• USD/JPY remains subdued as investors assess the latest US PMI figures.
• The preliminary June S&P Global PMI rose to 55.7, above the expected 54.8 figure, although softer employment details limited the bullish impact on the US Dollar.
• Geopolitical risk remains in focus after the US granted Iran a 60-day Oil sanctions waiver, while conflicting comments over nuclear inspections kept markets cautious.

The USD/JPY pair is trading in a neutral zone on Tuesday as investors digest the latest United States (US) Purchasing Managers Index (PMI) figures and recent ADP employment data, awaiting a stronger catalyst from Federal Reserve (Fed) commentary.

The latest S&P Global US PMIs showed that business activity continued to expand, with the release at 55.7, higher than the expected 54.8 in June, offering some support to the US Dollar. However, softer employment details inside the survey limited the bullish impact as traders remain cautious over whether the US labor market is starting to lose momentum.

Monday's ADP Employment Change 4-Week Average data showed that US private payrolls rose by 30.75K, improving from the previous 26.5K reading. The figure suggested that hiring remained resilient and strong enough to significantly alter expectations for the Fed’s policy path.

Meanwhile, the latest US-Iran developments kept geopolitical risk in focus. The US granted Iran a 60-day Oil sanctions waiver following initial peace talks, while President Donald Trump claimed that Tehran had agreed to nuclear inspections “into infinity,” a statement Iran later denied.

Short-term technical analysis:

On the 4-hour chart, USD/JPY trades at 161.52, maintaining a bullish bias as it holds above both the 20-period Simple Moving Average (SMA) at 161.44 and the 100-period SMA at 160.40. The cluster of nearby supports suggests dips are being bought, while the Relative Strength Index (RSI) around 61 stays in positive territory, hinting that upside momentum remains constructive but shy of overbought extremes.

On the topside, immediate resistance is aligned at 161.74, where a clear break would expose further gains toward the recent all-time highs. On the downside, initial support is seen at the 20-period SMA near 161.44, reinforced by horizontal levels at 161.42, 161.35 and 161.27, with the 100-period SMA at 160.40 underpinning the broader bullish structure on deeper pullbacks.

(The technical analysis of this story was written with the help of an AI tool.)