– Written by


Frank Davies

STORY LINK GBP/USD Forecast: Pound Sterling Rises on Trump TACO Trade

The Pound to US Dollar exchange rate (GBP/USD) traded choppily on Thursday but retained an upward bias overall as improving risk appetite outweighed mixed UK and US data.

At the time of writing, GBP/USD was trading around $1.3472, up more than 0.3% on the day.

The Pound (GBP) initially struggled to find direction, with stronger-than-expected UK data doing little to shield Sterling from broader market volatility.

Figures released earlier in the session showed UK public sector borrowing undershot expectations in December, supported by firmer tax receipts. This was followed by a sharp improvement in the Confederation of British Industry’s distributive trades survey, which rose to -17 in January from December’s -44, beating forecasts of -35.

Despite these constructive signals, Sterling failed to attract immediate follow-through. Instead, GBP traded in a narrow range as markets reacted to renewed volatility surrounding President Donald Trump’s abrupt shift in rhetoric on Greenland.

As the session progressed, however, sentiment improved. A more risk-positive backdrop emerged, lending support to the increasingly risk-sensitive Pound and allowing GBP/USD to grind higher into the latter part of the day.

Meanwhile, the US Dollar (USD) edged lower as demand for safe-haven assets ebbed.

After days of heightened tension between the US and Europe, President Trump appeared to soften his stance on Greenland during remarks at the World Economic Forum in Davos. He ruled out the use of force, spoke of a “framework of a future deal” agreed with NATO Secretary General Mark Rutte, and abandoned plans to impose tariffs on eight European nations backing Greenland, including the UK.

The easing in geopolitical tensions encouraged risk appetite and weighed on the Dollar. Later data offered little relief. The core PCE price index, the Federal Reserve’s preferred inflation gauge, showed price pressures remained sticky in November but failed to generate meaningful support for USD.

Pound-to-Dollar Forecast: Retail Sales and PMIs in Focus

Looking ahead, the Pound could come under early pressure on Friday following the release of the UK’s December retail sales figures. A forecast 0.1% decline would mark a third consecutive monthly contraction and may undermine Sterling sentiment.

Attention will then turn to January’s preliminary UK services PMI. A modest improvement is expected, with the index forecast to edge up from 51.4 to 51.7. Such a limited change may struggle to drive GBP unless the data delivers a clear surprise.

Across the Atlantic, US PMI releases later in the session may influence USD sentiment. Forecast improvements in both manufacturing and services activity could offer the Dollar some late-session support.

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TAGS: Pound Dollar Forecasts

DAX Rebounds as Trump Backs Down Over Greenland and Tariffs

The , along with its European peers, has rebounded on Thursday after President Trump abandoned tariff threats linked to Greenland and also ruled out using force to take the territory.

Trump announced that he had withdrawn tariff threats after a meeting with NATO Secretary General Mark Rutte, during which they reached a framework for a deal on Greenland’s future.

While details are few and far between, reports suggest the framework may involve mineral rights and the golden dome, Trump’s most ambitious missile defence plan yet. Greenland is home to a large amount of rare earth elements, many of which are crucial to technologies such as mobile phones and EVs.

NATO Secretary General said there was no discussion over the key issue of Danish sovereignty over Greenland

Trump’s comments have been enough to boost risk sentiment, calming fears of a potential trade war.

Those sectors which had been badly beaten in recent days are rebounding, with German automakers leading the charge higher.

With the TACO (Trump Always Chickens Out) trade in full swing, attention is also turning to financial updates. Volkswagen Europe’s largest carmaker is up 4.3% after posting better-than-expected net cash flow for 2025.

Attention will also be on U.S. data later today, including , the Fed’s preferred gauge for inflation, for October and November, although this may seem like old news now, as well as Q3 .

DAX Forecast – Technical Analysis

The DAX rebounded lower from its record high of 25,500 to a low of 24,350, although crucially closed above the 24,700 support level and the July and October highs, keeping the uptrend intact.

