• EUR/USD trades near 1.1700 in the European session on Wednesday.
• The technical outlook points to a bearish tilt in the short term.
• The Federal Reserve will publish the minutes of the June policy meeting.

EUR/USD struggles to hold its ground early Wednesday and trades in negative territory at around 1.1700 after posting small gains on Tuesday. The near-term technical outlook highlights a lack of buyer interest.

The US Dollar (USD) continues to benefit from safe-haven flows as investors assess the latest talks surrounding the US trade regime.

US Commerce Secretary Howard Lutnick said late Tuesday that another 15 to 20 tariff letters are expected to be announced in the next two days. Meanwhile, US President Donald Trump noted that the BRICS members will be subject to 10% tariff rate and added that they will be introducing tariffs on pharmaceuticals and semiconductors soon. Regarding the trade negotiations with the EU, Trump said that the EU is treating them “very nicely” and added that they are “probably two days off” from sending the EU letter.

In case the EU and the US manage to reach an agreement until Trump unveils the tariff decision on European imports, the Euro could gather strength with the immediate reaction. On the other hand, investors are likely to refrain from positioning themselves for a steady recovery in the Euro, while the uncertainty lingers.

Later in the day, the Federal Reserve (Fed) will publish the minutes of the June policy meeting. Nevertheless, investors could ignore this publication and remain focused on trade-related headlines.

EUR/USD Technical Analysis

The Relative Strength Index (RSI) indicator on the 4-hour chart stays below 50 and EUR/USD continues to trade below the 20-period and the 50-period Simple Moving Averages (SMA), which made a bearish cross on Tuesday.

On the downside, 1.1700-1.1690 (static level, round level, lower limit of the ascending channel) aligns as a key support area ahead of 1.1660 (100-period SMA) and 1.1600 (static level, round level). Looking north, resistance levels could be seen at 1.1750-1.1760 (20-period SMA, 50-period SMA), 1.1800 (round level, static level) and 1.1830 (static level).

Copper prices are under strong positive pressures, which allows it to surpass the barrier at $5.1000, to notice forming a strong bullish rally and achieving big gains by hitting $5.8100 level, forming an intraday rebound to $5.5500 to catch its breath and gather some gains.

Note that the price is surrounded by several positive factors that support the continuation of the positivity, such as the unionism of the main indicators by providing positive momentum besides forming extra support at $5.3200 level, which makes us prefer more of the bullish attempts that target 2.00%Fibonacci extended level at $5.9720, to approach from the resistance of the main bullish channel that appears in the above image.

The expected trading range for today is between $5.4500 and $5.9800

Trend forecast: Bullish

Copper prices are under strong positive pressures, which allows it to surpass the barrier at $5.1000, to notice forming a strong bullish rally and achieving big gains by hitting $5.8100 level, forming an intraday rebound to $5.5500 to catch its breath and gather some gains.

Note that the price is surrounded by several positive factors that support the continuation of the positivity, such as the unionism of the main indicators by providing positive momentum besides forming extra support at $5.3200 level, which makes us prefer more of the bullish attempts that target 2.00%Fibonacci extended level at $5.9720, to approach from the resistance of the main bullish channel that appears in the above image.

The expected trading range for today is between $5.4500 and $5.9800

Trend forecast: Bullish

• USD/JPY breaks past 146.80 as forecasted, validating the Fair Value Gap structure and liquidity sweep play.
• Tariff-driven yen weakness and fragile Japanese data fuel continued upside pressure into key resistance.
• The technical outlook favors bulls, with 147.00 and 148.00 in focus as long as price holds above 145.80 and FVG remains intact.

Yen weakens on renewed tariff pressure

USD/JPY traded sharply higher this week, fueled by renewed trade tensions and technical tailwinds. On July 7–8, the U.S. announced plans for 25% tariffs on Japanese and South Korean imports, set to take effect August 1. While not final, the announcement triggered an immediate market reaction. Check this out for reference: Forex, indices, Gold weekly gameplan: Technical analysis and price action outlook.

The result? The Japanese yen slid to multi-week lows as USD/JPY surged toward 146.90, fueled by:

• Tariff-induced yen weakness.
• Safe-haven support for the US Dollar.
• Technical reclaim of structure and bullish imbalance zones.

Meanwhile, Japan’s economic backdrop remains fragile. Q1 GDP showed contraction, real wages declined, and consumer sentiment weakened—all compounding yen softness and raising concerns ahead of Japan’s July 20 elections.

