The GBPJPY pair ended its last bullish rally by recording the target at 213.45, to form a strong obstacle against the attempts of resuming the bullish trend, which forces it to activate with the stochastic negativity by forming corrective rebound, to notice testing the bullish channel’s support at 212.30.
Reminding you that the repeated rise above 212.00 level which represents %2.380 Fibonacci extension level supports the chances of renewing the bullish attempts, to expect targeting 213.00 level, to attempt to surpass the mentioned obstacle, while declining below 212.00 and providing a negative close will confirm its surrender to the dominance of the bearish corrective bias, to expect suffering some losses by reaching 211.45 initially.
The expected trading range for today is between 212.00 and 213.45
The GBPJPY pair ended its last bullish rally by recording the target at 213.45, to form a strong obstacle against the attempts of resuming the bullish trend, which forces it to activate with the stochastic negativity by forming corrective rebound, to notice testing the bullish channel’s support at 212.30.
Reminding you that the repeated rise above 212.00 level which represents %2.380 Fibonacci extension level supports the chances of renewing the bullish attempts, to expect targeting 213.00 level, to attempt to surpass the mentioned obstacle, while declining below 212.00 and providing a negative close will confirm its surrender to the dominance of the bearish corrective bias, to expect suffering some losses by reaching 211.45 initially.
The expected trading range for today is between 212.00 and 213.45
The Euro had rallied against the US Dollar, but the British Pound has given back most of the gains already. So, with that being the case, I think you have to look at this as a situation where the 1.35 level continues to be a major barrier that just can’t be broken. If we do break above there, it’s really not until we break above 1.3550 that you start to talk about a move to the upside. This to me looks like a drop, a bounce, and perhaps a rollover. We’ll just have to wait and see. We did get claimant count change numbers earlier in the session, but it was slightly more negative, not really enough to affect the currency market, though in my estimation, directly.
EUR/GBP Technical Analysis
You can see what the strength of the Euro has done to the Euro against the British Pound. I still think this is a market that rolls over, but now we have to reset, and we’ll have to keep an eye on that 0.8750 level because this is an area that’s been important multiple times. If we do start to see the Euro roll over against the dollar, we’ll have to wait, but I think that probably will have an influence here as well.
So, with all of that being said, I like fading signs of exhaustion. We could send this market down to the 200-day EMA again, but if we clear 0.8750, I probably step back from this pair for a while.
For a look at all of today’s economic events, check out our economic calendar.
The Pound to US Dollar exchange rate (GBP/USD) pushed higher on Tuesday, touching a one-week peak amid escalating tariff concerns linked to Greenland and a mixed UK labour market report.
At the time of writing, GBP/USD was trading at $1.3450, up approximately 0.2% on the session, although it had slipped back slightly from earlier highs.
The US Dollar (USD) struggled to find support as renewed tariff warnings from President Donald Trump weighed on the American currency.
Trump signalled his intention to impose new trade levies on eight European countries opposing his proposed acquisition of Greenland, sharpening tensions between the US and several long-standing allies.
The prospect of a broader US-EU trade dispute unsettled markets, with investors increasingly uneasy about the potential drag on US growth and the risk that European governments could curb their holdings of US Treasuries.
These concerns lingered into the session as Trump doubled down on his position, brushing aside diplomatic criticism from European leaders and keeping the ‘Greenback’ under pressure.
Meanwhile, the Pound (GBP) advanced against the US Dollar as markets took a broadly constructive view of the UK’s latest labour market data, despite the figures offering a mixed picture.
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Employment rose by 82,000 in the three months to November, comfortably beating expectations for a 27,000 increase. However, the unemployment rate remained stuck at a multi-year high of 5.1%.
Wage growth continued to cool, although pay increases still outpaced inflation.
Taken together, the data proved sufficient to underpin Sterling on Tuesday, allowing the Pound to gain ground against a weaker US Dollar.
GBP/USD Outlook: UK Inflation Data in Focus
Looking ahead, attention is likely to turn to the UK’s forthcoming consumer price index release, which could shape near-term direction in the Pound to US Dollar exchange rate.
Markets expect headline inflation to have edged higher in December, rising from 3.2% to 3.3%, while core inflation is forecast to have held steady at 3.2%.
