April 22, 2025 – Written by Ben Hughes

STORY LINK GBP/USD Forecast: Pound Sterling Rally Stalls as “Momentum is Overbought”

The Pound Sterling’s recent rally against the US Dollar takes a break on Tuesday, with GBPUSD trading flat at around 1.337.

“GBPUSD looks to be taking a pause following its impressive 10-session rally from 1.2700,” says Shaun Osborne, Chief FX Strategist Momentum at Scotiabank.

“Momentum is overbought with an RSI at 71 and the latest couple of candles are showing extended upper shadows, hinting to exhaustion.

“We see near-term resistance in the lower 1.34s and look to support in the upper 1.32s.

The Pound US Dollar exchange rate traded sideways on Tuesday as markets continued to digest US President Donald Trump’s latest comments.

The US Dollar (USD) faced headwinds on Tuesday, slipping against most major currencies after fresh criticism from Donald Trump aimed at Federal Reserve Chair Jerome Powell.

Trump’s latest remarks, branding Powell as “Mr too late” and a “major loser,” stirred unease among investors, fuelling uncertainty over the Fed’s policy path.

With pressure mounting from the President for interest rate cuts, appetite for the Greenback remained subdued as markets hesitated to make bold moves.

Stephen Innes, managing partner at SPI Asset Management, said: ‘Markets are starting to question one of the bedrock assumptions behind the dollar’s reserve currency status: an independent, inflation-fighting Fed. With President Trump ramping up public pressure on Powell to slash rates “now,” we’re not just flirting with jawboning—we’re staring down the barrel of a credibility unwind.’

The Pound (GBP) held firm against most major currencies on Tuesday as European markets resumed following the Easter break.

Sterling drew modest support from a weakening US Dollar (USD) and renewed speculation over possible UK–US trade negotiations.

However, gains were kept in check as investors looked ahead to a speech from Bank of England (BoE) Deputy Governor Sarah Breeden.

Markets remained alert for any suggestion that global economic headwinds could prompt the BoE to consider loosening policy further, an outcome that could drag on the Pound.

Pound Sterling to Dollar FX Outlook

Looking to Wednesday, movement in the Pound US Dollar exchange rate is set to be shaped by the latest PMI releases from both the UK and the US.

UK flash estimates for the manufacturing and services sectors are projected to decline, and if confirmed, could drag on the Pound by reinforcing fears of a slowdown in economic activity.

Across the Atlantic, US PMI readings are also expected to soften.

A weaker-than-expected print could add to the pressure on the US Dollar, keeping it on the back foot as the week progresses.

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TAGS: Currency Predictions Pound Dollar Forecasts

• USD/JPY pares some of its intraday losses as the US Dollar strives to gain a temporary ground.
• The US Dollar has remained weak due to multiple headwinds.
• The BoJ is expected to continue raising interest rates.

The USD/JPY pair recovers some of its intraday losses but is still trading down near 140.65 during North American trading hours on Tuesday. The asset has demonstrated a sharp downside move in the last two weeks and revisited the 21-month low near 139.60.

The pair has remained weak as back-and-forth tariff announcements by United States (US) President Donald Trump and his tussle with Federal Reserve (Fed) Chair Jerome Powell have dampened the credibility of the US Dollar.

During North American trading hours, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, attracts some bids and rebounds to near 98.50 but is still close to the three-year low of 98.00.

Meanwhile, the Japanese Yen (JPY) has performed strongly as the global economic uncertainty due to an absence of clarity over Trump’s tariffs has improved its safe-haven appeal.

Additionally, firm expectations that the Bank of Japan (BoJ) will hike interest rates again this year have also strengthened the Yen. The BoJ is expected to continue supporting interest rate hikes, a report from Reuters indicated. The agency reported that higher risks from higher US tariffs won’t derail a cycle of rising wages and inflation seen as crucial to keep raising interest rates.

USD/JPY trades at a make-or-break point near the psychological level of 140.00. The outlook of the pair is strongly bearish as the 20-day Exponential Moving Average (EMA) is sloping downwards, which trades around 144.80.

The 14-day Relative Strength Index (RSI) oscillates in the bearish range of 20.00-40.00, indicating a strong downside momentum.

The asset would face more downside towards the 28 July 2023 low of 138.00 and the 14 July 2023 low of 137.25 after sliding below the September 16 low of 139.58.

On the flip side, a recovery move above the April 21 high of 142.15 will drive the asset towards the April 16 high of 143.28, followed by the April 9 low of 144.00.

USD/JPY daily chart

USD/JPY Technical Analysis

The US dollar is trying to bounce from the 140 yen level, a large, round, psychologically significant figure. And of course, this is a market that is oversold. Whether or not this can continue to the downside remains to be seen. But at this point, I would not be trying to chase the trade to the downside.

As far as buying is concerned, I would like to see the 143 yen level be taken over again by the US dollar before I start getting long. That would at least give me some momentum to follow. We are at a crucial point and an inflection point on the chart, so pay close attention.

AUD/USD Technical Analysis

The Australian dollar initially tried to rally during the day but has given back those gains right at the 200-day EMA in an overbought condition. So, this is very interesting to me. Maybe we may see this market fall from here. Whether or not that happens, like I said with the other pairs, we just don’t know. But at the end of the day, you have to assume that it is very possible. This is especially true if we start to see problems in China.

After all, the Australian economy is highly levered to the Chinese economy. And that, of course, is something that traders are very cognizant of. If we fall from here, the 50-day EMA is at the 0.6288 level, and that could be a short-term target. If we can break above the 0.6450 level, then it’s likely that the uptrend will continue.

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

The GBPJPY pair provided several negative closes in its recent trading below the critical resistance at 190.10, to interact with the negativity of the main indicators by attacking 38.2% Fibonacci correction level at 188.00.

Stochastic begin providing negative momentum will increase the chances for confirming breaking 188.00 level, which allows it to form strong bearish waves, to expect reaching 186.50, then attempt to press on the barrier near 186.10, in order to find an exit to resume the negative attack in the upcoming period trading.

The expected trading range for today is between 186.50 and 188.70

Trend forecast: Bearish

The GBPJPY pair provided several negative closes in its recent trading below the critical resistance at 190.10, to interact with the negativity of the main indicators by attacking 38.2% Fibonacci correction level at 188.00.

Stochastic begin providing negative momentum will increase the chances for confirming breaking 188.00 level, which allows it to form strong bearish waves, to expect reaching 186.50, then attempt to press on the barrier near 186.10, in order to find an exit to resume the negative attack in the upcoming period trading.

The expected trading range for today is between 186.50 and 188.70

Trend forecast: Bearish