July 13, 2025 – Written by Tim Boyer

STORY LINK Euro to Dollar Forecast: EURUSD Looks “Overbought and Overvalued”

The Euro to Dollar exchange rate (EUR/USD) recovered from lows at 1.1665 on Friday, but was held just below the 1.1700 level as narrow ranges prevailed.

The dollar held firm in global markets while there were no major Euro developments.

Credit Agricole commented; “EUR/USD continues to look overbought and overvalued (according to our fair value and FX positioning models) could make it vulnerable to further correction lower in the near term.”

ING expects narrow ranges may continue to prevail for now; “while near-term risks look more balanced, if anything slightly skewed to the downside, the lack of fresh data suggests the pair may remain anchored around 1.17 for now.”

UoB commented; “Although there is still no significant increase in momentum, only a breach of 1.1755 (‘strong resistance level previously at 1.1780) would indicate that the current downward risk has faded.”

It added; “Until then, if EUR were to close below 1.1660, it could potentially trigger a move to 1.1625.”

Scotiabank added; “We continue to highlight the importance of medium-term support at the 50 day MA (1.1466). We see the near-term range bound between 1.1650 support and 1.1750 resistance.”

Overnight, President Trump announced that he would impose 35% tariffs on Canadian exports to the US from August 1st.

Equities have moved lower, but the dollar has been resilient.

Scotiabank commented; “Investors may consider these threats to be largely negotiating tactics at this point.”

Commerzbank FX analyst Volkmar Baur outlined two potential scenarios. The first is that tariff announcements and trade deals trickle out.

An alternative scenario is that markets assume that Trump will back off and are then shocked when big tariff increases go into effect.

According to Baur “It makes a difference for the market. If the latter is the case, there could be considerable volatility on 1 August if Trump does not back down this time and the tariffs actually come into force. In the former case, we would probably have to wait for a significant deterioration in fundamental data before the market reacts.

He added; “I would expect a weaker US dollar in both situations. However, while things could move quite quickly at the beginning of August if there is no taco, the salami argument would suggest a gradual devaluation as soon as the fundamentals deteriorate.”

MUFG also pointed to the importance of US fundamentals; “With the US economy showing resilience and the labour market still holding up, we may start to see the dollar benefitting again from yields. Our G10 FX regression models indicate scope for the US dollar to recover further. Our EUR/USD model implies a 8% over-valuation that when we back test indicates a 65% probability of a retracement lower over a 4-week period.”

RBC differentiates between the near term and longer-term trend; “In the short term, there are factors that could limit immediate USD weakness, even within the broader theme of depreciation remaining intact.”

HSBC commented on the medium-term outlook; “for EUR-USD to sustain its rally beyond our 1.20 target, we think it needs four EUR-centric factors to work in its favour. These are an acceleration in private sector credit, positive and rising real wage growth, a recovery in the inventory cycle, and policy intervention by the ECB and EU.”

It added; “For now, these elements may not be sufficiently compelling to push the EUR higher from lofty levels.”

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TAGS: Currency Predictions Euro Dollar Forecasts

• The GBP/USD weekly forecast indicates weaker growth in the UK.

• Treasury yields soared after Trump announced higher tariffs on several countries.

• Next week, the US will release crucial inflation and retail sales figures.

The GBP/USD weekly forecast indicates weaker growth in the UK, which has pushed up BoE rate cut expectations.

Ups and downs of GBP/USD

The GBP/USD pair had a bearish week as the dollar gained with US Treasury yields. Meanwhile, the pound dropped after downbeat UK GDP figures. 

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Treasury yields soared after Trump announced higher tariffs on several countries, including Canada, Brazil, and Japan. If these tariffs take effect, they will hike import prices and drive inflation higher. This would force the Fed to maintain high borrowing costs. 

Elsewhere, data on Friday revealed that the UK economy contracted by 0.1% compared to the forecast of a 0.1% expansion. The report increased pressure on the Bank of England to cut interest rates.

Next week’s key events for GBP/USD 

Next week, the US will release crucial inflation and retail sales figures. Meanwhile, the UK will release inflation and employment numbers. The US inflation figures will show whether Trump’s tariffs have increased price pressures. If so, the Fed might remain cautious about rate cuts. However, if inflation is softer than expected, it will solidify rate cut expectations. 

