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The GBPJPY pair surrendered this morning trading due to the stability of the resistance at 200.40, to form a strong obstacle against the attempt to return to the bullish channel’s levels, forming strong correctional decline and its stability near 198.77.

Stochastic attempt to exit the oversold level makes us expect renewing the correctional attempts, note that breaking 198.25 level will force it to suffer extra losses that might extend to 61.8%Fibonacci correction level at 197.55, while the stability above 198.25 will increase the chances for renewing the bullish attempts in the near period.

The expected trading range for today is between 198.25 and 199.60

Trend forecast: Bearish

The EURJPY pair reacted with stochastic exit from the overbought level this morning, which forces it to delay the bullish attack to reach below 172.00, announcing its surrender to the bearish correctional scenario by its stability near 171.38.

The continuation of the negative pressure might force the price to suffer extra losses by reaching 170.90 followed by the extra support at 170.45, while the price return to settle above 172.00 will provide chances for renewing the bullish attempts and reaching 172.60.

The expected trading range for today is between 170.45 and 172.60

Trend forecast: Bearish temporarily

Created on August 14, 2025

• The British pound has rallied a bit against the U S dollar during the trading session here on Wednesday, as we have broken towards the 1.36 level, the 1.36 level is a large round psychologically significant figure and an area that has been important a couple of times.
• If we can break above the 1.36 level, then it’s likely that the British pound goes looking to the 1.38 handle.
• Short-term pullbacks here are possible with the 50 day EMA offering a bit of support near the 1.3433 level.

Anything below could open up a drop down to the 200 day EMA, but all things being equal, this is a situation where I think a lot of people are going to be looking at this as a harbinger of U S dollar weakness or strength. This is one of the favorite charts for me daily at the moment.

Pound Has Outperformed Previously

After all, even when the U S dollar was so strong during 2024, the British pound fared better than most of its competitors. Just as we’ve seen the same thing on the way back up. If this pair starts to fall apart, I still might not short it, but I probably will short other currencies like the Canadian dollar, the Euro, the Japanese yen, etc.

All things being equal though, this is a market that looks like it is trying to get to the upside and eventually break towards 1.38, a trade that I’m very comfortable with, but admittedly have to recognize that this V pattern is pretty aggressive. So, whether or not we can keep up the momentum is a completely different question, but either way, I’m at the very least not shorting this pair anytime soon. I look at it more of an indicator of the US dollar than anything else.

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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.

Created on August 13, 2025

• The British Pound has shot higher against the US dollar, and that’s not a huge surprise to me after the reaction to the CPI numbers were decidedly negative for the US dollar.
• And when you keep in mind that the British Pound has been one of the better currencies against the dollar.
• So, all of this makes a lot of sense. And I think we are going to revisit the 1.3550 level, possibly even break above 1.36 if the momentum against the US dollar continues.

We’ll just have to wait and see. Either way, I think this is a scenario where you certainly don’t want to short this pair, but I watched this pair quite closely. And the main reason is that if the British Pound struggles against the US dollar, then it’s a sign that the US dollar is strengthening and the US dollar will absolutely pummel most other currencies that aren’t as vigorous as Sterling has been.

Others Might Be Traded on a Drop

Think of the Canadian dollar or perhaps the Japanese yen. So even if you’re not trading in this market, it is a good indicator of US dollar strength as of late. When we sold off back at the end of last year and everybody was buying US dollars, the British pound, even though it did fall, it fell a lot less rapidly than many of its counterparts.

And as we’ve seen the US dollar sell off, the British pound was much quicker to rally than many of its counterparts. So, all things being equal, this is a market that’s worth paying attention to even if you don’t trade it. I continue to watch the Pound against many other currencies as well, as its strength is fairly widely distributed.

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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.

• EUR/USD trades above 1.1700 in the European session on Wednesday.
• The US Dollar struggles to find demand after July inflation data.
• The pair’s near-term technical outlook points to a bullish bias.