Buyers, encouraged by recovering momentum, will look to extend gains towards the 25,000 round number and 25,500 to fresh record highs.

Sellers would need to break meaningfully below the 24,700 level to negate the near-term uptrend. Below here, the 50 SMA and 200 SMA come into play at 24,275 and 23,930, also the mid-December low.

USD/JPY Rebounds as the “Sell America” Trade Unwinds

is rising as the holds onto yesterday’s gains after Trump backpedalled on trade tariffs and on Greenland, announcing a framework for a deal. As a result, investors unwound the “Sell America” trade, and risk sentiment has returned. 

In the absence of further updates regarding Greenland, attention will turn to US data and central banks. The US core PCE for October and November, the Fed’s preferred inflation gauge, will be released, helping to clear some of the haze left by the US government shutdown at the end of last year. US GDP for Q3, as well as jobless claims, will also be watched for clues over the Fed’s next move.

The market is pricing in two by the Fed this year.

The yen is weakening and remains in intervention territory at these levels. However, Japanese long-dated government bonds are extending gains on Thursday after a steep sell-off at the start of the week. Expectations are rising that the finance ministry could take some measures to contain further rises in yields.

Attention is turning to the Bank of Japan’s rate decision early on Friday. The central bank is expected to leave rates unchanged at 0.75% after raising them to the highest level since 1995 in the December meeting.

Attention will be on the extent to which BoJ governor Ueda provides hawkish signals at a time when the yen is on the brink of a key level versus the dollar at 160. This is the level considered a rough line in the sand, where authorities step in for multiple rounds of intervention, as in 2024.

The BoJ will be paying closer attention to the impact of the currency on inflation, as further weakening could accelerate the pace of future rate hikes.

USD/JPY Forecast – Technical Analysis

USD/JPY eased lower from its 18-month high of 159.45, finding support on its multi-month rising trendline and recovering higher. The uptrend remains intact. The RSI supports further gains as long as it remains out of overbought territory.

Buyers will look to rise above 159.45 to create a higher high towards 160.00 and 162.00, the 2024 high.

Support is seen around 157.75, the November high and weekly low.  A break below here and the 50 SMA at 156.50 opens the door to 145.50, the December low.

Original Post

Natural gas price activated with the US data positively, to rally above the broken bullish channel’s support initially at $4.050 level, to settle above it and to open the way for today’s trading with strong positivity by its rally directly to $5.490.

The price might form corrective trading to attempt to gather some gains, but its stability above $4.750 level supports the continuation of the positivity, to expect resuming the bullish attack to reach $5.770, then press on the bullish channel’s resistance at $5.960.

The expected trading range for today is between $5.100 and $5.770

Trend forecast: Bullish

Copper price approached the initial corrective target yesterday at $5.6500, to confirm delaying the attempts to resume the bullish trend due to its stability at $5.9700, besides providing negative momentum by its continued leaning below 80 level as appears in the above image.

Therefore, we will keep preferring the temporary negative attempts, which might target $5.6200 and $5.5100, while regaining the bullish trend requires a positive close above the mentioned barrier, to reinforce the chances of recording new historical gains that might begin at $5.6200 and $5.8500.

The expected trading range for today is between $5.6200 and $5.8500

Trend forecast: Bearish

– Written by


Frank Davies

STORY LINK Pound Sterling to Dollar Forecast: Is the Calm Temporary?

The Pound to Dollar exchange rate (GBP/USD) regained some composure after renewed equity market losses briefly dragged the pair back to key support levels.

GBP/USD Forecast: Recovery from Test of 1.34 Support

After a calmer start, there were fresh losses in equities which hampered the Pound with the Pound to Dollar (GBP/USD) exchange rate dipping to re-test the 1.3400 level before a recovery to 1.3430 as the dollar lost ground.

According to UoB, there is scope for gains to 1.3505, but added; “On the downside, a breach of 1.3380 could indicate that GBP is likely to range-trade instead of trading with an upward bias.”

