USDJPY, Gold Analysis: Are Peace Deals on the Horizon?

Key Events:

• Europe reaffirms support for Ukraine ahead of Russia-Ukraine peace-deal negotiations
• Yen strengthens against the dollar on strong prelim GDP data
• USDJPY: 151-support level remains a key test for further downside
• Gold: 2,940-resistance remains a barrier for further rallies

Europe Stands with Ukraine Ahead of Russia-Ukraine Talks

Key leaders are set to meet in Saudi Arabia today to establish the groundwork for a Russia-Ukraine peace deal, aiming to end a war that has lasted nearly three years. However, ahead of the negotiations, the EU affirmed its support for Ukraine, while Ukraine itself rejected any agreement made on its behalf, as the talks are exclusively between the US and Russia.

Gold’s price action reflects heightened uncertainty, with the metal surging back above the $2,900 mark after twice retreating from its record high of $2.940. Until the outcome of the negotiations is clear, Gold is likely to remain volatile.

Japanese Prelim GDP Pushes USDJPY to 151

Stronger economic data from Japan has bolstered the Yen, increasing expectations of a more hawkish monetary policy outlook. USDJPY has held above the key 151-support following an revision in Japan’s Q4 preliminary GDP from 0.3% to 0.7%. Meanwhile, a slight rebound in the US dollar from recent weaknesses have kept the pair afloat.

Technical Analysis: Quantifying Uncertainties

USDJPY Analysis: 3-Day Time Frame – Log Scale

Source: Tradingview

Approaching the 151-support level, a clear close below 151 could extend the decline toward 149 and 147. On the upside, resistance levels at 153.70, 154.80, and 156.20 could push USDJPY back into a bearish trajectory. Bullish risks may emerge if the pair surpasses the 158-mark, particularly due to potential BOJ intervention risks.

Gold Analysis: 3-Day Time Frame – Log Scale

Source: Tradingview

Gold has retested the record high of 2,940 twice, raising concerns about a potential double-top formation, as the RSI hovers near overbought levels last seen in November 2024—after which Gold retreated nearly 100 points. However, the latest price action still indicates strength to the upside, driven by haven demand amid unresolved geopolitical uncertainties. Possible scenarios:

Bullish Scenario: A close above 2,940 could extend gains toward $3,000 and $3,050.

Bearish Scenario: If 2,940 resistance holds, Gold could retrace to support levels at 2,860, 2,790, and 2,720, respectively.

Written by Razan Hilal, CMT

Follow on X: @Rh_waves