July 22, 2025 – Written by Frank Davies

STORY LINK Euro to Pound Sterling Forecast: EUR Firm Despite Downbeat Market Mood

The Euro-to-Pound exchange rate (EUR/GBP) was trapped in a narrow range on Tuesday despite a souring market mood.

At the time of writing, the GBP/EUR was trading at around €1.1528, virtually unchanged from Tuesday’s opening levels.

The Euro (EUR) found modest support on Tuesday, strengthening against several of its peers despite the absence of any notable Eurozone data releases.

Although muted against the Pound (GBP), a broadly cautious market tone helped lift demand for the safe-haven common currency, allowing it to edge higher against its risk-sensitive rivals.

However, the Euro’s gains were limited, as persistent concerns over US–EU trade relations acted as a headwind, tempering investor enthusiasm and keeping EUR performance relatively contained.

The Pound saw uneven trading on Tuesday, with its performance driven mainly by shifting risk appetite amid a quiet UK economic calendar.

Sterling managed to edge higher against its risk-sensitive rivals despite its own growing correlation with risk appetite, as an anxious trading environment dented demand for those currencies.

However, the Pound struggled to build momentum elsewhere, holding steady against safe-haven currencies such as the Euro, as the prevailing risk-off sentiment kept GBP gains in check.

Looking ahead to Wednesday’s European session, the Pound Euro (GBP/EUR) exchange rate is likely to remain subdued, with both currencies lacking clear direction in the absence of any high-impact domestic data.

With no notable UK or Eurozone releases scheduled, investors are likely to look ahead to more influential events later in the week.

The primary focus will be Thursday’s European Central Bank (ECB) interest rate decision.

While the ECB is widely expected to hold interest rates steady at its July meeting, the tone of the accompanying statement and press conference will be crucial in determining the central banks next move.

Any hints that further rate cuts remain on the table, especially in light of lingering concerns about weak growth across the bloc, could weigh heavily on EUR exchange rates.

Equally, if policymakers strike a more hawkish tone or express confidence in the Eurozone’s economic outlook, the single currency could find renewed support and push higher in the latter half of the week.

At the same time, the Pound may find fresh impetus from the UK’s upcoming flash PMI figures, also set for release on Thursday.

Markets are expecting the UK’s services PMI reading, the dominant sector of the UK economy, to remain in expansion territory, which could underpin GBP exchange rates.

Until then, however, the GBP/EUR exchange rate is likely to remain rangebound, as traders await Thursday’s key events.

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Important DisclaimersThe content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party’s services, and does not assume responsibility for your use of any such third party’s website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.Risk DisclaimersThis website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.

• The British pound has bounce significantly during the trading session here on Monday, to break above the top of the inverted hammer from the Friday session, as well as the 50 Day EMA.
• The uptrend line of course is something that a lot of people have been paying attention to, as it is so obvious for longer term trades.
• Now that we are above the 50 Day EMA, you have to ask the question as to whether or not the uptrend is going to continue.

Technical Analysis

Being above the 50 Day EMA is bullish obviously, but we also have a major trend line underneath that continues to offer support. If we were to break down below the uptrend line, and clear the 1.3350 level to the downside, then we could see something rather significant as far as a drop is concerned, perhaps a move down to the 1.31 level where the 200 Day EMA currently resides. However, I think that is very unlikely at the moment, mainly due to the fact that it would probably take the US dollar strengthening against almost everything. Ultimately, this is a market that remains bullish over the longer term, but we are sitting in an area that could dictate where we go for the next several handles.

Keep in mind that the US dollar of course is being thrown around by the idea of what the Federal Reserve may or may not do, as traders are looking for some type of handout in the form of lower interest rates. Ironically, the economic numbers coming out the United States have not shown an economy that is cooling off, so whether or not the Federal Reserve will actually cut anytime soon remains to be seen. However, it’s also worth noting that the British pound has outperformed other currencies against the US dollar for a couple of years now, even on the way down.

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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 Analysis Summary Today

• Overall Trend: Moving within a counter-bearish channel.
• Today’s EUR/USD Support Levels: 1.1630 – 1.1580 – 1.1490.
• Today’s EUR/USD Resistance Levels: 1.1700 – 1.1770 – 1.1830.

EUR/USD Trading Signals:

• Buy EUR/USD from the support level of 1.1580 with a target of 1.1780 and a stop loss of 1.1490.
• Sell EUR/USD from the resistance level of 1.1750 with a target of 1.1520 and a stop loss of 1.1830.

