The British pound rose against the Japanese yen again on Monday, as we continue to see the ‘carry trade’ play out.

GBP/JPY

The British pound has risen during the early part of the trading session on Monday as we are starting to see the Japanese yen soften a bit. That makes a certain amount of sense, considering the interest rate differential between the two currencies and, of course, the fact that the Bank of Japan is essentially stuck while the Bank of England is still offering much higher rates and likely to be a little bit more stubborn.

You can see that we have seen such a nice, strong uptrend since 2020, and nothing has changed here. I think we still have a buy on the dips scenario as we have a longer-term destruction of the Japanese yen ahead of us. I’m playing all the yen-related pairs with small positions. I’m not trying to jump in with both feet because you get paid at the end of every day, and you can take advantage of the overall interest rate differential, gradually padding your account. It’s the simple carry trade.

The Carry Trade Dynamics and Key Yen Levels

The 215 yen level is an area that has been important in the past, so it could offer a bit of support if we are driven down to that area. It’s worth noting that the 50-day EMA is in that same region as well, offering a potential support level for technical traders, also.

To the upside, the next large round psychologically significant figure is the 220 yen level. Overall, this is a market that I think, given enough time, probably has to determine whether or not we are still going to short the yen. And I think looking around the markets, it will be a pretty obvious scenario one way or the other because, quite frankly, the yen-related pairs all tend to move most of the time in the same direction. So, one way traders can take advantage of that is to look around the world and sort out which ones are doing what and whether or not we continue to see that same pattern play out.

Begin trading our daily forecasts and analysis. Here is a list of Forex brokers in Japan to work with.

Christopher Lewis is a technical analyst and market commentator at DailyForex with more than two decades of trading experience in Forex and other leveraged markets. Based in Columbus, Ohio, he specializes in chart-based analysis of major currency pairs, stock indices, commodities, and energy markets, focusing on clear support and resistance levels, trend structure, and risk management. Christopher produces daily written and video analysis for traders who rely on technical setups to navigate volatile market conditions

As seen on: Pairs Of Aces Podcast,The Trader Guy, FXEmpire

Platinum price kept providing weak sideways trading by its stability near $1605.00 level, affected by the contradiction of the main indicators, obstructing the attempts of activating the suggested negative trend.

The price needs a new negative momentum, which allow it to reach $1510.00 support, while breaking it will confirm its move to a new negative station, to target $1440.00 level, reaching $1310.00, while holding above this support might provide a chance for recording some gains by target $1690.00 level, reaching the barrier near $1785.00

The expected trading range for today is between $1555.00 and $1680.00

Trend forecast: Fluctuating 

– Written by


David Woodsmith

STORY LINK GBP/USD Forecast: Safe-Haven Demand Supports Dollar amid US-Iran Conflict

The Pound to US Dollar (GBP/USD) exchange rate slipped at the beginning of Monday’s session as renewed fighting in the Middle East encouraged demand for the safe-haven US Dollar (USD), although Sterling later recovered part of its initial decline.

At the time of writing, GBP/USD was trading at $1.3388 after rebounding from an overnight low of $1.3369.

The US Dollar edged higher at the start of the week after fresh hostilities erupted in the Middle East.

While the fighting eased temporarily on Friday, tensions reignited over the weekend when Iran attacked a container ship in the Strait of Hormuz. The US answered with strikes on Iranian targets, triggering retaliatory attacks by Tehran against US-backed Gulf states.

Growing concern that the conflict could intensify has weakened expectations that the two sides will be able to reach a durable peace agreement.

The cautious tone at the start of Monday’s session provided support for the safe-haven US Dollar. However, the ‘Greenback’ was unable to maintain its early advance as broader risk appetite proved more resilient than initially expected.

The Pound (GBP) lacked clear momentum on Monday as a quiet UK economic calendar left Sterling without a strong catalyst.

Even so, the currency avoided heavier losses against the US Dollar, with confidence in the UK’s political outlook continuing to provide support. Investors remained optimistic that the lengthy period of political uncertainty that has pressured the Pound was starting to ease.

As a result, GBP recovered a portion of its earlier losses against USD.

Near-Term GBP/USD Forecast: Will US Inflation Weigh on the US Dollar?

Looking ahead, the US Dollar could come under pressure on Tuesday when the latest US consumer price index is released.

Economists expect inflation to have eased from 4.2% in May to 3.8% in June. A reading in line with forecasts may reduce support for USD.

