• During the trading session on Monday, we had initially seen the US dollar spiked higher against the Japanese yen, as traders started to weigh the idea of a potential “risk off” type of environment due to the Americans bombing the Iranian nuclear sites.
• However, it looks like traders have had a bit of time to think about things that may not be as concerned as they were at the open.

Ceiling Above?

At this point in time, we have to ask whether or not there is a ceiling above, as the ¥148 level is an area that has caused resistance previously, and we have the 200 Day EMA hanging around in the same region. Because of this, I think you have a situation where it would take a lot to get above there, and the concern that we had over the weekend with the airstrike probably wasn’t enough to sustainably cause panic in the market.

Nonetheless, the Japanese yen has a lot of problems in and of itself, as the Bank of Japan has a major problem with the Japanese Government Bond markets, as there have been several days where there were no bids or buyers. Because of this, the Japanese yen is still a currency that I’m not a huge fan of, although of course in a panic we could see people running to it.

All things being equal, this is a market that will continue to be very noisy, but that’s nothing new for the Japanese yen. The ¥146 level is an area that has been important multiple times, so the question now is whether or not it will hold as support? That is a level that I would be watching the most right now, as it could determine whether or not we truly fall apart, or if we start to build another range in this market.

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.

• The US dollar initially pulled back just a bit during the trading session on Friday but then turned around to show signs of life as the ¥145 level is a major support level.
• It’s a large, round, psychologically significant figure, and it also features the 50 Day EMA, so I believe it makes a lot of sense that it continues to hold as support for short-term traders.
• However, I also recognize that the ¥146 level will be thought of as a major barrier, and if we can break above there, then it opens up the possibility of a move to the 200 Day EMA, which is just above the crucial ¥148 level.

Bottoming Process

I think were in the middle of a bottoming process, but I don’t necessarily think that we are just going to sliced through ¥146 level easily. The fact that we have been bouncing around in this range for a while now makes a certain amount of sense, with the ¥142 level is a major support level, and has offered a bit of a bottom for the market. Ultimately, I think short-term pullbacks are likely, but I also think they are more likely than not going to be bought into, because that is what we have seen over the last several weeks. Ultimately, the interest rate differential continues to favor the US dollar, so I think that as a little bit of a buffer anyway.

If we were to break down below the ¥142 level, then it opens up the possibility of a move down to the ¥140 level, which of course is an area that has been supported previously, and it is a large, round, psychologically significant figure, and an area where we see a lot of interest in this area. That being said, the market continues to be very noisy, so look for some type of value in order to take advantage of it on dips, but I’m starting to like the upside much more than I did just a few weeks ago.

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.

• The Euro has had a very strong session against the Japanese Yen, and we are now clearing a major hurdle as we are seeing Japanese Yen weakness across the board.
• It’s interesting because I’m hearing people on some of the financial channels talk about how the Japanese Yen should strengthen quite drastically.
• But what they are glossing over is the fact that nobody is buying Japanese debt. That’s a major issue. So, if the Bank of Japan does in fact, tighten monetary policy, like I’m starting to hear people talk about, there is a cost to that.
• It is probably wiping out their domestic banking system because the Japanese banks hold so much of this debt that nobody is bidding for.

So, you either let the debt go to massive losses in the banking sector or you have to buy it yourself if you’re the Bank of Japan. History tells us they tend to buy it themselves and therefore I think that’s part of what’s going on because even the US dollar is starting to tear up the Japanese yen at this point. Now that we have cleared the 168 yen level, I do think that we are free to go higher, probably as high as 172 yen.

It Will Be Noisy

But it doesn’t necessarily mean that we get there in a straight line. This is also a risk on move as it were, but I think this probably has more to do with the yen itself, at least at the moment. If we pull back, the 165 yen level would be your floor. And although it is 300 points away as I record this, I understand that you’re going to need a lot of pips as far as a stop loss is concerned in order to absorb the potential volatility here.

