“I believe that now is a prime opportunity to raise the policy interest rate. The once deeply entrenched norm has waned in Japan, that the price stability target has been almost achieved.”

Notably, the BoJ must weigh the benefits of a weaker yen boosting exports and the negative effects of higher import costs on households.

On Wednesday, October 22, former BoJ board member Eiji Maeda hinted at a December or January rate hike, stating:

“Moving too slowly in policy normalization would hurt people’s livelihoods by weakening the yen and accelerating inflation.”

PMI Data and Economic Momentum

As the dust settles from the inflation report, traders will now turn their attention to flash private sector PMI numbers.

The market focus will likely be on the Services PMI, given that the sector contributes over 70% to Japan’s GDP. Economists forecast the S&P Global Services PMI to drop from 53.3 in September to 53.0 in October.

A sharper drop in the headline PMI could signal a loss of economic momentum, potentially tempering bets on a BoJ rate hike. A more dovish BoJ policy stance may weigh on the Japanese yen. Conversely, a higher PMI reading could boost expectations of a BoJ rate hike.

However, traders should also consider input and output prices and the employment sub-components. Softer wage growth, weaker output prices, and job cuts would support a delay to monetary policy tightening. On the other hand, higher wages, stronger output prices, and rising jobs would suggest a more hawkish rate path.

US Services PMI, Consumer Sentiment, and the USD/JPY Outlook

Across the Pacific, US S&P Global Services PMI and Michigan Consumer Sentiment Index numbers will fill an economic data void as the US government shutdown enters day 24.

Economists forecast the Services PMI to fall from 54.2 in September to 53.5 in October.

A sharper drop toward the 50 neutral level would signal a marked loss of economic momentum, given that services contribute around 80% to US GDP. Additionally, traders should consider the employment and prices sub-components. Lower prices, job cuts, and slower services sector activity would support a more dovish Fed rate path, pushing USD/JPY toward 150.

Conversely, a pickup in services sector activity, higher prices, and rising employment could temper bets on multiple Fed rate cuts. A less dovish Fed rate path may send USD/JPY toward the August high of 153.274.

While the services sector data will be key, the Michigan Consumer Sentiment Index could also move the dial. According to preliminary data, the Michigan Consumer Sentiment Index slipped from 55.1 in September to 55.0 in October.

A downward revision could signal a pullback in consumer spending, dampening demand-driven inflation. A softer inflation outlook would support multiple Fed rate cuts and a USD/JPY fall toward 150. On the other hand, a higher reading could challenge bets on multiple Fed rate cuts, sending the pair toward 153.274. While the consumer sentiment figures will draw interest, the Services PMI will have more impact on the USD/JPY pair.

USD/JPY Scenarios: Services PMI Data, BoJ Uncertainty, and Dovish Fed Bets

Market scenarios for USD/JPY will hinge on central bank rhetoric and trade headlines.

• Bearish USD/JPY Scenario: hawkish BoJ commentary, stronger PMI data, or escalating US-China trade tensions could push USD/JPY toward 150.
• Bullish USD/JPY Scenario: dovish BoJ commentary, weaker PMI data, or easing US-China trade tensions could send USD/JPY toward 153.274.

– Written by


Tim Boyer

STORY LINK GBP/USD Price Forecast: Pound Sterling Holds Near 1.33 on Safe-Haven Demand

The Pound to US Dollar exchange rate (GBP/USD) was little changed on Thursday, as renewed US-China trade tensions lifted demand for the safe-haven Dollar while dovish Bank of England (BoE) expectations weighed on Sterling.

At the time of writing, GBP/USD was trading at 1.3329, down 0.15% on the day.

The US Dollar (USD) held firm throughout Thursday’s European session, finding support as risk sentiment soured amid reports of renewed trade strains between Washington and Beijing.

According to sources, the Trump administration is weighing new restrictions on software and technology exports to China — a move that reignited investor caution and encouraged a shift into safer assets.

Despite a quiet US data calendar, the ‘Greenback’ advanced against risk-sensitive currencies, underpinned by the day’s risk-off tone and speculation that the Federal Reserve may proceed cautiously with future rate cuts.

The Pound (GBP), meanwhile, struggled to regain momentum after Wednesday’s weaker-than-expected inflation data continued to drag on sentiment.