That said, developments in the Middle East are also expected to influence price action. If geopolitical tensions remain elevated, the safe-haven appeal of the ‘Greenback’ could strengthen.

Meanwhile, GBP investors will be watching a speech from Bank of England (BoE) Governor Andrew Bailey.

Bailey has continued to strike a cautious tone in recent weeks, arguing that policymakers should assess inflation carefully before adjusting interest rates. However, with renewed US-Iran tensions driving energy prices higher, Sterling could find support if his comments reinforce expectations that UK monetary policy will remain restrictive.

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TAGS: Pound Dollar Forecasts

2026.07.13 2026.07.13
Yen Finds Support as Japan Signals Pension Pivot. Forecast as of 13.07.2026

Dmitri Demidenkohttps://www.litefinance.org/blog/authors/dmitri-demidenko/

When the old playbook stops working, it’s time to write a new one. The Japanese government appears to have concluded that the most effective way to support the yen is to reignite investors’ fears of capital repatriation. Let’s examine the latest developments and develop a trading strategy for the USD/JPY pair.

Major Takeaways

• The Japanese government has spooked investors with capital repatriation.
• The BoJ’s rate hike fails to help the yen.
• The unwinding of the carry trade will affect the yen.
• Short positions on the USD/JPY pair can be opened if the price declines below 161.8 and 161.5.

Weekly Fundamental Forecast for Yen

Japan sought to demonstrate its resolve by spending ¥11.7 trillion on currency interventions in April and May, while repeatedly warning speculators against pushing the yen lower. Yet the market refused to back down. The USD/JPY pair climbed to a 40-year high, prompting policymakers to recognize that displays of force alone were not enough. A more sophisticated strategy was needed—and they appear to have found one.

No, this is not about the Bank of Japan adopting a more hawkish tone. Nor is it about Cabinet officials emphasizing that they have no intention of interfering with the BoJ’s monetary policy decisions. At first glance, both developments seem supportive of the yen. After all, speculation that Sanae Takaichi could pressure the central bank to keep interest rates low was one of the factors fueling the USD/JPY rally. If the BoJ’s independence is no longer in doubt, that should, in theory, provide support for the Japanese currency.

The reality, however, is more complicated. Over the past two years, the Bank of Japan has raised interest rates five times, a move that should have narrowed the policy gap with the Fed and pushed USD/JPY quotes lower. Instead, the pair continued to surge even after the BoJ abandoned negative interest rates.

Japanese Government Bond Yields

Source: Bloomberg.

The government has now adopted a far stronger strategy. It has begun raising the prospect of what global markets have long feared: large-scale capital repatriation to Japan. Finance Minister Satsuki Katayama has said the government will encourage Japanese pension funds, including the Government Pension Investment Fund (GPIF), to increase their allocations to domestic assets. The GPIF alone manages roughly $1.8 trillion, while Japanese investors hold an estimated $5 trillion in overseas assets. Should even a fraction of that capital begin flowing back from the US and Europe to Japan, the yen would receive a powerful boost against the world’s major currencies.

FX Volatility Index

Source: Bloomberg.

Another factor weighing on USD/JPY is the potential unwinding of carry trades. According to Goldman Sachs, conditions for carry strategies are the most favorable in two decades, largely because market volatility has fallen to its lowest level since 2022. However, growing uncertainty surrounding the Fed’s policy stance under Kevin Warsh, coupled with renewed tensions in the Middle East, is driving volatility higher.

As volatility rises, the appeal of carry trades diminishes. Investors are more likely to unwind existing positions, creating demand for traditional funding currencies such as the euro, the Swiss franc, and the Japanese yen.

By raising the prospect of capital repatriation, the Japanese government has added another source of support for USD/JPY bears, alongside the unwinding of carry trades.

Weekly USDJPY Trading Plan

Whether the pair will be able to develop a correction will depend on US inflation data. Weak data will likely put pressure on the US dollar, allowing investors to sell the USD/JPY pair if the price slides below the 161.8 and 161.5 support levels.

This forecast is based on the analysis of fundamental factors, including official statements from financial institutions and regulators, various geopolitical and economic developments, and statistical data. Historical market data are also considered.

Price chart of USDJPY in real time mode

The euro is forecast to come under renewed pressure against the US dollar this month as rising energy prices reinforce expectations that the Federal Reserve may need to keep monetary policy tighter for longer, according to ING.

