USD/JPY: Key Scenarios to Watch
- Bearish USD/JPY Scenario: Escalation in the Israel-Iran war, hawkish BoJ signals, or dovish Fed projections could push USD/JPY toward 140.
- Bullish USD/JPY Scenario: A de-escalation in the Iran-Israel conflict, dovish BoJ rhetoric, or hawkish Fed projections may drive the pair above 146.
See today’s full USD/JPY forecast with chart setups and trade ideas.
AUD/USD in Focus: Middle East Conflict to Drive Aussie Dollar Demand
Meanwhile, the Iran-Israel conflict will continue to impact demand for commodity currencies, including the Aussie dollar. The AUD/USD pair slid 0.73% on June 17 as markets reacted to an escalation in the conflict, reflecting Aussie dollar sensitivity to geopolitical risks.
On June 18, the Kobeissi Letter reported:
“The US is reportedly considering strikes as a possibility among ‘a range of options’.”
President Trump called for Iran’s unconditional surrender overnight while declaring he knew the location of Iran’s Supreme Leader. Potential US involvement in the conflict could fuel fears of a broader regional war, impacting risk sentiment further. However, a de-escalation and a move toward a US-Iran nuclear agreement could boost demand for risk assets and commodity currencies.
AUD/USD: Key Scenarios to Watch
- Bearish AUD/USD Scenario: Escalation in the Iran-Israel conflict or dovish RBA cues may push AUD/USD toward $0.64500.
- Bullish AUD/USD Scenario: De-escalation in the Middle East or hawkish RBA signals could drive AUD/USD toward the June 16 high of $0.65517.
Click here for a more comprehensive analysis of AUD/USD trends and trade data insights.
Aussie Dollar Daily Outlook: The Fed to Drive Rate Differentials
Later today, the FOMC interest rate decision, economic projections, and press conference will drive US-Aussie interest rate differentials and AUD/USD trends.
Hawkish interest rate projections would widen the rate differential, favoring the US dollar. A wider rate differential may drag AUD/USD below $0.64500, bringing the 50-day and 200-day EMAs into play. Conversely, a more dovish outlook could narrow the rate differential, potentially driving AUD/USD above $0.65 toward $0.65517.