July 9, 2025 – Written by Frank Davies

STORY LINK GBP/USD Forecast: Pound Sterling Price Flat as Markets Await FOMC

The Pound US Dollar exchange rate was trapped in a narrow range on Wednesday ahead of the release of the US’s latest FOMC minutes.

At the time of writing, GBP/USD was trading at approximately $1.3582, virtually unchanged from the start of Wednesday’s session.

The US Dollar (USD) trended lower on Wednesday, coming under pressure ahead of the Federal Reserve’s latest meeting minutes.

Sentiment towards the ‘Greenback’ soured earlier in the session following the announcement of fresh tariffs by President Donald Trump, which unsettled markets and added to trade policy uncertainty.

With a slight improvement in risk appetite also curbing demand for the safe-haven currency, USD struggled to attract support as investors looked ahead to the FOMC’s upcoming meeting minutes.

The Pound (GBP) found its footing on Wednesday, rebounding from earlier losses despite another quiet day on the UK economic calendar front.

Sterling’s mid-week recovery followed Tuesday’s slide, which was sparked by a downbeat fiscal forecast from the Office for Budget Responsibility (OBR).

The UK’s fiscal watchdog projected that UK government debt could climb to 270% of GDP by the 2070s, citing rising borrowing costs and mounting fiscal challenges.

Despite these concerns, the Pound managed to stabilise as markets appeared to take the long-term warning in stride, with broader risk sentiment helping to cushion GBP’s losses.

Looking ahead to Thursday’s European session, movement in the GBP/USD exchange rate will likely hinge on the Federal Reserve’s latest meeting minutes, released late on Wednesday.

Markets will be combing through the minutes for fresh insight into the Fed’s monetary policy outlook.

If policymakers strike a dovish tone and signal that rate cuts remain on the table, the US Dollar could find renewed support.

Meanwhile, with no UK economic data scheduled for release, the Pound is expected to remain at the mercy of external drivers.

In the absence of domestic catalysts, broader market sentiment will likely continue to guide GBP direction.

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• GBP/USD fluctuates at around 1.3600 in the European session on Wednesday.
• Technical sellers could remain interested once 1.3600 is confirmed as resistance.
• An improving risk mood could help the pair limit its losses.

GBP/USD recovered after setting a two-week low and closed virtually unchanged on Tuesday. The pair moves up and down in a narrow band at around 1.3600 midweek, while the technical picture doesn’t offer any signs of a steady recovery.

The uncertainty surrounding the United States’ trade relations and their potential impact on growth and inflation outlook causes markets to cling to a cautious stance. In turn, the US Dollar (USD) finds demand as a safe-haven and stays resilient against its rivals.

US President Donald Trump said late Tuesday that the BRICS members will be subject to 10% tariff rate and added that they will be introducing tariffs on pharmaceuticals and semiconductors soon. Meanwhile, US Commerce Secretary Howard Lutnick said that another 15 to 20 tariff letters are expected to be announced in the next two days.

In the second half of the day, the Federal Reserve will release the minutes of the June policy meeting. Following the upbeat June employment data from the US, the probability of the Fed cutting the policy rate by 25 basis points in July dropped to nearly 5% from about 25%, as per CME FedWatch Tool. Hence, the publication is unlikely to alter market expectations in a significant way.

Investors will continue to pay close attention to the risk perception. After trading flat earlier in the session, US stock index futures turned positive on the day. A bullish opening in Wall Street could hurt the USD and open the door for a rebound in the near term.

GBP/USD Technical Analysis

The 100-period Simple Moving Average (SMA) on the 4-hour chart aligns as a pivot level at 1.3600. In case GBP/USD confirms that level as resistance, 1.3570 (200-period SMA) could be seen as the next support level before 1.3540 (lower limit of the ascending channel, Fibonacci 38.2% retracement of the latest uptrend) and 1.3500 (static level, round level).

On the upside, 1.3630 (Fibonacci 23.6% retracement) could be seen as the first resistance level ahead of 1.3660 (50-period SMA) and 1.3700 (mid-point of the ascending channel).

• The USD/JPY forecast indicates brief relief for the yen after a steep decline.

• The yen has weakened significantly following Trump’s announcement of a 25% tariff on Japanese goods.

• Market participants are awaiting the release of the FOMC meeting minutes.

The USD/JPY forecast indicates brief relief for the yen after a steep decline due to tariff concerns. However, the outlook for Japan’s economy has darkened following Trump’s threat of a 25% reciprocal tariff. 

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The yen has weakened significantly this week following Trump’s announcement of a 25% tariff on Japanese goods, effective from August. The move came after trade talks between the US and Japan failed. Market participants are concerned that this could be the start of a trade war between the two partners. Such an outcome would hurt both economies and weaken their currencies. 

