• USD/JPY stalls below 148.50 as mixed U.S. CPI results keep price capped at the H4 Fair Value Gap.
• Fed rate cut bets at 94.2% maintain short-term support, but upside is limited without a decisive breakout.
• Technical bias split – breakout above 148.50 eyes 149.50, while rejection risks a slide toward 146.60.

Previous forecast recap (webinar)

In our last webinar, we highlighted 148.00–148.50 as the key rejection zone unless U.S. CPI delivered a strong dovish surprise. We noted that a failure at this level could open the path toward 146.50, targeting previous demand.

CPI results: Mixed message

On August 12, CPI data brought a split outcome:

• Headline CPI YoY: 2.7% (vs 2.8% forecast) – Dovish.
• Core CPI YoY: 3.1% (vs 3.0% forecast) – Hawkish.

The soft headline reinforced easing expectations, but the hotter core print kept the Fed from being fully locked into aggressive cuts, creating two-way volatility in USD/JPY.

Post-release price action

The pair rejected the 148.50 ceiling, confirming our pre-CPI bias. Price is now consolidating in the 148.50–147.50 range, awaiting a breakout trigger from further U.S. data or Fed commentary.

Rate cut probability – September FOMC

According to the CME FedWatch Tool following the CPI release:

• 94.2% probability of a 25 bps rate cut (target range 4.00–4.25%).
• 5.8% probability of no change.
• 0% probability of a hike.

This strong consensus for easing keeps USD/JPY supported in the short term, but with the risk of dollar weakness if future data aligns with the softer headline CPI trend.

Technical outlook – USD/JPY post-CPI structure

Following the CPI release, USD/JPY reacted with a sharp rejection from the H4 Fair Value Gap, aligning with the supply zone we outlined in the pre-event forecast.

• Pre-CPI Build-Up: The pair climbed steadily into the bearish fair value gap, showing controlled bullish momentum ahead of the release.
• Immediate Reaction: CPI data triggered a swift bearish impulse, driving price back lower from the H4 Fair Value Gap. This confirmed and aligned with the dovish or soft print of the CPI release, signaling, weakness on the dollar.
• Post-CPI Consolidation: Price is now ranging just below the FVG ceiling, holding around 148.00–148.50, signaling indecision as the market weighs mixed inflation signals against high Fed cut expectations.

Bullish scenario – Range + FVG breakout

Following the CPI release, USD/JPY has been consolidating within the H4 Fair Value Gap after an initial downside reaction. The current structure suggests the potential for buyers to reassert control if price action follows through on a clean breakout.

Key bullish triggers:

1. H4 FVG Reclaim – A decisive 4H close above 148.20 would confirm that buyers have gained traction, signaling renewed bullish intent.
2. Pullback Retest Hold – After breaking above the FVG, a retest of 148.00-148.20 holding as new support would strengthen upside momentum.
3. Continuation Pattern – Sustained higher lows following the retest would pave the way for a measured move higher.

Targets:

• 1st Target: 148.80–149.00 – Psychological and short-term liquidity zone.
• 2nd Target: 149.50 – Next liquidity pool before 150.00 round number.

Invalidation:

• A rejection back below 148.50 and a close under 147.50 would weaken the bullish setup and put the bearish scenario back in play.

This bullish pathway aligns with the macro backdrop of a 94.2% Fed rate cut probability, which generally supports carry trade flows into USD/JPY. If risk sentiment remains steady and Japanese yields stay suppressed, buyers could leverage the current consolidation as a launchpad for a push toward the 149 handle.

Bearish scenario – FVG resistance holds

Price remains capped within the H4 Fair Value Gap, showing signs of weakness. Sellers could regain control if price action respects this zone as a ceiling.

Key bearish triggers:

1. Rejection at FVG – A failure to break and hold above 148.50, with strong rejection wicks or bearish engulfing candles, signals low traction in favor of the dollar.
2. Break Below 147.50 – Losing this intraday support would confirm bearish momentum and invite further downside pressure.
3. Continuation After Pullback – A retest of the bottom FVG (148.00) turning into resistance would reinforce short setups.

