April 28, 2025 – Written by Tim Boyer

STORY LINK EUR/USD Outlook: Is Euro to Dollar Rate Forecast to Challenge on 1.15?

The Euro to US Dollar exchange rate (EUR/USD) has consolidated around 1.1350 ahead of a big week for US data.

The dollar has managed to stabilise in global markets, but sentiment remains cautious.

According to ING; “Hard data to determine dollar’s next move.”

It added; “The worst case for EUR/USD is probably 1.1250, should US data surprise on the upside. 1.1500 is the risk, should any of this week’s job releases suggest that tariff uncertainty has already triggered layoffs.”

On a longer-term view, Goldman Sachs has a 12-month target of 1.20.

US data will be watched closely this week, especially jobs-related releases.

According to HSBC; “Some high-frequency US data for April already point to a bleak picture.”

It added; “Given the steep drop in US survey/soft data, we’d be very surprised if it doesn’t spill over into hard data at all.”

Trade talks will also continue to be watched very closely.

Caution is likely to prevail in the short term, especially if Administration rhetoric does not appear to match reality.

Late on Friday, President Trump stated that Chinese President Xi had called, but this was denied with Beijing stating that there had been no trade negotiations.

According to Bank of America; “USD could depreciate faster if trade negotiations fail. De-escalation in the trade war and re-focus on pro-growth policies could help the USD recover, but we would not expect risk premium to fully vanquish any time soon.”

It added; “US trade policies and the surrounding uncertainty are bad for Europe, but worse for the US. We still think risks are we think skewed toward more EUR strength from potential European reforms and the EU pushing for trade deals elsewhere, assuming no EU-US trade escalation.

Nordea maintains a bearish stance; “Trump’s plan to deglobalise the US from the rest of the world presents a significant risk to the economy and financial market that is in danger of hurting investor confidence and trust which would be bad news for the dollar.”

Goldman Sachs notes that the Administration has dialled back tariff rhetoric.

It added; “However, after frequent changes in policy positions, we think it will take some time for investors to be convinced. Just as importantly, even after the exemptions and reversals, planned and actual tariff increases are still very large, and US businesses and consumers may be frozen by the uncertainty, which remains high and is why our economists are still on recession watch.”

Goldman also expects longer-term capital shifts; “We view the evidence that some investors have sold or hedged a portion of their Dollar assets largely as confirmation that they are unlikely to be adding to those positions with the same enthusiasm as before. Historically, these types of changes in investor appetite led to large, persistent changes in exchange rates.”

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The Pound to Euro exchange rate opened the new week near fortnight highs and could have scope to climb further to around 1.18 in the days ahead, as Roxette sings “Listen to Your Heart,” and Sterling makes a start on a journey that might ultimately see it back around 1.20 over the coming months.

GBP/EUR recovered to multi-week highs around 1.17 last week as EUR/USD receded from some of its best levels since November 2021 and with the latter pair perhaps set to take a further dip into the market’s very own Pool of Bethesda, Sterling may have scope to rise further toward 1.18 up ahead.

“We are also introducing changes in some of our other forecasts. More specifically, we are bringing our EURGBP forecasts marginally higher, reflecting the stronger EUR, without, however, changing our bullish GBP view directionally,” says the research team at Barclays, in a Sunday note.

“We have recommended longs in GBPCHF as a way to capture a further normalisation in the VIX with limited downside risk due to more-active SNB pushback on CHF appreciation,” they add, after lowering their second-quarter GBP/EUR forecast slightly, to 1.19.

The anticipation of an eventual climb toward 1.20 assumes a continued, gradual and orderly decline of the US Dollar that would help to lift EUR/USD to 1.20 over the next three-to-six months, and GBP/USD back to around 1.44.

Above: GBP/EUR shown at daily intervals with Fibonacci retracements highlighting possible resistances. Click image for closer inspection.

“Given that some BoE hawks [have talked] of trade dumping as being potentially disinflationary we would be mindful of a graduated uptick in June MPC pricing, from the current 11bps,” ”says Jeremy Stretch European head of FX strategy at CIBC Capital Markets.

“Despite the immediate retail beat we would maintain a cautious EUR/GBP upside bias, only a weekly close below 0.8519 [above 1.1798 in GBP/EUR} would negate looking for a return towards the 21 April high,” he adds in a Friday note to clients.

There is no meaningful data out in the UK or Euro Area this week, however, Sterling showed resilience last week when the S&P Global Composite PMI survey index fell sharply for April, to a level sometimes consistent with recession.

The above is admittedly a wild forecast, and somewhat contrary to popular opinion so in entertaining it, readers might like to just “Listen to your Heart,” as that’s what the biblical covenant says to do.  

Above: Roxette, Listen to Your Heart. Source: Youtube. 

Meanwhile, the euro was supported by a better-than-expected German Ifo survey suggesting an improvement in confidence among small businesses, and some favourable comments from European Central Bank officials.

“We raise our GBPUSD forecast and now see the pairing edging higher towards 1.39 at the end of our forecast horizon,” strategists at UBS say, in a Friday note.

“With US policy risks persisting and European fundamentals improving, EURUSD is likely to remain supported, with the balance of risks favoring further euro strength,” they add.

The outlook is largely a function of how Sterling and the Euro each trade against the Dollar, which was tipped by the UBS team on Friday to help lift EUR/USD to 1.18, implying they think GBP/EUR will likely trade around 1.1779 over the coming year.

Bonus Song: Florence and the Machine Rabbit Heart. Source: Youtube. 