However, at the moment, the dollar is rallying at the prospect of higher import costs. These might translate to higher inflation, forcing the Fed to keep interest rates high. 

Furthermore, Trump has threatened a 50% tariff on copper imports that would again ignite tensions with many countries. In the short term, tariffs might be bullish for the dollar. However, in the long run, they might dim the outlook for the US economy and hurt its currency. 

Elsewhere, market participants are awaiting the release of the FOMC meeting minutes. The report might contain clues about future policy moves. However, with tariff uncertainty, the outlook might become less clear.

USD/JPY key events today

USD/JPY technical forecast: Rally pauses for breath at the 147.01 level

On the technical side, the USD/JPY price has finally paused its steep rally near the 147.01 key level. However, the bullish bias remains strong, with the price well above the 30-SMA and the RSI near the overbought region.

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After such a strong move, bulls have paused for a breath at this level. Therefore, the price might consolidate as the SMA catches up. At the same time, it might pull back to retest the SMA as support. The bullish bias will remain as long as it stays above the SMA. 

After a pause, bulls might regain momentum to break past the 147.01 level for a new high. Such a move would allow USD/JPY to retest the 148.02 key resistance. A break above would solidify the bullish bias.

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• EUR/USD trades near 1.1700 in the European session on Wednesday.
• The technical outlook points to a bearish tilt in the short term.
• The Federal Reserve will publish the minutes of the June policy meeting.

EUR/USD struggles to hold its ground early Wednesday and trades in negative territory at around 1.1700 after posting small gains on Tuesday. The near-term technical outlook highlights a lack of buyer interest.

The US Dollar (USD) continues to benefit from safe-haven flows as investors assess the latest talks surrounding the US trade regime.

US Commerce Secretary Howard Lutnick said late Tuesday that another 15 to 20 tariff letters are expected to be announced in the next two days. Meanwhile, US President Donald Trump noted that the BRICS members will be subject to 10% tariff rate and added that they will be introducing tariffs on pharmaceuticals and semiconductors soon. Regarding the trade negotiations with the EU, Trump said that the EU is treating them “very nicely” and added that they are “probably two days off” from sending the EU letter.

In case the EU and the US manage to reach an agreement until Trump unveils the tariff decision on European imports, the Euro could gather strength with the immediate reaction. On the other hand, investors are likely to refrain from positioning themselves for a steady recovery in the Euro, while the uncertainty lingers.

Later in the day, the Federal Reserve (Fed) will publish the minutes of the June policy meeting. Nevertheless, investors could ignore this publication and remain focused on trade-related headlines.

EUR/USD Technical Analysis

The Relative Strength Index (RSI) indicator on the 4-hour chart stays below 50 and EUR/USD continues to trade below the 20-period and the 50-period Simple Moving Averages (SMA), which made a bearish cross on Tuesday.

On the downside, 1.1700-1.1690 (static level, round level, lower limit of the ascending channel) aligns as a key support area ahead of 1.1660 (100-period SMA) and 1.1600 (static level, round level). Looking north, resistance levels could be seen at 1.1750-1.1760 (20-period SMA, 50-period SMA), 1.1800 (round level, static level) and 1.1830 (static level).

Copper prices are under strong positive pressures, which allows it to surpass the barrier at $5.1000, to notice forming a strong bullish rally and achieving big gains by hitting $5.8100 level, forming an intraday rebound to $5.5500 to catch its breath and gather some gains.

Note that the price is surrounded by several positive factors that support the continuation of the positivity, such as the unionism of the main indicators by providing positive momentum besides forming extra support at $5.3200 level, which makes us prefer more of the bullish attempts that target 2.00%Fibonacci extended level at $5.9720, to approach from the resistance of the main bullish channel that appears in the above image.

The expected trading range for today is between $5.4500 and $5.9800

Trend forecast: Bullish

Copper prices are under strong positive pressures, which allows it to surpass the barrier at $5.1000, to notice forming a strong bullish rally and achieving big gains by hitting $5.8100 level, forming an intraday rebound to $5.5500 to catch its breath and gather some gains.

Note that the price is surrounded by several positive factors that support the continuation of the positivity, such as the unionism of the main indicators by providing positive momentum besides forming extra support at $5.3200 level, which makes us prefer more of the bullish attempts that target 2.00%Fibonacci extended level at $5.9720, to approach from the resistance of the main bullish channel that appears in the above image.

The expected trading range for today is between $5.4500 and $5.9800

Trend forecast: Bullish

• USD/JPY breaks past 146.80 as forecasted, validating the Fair Value Gap structure and liquidity sweep play.
• Tariff-driven yen weakness and fragile Japanese data fuel continued upside pressure into key resistance.
• The technical outlook favors bulls, with 147.00 and 148.00 in focus as long as price holds above 145.80 and FVG remains intact.