The softer September CPI reading has led investors to bring forward expectations for BoE rate cuts, with some now predicting a potential move as early as December.

As a result, Sterling traded in a narrow range on Thursday, with market participants largely unwilling to rebuild long GBP positions ahead of key UK data due on Friday.

GBP/USD Forecast: Retail Sales and Inflation Data to Drive Direction

Friday brings a busy data slate for both sides of the pair that could inject fresh volatility into GBP/USD.

In the UK, retail sales for September are forecast to fall by -0.2%, pointing to subdued household spending and adding to evidence of a cooling economy.

However, a modest uptick in the UK’s preliminary services PMI could provide partial relief, signalling that the broader economy retains some resilience despite weakening demand.

Across the Atlantic, attention turns to the latest US inflation figures, with headline CPI expected to rise from 2.9% to 3.1%, while core inflation is seen holding steady.

Stronger-than-forecast readings could bolster the Dollar by tempering expectations for near-term Fed rate cuts, while a softer outcome may trigger renewed USD selling pressure into the weekend.

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On the chart, we have the day that is circled, representing the FOMC interest rate decision and press conference. The US dollar has done pretty much nothing but strengthen since then, although again, the British pound has put up a bigger fight against it than many others.

EUR/GBP Technical Analysis

The euro is slightly stronger against the British pound during the trading session on Thursday, but at this point in time, we continue to move sideways, right around the 50-day EMA. The 50-day EMA sits in the middle of a larger consolidation area, with the 0.86 level on the bottom and the 0.8750 level on the top representing your support and resistance areas. Ultimately, this shows the neutrality between these two currencies as of late.

So that’s why they’re moving in tandem against the US dollar, or at least it helps you determine that one is not particularly stronger than the other. Ultimately, though, when I look at this chart, once we break out of this range, we should have a fairly decent move on our hands. Range-bound traders right now continue to bounce around about a 40 pip range.

For a look at all of today’s economic events, check out our economic calendar.

Created on October 23, 2025

EUR/USD Analysis Summary Today

• Overall Trend: Bearish
• Support Levels for EUR/USD Today: 1.1570 – 1.1500 – 1.1430.
• Resistance Levels for EUR/USD Today: 1.1660 – 1.1740 – 1.1810.

EUR/USD Trading Signals:

• Buy the EURUSD from the support level of 1.1520, target 1.1800, and stop 1.1460.
• Sell the EURUSD from the resistance level of 1.1730, target 1.1600, and stop 1.1800.

Technical Analysis of EUR/USD Today:

As anticipated, the bearish bias for EUR/USD has strengthened, moving towards and below the 1.1600 support level. During yesterday’s trading session, the most famous currency pair in the Forex market saw losses extend to the 1.1576 support level, near its lowest point in a week, before stabilizing around the 1.1610 level at the time of writing this analysis. Overall, the EUR/USD bias may remain bearish as traders now look to US inflation data for clues on whether the Federal Reserve will implement another interest rate cut next week.

The consolidation of the 14-day Relative Strength Index (RSI) around a reading of 43, below the neutral line, confirms the bearish shift for the EUR/USD pair across reliable trading platforms. Despite the losses, the pair still has more room for stronger declines before reaching oversold territory. This could happen if the bears succeed in pushing towards the support levels of 1.1540, 1.1470, and 1.1400, respectively.

As we mentioned before, the EUR/USD pair’s upward trend, based on the daily chart, will continue to be contingent on a move towards the 1.1800 resistance level again.

Trading Tips:

Wait for the reaction to the US inflation figures to anticipate the most appropriate EUR/USD trades, whether to buy or sell.

EUR/USD Forecasts for the Coming Days

According to Forex market trading, the EUR/USD exchange rate failed to breach the 1.1700 area at the start of this week’s trading and quickly inclined to move towards and below the 1.1600 support as the US Dollar achieved net gains in currency markets. Although the 10-year US Treasury yield remained below 4.00%, the US Dollar still managed to post net gains while the Yen recorded sharp losses.

Regarding the future of currency prices, UoB Bank does not expect a breakout; while a calmer fundamental tone suggests a potential drop in the Euro price today, any decline is likely to be part of a lower range between 1.1625 and 1.1660. However, according to ING Bank, there is room for further short-term decline; “EUR/USD remains almost entirely driven by US credit/equity sentiment. Accordingly, further stability could lead to EUR/USD trading reaching the 1.160 support. Levels below that will be difficult to justify unless Friday’s US CPI comes in higher than expected.”