HSBC has an end-year GBP/USD forecast of 1.35.

There was no major impact from the latest UK inflation data with geo-political developments dominating domestic and global markets. Events in Davos will continue to be monitored very closely.

Macquarie Group global forex and rates strategist Thierry Wizman commented; “The next step in the ‘Greenland or Bust’ saga is to see whether a common ground, such as NATO joint administration of Greenland, can be reached, starting at Davos this week.”

He added; “Until that happens the so-called primacy of the U.S. remains at risk of further dissolution, and with it an upending of the geopolitical alignments that have upheld markets in recent years.”

As far as financial markets are concerned, the developments in bond markets will be a key element.

Upward pressure on bond yields unsettled the dollar on Tuesday and had a knock-on effect on the Pound as UK bond yields also moved higher.

According to ING; “Greenland will be the dominant theme today and there may be scope for de-escalation, offering the dollar some support. Trump is meeting EU leaders in Davos today, and if the past year has shown anything, it’s that face‑to‑face engagement tends to provide the best opportunity for tensions with the US president to ease.”

MUFG noted; “The news yesterday that the Danish pension fund Akademikerpension was exiting the US Treasury market certainly added to the speculation of further foreign investor selling.”

It notes that this is not a sum which would destabilise the markets.

Nevertheless, it added; “But another announcement like the Danish one can certainly reinforce the negative momentum and feed the speculation of a broader sell-off of US assets. Investors sense that the taking of Greenland could be a step too far and warrants a more serious flight of capital from the US than what took place in April last year. The selling then was fleeting.”

Rabobank commented on the potential lack of alternatives; “The question remains, however; if we see mass dumping from European institutions, where do the dollars go?”

Domestically, the headline UK inflation rate increased to 3.4% from 3.2% and marginally above consensus forecasts of 3.3% with the core rate held at 3.2%.

Markets continued to price in around a 20% chance of a Bank of England rate cut at the March meeting.

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TAGS: Pound Dollar Forecasts

Created on January 22, 2026

The market has clearly spoken that it does not like the rising interest rates in Japan, as traders continue to punish the bond markets in Tokyo.

The US dollar has gone back and forth against the Japanese yen during trading on Wednesday as we continue to see a lot of choppiness right around this 158 yen level. It does make a certain amount of sense because we have the Bank of Japan interest rate decision happening on Friday, and that obviously will have a lot to do with where we go next.

While a cut or a hike isn’t necessarily expected, what people will be watching is the statement and the press conference. The Japanese are painted into a corner as they offer 75 basis points interest, but quite frankly, their bond market is starting to get out of control, and a lot of that comes down to the debt.

The market has clearly spoken that it does not like the interest rates rising in Japan and therefore continues to punish Japan via its bond market. If the central bank starts to talk about quantitative easing again, that probably helps the bond market but crushes the yen.

Interest Rate Differential

The interest rate differential, even after the Fed cuts a total of 50 basis points this year as expected, is still wide enough to drive a truck through, and therefore, you get paid at the end of every day to hold this currency pair. I think that continues to be one of the main drivers.

The 50-day EMA is down at the 156.11 level, and I think it is going to continue to offer a bit of a floor in the market. I like buying dips. I’ve been hanging on to this one for a while, adding occasionally, and building up a sizeable position that pays me at the end of every day. That’s how I think this continues. 160 yen will be the next target.

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.

Created on January 21, 2026

The interest rate differential is still wide enough to drive a truck through in this pair, and that’s the main focus longer-term. At this point, I look at pullbacks as an opportunity.

The British pound initially rallied against the Japanese yen during trading on Tuesday but has given back quite a bit of the gains. This does make a certain amount of sense because it has been more or less a risk-off type of environment. That to me doesn’t really matter, though, because I think that’s a temporary situation. The interest rate differential is still wide enough to drive a truck through, so I still prefer to own the British pound over the Japanese yen.

