– Written by


Frank Davies

STORY LINK GBP/USD Forecast: Pound Sterling Steady Near $1.37 Ahead of BoE

The Pound to US Dollar exchange rate (GBP/USD) traded sideways on Tuesday, with limited conviction on either side as a partial US government shutdown disrupted the flow of economic data.

At the time of writing, GBP/USD was hovering around $1.3667, little changed from the opening levels of the session.

The US Dollar (USD) struggled to gain momentum after confirmation that January’s key labour market releases would be delayed due to the ongoing government shutdown.

The US Bureau of Labor Statistics confirmed that the non-farm payrolls report and associated employment data will not be published until funding is restored, likely pushing the release into next week at the earliest.

The disruption left USD traders cautious, with many reluctant to take fresh positions amid the lack of timely economic signals.

The Dollar also faced pressure from an improvement in global risk appetite, following President Donald Trump’s decision to lift tariffs on India. The easing of trade tensions reduced demand for traditional safe-haven assets, further weighing on the ‘Greenback’.

The Pound (GBP) meanwhile traded steadily, showing resilience against most major counterparts.

Sterling activity remained subdued as investors positioned ahead of the Bank of England’s upcoming policy decision on Thursday. While interest rates are widely expected to be left unchanged, the recent uptick in UK inflation has prompted speculation that the BoE’s guidance could strike a slightly more hawkish tone.

GBP/USD Forecast: Can US Services PMI Revive the Dollar?

Looking ahead, volatility in the Pound to US Dollar exchange rate could pick up following the release of the latest ISM services PMI.

If January’s services data mirrors the resilience seen in the manufacturing sector, it could lend the US Dollar support by reinforcing expectations that the Federal Reserve will delay rate cuts well into 2026.

Attention will also turn to the UK’s final services PMI. Confirmation that activity expanded to a fresh 21-month high at the start of the year may offer the Pound some modest support, although markets are likely to remain sensitive to broader risk sentiment and US political developments.

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Created on February 03, 2026

The US dollar continues to see a lot of noise, as traders have recently tried to push the Federal Reserve into perceived rate cuts coming quickly. This is something the trading community has been wrong about for some side.

USD/JPY

The US dollar has risen slightly against the Japanese yen, gaining about 0.5% during the trading session on Monday as we are now threatening the 50-day EMA.

Quite frankly, I think the bulk of traders out there got caught on the wrong side of the Federal Reserve guestimate of the month. We’ve seen this multiple times previously where the market starts getting hyper-excited about the idea of interest rate cuts. While we do see them recently, the reality is they’re not going to be as quick as people think.

Furthermore, it’s not as if the Federal Reserve balance sheet is going to suddenly explode. The nominee, Kevin Warsh, is somebody who’s been a little bit hawkish over the longer term, so he probably brings a little bit of uncertainty to traders instead of the prayers of loose monetary policy that we’ve seen over the last couple of years that the market’s consistently gotten wrong.

Bank of Japan Constraints

On the other side of this equation, we have the Bank of Japan, which really can’t raise rates much, if at all, because they have too much debt. So, with all of that being said, I do think we eventually creep our way back towards the 158-yen level again, collecting swap along the way.

I like the idea of buying dips; I don’t necessarily want to chase this trade. But you’ve been watching me for months be bullish on this pair despite the fact that we saw some type of intervention. The reality is, it looks like we’re going to try to make our way back up to this battlefield again.

Want to trade our USD/JPY forex analysis and predictions? Here’s a list of forex brokers in Japan to check out.

Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.

Created on February 03, 2026

The euro did try to rally a little bit during the early hours here on Monday but simply cannot hang onto gains at the moment as the Federal Reserve Chairman nominee has the markets rethinking things.

EUR/USD

The euro did try to rally a little bit during the early hours here on Monday but then turned around to show signs of weakness as we are testing the 1.18 level, an area that is going to be important for our next move.

