– Written by


James Fuller

STORY LINK Pound to Dollar Week Ahead Forecast: Near-Term GBP/USD Rangebound

The Pound to Dollar exchange rate (GBP/USD) endured choppy trading through the week, supported by dollar weakness but capped by UK fiscal uncertainty.

Some analysts forecast a multi-year climb to 1.43 by 2026, while others expect the GBPUSD to stay trapped between 1.32 and 1.37 through next year.

GBP/USD Forecasts: Choppy waters

After initial losses, RBC Capital Markets forecasts that GBP/USD will strengthen to 1.43 by the end of 2026 on dollar losses.

ING, however, has a 12-month forecast of 1.36 even with a weaker US currency.

After sliding to 10-week lows near 1.3250 during the week, GBP/USD secured a net gain to 1.3430 in choppy trading.

Risk appetite dipped late in the week on US-China fears and a slide in US banking stocks with traders also having to contend with the on-going US government shutdown while gold surged to a fresh record high as risk conditions remained a key focus.

Danske Bank commented on trade war fears; “The tariff escalation underscored two key points: first, that any renewed trade tensions under a Trump administration are unambiguously negative for the broad USD. Second, markets still view the announced measures largely as negotiation tactics rather than policy reality.”

Standard Chartered is relatively sanguine over the outlook; “We expect the US and China to reach a trade truce again as both sides have economic leverage to avoid a downward spiral.”

Rabobank noted a high degree of uncertainty over trade policy; “Whether both players have a full grasp of their own and their opponent’s tools and power(s) remains an open question.”

It also expects a radical shift in the global order which risks dramatic shifts and high volatility; “That said, it’s even harder to see the spirit going back into the bottle. In other words, the world is changing more rapidly and profoundly than many would have imagined only a few months ago.”

The debate over UK fiscal policy will continue to simmer.

According to ING; “The fiscal risks are more prevalent into the budget in November. We’re not looking for a gilt crisis, but the Chancellor is going to have to make some tough decisions on tax rises or spending cuts.”

It added; “Tighter fiscal and looser monetary policy should ultimately be a bit bearish for sterling – though GBP/USD should trade between 1.32-1.37.

According to RBC; “In the short-term, we think there is room for sterling to underperform, particularly against the USD where the strength in GBP over the last year looks overstretched.

It notes the importance of November’s budget; “Increasingly these announcements have had an FX impact, most notably in 2022. The Budget last year was poorly received by markets and sterling considerably weakened in the weeks that followed.”

RBC, however, expects a multi-year dollar downtrend which will underpin GBP/USD.

It noted; “These long-term trends are rooted in structural asset allocation shifts rather than short-term market fluctuations, reinforcing the idea that the USD’s depreciation is a multi-year process driven by fundamental factors.”

At this stage, markets are still backing very cautious Bank of England rate cuts.

In contrast, traders have fully priced in two further Fed rate cuts before the end of 2025.

Standard Chartered commented; “Over the next three to six months, we continue to expect the USD to weaken, due to a cooling U.S. labour market, slower wage growth, and a more dovish Federal Reserve stance.”

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TAGS: Pound Dollar Forecasts

The GBPJPY pair is under strong bearish trading in Friday’s trading, suffering extra losses by its approach from the extra support at 200.45, forming quick bullish rebound, reaching 203.15 level, announcing its attempt to regain the bullish bias.

Note that the stability of the trading above 201.70 level is important to increase the chances of renewing the bullish attempts, repeating the pressure on 203.10 obstacle, and surpassing it will make it achieve extra gains by its rally towards 203.95, while the price return to settle below 201.70 will force it to form new bearish waves, waiting for attacking 200.45 level again.

The expected trading range for today is between 201.70 and 203.00

Trend forecast: Bullish

– Written by


Ben Hughes

STORY LINK Pound Sterling to Dollar Forecast: CIBC Sees 1.37 Year-End Despite Risk-Off Slide

The Pound to Dollar exchange rate (GBP/USD) slipped back to 1.3415 after failing to hold 10-day highs, with risk aversion blunting Sterling gains.

CIBC analysts maintain a year-end target of 1.37 but warn volatility will persist as US banking fears resurface.