EUR/USD Technical Analysis Today:

Ahead of anticipated new statements from US Central Bank Governor Jerome Powell today, Tuesday, July 22, 2025, the EUR/USD currency pair attempted to move above the 1.1700 resistance, recovering from its recent losses that pushed it towards the 1.1556 support level by the end of last week’s trading. The Euro’s stability comes as investors await the European Central Bank’s (ECB) monetary policy decision and closely monitor trade developments between the EU and the United States.

On the monetary policy front, the European Central Bank is expected to keep interest rates unchanged next Thursday after eight consecutive cuts, with policymakers adopting a wait-and-see approach amid uncertainty about the impact of higher-than-expected US tariffs and the strong Euro on European growth and inflation. Meanwhile, EU envoys are preparing to meet this week to discuss emergency measures in case no agreement is reached with US President Donald Trump, whose stance on tariffs appears to have hardened ahead of the August 1st deadline.

The technical forecasts for EUR/USD still indicate that the currency pair is moving within a counter-bearish channel, supported by its move below the 1.1600 support level. With the gains at the start of the week, the 14-day RSI (Relative Strength Index) has returned to around a reading of 56, moving away from the midline, which gives bulls renewed momentum to push higher. As a result, the MACD (Moving Average Convergence Divergence) lines are returning to neutrality. According to the daily timeframe chart performance, the 1.1770 and 1.1830 resistance levels will remain crucial to avoid the recent collapse, and at the same time, expectations for the psychological 1.2000 resistance are re-emerging.

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On the downside, over the same timeframe, trading the Euro below $1.16 will remain important for a bearish reversal and give bears enough momentum to move towards stronger losses. Euro trading today is not anticipating significant economic releases from the Eurozone, and the reaction to US Central Bank Governor Jerome Powell’s statements will be most important for the currency pair.

Trading Tips:

We advise to sell EUR/USD, but without excessive risk, and to monitor factors influencing the currency market.

Key Factors Affecting EUR/USD Price in the Coming Days:

According to observations by forex trading experts, Euro trading is experiencing a temporary upward trend, but it remains stable against the US dollar. Certainly, not many events are expected this week, as forex markets appear relatively quiet for now. While there are no major events on the US calendar, the EU and Japan will have to approve or reject new trade agreements with the United States within the next ten days, with President Donald Trump’s August 1st deadline approaching. Headlines regarding this issue could introduce some short-term volatility into the market.

Trading fundamentals suggest that trade agreements will benefit the US dollar, as they will reduce the likelihood of negative domestic economic shocks stemming from import tariffs. Reports indicate that the United States also wishes to apply comprehensive tariffs on EU goods exceeding 10% with few exceptions.

The main event this week is the European Central Bank (ECB) meeting, where interest rates are expected to remain at their current levels, signifying an end to its rate-cutting cycle. Last June, President Lagarde stated that the ECB is well-positioned to handle the current uncertain environment, emphasizing that further cuts are not guaranteed. Experts expect the ECB to keep the deposit facility rate at 2.0% at its meeting scheduled for July 24th, and we do not anticipate any further rate cuts after that. However, the risk of this decision stems from the possibility of an escalation in the trade dispute between the EU and the US, and a further appreciation of the Euro against the dollar.

Overall, if the ECB concludes its interest rate cuts, the Euro will receive good support from a future interest rate differential perspective. However, most market participants believe it will cut interest rates again in September for the final time. Even if it does, the broader picture is that the United States will likely see larger interest rate cuts in the coming months compared to the Eurozone, which supports the Euro against the dollar.

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The GBPJPY pair rose in its last intraday levels, affected by its lean on the support of minor bullish trend line on the short-term basis, gaining positive momentum, accompanied by the emergence of the negative signals on the (RSI), after reaching oversold levels, attempting to surpass the negative pressure on the EMA50, announcing its full recovery.

Therefore, our expectations suggest a rise of (GBPJPY) in its upcoming intraday trading, if the support settles at 198.70, to target the critical resistance level at 199.80.

The expected trading range for today is between 198.75 and 199.80

Trend forecast: Bullish

The GBPJPY pair rose in its last intraday levels, affected by its lean on the support of minor bullish trend line on the short-term basis, gaining positive momentum, accompanied by the emergence of the negative signals on the (RSI), after reaching oversold levels, attempting to surpass the negative pressure on the EMA50, announcing its full recovery.

Therefore, our expectations suggest a rise of (GBPJPY) in its upcoming intraday trading, if the support settles at 198.70, to target the critical resistance level at 199.80.

