• GBP/USD forecast remains higher as the UK budget provides near-term support.
• The US dollar remains weak amid soft economic data and increased dovish expectations from the Fed.
• Technically, the prices remain protected by the 200-MA support.

The GBP/USD forecast remains elevated as the pair rallied for its seventh straight session, trading near 1.3240 in Friday’s earlier session. The US dollar remains weak amid aggressive expectations for a Fed rate cut. The CME FedWatch tool now shows the market pricing in an 87% probability of a rate cut at the December meeting, a dramatic jump from last week’s lows of 31%. Markets now anticipate three more cuts in 2026 as well. The shift accelerated after reports that Kevin Hasset is the leading candidate to succeed Fed Chair Powell, as he’s considered rate-friendly, aligning with Trump’s preference for low rates.

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The British pound is also benefiting from domestic narratives, as markets digest Rachel Reeves’ UK Autumn Budget. Although the OBR’s forecasts leaked earlier, causing volatility, the larger-than-expected £22 billion fiscal buffer, lower gilt yields, and stable financial outlook helped sterling recover. Growth projections were revised lower, while tax burden is expected to climb toward historic highs. However, the near-term fiscal space restrained the downside for GBP. The pair reached the 4-week top near 1.3280 before consolidating gains during the thin liquidity sessions amid the Thanksgiving holidays.

On the monetary front, traders remain convinced that the Bank of England will cut rates at its next meeting, with the probability rising to 70%. Softer wage data, declining inflation pressures, and weak retail sales are pushing the central bank to ease policy. Governor Bailey noted that the disinflation trend remains in line with expectations, allowing room for more flexibility.

On the other hand, the dollar remains weak as sluggish durable goods orders and weak Chicago PMI data put further pressure on it. Although thin liquidity is preserving further movement, the downside bias in the dollar remains intact.

GBP/USD Technical Forecast: Correction Paused by 200-MA

The 4-hour chart for the GBP/USD pair shows a mild correction, finding support near the 200-period MA. The news-led spike on Wednesday formed a bullish pinbar pattern, protecting the pair from a deeper fall. The RSI is tilting downwards, suggesting consolidation around the 1.3200 area.

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The bullish scenario for the pair could propel prices higher, aiming for a 4-week high near 1.3280, ahead of 1.3300. However, a bearish reversal could push prices below 1.3200 and target 1.3160, with a potential aim of 1.3100.

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Crucially, rising expectations of a BoJ rate hike clash with bets on a December Fed rate cut, signaling a reversal of USD/JPY’s November gains.

Tokyo Inflation and Retail Sales Spotlight the BoJ

Headline inflation for Tokyo increased 2.7% year-on-year in November, easing from 2.8% in October. However, the so-called core-core inflation rate held steady at 2.8%, well above the BoJ’s 2% target.

November’s data supported economists’ predictions for a December rate hike. In the November Reuters poll, conducted between November 11 and 18, 43 of 81 economists expected the BoJ to raise interest rates by 25 basis points to 0.75% on December 19.

Meanwhile, consumers opened their purse strings in October, indicating an economic recovery in the fourth quarter. Retail sales rose by 1.7% year-on-year, up sharply from a 0.2% increase in September. Rising consumer spending may fuel demand-driven inflation, bolstering the case for tighter monetary policy, given that inflation remains well above the BoJ’s target.

Wage Growth Trends Strengthen the Policy Narrative

Friday’s data followed updates from wage negotiations, with Japanese labor unions calling for another hefty wage hike in the spring of 2026. Notably, early signs of strong wage growth would ease the BoJ’s concerns over US tariffs having a longer-term impact on the Japanese economy. Higher wages could boost private consumption, which accounts for around 55% of GDP.

For context, the Japanese economy contracted by 0.4% quarter-on-quarter in the third quarter after expanding by 0.6% the previous quarter. Private consumption increased just 0.1% in the quarter, down from 0.4% in the second quarter.

– Written by


Frank Davies

STORY LINK Pound Sterling Forecast: Budget Scrutiny Keeps GBP/USD Rangebound

The Pound to US Dollar exchange rate (GBP/USD) drifted on Thursday as investors continued to absorb the details of the UK’s autumn budget and assess its broader implications.

At the time of writing, GBP/USD was hovering near $1.3243, slightly below the session’s earlier peak of $1.3267.

The Pound (GBP) began Thursday on solid ground, still benefitting from the initial wave of optimism following the unveiling of the UK’s autumn budget.

However, that momentum quickly faded. As traders scrutinised the finer points of Chancellor Rachel Reeves’s fiscal plans, some of the early cheer gave way to caution, pushing Sterling back onto a softer footing.

Markets had initially welcomed Reeves’s move to carve out £22bn in fiscal headroom, but unease grew over the structure and timing of the tax measures. Much of the adjustment is pushed into the later years of the forecast period — close to the next general election — raising questions over whether those measures will be fully implemented.