On the other hand, the UK inflation numbers will shape the outlook for Bank of England rate cuts. Traders will also watch to see the state of the UK labor market. 

GBP/USD weekly technical forecast: Bears break below SMA after RSI divergence

On the technical side, the GBP/USD price has broken below the 22-SMA after showing weakness in the rally. The break indicates a bearish shift in sentiment. At the same time, the RSI has crossed below 50, showing that bearish momentum is stronger.

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Previously, the price was trading in a solid bullish rally, making higher highs and lows. However, the price started puncturing the SMA, a sign that bears were gradually getting stronger. At the same time, while the price made higher highs, the RSI made lower ones. This resulted in a bearish divergence, signalling weaker momentum. 

Consequently, bears made a strong break below the SMA. However, to confirm a new trend, the price must maintain its position below the 22-SMA. Additionally, it must start making lower highs and lows. That means breaking below the 1.3400 support. 

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• GBP/JPY strengthens to around 197.95 in Monday’s early European session. 
• The cross maintains a constructive view above the 100-day EMA with the bullish RSI indicator.  
• The immediate resistance level is seen at 198.81; the initial support level is located at 194.34.

The GBP/JPY cross trades in positive territory for the third consecutive day near 197.95 during the early European session on Monday. The Japanese Yen (JPY) weakens against the Pound Sterling (GBP) as the Bank of Japan’s (BoJ) preference to move cautiously in normalizing still-easy monetary policy forces traders to push back their bets about the likely timing of the next interest rate hike to Q1 2026. 

Technically, GBP/JPY keeps the bullish vibe on the daily chart, with the price holding above the key 100-day Exponential Moving Average (EMA). The path of least resistance is to the upside, as the 14-day Relative Strength Index (RSI) stands above the midline near 64.50. This suggests bullish momentum in the near term. 

The first upside target to watch for the cross is seen at 198.81, the high of July 25, 2024. Extended gains could see a rally to the 200 psychological level. Further north, the next hurdle is located at 203.62, the high of July 22, 2024. 

On the other hand, the initial support level for GBP/JPY emerges at 194.34, the low of June 18. A breach of this level could expose the key contention level in the 193.30-193.20 zone, representing the 100-day EMA and the lower limit of the Bollinger Band. The additional downside filter to watch is 191.90, the low of May 22. 

GBP/JPY Daily Chart

The GBPJPY pair began forming bullish wave achieving 199.45 level, but the contradiction of the main indicators and forming an extra barrier might reduce the chances of resuming the bullish attack in the current period.

The stability of the price below the extra barrier, we will begin preferring the bearish correctional trading, which might target 198.20 level reaching 61.8%Fibonacci correction level near 197.45, forming an important support against the upcoming trading, while its success to breach the barrier and holding above it will increase the chances for achieving extra gains that might begin at 200.35 reaching 201.55.

The expected trading range for today is between 198.20 and 199.45

Trend forecast: Bearish

July 11, 2025 – Written by Tim Boyer

STORY LINK Euro to Dollar Forecast: “1.170-1.175 Area for Now”

Evidence of on-going Federal Reserve resistance to interest rate cuts has supported the dollar with markets continuing to monitor trade developments closely.

The Euro to Dollar (EUR/USD) exchange rate was unable to move above 1.1750 on Thursday and retreated to test the 1.1700 area around the US open.

According to ING; “barring major surprises in the details of the deal, EUR/USD may stay attached to the 1.170-1.175 area for now.”

UoB took a similar view; “we view any advance as part of a higher range of 1.1700/1.1755.”

According to Scotiabank; “the multi-month trend remains bullish but the EUR’s latest consolidation has delivered a considerable loss of momentum.”

It sees a slightly wider near-term range; “We see the near-term range bound between 1.1680 support and 1.1780 resistance.”

ING noted that Euro demand in derivatives markets has slowed. It added; “Should this decline prove sustainable, it would signal markets are seriously scaling back bullish views on the pair – another testament of how the dollar is not bearing the risks associated with this round of tariff announcements for now.”

There was an important trade development overnight with the US threatening 50% tariffs on Brazilian exports to the US.

