Daily Forex Highlights – Jul 06 – DXY rebounds near 101.00; USD/JPY climbs above 162.00

📌 What Moves Markets Today

The US Dollar Index is rebounding toward 101.00 after last week's selloff, supported by Middle East concerns and a renewed USD/JPY rally. The Japanese yen is back under pressure as USD/JPY climbed above 162.00, with intervention risks mounting. The euro and pound are both drifting lower as the dollar finds its footing. South Korea launched 24-hour FX trading today.

🟡 Neutral for USD—rebounding but still below recent highs.

🔴 Bearish for JPY as USD/JPY breaks above 162.00.

🔥 Quick Takes

Dollar

- Trump delivered a July 4 speech on "American exceptionalism" → A holiday message with no policy signal.

- Treasury Secretary Bessent: Under Trump, the US is moving toward unprecedented growth, lasting dollar dominance, and fiscal strength → A bullish dollar endorsement from the administration.

Euro

- ECB's Villeroy: Inflation data is favorable; the ECB is in a "good position" → A dovish tilt. Less urgency to hike.

- Germany plans to raise 2027 borrowing as tax revenues fall short → Fiscal expansion is coming. Could support growth.

- ECB's Makhlouf: The ECB has a "clear will" to achieve the 2% inflation target → A hawkish commitment—the ECB is not backing down.

- France finance minister Lecornu: Will do everything to bring the deficit as close to 5% as possible next year → A deficit reduction push as the French government tightens.

Pound

- BOE Governor Bailey: The BOE seeks to meet its inflation target without damaging output → A balanced stance. No rush to hike or cut.

Yen

- Chief Cabinet Secretary Kihara: Watching markets with "a high sense of urgency"; ready to take appropriate FX action at any time → Strong verbal intervention. Markets are on high alert.

- RENGO: Average wage hike offered by firms was 5.01%, down from 5.25% last year → Wage growth is slowing. Less pressure on the BOJ to hike.

Won

- South Korea launched 24-hour FX trading today → A major market structure change. Could increase won liquidity and volatility.

- Korea said it is preparing for FX inflows from SK Hynix's ADR → The government is managing potential dollar inflows. Supportive for the won.

Other

- Thailand commerce ministry: Expects headline CPI to rise further; Q3 inflation forecast at 2.79% → Inflation is picking up. The baht may face less easing pressure.

💡 Technical Analysis

Source: Investing.com – Prices as of Jul 06, 2026

US Dollar Index – 101.00

The DXY is rebounding toward 101.00 after last week's decline. The index found support near 100.50 and is now testing the 101.00 level. A break above this level could open the door to further upside, while failure to hold could trigger another leg lower.

EUR/USD – 1.1400

The pair is drifting lower toward 1.1400 as the dollar rebounds. Price remains below the 23.6% Fibonacci retracement level and is testing the lower boundary of an ascending channel. RSI near 55 suggests fading momentum. MACD remains slightly positive but is losing steam. Support is at 1.1371 and 1.1325. Resistance is at 1.1466, 1.1516, and 1.1525.

GBP/USD – 1.3340

The pair is pulling back after a seven-day rally, trading near 1.3340. Price is testing the trendline resistance from late May highs, which sits near the 200-day SMA at 1.3400. RSI is drifting toward 50, suggesting easing bullish momentum. MACD has crossed below its signal line, a potential negative signal. Support is at 1.3268 and 1.3140. Resistance is at 1.3400 and 1.3460.

USD/JPY – 162.00

The pair climbed above 162.00 in Monday's session. Intervention risks are rising as the yen weakens again. Price remains well above the 200-period EMA (160.57), keeping the broader uptrend intact. RSI near 33 suggests weak momentum after dipping toward oversold territory. Support is at 160.57 (200-period EMA) and 159.86. Resistance is at 162.00 and 163.00.

🔮 What to Watch This Week

- 🇺🇸 Fed speakers – any shift after last week's weak jobs data?

- 🇯🇵 Japan intervention – verbal or actual?

- 🇰🇷 Korea 24-hour FX trading – early impact on won?

- 🇪🇺 Eurozone data – ECB rate expectations

- 🇫🇷 France budget plans – deficit reduction details