European Session Wrap: Yen Surges Below 155 and Oil Climbs Amid US Holiday

The European trading session experienced notable volatility despite the absence of US liquidity due to the Labor Day holiday. Major currency pairs reacted sharply to technical breaks and shifting macroeconomic sentiment across global markets.

The Japanese yen emerged as a primary focus for forex traders, driving USD/JPY down by one percent to trade at 154.65. This marked the first time the currency pair has broken below the key 155 threshold since February, catching many short-yen positions off guard.

Crude oil prices also climbed during the European hours, with WTI crude advancing 0.9 percent to reach $92.30 per barrel. Ongoing supply concerns in the Middle East, fueled by missile strikes near the Strait of Hormuz and attacks on infrastructure, kept geopolitical risk premiums elevated.

In the precious metals market, gold erased previous gains driven by Federal Reserve commentary. Bullion dropped 0.8 percent to trade near $4,390 as rising rate hike expectations following a hot non-farm payrolls report weighed on non-yielding assets.

European economic data presented a mixed picture for regional assets. While German factory output slumped in July as the automotive sector hit the brakes, broader Eurozone investor confidence jumped to a four-year high, supported by an upward revision to second-quarter GDP growth.

Funded traders and retail market participants monitoring these developments should note that reduced liquidity during US holidays can exaggerate intraday moves. Risk management protocols remain crucial as markets look ahead to the upcoming US consumer price index release.