I wrote on the 8^th February that the best trades for the week would be:

1. Long of the Dow Jones Industrial Average. This gave a loss of 1.09% over the week.

A summary of last week’s most important data in the market:

1. US CPI (inflation) – this came in just a fraction lower than expected, showing a month-on-month increase of 0.2% compared to 0.3%. This had no discernable impact on the market.
2. US Average Hourly Earnings – came in a tick higher than expected, which helped boost the greenback earlier in the week.
3. US Retail Sales – this was considerably worse than expected, showing no change month-on-month while an increase of 0.4% was expected. This created a minor dovish tilt concerning the timing of US rate cuts in 2026.
4. US Non-Farm Employment Change – somewhat better than expected, boosting the effect outlined above in 3.
5. Swiss CPI (inflation) – no change was expected month-on-month but a deflation of 0.1% was the result, which helped strengthen the Swiss Franc.
6. UK GDP – as expected.
7. US Unemployment Rate – an unexpected tick lower from 4.4% to 4.3%.
8. US Unemployment Claims– as expected.

Last week’s data had some minor effects upon the US Dollar and general outlook for risk appetite, with the US economy first looking more ready for rate cuts, but then at the end of the week still looking like its running slightly hot. Overall, the CME FedWatch tool has narrowly moved in favour of expecting three rate cuts in 2026 of 0.25% (June, September, and December), which is a dovish change for the US Dollar.

The other big news, in fact really the big news of the week in the market, was the huge gain printed by the Japanese Yen, which rose by almost 3% against the US Dollar and by a bit less against 4 other currencies. This was an unusually strong appreciation and was driven by the previous weekend’s stunning election victory by the current administration, which gives Japan its strongest government in many years. Investment has been flowing strongly into the Japanese stock market, which accounts for some of the Yen’s gain. There is also an expectation that the Bank of Japan will be hiking its interest rate soon, which is leading traders to get out of short Yen carry trade positions. However, there are strong questions as to how much further the Yen can rise over the coming days, as it looks very overbought and is due for a bullish retracement.

The coming week’s most important data points, in order of likely importance, are:

1. US Core PCE Price Index
2. US Advance GDP
3. US FOMC Meeting Minutes
4. UK Claimant Count Change
5. UK CPI (inflation)
6. Canadian CPI (inflation)
7. RBNZ Official Cash Rate / Rate Statement / Monetary Policy Statement
8. US / German / UK Flash Services & Manufacturing PMI
9. UK Retail Sales
10. US Unemployment Claims
11. Australian Unemployment Rate

Monday will be a public holiday in the USA and Canada. The entire week is a public holiday in China.

Currency Price Changes and Interest Rates

For the month of February, I forecasted that the EUR/USD currency pair would rise in value.

February 2026 Monthly Forecast Performance to Date

Last week saw one cross with excessive volatility, so I made the following weekly forecast:

• Short AUD/JPY – this produced a win of 2.23%.

There were several Yen crosses which made excessive moves, so I forecast that these crosses will rise over the coming week:

• Long AUD/JPY
• Long EUR/JPY
• Long GBP/JPY
• Long NZD/JPY
• Long CAD/JPY

The Japanese Yen was the strongest major currency last week, while the US Dollar was the weakest. Directional volatility rose slightly last week, with just over one third of all major pairs and crosses changing in value by more than 1%. The Yen was extremely volatile and made a large move higher over the week.

Next week’s volatility is likely to be similar or maybe a bit less.

You can trade these forecasts in a real or demo Forex brokerage account.

Key Support and Resistance Levels

Last week, the US Dollar printed a bearish candlestick which engulfed the real bodies of the previous two bullish candlesticks. However, there is a notable lower wick, and the price action taken together with previous candlesticks is only very marginally bearish.

Zooming out, we can see that although last week’s close was almost the lowest in more than a year, and although there is a clear long-term bearish trend in terms of the price, the action of the past year has been quite consolidative.

We certainly saw the interest rate outlook turn more bearish last week on the greenback, with markets now pricing in three rate cuts of 0.25% over the course of 2026 instead of two.

All in all, a weakly bearish bias looks sensible, but a minor rise in the greenback over the coming week would not be very surprising.

US Dollar Index Weekly Price Chart

The USD/JPY currency pair was at the heart of the Forex market last week, as it made an unusually strong move, with both the US Dollar dropping, plus the Japanese Yen gaining very strongly. The move really came from the Yen, and the Yen also gained excessively against several other currencies as well as the US Dollar.

The weekly candlestick shown below in the price chart completely engulfed the previous week, and most of the week before that. There is a very small lower wick, which could be a bearish sign, but there is a key support level close by. Shorter-term price action also shows a consolidation near the low.

