Forex Signals Brief July 22: Yen Surges, Dollar Slumps – All Eyes on Powell’s Policy Outlook

Global Economic Calendar: PBOC LPR and Powell’s Speech

PBoC Steady as Chinese Data Strengthens

Elsewhere, China’s Loan Prime Rates (LPRs) were left unchanged, as widely expected. The 1-year LPR remains at 3.00%, while the 5-year LPR holds at 3.50%, serving as benchmarks for business loans and mortgages, respectively. With Chinese Q2 GDP and Industrial Production data both coming in above forecasts—and Retail Sales the only notable miss—the PBoC appears comfortable with its current policy stance, especially following broad rate cuts in May.

Powell’s Speech Could Be the Tipping Point

Markets are approaching Powell’s Tuesday remarks with caution. With the dollar already under pressure and gold, equities, and crypto all showing strength, any dovish pivot or even balanced tone from Powell could send the USD lower. On the flip side, a firmer stance on keeping rates higher for longer could reverse the greenback’s slide.

As rate expectations shift and election dynamics swirl in the background, Powell’s tone—and technical levels in key markets—may set the tone for the rest of the summer.

Last week, markets were slower than what we’ve seen in recent months, with gold retreating and then bouncing to finish the week unchanged. EUR/USD slipped toward 1.16, while S&P and Nasdaq continued higher. The moves weren’t too big though, and we opened 35 trading signals in total, finishing the week with 23 winning signals and 12 losing ones.

Gold Rebounds, tests $3,400

Gold climbed nearly $50 to close near $3,400/oz, driven by softer US dollar action and ongoing geopolitical risk. However, after touching near $3,500 earlier this year, the precious metal has entered a phase of consolidation. Recent price action shows a recovery from its 20-week SMA near $3,150, but tepid buying interest suggests traders are waiting for stronger conviction—either from Fed policy signals today or renewed inflation fears.

USD/JPY Returns Below the 100 Weekly SMA After Japanese Elections

USD/JPY – Weekly Chart

Cryptocurrency Update

Cryptocurrencies Hold Gains as Bitcoin Briefly Tops $120K

Bitcoin briefly breached the $113,000 mark before retreating and finding support again above $120,000, underscoring the growing appetite for digital assets amid traditional market uncertainty. After dipping below its 50-day moving average earlier in the week, strong buying support around the 20-week SMA helped fuel a swift recovery.

BTC/USD – Weekly chart

Ethereum Breaks Above Resistance, Heads for $4,000

Ethereum, meanwhile, has outshone Bitcoin with a 20% gain since April, breaking above its 100-week moving average. Optimism surrounding the upcoming Pectra upgrade, which aims to improve scalability and efficiency, has fueled a surge in institutional interest, with traders now eyeing a potential run toward the $4,000 zone.

ETH/USD – Daily Chart