The forex market is currently navigating heightened volatility driven by rising US jobless claims, dovish Fed rate cut expectations, and ongoing geopolitical tensions. Our analysis focuses on four major currency pairs—USD/JPY, EUR/JPY, GBP/USD, and USD/CHF—evaluating both fundamental and sentiment outlooks to provide actionable insights.
USD/JPY is under pressure as soft US labor data and Fed rate cut speculation weigh on the dollar, though yen weakness and potential BoJ shifts add a layer of uncertainty. EUR/JPY shows strength, supported by stable eurozone fundamentals and positive sentiment flows, making it the most attractive buy opportunity among the pairs analyzed. GBP/USD faces downside risk from persistent inflation concerns and mixed UK data, suggesting a cautious approach. Meanwhile, USD/CHF remains bearish due to broad dollar weakness and the CHF’s safe-haven appeal.
Key risks include unexpected labor market deterioration and shifts in global risk sentiment. Traders should closely monitor upcoming central bank meetings and economic data releases for potential volatility spikes. Overall, the market favors defensive positioning, with EUR/JPY as a buy, and USD/JPY, GBP/USD, and USD/CHF as sell opportunities in the near term.