Created on August 25, 2025

• Friday is seen the US dollar plunged rather significantly against the Japanese yen after the Jackson Hole speech by Jerome Powell.
• At this point, it looks as if the Federal Reserve is at least “open to the idea of cutting rates”, which is something that is fairly new.
• This has people suspecting that maybe the Federal Reserve will cut rates, and the Fed Funds Futures markets have a 91% chance of a rate cut in September priced in again.
• At one point, we dropped about 25%, but now it looks like the market is all but convinced it’s going to happen.

That being said, you have to be careful with these moves, because quite often, the initial “knee-jerk reaction” isn’t necessarily the correct one. After all, despite the fact that we have fallen rather significantly, we are basically just at the bottom of the consolidation area that we have been in for 2 weeks. The question then is whether or not this will change things? I don’t know if it will, I think it’s a little too early to make that determination, especially considering that even if the Federal Reserve were to cut twice this year, as the Fed Funds Futures markets expect, you are still talking about an interest rate differential that is wide enough to drive a truck through.

Technical Analysis

I’m watching the ¥149 level very closely, because if we were to break above there, then it would be very poor for the Japanese yen. Conversely, if we break down below the ¥146 level, then I think the US dollar could drop to the ¥145 level. Anything underneath there opens up the possibility of the ¥142 level being targeted.

Do not get me wrong, the candlestick is very ugly and could lead to something quite drastic. However, a couple of weeks ago we had a massive bearish engulfing candlestick that was followed up by nothing but sideways action. This is a very choppy and erotic currency pair, so make sure that you are careful with your position size.

Want to trade our USD/JPY forex analysis and predictions? Here’s a list of forex brokers in Japan to check out.

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 at around 1.1700 in the European session on Monday.
• Fed Chair Powell’s dovish remarks triggered a USD selloff on Friday.
• The pair’s near-term technical outlook suggests that the bullish bias remains intact.

EUR/USD gained 1% on Friday and touched its highest level since late July near 1.1750. The pair corrects lower to start the new week and trades at around 1.1700.

The US Dollar (USD) came under heavy selling pressure heading into the weekend and fuelled EUR/USD’s rally.

While delivering a speech on “Economic Outlook and Framework Review” at the annual Jackson Hole Economic Symposium on Friday, Federal Reserve (Fed) Chair Jerome Powell announced that they will adopt a new policy framework of flexible inflation targeting and eliminate ‘makeup’ strategy for inflation.

Commenting on the economic outlook, Powell acknowledged that downside risks to the labor market were rising and added that inflation effects of tariffs could be short-lived. The USD Index turned south and fell nearly 1% on Friday, reflecting the broad-based USD weakness.

On Monday, the data from Germany showed that the German IFO Business Climate Index rose to 89 in August from 88.6 in July, beating the market forecast of 88.6. On a negative note, the Current Economic Assessment Index edged lower to 86.4 from 86.5. Finally, the Expectations Index climbed to 91.6 from 90.7 in this period. These mixed figures don’t seem to be having a noticeable impact on the Euro’s valuation.

In the second half of the day, July New Home Sales will be the only data featured in the US economic calendar. In the meantime, US stock index futures lose between 0.1% and 0.2% in the early European session.

In case markets remain risk-averse in the second half of the day, EUR/USD could find it difficult to regain its traction. On the other hand, an improving risk mood is likely to weigh on the USD and open the door for another leg higher in the pair.

EUR/USD Technical Analysis

The Relative Strength Index (RSI) indicator on the 4-hour chart stays slightly above 60 and EUR/USD trades comfortably above the 20-period, 50-period, 100-period and the 200-period Simple Moving Averages (SMAs), highlighting a bullish stance in the near term.

On the upside, 1.1720 (static level) aligns as the immediate resistance level before 1.1760 (static level) and 1.1790-1.1800 (static level, round level). Looking south, support levels could be spotted at 1.1670 (50-period SMA), 1.1640 (100-period SMA, 200-period SMA) and 1.1600 (static level, round level).

Created on August 25, 2025

• We initially did try to rally in this pair during the trading session on Friday but gave back the gains as we see a lot of confusion right now.
• The speech by Jerome Powell Jackson Hole suggested that the Federal Reserve was willing to perhaps cut interest rates in the future.
• So that had a major influence on a lot of different things that have gone on.