Targets:

• 1st Target: 147.00 – Psych Level
• 2nd Target: 146.60 – Deeper liquidity pool from previous accumulation.

Invalidation:

• A clean 4H close above 148.20-148.50 would nullify this bearish bias and open the door for bullish continuation toward 149.00.

The rejection from the H4 Fair Value Gap aligns with the idea of distribution at premium pricing, particularly as the market digests mixed CPI signals. While a 94.2% Fed cut probability leans dovish for the USD in theory, if the yen strengthens on any BoJ commentary or risk-off sentiment, sellers could drive the pair into a deeper retracement phase.

• EUR/USD rallies toward 1.1700 as softer U.S. CPI data boosts Fed rate-cut probability to 94.2%, pressuring the dollar.
• Technical structure remains bullish, with price holding above the 1.16556–1.16645 H4 Fair Value Gap and eyeing 1.175–1.18 targets.
• Bearish risks emerge if 1.1655 support fails, opening the path toward 1.1600 and potentially 1.1550.

The euro is building on its bullish footing against the U.S. dollar after a mixed but dovish-leaning U.S. CPI report reinforced expectations of a Federal Reserve rate cut in September. EUR/USD is now trading around.

While core CPI YoY came in slightly above forecast at 3.1%, the headline CPI YoY remained unchanged at 2.7%, missing estimates for 2.8%. Markets interpreted this as a sign that inflationary pressures are not re-accelerating, allowing the Fed more room to ease policy without reigniting price growth.

The euro, supported by steady Eurozone data and a technical structure that has respected key retracement zones, has benefited directly from the resulting dollar weakness.

US inflation results and EUR/USD reaction

Traders largely dismissed the slight core CPI beat, focusing instead on the fact that headline CPI YoY remains anchored at 2.7%. This reinforced a dovish Fed bias and triggered a USD sell-off, giving EUR/USD the momentum to push toward the top of its range.

Rate cut probability surges to 94.2%

The CME FedWatch tool now shows a 94.2% probability of a 25 bps cut at the September 17 FOMC meeting—up sharply from 84.5% in our August 12 forecast.

This jump reflects market conviction that the Fed will take action, as YoY inflation has stabilized and risks of re-acceleration appear limited. The pricing shift further undercuts

How the bullish bias materialized

In the previous webinar, our bullish projection outlined:

1. EUR/USD holding the 0.705–0.786 retracement zone as a demand base.
2. Another round of price run towards the lows of the discount/retracement level, gearing towards upside ahead of CPI release.
3. Liquidity targets above 1.1700 as the next milestone.

Following the inflation release, the market followed this blueprint precisely—rejecting deeper downside, reclaiming the upper range, and moving toward breakout territory.

Technical outlook: EUR/USD retains bullish control above four-hour fair value gap

The recent EUR/USD price action confirms a bullish market structure, with price breaking higher from the earlier consolidation zone and now leaving the H4 Fair Value Gap (FVG) between 1.16556 – 1.16645 untouched as potential fresh intraday support for pullback opportunity.

The rally from the August 12 low was impulsive, sweeping prior liquidity and leaving behind a clean demand imbalance that aligns with our prior bullish roadmap. Current price action shows a modest consolidation just below 1.1700, a key breakout level.

Bullish scenario: Breakout or retest continuation

EUR/USD is currently consolidating just under the 1.1700 breakout level after a sharp rally from the August 12 lows. Price is holding above the H4 Fair Value Gap (1.16556 – 1.16645), which is acting as a key intraday support zone.

From here, there are two bullish pathways:

Immediate breakout:

• A clean break above 1.1700 could open a fast move toward 1.175, with extended upside targeting the liquidity pool at 1.18.
• Momentum traders may look for a continuation entry on a confirmed candle close above 1.1700.

