USD/JPY Falls Further Ahead of the NFP Report

is falling as the dollar struggles across the board, while the yen continues to outperform following Prime Minister Takaichi’s landslide election victory at the weekend.

Expectations had been for the yen to weaken if Takaichi, a fiscal dove, won a landslide victory, but the reality is the yen has strengthened amid optimism over the growth prospects, the potential for a more hawkish Bank of Japan and political clarity, which is encouraging speculators to scale back on short yen positions.

Meanwhile, the is falling across the board, extending yesterday’s weakness, after slower-than-expected December and as investors look ahead to today’s nonfarm payrolls report.

The delayed , due to the government shutdown, is expected to show that 70,000 jobs were created last month, up from 50,000 in December.

The data comes at a time when the market is trying to decide whether the US economy is merely slowing towards trend or if the labour market is weakening in a way that would force the sooner.

The data could help shape expectations for Federal Reserve policy. The markets are currently pricing in 60 basis points of Fed easing by the end of the year. Weak data could lift Fed rate cut bets, weighing on USD/JPY

USD/JPY Forecast – Technical Analysis

After running into resistance at 157.65 USD/JPY rebounded lower, breaking below 154.50 support to test the rising trendline at 152.80.

Sellers supported by the RSI below 50 will look to break below the trendline to test 152, the 2026 low. A break below here creates a lower low and exposes the 200 SMA at 150.30.

Resistance is seen at 154.50, the mid-December low, with a rise above this level opening the door to 156.00. A rise above 157.80 creates a higher high.

DAX Falls on AI Disruption Concerns and Ahead of the NFP Report

European stocks are under pressure on Wednesday, pulled lower by tech and financial stocks amid ongoing worries that new AI models could hurt traditional software businesses

While worries that AI is disrupting software companies hit tech stocks particularly hard in the US last week, those worries are also in Europe. French company Dassault’s shares are down almost 20% and on track for their largest daily drop after the software maker posted disappointing Q4 revenue growth and a weak outlook for this year.

Fears over AI disruption are not only affecting software firms; they are also spreading to other parts of the market, including insurers, asset managers, and index providers, following the release of several new AI tools.

On the macro front, attention is on the US jobs report later today, which could help gauge expectations for Federal Reserve rate cuts this year.

The report is expected to show 70,000 jobs added, up from 50,000 in December, and is expected to rise to 4.5%, up from 4.4%.

Slightly weaker jobs data could support expectations for Fed cuts, which would be positive for risk assets globally.

DAX Forecast – Technical Analysis

The rebounded from the rising trendline support, moving above the 50 SMA before encountering resistance around 25,000 as momentum faded. Buyers will look to rise above the 25,000 level towards 25,500 and fresh record highs.

Immediate support is seen at 24,650, the October and July high and the 50 SMA. A break below 24,200, the February low creates a lower low.

Original Post

Natural gas price continued forming negative pressures to keep its positive stability above the bullish channel’s support at $3.050, forming weak sideways trading due to the contradiction of the main indicators by providing negative momentum in the last period.

Note that the stability above the support level makes us wait for gathering the bullish momentum, to ease the mission of forming bullish waves, to target $3.450 reaching $3.910 level, while breaking the support and holding below it will force it to resume the decline, suffering big losses by reaching $2.850 and $2.660.

The expected trading range for today is between $3.000 and $3.450

Trend forecast: Bullish

The EURJPY pair was under strong bearish pressure yesterday, to press on the bullish channel’s support, represented by 183.45 level, to begin this morning trading with new negative trading by its exit from the bullish track and suffering extra losses by reaching 182.60 level.

Providing negative momentum by the main indicators confirms the price surrender to the bearish scenario, to expect to continue targeting negative stations until reaching 182.00, to attempt to test the next support near 181.05.

The expected trading range for today is between 181.05 and 183.50

Trend forecast: Bearish

BitcoinWorld

EUR/GBP Forecast: Critical Resistance Battle Looms as Pair Hovers Below 0.8720 and 0.8745 Levels

London, March 2025 – The EUR/GBP currency pair currently faces a decisive technical juncture, hovering below significant resistance levels at 0.8720 and 0.8745. This positioning follows several weeks of consolidation within a narrowing trading range. Market participants closely monitor these technical barriers as they could determine the pair’s directional bias for the coming trading sessions. Meanwhile, fundamental factors from both the Eurozone and United Kingdom continue to influence price action through monetary policy expectations and economic data releases.

EUR/GBP Technical Analysis: Current Price Structure

The EUR/GBP exchange rate demonstrates clear technical characteristics as it approaches critical resistance zones. Currently trading around 0.8705, the pair has tested the 0.8720 level three times in the past two weeks without sustaining a breakthrough. Each rejection has resulted in modest pullbacks toward the 0.8680 support area. The 0.8745 resistance represents a more significant barrier, corresponding with the 61.8% Fibonacci retracement level from the January decline. Technical analysts note that the pair maintains position above its 50-day moving average at 0.8682, suggesting underlying support remains intact despite resistance challenges.