However, this is a little bit different in the situation because this should be moving higher with risk appetite increasing. Granted, the latest move to the upside has slammed into the 200 yen level again, which looks like it’s a brick wall. Underneath current levels, we have the 50 day EMA near the 198.40 yen level, which is rising and has for the most part acted like a bit of a trend line since the middle of May.

Could Buyers Return?

The question now is whether or not buyers will come back in and try to pick up value. The interest rate differential most certainly favors the British pound against the Japanese yen. But I find this move a little bit concerning due to the fact that it’s not moving how you would anticipate. Granted, the Japanese yen got a boost against the US dollar after that Jerome Powell speech, maybe this is a temporary thing. Obviously, if we can break above the 200 day EMA, then I think we could really go much higher, probably 204 yen, possibly even 208 yen.

If we drop from here and break down below the 50 day EMA, we could be looking at a move down to the 195 yen level. Perhaps traders are worried about the global economy slowing down. Maybe that’s what they got out of the Powell speech. If that’s the case, then a fall from this level would make quite a bit of sense as it is remarkable resistance as well. And of course, you could see a flood to safety assets. This is a pair that’s worth watching.

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

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.

Platinum price took advantage of its repeated positive stability above the breached obstacle level at $1342.00, besides providing positive momentum by the main indicators, achieving the suggested targets by hitting $1383.60, to force it to provide some sideways trading by its fluctuation near $1355.00.

By the above image, we notice the stability of the moving average 55 near $1342.00 level, reinforcing the chances for forming an important extra support level, increasing the efficiency of the bullish track, to expect reaching $1383.00 and surpassing it will form the next main target for the bullish track at $1420.00 level.

The expected trading range for today is between $1340.00 and $1383.00

Trend forecast: Bullish

See today’s full USD/JPY forecast with chart setups and trade ideas.

AUD/USD: Inflation in Focus as Traders Eye a November RBA Rate Cut

Turning to the AUD/USD pair, the RBA cut interest rates this month as inflation cooled. A further easing in inflation could boost expectations of further policy easing in the fourth quarter. On Wednesday, August 27, the Monthly CPI Indicator may affect demand for the Aussie dollar. Economists expect the annual inflation rate to rise from 1.9% in June to 2.2% in July.

A higher-than-expected reading could temper expectations of a Q4 RBA rate cut, lifting the appetite for the Aussie dollar. Conversely, a softer inflation print may bolster bets on further policy easing. This week’s inflation data could be crucial for the AUD/USD pair given Fed Chair Powell’s policy pivot on Friday, August 22. AUD/USD rallied 1.09% to close the session at $0.64898 on Powell hinting at a September rate cut.

When do economists expect the RBA to ease policy further?

AMP Head of Investment Strategy and Chief Economist Shane Oliver projected a November rate cut and further policy easing in H1 2026, stating:

“We continue to see the RBA cutting rates again in November, February and May taking the cash rate down to 2.85%.”

AUD/USD: Key Scenarios to Watch

• Bearish AUD/USD Scenario: Dovish RBA signals and softer inflation. These factors could push AUD/USD toward the 200-day EMA and $0.6450 support level.
• Bullish AUD/USD Scenario: Hawkish RBA rhetoric and hotter inflation. These factors could send AUD/USD above the 50-day EMA, bringing the $0.6550 resistance level into play.

Explore our full AUD/USD analysis, including key trends and trade data, here.

AUD/USD Daily Outlook: Will US Data Narrow the Rate Differential?

While economists are betting on a November RBA rate cut, support for a September Fed rate cut sent AUD/USD toward $0.65.

Weaker-than-expected US economic data could raise expectations of multiple Fed rate cuts, narrowing the rate differential. A narrower rate differential may push the pair above the 50-day EMA. A break above the 50-day EMA and the $0.65 level may pave the way to the $0.6550 suppot level.

Conversely, stronger-than-expected data could signal a less dovish Fed rate path, potentially widening the rate differential. Under this scenario, AUD/USD could fall toward the 200-day EMA and the $0.6450 support level.

Beyond the data, traders should monitor FOMC members’ comments on the economy, inflation, and monetary policy.