FVG retest before breakout:

• Price may retrace into the 1.16556 – 1.16645 H4 FVG for a deeper liquidity grab before resuming higher.
• This pullback would offer a high-probability long entry if bullish order flow is reasserted from the gap zone.
• Following the retest, the same upside targets remain: 1.175 (first target) and 1.18 (secondary target).

Bullish invalidations:

• A sustained break below 1.1655 would weaken the bullish structure and shift focus back to 1.1556 demand.

Bearish scenario: Rejection and deeper pullback

EUR/USD is showing signs of stalling just below the 1.1700 breakout level, with the potential for a rejection that sends price back toward the H4 Fair Value Gap (1.16556 – 1.16645).

If the gap fails to hold as support, bearish pressure could accelerate toward the 1.1600 psychological level which marks the prior accumulation base and key liquidity pool before the CPI momentum.

Bearish pathway:

1. Price rejects from 1.1700 and drops into the 1.16556 – 1.16645 FVG..
2. Weak reaction or a clean break below this zone signals a loss of short-term bullish structure.
3. Downside targets:
4. • Target 1: 1.1600 – minor support / psychological level.
4. A break below 1.1600 exposes a deeper slide toward 1.1550.

Bearish invalidation:

• A sustained rally and close above 1.1700 would negate this short-term bearish outlook and put buyers back in control.

USD/JPY Technical Analysis

The US dollar initially rallied against the Japanese yen during the early hours here on Tuesday but gave back gains as CPI again came out as anticipated. We are hovering right around the 200-day EMA, which, of course, is an indicator that a lot of people pay attention to anyway. So, I think you would anticipate seeing a bit of noise here regardless. If we do break down from here and break down below the 200 day EMA, then we could go looking at the 50 day EMA underneath. So, with that being said, I think you’ve got a lot of cushion underneath that will continue to push to the upside, although I don’t know how quickly.

AUD/USD Technical Analysis

The Australian dollar fell initially during the day but has turned around as the 50 day EMA has held out support and let’s be honest here, this was all about the CPI number not being hotter than anticipated. So, at this point, the Australian dollar could go looking to the 0.6550 level, an area that’s been important multiple times in the past. And with that, I think you have to assume it’s a bit of a magnet for price.

If we break down below the bottom of the candlestick, then it opens up the possibility of a move down to the 200 day EMA at the 0.6457 level. Anything below there could open up fresh selling, but right now I think we’re just heading right back into the same area that we’ve been stuck in for what seems like a lifetime here.

For a look at all of today’s economic events, check out our economic calendar.

GBPCHF continued to form strong bullish trading as it confirmed breaching the barrier at 1.0825, recording some extra gains by hitting 1.0915 level, which forces it to form an intraday negative rebound, affected by stochastic exit from the overbought level.

The price might be forced to provide sideways trading, to keep waiting for the positive momentum, which allows it to press on 50%Fibonacci correction level at 1.0935, and surpassing it will make it success to record extra gains that might extend at 1.0995 and 1.1025 initially.

The expected trading range for today is between 1.0860 and 1.0935

Trend forecast: Bullish

– Written by


Ben Hughes

STORY LINK GBP/USD Forecast: Pound Sterling Extends Gains after US Inflation Disappoints

The Pound to US Dollar (GBP/USD) exchange rate pushed to a two-week high on Tuesday, buoyed by softer-than-expected US inflation data and steady UK employment figures.

At the time of writing, GBP/USD was trading at around $1.3483, up roughly 0.4% from Tuesday’s opening levels.

The US Dollar (USD) came under pressure on Tuesday following the release of the July Consumer Price Index, which came in softer than markets had anticipated.

Headline inflation held steady at 2.7% year-on-year, falling just short of the 2.8% forecast. Meanwhile, core inflation, which excludes food and energy, rose to 3.1%, slightly above expectations.

Despite the elevated core reading, the cooler-than-expected headline figure is reinforcing bets that the Federal Reserve will begin cutting interest rates before year-end.

Indeed, markets are now placing in as much as 75bps of easing by the end of 2025.

