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EUR/USD Forecast: US Dollar Strength Pressures Pair, Key Support in Focus

The euro is facing renewed downside pressure against the US dollar as of mid-April 2025, with the EUR/USD pair trading near 1.1300, its lowest level in several weeks, driven by a broadly stronger greenback and shifting interest rate expectations.

Why is the US dollar strengthening?

The US dollar index has climbed for three consecutive sessions, supported by resilient US economic data and hawkish remarks from Federal Reserve officials. Market participants have trimmed bets on aggressive Fed rate cuts this year, with futures now pricing in a 60% chance of a hold in June, according to CME FedWatch. This contrasts with the European Central Bank, which is widely expected to cut its deposit rate by 25 basis points at its June meeting, widening the rate differential in favor of the dollar.

Technical outlook: Key levels to watch

On the daily chart, EUR/USD is testing a critical support zone between 1.1280 and 1.1300, which has held since late March. A break below this level could open the door to further losses toward 1.1200, while resistance is seen at 1.1350 and then 1.1400. The 14-day relative strength index is hovering near 45, indicating bearish momentum but not yet oversold conditions.

Impact on traders and the broader market

For forex traders, the pair’s direction hinges on upcoming US inflation data and ECB policy signals. A stronger dollar raises import costs for emerging markets and can weigh on global risk sentiment. Meanwhile, European exporters may benefit from a weaker euro, potentially cushioning the region’s economic growth. The current trend underscores the importance of monitoring central bank communications and economic releases for short-term trading decisions.

Conclusion

In summary, EUR/USD remains under pressure as the US dollar gains on Fed policy expectations, while the ECB leans toward easing. The key support at 1.1280 will be pivotal in determining the pair’s next move. Traders should watch for breaks below this level or a reversal above 1.1350 for clearer directional signals.

FAQs

Q1: What is the current EUR/USD exchange rate?
As of mid-April 2025, EUR/USD is trading near 1.1300, having declined from around 1.1450 earlier in the month.

Q2: Why is the US dollar strengthening against the euro?
The dollar is supported by robust US economic data and reduced expectations of near-term Fed rate cuts, while the ECB is expected to ease policy, widening the interest rate differential.

Q3: What are the key technical levels for EUR/USD?
Support is at 1.1280-1.1300, with a break potentially leading to 1.1200. Resistance is at 1.1350 and 1.1400.

This post EUR/USD Forecast: US Dollar Strength Pressures Pair, Key Support in Focus first appeared on BitcoinWorld.

Currency analysts see USD/JPY easing in coming months as intervention risk and a September BoJ hike collide with renewed US pressure on Tokyo.

The US Dollar to Japanese Yen (USD/JPY) exchange rate traded around 160.03 on Tuesday, with the Yen once again struggling to capitalise on mounting expectations for tighter Bank of Japan policy.

USD/JPY gained 1.38% during August and has recovered roughly half the fall triggered by the joint US-Japan intervention at the end of July.

Rabobank nevertheless sees room for USD/JPY to move lower.

“In our view, fear of further FX intervention in support of the JPY coupled with the prospect of a BoJ September rate hike suggests scope for USD/JPY to trade in the 158-157 area on a 3-to-6-month view.”

The call now has an unusual extra ingredient: Washington is openly pushing Tokyo towards tighter monetary policy.

US Treasury Secretary Scott Bessent said at the weekend that he expected BoJ Governor Kazuo Ueda to “do the right thing” before going further on Monday.

“I have information that the market doesn’t have, and it’s my belief that the Japanese government and the BOJ will do the things that will lead to a stronger yen,” Bessent told CNBC.

Not exactly subtle.

Bessent Pressure Changes the September Calculation

Rabobank notes that this is hardly Bessent’s first intervention in the BoJ debate.

“US Treasury Secretary Bessent has made his views on Bank of Japan policy clear before. In August 2025 he aired the opinion that the BoJ is ‘behind the curve’ on inflation.”

The latest comments followed meetings with Ueda and Japanese Finance Minister Satsuki Katayama, and Reuters reports that a September hike is now close to fully priced.

The Bank of Japan’s next policy meeting is scheduled for 17-18 September.

Rabobank thinks Japan already has enough domestic justification to act without encouragement from Washington.

“Last week’s release of August Tokyo core, core CPI inflation at 2.0% y/y was the third straight month of acceleration.”

“The presence of tight labour market conditions and a resilient economy combined with elevated oil prices and a weak JPY all increase the risk of second order price effects in Japan, suggesting there are good reasons for the BoJ to raise rates again.”

