Created on March 06, 2025

• Strong signals from the Bank of Japan regarding future interest rate hikes, coupled with the US dollar’s decline against other major currencies following the official approval of US tariffs, helped bears push the USD/JPY currency pair towards the support level of 148.40 before stabilizing around 148.90 at the time of writing the analysis.
• The currency pair has given up its gains from the start of the week, which reached the resistance level of 151.30.
• Furthermore, the USD/JPY pair may continue to decline until the reaction to the announcement of US job numbers at the end of the week.

Bank of Japan Policies Support Strong Yen Gains

There is no doubt that, according to currency market trading on licensed Forex trading companies’ platforms, the Japanese Yen’s gains have increased to their highest in five months amidst hawkish comments from a senior Bank of Japan official. Bank of Japan Deputy Governor Shinichi Uchida stated that the central bank would raise interest rates further if its economic forecasts are met, emphasizing that the exit from the intensive monetary easing program has not just begun. The official also stressed that monetary conditions remain very accommodative, noting that the Bank of Japan’s reduction of Japanese government bond holdings has been limited.

Meanwhile, the latest data showed that Japan’s services sector grew at its fastest pace in six months in February, driven by strong demand.

Globally, the Japanese yen was pressured by growing trade concerns after new U.S. tariffs on Canada, Mexico and China took effect this week, prompting retaliatory measures from those countries.

Trading Tips:

Watch the dollar decline against the Japanese yen to seize new buying opportunities, but always remember not to take risks.

A look at the policies of the Japanese central bank

At its latest meeting, the Bank of Japan raised its key short-term interest rate by 25 basis points to 0.5%, the highest level in 17 years, in line with market consensus. This move reflects the momentum of wage increases and steady progress in inflation. It also represents the third-interest rate hike since the Japanese central bank ended negative interest rates in March 2024. The central bank also indicated plans for further price increases and scaling back monetary support if economic data and prices match its expectations.

Friday’s decision was passed by a majority of 8-1, with board member Nakamura dissenting. At the same time, in its quarterly forecast, the Bank of Japan raised its core inflation forecast to 2.7% for fiscal 2024 from October’s estimate of 2.5%, citing a growing labour shortage. Moreover, the Bank of Japan also expected core inflation to decline to 2.4% in fiscal 2025 and 2.0% in fiscal 2026.

At the same time, the central bank lowered its GDP growth forecast for 2024 slightly to 0.5% from the previous figure of 0.6%. Growth forecasts remain at 1.1% for fiscal 2025 and 1.0% for fiscal 2026.

USD/JPY Technical Analysis and Expectations Today:

According to trading via the daily chart, the general downward trend for the USD/JPY pair is getting stronger and breaking the support of 148.00 may be possible. If this happens, the technical indicators may start giving strong oversold signals from the Relative Strength Index and the MACD indicator. Currently, the closest support levels for the currency pair are 148.00, 147.20 and 146.00, respectively. We still prefer to buy the dollar against the Japanese yen, but without risk and dividing the trading volume on separate support levels. On the other hand, and for the same time period, the resistance of 152.50 will remain the most important to break the current bearish outlook for the currency pair.

Want to trade our USD/JPY forex analysis and predictions? Here’s a list of forex brokers in Japan to check out.

The GBPCHF price formed strong bullish rally yesterday, taking advantage of the frequent consolidation within the minor bullish channel, to notice surpassing 1.1420 barrier and approaching 1.1510 resistance line.

Note that stochastic crawl towards the overbought areas will reinforce the chances of gathering the additional positive momentum to ease the mission of breaching the current resistance and start targeting new positive stations, starting as a 1.1545 level.

The expected trading range for today is between 1.1450 and 1.1545

Trend forecast: Bullish

Created on March 06, 2025

• The weakness of the US dollar immediately after the official announcement of US tariffs on global economies, coupled with investors’ relatively increased risk appetite, helped bulls push the GBP/USD pair towards the resistance level of 1.2900.
• This is the pair’s highest in four months, and it is stabilizing around its gains at the start of today’s Thursday trading.

Interest Rate Bets and Britain’s Avoidance of US Tariffs Helped Bulls

According to Forex market trading and reliable trading companies’ platforms, the British Pound benefited significantly from expectations that interest rates in Britain will remain higher for longer, with traders reducing their bets on interest rate cuts by the Bank of England to 52 basis points for 2025. Bank of England Deputy Governor Ramsden warned that persistent wage pressures could keep inflation high but suggested that future interest rate cuts could accelerate if needed.

Additionally, the Pound is seen as less exposed to US tariffs, especially after US President Trump suggested a potential trade deal with Britain that could avoid new tariffs. At the same time, Germany announced a significant increase in defence and infrastructure spending, while Britain has already outlined its plans to increase defence spending and cover it with cuts in development budgets.