Markets have been extraordinarily volatile due to basically everything that’s going on in the world. So that translates to smaller sizes and to positions and larger ranges of stop losses. It’s the only thing you can control. With this, think short-term pullbacks continue to be buying opportunities and I do think we will go higher.

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.

• GBP/USD trades at a fresh monthly low below 1.3400 on Monday.
• The US Dollar benefits from escalating geopolitical tensions.
• The technical outlook suggests that there is more room on the downside.

After losing nearly 1% in the previous week, GBP/USD stays under bearish pressure on Monday and trades at its lowest level in a month below 1.3400. In case safe-haven flows continue to dominate the action in financial markets in the second half of the day, the pair could continue to stretch lower.

The negative shift seen in risk sentiment helps the US Dollar (USD) outperform its rivals and weighs on GBP/USD on Monday. Market participants grow increasingly worried about a widening and deepening conflict in the Middle East following the United States’ decision to strike three nuclear facilities in Iran over the weekend.

Meanwhile, the data from the UK showed that the business activity in the private sector expanded at an accelerating pace in June, with the S&P Global Composite Purchasing Managers Index (PMI) improving to 50.7 from 50.3 in May. This reading, however, failed to support Pound Sterling.

Later in the day, the US economic calendar will feature S&P Global PMI data for June. Markets expect the Manufacturing PMI to edge lower to 51 from 52 in May and see the Services PMI retreating to 52.9 from 53.7. In case either of these PMIs come in below 50, the USD could come under selling pressure. Nevertheless, the market reaction could remain short-lived in the current market environment, with investors staying focused on geopolitics. A further escalation in the Iran-Israel crisis could boost the USD and cause GBP/USD to extend its slide in the near term.

GBP/USD Technical Analysis

The Relative Strength Index (RSI) indicator on the 4-hour chart declines toward 30 and GBP/USD continues to pull away from the 200-period Simple Moving Average (SMA), reflecting a buildup of bearish momentum.

On the downside, 1.3340 (Fibonacci 61.8% retracement of the latest uptrend) aligns as the next support level before 1.3300 (round level, static level) and 1.3260 (Fibonacci 78.6 retracement). Looking north, resistance levels could be spotted at 1.3400 (Fibonacci 50% retracement), 1.3450 (Fibonacci 38.2% retracement, 200-period SMA) and 1.3500 (static level, round level).

• EUR/USD trades below 1.1500 in the European session on Monday.
• Mixed PMI data releases make it difficult for the Euro to find demand.
• The US Dollar is likely to stay resilient against its rivals unless the risk mood improves.

EUR/USD struggles to gain traction and trades below 1.1500 to start the week. The near-term technical outlook highlights a buildup of bearish momentum. In the second half of the day, Purchasing Managers Index (PMI) data from the US and developments surrounding the Iran-Israel conflict could drive the US Dollar’s (USD) valuation and impact the pair’s action.

Markets remain risk-averse and help the USD hold its ground on Monday after the United States (US) got involved in the Israel-Iran conflict by bombing three Iranian nuclear sites over the weekend.

Meanwhile, mixed PMI data releases from the Euro area seems to be making it difficult for the Euro to stage a rebound. HCOB Composite PMI in Germany improved to 50.4 in June’s flash estimate from 48.5 in May. In the same period, HCOB Composite PMI in the Eurozone remained unchanged at 50.2, missing the market expectation of 50.5.

In the second half of the day, S&P Global Manufacturing and Services PMI data for June will be featured in the US economic calendar. The market reaction to these data releases is likely to be straightforward and remain short-lived. Stronger-than-forecast PMI reading are likely to support the USD.

In the European morning, US stock index futures trade marginally higher after opening deep in negative territory. A bullish opening in Wall Street could weigh on the USD and help EUR/USD edge higher. Unless there is a de-escalation of the tensions in the Middle East, however, investors could refrain from taking large positions in risk-sensitive assets.