GBP/USD Forecasts: Unable to Make Headway

The Pound to Dollar (GBP/USD) exchange rate strengthened to 10-day highs at 1.3470 during Friday’s Asian session before a retreat to around 1.3415 as the dollar recovered ground.

The dollar was hurt by fresh concerns over US regional banks and very strong expectations of further Federal Reserve rate cuts, but the Pound was undermined by a notable deterioration in risk appetite.

UoB does not expect a break of resistance; “Although there has been no clear increase in upward momentum, today there is a chance for GBP to test 1.3475 today. Based on the current momentum, a continued advance above this level is unlikely.”

CIBC has a year-end GBP/USD forecast of 1.37.

US equities dipped after warnings of loan-related losses from Zions Bancorp and Western Alliance Bancorp.

The S&P Regional Banks Select Industry Index declined by -6.3% and the largest daily decline since the sell-off in April triggered by President Trump’s “Liberation Day” tariffs announcement.

After a significant setback on Wall Street, the FTSE 100 index posted significant losses with notable declines in the banking sector.

Weaker risk conditions are an important negative factor for the Pound with investors also still wary over the UK fundamentals.

Richard Hunter, head of markets at interactive investor commented; “There are increasing signs of storm clouds gathering over markets, with little relief from the building wall of worry.”

He added; “Already grappling with stretched stock valuations in the AI space, an unresolved government shutdown and a deteriorating relationship between Beijing and Washington, investors were exposed to a new source of concern in the form of lending practices and bad loans for US regional banks.”

Overnight, Fed Governor Waller backed a further rate cut at the October meeting despite a lack of official data and there has been a further shift in market pricing.

Traders are pricing in over an 80% chance that rates will be cut again in December, but there is now close to a 20% chance of a more aggressive 50 basis-point cut at that meeting.

Domestically, Bank of England (BoE) chief economist Pill maintained a relatively hawkish stance in comments on Friday.

According to Pill, the bank needs to recognise that CPI stubbornness is more pressing and that the policy committee should adopt a more cautious pace of easing.

He did, however, add that he does see rate cuts if the economy evolves as forecast.

If the BoE holds firm and the Fed does deliver sharp rate cuts, yield spreads could underpin the Pound in global markets.

There will, however, be the risk that the BoE narrative changes

CIBC commented on BoE expectations; “we remain mindful of the market underpricing risks of a December adjustment.”

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TAGS: Pound Dollar Forecasts

Created on October 20, 2025

• The US dollar initially plunged against the Japanese yen during trading on Friday, but it does seem to be holding its own.
• At this point, the 150 yen level is a little bit of support, and it looks like we’re trying to form a bit of a hammer.
• With what we’ve seen recently, this breakout and then pullback, I think, sends up a nice little buying opportunity. And given enough time, I think we could go as high as 162 yen.

Get Paid to Wait

Obviously, that’s a longer-term call, but for me, that is a longer-term buy-and-hold setup just waiting to happen. You get paid to hang on to the trade between now and then, which always helps. That means you can pad your trade a little bit. Also, keep in mind that the 50-day EMA is racing to reach the 149 yen level, which is right around where we bounced from earlier in the session.

The Japanese yen has a host of issues working against it, not the least of which will be the fact that the Bank of Japan cannot tighten rates much, if at all. With the debt load in Japan, they probably have reached about as tight as they can get. If that is in fact going to be the case, and of course, the reaction to the recent election is the correct one, where Japan should become a loose monetary state anyway, then this is a pair that should continue to take off to the upside.

The US dollar has been very stubborn against multiple currencies around the world, so the Japanese yen won’t be any different. This is a pair that I have been buying since somewhere around 143 yen. It’s been a little bit of a rocky road on the way up, but I’ve been getting paid every day to hang on to it. Therefore, it allows me to stick with the trade longer. I think we have the next leg up just waiting to happen here. That being said, I remain bullish.

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.

The Japanese Yen (JPY) has long been a pivotal currency in global foreign exchange markets. Understanding its dynamics can help traders make informed decisions, especially regarding the USD/JPY currency pair. This analysis provides insights into the factors influencing the Yen, its forecast for 2025 and 2026, and whether it is a good pair to trade.

Understanding the Japanese Yen
The Japanese Yen is the official currency of Japan and serves as a major reserve currency. Its significance in the forex market stems from Japan’s status as one of the world’s largest economies. The Yen is often viewed as a safe-haven currency, meaning that it tends to strengthen during periods of economic uncertainty or market volatility.