That is the straightforward part of the story.

The more interesting question is why the US Treasury Secretary is leaning so publicly on another major central bank.

Rabobank puts it this way:

“The market is likely to start with the questions of why the Treasury Secretary has broken international precedent by pressuring another country’s central bank and what are the benefits to him for a tighter monetary policy in Japan?”

The answer may sit in the bond market as much as the currency market.

The Yen Story Is Also a US Treasury Story

Japan remains the largest foreign holder of US Treasuries, and higher Japanese yields create a growing incentive for domestic investors to bring capital home.

There is a plumbing issue here as well, and it matters.

Rabobank notes that the July joint intervention agreement indicated Japan would avoid selling US Treasury securities during further Yen operations and instead raise Dollars through a Federal Reserve repo facility.

“It is not known if this was a condition of US participation, though it caught the market’s attention.”

“Japan is the largest foreign holder of US treasuries, and the inference was that the US Treasury was keen to avoid selling pressure on US debt.”

Weeks later, Bessent announced that the Treasury would at least double some long-duration bond buybacks, reviving arguments that Washington was trying to dampen long-term borrowing costs.

Japanese yields are moving in the opposite direction.

The 10-year JGB yield reached 3% on Tuesday for the first time since 1996, while the two-year yield hit its highest level in 31 years as investors priced stronger inflation and quicker BoJ tightening.

This is where the cross-market argument gets rather more interesting.

If Japanese bonds become sufficiently attractive, insurers and pension funds have less reason to own foreign debt, including Treasuries.

Rabobank points to Finance Minister Katayama’s suggestion that Japan could alter the GPIF pension fund’s allocation “to make substantially greater investments in Japanese financial assets”.

“Either way, it likely caught the attention of the US Treasury.”

“It can be assumed that Bessent would favour that the Japanese authorities found a way to support the JPY, which did not involve the risk of further pressure on US treasuries.”

That interpretation fits the unusual pattern of recent US policy: Washington helped Japan buy Yen, Treasury buybacks were increased soon afterwards, and Bessent is now openly encouraging higher Japanese policy rates.

As we noted in our recent USD/JPY weekly forecast, intervention broke the earlier momentum but did not fix the interest-rate gap.

Now the focus has moved decisively to the BoJ.

A September Hike May Still Not Be Enough

Rabobank sees two persistent drags on the Yen.

“In our view, there are two main factors that have been weighing on the JPY since the tail end of last year.”

The first is the widening divergence between USD/JPY and two-year yield spreads following Sanae Takaichi’s rise to the LDP leadership.

The second is the perception that fiscal policy and political preferences have constrained the BoJ.

“The PM’s reputation as a fiscal dove combined with her previously spoken preference for low interest rates has undermined the JPY and sparked speculation that the government has been leaning on the BoJ not to raise rates.”

“For sure, the BoJ has been slow to raise rates and for the JPY to stabilise, the BoJ will almost certainty have to hasten the pace of policy tightening.”

Reuters reported Tuesday that USD/JPY was still around 160.08 despite the increasingly hawkish September narrative, with traders focused on the continuing US-Japan yield gap.

That stubbornness says quite a lot.

Even a 25-basis-point hike may only buy Tokyo time unless Ueda signals that additional tightening will follow.

“The absence of a hawkish stance from the BoJ at the September 18 policy meeting would almost certainly weigh heavily on the JPY.”

“Even with a rate hike this month, the JPY is unlikely to be out of the woods.”

Fiscal policy remains the other loose end, with markets increasingly sensitive to JGB supply and the 2027 budget discussions.

We made the same distinction in our earlier Yen analysis: getting the rate to 1.25% is one thing; convincing markets that Japan has entered a durable tightening cycle is another.

At 160, the pair is basically daring the BoJ to prove it.

Rabobank thinks the combination of intervention risk and September tightening can eventually pull USD/JPY back into 157-158.

The next move, though, probably depends less on whether the BoJ hikes than on whether Ueda can convince investors there is another hike behind it.

BitcoinWorld

EUR/GBP Holds Near 0.8500 as Bullish Momentum Fades: Technical Outlook

EUR/GBP is trading sideways around the 0.8500 level as of [current date], with the pair losing its earlier bullish traction and consolidating in a narrow range.

What’s driving the sideways move?

The recent rally in EUR/GBP has stalled, with buyers failing to push the pair decisively above the 0.8500 handle. The lack of fresh catalysts from either the European Central Bank or the Bank of England has left the pair directionless, as markets digest mixed economic data from both economies.

