency intervention to support the yen triggered a sharp reversal, with GBP/JPY falling significantly and closing the week near its lows.

Technical Picture
The sharp sell-off has pushed GBP/JPY back toward its June lows, an area that could provide technical support if further intervention does not occur. The pair is now looking oversold after Friday's heavy decline, although intervention headlines are likely to have a greater influence on price than technical indicators in the near term.

Outlook This Week
A short-term rebound is possible early this week as medium- and long-term traders may see the recent decline as a buying opportunity. However, the risk of further Japanese intervention remains high and could trigger another sharp sell-off without warning. Traders should manage risk carefully, use stop-loss orders, and be prepared to exit long positions quickly if market volatility increases.

EUR/USD

Last Week Recap
EUR/USD finished the week sharply higher as weaker-than-expected U.S. economic data and the Federal Reserve's decision to keep interest rates unchanged weighed on the U.S. dollar.

Technical Picture
The recent rally pushed EUR/USD above the upper Bollinger Band, while the 10-day moving average has turned higher. Momentum has improved, but the pair now appears overbought in the short term.

Outlook This Week
With EUR/USD looking overbought, a move back below the upper Bollinger Band could provide a selling opportunity. Medium-term traders may also look for signs that the rally is losing momentum before considering short positions.

Equities

U.S. Stock Market

Last Week Recap
The Nasdaq had a volatile week, trading lower for most of the period as investors remained concerned about high AI stock valuations. However, buyers returned after the Federal Reserve kept interest rates unchanged as expected, helping the index recover and finish the week slightly higher.

Technical Picture
Although the rebound from the lower Bollinger Band generated a short-term buy signal, the Nasdaq remains below its 10-day moving average, which continues to point to a weakening trend. This suggests further gains may be difficult without a stronger improvement in market sentiment.

Outlook This Week
Concerns over high AI stock valuations remain, and the technical trend continues to favour the downside. Selling into rallies is likely to remain the preferred strategy for both short- and medium-term traders.

Commodities

Gold

Last Week Recap
Gold had a relatively quiet week as the market remained balanced around the $4,000 level. Expectations of higher interest rates from major central banks continued to weigh on prices, while strong buying from central banks below $4,000 provided solid support.

Technical Picture
Gold is trading near the middle of a narrow Bollinger Band, while the 10-day moving average remains flat. Both indicators suggest the market is continuing to trade within a well-defined range.

Outlook This Week
Short-term traders may continue to find the best opportunities by trading the range. With strong support holding below $4,000, medium- and long-term traders may also look for buying opportunities on any weakness.

Markets are set for another busy week, with the U.S. Nonfarm Payrolls report taking center stage. Investors will also watch global Manufacturing PMI data and the Bank of Japan's Meeting Minutes. Meanwhile, traders will continue to assess the sharp move in USD/JPY following the reported yen intervention, while concerns over AI stock valuations remain in focus.