The GBPJPY pair succeeded in breaking the bullish channel’s support that is represented by 213.45 level, activating the previously suggested bearish corrective track, recording all the waited targets by reaching 211.60 level, attempting to recover some of the losses by its rally towards 212.85, attempting to retest the extra barrier that appears in the above image.

Confirming the bearish scenario requires providing new bearish close below 212.85, to ease the mission of targeting 212.00 level and surpassing it might extend the losses towards 211.25 and 210.45, while regaining the bullish trend requires forming strong bullish moves to settle above 214.15 level.

The expected trading range for today is between 211.25 and 213.00

Trend forecast: Bearish

The EURJPY pair provided several weak sideways trading, delaying the bullish trend due to its stability below 185.45 barrier, to form some mixed trading by reaching 184.35 level.

Note that stochastic exit from the overbought level might increase the negative pressures on the trading, forcing it to provide negative corrective trading, to target 183.85 level reaching the bullish channel’s support at 183.20, while breaching the barrier and holding above it will reinforce the chances of recording extra gains that might begin at 186.20.

The expected trading range for today is between 183.85 and 185.40

Trend forecast: Fluctuating within the bullish trend

– Written by


Frank Davies

STORY LINK GBP/USD Forecast: Pound Sterling Weakens after BoE Policy Shift

The Pound to US Dollar exchange rate (GBP/USD) sold off sharply on Thursday as markets digested the Bank of England’s latest policy decision, which was viewed as more dovish than expected.

At the time of writing, GBP/USD was trading near $1.3570, marking a decline of around 0.6% from the start of the day’s session.

Sterling came under sustained pressure after the Bank of England left interest rates unchanged at its first meeting of 2026, but with a narrower vote split than markets had anticipated.

Rather than the widely expected 7–2 decision in favour of holding rates, the Monetary Policy Committee delivered a 5–4 vote, signalling a growing divide within the committee and a stronger appetite for looser policy.

The unexpectedly tight outcome reinforced expectations that interest rate cuts could arrive sooner rather than later. Markets moved to price in as much as 50 basis points of easing this year, with some traders now seeing scope for the first cut as early as March, dragging the Pound lower.

The US Dollar, meanwhile, found some support through Thursday’s European session, benefiting from safe-haven demand amid choppy market conditions.

However, the Greenback’s gains were capped following the release of the latest US jobless claims figures. Initial claims for unemployment benefits rose to 231,000 last week, up from 209,000 previously.

The increase prompted investors to reassess the resilience of the US labour market, unwinding part of the recent hawkish repricing of Federal Reserve rate expectations and limiting further USD upside.

GBP/USD Forecast: Will Softer US Confidence Weigh on the Dollar?

Looking ahead, attention turns to the University of Michigan’s consumer sentiment survey, which could provide the next directional cue for the Pound to US Dollar exchange rate.

A further deterioration in household confidence may revive concerns over the durability of US economic momentum, potentially weighing on the Dollar.

On the UK side, the economic calendar remains sparse. In the absence of fresh data, Sterling may remain sensitive to domestic political developments, with questions continuing to swirl within the Labour Party over Prime Minister Keir Starmer’s leadership following the Mandelson–Epstein controversy.

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US Consumer Sentiment Spotlights the Fed

While Japanese data and the upcoming election influence yen demand, US economic data will affect buying interest in the US dollar.

Later on Friday, US consumer sentiment numbers will take center stage, given the delay to the US jobs report. Economists forecast the Michigan Consumer Sentiment Index to fall from 56.4 in January to 55.0 in February. Waning consumer sentiment could signal a pullback in consumer spending and a softer inflation outlook. Cooling inflation would support a more dovish Fed rate path, weighing on US dollar demand.

A more dovish Fed policy stance and a more hawkish BoJ rate path would indicate a narrowing in US-Japan rate differentials. Narrowing rate differentials in favor of the yen would be bearish for USD/JPY.

According to the CME FedWatch Tool, the chances of a March Fed rate cut increased from 13.4% on January 29 to 24.3% on February 4. Meanwhile, the probability of a June cut jumped from 61.8% to 82.3%.

Technical Outlook: Key Levels to Watch

For USD/JPY price trends, traders should assess technical indicators, incoming economic data, central bank chatter, and political developments.