EUR/USD Technical Analysis

The Relative Strength Index (RSI) indicator on the 4-hour chart declined below 40 and EUR/USD fell below the lower limit of the ascending regression channel, reflecting a buildup of bearish momentum.

EUR/USD faces a pivot level at 1.1460-1.1470, where the 100-period Simple Moving Average (SMA) and the lower limit of the ascending channel align. In case this area is confirmed as resistance, technical sellers could remain interested. In this scenario, 1.1420 (Fibonacci 38.2% retracement level of the latest uptrend) could be seen as the next support before 1.1360 (200-period SMA).

Looking north, resistance levels could be spotted at 1.1500 (Fibonacci 23.6% retracement), 1.1530 (50-period SMA) and 1.1570 (mid-point of the ascending channel).

Platinum price activated the attempts of gathering the previously achieved gain, by forming a clear correctional decline in Friday, to settle below the extra support at $1275.00 level targeting $1244.00 as appears in the above image.

Reminding you that the stability above $1225.00 level until now might assist renewing the bullish attempts, to target $1300.00 and $1335.00 level, while its decline below this support and providing a negative close will confirm its readiness to resume the correctional decline, to wait for targeting $1210.00 and $1187.00.

The expected trading range for today is between $1225.00 and $1300.00

Trend forecast: Fluctuated 

Platinum price activated the attempts of gathering the previously achieved gain, by forming a clear correctional decline in Friday, to settle below the extra support at $1275.00 level targeting $1244.00 as appears in the above image.

Reminding you that the stability above $1225.00 level until now might assist renewing the bullish attempts, to target $1300.00 and $1335.00 level, while its decline below this support and providing a negative close will confirm its readiness to resume the correctional decline, to wait for targeting $1210.00 and $1187.00.

The expected trading range for today is between $1225.00 and $1300.00

Trend forecast: Fluctuated 

June 22, 2025 – Written by Tim Boyer

STORY LINK Euro to Dollar Forecast: Volatility Expected as Iran to Shut Strait of Hormuz

LIVE UPDATE: The Euro to Dollar exchange rate (EUR/USD) found support close to 1.1450 on Thursday and rallied to 1.1530 on Friday amid a fresh glimmer of hope that further escalation in the Israel/Iran war could be avoided with the dollar losing defensive support.

However, Iran’s Parliament has voted to close the Strait of Hormuz in response to U.S. strikes on its nuclear facilities. The move does still require approval from the country’s National Security Council before it can take effect.

This development, if confirmed, would have immediate global repercussions. The Strait of Hormuz is a critical chokepoint for global oil shipments, roughly 20% of the world’s oil passes through it daily. A closure would likely send crude oil prices soaring and trigger safe-haven flows into the U.S. dollar, Swiss franc, and Japanese yen.

Commodity-linked currencies such as the Canadian dollar and Norwegian krone could also rally on higher energy prices, while emerging market currencies and oil-importing nations (like India or Turkey) would come under pressure due to rising energy costs and geopolitical risk aversion.

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According to UoB; “The mild downward pressure has faded, and the current price movements are likely part of a range trading phase, expected to be between 1.1470 and 1.1540.”

On a medium-term view, ING commented; “The current USD risk premium already embeds plenty of negatives, and 1.15 can prove the anchor, rather than the starting point for another major rally, at least this year.”

There had been a tentative net improvement in risk appetite as President Trump appeared to signal that there would not be an immediate US attack on Iran’s nuclear facilities.

He indicated that there would be a delay of up to two weeks in order for last-ditched diplomatic efforts to take place.

MUFG commented; “President Trump’s decision to publicly state that he will make his mind up on involving the US in the conflict within the next two weeks has raised optimism that a deal can be done to avoid an escalation. Senior officials from the UK, Germany and France will meet Iranian officials in Geneva today and we are likely to go into the weekend with hope of diplomatic progress.”

There is, however, still a high degree of uncertainty, especially with Trump emphasising the benefit of unpredictability.

