– Written by


Frank Davies

STORY LINK British Pound to Dollar Forecast: GBP Steady as Middle East Optimism Cools

The Pound US Dollar (GBP/USD) exchange rate remained trapped in a narrow range on Thursday as investors balanced geopolitical uncertainty against expectations for key US labour market data.

At the time of writing, GBP/USD was trading at around $1.3459, largely unchanged from Thursday’s opening levels.

The US Dollar (USD) held firm on Thursday as investors grew less confident that a ceasefire agreement between the US and Iran would be reached in the immediate future.

Earlier in the week, optimism over progress in negotiations had boosted market sentiment and reduced demand for the safe-haven ‘Greenback’.

However, reports indicating that talks remain deadlocked over shipping access, monitoring arrangements and other key issues prompted traders to scale back expectations of a swift breakthrough.

Iran also reiterated that any reopening of the Strait of Hormuz depends on resolving several unresolved conditions, helping to lift oil prices and restore some defensive demand for the US Dollar.

The Pound (GBP) traded without a clear direction on Thursday as the lack of UK economic releases left investors with little reason to adjust their positions.

Stable trading in the UK gilt market also failed to provide Sterling with meaningful support, while subdued conditions across global financial markets kept volatility low.

With few domestic or international catalysts emerging, the UK currency remained confined to a tight trading range against most of its peers.

Near-Term GBP/USD Forecast: US Payrolls to Drive End-of-Week Trade?

Attention now turns to Friday’s US non-farm payrolls report, which is expected to be the key driver of movement in the Pound to US Dollar (GBP/USD) exchange rate.

Economists expect employment growth to have recovered in July following June’s particularly weak reading.

Should payroll growth once again disappoint and remain below the 100,000 mark, investors may further reduce expectations of a Federal Reserve interest rate hike in September, potentially dragging the US Dollar lower.

Meanwhile, with the UK calendar remaining devoid of notable economic releases, Sterling is likely to continue taking its cues from broader market sentiment and moves in its major counterparts.

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Crédit Agricole forecasts USD/JPY averaging 162 in Q3 and 163 in Q4, arguing that 164 remains the key intervention threshold despite weaker valuation extremes than in past episodes.

The US Dollar to Yen (USD/JPY) exchange rate has recovered to around 158.3 after last week’s violent intervention-driven fall, but Crédit Agricole does not think the underlying case for a high exchange rate has disappeared.

The bank still forecasts USD/JPY averaging 162 in the third quarter and 163 in Q4, while treating 164 as the effective ceiling authorities are prepared to defend.

“We continue to believe 164 in USD/JPY is the line in the sand for authorities,” Crédit Agricole said. “The recent joint intervention has reaffirmed this view.”

The important wrinkle is that this intervention began from a less stretched starting point than comparable joint operations in 1998 and 2011.

“Relative to the 1998 and 2011 joint interventions, the misvaluations in USD/JPY and EUR/JPY are less extreme currently,” the bank said, “so the present joint intervention has started from a weaker point.”

That matters because past coordinated interventions only bought time.

“The effects of the joint interventions in 1998 and 2011 faded after a few months as fundamentals took back control of FX markets,” Crédit Agricole said. “Likewise, if the fundamentals do not shift for the JPY, its current intervention gains could also fade.”

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USD/JPY has fallen sharply from July’s peak near 164, but has already recovered from the intervention lows below 156.

Crédit Agricole sees several reasons for renewed upside pressure: it expects the Bank of Japan’s next rate hike only in mid-2027, sees US economic outperformance attracting capital into the Dollar, and expects oil prices to stay elevated relative to pre-war levels.

Japan’s fiscal position is another worry.

“Investors will remain nervous about Japan’s fiscal sustainability given that PM Sanae Takaichi is not backing down from her fiscal spending plans,” the bank said.

Retail Traders May Be Blunting Intervention

MUFG adds a less obvious reason why official Yen buying may struggle to produce a lasting move.

Japanese retail margin traders were already positioned heavily for intervention before it happened.

“The USD/JPY short position increased in June to a record total,” MUFG said. “The implied short USD/JPY position was USD17.65bn which… is an extreme position and by some distance a record.”