If inflation proves stubborn, traders may scale back expectations for a near-term Bank of England rate cut, potentially offering Sterling further support. Conversely, any downside surprise could revive dovish expectations and place the Pound under renewed pressure.
For the US Dollar, the data calendar remains light, leaving USD sentiment closely tied to political developments.
Continued focus on President Trump’s tariff threats and rhetoric surrounding Greenland may sustain a broader ‘sell-America’ tone, keeping the ‘Greenback’ on the defensive.
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The US dollar initially fell against the Japanese yen on Monday as traders ran to safety during Asian trading. However, cooler heads have prevailed.
The US dollar initially fell against the Japanese yen on Monday as everybody lost their minds about the latest comments coming out of Donald Trump and the European Union, suggesting that the trade deal between the US and the EU was over.
This had people running to safety. The US dollar sold off against multiple currencies around the world, and it does make a certain amount of sense that people ran to the Yen, but the reality is this is an ongoing game that we’ve been playing for months, and I think traders have realized that this is just more of the same. Nothing has actually changed. So what if there’s no trade agreement between the United States and the European Union? That was how we functioned for several months, and the world didn’t fall apart.
The Bank of Japan does have a meeting this week, and that’s something to pay attention to, but at the end of the day, the Japanese can only raise rates so high. Their bond market is already doing it for them, and it’s causing some pain. The Yen could very well find its way to the 160 level against the US dollar, maybe even higher than that. In fact, some pundits that I know are calling for something like 250 before this is all said and done.
Buyers Are Returning
Now that doesn’t mean it happens overnight, obviously it wouldn’t, but this little consolidation area that we had been in, we had broken out of, we pulled back to 158, and it looks like the buyers are returning.
Because of this, I like the idea of buying this pair. I think the 50-day EMA also confirms that there is support underneath. As far as this pair is concerned, you get paid at the end of every day, so you get to collect that interest rate differential and continue to ride the wave higher.
Support Levels for EUR/USD Today: 1.1580 – 1.1520 – 1.1440.
Resistance Levels for EUR/USD Today: 1.1680 – 1.1740 – 1.1800.
EUR/USD Trading Signals:
Buy EUR/USD from the support level of 1.1560 with a target of 1.1800 and a stop-loss at 1.1470.
Sell EUR/USD from the resistance level of 1.1730 with a target of 1.1500 and a stop-loss at 1.1800.
Technical Analysis of EUR/USD Today:
Concerns regarding Greenland have dominated Euro trading against other major currencies. This follows recent market anxiety over the future of U.S. Federal Reserve policies. According to performance data from trusted trading platforms, the EUR/USD price plummeted at the start of the trading week to the support level of 1.1576—the pair’s lowest level in nearly two months—before quickly rebounding to settle around the 1.1645 resistance level at the time of writing.
From a technical perspective, the EUR/USD bias remains bearish. It could quickly drop toward the psychological support level of 1.1500 in the coming days if fears of a persistent conflict between the U.S. and Europe intensify, especially following mutual threats of imposing tariffs. The 14-day RSI is reading around 45, supporting “bear” control, while the MACD signal lines remain steadily downward. Conversely, the psychological resistance at 1.1800 remains the key target to confirm a shift to a bullish trend.
For economic calender today, The euro’s price will be affected today by the release of the German Producer Price Index (PPI) at 9:00 AM Egypt time, followed by the Eurozone current account figures at 11:00 AM Egypt time. An hour later, the German ZEW index will be released. No major economic releases are expected from the US.
EUR/USD Exchange Rate and the Future of Fed Policies
The EUR/USD exchange rate has retreated from its recent highs, falling back toward 1.16 as investors grow cautious about the timing and scale of Fed interest rate cuts. While some banks still see room for the Euro to rise in the medium term, strong U.S. economic data and a strengthening Dollar have capped these gains for now. Increasingly, markets are focused on the Fed’s credibility and whether U.S. rates could remain high well into 2026.
EUR/USD Forecast for the Coming Days
In this regard, RBC Capital Markets expects the EUR/USD exchange rate to strengthen in 2026, but has lowered its year-end forecast to 1.20 from 1.24, now anticipating it will reach that level by the end of 2024. However, after a slight initial shift, ING still supports a rise to 1.22 by the end of 2026, driven by continued US interest rate hikes.