The Pound (GBP) gained traction on Tuesday, following the release of the UK’s latest employment report.

Figures from the Office for National Statistics (ONS) showed the unemployment rate holding at 4.7% in June, with wage growth easing slightly from 5% to 4.6%.

Meanwhile, payroll numbers fell by just 8,000, far better than the anticipated 60,000 drop and the smallest decrease since January.

While the data confirmed that the labour market is gradually cooling, the pace of the slowdown does not yet appear sufficient to push the Bank of England (BoE) into accelerating its rate-cutting cycle.

Looking ahead, the Pound to US Dollar (GBP/USD) exchange rate may face a key test later this week when the UK’s second-quarter GDP figures are released.

Economists expect growth to slow sharply, with forecasts pointing to a 0.1% quarterly expansion, down from 0.7% in Q1. Such a result could prompt fresh calls for the BoE to step up policy support and fuel concerns over government finances, including the potential for more tax hikes.

In the meantime, geopolitical tensions may offer some support to the US Dollar, with investors likely to turn more cautious ahead of Friday’s planned meeting between US President Donald Trump and Russian President Vladimir Putin.

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• EUR/USD trades in a tight range above 1.1600 after posting marginal losses on Monday.
• Investors await July CPI inflation data from the US.
• The near-term technical outlook points to a neutral stance.

EUR/USD moves sideways slightly above 1.1600 after closing marginally lower on Monday. As investors await July Consumer Price Index (CPI) data from the US, the pair’s near-term technical outlook highlights a neutral stance.

The US Dollar (USD) held its ground on Monday and caused EUR/USD to edge lower as investors cheered the news of the US and China agreeing to extend the trade truce for another 90 days.

Annual inflation in the US, as measured by the change in the CPI, is expected to rise to 2.8% in July from 2.7% in June. On a monthly basis, the CPI and the core CPI, which excludes volatile food and energy prices, are forecast to increase by 0.2% and 0.3%, respectively.

In case the headline annual CPI comes in above the market consensus, the USD could gather strength against its rivals with the immediate reaction. If this data matches the expectation, investors could react to the monthly core CPI print. A stronger-than-forecast increase in this figure could be supportive for the USD. Conversely, a soft core inflation reading is likely to feed into expectations of three Federal Reserve (Fed) rate cuts this year and hurt the USD, allowing EUR/USD to gain traction.

According to the CME FedWatch Tool, investors are currently pricing in a 43% probability of the Fed lowering the policy rate by a total of 75 bps in the remainder of the year.

EUR/USD Technical Analysis

The Relative Strength Index (RSI) indicator on the 4-hour chart moves sideways near 50 and EUR/USD fluctuates at around the 100-period Simple Moving Average (SMA), while remaining in between the 50-period and the 20-period SMAs, reflecting a neutral stance.

The 100-period SMA could be seen as a pivot level at 1.1625. Once EUR/USD confirms that level as support, 1.1650-1.1665 (Fibonacci 23.6% retracement of the latest uptrend, 200-period SMA) could be seen as the next resistance before 1.1700 (static level, round level) and 1.1760 (static level).

On the downside, 1.1600-1.1590 (static level, round level, 50-period SMA) aligns as the first support before 1.1540 (Fibonacci 38.2% retracement) and 1.1500 (static level, round level).

The (ETHUSD) price rose in its last intraday trading, amid its move in sideways range in attempt to gain positive momentum that might help it to recover and complete the strong bullish track, amid its trading alongside a minor bullish bias line on the short-term basis, taking advantage of the dynamic support that is represented by its trading above its EMA50, on the other hand, we notice the emergence of the negative signals on the (RSI), which reduced the last gains of the price.

Therefore, our expectations suggest a rise in the (ETHUSD) price in the upcoming intraday trading, conditioned by its stability above $4,150, targeting the resistance level at $4,500.

The expected trading range is between $4,000 support and $4,500 resistance.

Today’s forecast: Bullish