The EURJPY pair recorded some extra gains by hitting 167.60 level, which forces it to form a temporary correctional rebound, affected by a stochastic attempt to exit the overbought level, providing chances for catching its breath and gathering the gains by reaching 166.70.
The price keeps providing mixed trading, but its repeated stability within the bullish channel’s levels and forming extra support at 166.00 level, so these factors make us keep the main bullish suggestion, which might target 168.00 level in the near period trading reaching the resistance level at 168.90.
The expected trading range for today is between 165.95 and 167.45
Trend forecast: Fluctuated within the bullish track
The EURJPY pair recorded some extra gains by hitting 167.60 level, which forces it to form a temporary correctional rebound, affected by a stochastic attempt to exit the overbought level, providing chances for catching its breath and gathering the gains by reaching 166.70.
The price keeps providing mixed trading, but its repeated stability within the bullish channel’s levels and forming extra support at 166.00 level, so these factors make us keep the main bullish suggestion, which might target 168.00 level in the near period trading reaching the resistance level at 168.90.
The expected trading range for today is between 165.95 and 167.45
Trend forecast: Fluctuated within the bullish track
The US dollar has initially pulled back just a bit during the early hours on Tuesday only to turn around and show signs of life.
As we have seen the US dollar show signs of recovery against multiple currencies.
This is a pair that I’ve been talking about and watching quite a bit over the last couple of weeks as the 145 yen level is an area that I think a lot of people will be paying close attention to.
It’s a large round psychologically significant figure, but it’s also where we have the 50 day EMA currently hanging around. Because of this, I think you must look at this as a dangerous area, but if we get follow through here, that could open up the U.S. dollar going much higher. However, it is worth noting that this is a pair that has been very rangebound for a while, and we are getting a lot of things to think about in the next few sessions.
Timing Could Be Better
It’s unfortunate that this is happening the day before the FOMC announcement because the interest rate difference, the interest rate statement and press conference of course is something that will move the market.
Now there are hints that the United States may be looking at getting involved in the war against the Iranians. So, everything is a fluid situation at the moment. This is a market that if it does break down from here, and it wouldn’t really surprise me that much, it should at least in theory, open up a buying opportunity, but we’ll just have to see there’s so many variables at the moment.
It is going to be very difficult to do anything in size, I more than anything else will be keeping my position size small in this environment because quite frankly, it would be very easy to lose money.
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.
Goldman Sachs has raised its EUR/USD forecasts to 1.20 by year-end and 1.25 over the next 12 months, drawing parallels to the 2017 rally driven by global capital flows. However, unlike 2017 when the euro was deeply undervalued, the current move reflects a structural reassessment of the US dollar rather than renewed euro optimism.
Key Points:
Forecast Revisions:
2017 Comparison:
In 2017, global growth optimism and capital inflows into the Eurozone fueled EUR strength.
Rate differentials remained stable, but a shift in fund flows provided upward pressure.
Current Drivers: It’s About the USD
Today, euro strength is less about Eurozone fundamentals and more about dollar weakness.
Preliminary fund flow data suggests rising investor interest in reallocating away from USD assets.
Valuation Contrast:
In 2017, the euro started from a deeply undervalued level—today it is broadly overvalued.
This limits the upside potential and makes the current move more about dollar repricing than euro revaluation.
Not Another 2002–2004:
The structural USD shift supports EUR/USD upside but lacks the valuation tailwind seen in past long-cycle rallies.
As a result, Goldman views the rally as more contained and measured compared to earlier episodes of sustained dollar depreciation.
Conclusion:
Goldman Sachs sees further upside for EUR/USD, driven by broad-based USD weakness and shifting global capital flows. While there are echoes of 2017, the current rally is more about a reassessment of US economic leadership and dollar valuations than a euro-area story. As such, 1.25 is possible, but the path higher will be steadier and more limited than in prior cycles.
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The Pound US Dollar exchange rate was dented on Tuesday even as the US released a worse-than-expected US retail sales index.
At the time of writing, GBP/USD was trading at approximately $1.3451, down roughly 0.2% from the start of Tuesday’s session.
The US Dollar (USD) held its ground against most major peers on Tuesday despite the release of underwhelming US retail sales figures for May.
The data showed a sharper-than-expected contraction, with sales falling by 0.9% versus the forecasted 0.7% decline, raising fresh concerns about the strength of US consumer spending.
While a mildly upbeat market mood saw the ‘Greenback’ dip against risk-sensitive currencies, it remained broadly stable elsewhere, with investors showing caution ahead of the Federal Reserve’s upcoming interest rate decision on Wednesday.
The Pound (GBP) lacked clear direction on Tuesday and dipped against a number of its counterparts as investors adopted a cautious stance ahead of the UK’s upcoming inflation data, scheduled for release on Wednesday.