Technical indicators on the daily chart show fading bullish momentum, with the Relative Strength Index (RSI) retreating from overbought levels. The pair remains supported by the 20-day moving average, but a break below that could open the door for a test of lower supports.

Key levels to watch

Immediate resistance is seen at 0.8520, followed by the recent swing high near 0.8550. On the downside, support lies at 0.8480 and then the 50-day moving average around 0.8450. A sustained move above 0.8550 would signal a resumption of the uptrend, while a break below 0.8450 could shift the bias to bearish.

Why this matters for traders

The consolidation reflects a broader market uncertainty about the policy paths of the ECB and the BoE. With inflation still above targets in both regions, any surprise in upcoming data or central bank commentary could trigger a breakout. For traders, the current range offers opportunities but also requires patience, as the pair may remain choppy until a clear catalyst emerges.

Conclusion

EUR/GBP is stuck in a tight range near 0.8500, with fading bullish momentum suggesting a period of consolidation. Traders should watch for a break of the range boundaries for directional cues, while keeping an eye on economic releases and central bank speeches for potential volatility.

FAQs

Q1: What does ‘trading sideways’ mean in forex?
It means the price is moving within a narrow range without a clear upward or downward trend, often reflecting indecision in the market.

Q2: What is the significance of the 0.8500 level for EUR/GBP?
0.8500 is a psychological round number and a key support/resistance zone. It has acted as a pivot point in recent trading, and a break above or below could signal the next directional move.

Q3: How can central bank policy affect EUR/GBP?
Differences in interest rates and monetary policy between the European Central Bank and the Bank of England influence the relative attractiveness of the euro and the pound, driving the exchange rate.

This post EUR/GBP Holds Near 0.8500 as Bullish Momentum Fades: Technical Outlook first appeared on BitcoinWorld.

– Written by


David Woodsmith

STORY LINK Pound to Dollar Forecast: Hawkish Warsh Sends GBP to 10-Day Lows

The Pound to Dollar exchange rate (GBP/USD) has slipped to 10-day lows around 1.3525 after Federal Reserve Chair Kevin Warsh used his Jackson Hole speech to reinforce concerns over persistent US inflation. Markets have responded by raising the probability of a September Fed rate hike to around 60%, providing renewed support for the Dollar and leaving the important 1.3500 area in focus for Sterling.

GBP/USD Forecasts: Holds Above 10-Day Lows

The dollar posted net gains following hawkish comments from Federal Reserve Chair Warsh’s comment on Friday.

The Pound to Dollar (GBP/USD) exchange rate dipped to 10-day lows around 1.3525 before trading around 1.3545 on Monday. Trading ranges were narrow with UK markets closed for a holiday.

There is important GBP/USD support in the 1.3500 area.

According to UoB; “Today, GBP may edge lower, but any decline should remain within a range of 1.3520/1.3570.”

From a slightly longer-term view, it added; “The risk remains on the downside, and the level to watch is 1.3480. Overall, GBP is likely to remain under pressure as long as it holds below 1.3600.”

In his speech at the Jackson Hole symposium, Warsh expressed some unease over underlying inflation trends and added; “we must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed. Otherwise, we have work to do.”

Cleveland Fed President Hammack, who voted for a hike in July, maintained a hawkish stance and continued to back an immediate rate hike.

MUFG commented; “While stopping short of explicitly backing a September rate hike, Warsh stressed that inflation remains insufficiently contained, reaffirmed the Fed’s commitment to its 2% target, and argued that current financial conditions are not restrictive. He also noted that recent improvements in inflation data are not yet enough to signal a meaningful improvement in underlying price trends.”
According to Elwin de Groot, head of macro strategy at Rabobank; “Warsh’s prepared remarks seemed designed to lift rate-hike expectations, rebalance the September debate towards the hawks and rebuild his inflation-fighting credibility.”
He added; “Warsh delivered an important signal: the Fed is not relying on tighter financial conditions alone and remains willing to tighten further if underlying inflation stalls.”
In response, markets now consider that there is close to a 60% chance that the Fed will hike rates at the September meeting.

ING still considers that there is a high degree of uncertainty; “We are far more constructive on inflation, and its path lower through 2027, and without the need for hikes. But there may well be a sense here that the wider FOMC might not have the same patience that we have on the timing of inflation falls. As it is, the September meeting is now a market toss-up.”

According to Rabobank; “The next round of economic data – especially the Employment Report on September 4 and the CPI on September 11 – could be crucial to the swing voters in the Committee.”

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