Meanwhile, expectations for a December Bank of England (BoE) interest rate cut edged higher, with markets placing the probability closer to 90%. This further dampened appetite for the Pound.

By late morning, Sterling had slipped back from recent highs and settled into a narrow, cautious range, mirroring the more subdued market mood.

The US Dollar (USD) traded sideways on Thursday, muted by the Thanksgiving holiday closure in US markets.

The lack of liquidity offered the ‘Greenback’ a measure of insulation, softening the impact of modest risk-on sentiment and lingering expectations that the Federal Reserve could cut interest rates in December.

With trading activity significantly thinned and few fresh catalysts emerging, USD movement remained restrained throughout the session.

Pound to US Dollar Outlook: Market Mood to Drive Movement?

With limited UK and US data scheduled for Friday, the Pound to US Dollar exchange rate is likely to take its direction from broader market sentiment.

Risk appetite may prove the primary driver. A more upbeat tone would typically support the increasingly risk-sensitive Pound, allowing it to gain ground against the US Dollar. Conversely, if sentiment sours — for instance, if optimism surrounding potential progress in Ukraine–Russia peace discussions begins to fade — the safe-haven ‘Greenback’ could firm and exert downward pressure on GBP/USD.

At the same time, markets will continue digesting the UK’s autumn budget. Rising expectations of further BoE rate cuts, fiscal concerns, and ongoing doubts about the UK’s growth outlook may all temper Sterling’s ability to hold onto this week’s gains.

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TAGS: Pound Dollar Forecasts

Created on November 27, 2025

EUR/USD Analysis Summary Today

• Overall Trend: : Neutral.
• Support Levels for EUR/USD Today: 1.1565 – 1.1480 – 1.1400
• Resistance Levels for EUR/USD Today: 1.1660 – 1.1720 – 1.1800

EUR/USD Trading Signals:

• Buy EUR/USD from the support level of 1.1520 with a target of 1.1700 and a stop-loss at 1.1450.
• Sell EUR/USD from the resistance level of 1.1720 with a target of 1.1500 and a stop-loss at 1.1800.

Technical Analysis of EUR/USD Today:

Ahead of today’s US holiday, liquidity and investor appetite for new trades may weaken. This has enabled the EUR/USD pair to rebound, reaching the resistance level of 1.1615 and currently holding steady around its gains at the time of writing. On reputable trading platforms, the EUR/USD pair has been attempting to recover from the losses of the recent downward reversal, which pushed it towards the support level of 1.1491, the lowest point for the currency pair in three weeks. Today, the euro is up 0.20% against the dollar, marking its third consecutive session of gains. Over the past three sessions, the euro has risen 0.70%. Since the beginning of November, it has gained 0.49% against the dollar. And since the beginning of 2025, the euro has risen 11.96% against the US dollar.

The Upward Reversal for the Euro/Dollar is Still Early

Based on trading on the daily chart, the recent gains in the EUR/USD have not amounted to a shift in the overall trend to bullish but rather a return to the neutral zone. Confirming this is the stability of the 14-day Relative Strength Index (RSI) around a reading of 53 (above the neutral line of 50), and the MACD indicator lines are starting to turn upwards. To confirm a bullish reversal in the currency pair’s trend, a push towards the resistance levels of 1.1720 and 1.1800 sequentially is necessary.

Conversely, over the same timeframe, the EUR/USD trajectory will return to bearish if the bears succeed in pushing the pair back towards the support levels of 1.1520 and 1.1440 sequentially. It should be taken into account that with the US holiday, there are no significant European economic releases, which confirms that the Euro/Dollar price will be influenced by the reaction to the latest US economic data announcements and investor sentiment towards risk-taking.

Trading Advice:

Keep in mind that the upward reversal for the Euro/Dollar is just beginning. Wait for stronger positive stimulus factors and stronger gains to firmly confirm the upward shift.

Eurozone Bond Yields Under Pressure

Based on recent trading, Eurozone government bond yields fell slightly after the weaker-than-expected German IFO Business Climate Survey showed, maintaining concerns about the economy’s fragility. As recently announced, the IFO Business Climate Index fell to 88.1 in November, below expectations in a Wall Street Journal survey for a slight rise to 88.5. The probability of a US interest rate cut also increased after New York Fed President John Williams stated on Friday that another near-term US interest rate cut might be warranted. However, the yield declines remain limited as equity prices rise.

Finally, tradeweb data showed that the yield on Germany’s 10-year Bund fell by 1.2 basis points to 2.682%.

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But the last couple of days have been pretty brutal for the dollar against the pound, although Thursday is starting to see a little bit of pushback. That budget deal in London evidently got everybody excited, but really, at the end of the day, I don’t know that that matters in the end. I am still looking for selling opportunities.