Sterling primarily weakened against higher-risk currencies, as investor appetite for riskier assets remained strong throughout the session.
In the absence of significant UK economic data, GBP exchange rates struggled to gain ground during Tuesday’s European trading session.
Looking ahead, attention for the GBP/USD exchange rate during Wednesday’s European session will likely centre on the release of the UK’s latest consumer price index (CPI).
Headline inflation is expected to ease slightly from 3.5% to 3.4% in May, while core inflation is forecast to decline from 3.8% to 3.6%.
If these figures meet expectations, signs of easing price pressures could fuel speculation that the Bank of England (BoE) is edging closer to cutting interest rates.
However, with inflation expected to remain well above the BoE’s 2% target, any GBP losses may be modest as markets moderate their expectations for aggressive policy moves.
Meanwhile, US Dollar investors will likely hold back from making bold moves ahead of the Federal Reserve’s interest rate announcement, scheduled for Wednesday evening, adding a layer of caution to USD trading.
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Despite Platinum price attempts to provide some positive trading, but its repeated stability below the barrier at $1275.00 level assists to motivate providing new bearish trading, attempting to decline below $1225.00, then targeting $1184.00 level, which represents the initial extra target for the near trading.
By the above image, we notice stochastic reach below 50 level, to increase the chances for gathering the required negative momentum to reach the mentioned negative stations.
The expected trading range for today is between $1185.00 and $1260.00
The GBPJPY pair continued forming bullish trading since yesterday, taking advantage of the main stability within the bullish channel’s levels, besides surpassing the extra barrier at 195.80, approaching from the initial target level at 196.85 level.
We expect gathering the positive momentum by stochastic attempt to reach the overbought level, to reinforce the chances for targeting new bullish stations that might extend to 197.45 reaching 198.80 in the medium period trading.
The expected trading range for today is between 195.85 and 197.45
GBP/USD fluctuates at around 1.3550 in the European session on Tuesday.
Technical sellers could show interest in case 1.3530 support fails.
The UK’s Office for National Statistics (ONS) will publish May inflation data on Wednesday.
GBP/USD stays on the back foot and trades near 1.3550 in the European session on Tuesday after posting small gains on Monday. The pair could extend its decline if the support level at 1.3530 fails.
British Pound PRICE This week
The table below shows the percentage change of British Pound (GBP) against listed major currencies this week. British Pound was the weakest against the New Zealand Dollar.
USD
EUR
GBP
JPY
CAD
AUD
NZD
CHF
USD
-0.17%
0.15%
0.20%
-0.17%
-0.67%
-0.75%
0.09%
EUR
0.17%
0.18%
0.35%
-0.01%
-0.40%
-0.59%
0.27%
GBP
-0.15%
-0.18%
0.20%
-0.19%
-0.58%
-0.77%
0.09%
JPY
-0.20%
-0.35%
-0.20%
-0.37%
-1.18%
-1.28%
-0.50%
CAD
0.17%
0.00%
0.19%
0.37%
-0.43%
-0.58%
0.28%
AUD
0.67%
0.40%
0.58%
1.18%
0.43%
-0.19%
0.68%
NZD
0.75%
0.59%
0.77%
1.28%
0.58%
0.19%
0.86%
CHF
-0.09%
-0.27%
-0.09%
0.50%
-0.28%
-0.68%
-0.86%
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
The improving risk mood made it difficult for the US Dollar (USD) to stay resilient against its peers on Monday and helped GBP/USD push higher. The Wall Street Journal reported that Iran was looking to end hostilities with Israel and resume talks about its nuclear program. Major equity indexes ended the day decisively higher, reflecting a risk-positive market atmosphere.
Early Tuesday, investors turn cautious and allow the USD to hold its ground as the Israel-Iran conflicts enters its fifth day. Citing Iran’s IRNA news agency, Reuters reported that Iran has recently launched a “more powerful” new wave of missiles toward Israel. Additionally, a senior commander for the Iranian army noted that a new wave of hundred of drones will soon hit Israel.
In the second half of the day, the US economic calendar will offer Retail Sales and Industrial Production data for May. A significant negative surprise in the Retail Sales data could hurt the USD with the immediate reaction. Nonetheless, unless Wall Street stages a bullish opening, the USD could continue to benefit from safe-haven flows.
Early Wednesday, the UK’s Office for National Statistics will publish the Consumer Price Index (CPI) data for May. Later in the day, the Federal Reserve (Fed) will announce monetary policy decisions and publish the revised Summary of Economic Projections. On Thursday, the Bank of England is expected to leave the bank rate unchanged at 4.25%.
