– Written by


David Woodsmith

STORY LINK GBP/USD, Oil Price Forecast: Pound Slips as Brent Tops $100 and Dollar Strengthens

The Pound US Dollar (GBP/USD) exchange rate edged lower in mid-week trading, with a cautious market mood encouraging investors towards traditional safe-haven currencies such as the US Dollar.

GBP/USD was trading at approximately $1.3227 at the time of writing, a decline of around 0.4% from Wednesday’s opening levels.

Fresh demand for the US Dollar (USD) emerged on Wednesday as deteriorating risk appetite strengthened the appeal of the safe-haven currency.

A renewed jump in oil prices added to the more defensive tone, with Brent crude moving back above $100 a barrel.

Concerns over global energy supplies intensified amid escalating tensions in the Middle East, while a storm also threatened US oil production.

Market participants were also adopting a cautious stance ahead of the release of minutes from the Federal Reserve’s latest policy meeting.

Investors will scrutinise the minutes for clues about the debate surrounding the future direction of US interest rates, particularly after several policymakers struck a more cautious tone in response to recent softer inflation and employment figures.

Signs that officials remain worried about stubborn price pressures could bolster expectations of additional monetary tightening, potentially giving the US Dollar another lift.

Sterling struggled for momentum on Wednesday, with a lack of significant UK economic releases leaving the currency particularly sensitive to developments in the domestic bond market.

Gilt yields continued to edge higher, creating an additional headwind for the Pound.

Rising borrowing costs have once again highlighted concerns surrounding the UK’s stretched public finances, with the prospect of further increases potentially eating into Chancellor John Healey’s limited fiscal headroom ahead of the Autumn Budget.

Expectations of a November interest rate increase from the Bank of England (BoE), however, continued to provide some support for Sterling and helped prevent a sharper decline.

Near-Term GBP/USD Forecast: BoE Speakers and US Jobless Claims in Focus

Attention now turns to a busy run of BoE speeches, which could provide fresh direction for the Pound US Dollar exchange rate during the latter part of the week.

MPC members Megan Greene and Huw Pill are both scheduled to speak, having joined the minority that voted for a 25-basis-point rate increase at last month’s meeting.

Governor Andrew Bailey is also due to address markets.

A more hawkish message from Bailey, particularly if he suggests that persistent inflationary pressures could justify another rate increase in November, may offer Sterling a boost.

On the US side, the latest initial jobless claims figures could influence USD trading on Thursday.

A larger-than-expected increase in unemployment claims could weigh on the Dollar by raising concerns over the health of the US labour market.

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USD/JPY remains stuck near the resistance level at 158.00 – 158.50 despite rising Treasury yields. The yield of 10-year Treasuries settled near the 5.32% level, while the yield of 30-year Treasuries continued its attempts to settle above 5.70%. Interestingly, recent hawkish comments from BoJ Governor Ueda did not provide material support to the Japanese yen.

From the technical point of view, USD/JPY continues its attempts to settle above the 158.50 level. If USD/JPY settles above 158.50, it will head towards the next resistance, which is located in the 160.00 – 160.50.

EURJPY remains affected by conflicting signals from the main indicators, forming some bullish corrective waves and stabilizing near 178.00. However, this will not affect the main bearish scenario, which remains supported by the formation of 179.45 as an additional resistance level.

We expect the pair to continue mixed trading for now until it gathers the required bearish momentum to resume its negative attempts and reach the bearish targets, starting at 176.80 and 176.00. However, breaking above the additional resistance would give the price room to extend its corrective gains, with the next targets at 179.90 and the key resistance at 180.80.

The expected trading range for today is between 177.00 and 179.40

Trend forecast: Volatile within the bearish trend

EUR/USD is near 1.1230 on the daily chart and has recently fallen from the 1.1352 area. I find it important that price is below both the moving averages and the rising trendline, and the latest leg lower has pushed the pair into the lower Fibonacci extension. From a larger time frame perspective, the structure is very bearish.

Support comes in at 1.1225. A downside break from that area would open up 1.1131 and then 1.0993. 1.1352 remains the first major barrier on the upside, with 1.1489 extending higher and coming into focus if we see a more decisive recovery.

RSI is extremely oversold and confirms the strength of the lower moves, however it also increases the probability of a minor bounce back higher. I am looking for opportunities to sell more aggressively should we remain below 1.1352 and within the existing descending trend. If 1.1489 comes into play, I will look to reverse my perspective. A break below 1.1225 would put 1.1131 in focus.