There is, however, still optimism that the EU will be able to negotiate some form of framework deal over the next few days.

According to Scotiabank; “while markets may understand that these announcement are just gambits in more extended trade negotiations, the persistence with tariff action may be wearing on investor patience.”

ING takes a more positive stance on the US currency; “we could see it get to 20% from the current 14%. But how we get there matters hugely for the dollar. A gradual implementation of sector-specific tariffs should do much less damage to the dollar compared to sudden, ‘Liberation Day’-style measures. The former may ultimately result in some inflationary effect that can keep the Fed cautious for longer – a dollar positive.”

The latest US data recorded a decline in initial jobless claims to 227,000 in the latest week from a revised 232,000 previously while continuing claims edged higher to 1.97mn from 1.96mn.

The data did not indicate any further near-term labour-market deterioration.

On Wednesday, the Federal Reserve released minutes from the June policy meeting.

Two members saw scope to cut interest rates at the July policy meeting, but the majority were not convinced that inflation trends justified a near-term move.

According to MUFG; “the minutes continued to signal that “most” participants expected it likely would be appropriate to cut rates this year but they are waiting for more data to provide clarity over the impact of tariffs.”

It added; “The prospect of an even earlier rate cut later this month appears to be off the table now after the stronger than expected nonfarm payroll report for June.”

There has been a further shift in market pricing with traders now pricing in only just above a 30% chance of a September cut.

RBC Capital Markets is still positive on the Euro; “As the second-most traded currency, the euro essentially acts as the “anti-dollar,” and the currency’s appreciation this year partly reflects the extent to which the greenback has fallen.”

It added; “Having said that, there have been a number of positive developments in Europe this quarter that could strengthen the currency in coming months.”

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TAGS: Euro Dollar Forecasts

• GBP/USD trades in negative territory below 1.3550 on Friday.
• The US Dollar could preserve its strength unless risk flows return to markets.
• The technical outlook suggests that sellers look to retain control in the near term.

After closing marginally lower on Thursday, GBP/USD stays on the back foot and trades below 1.3550 in the European session on Friday. The negative shift seen in risk mood could make it difficult for the pair to stage a rebound heading into the weekend.

The US Dollar (USD) benefited from the better-than-forecast weekly Initial Jobless Claims data in the early American session on Thursday. Later in the day, US President Donald Trump’s tariff announcements caused markets to adopt a cautious stance, providing an additional boost to the USD and weighing on GBP/USD.

Trump said that they will impose 35% tariffs on Canadian imports from August 1 and added that they are planning to impose blanket levies of 15% or 20% on most trade partners. US stock index futures were last seen losing about 0.7% on the day. In case safe-haven flows dominate the action in financial markets, GBP/USD could find it hard to shake off the bearish pressure.

Meanwhile, the disappointing growth data from the UK seems to be hurting Pound Sterling on Friday. The UK’s Office for National Statistics announced that the Gross Domestic Product (GDP) contracted by 0.1% on a monthly basis in May. This reading followed the 0.3% contraction recorded in April and came in worse than the market expectation for an expansion of 0.1%.

GBP/USD Technical Analysis

GBP/USD trades near 1.3540, where the Fibonacci 23.6% retracement level of the latest uptrend and the lower limit of the ascending channel align. In case the pair falls below this level and starts using it as resistance, 1.3500 (50-day Simple Moving Average) could be seen as the next support level before 1.3465 (Fibonacci 50% retracement).

Looking north, resistance levels could be seen at 1.3570 (200-period Simple Moving Average), 1.3620 (Fibonacci 23.6% retracement) and 1.3700 (mid-point of the ascending channel).

The GBPJPY pair began forming bullish wave achieving 199.45 level, but the contradiction of the main indicators and forming an extra barrier might reduce the chances of resuming the bullish attack in the current period.

The stability of the price below the extra barrier, we will begin preferring the bearish correctional trading, which might target 198.20 level reaching 61.8%Fibonacci correction level near 197.45, forming an important support against the upcoming trading, while its success to breach the barrier and holding above it will increase the chances for achieving extra gains that might begin at 200.35 reaching 201.55.