Yen weakens on renewed tariff pressure

USD/JPY traded sharply higher this week, fueled by renewed trade tensions and technical tailwinds. On July 7–8, the U.S. announced plans for 25% tariffs on Japanese and South Korean imports, set to take effect August 1. While not final, the announcement triggered an immediate market reaction. Check this out for reference: Forex, indices, Gold weekly gameplan: Technical analysis and price action outlook.

The result? The Japanese yen slid to multi-week lows as USD/JPY surged toward 146.90, fueled by:

• Tariff-induced yen weakness.
• Safe-haven support for the US Dollar.
• Technical reclaim of structure and bullish imbalance zones.

Meanwhile, Japan’s economic backdrop remains fragile. Q1 GDP showed contraction, real wages declined, and consumer sentiment weakened—all compounding yen softness and raising concerns ahead of Japan’s July 20 elections.

High-impact news driving USD/JPY

These developments amplify the macroeconomic narrative driving USD/JPY:

• Weak yen fundamentals.
• Hawkish U.S. tone with risk-averse global positioning.
• Key resistance zones now under threat of breakout.

Forecast vs actual – Bullish scenario played out perfectly

In our prior analysis – EUR/USD, Gold, Nasdaq, Bitcoin forecast and more, breakout trading setups -, we outlined a bullish Smart Money structure built around a 4-Hour Fair Value Gap Level resting between 143.934-144.608, a sweep of previous highs at 145.00, and a continuation rally past it.

Actual market reaction

• Price swept highs at 145.00 after bouncing off from the 4-Hour Fair Value Gap Level resting between 143.934-144.608.
• USD/JPY then surged beyond 146.80 as projected.

This confirms the renewed strength of the U.S. dollar over the Yen’s dovish stance.

Technical outlook

USD/JPY has reclaimed its bullish trajectory, now sitting near its highest level since early June.

Bullish scenario – In progress

A break and hold above 147.00 could open the path toward multi-month highs. We could see further upside as long as:

• The 4-Hour Fair Value Gap between 146.280-146.631 remains intact.
• Price does not close below the immediate low at the 145.80 level.
• The Fed’s tone remains hawkish.

Targets:

• 147.00 – Next Psych Level.
• 148.00 – June High.

Bearish scenario

As the rally looks over-extended and over-stretched, this could pose a risk for downside as profit-taking takes place. We could see signs of weakness if:

• The 4-Hour Fair Value Gap between 146.280-146.631 gets closed down
• Failure to remain and break the 145.80 level
• A dovish Fed + July election sentiment

The USD/JPY rally played out almost identically to the forecasted Smart Money setup, reclaiming the Fair Value Gap, executing a sweep, and continuing higher.

With U.S. tariff risk pressuring Japan and institutional bullish structure now active, the path of least resistance leans toward a breakout. But traders should stay alert for event-driven volatility around FOMC and Japanese elections in the coming days.

July 8, 2025 – Written by David Woodsmith

STORY LINK Pound-to-Dollar Forecast: GBP Below 1.36 on Net USD Gains

The latest tariff developments have not undermined the US Dollar while medium-term budget fears continue to erode Pound Sterling support.

The Pound to Dollar exchange rate (GBP/USD) failed near 1.3650 on Tuesday and dipped back below 1.3600 with lows at 1.3570.

According to UoB; “While downward momentum has increased further, we prefer to wait for GBP to close below 1.3560 before expecting a move to 1.3510. On the upside, the ‘strong resistance’ level is now at 1.3700.”

Scotiabank is still broadly bullish on GBP/USD, but added; “The latest pullback is worrisome, however, and we highlight the importance of the 50 day MA (1.3481) as a critical source of medium-term support. We look to a near-term range defined by 1.3550 support and 1.3650 resistance.

A break below 1.3650 would push the pair to 2-week lows, increasing the risk of a slide towards 1.3400.

The US Administration announced 25% tariffs for Japan and South Korea as the first batch of tariff letters was released. The deadline, however, was pushed back to August 1st from July 9th.

Overall risk appetite held firm despite the announcements while there were hopes that tariffs would be watered down, lessening the threat of a severe US downturn.

According to Barclays currency strategist Skylar Montgomery Koning; “The fact that some of the more problematic policies from the US administration have been dialled back — and there are deals getting done — means that the economic pain for the US won’t be as bad as originally feared.”

Scotiabank added; “the August 1 deadline means another punt and time for more negotiations before the hammer drops. Secondly, the delay to August for all reciprocal tariffs now means the impact on the US economy may not be felt until much later in the year.”