The expected trading range for today is between 198.75 and 199.80

Trend forecast: Bullish

Important DisclaimersThe content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party’s services, and does not assume responsibility for your use of any such third party’s website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.Risk DisclaimersThis website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.

July 21, 2025 – Written by Frank Davies

STORY LINK Pound to Dollar Forecast for Coming Week: Diverging FX Predictions

The Pound to Dollar exchange rate (GBP/USD) faces diverging forecasts, with BNP Paribas targeting a rise to 1.42 by end-2026, while ING sees limited upside amid UK fiscal concerns and a slower Bank of England easing cycle; broader USD weakness may support Sterling, but political risk and Fed uncertainty keep short-term volatility high.

BNP Paribas forecasts that the Pound to Dollar rate will strengthen to 1.38 by the end of 2025 with a further advance to 1.42 by the end of next year.

ING forecasts that GBP/USD will be held to 1.34 on a 12-month view.

GBP/USD dipped to 8-week lows below 1.34 during the week before recovering slightly.

JP Morgan expressed concerns over the technical outlook with GBP/USD key trend support at 1.3376-1.3497.

Looking at the risk of a break it commented; “were to occur this summer. We see the 1.319-1.3148 area as the first medium-term support zone for the pair.”

UK data was mixed during the week, but did dampen expectations of a more aggressive Bank of England (BoE) series of rate cuts.

The headline inflation rate increased to 3.6% from 3.4% with an increase in the core rate to 3.7% from 3.5%.

The latest labour-market data reported a provisional 41,000 decline in payrolls for June, but the May decline was revised to 25,000 from the 109,000 reported previously.

The data eased fears over a rapid deterioration in the jobs market.

Markets are still confident that the BoE will cut rates at the August meeting.

BNP commented; “We continue to hold the view that the GBP can benefit from USD weakness, although not as much as the EUR, which has more positive drivers. We therefore see the GBP performing around the middle of the pack of G10 currencies as the weaker USD trend continues.”

ING remains concerned over the fiscal outlook; “Sterling is starting to underperform a little. Fiscal policy is back in the headlines after the government failed to deliver spending cuts in welfare. Other spending cut options look limited, leaving the alternatives of tax hikes or a softening of the fiscal rules – neither of which look good for sterling.”

ING added; “We still look for the Bank of England to cut rates on a quarterly cycle. But a quicker deterioration in the labour market could see the BoE terminal rate priced some 25-50bp lower to the 3.00/3.25% area. This could see GBP/USD lag in an otherwise soft multi-quarter dollar environment.”

There was firm US data during the week with markets cutting expectations of a September rate cut to around 40%.

Credit Agricole commented; “We think the Fed would prefer to examine another couple of reports before determining a course of action, given that the labour market has held up okay heading into the July FOMC. A September cut remains our current base case, though such a move is far from certain.”

The dollar did, however, slide briefly following reports that President Trump was on the point of dismissing Fed Chair Powell, but recovered quickly when this was denied.

MUFG considers that the threat to Fed independence will remain a key risk factor; “the scope for any meaningful recovery of the dollar remains very limited in our view given these building efforts by the Trump administration to interfere and turn the Fed notably more dovish over time.”

Goldman Sachs expects the US economy will struggle; “A key underpinning to our bearish Dollar outlook is that US firms and households will pay for the majority of the tariffs, which will weigh on US relative performance. This, together with broader policy uncertainty, will lead investors to reduce their exposure to US Dollars.”

BNP remains bearish on the dollar; “We expect the secular USD downtrend to continue as global investors further reduce their overweight and under-hedged US asset exposure.

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• The USD/JPY forecast shows a resilient yen despite a shift in Japan’s political landscape.

• Japan’s ruling party lost the election on Sunday.

• If there is no trade deal by August 1, Japan might face a 25% tariff on its goods.

The USD/JPY forecast shows a resilient yen despite a shift in Japan’s political landscape. The currency edged higher against the dollar despite Japan’s ruling party losing majority seats in the Upper House. However, there is caution as market participants await the implications for the Prime Minister and US-Japan trade negotiations. 

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The yen strengthened on Monday after Japan’s ruling party lost the election on Sunday. Prime Minister Shigeru Ishiba’s party got 47 seats out of the 50 required to win a majority in the Upper House. This means that Ishiba has lost most of his power. Already, the ruling party has lost majority of seats in the Lower House. The new loss means a difficult time trying to pass policies. 