The Japanese Yen gained over the past week as money flowed into Japan to invest in the strong stock market following the government’s landslide election win. There is also an expectation that the Bank of Japan will make more rate hikes soon, which will tend to boost the Yen.

Despite these factors, I expect that the Yen will give up some of its gains over the coming week. As well as the support level at ¥152.14 there is also a long-term bullish ascending trend line which is currently located at the support level below that, at ¥151.61.

Bullish bounces off either of these support levels could be excellent long trade entries with the kind of volatility we are seeing now. This kind of trade against the Yen will likely work even better in one or more of the Yen crosses over the coming week.

USD/JPY Weekly Price Chart

The S&P 500 Index has been in a strong bull market for a long time. However, although we did see a new record high price just a couple of weeks ago, a look at the weekly chart below shows that the price has just been consolidating, or topping out, for about the last 9 weeks. The support below at 6737 looks pivotal, and the support below that confluent with 6,500 looks even more so, especially when you consider the 200-day simple moving average is confluent with that major half-number.

It is still technically a bull market, and I would go long if we got a record high daily close above 7,025, but the choppiness and reluctance to make new highs suggests we are going to see a deeper drop, which may or may not be the beginning of the end of this bull market.

The NASDAQ 100 Index looks even more vulnerable to a significant fall.

S&P 500 Index Weekly Price Chart

BTC/USD has been making significant bearish breakdowns below some long-term support levels and reached a new 16-month low. This was technically very significant in a bearish way. However, this week’s candlestick is an inside bullish near-doji / pin bar, which suggests an end to the drop, even if temporary. So, we may have finally seen some long-term dip buying, although the price action here does not look confidently bullish.

I would be nervous to be bullish as Bitcoin has been such a standout bearish asset over recent weeks and months. If the price can get established above the resistance level near $81,000 then I would have more confidence that bulls were getting the upper hand.

Alternatively, if the price breaks below the recent low at about $60,000 that would be a very bearish sign, and one that might be worth trading short on the breakdown. That would probably trigger a further drop towards the $50,000 area soon.

Bitcoin Weekly Price Chart

Gold, like Silver, saw a massive drop in just a day or two at the end of January. Gold fell quickly from a record high at about $5,600 to a low at $4,400 by the end of the week, but has been regaining ground with choppy, wide-swinging price action, as you can see in the daily chart below.

Applying a Fibonacci retracement study, we can see that the halfway level of this movement is very confluent with a major round number at $5,000 and this has been broken to the upside, although it has not managed to hold as key support – yet $4,880 has.

The price action suggests we are going to get a slowly rising consolidation on gradually declining volatility, like a struck tuning fork playing itself out.

Despite seeing Gold as likely to be weakly bullish, I am not interested in being long here again until the price makes a long-term, multi-month high closing price.

It is also notable that Gold is behaving more bullishly than any other precious metal.

Gold Daily Price Chart

I see the best trades this week as:

1. Long of the S&P 500 Index following a daily (New York) close above 7,025.
2. Long of any JPY currency cross except CHF/JPY.

Ready to trade our weekly Forex forecast? Check out our list of the top 10 Forex brokers in the world.

Created on February 13, 2026

• The British pound has been all over the place during the trading session on Thursday as we continue to wait for more US data.
• After all, the jobs number was hotter than anticipated during the Wednesday session, which sent the British pound and other currencies down against the US dollar.

Now on Friday, we have to keep in mind that the Consumer Price Index month-over-month figures will be watched, with Core CPI taking center stage, anticipated to be 0.3%. If it’s hotter than anticipated, that probably drives this pair down toward the 50-day EMA and the 1.30 level as well.

US Dollar Influence and Potential Scenarios

Any rally at this point in time could open up the possibility of a move to the 1.3750 level, and that could be kicked off by a weaker than anticipated CPI number. But really at this point, I think you have a situation where the British pound is still going to be a little bit more resilient than many other currencies against the greenback and any strength that the greenback has.

But I also recognize that the US dollar is the currency that you have to get correct, not necessarily the pound. After all, all of the majors are driven by what’s going on with the greenback, and it does look like the US dollar is trying to fight back. If we do break out to the upside above the 1.3750 level, then it could kick off a longer-term move to the upside, which would be a continuation of the overall pattern that we had seen for some time. Breaking down below the 1.35 level could accelerate selling, and at that point, not only would we see the British pound fall against the US dollar, but I suspect you would see many other currencies follow suit as well.

Ready to trade the Forex GBP/USD analysis and predictions? Here are the best forex trading platforms UK to choose from.

Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.

BitcoinWorld

GBP/JPY Forecast: Bulls Face Critical Resistance at 209.65 Amid Shifting Economic Tides

LONDON, March 2025 – The GBP/JPY currency pair, a key barometer of risk sentiment between the UK and Japan, approaches a decisive technical juncture. Recent price action suggests bullish momentum may encounter significant resistance near the 209.65 area, a level scrutinized by institutional traders and algorithmic systems worldwide. This analysis delves into the multifaceted charts, underlying economic drivers, and expert insights shaping the forecast for one of forex’s most volatile major crosses.

GBP/JPY Technical Landscape and the 209.65 Hurdle

Technical charts provide the primary framework for identifying the 209.65 resistance zone. This level is not arbitrary; it represents a convergence of several critical technical indicators. Firstly, it aligns with the 78.6% Fibonacci retracement level drawn from the Q4 2024 swing high to the January 2025 low. Consequently, this area often acts as a final barrier before a potential full retracement. Furthermore, the weekly chart shows this zone previously acted as support in early 2024 before breaking down, a classic example of a former support level turning into resistance.

Market analysts frequently monitor volume profile data. Notably, the Volume-Weighted Average Price (VWAP) from the last major decline anchors near this region. Additionally, the pair’s 200-day simple moving average is descending toward 209.65, creating a potent technical confluence. Therefore, a clean break above this cluster requires substantial buying pressure, potentially fueled by a fundamental catalyst.

Chart Pattern Analysis and Momentum Indicators

Currently, the daily chart exhibits a structure of higher lows since the January bottom, suggesting a short-term uptrend. However, the Relative Strength Index (RSI) on the same timeframe is approaching overbought territory above 65. Meanwhile, the Moving Average Convergence Divergence (MACD) histogram shows bullish momentum but is decelerating as price nears the key zone. This divergence often precedes consolidation or reversal. For instance, a failure to break 209.65 could see a retest of immediate support near 206.80.

Fundamental Drivers Behind the GBP/JPY Pair

Beyond the charts, the GBP/JPY forecast is intrinsically linked to divergent monetary policies and economic data. The Bank of England (BoE) and the Bank of Japan (BoJ) remain on starkly different paths. The BoE, while having paused its hiking cycle, maintains a relatively hawkish stance compared to its G10 peers due to persistent services inflation. Conversely, the BoJ continues its ultra-accommodative policy, only gradually normalizing yields. This policy divergence typically supports a stronger Pound against the Yen.

However, global risk sentiment acts as a powerful counterweight. The Japanese Yen traditionally strengthens during market stress as a safe-haven asset. Recent volatility in equity markets and geopolitical tensions have provided intermittent support for the Yen, capping the GBP/JPY’s ascent. Upcoming data releases, including UK wage growth and Japan’s Tokyo Core CPI, will be critical for near-term direction.

Expert Analysis and Institutional Positioning

Senior analysts from major investment banks highlight the significance of the 209.65 area. “Our quantitative models flag 209.50-209.80 as a high-probability resistance band,” notes a strategist from a leading European bank. “Option markets show a dense concentration of gamma strikes here, which can suppress volatility and pin price action.” Commitment of Traders (COT) reports indicate leveraged funds have built substantial net-long GBP positions. This crowded trade raises the risk of a sharp unwind if resistance holds, potentially triggering a swift corrective move.

Historical Context and Comparative Performance

Understanding the current GBP/JPY forecast requires historical perspective. The pair has traded within a broad range of 180 to 210 over the past five years. A break above 210 would open the path to levels not seen since 2015. The table below compares key technical and fundamental factors at play:

Comparatively, the GBP has outperformed the JPY against other majors like the USD and EUR in 2025, underscoring its relative strength. This cross-rate performance often influences flows in the broader G10 forex space.

Potential Market Impact and Trader Considerations

The outcome at the 209.65 resistance area carries implications beyond spot forex. A decisive breakout could:

• Trigger follow-through buying from systematic trend-following funds.
• Impact JPY crosses like AUD/JPY and CAD/JPY, which often correlate.
• Influence UK export competitiveness to Japan, a key trade partner.

Conversely, a rejection may lead to increased volatility and a flight to safety, benefiting the Yen across the board. Prudent risk management strategies for traders approaching this level include:

• Waiting for a confirmed daily close above 209.80 or below 209.00 for direction.
• Implementing tighter stop-loss orders due to expected volatility.
• Monitoring correlated assets like the FTSE 100 and Nikkei 225 for confirmation.