Created on October 07, 2026

This currency paid has been within a long-term upwards track. However, financial institutions and large players who find themselves taking opposing positions and are trying to merely pursue the bullish trend often find that dangers and expensive losses lurk. The USD/JPY trend is publicly being confronted by the Bank of Japan – and sometimes the U.S Treasury/Fed – and those who want to pursue what appears to be a consistently rising tide, must also acknowledge the tide reverses quickly. Retail traders who want to pursue the USD/JPY cannot be blamed, there are profits to be made, but substantial losses can occur too.

USD/JPY’s Uptrend Remains Vulnerable to Sudden Reversals

Technical traders of the USD/JPY can point to a long line of charts to say the currency pair remains locked within an upwards draft. However, those same technical charts – including near-term – also clearly show that spikes downwards occur. The desire to seek momentum in the USD/JPY remains strong and can be described as tantalizing.

Yet, experienced speculators know that what feels like a comfortable march upwards can be struck by a sudden punch downwards. The Bank of Japan is caught within a monetary policy that has many financial institutions outwardly betting against the JPY, thus the BoJ has steadily intervened and crushed long positions. The ability of the Bank of Japan to intervene remains a real threat for large and small traders tempted to buy the USD/JPY.

Intervention Warnings Complicate USD/JPY’s Renewed Advance

As of this writing the USD/JPY is near the 158.350 realm and has been showing a track upwards. The currency pair remains fast and has been climbing again over the past couple of weeks – but has also seen momentary strikes lower. Betting on the USD/JPY to move higher at the current elevations is a wager that makes sense.

But it is also a gamble, because if financial institutions are threatened by the BoJ via rhetoric that an intervention could occur, this sometimes proves enough to cause reversals lower. Yes, the USD/JPY has been higher and then has faced loud interventions. Two questions and points come to mind: where would the USD/JPY be if there had been no interventions over the past year? And how should traders attack the USD/JPY if they remain skeptical about fundamental policies that the Bank of Japan is having a difficult time fixing – particularly when interventions to kill off buying momentum is a real piece of the trading landscape.

Abrupt Price Moves Can Undermine Planned Exits

Without the influence of the Bank of Japan interventions the currency pair would likely be closer to 170.00 at this juncture, perhaps higher. However, that really cannot be worked into the thinking of traders accept to know the policy of the BoJ is not held in high regard in the mindsets of many financial institutions.

Thus, retail traders need to understand if they are wagering on the USD/JPY, that the bets should always be on the lookout for sudden problems to emerge and have take profit orders working to cash out winning bets. If a trader can use a trailing stop and simply have their wager eliminated effectively with a profit remaining that is a good option. However, sometimes interventions can cause notorious spikes downwards which shoot past stop loss orders leaving traders at the mercy of their brokers.

USD/JPY Price Chart – Double Top at 158.00

Rising USD/JPY Tests Confidence in the Trend

You cannot blindly bet on the upside of the USD/JPY. The BoJ has proven it can and will hurt the largest of players in the currency pair if they believe too much speculation exists. The Bank of Japan however remains caught in a tough problem. Clearly the government of Japan favors a somewhat weaker JPY, but at the same time doesn’t want the currency to become too devalued. The current USD centric strength in the broad market is problematic too for the USD/JPY right now and not making things easy on policy makers in Japan, nor the U.S Treasury. Yet, looking for upside in the USD/JPY remains the logical bet. However, conservative traders may want to wait for downturns and then look to ignite upside bets.

Following Momentum and Avoiding Sudden Violent Shifts

The USD/JPY is approaching dangerous elevations once again. Again – being the most important word. We have seen this currency pair theatre before. Buying the USD/JPY certainly remains the flavor of the day. The problem for speculators is knowing when it is safe to step into the speculative spotlight and follow momentum correctly, without getting destroyed by a sudden shift of sentiment caused by the BoJ.

USD/JPY: Levels to Watch

Around the article’s quoted price of 158.350, the immediate focus is whether that support area holds and how the pair behaves near resistance at 158.450. Sustained trading above resistance would put 158.850 into focus; a loss of support would shift attention toward 157.950.

These are reference points rather than promised destinations. The unresolved issue is whether moves beyond this narrow range attract sustained participation or quickly reverse, particularly if intervention concerns return to the foreground.

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Robert Petrucci is a Market and Geopolitical Analyst at DailyForex with professional experience in the Forex, commodity, and broader financial markets dating back to 1993. His work focuses on risk analysis, macroeconomic themes, and how geopolitical events affect currencies, commodities, stock indices, and cryptocurrencies. Robert brings a conservative wealth management perspective from his long-standing advisory roles, translating complex market conditions into structured scenarios for traders and investors.

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