Forex Daily: USD/JPY and AUD/USD Falter as Year-End Liquidity Thins

Major currency pairs are struggling to maintain momentum as the final trading week of 2025 begins, with thin holiday liquidity amplifying technical resistance levels.

USD/JPY: Intervention Specter Looms

The USD/JPY pair has reversed course, retreating toward the 156.00 handle after a failed bullish breakout. The yen's recovery is driven less by domestic data and more by lingering fears of “Yentervention”—direct market action by the Bank of Japan or Ministry of Finance to curb excessive currency depreciation.

• Key Watch: If the pair fails to hold support at 155.50, further corrective selling could ensue as traders square books before year-end.

AUD/USD: Bulls Run Out of Steam

The Australian Dollar has also hit a ceiling, sliding back below the psychological 0.6700 level. Despite a generally risk-positive environment, the “Aussie” lacks the catalyst to push higher in a low-volume environment.

• Outlook: Without fresh commodities data or a significant shift in China's economic sentiment, AUD/USD is likely to remain range-bound, with downside risks increasing if global risk sentiment sours due to the developing geopolitical headlines in Europe and the Middle East.