On the daily chart, USD/JPY remains above its 50-day and 200-day Exponential Moving Averages (EMAs). The EMA positions signal a bullish bias. However, positive yen fundamentals continue to offset technicals.

A break below the 50-day EMA would bring the 200-day EMA into play. If breached, 150 would be the next key support level.

Importantly, a sustained fall through the EMAs would indicate a bearish trend reversal and reaffirm the negative medium-term price outlook.

GBP/USD Falls to 1.36 Ahead of the BoE Rate Decision

The Bank of England will deliver its first monetary policy decision of 2026 at midday today. Expectations are that the central bank will leave interest rates unchanged at 3.75% after cutting rates by 25 basis points at the December meeting.

The December rate count was a narrow vote of five to four. Highlighting how finely balanced the debate about further rate cuts has become. The message from policymakers was still cautiously dovish, with a gradual downward path for rates, meaning that further cuts would be harder to justify as policy moves closer to neutral.

Growth momentum is showing signs of fading, with the economy expected to flatline in Q4. The central bank expects inflation to return to the 2% target by spring, despite rising to 3.4% in January.

There are signs, however, that the labour market is cooling, with the 5.1% percent. data from yesterday showed that the employment subcomponent fell sharply in January, continuing a trend that began in October 2024, marking the longest period of job shedding in the UK service sector in 16 years.

Further weakening in the jobs market would put downward pressure on wage growth and pull service sector inflation lower. Wage growth and service-sector inflation are currently too high for the Bank of England to be comfortable with further rate cuts, or to be consistent with inflation back at 2%.

The focus will be on the vote split, which is expected to be 7-2. A more dovish vote could put pressure on the pound. Bank of England Governor Andrew Bailey’s comments will be in focus, and dovish commentary would be pound-negative.

Meanwhile, the is rising as it nears a 2-week high amid market pricing in a slower pace and potential Federal Reserve rate cuts.

Federal Reserve governor Lisa Cook emphasised concerns over sticky inflation rather than the cooling labour market, suggesting that she was not supporting a rate cut until there are further signs of inflation easing.

Data yesterday showed the remained at 53.8 in January, aligning with the previous month’s figure and exceeding expectations from a client of 53.5. However, prices paid also increased to 66.6 from 65.1, signalling rising inflationary pressures. Attention will now turn to U.S. initial jobless claims, which are expected to rise modestly to 212K, up from 209 K.

GBP/USD Forecast – Technical Analysis

trended higher from 1.30 before running into resistance at 1.3870. GBP/USD rebounded lower from here and is testing support at the 1.36 zone, the round number, horizontal and trendline support.

A break below here exposes the 200 SMA at 1.3420. A break below 1.3350 creates a lower low, bringing 1.32 into focus.

Should the support hold, buyers will look to rise above 1.37. A rise above here brings 1.3870 back into play.

EUR/USD Steadies Around 1.18 Ahead of the ECB Rate Decision

has fallen back to 1.18 ahead of the ECB rare decision at 13:15 GMT where the central bank is widely expected to leave interest rates unchanged at 2% (deposit rate). The ECB last cut rates in June last year. However, inflation hovering around the 2% target led policymakers to consider monetary policy to be in a good place.

However, this meeting comes after data yesterday showed cooled by more than expected to 1.7% YoY in January, down from 1.9% in December and further from the ECB’s 2% target, reopening the debate over whether the ECB will cut again this year.

A stronger EUR, – EUR/USD rose to a 4-year high above 1.20 in late January, and cheap Chinese exports, which have flooded the eurozone, exert deflationary pressure and, if this persists, could amplify dovish calls within the ECB.

Given that no rate cut is expected, the focus will be on the tone of President Lagarde’s press conference as the near-term catalyst for the EUR.

A stronger USD and a slightly more dovish ECB could pull EUR/USD back towards 1.17.

EUR/USD Forecast – Technical Analysis

After recovering from the 200 SMA support and rising to a 4-year high of 1.2085, EUR/USD has fallen back and is testing the 1.18 support, the round number, the December high and the falling trendline support. The RSI is close to neutral.

Should buyers successfully defend this support, upside resistance is at 1.1870, with a rise above here bringing 1.20, the psychological level and 1.2085 back into focus.

Should sellers remove the 1.18 support, this would expose the 50 SMA and the 1.17 level. Below here, the 200 SMA at 1.16 comes into play, along with the 2026 low.

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