USD/JPY & Silver Outlook: Dollar Holds, Silver Weakens

Despite a sharper-than-expected decline in US CPI, from 4.2% to 3.5%, the US dollar continues to hold firm above the 100 mark while silver resumes its weakness below $60 as geopolitical risks remain elevated.

Market rebounds across major currency pairs, precious metals, and risk assets continue to face headwinds as the implications of the Middle East conflict extend into the second half of the year. Markets are increasingly being influenced by:

• Disruptions to global shipping, with higher transit costs, tolls, and restricted access across parts of the Strait of Hormuz.
• A cautious second-half outlook from corporate management teams despite stronger-than-expected earnings from major US banks, including JPMorgan and Goldman Sachs, as well as AI semiconductor leader ASML.
• Crude oil rebounding toward the $80 mark.
• Precious metals returning to critical bearish breakout zones.

From an FX perspective, USD/JPY remains one of the most interesting charts. The pair is trading near levels last seen in the 1980s and could be at risk of another steep bullish breakout toward 170 should the US Dollar Index (DXY) confirm its own breakout above 102.

Across precious metals, both gold and silver are approaching major historical confluence zones:

• Gold is testing a 10-year ascending trendline that has transitioned from resistance into support, alongside the 27.2% Fibonacci retracement of the 1920–2026 advance. Full Gold Analysis 
• Silver is testing a breakdown below the 50% Fibonacci retracement of the 1930–2026 advance, while approaching a multi-decade resistance-turned-support zone near $50.

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USD/JPY Price Outlook: 4-Hour Time Frame – Log Scale

Source: TradingView

On the 4-hour chart, USD/JPY continues to coil within a triangle pattern, pointing to growing bullish breakout risks above the 162.40–162.80 resistance zone. A sustained break above this area—and above 163.50—would strengthen the case for an extension toward 165, 168, and eventually 170.

These upside targets align with the 61.8%, 100%, and 127.2% Fibonacci extension levels of the May–June 2026 advance, while also converging with the upper boundary of the ascending channel that has guided price action since April 2025.

On the downside, a confirmed break below 161.10 and 160.80 would expose the lower boundary of the channel near 158. From there, prices could either stage another rebound to preserve the year-long bullish trend or extend losses toward 155 and 152, near the yearly lows. This bearish scenario would likely coincide with a DXY breakdown below the 100.30–99.30 support zone. Expanded Analysis 

USD/JPY Price Outlook: Weekly Time Frame – Log Scale

Source: TradingView

The weekly chart highlights the broader one-year ascending parallel channel, with price currently trading near its midpoint. This also aligns with the midpoint of the larger channel that has been in place since 2022, creating a major technical confluence zone.

A sustained move toward 170 remains possible, while a decisive close above 170 would expose the upper boundary of the 2022–2026 channel near 180.

Although this remains an aggressive scenario and would likely increase the probability of Bank of Japan intervention, it cannot be ruled out if the US dollar extends its breakout above 102 without a meaningful policy response from the BOJ.

Silver Price Outlook: Six-Month Time Frame – Log Scale

Source: TradingView

The six-month chart continues to highlight several important long-term technical developments:

• A six-month shooting star reversal pattern.
• A breakdown below the 50% Fibonacci retracement of the 1930–2026 secular advance.
• Price approaching the multi-decade trendline connecting the highs between 1980 and 2024, which could transition from long-term resistance into major support. This area also aligns with the 61.8% Fibonacci retracement of the entire advance near $46–50.

The shorter-term outlook is further clarified on the daily chart below.

Silver Price Outlook: Daily Time Frame – Log Scale

Source: Trading view

From a daily perspective, silver remains capped below a descending trendline connecting the lower highs formed since May 2026. At the same time, daily momentum remains below the neckline of the previous head-and-shoulders pattern, reinforcing the bearish momentum backdrop.

A breakdown below $57 would expose the longer-term support zone discussed above.

Conversely, a breakout above the resistance levels at $61, $63.80, $68, and eventually $72 would significantly increase confidence that a broader bullish reversal is underway, reopening the path toward triple-digit price targets over the longer term.

Key Takeaway

The US Dollar Index will remain the primary benchmark for both the FX and precious metals markets as geopolitical tensions continue to evolve.

The 101.80–102.00 resistance zone remains the key level to watch. A confirmed breakout would likely strengthen the US dollar further and increase downside pressure across major currencies and precious metals during the second half of the year.

Conversely, a breakdown below 100.60, followed by 100.30 and 99.30, would ease dollar strength and improve the outlook for currencies and precious metals alike.

Written by Razan Hilal, CMT

Follow on X: @Rh_waves