Rabobank notes the difficult policy choices; “If he declines to initiate strikes Iran could plausibly sprint for a nuclear weapon that would pose an existential threat to Israel and perhaps encourage Saudi Arabia to pursue nuclear arms of its own.”

It added; “If he conducts limited strikes on Fordo and elsewhere they may not succeed in destroying Iran’s nuclear program and the Hydra’s heads will undoubtedly grow back, leaving America to face the same conundrum again in the future.”

Extensive US action against Iran could have major geo-political and economic ramifications.

There will, therefore, be reservations over aggressive dollar selling, especially ahead of the weekend.

ING is less positive on the dollar; “The FX market has taken the somewhat lower probability of the US intervening in Iran already this weekend as an opportunity to re-enter USD short positions, especially against European currencies.”

It added; “This confirms that a constant flow of oil-positive, risk-negative geopolitical news is needed to keep the dollar supported in an environment where markets retain a strong bias towards strategic USD shorts.”

MUFG noted that the Chinese central bank fixed the yuan stronger than expected.

According to the bank; “The fixings are a strong message that the Chinese authorities will not seek CNY depreciation as an offset to the ongoing trade uncertainties as we approach the key period when reciprocal tariffs are set to be reactivated.”

Chinese resistance to yuan losses would tend to support the Euro in global markets and underpin EUR/USD.

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June 22, 2025 – Written by Frank Davies

STORY LINK Pound to Euro Forecast: GBP Trapped near 1.17 vs EUR

The Pound to Euro exchange rate (GBP/EUR) consolidated around 1.17 with improved risk conditions offset by evidence of a fragile economy and fears over further medium-term tax increases.

There will be ongoing reservations surrounding fiscal policy and the possibility of faster Bank of England interest rates, which will tend to hurt the Pound.

ING still sees scope for GBP/EUR losses to 1.1630.

UK equites posted gains after the US Administration suggested that any military strike on Iran could be delayed for up to 2 weeks to allow a last-minute diplomatic effort.

Economic data, however, offered no Pound support.

Retail sales volumes slumped 2.7% for May compared with consensus forecasts of a 0.5% decline. This was the sharpest fall since December 2023 and followed an upwardly-revised 1.3% gain for April.

Sales still increased 0.8% in the three months to May compared with the previous 3-month period.

Food stores sales volumes fell by 5.0% in May 2025 following growth of 4.7% in April while non-food sales declined 1.4%.

ONS senior statistician Hannah Finselbach commented; “Retail sales fell sharply in May with their largest monthly fall since the end of 2023. This was mainly due to a dismal month for food retailers, especially supermarkets, following strong sales in April.”

The latest data recorded a UK government borrowing requirement of £17.7bn for May compared with £17.0bn the previous year. Although close to consensus forecasts, this was the second-highest May deficit on record.

For the first 2 months of the fiscal year, the deficit increased to £37.7bn from £36.1bn the previous year.

According to Capital Economics; “We doubt it will get much better for the Chancellor anytime soon, as her £9.9bn buffer against her fiscal mandate may be wiped out at the Autumn Budget.”

It added; “The u-turns on benefit and welfare spending, downward revisions to the OBR’s productivity forecasts and higher borrowing costs may mean to maintain her current £9.9bn buffer, Reeves has to raise £13-23bn later this year. All this means tax rises are looking increasingly likely.”

The UK GfK consumer confidence index improved to -18 for June from -20 previously and compared with market expectations of no change. Consumers were more confident surrounding the overall economic outlook.

Neil Bellamy, Consumer Insights Director at GfK, commented; “Yet confidence is still fragile because the dark shadow of inflation is a day-to-day challenge for so many of us. With petrol prices set to rise in the coming weeks and with ongoing uncertainty as to the full impact of tariffs, there is still much that could negatively impact consumers. With so much volatility, now is certainly not the time to hope for the proverbial ‘light at the end of the tunnel’.”

Markets continue to debate the Bank of England outlook following Thursday decision to hold rates at 4.25%.