Volume analysis reveals decreasing participation during recent resistance tests, potentially indicating weakening selling pressure at these levels. The Relative Strength Index (RSI) currently reads 58, positioned in neutral territory with room for movement in either direction. Bollinger Bands show contraction, typically preceding significant price movements. Furthermore, the Average Directional Index (ADX) registers at 22, suggesting the current trend lacks strong directional conviction. These technical indicators collectively paint a picture of a market awaiting a catalyst for decisive movement.

Fundamental Drivers Influencing Euro-Pound Dynamics

Multiple fundamental factors currently influence the EUR/GBP exchange rate, creating a complex backdrop for price action. The European Central Bank maintains a cautious approach to monetary policy normalization, with inflation in the Eurozone showing signs of moderation toward target levels. Recent ECB communications suggest a measured pace of interest rate adjustments, contrasting with more aggressive approaches seen in previous cycles. Meanwhile, the Bank of England faces its own policy challenges as UK economic data presents mixed signals about growth and inflation persistence.

Comparative Economic Performance and Policy Outlook

Economic indicators from both regions reveal important divergences affecting currency valuations. Eurozone manufacturing PMI data recently improved to 47.8, though remaining in contraction territory. Services sector performance shows greater resilience at 52.3. UK economic data presents a different picture, with services PMI at 53.5 but manufacturing struggling at 46.2. These sectoral differences influence central bank policy expectations and consequently currency valuations. Additionally, political developments in both regions contribute to market uncertainty, with European Parliament elections approaching and UK political dynamics continuing to evolve post-Brexit.

Interest rate differentials remain a crucial factor for EUR/GBP direction. Current market pricing suggests approximately 75 basis points of ECB easing priced in for 2025, compared to 50 basis points from the Bank of England. This differential creates inherent support for sterling against the euro, though actual policy implementation may diverge from market expectations. Trade balance data also influences currency flows, with the UK maintaining a substantial goods trade deficit partially offset by services surplus, while the Eurozone shows more balanced external accounts.

Key Resistance Levels: Technical Significance and Market Psychology

The 0.8720 resistance level holds particular technical importance as it represents the convergence of multiple analytical factors. This price point aligns with the early March high and corresponds to the upper boundary of a descending trendline from the January peak. Additionally, option barriers reportedly cluster around this level, potentially amplifying its significance. The 0.8745 resistance carries even greater weight as it represents the 61.8% Fibonacci retracement of the January-February decline, a level many technical traders monitor for trend continuation or reversal signals.

Market positioning data reveals interesting dynamics around these resistance levels. According to recent Commitment of Traders reports, speculative positioning in EUR/GBP remains relatively balanced with a slight net long euro position. This contrasts with more extreme positioning seen in other major currency pairs. The balanced positioning suggests market participants await clearer directional signals before committing to substantial positions. Order flow analysis indicates substantial sell orders clustered above 0.8720, potentially explaining recent rejections at this level.

Several technical patterns warrant attention in the current EUR/GBP price structure. The pair has formed a symmetrical triangle pattern over the past six weeks, with converging trendlines suggesting impending volatility expansion. Additionally, a bullish divergence appeared on the daily chart earlier this month, with price making lower lows while momentum indicators formed higher lows. This classic technical signal often precedes trend reversals, though confirmation requires price breaking above resistance levels. The 200-day moving average currently sits at 0.8665, providing additional context for the broader trend direction.

Historical Context and Seasonal Patterns

Historical analysis of EUR/GBP price action provides valuable context for current market conditions. The pair has demonstrated notable seasonal tendencies, with March typically showing increased volatility as financial year-ends approach in multiple jurisdictions. Over the past decade, March has produced positive returns for EUR/GBP in six of ten years, with an average monthly movement of approximately 1.8%. This historical context suggests the current consolidation may resolve with increased directional movement as the month progresses.

Longer-term charts reveal that the 0.8720-0.8745 resistance zone previously served as support during the latter half of 2023. This role reversal from support to resistance represents a common technical phenomenon that often creates significant price reactions. The psychological importance of round numbers in forex trading further amplifies the significance of these levels, with many algorithmic trading systems programmed to respond to tests of such technical thresholds. Market memory of previous price action around these levels may influence current trader behavior and order placement.

Institutional Perspectives and Risk Scenarios

Major financial institutions offer varied perspectives on EUR/GBP’s near-term direction. Several investment banks highlight the importance of the 0.8745 level, suggesting a sustained break above could trigger momentum buying toward 0.8800. Conversely, other analysts emphasize downside risks should the pair fail to overcome current resistance, with potential declines toward 0.8600. These divergent views reflect genuine uncertainty in markets about the fundamental drivers and their relative importance.