– Written by


Tim Boyer

STORY LINK Pound Sterling Forecasts Warn Crash vs Euro, Dollar on 1976-Style UK Crisis

The British Pound faces its most alarming warning in decades, with GBP analysts bracing for heavy losses against the euro and US dollar. A former Bank of England policymaker has drawn chilling parallels with the economic crash of 1976 – when the UK was forced into an IMF bailout. With inflation stuck near 4%, gilt yields heading towards 5%, and government borrowing spiralling, fears are growing that the Pound Sterling could be sliding towards a historic collapse.

Former Bank of England (BoE) Monetary Policy Committee (MPC) Andrew Sentance has warned that the UK will see a repeat of the 1976 economic crisis with bonds and the Pound sliding in tandem.

Rachel Reeves is on course to deliver a Healey 1976-style crisis in late 2025 or 26. Like Healey, she has massively boosted public spending, borrowing and taxes – fuelling both demand-pull and cost-push inflation. Unless policies are reversed we are heading for an economic crash!

— Andrew Sentance (@asentance) August 20, 2025

There was a mini scare in January, but Sentance has warned that this is just a taster for more severe turbulence within the next few months.

ING expects the Pound to Euro (GBP/EUR) exchange rate to slide to 1.11 by the end of 2026.

There are parallels with 1976 in weather terms as that year was famous or infamous for a prolonged period of hot weather and drought with the government appointing a minister for drought.

It’s also worth noting that this was followed by heavy rain and floods.

As far as the economy is concerned, 1976 marked economic humiliation for the Callaghan government with Chancellor Healey forced to run to the IMF for an emergency loan as the Pound plummeted in currency markets.

The pound collapsed amid a widening budget deficit, a yawning current account imbalance and stubbornly persistent inflation with the Bank of England unable to support growth via cuts in interest rates.

The government secured a $3.9bn loan, half of which was drawn down by the administration.

Andrew Sentance, who was well known as a very hawkish voice on the MPC has issued a stark new warning.

According to Sentance; “Rachel Reeves is on course to deliver a Healey 1976-style crisis in late 2025 or 26. Like Healey, she has massively boosted public spending, borrowing and taxes – fuelling both demand-pull and cost-push inflation. Unless policies are reversed we are heading for an economic crash!”

The latest official inflation data recorded headline and core inflation at 3.8%, but Sentence considers that the data is underestimating inflation.

Looking at a wider range of indicators, Sentance considers that inflation is already 4.1% and set to increase further.

The 10-year bond yield has increased to above 4.75% and close to 4-month highs. According to Sentence, the yield could increase to 5% before long.

The Pound posted sharp losses in January as fears surrounding UK economic policy increased.

As bond yields continue to move higher, the cost of debt servicing continues to increase. This risks a vicious cycle as bond markets and the Pound crash in tandem.

Sentance has also continued to criticise Bank of England policy.

According to Sentance; “The shocking surge in UK inflation continues. When will the MPC recognise that control of inflation requires policy action to bear down on price rises with interest rates. Cutting rates while inflation is rising is a perverse and irresponsible policy.”

Danske Bank is wary over UK fundamentals and expects GBP/EUR losses to 1.1235 on a 6-12-month view. According to Danske; “The key risk to seeing EUR/GBP trade substantially higher than our forecast is a sharp sell-off in global risk and/or renewed focus on the UK’s fragile fiscal position.”

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TAGS: Pound Sterling Forecasts

– Written by


David Woodsmith

STORY LINK 2025 Forecast: Pound Sterling to Strengthen Against Dollar, Not the Euro

The latest Pound Sterling forecasts point to a split outlook: analysts see the Pound to Dollar (GBP/USD) forecast turning more positive, while the Pound to Euro (GBP/EUR) forecast remains subdued. Markets expect Sterling to push higher against the US Dollar towards 1.39 over the next 12 months, but struggle to break above 1.16 against the Euro.

Consensus suggests a diverging path for Sterling, shaped by resilient UK economic data, stubborn inflation at 3.8%, and an uncertain Bank of England (BoE) policy outlook.

Pound to Dollar Forecast (GBP/USD)

The Pound to Dollar exchange rate failed to re-test the 1.36 level this week, retreating to near 1.34 amid a tentative dollar recovery. Nevertheless, consensus forecasts are for GBP/USD to strengthen to 1.39 on a 12-month view as markets anticipate lower Federal Reserve interest rates.