The expected trading range for today is between 198.20 and 199.45

Trend forecast: Bearish

The GBPJPY pair began forming bullish wave achieving 199.45 level, but the contradiction of the main indicators and forming an extra barrier might reduce the chances of resuming the bullish attack in the current period.

The stability of the price below the extra barrier, we will begin preferring the bearish correctional trading, which might target 198.20 level reaching 61.8%Fibonacci correction level near 197.45, forming an important support against the upcoming trading, while its success to breach the barrier and holding above it will increase the chances for achieving extra gains that might begin at 200.35 reaching 201.55.

The expected trading range for today is between 198.20 and 199.45

Trend forecast: Bearish

• The British pound has been all over the place during the trading session here on Thursday as we continue to pay close attention to the 1.3550 level.
• As long as this area holds and maybe just a little bit below there at the 50 day EMA, I think you’re still in an uptrend.
• After all, you can see that on the chart, I have a significant up trending channel plotted and we have been in that since basically the beginning of April.

With that being the case, there is more of a steady as she goes type of attitude in this market and there’s no reason to fight the overall trend. There isn’t really a whole lot out there that’s going to change things that I can see. And it is worth noting that for quite some time, the British pound has outperformed most of its contemporaries against the US dollar even on the way down in late last year. It just fell less, so it makes sense that as the US dollar struggles, it rises quicker.

The 1.38 Level is Important

Ultimately, I do think that the 1.38 level is worth paying close attention to as it was recent resistance. If we were to break down below that 50-day EMA though, it could open up a move down to roughly 1.3350. Overall, though, if this market does start to sell off, I imagine you’re probably going to be better off buying dollars against other currencies because none of them for the most part are as strong as the British pound has been with maybe the recent exception of the euro.

So basically, you would be looking to buy dollars in short Asia, for example. Europe looks relatively strong or at least steady as she goes. And that of course translates into the British pound doing the same thing as the Euro and other European assets. With this, I remain a little bit positive, but I’m not looking for huge moves. I’m just looking for a grind higher.

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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.

July 10, 2025 – Written by David Woodsmith

STORY LINK GBP/USD Price Forecast: Pares Gains as US Jobless Claims Bolster Dollar

The Pound US Dollar exchange rate was trapped in a narrow range despite Thursday’s upbeat market mood.

At the time of writing, GBP/USD was trading at approximately 1.35654, showing losses of 0.24%.

Before the US jobless claims data release, the US Dollar (USD) had faced headwinds on Thursday, weakening against a number of its major peers as multiple factors weighed on the currency.

Improved market sentiment following President Donald Trump’s latest tariff announcements saw investors pivot away from the safe-haven ‘Greenback’. This risk-on mood limited USD demand through much of the European session.

Adding further pressure, the Federal Reserve’s latest meeting minutes, published on Wednesday evening, signalled a more dovish tone.

Several policymakers indicated a willingness to consider cutting interest rates in July, depending on how upcoming data unfolds.

This shift in Fed rhetoric dragged on the Dollar, with traders increasingly pricing in potential policy easing.

Looking ahead, the US’s latest initial jobless claims could add to the pressure. Any uptick in filings may reinforce expectations of a rate cut and further undermine USD appeal.

The Pound (GBP) traded sideways on Thursday, lacking the momentum to stage any significant moves amid a continued dearth of UK economic data.

As markets maintained a broadly optimistic tone, Sterling slipped against higher-risk currencies that tend to outperform in buoyant conditions.

At the same time, the Pound’s increasing sensitivity to risk allowed it to hold firm against its safe-haven rivals like the US Dollar.

With no fresh UK data to offer direction, GBP remained stuck within a narrow trading range, drifting in line with broader market sentiment throughout the session.

Looking ahead to Friday’s European session, the spotlight will fall on the UK’s latest GDP figures for May, which are expected to show a modest rebound.

Forecasts point to a rise in monthly growth from -0.3% to 0.1%.

If the data confirms an economic recovery, it could lend the Pound some support, potentially allowing GBP/USD to edge higher and end the week on a stronger note.

Meanwhile, the US Dollar looks set to remain at the mercy of broader market sentiment, with no notable US data due for release on Friday.

If investor confidence fades heading into the weekend, safe-haven demand could offer the ‘Greenback’ a lift.

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TAGS: Pound Dollar Forecasts