GBP/USD Technical Analysis
The Relative Strength Index (RSI) indicator on the 4-hour chart stays slightly below 50 and GBP/USD trades below the 20-period and the 50-period Simple Moving Averages (SMA), hinting at a bearish tilt on the short-term outlook.
On the downside, the 100-period SMA forms the first support level at 1.3530 ahead of 1.3500 (round level, static level) and 1.3430 (200-period SMA). Looking north, resistance levels could be spotted at 1.3570 (20-period SMA), 1.3600 (static level, support level) and 1.3630 (mid-point of the ascending channel).
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data.
Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates.
When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money.
When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP.
A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period.
If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
Buy EUR/USD from the support level of 1.1385 with a target of 1.1560 and a stop-loss at 1.1290.
Sell EUR/USD from the resistance level of 1.1640 with a target of 1.1400 and a stop-loss at 1.1710.
EUR/USD Technical Analysis Today:
Based on recent trades, the EUR/USD pair continues to trade within a well-defined ascending channel, which has guided price action over the past few weeks. The EUR/USD pair is currently testing a resistance level near the upper boundary at 1.1540. The currency pair has demonstrated resilience by maintaining its upward trajectory along the lower trendline support of the channel.
Overall, technical analysis reveals that the EUR/USD pair recently approached the top of the channel after bouncing off support levels, indicating sustained upward momentum. However, approaching the resistance level might lead to some profit-taking or consolidation before the next directional movement begins. Fibonacci retracement levels provide key reference points for potential pullback scenarios. Should the EUR/USD pair retrace from its current levels, initial support might appear around the 38.2% retracement level at 1.1532, followed by the more significant 50% level at 1.1502.
A deeper correction could extend towards the 61.8% Fibonacci level at 1.1473, which closely coincides with dynamic support levels.
Trading Tips:
The EUR/USD trend remains upward, but it may face some volatility from the announcement of US inflation figures and the US Federal Reserve’s policy announcements this week, in addition to the extent of investor risk aversion.
At the same time, the moving average formation supports positive expectations, with shorter-term averages positioned above longer-term averages, confirming that the stronger path remains upward. These dynamic levels are trending higher and may provide support for any short-term weakness, reinforcing the lower boundary of the ascending channel. From a momentum perspective, the Stochastic indicator appears to be approaching the overbought region, suggesting that upward pressure might reach exhaustion levels. This situation indicates the possibility of sellers emerging soon, which could lead to a pullback within the channel’s framework.
The RSI (Relative Strength Index) readings show the oscillator fluctuating between neutral and slightly bullish, allowing for further upside before reaching overbought territory. However, any decline from current levels suggests the potential for a corrective phase to begin. Overall, the technical outlook for EUR/USD remains positive within the ascending channel structure, though some consolidation or a slight pullback would not be surprising given its proximity to resistance and momentum indicators.
Today’s EUR/USD trading will be influenced by important economic data, led by the ZEW German Economic Sentiment Index reading, with expectations for a recovery to 34.8 from the previous reading of 25.2. This release is due at 12:00 PM Egypt time. Later the same day, the EUR/USD will react to the announcement of US retail sales figures, due at 3:30 PM Egypt time. These figures confirm consumer confidence and, consequently, spending.
European Stock Prices Rise Despite Global Concerns:
During yesterday’s trading session, European stocks closed significantly higher across stock trading platforms, ending five consecutive sessions of losses. Recently, the easing of concerns that hostilities between Israel and Iran would impede the global economy contributed to higher global stock prices. Recent reports indicated that Tehran is prepared to resume nuclear talks with the United States, signalling its readiness to de-escalate exchanges with Israel, which bolstered hopes that the conflict would not negatively impact global economic activity and energy prices. Financial markets are also preparing for key monetary policy decisions this week, led by the Bank of England, the Swiss National Bank, the Swedish Central Bank, and the Norwegian Central Bank, in addition to the US Federal Reserve and the Bank of Japan outside of Europe.
According to trading activity, bank stocks led the gains as bond yields fell, with shares of Santander, BNP Paribas, Intesa Sanpaolo, and UniCredit rising between 2.5% and 3%. Technology stocks also saw increases, with Adyen and Nokia shares jumping between 2% and 3%. Finally, Kering’s stock rose by 12% on expectations that Luca de Meo, CEO of Renault, would join the luxury goods giant.
Despite Platinum price attempts to provide some positive trading, but its repeated stability below the barrier at $1275.00 level assists to motivate providing new bearish trading, attempting to decline below $1225.00, then targeting $1184.00 level, which represents the initial extra target for the near trading.
By the above image, we notice stochastic reach below 50 level, to increase the chances for gathering the required negative momentum to reach the mentioned negative stations.
The expected trading range for today is between $1185.00 and $1260.00