Not all banks are aligned: Wells Fargo expects GBP/USD will retreat to 1.30 by the end of 2026 on renewed dollar gains, while UBS sees scope for a move back to 1.39 by late 2025, citing “the outlook for lower Federal Reserve rates, White House policy uncertainty, and international investors raising hedge ratios for dollar assets.”

The Federal Reserve remains the key driver. Earlier in the week, markets were convinced that the Fed would cut rates in September, but stronger US data has cast doubt. Fed members remain split, with Cleveland Fed President Hammack stating current conditions “do not justify a rate cut at this stage.”

Markets are now pricing just over a 70% chance of a September cut. A cautious stance from Chair Powell at Jackson Hole could see the Dollar regain ground in the short term, but longer-term expectations still lean towards weakness, underpinning the more positive GBP/USD forecast.

Pound to Euro Forecast (GBP/EUR)

The Pound to Euro exchange rate has consolidated around 1.1570 after failing again to hold above 1.16. Consensus forecasts point to limited losses, with GBP/EUR seen at 1.15 on a 12-month horizon.

Danske Bank is more bearish, forecasting a retreat to 1.1235 within 6-12 months on the back of weak UK fundamentals. It argues that relative growth dynamics are turning against Sterling:
“We increasingly see domestic factors and the relative growth outlook between the UK and the euro area as becoming GBP negatives. This is further amplified by divergence in fiscal policy, with UK fiscal policy set to be tightened in the Autumn.”

Societe Generale also warns that Sterling’s underlying support is fading:
“GBP has decent short-term support, even if its medium-term support is rotting away in the face of a depressing fiscal outlook. Higher taxes are coming and so is slower growth and further GBP weakness.”

SocGen highlights the Euro’s strengthening base, noting that EUR/GBP support has risen steadily from 0.8250 early in the year to 0.86 by July. By the autumn, it expects support to climb to 0.87 — implying GBP/EUR below 1.15.

UK data continues to paint a mixed picture. Manufacturing PMI remains in contraction, while services activity hit a 12-month high. Inflation data came in stronger than expected at 3.8% for both headline and core, raising stagflation concerns.

The Eurozone, meanwhile, reported a 15-month high in its composite output index, supported by gains in both manufacturing and services despite ongoing global trade headwinds.

The Pound Sterling forecast remains finely balanced. Against the Dollar, expectations of Fed easing underpin projections for GBP/USD to strengthen towards 1.39, but short-term risks remain if Powell pushes back on cuts. Against the Euro, Sterling continues to struggle, with GBP/EUR likely capped around 1.15 and downside risks highlighted by Danske and SocGen.

For now, Sterling’s fate will rest on a tug of war between UK fundamentals, BoE caution, and external drivers from Washington and Frankfurt.

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TAGS: Pound Dollar Forecasts Pound Euro Forecasts

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USD/JPY Technical Analysis

The US dollar continues to take off against the Japanese yen. And if Jerome Powell sounds even remotely hawkish during the session on Friday, then that could send the US dollar screaming towards the 150.50 yen level. On a pullback, I would anticipate that the 50 day EMA offers support, followed by the 146 yen level.

AUD/USD Technical Analysis

The Australian dollar tried to rally during the session, but it looks like it’s going to give those gains up pretty quickly, as there just isn’t enough momentum to get the Aussie moving. Ultimately, I think you’ve got a situation here where you have to assume that market participants are looking at this through the prism of a market that just hasn’t performed well to begin with.

And therefore, it makes a lot of sense that the Australian dollar eventually gives up strength. Keep in mind that New Zealand just cut interest rates and that probably has people thinking the Australian dollar will suffer the same fate and that makes it a little weaker than other currencies in general.

Over the last year, we’ve seen the US dollar get hit pretty hard and with that, I think you have to believe that if the Australian dollar really couldn’t take advantage of it. If we start to see the US dollar strengthen, then the Aussie is really going to take it on the chin. As things stand right now, I like fading rallies, and I believe the 0.6550 level will continue to be resistant.

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

The GBPJPY pair provided temporary positive trading, attempting to recover some of its losses by its rally to 199.35, to begin declining affected by stochastic negativity, approaching from 20 level as appears in the above image.

The attempts of forming an extra barrier at 199.60 level confirms the price confinement within the bearish track, to keep preferring the negative attempts, that might target 198.20 reaching 197.45, to face 61.8%Fibonacci correctional level.

The expected trading range for today is between 198.20 and 199.40

Trend forecast: Bearish