ING believes the deteriorating situation in the Gulf is proving more supportive for the US dollar than the euro, with higher oil and natural gas prices creating a particularly difficult backdrop for energy-importing Europe while simultaneously keeping US inflation concerns alive.

Why Higher Energy Prices Favour the US Dollar

According to ING, two themes are dominating currency markets: rising energy prices and strong demand for higher-yielding currencies.

The bank argues that renewed disruption risks in the Gulf are strengthening the US dollar because higher energy costs could keep Federal Reserve tightening expectations alive.

At the same time, Europe remains more vulnerable to higher energy prices, with natural gas costs beginning to climb again at a time when inventories remain relatively low.

That combination leaves the euro at a disadvantage against the dollar in the near term.

Why the Euro Is Losing Momentum

ING says last week’s corrective rebound in EUR/USD has already started to lose momentum.

The bank notes that higher gas prices have capped the euro’s recovery, while a relatively quiet Eurozone economic calendar means energy markets are likely to have a greater influence on short-term price action than comments from European Central Bank officials.

EUR/USD was trading close to 1.1414 on Monday afternoon after remaining largely unchanged over the past week, having already fallen more than 2% during June.

The Federal Reserve Holds the Key

ING believes upcoming US inflation data and testimony from Federal Reserve Chair Kevin Warsh will be the biggest catalysts for EUR/USD this week.

Although headline inflation may soften, the bank expects rising energy prices and resilient core inflation to keep the prospect of another Fed rate increase firmly on the table.

If markets continue to believe US interest rates could remain higher for longer, the dollar is likely to stay well supported against lower-yielding currencies such as the euro.

What’s the Forecast for the Euro versus the US Dollar?

ING expects EUR/USD to drift lower in the near term outlook.

The bank believes the exchange rate can easily fall towards 1.1360 and says a test of the 1.1300-1.1325 area is possible later this month if energy prices continue rising and markets maintain expectations for tighter US monetary policy.

Even so, ING does not expect that area to give way easily, suggesting it is likely to provide an important floor for EUR/USD during the summer unless the macroeconomic backdrop deteriorates further.

EUR/USD Forecast FAQ

Why does ING expect EUR/USD to weaken?

ING believes higher oil and natural gas prices favour the US dollar by keeping expectations for Federal Reserve tightening alive while simultaneously weighing on the euro through higher European energy costs.

What is ING’s near-term EUR/USD target?

ING believes EUR/USD can fall towards 1.1360 initially, with scope to test the 1.1300-1.1325 area later this month.

Why are natural gas prices important for the euro?

Europe remains heavily exposed to imported energy. Rising gas prices increase inflation risks and can weaken the region’s growth outlook, making the euro less attractive.

What could stop EUR/USD falling?

A decline in energy prices or signs that the Federal Reserve no longer needs to consider another interest rate increase would reduce support for the US dollar and could help stabilise EUR/USD.

Platinum price provided weak trading recently by its fluctuation near $1595.00 level, surrendering to the bearish trend, which depends on the continuation of forming a main resistance at $1810.00 level, besides the stability of the extra barrier near $1690.00 level.

The attempt to provide negative momentum by the main indicators might increase the negative pressure in the current trading, which makes us keep the negative scenario, which might target $1555.00 level, to press on the support at $1510.00, to find an exit for resuming the decline in the upcoming trading.

The expected trading range for today is between $1555.00 and $1640.00 

Trend forecast: Bearish

The EURJPY pair confirmed the dominance of the bearish trend by providing repeated closes below 185.85 level, forming strong decline in Friday, approaching the initial target at 184.20, which represents an extra support against the last bullish rally.

The contradiction of the main indicators might force the price to provide weak sideways fluctuation, confining the trading between the current support and 184.90 level, which represents an extra barrier against the bearish trading, while breaking the support and holding below it will open the way for targeting more negative stations, which might begin at 183.70 and 183.25.

The expected trading range for today is between 184.20 and 185.00

Trend forecast: Sideways

The Euro to Dollar (EUR/USD) exchange rate is trading around 1.1415 after losing more than 2% during June and struggling to build a sustained recovery in July.

Goldman Sachs has lowered its six- and 12-month EUR/USD forecasts to 1.12, compared with previous targets of 1.18 and 1.20 respectively.