ING commented; “We only expect two cuts this year two cuts this year, but markets may be tempted on the dovish side by soft UK data, and we remain generally bullish in EUR/GBP in our multi-month view.

Danske Bank added; “We expect the BoE to stick to quarterly cuts, leaving the Bank Rate at 3.75% by YE 2025, which is aligned with market pricing.

It added; “Markets are pricing 50bp for the remainder of the year. However, we highlight that the risk is skewed towards a swifter cutting cycle in 2025 and 2026 given the downside risks to growth and the labour market.”

It expects gradual GBP/EUR losses with a 12-month forecast of 1.15.

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June 22, 2025 – Written by Tim Boyer

STORY LINK Pound to Dollar Forecast: End to GBP Rebound on Break Below 1.3420

The Pound to Dollar (GBP/USD) exchange rate found support above 1.3400 and consolidated close to 1.3500 in New York trading.

The Pound was unable to draw support from the UK data while a net easing of immediate geo-political concerns curbed dollar support as the US appears to have pulled back from an immediate attack on Iran’s underground nuclear facilities.

According to UoB; “On the downside, if GBP breaks below 1.3420 (minor support is at 1.3445), it would indicate that GBP is not rebounding further.”

It expects resistance in the 1.3500-20 range.

Scotiabank is still bullish on GBP/USD, but does note that a loss of momentum is worrying. It added; “In terms of near-term price action, we look to support at 1.3400 and see limited resistance ahead of 1.3550.”

Immediate Middle East concerns eased slightly amid hopes that any delay in sanctioning a US attack on Iran would give diplomacy a chance, but there is still a high degree of uncertainty.

Scotiabank commented; “President Trump appears to want to give diplomacy more time but the mixed messaging highlights the rather capricious and volatile nature of policymaking in this administration.”

The Federal Reserve and Bank of England both decided against changing interest rates this week, but there are huge challenges for both central banks given the global environment.

Saxo chief investment strategist Charu Chanana commented; “Rising oil prices introduce inflation uncertainty at a time when growth is weakening.”

She added; “That makes central banks’ jobs much harder — do they ease to support growth or hold back to avoid fuelling inflation? Most seem to be prioritizing growth concerns for now, assuming that crude gains may not be sustained.”

UK data illustrated underlying challenges. UK government borrowing increased to £17.7bn in May from £17.0bn last year. Data for the first two months of 2025/26 were still below the March OBR forecast, but there are clear underlying pressures.

RSM economist Thomas Pugh commented; “Looking ahead to the budget in the autumn, the under performance of the economy and higher borrowing costs mean the chancellor may already have lost the £9.9bn of fiscal headroom that she clawed back in March.

He added; “We are pencilling in tax increases of £10-£20bn. The good news is that with interest rates likely to be around 4% at the time of the budget there is plenty of scope for the Bank of England to cut rates to offset the impact of any fiscal consolidation on the economy.”

Elsewhere, retail sales volumes posted a sharp 2.7% drop for May after a revised 1.3% increase for April amid a sharp decline in food sales on the month following a weather-related surge in April.

According to Rabobank there will be quarterly BoE rate cuts; “This pace gives the Committee space to assess inflation persistence, labour cost dynamics, the Trump presidency and its Schrödinger’s tariffs, and any new shocks that undoubtedly emerge, such as in the Middle East right now.”

Rabobank added; The limits of monetary policy may again be explored if Iran makes good on renewed threats overnight to close the Strait of Hormuz. Unfortunately, central banks can’t print oil or gas.”

The US Philadelphia Fed manufacturing index was unchanged at -4.0 for June, compared with consensus forecasts of -2.0 with a slight easing of inflation pressures.

Companies were less confident over the outlook with expectations of stronger upward pressure on prices.

Scotiabank considers that the dollar price action is disappointing; “FX price action suggests the brief push higher in the USD yesterday through trend resistance that has dictated the slide in the index since January has been rejected.”

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