Following Monday’s decline, EUR/USD reversed its direction and registered strong gains on Tuesday. The pair preserves its bullish momentum and trades in positive territory above 1.1700 in the European session on Wednesday.

The US Dollar (USD) came under renewed selling pressure in the American session on Tuesday as July inflation data fed into expectations of a dovish Federal Reserve (Fed) policy outlook in the last quarter of the year.

The US Bureau of Labor Statistics announced that the annual inflation, as measured by the change in the Consumer Price Index (CPI), held steady at 2.7% in July. This reading came in below analysts’ estimate of 2.8%. On a monthly basis, the CPI and the core CPI increased by 0.2% and 0.3%, respectively, to match market expectations.

According to the CME FedWatch Tool, the probability of the Fed lowering the policy rate three times this year rose to 53% from about 43% before the inflation report was released.

Meanwhile, Wall Street’s main indexed registered strong gains after the opening bell on Tuesday, putting additional weight on the USD’s shoulder.

Early Wednesday, US stock index futures rise about 0.2% on the day. In the absence of high-impact data releases, the risk perception could impact EUR/USD’s action. The pair could continue to push higher in case risk flows continue to dominate the action in financial markets.

EUR/USD Technical Analysis

The Relative Strength Index (RSI) indicator on the 4-hour chart rose above 60 and EUR/USD cleared the 200-period Simple Moving Average (SMA), highlighting a buildup of bullish momentum.

On the upside, 1.1760 (static level) aligns as the next resistance level before 1.1800 (static level, round level) and 1.1830 (July 1 high). Looking south, support levels could be spotted at 1.1660-1.1650 (200-period SMA, Fibonacci 23.6% retracement of the latest uptrend), 1.1620 (100-period SMA, 50-period SMA) and 1.1540 (Fibonacci 38.2% retracement).

The GBPJPY pair succeeded in settling above 66%Fibonacci correction level at 198.85, reinforcing the continuation of the positivity, to face 200.10 resistance, achieving the extra waited target in the previous report.

Note that monitoring the price behavior as there is a chance for forming mixed trading until breaching the current resistance, to settle within the bullish channel’s levels again, increasing the chances for achieving extra gains that might begin at 200.85 reaching 78.2%Fibonacci correction level at 202.00.

The expected trading range for today is between 199.25 and 200.40

Trend forecast: Sideways

The GBPJPY pair succeeded in settling above 66%Fibonacci correction level at 198.85, reinforcing the continuation of the positivity, to face 200.10 resistance, achieving the extra waited target in the previous report.

Note that monitoring the price behavior as there is a chance for forming mixed trading until breaching the current resistance, to settle within the bullish channel’s levels again, increasing the chances for achieving extra gains that might begin at 200.85 reaching 78.2%Fibonacci correction level at 202.00.

The expected trading range for today is between 199.25 and 200.40

Trend forecast: Sideways

• USD/JPY stalls below 148.50 as mixed U.S. CPI results keep price capped at the H4 Fair Value Gap.
• Fed rate cut bets at 94.2% maintain short-term support, but upside is limited without a decisive breakout.
• Technical bias split – breakout above 148.50 eyes 149.50, while rejection risks a slide toward 146.60.

Previous forecast recap (webinar)

In our last webinar, we highlighted 148.00–148.50 as the key rejection zone unless U.S. CPI delivered a strong dovish surprise. We noted that a failure at this level could open the path toward 146.50, targeting previous demand.

CPI results: Mixed message

On August 12, CPI data brought a split outcome:

• Headline CPI YoY: 2.7% (vs 2.8% forecast) – Dovish.
• Core CPI YoY: 3.1% (vs 3.0% forecast) – Hawkish.

The soft headline reinforced easing expectations, but the hotter core print kept the Fed from being fully locked into aggressive cuts, creating two-way volatility in USD/JPY.

Post-release price action

The pair rejected the 148.50 ceiling, confirming our pre-CPI bias. Price is now consolidating in the 148.50–147.50 range, awaiting a breakout trigger from further U.S. data or Fed commentary.