Furthermore, the bond market in Japan is all over the place, and I think that is a story that will continue to play out. While the interest rates in Japan have been climbing, it’s not for the right reasons, and therefore, I think the Japanese yen will continue to suffer.

Pullbacks and Support Levels

Pullbacks at this point in time will more likely than not look at the ¥210 level as a floor. After that, we have the 50-day EMA sitting just below the ¥209 level. To the upside, the ¥215 level could be your target, but we haven’t made it there yet. It looks like the area right around ¥214 continues to cause a little bit of a headache.

I think it makes a lot of sense to go sideways for a while and perhaps have more of a buy-on-the-dip type of behavior in this market. The Bank of England has a little bit of a negative, kind of dovish tone to it, but it’s not aggressively so, and therefore, the carry trade will be very much alive in this pair going forward for the foreseeable future.

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.

– Written by


David Woodsmith

STORY LINK Pound to Dollar Forecast: “Sell America” Risks Test GBP/USD Near 1.35

The Pound to Dollar exchange rate (GBP/USD) has edged closer to 1.35 as renewed dollar weakness offsets a softer risk backdrop, with markets increasingly focused on US political risks rather than UK fundamentals.

GBP/USD Forecasts: Trump Agenda Dominates

The Pound to Dollar (GBP/USD) exchange rate held above 1.3400 in Asia on Tuesday and has advanced to highs just below 1.3500 amid dollar losses. Major GBP/USD resistance levels come in above 1.3550.

Risk conditions are likely to dominate and a key issue will be whether the dollar can gain defensive support or whether there is a renewed sell-off in the currency amid fears over the US outlook. If equities continue to slide, it will be tough for the Pound to make headway.

The key issues are likely to be intense uncertainty and higher volatility with a focus on rhetoric at the Davos gathering.

RBC Capital Markets has a year-end GBP/USD target of 1.36 and added; “while some cable downside risks can be priced out of 2026, new uncertainties may emerge.”

Geo-political developments have dominated with further concerns over the US threat of tariffs on eight European countries if there is no deal on Greenland.

The dollar has been hurt by renewed talk of a sell America mentality, especially with the risk of retaliation from Europe. Overall risk appetite, however, has dipped again with sharp losses for equities.

Adding to the sense of unease has been a highly critical post from Trump calling the UK deal on the Chagos Islands as an act of great stupidity.

Markets are also still having to deal with uncertainty surrounding Federal Reserve independence.

According to MUFG; “The trade uncertainty, Fed independence threats, and Trump’s approach to geopolitics generally are all factors that could result in a sudden pick up in appetite for reducing US dollar exposures. The cost involved in that should also cheapen if we see the Fed deliver further rate cuts this year.”

ING notes that US assets are still performing well and added; “until the performance outlook for those assets significantly shifts, we are unlikely to see a significant exodus of European capital from the US.”

It added; “That said, we are a little negative on the dollar this year for macro reasons. But a 10% sell-off akin to last April’s ‘sell America’ theme looks unlikely.”

As far as data is concerned, the UK unemployment rate held at 5.1% in the three months to November, matching the 4-year high, and in line with consensus forecasts.

The ONS reported a 33,000 decline in payrolls for November with a provisional decline of 43,000 for December.

Headline average earnings growth slowed to 4.7% from 4.8% with underlying growth at 4.5% from 4.6% previously and in line with expectations.

There was no shift in Bank of England expectations with markets not expecting a February cut.

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TAGS: Pound Dollar Forecasts

Created on January 21, 2026

The US dollar has been very noisy against the Japanese yen on Tuesday as we see the JGB markets show signs of stress.

The US dollar has been very noisy against the Japanese yen during the bulk of the Tuesday trading session, as we continue to see a lot of noisy action. That being said, you should also pay close attention to the fact that the Japanese bond market is showing extreme stress and volatility, so this is going to make the Japanese yen very difficult to get a handle on in the short term.