Overall, markets anticipate two US interest rate cuts by the Federal Reserve in 2026. Crédit Agricole expects the euro to depreciate further as the Fed resists further rate cuts: “We still expect interest rates to remain unchanged in January. After that, our current baseline forecast suggests the pause will extend throughout 2026, subject to the stability of the labor market in upcoming reports. Weaker-than-expected data would increase the risk of a shorter pause and/or greater monetary easing than we currently anticipate.”
Meanwhile, the independence of the US Federal Reserve will remain a pivotal issue for currency exchange rates.
Earlier this week, the Justice Department issued subpoenas against the Federal Reserve and its chairman, Jerome Powell, for alleged misconduct related to renovations at the Fed headquarters. Powell strongly rejected the move and defended the bank. MUFG commented on the development, stating, “The continued attacks on the Fed’s independence, in response to President Trump’s desire to lower interest rates, pose a downside risk to the US dollar and support our expectations of a decline.” The bank added, “However, this could backfire on President Trump if Fed officials maintain their stance and keep US interest rates unchanged, challenging the Fed’s continued independence in setting monetary policy.”
RBC Bank, for its part, still anticipates net losses for the dollar against the euro for three reasons: lower interest rates between the two countries, increased hedging against US assets, and a shift towards European assets and stronger growth in the Eurozone. RBC remains cautious about the potential for significant gains.
Trading advice:
We advise waiting for upcoming selling pressure on the EUR/USD. Obvioulsy, this will allow for “Buy” positions from the lowest possible prices. However, we strongly advise against over-leveraging or taking unnecessary risks.
The Pound pulled back from session highs at the 213.50 area against the Japanese Yen on Tuesday, following mixed UK employment figures. Still, downside attempts remain contained above 212.30, leaving the pair in no man’s land.
Net employment increased by 82K in the UK in the three months to December, following a 17K contraction in November. Wage growth remained at strong levels while claimants for unemployment benefits grew less than expected. On the negative side, the jobless rate remained steady at 5.1% against market expectations of a slight decline to 5%.
The pair, however, remains supported by Yen weakness, amid growing fiscal concerns following Prime Minister Sanae Takaichi’s decision to call snap elections as well as her plans to suspend the 8% food tax for two years.
Technical Analysis: Potential Head and Shoulders formation in progress
GBP/JPY trades at 212.75. The Bullish engulfing candle printed in the daily chat on Monday suggests a strong support in the 210.30 area, but the pair’s rejection at 213.50 might print the right shoulder of a H&S formation, a bearish sign.
Technical indicators are positive. The 4-Hour Moving Average Convergence Divergence (MACD) line stands above the Signal line and slightly above zero, with a widening positive histogram that suggests strengthening bullish momentum. The Relative Strength Index (RSI) remains above 50, but is pulling down from higher levels.
Bulls would have to breach session highs at 213.40 to clear the path towards the long-term highs at 214.30. On the downside, key support is at the 210.30 area, the late December and early January lows, and the neckline of the mentioned H&S. Further down, the December 10 lows, near 208.90 w
(The technical analysis of this story was written with the help of an AI tool.)
Japanese Yen Price Today
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the US Dollar.
USD
EUR
GBP
JPY
CAD
AUD
NZD
CHF
USD
-0.73%
-0.35%
-0.19%
-0.32%
-0.25%
-0.75%
-1.03%
EUR
0.73%
0.38%
0.54%
0.42%
0.49%
-0.02%
-0.29%
GBP
0.35%
-0.38%
0.17%
0.04%
0.11%
-0.39%
-0.67%
JPY
0.19%
-0.54%
-0.17%
-0.12%
-0.06%
-0.56%
-0.83%
CAD
0.32%
-0.42%
-0.04%
0.12%
0.07%
-0.44%
-0.71%
AUD
0.25%
-0.49%
-0.11%
0.06%
-0.07%
-0.50%
-0.76%
NZD
0.75%
0.02%
0.39%
0.56%
0.44%
0.50%
-0.28%
CHF
1.03%
0.29%
0.67%
0.83%
0.71%
0.76%
0.28%
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
The Euro recovers against the Japanese yen after opening drama and noise about trade agreements.
The Euro has gapped lower against the Japanese yen at the open on Monday, only to turn around and recapture that, as well as grind even higher. We are above the 184 yen level as I record this, which is a good sign. That being said, we need to take a look at what’s going on to understand why the 183 yen level offered support.