Conclusion

The GBP/JPY forecast hinges on the battle at the 209.65 technical resistance area. While underlying fundamentals and short-term momentum favor the bulls, the confluence of historical price action, indicator levels, and market positioning creates a formidable barrier. A clean breakout would signal a significant shift in the pair’s multi-year range and likely usher in a new phase of bullish momentum. However, failure to overcome this hurdle could validate a continuation of the broader consolidation pattern. Ultimately, the resolution at this critical level will provide a crucial signal for currency traders and global risk assets in the weeks ahead, making the GBP/JPY pair a focal point for market sentiment analysis.

FAQs

Q1: Why is the 209.65 level specifically important for GBP/JPY?
A1: The 209.65 level is important due to technical confluence. It aligns with a key Fibonacci retracement level, a former support zone, and the descending 200-day moving average, creating a strong resistance cluster that often halts or reverses price trends.

Q2: What fundamental factors could help GBP/JPY break above 209.65?
A2: A stronger-than-expected UK inflation or wage growth report that revives Bank of England hawkish expectations, combined with sustained calm in global risk markets reducing safe-haven Yen demand, could provide the fundamental thrust for a breakout.

Q3: How does Bank of Japan policy affect GBP/JPY?
A3: The Bank of Japan’s ultra-loose monetary policy, characterized by near-zero interest rates and yield curve control, weakens the Yen by making it a funding currency for carry trades. Any shift toward policy normalization could strengthen the JPY and pressure GBP/JPY lower.

Q4: What is a key risk for bullish GBP/JPY traders at this level?
A4: A key risk is a “false breakout,” where price briefly spikes above 209.65 before sharply reversing. This can trap late buyers and lead to a swift downward move, especially if driven by a sudden shift in global risk aversion.

Q5: Where is the next major support if GBP/JPY fails at 209.65?
A5: If rejected from 209.65, immediate support resides near 207.50, followed by the more significant swing low and psychological level around 205.00. A break below 205.00 would invalidate the current bullish structure on higher timeframes.

This post GBP/JPY Forecast: Bulls Face Critical Resistance at 209.65 Amid Shifting Economic Tides first appeared on BitcoinWorld.

– Written by


David Woodsmith

STORY LINK Pound to Dollar Exchange Rate Forecast: Consolidation Above 1.3600

The Pound to Dollar (GBP/USD) exchange rate found support above 1.3600 on Thursday and consolidated around 1.3650.

The dollar struggled for conviction despite better than expected data yesterday while there was a measured reaction to the latest UK GDP data with markets still expecting a March Bank of England rate cut.

GBP/USD Forecasts: Consolidation Near 1.3650

According to UoB; “Although our ‘strong support’ at 1.3600 has not been clearly breached yet, upward momentum has faded. For the time being, we expect GBP to range-trade, probably between 1.3550 and 1.3700.”

ING expects the dollar and Pound will both struggle with an end-2026 GBP/USD forecast of 1.36.

The dollar strengthened in an immediate response to the stronger than expected jobs data on Wednesday, but struggled to extend the gains.

ING commented on the dollar performance; “A set of robust US jobs numbers yesterday prompted a hawkish Fed repricing, but failed to give a significant boost to the dollar. This is – in our view – a signal of lingering strategic bearishness on the greenback, which can only be fought with more good data.”

US initial jobless claims edged lower to 227,000 in the latest week from a revised 232,000 previously, but above consensus forecasts of 222,000 while continuing claims also increased.

MUFG the recent pick-up in employment growth gives the Fed more breathing room to assess how the labour market and inflation evolve before cutting rates further this year.

It added; “Overall, the report has helped to dampen downside risks for the US dollar in the near-term but does not change our outlook for the US dollar to weaken further in 2026.”

Scotiabank commented; “If you ignore the jobs data, economic trends still raise some question marks over those rate cut assumptions—and the employment report will embolden the few voices suggesting that that the real risk for Fed policy lies towards higher rates.”

Nevertheless, it added; “We think broader risks remain tilted towards more USD weakness. If Fed monetary policy is set relatively loose in a Warsh Fed, allowing the US economy to “run hot”, the (still relatively expensive) USD in real effective terms in the medium term will weaken.”

Earlier, the UK recorded GDP growth of 0.1% for December, in line with consensus forecasts, but fourth-quarter growth of 0.1% was slightly below expectations of 0.2% amid downward revisions to earlier data.

Nick Rees, head of macro research at Monex noted the potential political implications; “we don’t think there’s much signal to be taken from this as far as projecting how the UK economy is going to do in the early part of 2026. But the headlines that we expect to see today are ‘the UK economy has grown less than expected,’ and that’s just another piece of bad news to the Prime Minister.”

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