Trading Tips:

As we expected before, the improvement in investor and market sentiment will support further gains for the British pound, and now you should be careful not to renew the selling operations to take profits.

Trump’s Tariffs Weaken the US Dollar

According to Forex market trading, the US dollar’s decline after the confirmation of tariffs on Canada and Mexico perplexed traders and analysts alike. In general, the dollar’s weakness reflects expectations that tariffs pose a significant obstacle to US economic growth and at the same time raise inflation. In short, it’s stagflation. Commenting on recent trading, Morgan Stanley analysts say that this breakout is very important because it opens the door to broader US dollar weakness. After recent gains, the GBP/USD pair rose to recover the 50% Fibonacci retracement of the major decline that occurred from October 2024 to January 2025.

On another note, the slowdown in US economic data has become clear, prompting financial markets to bet on further US interest rate cuts by the Federal Reserve. Money markets show that investors are pricing in 75 basis points of cuts by the December meeting. That would mean three 25 basis point cuts, higher than the single cut expected in early February. This is weighing on US bond yields, which in turn is weighing on the US dollar.

Rise in British Treasury Bond Yields

According to recent trading, the yield on the 10-year British treasury bond rose 11 basis points to 4.613%, following a rise in European bond yields after Germany announced a historic fiscal shift to boost spending on defence and infrastructure. The move signals increased borrowing across Europe, weighing on UK revenues as the government also plans to increase defence spending, funded by cuts in other areas.

At the same time, expectations of a Bank of England rate cut have dimmed, with markets now pricing in just 52 basis points of cuts for 2025. BoE Deputy Governor Ramsden warned that persistent wage pressures could keep inflation high, but also suggested that future rate cuts could accelerate if economic conditions worsen.

Technical Analysis for the GBP/USD pair today:

According to the performance on the daily chart, bulls’ control over the GBP/USD pair is getting stronger and a move towards the psychological resistance of 1.3000 will be the strongest confirmation of the upward shift. At the same time, technical indicators will move towards strong overbought levels led by the movement of the RSI and MACD indicators. In contrast, and over the same time frame, the support level of 1.2630 will remain a threat to the current upward shift. Finally, we expect GBP/USD to remain on its upward trajectory until the reaction to the US jobs numbers which may affect market expectations for future US central bank policy.

Ready to trade our daily GBP/USD Forex forecast? Here’s some of the best forex broker UK reviews to check out

• EUR/USD trades at fresh multi-month highs near 1.0800 in the European morning on Thursday.
• The ECB is widely anticipated to lower key rates after March policy meeting.
• The pair remains technically overbought in the near term.

EUR/USD preserved its bullish momentum and registered impressive gains for the third consecutive day on Wednesday. The pair continues to inch higher in the European morning on Thursday and trades at its highest level since early November above 1.0800. 

The US Dollar (USD) remained under heavy selling pressure midweek despite the upbeat ISM Services Purchasing Managers Index (PMI) report for February. News of US President Donald Trump granting the US automative industry a one-month exemption from 25% tariffs imposed on Canada and Mexico allowed the risk mood to improve and forced the USD to continue to weaken.

Later in the day, the European Central Bank (ECB) will announce monetary policy decisions and publish the revised macroeconomic projections. Markets widely expect the ECB to lower key rates by 25 basis points (bps).

A downward revision to inflation and growth expectations could cause investors to price in a continuation of policy easing and open the door for the Euro to correct lower. Market participants will also pay close attention to comments from ECB President Christine Lagarde. In case Lagarde adopts a cautious tone on additional rate cuts, citing the uncertainty surrounding the EU-US trade relations, the Euro could hold its ground.

The US economic calendar will feature the weekly Initial Jobless Claims data. Investors, however, could ignore this data ahead of Friday’s Nonfarm Payrolls (NFP) report.

EUR/USD Technical Analysis

The Relative Strength Index (RSI) indicator on the 4-hour chart climbed above 80, reflecting extremely overbought conditions for EUR/USD in the near term. On a bullish note, the pair made a daily close above the 200-day Simple Moving Average (SMA), currently located at 1.0720, for the first time in four months.

On the downside, 1.0760 (static level) aligns as interim support before 1.0720 (200-day SMA) and 1.0700 (static level, round level). Looking north, first resistance could be spotted at 1.0900 (static level, round level) ahead of 1.0940 (static level from November).

Copper price confirmed its surrender to the previously suggested positivity by settling within the bullish channel frequently and surpassing 4.6800$ barrier now, to notice the beginning of recording the positive targets by touching 4.7800$ now.

The continuous positive momentum provided by the major indicators will increase the efficiency of the bullish track, to expect attacking 4.8100$ recorded high soon, while surpassing it will start targeting new positive stations by rallying towards 4.9100$ and face the bullish channel’s resistance line.

The expected trading range for today is between 4.6800$ and 4.9100$

Trend forecast: Bullish