High-impact news driving USD/JPY

These developments amplify the macroeconomic narrative driving USD/JPY:

• Weak yen fundamentals.
• Hawkish U.S. tone with risk-averse global positioning.
• Key resistance zones now under threat of breakout.

Forecast vs actual – Bullish scenario played out perfectly

In our prior analysis – EUR/USD, Gold, Nasdaq, Bitcoin forecast and more, breakout trading setups -, we outlined a bullish Smart Money structure built around a 4-Hour Fair Value Gap Level resting between 143.934-144.608, a sweep of previous highs at 145.00, and a continuation rally past it.

Actual market reaction

• Price swept highs at 145.00 after bouncing off from the 4-Hour Fair Value Gap Level resting between 143.934-144.608.
• USD/JPY then surged beyond 146.80 as projected.

This confirms the renewed strength of the U.S. dollar over the Yen’s dovish stance.

Technical outlook

USD/JPY has reclaimed its bullish trajectory, now sitting near its highest level since early June.

Bullish scenario – In progress

A break and hold above 147.00 could open the path toward multi-month highs. We could see further upside as long as:

• The 4-Hour Fair Value Gap between 146.280-146.631 remains intact.
• Price does not close below the immediate low at the 145.80 level.
• The Fed’s tone remains hawkish.

Targets:

• 147.00 – Next Psych Level.
• 148.00 – June High.

Bearish scenario

As the rally looks over-extended and over-stretched, this could pose a risk for downside as profit-taking takes place. We could see signs of weakness if:

• The 4-Hour Fair Value Gap between 146.280-146.631 gets closed down
• Failure to remain and break the 145.80 level
• A dovish Fed + July election sentiment

The USD/JPY rally played out almost identically to the forecasted Smart Money setup, reclaiming the Fair Value Gap, executing a sweep, and continuing higher.

With U.S. tariff risk pressuring Japan and institutional bullish structure now active, the path of least resistance leans toward a breakout. But traders should stay alert for event-driven volatility around FOMC and Japanese elections in the coming days.

July 8, 2025 – Written by David Woodsmith

STORY LINK Pound-to-Dollar Forecast: GBP Below 1.36 on Net USD Gains

The latest tariff developments have not undermined the US Dollar while medium-term budget fears continue to erode Pound Sterling support.

The Pound to Dollar exchange rate (GBP/USD) failed near 1.3650 on Tuesday and dipped back below 1.3600 with lows at 1.3570.

According to UoB; “While downward momentum has increased further, we prefer to wait for GBP to close below 1.3560 before expecting a move to 1.3510. On the upside, the ‘strong resistance’ level is now at 1.3700.”

Scotiabank is still broadly bullish on GBP/USD, but added; “The latest pullback is worrisome, however, and we highlight the importance of the 50 day MA (1.3481) as a critical source of medium-term support. We look to a near-term range defined by 1.3550 support and 1.3650 resistance.

A break below 1.3650 would push the pair to 2-week lows, increasing the risk of a slide towards 1.3400.

The US Administration announced 25% tariffs for Japan and South Korea as the first batch of tariff letters was released. The deadline, however, was pushed back to August 1st from July 9th.

Overall risk appetite held firm despite the announcements while there were hopes that tariffs would be watered down, lessening the threat of a severe US downturn.

According to Barclays currency strategist Skylar Montgomery Koning; “The fact that some of the more problematic policies from the US administration have been dialled back — and there are deals getting done — means that the economic pain for the US won’t be as bad as originally feared.”

Scotiabank added; “the August 1 deadline means another punt and time for more negotiations before the hammer drops. Secondly, the delay to August for all reciprocal tariffs now means the impact on the US economy may not be felt until much later in the year.”

The US NFIB small-business confidence index declined marginally to 98.6 for June from 98.8 previously and fractionally below consensus forecasts with concerns over excess inventories a key negative factor.

The NFIB commented on interest rates; “Inflation remains stubbornly above the Federal Reserve’s target, therefore the policy rate remains over 4 percent with the possibility of cuts getting pushed down the road. The President wants a lower rate, and sometime this fall, market conditions will likely justify a rate cut by the FOMC.”

The UK Office for Budget Responsibility (OBR) has warned over the medium-term fiscal outlook and criticised the lack of effort to bring borrowing back under control after two major shocks.