Multiple risk scenarios could influence EUR/GBP direction in coming sessions. A breakthrough of 0.8745 resistance could trigger:

• Stop-loss buying from short positions
• Momentum-based algorithmic buying
• Increased hedging demand from corporates
• Potential for rapid movement toward 0.8800

Conversely, rejection at current levels might prompt:

• Technical selling from range-bound strategies
• Increased hedging against euro weakness
• Position unwinding by speculative accounts
• Potential test of 0.8650 support

Market Microstructure and Trading Implications

Trading volume patterns around key technical levels provide insights into market dynamics. Recent sessions show increased volume during European trading hours when the pair approaches resistance, suggesting institutional participation in these price tests. Asian session volume remains subdued, while North American participation varies with broader dollar dynamics. Liquidity conditions remain adequate, though bid-ask spreads occasionally widen during volatile periods, particularly around economic data releases from either region.

Options market activity reveals interesting positioning around current price levels. Implied volatility for at-the-money options remains elevated compared to historical averages, reflecting market uncertainty about near-term direction. Risk reversals show slight skew toward euro puts (sterling calls), indicating modest hedging demand for euro downside protection. This options market positioning provides additional context for spot price action and potential volatility events.

Conclusion

The EUR/GBP forecast remains contingent on the pair’s ability to overcome significant resistance at 0.8720 and 0.8745. Technical indicators suggest consolidation within a narrowing range, typically preceding directional movement. Fundamental factors present a mixed picture, with monetary policy expectations and economic data from both regions influencing trader sentiment. Market participants should monitor these resistance levels closely, as sustained breaks above could trigger momentum-based buying, while rejections might prompt renewed testing of support areas. The current technical setup, combined with fundamental uncertainties, creates conditions for potentially significant price movement once the consolidation phase resolves.

FAQs

Q1: What are the key resistance levels for EUR/GBP?
The primary resistance levels are 0.8720 and 0.8745. The 0.8720 level represents recent highs and trendline resistance, while 0.8745 corresponds with the 61.8% Fibonacci retracement level from January’s decline.

Q2: What fundamental factors currently influence EUR/GBP?
Monetary policy expectations from the ECB and Bank of England, economic data from both regions, interest rate differentials, and political developments in Europe and the UK all influence the pair’s direction.

Q3: What technical patterns are visible in EUR/GBP charts?
The pair shows a symmetrical triangle pattern with converging trendlines, suggesting impending volatility expansion. The price also maintains position above its 50-day moving average while facing resistance from higher time frame levels.

Q4: How does market positioning affect EUR/GBP price action?
According to Commitment of Traders reports, speculative positioning remains relatively balanced with a slight net long euro position. This balanced positioning suggests traders await clearer directional signals before establishing substantial positions.

Q5: What happens if EUR/GBP breaks above 0.8745 resistance?
A sustained break above 0.8745 could trigger momentum buying, stop-loss activation on short positions, and potentially rapid movement toward the next resistance area around 0.8800, depending on accompanying volume and fundamental developments.

This post EUR/GBP Forecast: Critical Resistance Battle Looms as Pair Hovers Below 0.8720 and 0.8745 Levels first appeared on BitcoinWorld.

– Written by


David Woodsmith

STORY LINK GBP/USD Forecast: Pound Sterling Drifts Near $1.36

The Pound to US Dollar exchange rate (GBP/USD) struggled to gain momentum on Tuesday, with renewed political uncertainty in the UK weighing on Sterling sentiment.

At the time of writing, GBP/USD was trading around $1.3679, down close to 0.2% on the session as investors remained cautious.

The Pound stayed on the back foot as markets continued to digest a turbulent period for the UK government. Confidence was shaken by the resignation of two senior aides and renewed scrutiny of Prime Minister Keir Starmer’s leadership.

Adding to the pressure, Scottish Labour leader Anas Sarwar publicly urged Starmer to step aside, reigniting debate over the Prime Minister’s grip on power. While Starmer has resisted calls to resign, attention is already shifting to the upcoming Manchester by-election, where a poor result for Labour could intensify leadership concerns and keep Sterling exposed.

The US Dollar initially traded firmer, benefiting from a broader recovery in US markets. However, the Greenback’s upside proved limited after the release of disappointing US retail sales data.

Figures showed sales growth flatlined in December, undershooting expectations for a 0.4% rise. The miss revived concerns about the strength of US consumer spending and nudged markets toward more dovish Federal Reserve rate expectations, capping USD gains.

GBP/USD Forecast: Jobs Data and UK GDP in Focus

Looking ahead, the Pound to Dollar exchange rate could see increased volatility with the release of the latest US non-farm payrolls report. Forecasts point to job growth of around 70,000 in January, up from December’s 50,000 gain.

Given the recent run of weaker labour indicators, another soft reading could reinforce expectations for Fed rate cuts and place renewed pressure on the Dollar.

For Sterling, attention will turn to Thursday’s UK GDP figures. With domestic data scarce and political risks elevated, the Pound may struggle to find clear direction unless growth data delivers a meaningful surprise.

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