Weekly Technical Outlook – USD/JPY, GBP/USD, US 100

US CPI Inflation → USD/JPY

Friday’s nonfarm payrolls report beat expectations, particularly on the wage front. However, the broader data trend remains downward, with negative revisions to previous readings weighing on USD/JPY. As a result, the pair remains trapped below the 144.95 level and the 50-day exponential moving average (EMA).

The next key event is the US CPI inflation report, due Wednesday at 12:30 GMT. Forecasts suggest an acceleration to 2.5% year-on-year in May, up from 2.3%. The core measure, which excludes volatile food and energy prices, is also expected to rise to 3.9% y/y and 0.3% m/m. A potential uptick in inflation could challenge the likelihood of a September rate cut, which is currently seen as a coin toss. If inflation surprises to the upside, USDJPY may confirm a double-bottom pattern around 142.40. However, only a sustained move above the resistance trendline from January’s high near 146.00 could open the way for a strong rally toward the 200-day EMA at 148.63.

Conversely, if the figures show further weakness, the price could drop below its 20-day EMA, targeting support in the key 142.40–143.00 area. If that floor breaks, focus may shift to April’s low between 140.40 and 140.90.

UK GDP Growth → GBP/USD

GBP/USD was rejected twice near the three-year high of 1.3592 and around the resistance line connecting the highs of July 2023 and September 2024, forming a bearish double-top pattern following disappointing jobs data on Monday.

The 20-day simple moving average (SMA) is currently providing some support near 1.3455. However, the downward slope in technical indicators does little to inspire confidence in a rebound. Traders will now turn to April’s GDP growth figures, due Thursday at 06:00 GMT. The three-month average and annual growth rate are expected to hold steady at 0.7% and 1.1%, respectively, but the monthly figure may show a mild contraction of -0.1%, raising concerns that Q2 began on a weak footing.

Still, with inflation rising to a one-year high of 3.5% y/y in April, the GDP data may not be enough to justify a summer rate cut when the Bank of England meets next week.

Technically, a break below 1.3455 could trigger a new bearish wave toward 1.3250. A further drop below 1.3175 would signal a short-term end to the recent bullish trend.

Trade Risks → US 100 Index

On Wall Street, the US 100 index remains just below the 22,000 psychological level and February’s all-time high of 22,236. Friday’s post-NFP rally showed that bulls are still active, but whether they have enough momentum to push into record territory is uncertain, especially with persistent overbought conditions.

If US CPI data increases the chances of a summer rate cut, or if US-China trade talks—particularly as they touch on more sensitive issues during their second day in London—show meaningful progress, the bulls may resume their record-setting rally, potentially targeting the 22,800–23,000 zone.

Otherwise, a disappointing inflation prints or escalating trade tensions could spark renewed selling. Should the 20-day SMA fail to hold, the decline could extend toward the key support area at 20,880.