The US NFIB small-business confidence index declined marginally to 98.6 for June from 98.8 previously and fractionally below consensus forecasts with concerns over excess inventories a key negative factor.

The NFIB commented on interest rates; “Inflation remains stubbornly above the Federal Reserve’s target, therefore the policy rate remains over 4 percent with the possibility of cuts getting pushed down the road. The President wants a lower rate, and sometime this fall, market conditions will likely justify a rate cut by the FOMC.”

The UK Office for Budget Responsibility (OBR) has warned over the medium-term fiscal outlook and criticised the lack of effort to bring borrowing back under control after two major shocks.

According to the OBR; “Planned tax rises have been reversed, and, more significantly, planned spending reductions have been abandoned. The more persistent fiscal deficits and ratcheting up of debt that resulted have been accommodated by successive loosening of the fiscal rules.”

Scotiabank commented; “market participants remain concerned about domestic political developments and ongoing uncertainty related to the fiscal outlook as UK yields hit fresh highs. Media are focusing on the OBR’s latest report highlighting shifts in the distribution of UK government debt holders.”

The UK 10-year bond yield increased to just above 4.65% early in the day before edging lower to 4.62%.

According to the OBR, the UK is facing the 3rd highest borrowing costs among 36 major economies which will maintain upward pressure on debt-servicing costs.

Jefferies strategist Mohit Kumar commented; “Our view remains negative on the growth and fiscal picture in the UK. The government will have no choice but to increase taxes, but we (are) reaching a point where further tax rises can be counterproductive.”

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July 8, 2025 – Written by Ben Hughes

STORY LINK Pound to Dollar Forecast: USD, Stocks Rally Despite Trump Tariff Threats

The Pound US Dollar exchange rate held steady as a risk-on market mood underpinned GBP/USD on Tuesday.

At the time of writing, GBP/USD was trading at approximately $1.3612, virtually unchanged from the start of Tuesday’s session.

The US Dollar (USD) weakened against most major currencies on Tuesday after President Donald Trump announced an overnight extension to the deadline for implementing global tariffs, pushing it from 9 July to 1 August.

Rather than sparking concern, the announcement was met with a wave of optimism during the European session, fuelling a broad risk-on rally.

Investors appeared largely unconcerned by the delay and prospects of additional tariffs.

The market’s muted reaction reflected a growing sense of fatigue toward tariff threats, which have become a recurring theme of Trump’s trade strategy but are often softened or reversed.

As Wind Shift Capital’s Bill Blain put it: ‘A year ago, the idea that a sovereign nation would blithely impose crippling global tariffs on its long-standing friends, allies, and competitors, and expect them to bend over and say, “Thank you sir, may I have some more”, would have been dismissed as the mad haverings of a dystopian crackpot. Today, it’s happening, and no one bats an eyelid. That’s because markets have concluded that last night’s tariffs are “just another TACO (Trump Always Chickens Out) ploy.”’

As such, the US Dollar lost ground as investors sought out riskier assets, shrugging off the latest tariff headlines.

The Pound (GBP) lacked clear momentum on Tuesday, with the absence of UK economic data leaving it to drift in response to global risk appetite.

As market sentiment improved, traders turned towards riskier assets, which weighed on Sterling against its risk-sensitive counterparts.

Although the Pound has increasingly shown risk-sensitive traits, it failed to attract the same level of demand as its more volatile counterparts in the buoyant trading conditions.

With no domestic catalysts to steer direction, Sterling traded in a narrow range, influenced more by shifting investor mood than by any economic developments.

Looking ahead to Wednesday’s European session, movement in the GBP/USD exchange rate is likely to be shaped by the release of the latest minutes from the Federal Reserve’s FOMC meeting.

If the minutes reinforce expectations for a cautious approach to future US interest rate cuts, the US Dollar may strengthen later in the day.

Meanwhile, the UK’s economic calendar remains quiet, offering little domestic impetus for Sterling.

In the absence of fresh data, GBP is expected to remain directionless, with broader market sentiment continuing to guide its path.

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The EURJPY pair resumed the bullish attempts, taking advantage of its repeated stability above the extra support at 169.10, reaching the previously suggested target at 171.60, to face the resistance of the main bullish channel, which forces it to form a sideways fluctuation by its rebound to 171.30.

Due to the strength of the current resistance we expect entering instability station by the contradiction of the resistance stability against the main indicators attempts to provide the positive momentum, while resuming the bullish attack requires forming new bullish wave to settle above 172.00 level, to open the way towards recording extra gains that might begin at 172.80 reaching 173.90.

The expected trading range for today is between 170.45 and 171.90

Trend forecast: Fluctuated within the bullish track