At the same time, it means uncertainty on trade talks with the US. If there is no trade deal by August 1, Japan might face a 25% tariff on its goods. Such an outcome would weigh on the economy and the yen.

USD/JPY key events today

Market participants do not expect any key economic releases from Japan or the US. Therefore, they will continue to monitor tariff developments.

USD/JPY technical forecast: Bearish RSI divergence

On the technical side, the USD/JPY price has broken below the 30-SMA, showing bears have taken the lead. The price now sits below the SMA, with the RSI under 50, supporting a bearish bias. However, the price is still facing the 148.02 key support level. At the same time, bears must break below the previous low to form a lower low and confirm a new downtrend. 

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Previously, the price was trading in a solid uptrend above the 30-SMA, making higher highs and lows. However, this stopped when bulls met the 149.01 resistance level. Here, they could not make a higher high. The price failed to break above the previous high, and the RSI made a bearish divergence. This allowed bears to push the price below the SMA. 

A break below 148.02 would confirm the shift in direction and clear the path to the 146.01 support level. However, if the price fails to break below the support level, bulls will likely return to retest the 149.01 resistance.

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July 21, 2025 – Written by David Woodsmith

STORY LINK Euro to Dollar Bank Forecast RAISED to 1.23 for Next 12 Months

The Euro to Dollar exchange rate (EUR/USD) is expected to strengthen over the coming year, with UBS raising its 12-month forecast to 1.23 amid shifting rate expectations, political risks for the Fed, and Eurozone fiscal momentum, though short-term volatility remains as markets digest firm US data and tariff threats.

UBS has raised its 12-month Euro to Dollar rate forecast to 1.23 from 1.20 previously.

ING expects EUR/USD will retreat to 1.15 on a 3-month view before a rebound to 1.18 in 12 months.

EUR/USD dipped to 3-week lows around 1.1560 during the week before a recovery to just above 1.1650.

US data releases were also generally firm with markets cutting the potential for a September rate cut to around 40%.

ING commented; “The dominant theme for this quarter we believe will be resurgent US inflation and a Fed resisting heavy political pressure to cut rates. This can deliver some brief respite to the dollar.”

It added; “But expect a lot of interest to buy the dip before EUR/USD rallies again into year-end on a 50bp Fed cut and Powell speculation.”

The dollar briefly slumped following reports that President Trump was poised to sack Fed Chair Powell, but rallied when these reports were denied.

Scotiabank Derek Holt VP & Head of Capital Markets Economics commented; “Personally, I think it’s all just a bunch of performative stunts by the administration.”

Deutsche Bank expects heavy dollar losses if Powell is removed; “we believe the market reaction would be large. It is stating the obvious that investors would likely interpret such an event as a direct affront to Fed independence putting the central bank under extreme institutional duress.”

UBS tied concerns in with unease over the budget deficit; “With US public debt set to rise firmly above 100% of GDP in the coming years, we see room for markets to demand a higher risk premium on US Treasuries. If the Fed provides a helping hand in managing the debt load—i.e., by reducing short-term rates or ramping up its balance sheet again—the USD would likely be hit hard.”

In this context, dollar fundamentals will also be a key element.

According to BNP; “We expect the secular USD downtrend to continue as global investors further reduce their overweight and under-hedged US asset exposure.”

It commented; “Data from European pension funds already highlights a significant increase in hedge ratios, and we suspect that this is a price-sensitive rotation whereby these ratios can rise further as the USD weakens.”

Trade developments will be important as the clock ticks towards the August 1st deadline with Trump threatening to impose 30% tariffs on the EU.

Barclays expects dollar resilience; “In the past few weeks there has been a gradual shift in the market’s reaction function, with the dollar now more resilient to tariff escalation news than post-Liberation Day.”

Barclays added; “the absence of widespread retaliation detracts from overt dollar bearishness. Combined with a hefty tariff schedule against the EU in particular and a markedly lower ECB rate path, this would make for a more challenging environment for the EUR.”

Goldman expects there would be renewed dollar selling; “If broad tariff rate hikes are implemented once again, we think the Dollar reaction would be negative again.”

UBS is positive on the Euro due to the election of a new German Chancellor and large fiscal package.

It also notes that the Euro is the most liquid alternative to the dollar while the Euro area has a positive net investment position.

It added; “In our view, all three drivers will remain in place in the coming months and quarters and are likely to push the euro higher against the USD—especially after the recent announcements of more front-loaded spending in Germany.”

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