January 28, 2025 – Written by Frank Davies

STORY LINK Pound to Euro (GBP/EUR) Exchange Rate Muted despite Upbeat German Data

The Pound Sterling was trapped in a narrow range against the Euro on Monday despite the release of some better-than-expected German data.

At the time of writing, the GBP/EUR exchange rate was trading at around €1.1889, virtually unchanged from Monday’s opening levels.

Although flat against the Pound (GBP), the Euro (EUR) gained ground against several of its counterparts on Monday following the release of Germany’s latest IFO business climate index.

The index ticked up in January, rising from 84.7, the lowest level since May 2020, to 85.1, surpassing expectations that it would remain unchanged.

This positive data from the Eurozone’s largest economy bolstered the Euro at the beginning of the week, especially amid a generally cautious market sentiment.

As a safe-haven currency, the Euro also benefited from the risk-averse trading environment on Monday.

On Monday, the Pound stayed largely muted against most of its peers, owing to a lack of fresh economic data releases.

This absence of new information left Sterling without a clear direction at the start of the week, however, saw the Pound remain relatively steady.

Given the anticipated scarcity of UK economic data throughout the week, it’s likely that the Pound will continue to oscillate without any major economic drivers influencing its movement.

Looking ahead to Tuesday, the main factor influencing the Pound Euro exchange rate will likely be several speeches from European Central Bank (ECB) officials.

Both ECB official Piero Cipollone and ECB President Christine Lagarde are set to speak on Tuesday.

If either policymaker hints at a potential ECB interest rate cut, EUR exchange rates could weaken as a result.

For the Pound, with UK data remaining sparse, GBP exchange rates are likely to continue struggling to find a clear direction this week.

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Created on January 29, 2025

• The British Pound has rallied a bit during the early hours on Tuesday against the Japanese Yen as we continue to see a lot of noise.
• Ultimately, this is a pair that is currently struggling with the 200 day EMA and the 50 day EMA both being flat.
• So that does suggest there’s a little bit of lackluster trading.

However, it is also worth noting that the 195 yen level above gives us a nice area from which to judge this market. If we can break above that level, then I think it opens up a possible trade to the 200 yen level. Short-term pullbacks are more likely than not going to end up being buying opportunities with the 190 yen level underneath offering a bit of a floor.

Interest Rates Still Matter

All things being equal, the interest rate differential still favors the United Kingdom, and that’s not going to change anytime soon. So, if we see British Pound strength in general, that will almost certainly be felt here in spades. I don’t like the idea of shorting this pair, and I do believe that longer term traders are just simply collecting swap at the end of the day and are waiting for a continuation of the overall upward momentum that will eventually have this market testing the 200 yen level again. Anything above there probably opens up the possible move to the 208 yen level again, but right now I think we’re just killing time. I still favor the upside, but I’m not looking for anything major. I think if you are somewhat tactical with your entries, it’s probably a good market to take advantage of as it has been somewhat stable, and the market is likely to see a bit of back and forth trading set ups.

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January 29, 2025 – Written by David Woodsmith

STORY LINK Pound Sterling Slips vs Euro and Dollar as Tech Selloff Sparks Safe-Haven Demand

The Pound to Dollar exchange rate (GBP/USD) edged lower on Tuesday as risk-averse sentiment saw investors flock to the safe-haven Greenback.

At the time of writing, GBPUSD was trading near $1.2428, down approximately 0.2% from Tuesday’s opening levels.

The US Dollar (USD) continued its upward trajectory on Wednesday, consolidating gains made during the overnight session.

This followed a sharp selloff in US tech stocks, triggered by investor concerns over the competitive threat posed by China’s newly unveiled AI model, DeepSeek.

Adding to the Greenback’s safe-haven appeal were fresh tariff warnings from Donald Trump, who reiterated his plans to implement 25% tariffs on imports from Mexico and Canada.

However, USD gains were tempered by disappointing durable goods orders data, which revealed an order growth unexpectedly contracted for a second consecutive month in December.

Pound (GBP) Weakens Amid Deteriorating Risk Sentiment

The Pound (GBP) struggled to hold its ground on Tuesday as market-wide risk aversion weighed on Sterling.

Compounding these pressures were downward revisions to the UK’s growth outlook by Morgan Stanley.

The investment bank downgraded its forecast for 2025 UK GDP growth from 1.3% to just 0.9%.

This projection significantly lags behind the Bank of England’s (BoE) estimate of 1.5% growth, fuelling speculation that the BoE may pivot toward a looser monetary policy if upcoming data aligns with Morgan Stanley’s forecast.

GBP/USD Forecast: Fed Rate Decision to Drive the US Dollar Higher?

Looking ahead, the Pound US Dollar exchange rate could face significant volatility on Wednesday as the Federal Reserve announces its latest interest rate decision.

While the Fed is expected to keep rates steady this month, its forward guidance will be key.

Should policymakers adopt a hawkish stance and suggest no imminent plans to resume rate cuts, the US Dollar could see a sharp boost.

Meanwhile, attention will also turn to Bank of England Governor Andrew Bailey’s testimony before the Treasury Select Committee. Any indication that a February rate cut is under consideration may weigh further on the Pound.

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The EURJPY pair still affected by the domination of the sideways bias by fluctuating within the sideways track represented by 161.60 support and 163.25 resistance.

Note that stochastic continuous negative momentum might push the price to attack the current support, while breaking it will push the price to form new negative trades to target 160.90 and 160.20 levels.

The expected trading range for today is between 161.65 and 163,25

Trend forecast: Neutral

Ethereum price (ETHUSD) bounced bearishly after testing 3222.00$ level in the previous sessions, to reach the key support 3017.30$, noticing that the price attempts to recover and build new bullish wave, motivated by stochastic current positivity.

Until now, our neutrality still valid until the price confirms surpassing one of the above mentioned levels, noting that breaking the mentioned support will put the price under additional negative pressure that targets 2765.00$ areas on the near-term basis, while breaching the resistance will motivate the price to build new bullish wave that its first main target located at 3425.50$.

The expected trading range for today is between 2970.00$ support and 3260.00$ resistance.

Trend forecast: Neutral