– Written by


James Fuller

STORY LINK GBP/USD Forecast: Pound Sterling Climbs to $1.352 as Shutdown Pressures Greenback

The Pound to US Dollar (GBP/USD) exchange rate strengthened on Wednesday as the Dollar was hobbled by a US government shutdown and some underwhelming data releases.

At the time of writing, GBP/USD was trading at approximately $1.3521, up roughly 0.6% from the start of Wednesday’s session.

The US Dollar (USD) weakened through Wednesday’s European session, coming under sustained pressure amid renewed political and economic concerns.

In early trade, the ‘Greenback’ was undermined by market jitters surrounding the US government shutdown, which dampened investor confidence in the currency.

Losses deepened later in the day following the release of disappointing US data.

September’s ADP employment change slumped sharply, dropping from -3k to -32k, in stark contrast to forecasts of a 50k increase.

Meanwhile, although the ISM manufacturing PMI exceeded expectations, the index remained below the 50-point threshold, signalling continued contraction in the sector.

Together, the data compounded selling pressure on USD, leaving the currency broadly weaker by the close of mid-week trade.

The Pound (GBP) traded in a relatively steady fashion against most of its peers during Wednesday’s European session, despite the release of underwhelming domestic data.

The UK’s latest manufacturing PMI for September, while less closely watched than the services index, remained an important gauge of industrial performance.

The reading fell from 47.0 to 46.2, extending deeper into contraction territory, though it broadly aligned with market expectations.

Even with the weaker data, GBP held its ground, supported by a generally upbeat market mood, as the day’s risk-on sentiment helped the increasingly risk-sensitive Sterling maintain stability throughout Wednesday’s trading session.

GBP/USD Forecasts: US Shutdown to Fuel Fresh Volatility?

Looking ahead to Thursday’s European session, the GBP/USD exchange rate may continue to find support as investor focus remains on the ongoing US government shutdown.

With the closure disrupting scheduled economic publications, key releases such as the latest initial jobless claims and factory orders will not be published.

The absence of this data could keep the ‘Greenback’ under pressure, as uncertainty over the political situation in the US weighs on sentiment.

On the UK side, no major domestic releases are due on Thursday’s calendar.

As a result, Sterling may lack fresh direction of its own, leaving GBP exchange rates vulnerable to shifts in broader market sentiment and external developments.

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USD/JPY Technical Analysis

The US dollar initially tried to rally, only to fall apart against the Japanese yen during the trading session here on Wednesday, as it looks like we’re probably going to try to grind back down to the bottom of the overall consolidation. That means we could go down to the 146 yen level. That’s an area that’s been on a massive floor in the market. So, it’ll be very important and very interesting to watch. So, if we drop there and bounce, I think that is an extraordinarily good sign. If we turn it around and rally at this point, 149 yen probably will be the target.

AUD/USD Technical Analysis

The Australian dollar initially did fall against the US dollar, but then turned around to show signs of light at the top of the rectangle that we had been in previously. So, the 0.66 level looks like it is, in fact, trying to offer a bit of support based on market memory. We’ll wait and see how that plays out. But if we break down from here, then I’d be watching the 0.6550 level.

The 50 day EMA is right there as well. So, I think there is a floor in this market. If we can rally from here, the 0.67 level would be a bit of a target. We have been in an uptrend for quite some time. So, despite the fact that this has been a very lackluster move to the upside, the reality is that it’s been more of a grind. So, I’m not looking for explosive moves.

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

The US dollar faced renewed pressure this week, while the Japanese yen emerged as one of the strongest performers in the foreign exchange market. The decline in US bond yields and falling oil prices are typically beneficial for energy-importing countries like Japan, providing support to the yen. However, the real driving factor was the US government shutdown. With no signs of a quick resolution, markets are bracing for a prolonged standoff, which could weaken consumer confidence and exacerbate concerns over job security. As a result, the USD/JPY pair is likely to remain slightly bearish in the near term.

The US dollar is under dual pressure from political and data risks.

As traders focus on the US government’s budget impasse, the dollar has continued its steady decline. Although the government shutdown was anticipated, it still had tangible impacts, most notably the delay in the release of key labor market data. With the Federal Reserve currently ‘flying blind’ on employment data, any attempts at a short-term rebound in the dollar are likely to be fleeting.