Rate cut probability – September FOMC

According to the CME FedWatch Tool following the CPI release:

• 94.2% probability of a 25 bps rate cut (target range 4.00–4.25%).
• 5.8% probability of no change.
• 0% probability of a hike.

This strong consensus for easing keeps USD/JPY supported in the short term, but with the risk of dollar weakness if future data aligns with the softer headline CPI trend.

Technical outlook – USD/JPY post-CPI structure

Following the CPI release, USD/JPY reacted with a sharp rejection from the H4 Fair Value Gap, aligning with the supply zone we outlined in the pre-event forecast.

• Pre-CPI Build-Up: The pair climbed steadily into the bearish fair value gap, showing controlled bullish momentum ahead of the release.
• Immediate Reaction: CPI data triggered a swift bearish impulse, driving price back lower from the H4 Fair Value Gap. This confirmed and aligned with the dovish or soft print of the CPI release, signaling, weakness on the dollar.
• Post-CPI Consolidation: Price is now ranging just below the FVG ceiling, holding around 148.00–148.50, signaling indecision as the market weighs mixed inflation signals against high Fed cut expectations.

Bullish scenario – Range + FVG breakout

Following the CPI release, USD/JPY has been consolidating within the H4 Fair Value Gap after an initial downside reaction. The current structure suggests the potential for buyers to reassert control if price action follows through on a clean breakout.

Key bullish triggers:

1. H4 FVG Reclaim – A decisive 4H close above 148.20 would confirm that buyers have gained traction, signaling renewed bullish intent.
2. Pullback Retest Hold – After breaking above the FVG, a retest of 148.00-148.20 holding as new support would strengthen upside momentum.
3. Continuation Pattern – Sustained higher lows following the retest would pave the way for a measured move higher.

Targets:

• 1st Target: 148.80–149.00 – Psychological and short-term liquidity zone.
• 2nd Target: 149.50 – Next liquidity pool before 150.00 round number.

Invalidation:

• A rejection back below 148.50 and a close under 147.50 would weaken the bullish setup and put the bearish scenario back in play.

This bullish pathway aligns with the macro backdrop of a 94.2% Fed rate cut probability, which generally supports carry trade flows into USD/JPY. If risk sentiment remains steady and Japanese yields stay suppressed, buyers could leverage the current consolidation as a launchpad for a push toward the 149 handle.

Bearish scenario – FVG resistance holds

Price remains capped within the H4 Fair Value Gap, showing signs of weakness. Sellers could regain control if price action respects this zone as a ceiling.

Key bearish triggers:

1. Rejection at FVG – A failure to break and hold above 148.50, with strong rejection wicks or bearish engulfing candles, signals low traction in favor of the dollar.
2. Break Below 147.50 – Losing this intraday support would confirm bearish momentum and invite further downside pressure.
3. Continuation After Pullback – A retest of the bottom FVG (148.00) turning into resistance would reinforce short setups.

Targets:

• 1st Target: 147.00 – Psych Level
• 2nd Target: 146.60 – Deeper liquidity pool from previous accumulation.

Invalidation:

• A clean 4H close above 148.20-148.50 would nullify this bearish bias and open the door for bullish continuation toward 149.00.

The rejection from the H4 Fair Value Gap aligns with the idea of distribution at premium pricing, particularly as the market digests mixed CPI signals. While a 94.2% Fed cut probability leans dovish for the USD in theory, if the yen strengthens on any BoJ commentary or risk-off sentiment, sellers could drive the pair into a deeper retracement phase.

• EUR/USD rallies toward 1.1700 as softer U.S. CPI data boosts Fed rate-cut probability to 94.2%, pressuring the dollar.
• Technical structure remains bullish, with price holding above the 1.16556–1.16645 H4 Fair Value Gap and eyeing 1.175–1.18 targets.
• Bearish risks emerge if 1.1655 support fails, opening the path toward 1.1600 and potentially 1.1550.