According to the OBR; “Planned tax rises have been reversed, and, more significantly, planned spending reductions have been abandoned. The more persistent fiscal deficits and ratcheting up of debt that resulted have been accommodated by successive loosening of the fiscal rules.”

Scotiabank commented; “market participants remain concerned about domestic political developments and ongoing uncertainty related to the fiscal outlook as UK yields hit fresh highs. Media are focusing on the OBR’s latest report highlighting shifts in the distribution of UK government debt holders.”

The UK 10-year bond yield increased to just above 4.65% early in the day before edging lower to 4.62%.

According to the OBR, the UK is facing the 3rd highest borrowing costs among 36 major economies which will maintain upward pressure on debt-servicing costs.

Jefferies strategist Mohit Kumar commented; “Our view remains negative on the growth and fiscal picture in the UK. The government will have no choice but to increase taxes, but we (are) reaching a point where further tax rises can be counterproductive.”

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July 8, 2025 – Written by Ben Hughes

STORY LINK Pound to Dollar Forecast: USD, Stocks Rally Despite Trump Tariff Threats

The Pound US Dollar exchange rate held steady as a risk-on market mood underpinned GBP/USD on Tuesday.

At the time of writing, GBP/USD was trading at approximately $1.3612, virtually unchanged from the start of Tuesday’s session.

The US Dollar (USD) weakened against most major currencies on Tuesday after President Donald Trump announced an overnight extension to the deadline for implementing global tariffs, pushing it from 9 July to 1 August.

Rather than sparking concern, the announcement was met with a wave of optimism during the European session, fuelling a broad risk-on rally.

Investors appeared largely unconcerned by the delay and prospects of additional tariffs.

The market’s muted reaction reflected a growing sense of fatigue toward tariff threats, which have become a recurring theme of Trump’s trade strategy but are often softened or reversed.

As Wind Shift Capital’s Bill Blain put it: ‘A year ago, the idea that a sovereign nation would blithely impose crippling global tariffs on its long-standing friends, allies, and competitors, and expect them to bend over and say, “Thank you sir, may I have some more”, would have been dismissed as the mad haverings of a dystopian crackpot. Today, it’s happening, and no one bats an eyelid. That’s because markets have concluded that last night’s tariffs are “just another TACO (Trump Always Chickens Out) ploy.”’

As such, the US Dollar lost ground as investors sought out riskier assets, shrugging off the latest tariff headlines.

The Pound (GBP) lacked clear momentum on Tuesday, with the absence of UK economic data leaving it to drift in response to global risk appetite.

As market sentiment improved, traders turned towards riskier assets, which weighed on Sterling against its risk-sensitive counterparts.

Although the Pound has increasingly shown risk-sensitive traits, it failed to attract the same level of demand as its more volatile counterparts in the buoyant trading conditions.

With no domestic catalysts to steer direction, Sterling traded in a narrow range, influenced more by shifting investor mood than by any economic developments.

Looking ahead to Wednesday’s European session, movement in the GBP/USD exchange rate is likely to be shaped by the release of the latest minutes from the Federal Reserve’s FOMC meeting.

If the minutes reinforce expectations for a cautious approach to future US interest rate cuts, the US Dollar may strengthen later in the day.

Meanwhile, the UK’s economic calendar remains quiet, offering little domestic impetus for Sterling.

In the absence of fresh data, GBP is expected to remain directionless, with broader market sentiment continuing to guide its path.

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The EURJPY pair resumed the bullish attempts, taking advantage of its repeated stability above the extra support at 169.10, reaching the previously suggested target at 171.60, to face the resistance of the main bullish channel, which forces it to form a sideways fluctuation by its rebound to 171.30.

Due to the strength of the current resistance we expect entering instability station by the contradiction of the resistance stability against the main indicators attempts to provide the positive momentum, while resuming the bullish attack requires forming new bullish wave to settle above 172.00 level, to open the way towards recording extra gains that might begin at 172.80 reaching 173.90.

The expected trading range for today is between 170.45 and 171.90

Trend forecast: Fluctuated within the bullish track

Copper price attempted to surpass stochastic negativity by its stability yesterday above $4.9000 level, which forms 68.00%Fibonacci correction level, to reinforce its stability within the bullish channel’s levels, extending its support to $4.8400.