Created on April 28, 2025

• Recently, equity markets have once again helped to support the British pound against other major currencies.
• According to stock market trading, the UK’s FTSE 100 index has already risen for the past nine trading sessions, coinciding with easing trade war tensions, marking its longest winning streak since December 2019.
• The crucial question for Forex currency investors is whether upcoming UK data, global developments next week, and the Bank of England’s monetary policy meeting results on May 8th could trigger a reversal in recent market trends.
• The GBP/USD price is stabilizing around the resistance level of 1.3320 at the time of writing this analysis.

Expected Bank of England Policies

If the Bank of England remains cautious about interest rate cuts and risk appetite declines, the British pound could benefit. Recently, UK economic data results were mixed on Friday, with stronger-than-expected retail sales data offset by a further decline in consumer confidence. According to the economic calendar data results, retail sales volumes rose by 0.4% for March, compared to the consensus forecast of a 0.3% decline, although the February increase was revised down to 0.7% from the original reading of 1.0%. favourable weather boosted demand for clothing and outdoor product sales, which was partly offset by a fall in supermarket sales.

First-quarter sales rose by 1.6% compared to the final quarter of 2024, the strongest increase since July 2021. According to Forex market trading, the British pound is taking some comfort from this. We wouldn’t overstate it, but it has performed well and was threatening to roll over, and it has received some support from the data, temporarily at least. On another front, doubts remain about the sustainability of spending. The UK GfK consumer confidence index fell to -23 for April from -19 previously, slightly worse than the -21 forecast, its lowest level since November 2023, with all components declining during the month.

Trading Tips:

The British pound continues to benefit significantly against other major currencies from Britain’s avoidance of US tariffs.

Will the GBP/USD Price Rise? And Where To?

According to trusted trading platforms, the GBP/USD exchange rate rose to test a three-year high of around 1.3430 before retreating slightly. With the recent decline, some currency market experts have lowered their foreign exchange market forecasts, as the dominant theme in the markets has been the increasing political turmoil in the United States, caused by escalating trade tensions, which has led to increased fears of a US recession. In the longer term, structural challenges, such as US political shifts, the trade war, and capital flight from US assets, point to a significant decline in the value of the US dollar.

Technical Analysis for the GBP/USD pair today:

According to reliable trading platforms, the GBP/USD exchange rate rose to test its highest levels in three years at around 1.3430 before a limited pullback. With the recent decline, some currency market experts lowered their foreign exchange market forecasts, as the dominant theme in the markets was increasing political turmoil in the United States, stemming from escalating trade tensions, leading to growing fears of a US recession. In the longer term, structural challenges, such as US political shifts, the trade war, and capital moving away from US assets, point to a significant decline in the value of the US dollar.

They remain cautious about the UK’s economic outlook, but the sharp decline in the dollar has led to a strong revision in the forecast for the British pound. Accordingly, the GBP/USD pair is now expected to rise to the 1.39 resistance level on a 12-month forecast, from 1.31 previously. The forecasts are driven by a high degree of uncertainty, as investors now face multiple scenarios and forecasts based on how tariff policy develops, all of which hinge on President Trump’s decisions.

Therefore, the easiest option for investors now is to reduce exposure to the US dollar and US assets in general, and reassess when developments allow more certainty about the outlook.

Regarding the British pound, the Bank of England is expected to adhere to a cautious stance; we also believe that the market is pricing in a much larger amount of monetary easing than will actually be implemented, which provides support for the pound as expectations are reassessed. Accordingly, we expect some gains for the pound against a weaker US dollar, but it may struggle to improve significantly against the euro at present.

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Created on April 28, 2025

• For five consecutive trading sessions, the USD/JPY currency pair has been attempting to rebound upwards, but its gains have not exceeded the resistance level of 144.02 before stabilizing around the 143.80 level at the time of writing this analysis.
• The pair is awaiting strong catalysts to continue its movement within an ascending channel, attempting to break out of the stronger bearish trend that pushed the USD/JPY price to the support level of 139.88, the pair’s lowest in months.

US Dollar Strengthens Amid Easing Tensions:

According to Forex market trading, the USD/JPY price continued its upward rebound path as the US dollar’s value rose amid receding global trade tensions. Last week, Japanese Finance Minister Katsunobu Kato and US Treasury Secretary Scott Bessent held a closed-door meeting on the sidelines of the International Monetary Fund and World Bank Spring meetings in Washington. While Kato remained silent on the discussions, he emphasized that Japan and the United States would continue close and constructive dialogue on exchange rates, hinting that currency issues could be part of broader trade negotiations.

Senior Japanese trade negotiator, Hirose Akazawa, is also scheduled to visit Washington this week for a second round of bilateral talks. At the same time, the Bank of Japan is widely expected to keep its interest rate steady at 0.5% this week as it monitors the potential impact of US tariffs on the export-driven Japanese economy.

Trading Tips:

I still recommend buying the US dollar against the Japanese yen at every downward trend level, but without risk, while monitoring the factors influencing currency rates.

USD/JPY Technical analysis and Expectations Today:

At the end of last week’s trading and in the short term, the USD/JPY pair rebounded from the trendline support level at around 142.48 to trade at around 143.80. The pair is trading within an ascending channel. The USD/JPY pair has now advanced to trade above the 100-hour moving average by a few levels. As a result, the pair is approaching entering overbought levels on the 14-hour RSI. Therefore, bulls will aim to extend the current gains towards the resistance at 144.30 and then to the resistance at 145.00. Conversely, bears will seek to capitalize on renewed profit-taking selling at the support level around 143.20 or lower at the support of 142.50.

In the long term, based on the daily chart, the USD/JPY pair is trading within a descending channel. However, the 14-day RSI has recently rebounded to avoid entering an oversold condition. Therefore, bulls will seek to extend their current rebound towards resistance at 146.00 or higher, reaching resistance at 149.00, respectively. On the other hand, and over the same period of time, bears will seek to take profits at the support level of 141.00 and then at the support level of 139.00, respectively.

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