The euro is building on its bullish footing against the U.S. dollar after a mixed but dovish-leaning U.S. CPI report reinforced expectations of a Federal Reserve rate cut in September. EUR/USD is now trading around.

While core CPI YoY came in slightly above forecast at 3.1%, the headline CPI YoY remained unchanged at 2.7%, missing estimates for 2.8%. Markets interpreted this as a sign that inflationary pressures are not re-accelerating, allowing the Fed more room to ease policy without reigniting price growth.

The euro, supported by steady Eurozone data and a technical structure that has respected key retracement zones, has benefited directly from the resulting dollar weakness.

US inflation results and EUR/USD reaction

Traders largely dismissed the slight core CPI beat, focusing instead on the fact that headline CPI YoY remains anchored at 2.7%. This reinforced a dovish Fed bias and triggered a USD sell-off, giving EUR/USD the momentum to push toward the top of its range.

Rate cut probability surges to 94.2%

The CME FedWatch tool now shows a 94.2% probability of a 25 bps cut at the September 17 FOMC meeting—up sharply from 84.5% in our August 12 forecast.

This jump reflects market conviction that the Fed will take action, as YoY inflation has stabilized and risks of re-acceleration appear limited. The pricing shift further undercuts

How the bullish bias materialized

In the previous webinar, our bullish projection outlined:

1. EUR/USD holding the 0.705–0.786 retracement zone as a demand base.
2. Another round of price run towards the lows of the discount/retracement level, gearing towards upside ahead of CPI release.
3. Liquidity targets above 1.1700 as the next milestone.

Following the inflation release, the market followed this blueprint precisely—rejecting deeper downside, reclaiming the upper range, and moving toward breakout territory.

Technical outlook: EUR/USD retains bullish control above four-hour fair value gap

The recent EUR/USD price action confirms a bullish market structure, with price breaking higher from the earlier consolidation zone and now leaving the H4 Fair Value Gap (FVG) between 1.16556 – 1.16645 untouched as potential fresh intraday support for pullback opportunity.

The rally from the August 12 low was impulsive, sweeping prior liquidity and leaving behind a clean demand imbalance that aligns with our prior bullish roadmap. Current price action shows a modest consolidation just below 1.1700, a key breakout level.

Bullish scenario: Breakout or retest continuation

EUR/USD is currently consolidating just under the 1.1700 breakout level after a sharp rally from the August 12 lows. Price is holding above the H4 Fair Value Gap (1.16556 – 1.16645), which is acting as a key intraday support zone.

From here, there are two bullish pathways:

Immediate breakout:

• A clean break above 1.1700 could open a fast move toward 1.175, with extended upside targeting the liquidity pool at 1.18.
• Momentum traders may look for a continuation entry on a confirmed candle close above 1.1700.

FVG retest before breakout:

• Price may retrace into the 1.16556 – 1.16645 H4 FVG for a deeper liquidity grab before resuming higher.
• This pullback would offer a high-probability long entry if bullish order flow is reasserted from the gap zone.
• Following the retest, the same upside targets remain: 1.175 (first target) and 1.18 (secondary target).

Bullish invalidations:

• A sustained break below 1.1655 would weaken the bullish structure and shift focus back to 1.1556 demand.

Bearish scenario: Rejection and deeper pullback

EUR/USD is showing signs of stalling just below the 1.1700 breakout level, with the potential for a rejection that sends price back toward the H4 Fair Value Gap (1.16556 – 1.16645).

If the gap fails to hold as support, bearish pressure could accelerate toward the 1.1600 psychological level which marks the prior accumulation base and key liquidity pool before the CPI momentum.

Bearish pathway:

1. Price rejects from 1.1700 and drops into the 1.16556 – 1.16645 FVG..
2. Weak reaction or a clean break below this zone signals a loss of short-term bullish structure.
3. Downside targets:
4. • Target 1: 1.1600 – minor support / psychological level.
4. A break below 1.1600 exposes a deeper slide toward 1.1550.

Bearish invalidation:

• A sustained rally and close above 1.1700 would negate this short-term bearish outlook and put buyers back in control.