Overall, US interest rate expectations will be a key market influencer.

At this stage, traders are pricing in a near-100% chance of a US rate cut at next week’s meeting, and the Federal Reserve has not expressed any objection. In this regard, Rabobank commented, “The FOMC remains likely to make another cut in October, even if the committee’s vision is limited. In the absence of convincing evidence to go beyond October or to make a larger cut in October, the FOMC is operating automatically.”

Generally, financial markets also estimate a probability exceeding 95% for an additional 25 basis point US interest rate cut in December. Before that, with the government shutdown, US markets continue to operate with a scarcity of data, which increases the risk of misjudging subsequent meetings.

Ready to trade our EUR/USD daily forecast? Here’s a list of some of the top forex brokers in Europe to check out.

Created on October 23, 2025

• The euro dropped initially during the trading session on Wednesday, struggling to maintain its strength against the Japanese yen.
• However, we have turned around to show signs of life, and the way that the market has turned around to show signs of strength suggests that the overall uptrend is likely to continue to be the way forward.
• It’s also worth noting that the ¥175.50 level is an area that has been important previously.

Technical Analysis

The technical analysis for this market is obviously very bullish overall, as we had gapped to the upside after the Japanese election. With that being said, the market has pulled back to test the top of the gap, and now it looks like we are trying to turn things around and start to look like we are going to go to the ¥178 level. The ¥178 level is an area that offered resistance previously, so I think you have a situation where we are going to continue to see a lot of noise overall, and ultimately, I think this volatility probably has people looking at this through the prism of a “buy on the dips” market.

It’s not necessarily that like the euro itself, it’s just that the Japanese yen has so many issues with it at the moment that it makes sense that this pair will move right along with the other JPY-denominated markets. Ultimately, I do think we are higher, not only in this pair, but all of the other JPY-denominated pairs. All things being equal, I also would watch the 50 Day EMA near the ¥174 level, which is rising and offering itself as a bit of an uptrend line. Typically, this is a market that continues to see a lot of noisy behavior, but I also think all things being equal, the Japanese yen weakness will be the main driver here, although there is a bit of a positive swap in this pair if you are long.

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.

Created on October 23, 2025

The U.S. dollar remains steady against the yen on Wednesday, holding above ¥150 support. Analysts expect continued upside toward ¥153–¥155, citing strong rate differentials and Bank of Japan policy, with dips viewed as long-term buying opportunities.

• The U.S. dollar has been a little bit noisy during the trading session here on Wednesday, but really not a lot has changed if you look at it through that prism.
• All things being equal, I think you’ve got a situation where traders are looking at this through the prism of a market that does pay you to hang on to the trade to the upside.

The ¥150 level has shown itself to be important multiple times, with the ¥150 level being resistance previously and then offering support when we fell on Friday to turn around and form a hammer. All things being equal, if the market were to break above the ¥152 level, then it’s possible that we could go looking to the ¥153.25 level.

Interest Rate Differential and Swap Pays

Over the longer term, I do anticipate that the ¥155 level will be targeted, possibly even higher than that. The 50-day EMA currently sits right around the ¥149 level and is rising, and should end up being a nice buying opportunity. Ultimately, this is a market where I think the interest rate differential continues to pay.

Therefore, you have to look at this as a market that is trying to go much higher over the longer term. Eventually, I think each dip gets bought into, and with the Bank of Japan in a situation where they are probably going to have to stay pretty loose, I think you’ve got a situation where we just cannot go in any other direction. For what it’s worth, the U.S. dollar is strengthening against most currencies, so I like this as a buy-on-the-dip scenario.

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.

Copper price confirmed its surrender in its current period trading to the dominance of the sideways bias, affected by the stability of the barrier near $5.0600, which forces it to delay the attempts of resuming the main bullish attack, to notice its fluctuation near $4.9500 level.

Note that the stochastic contradiction with the main stability within the bullish channel’s levels and attempting to providing negative momentum that might force the price to form some corrective trading, to target the extra support at $4.7500, by breaking this support might force it to suffer extra losses by reaching $4.5800 and $4.4100.

The expected trading range for today is between $4.7500 and $5.0600

Trend forecast: Fluctuated within the bullish track