EUR/GBP Technical Analysis

The euro has gone back and forth against the British pound during the trading session on Thursday as well and we are hanging around the 0.8750 level. We are also hanging around the 50-day EMA, but this level was previously resistance, so it should be support. We’ll have to wait and see, but if we can break above the highs of the Thursday session, I suspect that the euro bounces against the pound again and we go looking to the 0.88 level. Ultimately, I have no interest in trying to short this pair. It’s far too strong of an uptrend.

But I would have to take notice if we dropped below the 0.8725 level, as it would be a sign of trouble.

For a look at all of today’s economic events, check out our economic calendar.

slips as investors continue to digest the Chancellor’s Budget. hovers below 1.16 ahead of EZ and ECB meeting minutes.

GBP/USD Slips as Investors Continue to Digest the Chancellor’s Budget

• The Chancellor’s tax-heavy budget sees her fiscal buffer double
• BoE is still expected to cut rates next month
• GBP/USD tests 1.32 support

GBP/USD is easing lower after solid gains yesterday as investors continue to digest the UK budget.

Despite the chaotic start to the Budget, which saw the OBR mistakenly release the Budget measures and forecasts ahead of Chancellor Rachel Reeves’s speech, the markets initially liked what they saw.

The Chancellor’s tax-heavy budget meant she managed to double her fiscal headroom to £22 billion, well above the 15 billion that economists had expected. This was sufficient to please the bond market at least for now, sending yields across the curve lower.

However, this was pretty much where the good news ended. The OBR downgraded UK growth in 2026 to 1.4% down from 1.9%, and it also upwardly revised inflation. Welfare spending is soaring, living standards are expected to rise more slowly, and the tax burden will reach a record high of 38% of GDP.

While the markets liked the larger fiscal margin, there is still reason to be cautious given increased spending in the near term, whilst the tax hikes will take effect later. This means that if economic growth falls short of expectations, tax revenues could be lower and spending higher, eroding the headroom once again. With the tax hikes back-loaded, the plan’s credibility won’t be known for some time.

The Bank of England is still expected to at the December meeting, which limits sterling’s upside.

The USD is rising today but is lower for the week amid expectations that the Federal Reserve will cut interest rates at its December meeting. U.S. markets are closed for Thanksgiving today, so volumes could be thin.

GBP/USD Forecast – Technical Analysis

GBP/USD has recovered from its 1.3040 November low, rising above 1.32 and the falling trendline, which, combined with the RSI above 50, keeps buyers hopeful of further gains.

Buyers will look to extend the recovery above the 200 SMA at 1.33. A rise above 1.3350 puts the pair on a more stable footing.

On the downside, support is seen at 1.32, and below, here, 1.31 support comes into focus. A break below 1.30 could spur a deeper sell-off towards 1.27.

EUR/USD Hovers Below 1.16 Ahead of EZ Consumer Confidence and ECB Meeting Minutes

• ECB is expected to leave rates unchanged across 2026
• Expectations of a December Fed rate cut have risen to 85%
• EUR/USD needs to rise above the 50 SMA to extend its recovery

EUR/USD is holding steady, just below 116, and its highest level since mid-November, as investors look towards a busy economic calendar at the end of this month, including inflation data from Germany, the eurozone’s largest economy, on Friday.

Today, German consumer confidence showed a slight improvement heading into December as households showed more willingness to spend ahead of the holiday season. This was a bright point in data after figures earlier in the week showed that German stagnated and Ifo business sentiment deteriorated.

Looking ahead, eurozone is due later today, along with the minutes from the meeting at which the central bank left unchanged.

On the policy front, the ECB is widely expected to keep interest rates unchanged through 2026, supported by resilient economic growth and near the 2% target.

Meanwhile, the US donor is on track for its worst weekly performance in four months amid thin volumes due to the US Thanksgiving holiday.

The has come under pressure amid rising expectations that the Federal Reserve will in the December meeting. Softer-than-expected U.S. economic data and dovish comments from several Fed officials now have the market pricing in an 85% probability of a rate cut next month, up from 30% last week.

The ECB-Fed rate path diversion could support EUR/USD higher.

EUR/USD Forecast – Technical Analysis

After falling away from 1.1920, the 2025 high, EUR/USD is trading in a holding pattern supported on the downside by the 1,145—1.15 support zone, while the 50 SMA caps gains. The RSI is neutral.

Buyers will need to rise above he 50 SMA at 1.1630 to extend gains towards 1.17. Above here, 1.1780 comes into focus.

Failure to rise above the 50 SMA could see the price retest the 1.1450-1.15 support zone. A break below here exposes the 200 SMA at 1.1420. Should sellers take out support at 1.14, the July low, this could spur a much deeper decline towards 1.12.

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