Expectations for interest rates have shifted, with markets now anticipating approximately two rate cuts by the Fed before the end of the year, and cumulative cuts exceeding 100 basis points by 2026. This adjustment reflects both recent robust data and lingering concerns about the labor market. Should forthcoming data disappoint, downside risks for the dollar will remain significant.

Data release schedules disrupted.

Although the ADP private employment data and ISM Manufacturing Index may still be released today, the weekly initial jobless claims and September nonfarm payroll data are likely to be postponed. The ADP employment report showed a decrease of 32,000 jobs, below the expected increase of 50,000, creating a bearish sentiment for the dollar.

The ISM Manufacturing Index is expected to come in slightly below 50.0. Earlier this week, softening consumer confidence figures and a weak Chicago Purchasing Managers’ Index (PMI) added further pressure on the dollar, underscoring the fragility of current market sentiment.

The yen is gradually gaining upward momentum.

The yen is becoming the clearest beneficiary of the current market turmoil. The USD/JPY exchange rate has broken below the 147.00 level, and with neither the Democratic nor Republican parties showing willingness to compromise, this deadlock may persist. If the impasse drags on, layoffs and distorted employment data could further dampen market sentiment, reinforcing the bearish outlook for USD/JPY.

Aside from U.S. political factors, the overall market environment is also favorable for the yen. Currency pairs such as GBP/JPY and CAD/JPY are under pressure; meanwhile, the Bank of Japan has signaled a gradual shift toward tighter monetary policy, while the Federal Reserve moves toward rate cuts, with narrowing interest rate differentials likely to continue supporting the yen.

USD/JPY Forecast: Technical Outlook

(USD/JPY Daily Chart Source: Easy Forex)

From a technical perspective, after a volatile summer, the USD/JPY forecast has turned bearish. The bears have broken through the recent low around 147.50, triggering stop-loss selling, and breached the initial downside target at 147.00. If the USD/JPY exchange rate continues to trade below 147.50, it may further decline in the short term, potentially testing 146.30, 146.00, and possibly even reaching 145.00.

On the upside, the immediate resistance level is located at 147.50, followed by the 148.50–148.65 range, with the key psychological threshold of 150.00 positioned higher.

At 21:29 Beijing Time, USD/JPY was trading at 146.735/743, down 0.72%.

Created on October 01, 2025

• The US dollar initially rallied against the Japanese yen during the trading session here on Tuesday to reach towards the 149 yen level but then pulled back significantly to break below the 200 day EMA at least for part of the session. The 50 day EMA also offer support. So now that we have, it has shown itself to be a little bit more resilient. I think you’ve got a situation where traders just aren’t willing to go too deep into the market as the non-farm payroll uh comes out on Friday.
• That being said, I think you still have to favor the upside due to the swap differential. The interest rate differential still favors the US dollar regardless, and if we can break above the 149 yen level, I think we have a real shot at going to the 150 yen level, possibly even 151 yen. Anything about that then becomes buy and hold. I have been buying dips along the way for several months now.
• And I think that is going to be how I continue to play this market. Just simply collecting swaps to get paid, to hang on to the trade and then collecting my gains as they occur.

On a Break Lower

If we were to break down below the 146 yen level, then it’s likely that we really will start to fall apart, perhaps reaching down to the 143.50 yen level. The market remains a little bit noisy, but really that’s not a huge surprise. Just think of all of the drama going on at the same time. And with that being the case, it’s difficult for people to get overly aggressive in any particular position. That includes the dollar against the yen, but over the longer term, I still prefer the US dollar over the yen, at least until we break down below the 146 yen level.

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.

Copper price settled above $4.7500 level, increasing the efficiency of the suggested bullish trend, hitting 4.8500 level again.

The unionism of the main indicators to provide positive momentum by forming extra support at $4.5600 level, these factors will support renewing the bullish attempts, that target $4.9500 level reaching the next main target near 5.3200.

The expected trading range for today is between $4.6700 and 4.9500

Trend forecast: Bullish