– Written by


Frank Davies

STORY LINK Pound Sterling Forecast: UK Borrowing Costs Spark Fresh GBP/USD Volatility

The Pound US Dollar (GBP/USD) exchange rate fell to a six-day low on Thursday before recovering some ground as volatility across bond markets drove choppy trading in the pairing.

At the time of writing, GBP/USD was trading at $1.3226, having edged slightly higher on the day.

The Pound (GBP) struggled to find a firm footing on Thursday, as a lack of significant UK economic data left Sterling exposed to wider market movements.

GBP initially came under pressure as UK gilt yields rose to multi-year highs, although borrowing costs later retreated from their peaks.

The sharp rise in yields raised concerns over the government’s financing position ahead of the Autumn Budget, putting additional pressure on the Pound.

As gilt yields subsequently pulled back, however, some of those concerns eased and Sterling was able to claw back its earlier losses.

The US Dollar (USD) struggled to establish a clear direction on Thursday, with changing market sentiment leaving the ‘Greenback’ without a firm bias.

USD initially strengthened as risk appetite deteriorated.

Oil prices climbed again following recent attacks on oil tankers in the Strait of Hormuz, while several US energy companies shut down offshore oil and gas platforms in the Gulf of Mexico as an approaching hurricane increased operational risks.

Expectations of higher interest rates globally added to the pressure on sentiment.

Markets were also unsettled by reports that several major technology companies were looking to raise billions of Dollars through debt.

However, sentiment recovered somewhat as the session progressed, taking some of the support away from the US Dollar and prompting USD to give up its earlier gains.

Near-Term GBP/USD Forecast: US Consumer Sentiment in Focus

Looking ahead, the latest US consumer sentiment index from the University of Michigan will be the main data release to watch on Friday.

US household confidence is expected to have slipped to 47.6 in October, marking a third consecutive monthly decline and taking the index to its lowest level since May.

A reading in line with forecasts could weigh on the US Dollar, leaving the ‘Greenback’ vulnerable to further losses.

Elsewhere, shifts in risk appetite are likely to remain an important influence on the safe-haven US Dollar.

A more cautious approach among investors could lend support to the ‘Greenback’.

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TAGS: Pound Dollar Forecasts

GBPJPY ended yesterday’s trading with another negative close below the 210.40 level, forming strong bearish waves once again and currently approaching the additional support at 208.10, thereby reaching the targets suggested in the previous report.

We recommend waiting for the price to break the current support and hold below it to confirm its readiness to resume the main bearish attack, targeting further negative levels as it heads directly toward 207.45 and 206.80.

The expected trading range for today is between 207.45 and 209.25

Trend forecast: Bearish

U.S. Dollar Index gains some ground as traders focus on the Initial Jobless Claims report. The report indicated that 197,000 Americans filed for unemployment benefits in a week, compared to analyst consensus of 200,000. The previous report was revised from 197,000 to 199,000. The report indicated that the job market remained in decent shape.

U.S. Dollar Index continues its attempts to settle above the resistance level at 102.35 – 102.50. In case U.S. Dollar Index manages to settle above the 102.50 level, it will head towards the next resistance, which is located in the 103.15 – 103.30 range.

• EUR/JPY could find immediate support at the descending channel’s lower boundary around 176.30.
• The 14-day Relative Strength Index at 33.25 sits slightly above oversold territory.
• The primary resistance lies at the nine-day EMA at 177.87.

EUR/JPY inches higher after posting modest losses in the previous day, trading around 177.10 during European hours on Thursday. Technical analysis of the daily chart shows that the currency cross is remaining within the descending channel pattern, suggesting an ongoing bearish bias.

The EUR/JPY cross is keeping a bearish near-term tone as price holds below both the nine-period and 50-period Exponential Moving Averages (EMAs). The short-term EMA is trading under the longer one while both remain above spot, suggesting topside pressure, while the 14-day Relative Strength Index (RSI) at 33.25 hovers just above oversold territory, hinting that downside momentum is still dominant but becoming stretched.

The EUR/JPY cross may test the lower boundary of the descending channel around 176.30, followed by an 11-month low of 175.70, recorded in November 2025. Further declines below this confluence support zone would expose the 14-month low of 169.72.

On the upside, the primary resistance lies at the nine-day EMA of 177.87, followed by the 50-day EMA at 180.91. A break above these moving averages would support the EUR/JPY cross to approach the upper boundary of the descending channel around 184.10, followed by the all-time high of 187.95 set on April 17.

French debt jitters resurface as Treasury mulls shorter issuance

Analysts at ING note that the recent stabilisation in French sovereign markets has proved short-lived. They point out that French government bonds, which had “enjoyed a modest rebound earlier in the week,” were “hit by a report yesterday that the French Treasury could shorten the duration of its issuance to protect the long end.” ING suggests this shift in issuance strategy has unsettled investors, reinforcing the sense of fragility around French debt and, by extension, related Euro assets.

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