The bank expects a divided US Dollar environment, with the Greenback likely to strengthen further against lower-yielding currencies such as the Euro while losing ground against selected higher-carry currencies.

According to Goldman Sachs, the forecast revisions reflect an “ongoing divided Dollar environment” rather than an expectation of uniform Dollar gains across the foreign exchange market.

The bank expects US interest rates to remain at 3.50-3.75% for the rest of 2026, while resilient economic growth and persistent inflation should keep US yields relatively attractive.

Goldman Sachs forecasts US growth of 2.0% in 2026 and expects core PCE inflation to end the year at 3.0%, reducing the case for rapid Federal Reserve easing.

These conditions should continue to favour the Dollar against the Euro, with Goldman Sachs now expecting EUR/USD to fall towards 1.12 over both the six- and 12-month horizons.

Fundamental Analysis & Market Sentiment

I wrote on 5th July that the best trades for the week would be:

1. Long of the USD/JPY currency pair. This produced a gain of 0.21% over the week.

2. Short of the EUR/USD currency pair. This produced a gain of 0.16% over the week.

The total gain of 0.37% averages to 0.19% per asset.

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

1. FOMC Meeting Minutes – showed members were tilting just a fraction hawkish and were split on the course of interest rates.

2. US ISM Services PMI – just a fraction lower than expected.

3. Reserve Bank of New Zealand policy meeting – hiked Official Cash Rate by 0.25% as expected, and signaled further hikes are likely, which was a hawkish tilt. This helped make the NZD the major gainer within last week’s Forex market.

4. Canadian Unemployment Rate & Employment Change – the rate fell unexpectedly from 6.6% to 6.5%.

The big story last week was the Federal Reserve’s minutes of its most recent policy meeting, which showed that members were a little more hawkish on rates than had been widely thought.

Another major item was the more hawkish RBNZ, which sent the Kiwi higher. It was a very light week in terms of news. The major story away from economic data releases is the deterioration of the former ceasefire between the USA and Iran into daily exchanges of fire centred around the Strait of Hormuz. The Strait is effectively closed to shipping, and Iran has launched attacks against US allies Bahrain, Kuwait, Qatar, Jordan, Iraq. This started to affect the crude oil market towards the end of last week as the security situation deteriorated, and unless there is some major announcement elevating the ceasefire today, we can expect the price of crude oil to rise when markets open this week.

It is noteworthy that the USA/Iran situation does not in itself seem to be harming the performance of stock markets much.

The Week Ahead: 13th – 17th July

Next week looks relatively light but includes some significant data items. The coming week’s most important data points, in order of likely importance, are:

1. US CPI (inflation)

2. US PPI

3. Fed Chair Warsh Testifies to Congress

4. Bank of Canada Policy Meeting

5. UK GDP

It is a public holiday in France on Tuesday.

Monthly Forecast July 2026

Currency Price Changes and Interest Rates

For the month of July, I forecasted that the EUR/USD currency pair will decline in value, and the USD/JPY currency pair will rise in value. The performance so far is:

Weekly Forecast 12th July 2026

Last week, I made no weekly forecast.

This week, I again make no forecast, as there were no exceptional price movements last week.

Volatility increased last week, with 19% of the notable currency pairs and crosses moving by more than 1% in value. Next week’s volatility is likely to remain at a similar level, although it might be higher in US Dollar currency pairs.

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

Technical Analysis

Key Support/Resistance Levels for Popular Pairs

Key Support and Resistance Levels

US Dollar Index

The US Dollar printed an inside doji candlestick last week, signifying indecision, which closed higher and is positioned as a bullish candlestick threatening another breakout to a new 13-month high above the key long-term resistance level at 101.39.

A valid long-term bullish trend has clearly been established, with the price above its levels of both 3 months ago and 6 months ago, but its failure to break above resistance so far calls it into some doubt.

I am neutral on the US Dollar over the coming week – I will wait until we get a solid breakout above the key resistance level 101.39. The price is clearly undecided about that.

I could see this bullish breakout happening over the coming week, unlike last week – perhaps triggered by a higher-than-expected US CPI (inflation) print over the coming week.

US Dollar Index Weekly Price Chart

USD/JPY

The USD/JPY currency pair was unable to reach a new 39-year high price last week, despite getting very close to it, printing an inside near-pin bar / hammer with bearish implications. There is no confirmation that the Japanese Financial establishment intervened to prop up the Yen, but this might have happened quietly.