Note that the continuation of the main indicator’s contradiction might push the price to provide weak sideways trading, but the bearish correctional suggestion will remain valid, depending on the stability of the barrier at $5.1000, to expect testing the bullish channel’s support, then monitor its behavior to detect the expected trend on the upcoming trading.

The expected trading range for today is between $4.8650 and $5.0000

Trend forecast: Fluctuated within the bullish track

The EURJPY pair resumed the bullish attempts, taking advantage of its repeated stability above the extra support at 169.10, reaching the previously suggested target at 171.60, to face the resistance of the main bullish channel, which forces it to form a sideways fluctuation by its rebound to 171.30.

Due to the strength of the current resistance we expect entering instability station by the contradiction of the resistance stability against the main indicators attempts to provide the positive momentum, while resuming the bullish attack requires forming new bullish wave to settle above 172.00 level, to open the way towards recording extra gains that might begin at 172.80 reaching 173.90.

The expected trading range for today is between 170.45 and 171.90

Trend forecast: Fluctuated within the bullish track

July 8, 2025 – Written by Tim Boyer

STORY LINK Pound to Dollar Forecast: Trend Bullish, but “Near-term Pullback Possible”

GBP/USD short-term technicals remain bullish/neutral according to foreign exchange forecasters at Scotiabank.

“The multi-month trend remains bullish, but we are looking to the possibility of a near-term pullback from recent multi-year highs.”

US trade developments are likely to dominate in the short term with US Administration announcements on tariffs ahead of the July 9th deadline.

ING commented; “FX markets are preparing for a noisy week on trade.”

Meanwhile, the Pound is still vulnerable on fiscal grounds. The Pound to Dollar (GBP/USD) exchange rate dipped to lows at 1.3575 before settling close to 1.3600.

UoB commented; “Overall, only a breach of the ‘strong resistance’ at 1.3750 (no change in level) would indicate that the likelihood of GBP breaking clearly below 1.3560 has faded.”

Scotiabank, however, maintains a positive underlying stance on the Pound; “We remain bullish GBP and see no reason to make changes to our longer-term forecast targeting 1.40 by year-end 2025.”

US trade developments are likely to dominate in the short term.

On Monday, President Trump is set to start releasing letters informing countries of their tariff rates while last-minute negotiations will continue.

There have, however, also ben indications that tariffs would not come into effect until August 1st which would leave time for further negotiations.

Convera senior corporate FX dealer James Kniveton commented; “Market volatility appears inevitable when the pause officially ends and new tariff levels are announced.”

Nevertheless, he added; “the impact may prove more muted this time. Unlike previous announcements where tariff levels exceeded expectations, current proposals are largely anticipated. Moreover, markets appear to be pricing in continued deadline extensions.”

According to ING; “Threats of a resumption of 50% tariff levels could briefly hit the benign risk environment, although with a market already positioned underweight the dollar, the dollar might not have too far to fall.”

MUFG noted the risk of complacency given Administration unpredictability; “The ‘Trump Always Chickens Out’ (TACO) theory is certainly part of why investors show limited concerns. Hence, there is a risk of surprise for the markets if over the coming days the tariffs prove more aggressive than expected.”

It added; “More aggressive action will likely see some milder degree of repeat of what happened in April after ‘Liberation Day’ while a more benign scenario should push US Treasury yields lower, fuel stronger speculation of Fed rate cuts that would result in moderate dollar selling.”

Overall confidence in the Pound remains fragile amid fiscal and monetary policy reservations.

Expectations of tax increases in the Autumn budget have intensified further with some reports that tax increases of £20bn would be needed in the Autumn budget to meet current fiscal rules.

UBS economist Dean Turner commented; “We learned last week that any attempt to curb spending is going to prove almost impossible for this government, even with such a large majority. This inevitably means taxes are going up. The sooner the government is honest with the public and gets the deed done, the better.”

Turner downplayed the risk of selling in the UK bond market; “For investors in the gilt market, the volatility is likely here to stay for the time being. But this does not mean gilts do not look attractive, especially relative to cash, as interest rates will be much lower by the time the government’s second anniversary comes around.”

Scotiabank still has confidence in the Pound; “We see Wednesday’s political turbulence as a short-lived event with no lasting impact, given PM Starmer’s expression of continued support for Chancellor Reeves as both the PM and Chancellor seek to reinforce their commitment to fiscal responsibility in the UK.”

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