That being said, longer term, we certainly have a lot of upward pressure at this point with the 158 yen level being a bit of a magnet, and I think the 160 yen level being a bit of a target. Short-term pullbacks would open up the possibility of buying opportunities with the 156 yen level offering support at the 50-day EMA.

The 50-day EMA, of course, is an indicator that I think a lot of people will continue to look at as a potential trend line. To the upside, I do think that we could eventually go looking to the 162 yen level after we get above 160 yen, but I think that would take a certain amount of momentum.

The Carry Trade Is Still Alive

Keep in mind that the carry trade is still very much alive, and of course, the US dollar does pay you to hold it against the Japanese yen despite the fact that yields are rising in Japan, because that’s a sign of stress.

That will be very volatile, and I think at this point in time, the market is trying to tell Japan you are not going to be able to raise rates too much, and therefore, the Bank of Japan may find itself acquiescing. There is the possibility of intervention, but intervention just gets bought into before it’s all said and done, as we have seen multiple times.

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

Created on January 21, 2026

EUR/USD Analysis Summary Today

• Overall Trend: Bearish Technical Correction
• Support Levels for EUR/USD Today: 1.1590 – 1.1530 – 1.1440
• Resistance Levels for EUR/USD Today: 1.1800 – 1.1860 – 1.1920

EUR/USD Trading Signals:

• Buy EUR/USD from the support level of 1.1650 with a target of 1.1800 and a stop-loss at 1.1560.
• Sell EUR/USD from the resistance level of 1.1800 with a target of 1.1500 and a stop-loss at 1.1880.

Technical Analysis of EUR/USD Today:

For two consecutive sessions, the EUR/USD pair has been rebounding from the support level of 1.1576 – the pair’s lowest level in two months. Gains extended to the resistance level of 1.1768, and the price is currently stabilizing around 1.1730 at the time of writing. According to performance on reliable trading platforms, the “Greenland Deal” continues to dominate the narrative for the second straight day, as traders begin to fear this is more than just a passing headline.

Generally, financial markets perceive heightened risks associated with the confrontation between the United States and Europe over the Greenland issue. As of Tuesday, Trump did not appear willing to back down from his stance on annexing Greenland to the United States, meaning that the UK and the EU will face a 10% tariff starting February 1st.

According to Forex market activity, the U.S. Dollar tends to decline as investors realize the negative economic impact of tariffs, which are largely borne by American consumers. Conversely, the Euro tends to benefit as a “large” and more liquid alternative to the U.S. Dollar, even if it is the party directly hit by Trump’s tariffs.

In general, Trump’s recent statements represented a new escalation in the Greenland dispute and confirmed the deterioration in relations between the United States and the European Union, keeping financial markets on edge. However, the euro avoided sustained losses. Its strong inverse relationship with the US dollar (USD) provided some protection, as the dollar came under pressure following Trump’s latest tariff threat.

EUR/USD Opportunities for a Bearish Breakout

The EUR/USD pair’s upward trend, as seen on the daily chart, could gain positive momentum if bulls manage to push the currency above the psychological resistance level of 1.1800. Recent gains have pushed the 14-day Relative Strength Index (RSI) towards 57, away from the neutral line, suggesting bullish momentum towards stronger upward levels if investor sentiment improves amid the recent US-EU dispute over the Greenland trade deal. Technically, the MACD indicator is also trending upwards, awaiting further positive momentum.

A EUR/USD a bearish scenario on the daily chart would require bears to push the currency back towards the support levels of 1.1655 and 1.1580, respectively. The EUR/USD’s direction today will be influenced first by statements from European Central Bank President Lagarde at 9:30 AM Egypt time. Then, most importantly, statements from US President Trump at 3:30 PM Egypt time.

Trading Advice:

We advise waiting for the EUR/USD to break through the 1.1800 resistance level before considering selling again. However, never take risks, no matter how strong the available currency trading opportunities may seem.

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