The USD/JPY currency pair traded in a neutral zone on Tuesday as market participants evaluated the latest US economic data and awaited further guidance from Federal Reserve commentary [1]. The S&P Global US Purchasing Managers Index (PMI) for June was reported at 55.7, surpassing expectations of 54.8 and indicating continued expansion in US business activity, which provided some support to the US Dollar [1]. However, the positive impact was tempered by softer employment details within the PMI survey, raising concerns about potential weakening in the US labor market [1].
Additionally, the ADP Employment Change 4-Week Average showed US private payrolls increasing by 30.75K, up from the previous 26.5K, suggesting that hiring remains resilient and strong enough to potentially influence expectations for the Federal Reserve’s policy decisions [1].
Geopolitical risks also remained in focus, as the US granted Iran a 60-day oil sanctions waiver following initial peace talks. President Donald Trump stated that Tehran had agreed to nuclear inspections 'into infinity,' a claim that was subsequently denied by Iran [1].
From a technical perspective, USD/JPY traded at 161.52, maintaining a bullish bias as it stayed above both the 20-period Simple Moving Average (SMA) at 161.44 and the 100-period SMA at 160.40. The Relative Strength Index (RSI) was around 61, indicating constructive upside momentum without reaching overbought levels. Immediate resistance was noted at 161.74, with further gains possible toward recent all-time highs if this level is breached. On the downside, support levels were identified at 161.44, 161.42, 161.35, and 161.27, with the 100-period SMA at 160.40 providing broader support on deeper pullbacks [1].
CONCLUSION
The USD/JPY pair remains in a neutral to bullish posture as investors digest robust US PMI and ADP data, while geopolitical developments add a layer of uncertainty. Technical indicators suggest that the pair is well-supported, with potential for further gains if resistance levels are breached.