Key Characteristics of the Yen
Safe-Haven Currency: Investors flock to the Yen during geopolitical tensions or financial crises, leading to appreciation against other currencies.
Interest Rates: The Bank of Japan (BOJ) plays a crucial role in influencing the Yen’s value through its monetary policy, particularly its interest rates.
Economic Indicators: Economic data such as GDP growth, inflation, and trade balance significantly impact the Yen’s performance.

Factors Influencing the Yen
Several factors can influence the strength of the Japanese Yen, making it essential for traders to stay informed:

1. Monetary Policy
The Bank of Japan’s monetary policy is a primary driver of the Yen’s value. The bank has maintained a loose monetary policy for years, including negative interest rates and quantitative easing, to stimulate economic growth. Any shift toward tightening could lead to a stronger Yen, while continued easing may weaken it.

2. Economic Performance
Japan’s economic health is crucial for the Yen’s valuation. Key indicators include:

GDP Growth: Sustained economic growth can bolster the Yen as it attracts foreign investment.
Inflation Rates: Rising inflation may prompt the BOJ to adjust interest rates, impacting the Yen’s strength.

Trade Balance: Japan is a major exporter, and a positive trade balance generally supports the Yen.

3. Global Economic Conditions
Global economic stability significantly impacts the Yen. During times of economic uncertainty, investors often flock to safe-haven assets, leading to Yen appreciation. Conversely, a robust global economy may weaken the Yen as investors seek higher returns in riskier assets.

4. U.S. Dollar Strength
The USD/JPY pair’s performance is directly influenced by the strength of the U.S. Dollar. Factors affecting the Dollar, such as U.S. interest rates and economic data, will also impact the Yen. A strong Dollar often leads to a weaker Yen and vice versa.

Current Economic Landscape
As of late 2023, the global economy is facing various challenges, including inflationary pressures, supply chain disruptions, and geopolitical tensions. The Bank of Japan’s stance on monetary policy remains crucial as it navigates these complexities.

Recent Developments

source: tradingview

Interest Rates: The BOJ has maintained its accommodative stance, but there are signs that it may consider tightening in response to rising inflation.
Inflation: Japan has experienced higher inflation rates, prompting discussions about potential policy changes.
Global Uncertainty: Ongoing geopolitical tensions and economic challenges have led to fluctuations in the Yen’s value.

Japanes Yen Forecast for 2025/2026
Economic Projections
Analysts predict that the Japanese economy will continue to recover gradually. Key factors influencing the forecast include:

Monetary Policy Adjustments: If the BOJ shifts towards a tighter monetary policy, it could strengthen the Yen.

Global Economic Conditions: A stable global economy may lead to a weaker Yen as investors seek higher returns elsewhere.

Domestic Economic Growth: Continued growth in Japan’s GDP could provide support for the Yen.

Japanese Yen Technical Analysis
From a technical perspective, the USD/JPY pair has shown significant volatility. Traders should monitor key support and resistance levels to gauge potential price movements.

Support Levels: Key support levels to watch include recent lows that may indicate buying opportunities.

Resistance Levels: Resistance levels can signify potential selling points or areas where the price may struggle to rise.

Is USD/JPY a Good Pair to Trade?
Advantages of Trading USD/JPY
Liquidity: The USD/JPY pair is one of the most liquid currency pairs, making it easy to enter and exit trades.

Volatility: The pair often experiences significant price movements, providing opportunities for traders to capitalize on short-term fluctuations.

Economic Correlation: The close relationship between the U.S. and Japanese economies provides a solid basis for analysis and forecasting.

Considerations for Trading
Market Sentiment: Traders should remain aware of global economic conditions and market sentiment, as these can impact the Yen’s value.

Technical Analysis: Utilizing technical indicators and chart patterns can help traders identify potential entry and exit points.

Risk Management: Implementing effective risk management strategies is crucial when trading the USD/JPY pair, especially given its volatility.

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Conclusion
The Japanese Yen remains a significant currency in the forex market, influenced by various economic factors and global conditions. The USD/JPY pair presents several opportunities for traders, particularly due to its liquidity and volatility.