The 1.18 level is an area that I think a lot of people will be watching and with that being said I think this is a market that is going to continue to play based on the central banks around the world specifically the European Central Bank which is doing nothing and then the Federal Reserve which of course has just got itself back into the headlines due to Kevin Warsh being nominated.

Central Bank Impact and Technical Levels

That’s a little bit more conservative than I think people thought was going to be the case. With that there is some doubt as to how many Federal Reserve rate cuts there are going to be and with that I think we have to look at this as a market so that if it breaks down below the 1.18 level we could be re-entering consolidation. This would be typical euro/dollar behavior to be honest.

If we turn around and take out the 1.1875 level above, then I think you have a real shot at this market rallying perhaps to the 1.20 level followed by the 1.23 level which is what the implied move from the consolidation range suggests.

Lots of things are going on and then on top of that we have the employment figures later this week.

Ready to trade our EUR/USD analysis and predictions? Here are the best European brokers to choose from.

Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.

The EURJPY pair failed to breach 184.00 barrier, obstructing the attempts to resume the bullish trend, which forces it to form sideways trading by its fluctuation near 183.55.

Reminding you that the bullish scenario will remain valid by the stability of the trading above the bullish channel’s support at 182.75, confirming the importance of surpassing the barrier, to ease the mission of recording extra gains by its rally towards 184.85 and 185.45, while breaking the bullish channel’s support and holding below it will force it to form strong bearish waves to suffer several losses by reaching 181.50.

The expected trading range for today is between 183.00 and 184.00

Trend forecast: Sideways 

– Written by


Ben Hughes

STORY LINK GBP/USD Forecast: Pound Sterling Lacks Momentum Ahead of US Jobs

The Pound to US Dollar exchange rate (GBP/USD) traded in a narrow range on Monday, with an upbeat revision to the UK’s final manufacturing PMI failing to generate meaningful momentum for Sterling.

At the time of writing, GBP/USD was trading at $1.3699, edging only marginally above opening levels as markets largely shrugged off the data.

The US Dollar (USD) was broadly steady at the start of the week, pausing after the rebound it mounted late on Friday.

The ‘Greenback’ had slumped to multi-year lows last week before finding support after US President Donald Trump confirmed Kevin Warsh as his pick for Federal Reserve Chair. Warsh is widely viewed as the most market-friendly of the potential nominees, helping to spark a sharp recovery in USD demand.

That momentum, however, faded on Monday. While Warsh’s nomination eased concerns over political interference at the Fed, investors remain confident the US central bank will still move to cut interest rates later this year, limiting the Dollar’s upside.

The Pound (GBP) initially came under pressure as a mild risk-off mood weighed on risk-sensitive currencies.

Sterling was able to recover those losses early in the session after the UK’s final manufacturing PMI for January was revised higher.

The index was confirmed at 51.8, its strongest reading in 17 months and slightly above the preliminary estimate of 51.6, signalling improving conditions in the factory sector.

Despite the positive revision, GBP gains proved limited. While analysts welcomed signs of stabilisation in manufacturing, many warned that ongoing trade uncertainty and rising cost pressures could continue to weigh on UK industry well into 2026.

GBP/USD Forecast: US Labour Data in Focus

Looking ahead, attention turns to Tuesday’s release of the US Job Openings and Labour Turnover Survey (JOLTS).

The data is expected to show a modest decline in job vacancies in December, with openings forecast to drift back towards the near four-year low seen in September 2024.

Confirmation of a cooling labour market could place renewed pressure on the US Dollar by reinforcing expectations for Federal Reserve interest rate cuts later this year.

With the UK data calendar remaining light, movements in GBP/USD are likely to be driven by shifts in global risk appetite. A risk-off tone could favour the safe-haven Dollar, while an improvement in sentiment following the JOLTS release may allow Sterling to regain some ground.

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TAGS: Pound Dollar Forecasts