The implications of this recent higher-volatility price action are bearish. However, the price is not far from the record high and there is clearly a very long-term bullish trend in force, with the price action supported by a rising trend line for over one year now.

There are fundamental reasons why the US Dollar is quite likely to remain strong, but the currency that many analysts see as having a long way to weaken further over the coming years is the Japanese Yen, due to the massive levels of national debt there.

I think the near future here will mostly depend on the US Dollar: if the DXY can break above the resistance at 101.39 then this currency pair should continue to reach new high prices.

I am long of this currency pair, as a trend traders.

I am very comfortable being long of this currency pair – as a longer-term trend trade, this pair still looks good. Look at that supportive ascending trend line shown in the price chart below which stretches all the way back to April 2025.

USD/JPY Weekly Price Chart

EUR/USD

The EUR/USD currency pair was looking likely to make a serious bearish breakdown and did briefly reach new long-term low prices, drawing in many trend traders like me on the short side. However, it made quite a natural recovery last week, generating a relatively fat bullish candlestick. The Euro is certainly naturally less bearish than the Japanese Yen is.

I remain short here, but I am not very hopeful about this trade. However, there is a valid long-term bearish trend, and this pair does like to pull back so I will stick with it. It is easy to be put off by the usual deep retracements in this currency pair. The Euro is not a particularly strong currency, so I still see it as likely to be weaker than the US Dollar over the next few weeks.

EUR/USD Weekly Price Chart

S&P 500 Index

The S&P 500 Index printed a strong bullish candlestick last week which closed at the highest ever closing price very near the high of its weekly range. The candlestick has a meaningful lower wick. These are all bullish signs, as is the fact that the S&P 500 Index is looking technically more bullish than the NASDAQ 100 Index, even though that latter technology index just made a bullish breakout from a narrowing triangle chart pattern.

This suggests that markets are turning their focus away from AI, which is finally starting to underperform the wider market. Given how overbought the AI sector is, this could persist.

Before going long here, I prefer to wait for a record daily closing price at or above 7,623. I am very optimistic about being long of a major US stock market index when it breaks to a new record high – the historical data precedents on this are very encouraging. Ignore the people worrying about a crash – that could always happen but don’t miss out on the chance of another leg higher!

US stock in general is “overbought”, but that does not mean they won’t continue to trade higher.

S&P 500 Index Daily Price Chart

Gold

Gold had a bearish candlestick last week, but the large lower week means it was only bearish in name and doesn’t really give us much bearish information or feeling. The descending trend line is still suppressing the price, but there are initial signs that things might be about to change.

If you are thinking of buying, it will likely be wiser once the trend line I mentioned is decisively broken. Next week, this trend line will be located at about $4,200.

It could be that Gold and Silver have finally found bottoms that are going to hold, at least for a few weeks. It has now been almost two weeks since the long-term low below $4,000 was tested. However, it will be best to wait for a decisive break of that trend line before entering a new long position in Gold.

Gold Weekly Price Chart

WTI Oil Futures

WTI Crude Oil finally had an up week for the first time in quite a while, after reaching key support at $67.11 the week before last which is classic “stairstep” support as it previously acted as resistance. This was the area the price was trading in before the USA / Iran war started on 28th February earlier this year.

The ceasefire between the USA and Iran continued to deteriorate substantially last week, and this was the proximate cause of the rise over the week, although we can see from the significant upper wick that crude oil gave up much of its gain earlier in the week as the USA and Iran dialed down their military confrontation in the Strait of Hormuz and President Trump did not follow through with his comments about the ceasefire being “over”.

However, after this incident, the situation in the Strait has deteriorated again, with a stronger exchange of fire this weekend and Iranian attacks on several Gulf nations. The Strait is apparently effectively closed according to publicly available information, and if this does not change quickly, the price of crude oil is going to trade higher when markets open this week. President Trump may let it rise a little, but he will be placed in a major dilemma if the Iranians can cause enough impact over Hormuz to threaten to reignite crude oil price shock inflationary fears over the global economy.

I am not sure how much further it will go, but we may have a nice short-term buy here off $67.11. Day traders might choose to get involved on the long side during the US session if the price is rising.

WTI Crude Oil Spot Weekly Price Chart

Bottom Line

I see the best trades this week as:

1. Long of the USD/JPY currency pair.

2. Short of the EUR/USD currency pair.