As we look toward 2025 and 2026, the Yen’s performance will largely depend on the Bank of Japan’s monetary policy decisions, Japan’s economic growth, and global economic stability. Traders should stay informed and employ sound analysis strategies to navigate the complexities of this currency pair effectively.

In summary, while trading USD/JPY can be lucrative, it requires careful consideration of market dynamics, economic indicators, and risk management practices. With the right approach, traders can capitalize on the opportunities presented by this pivotal currency pair.

USD/JPY Technical Analysis

The US dollar has fallen against the Japanese yen only to turn around and show signs of life in what is an area that I think you need to look at the top of the ascending triangle as a potential entry. And with that being said, if we can break above the 152 yen level, then I think it opens up the possibility of a much bigger move. A breakdown below the bottom of the trading session for the week could open up a move down to 149 yen, which is an area that’s been support as well. Either way, keep in mind that you get the interest rate differential working in your favor here. And I do think that will be one of those things that people continue to pay close attention to in what has been a very strong move.

AUD/USD Technical Analysis

The Australian dollar initially pulled back just a bit during the trading session here on Thursday, but it looks like the 200 day EMA is going to continue to offer a little bit of support. If we can rally from here, then the 0.6550 level is an area that I think a lot of people will be watching closely. It also features a 50 day EMA. So that is a scenario where we are probably going to test that and then possibly go looking at the 0.66 level.

Signs of exhaustion, I think, show selling opportunities. This is a market that has underperformed against the US dollar, and I think that continues to be the case. So, if the US dollar strengthens, then it’s likely that the Aussie really takes a bit of a beating.

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

– Written by


Tim Boyer

STORY LINK Euro to Dollar Forecast: USD Retreats on Trade Fears, EUR Finds Support

The Euro to Dollar exchange rate (EUR/USD) climbed to one-week highs near 1.1650 as renewed US economic worries and rising trade tensions weighed on the dollar.

ING analysts maintain a bullish stance, keeping its 1.20 year-end target intact.

EUR/USD Forecasts: One-Week High

The dollar has lost ground in global markets amid expectations of two further Fed rate cuts this year with the US currency also hurt by renewed fears over a US-China trade war.

In contrast, the Euro has also gained some support from optimism that the French government will survive confidence votes on Thursday.

The Euro to Dollar rate traded just above the 1.1650 level with the US official data vacuum contributing to the wider sense of unease with gold hitting a fresh all-time high.

UoB expects a near-term cap around 1.1680; “Given that there is still no significant increase in upward momentum, we do not expect a continued rise above this level. The major resistance at 1.1720 is also not expected to come into view.”

ING is also cautious at this stage; “It’s hard to see EUR/USD breaking above the 1.1685/1730 area in the near term. However, the longer EUR/USD can consolidate here, the closer it comes to the seasonally bullish period of November and especially December. We retain a 1.20 year-end call.”

US-China trade tensions have increased further with overnight comments from President Trump that the US and China are in a trade war.

ING commented; “FX markets are reasonably calm as attention builds on China’s export controls on rare earths. The decision to impose such controls has clearly touched a nerve in the US and across G7 nations. The ability or failure to get those controls negotiated away will be one of the hottest topics for financial markets over the next four weeks.”

Rhetoric will be watched closely in the short term. Markets will be looking for further evidence whether Trump will meet Chinese President Xi late this month.

Another key issue is whether there will be an extension of the current truce on overall tariffs will be extended beyond November 10th. Without an extension, tariffs are due to revert to 145%.

According to Joseph Capurso, head of foreign exchange at Commonwealth Bank of Australia; “An extension, rather than a grand bargain that settles all trade issues, is probably the most realistic second-best outcome compared to the alternative of escalation of retaliation.”

Betting markets expect the US government shutdown to extend into November, increasing potential economic damage, and traders are pricing in around a 95% chance of two Fed rate cuts by the end of 2025.

At this stage, markets expect no change in ECB rates which would support the Euro if the Federal Reserve does deliver two further rate cuts by the end of this year.

MUFG considers that the ECB should keep its options open.

It added; “One cut by mid-2026 is unlikely to derail prospects of a rebound in EUR/USD given the Fed is set to be much more active and with a risk of pricing of cuts over that period increasing further as well.”

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TAGS: Euro Dollar Forecasts