There was quite a bit of noise over the weekend as far as the US and the European Union busting up trade agreements, and of course, the first thing that traders do is panic. That being said, those who are not weak or drama-filled typically will look at these movements as an opportunity. And that’s exactly what we’ve seen here.
Interest Rate Outlook
The European Central Bank is still stable in its interest rate outlook, and that’s not going to change whether or not Trump and Macron or whoever start getting into arguments through the press. The reality is that the European economy is about where the ECB needs it to be, while the Bank of Japan has the problem of dealing with the idea of massive amounts of debt and their rates skyrocketing, which generally would be good for the yen, but the problem is it’s not in a controlled manner.
There is a Bank of Japan meeting later this week that will come into play, but at this point, the Euro has just offered a buying opportunity against the Japanese yen, as you have seen. This remains a bullish pair. It will remain a bullish pair for quite some time. Markets do not turn on a dime, especially when it’s a repeated headline of trade tensions. We’ve been going through this for a year now. All things being equal, we continue to grind to the upside, and I think we will go looking to 186 yen sooner or later.
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 British pound has been much better, but that’s not a huge surprise. The British pound has been quite strong in comparison to many other currencies. So, if the Euro rallies against the dollar, the British pound does as well, and a little bit more.
That being said, the market still has a lot of resistance between here and 1.3550, so I’m looking for signs of exhaustion for potential selling opportunities. We are hovering right around that crucial 50-day EMA.
EUR/GBP Technical Analysis
And finally, the Euro has rallied slightly against the British pound only to give up those gains, which is not a surprise when you look at the other two charts. There is a certain amount of resistance right around 0.87 that continues to cause a ceiling in this market, but we also have the 200-day EMA sitting just below, offering support. I think we continue to see a lot of this sideways action in the short term, but once we break out of this little range run, then we have a bit more clarity.
I still look at this as a market that’s in the midst of rolling over for a bigger picture due to the fact that the ECB is pretty much flat, but the Bank of England has been fighting the idea of rapid rate cuts. Furthermore, keep in mind that there are several important numbers, including inflationary numbers and employment numbers, coming out of the United Kingdom this week that will obviously have an influence here.
For a look at all of today’s economic events, check out our economic calendar.
The Pound to US Dollar exchange rate (GBP/USD) opened the week on firm footing as investors reacted to fresh tariff rhetoric from US President Donald Trump linked to Greenland.
At the time of writing, GBP/USD was trading near $1.3403, only modestly up from Monday’s opening levels.
The US Dollar (USD) struggled for momentum at the start of the week as renewed geopolitical uncertainty weighed on investor confidence.
Over the weekend, Donald Trump outlined plans for additional tariffs on European nations opposing a potential US acquisition of Greenland. These measures would reportedly begin at 10% from 1 February and rise to 25% by 1 June should negotiations fail.
The prospect of tariffs being used against long-standing allies unsettled markets, fuelling concerns that a broader transatlantic trade dispute could emerge.
The European Union is already reportedly revisiting proposals for up to €93bn in tariffs on US goods, while speculation has also grown that some European states could scale back purchases of US Treasuries.
That said, losses in the US Dollar have so far been contained, with the currency finding some support from shifting expectations over who may next lead the Federal Reserve, following reports that Kevin Hassett could be out of contention.
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The Pound (GBP) made modest gains against the US Dollar on Monday but was less convincing against several other major currencies.
The UK was included in Trump’s latest tariff warning, having backed Denmark’s sovereignty over Greenland.
Any escalation in trade barriers would risk adding further strain to an already fragile UK economy.
Addressing the issue at a press conference, Prime Minister Keir Starmer stressed that a tariff confrontation would serve no one’s interests and attempted to calm fears that the UK would respond with immediate retaliatory action.
GBP/USD Forecast: UK Labour Data to Drive Near-Term Direction?
Looking ahead, the Pound to US Dollar exchange rate could see increased volatility on Tuesday with the release of the UK’s latest employment figures.
Sterling may draw support if the data shows unemployment edged lower in November, after reaching a four-year high of 5.1% in October.
However, any gains could prove short-lived if the report also points to a slowdown in wage growth, which would reinforce expectations for looser UK monetary policy.
Meanwhile, the reopening of US markets on Tuesday could inject fresh movement into the US Dollar as American investors digest the implications of Trump’s latest tariff proposals.
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