That figure was larger than MUFG’s estimate of the probable total size of the latest intervention.

The implication is awkward for Tokyo. Retail traders who had already sold USD/JPY in anticipation of intervention were in a position to take profits as the pair collapsed.

“We can also assume that following intervention Japanese retail traders were quick to liquidate and were likely active buyers given the historic short position that was in place,” MUFG said.

“So Japan’s retail sector was likely a key buyer of USD/JPY on the decline during intervention, curtailing some of the impact of the MoF’s record yen buying intervention.”

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USD/JPY remains slightly higher in 2026 despite the sharp intervention-led reversal from July’s highs.

That helps explain why Crédit Agricole is reluctant to project a sustained move much lower.

Its research suggests Japan and the US have enough resources to defend 164, particularly if Tokyo makes use of the Fed’s FIMA facility, but the bank is not treating intervention as a substitute for fundamentals.

“We think they have enough to hold the exchange rate below that level,” Crédit Agricole said.

The likely result is an uncomfortable middle ground: authorities trying to stop USD/JPY breaking through 164, while interest-rate, energy and fiscal fundamentals continue pushing the pair back upwards.

The euro is extending its advance against the US dollar, with technical indicators suggesting the pair is poised to push beyond the 1.1600 level in the near term. As of the latest trading session, EUR/USD is trading near 1.1580, up 0.3% on the day, supported by a softer dollar and improving risk sentiment.

Technical Outlook: Breaking Above Key Resistance

The pair has been consolidating above the 50-day moving average, and a clear break above the 1.1600 handle would open the door to further upside toward the 1.1650 region, a level not seen since early September. Momentum indicators, including the Relative Strength Index (RSI), are pointing higher but remain below overbought territory, suggesting room for additional gains.

On the downside, immediate support is seen at 1.1550, followed by the 1.1500 psychological level. A failure to hold above 1.1550 could signal a retest of the 1.1450 area, but the overall bias remains tilted to the upside as long as the pair stays above the 50-day MA.

Market Drivers: Dollar Weakness and ECB Policy

The dollar has been under pressure amid expectations that the Federal Reserve may be nearing the end of its tightening cycle, while the European Central Bank (ECB) maintains a hawkish stance. Recent US economic data, including softer inflation figures, have reinforced the view that the Fed could pause rate hikes, undermining the dollar’s yield advantage.

In contrast, ECB officials have signaled further rate increases to combat persistent inflation in the eurozone. This policy divergence is a key factor supporting EUR/USD, as investors adjust their positions to reflect the shifting interest rate outlook.

Impact on Traders and Investors

For forex traders, a sustained break above 1.1600 could trigger a fresh wave of buying, with potential targets at 1.1650 and 1.1700. Conversely, a failure to break resistance might lead to profit-taking and a pullback toward 1.1500. Investors with exposure to European assets may also benefit from a stronger euro, as it boosts the value of euro-denominated holdings when converted to dollars.

Conclusion

In summary, EUR/USD’s technical setup favors further upside, with the 1.1600 level acting as a critical trigger for the next leg higher. While market sentiment and central bank policy will remain key drivers, the current momentum suggests that a break above 1.1600 is increasingly likely in the coming sessions.

FAQs

Q1: What is the key resistance level for EUR/USD?
The immediate resistance is at 1.1600, and a break above that level could lead to a test of 1.1650 and beyond.

Q2: Why is the euro strengthening against the dollar?
The euro is benefiting from a weaker dollar, driven by expectations that the Fed may pause rate hikes, while the ECB remains hawkish on inflation.

Q3: What are the key support levels to watch?
Initial support is at 1.1550, followed by the 1.1500 psychological level. A drop below 1.1500 could signal a deeper correction.

– Written by


Frank Davies

STORY LINK Pound-to-Dollar Forecast: GBP Climbs on Strait of Hormuz Deal Hopes

The Pound US Dollar (GBP/USD) exchange rate moved higher on Wednesday as a brighter market mood reduced demand for traditional safe-haven currencies.

At the time of writing, GBP/USD was trading at around $1.3478, up approximately 0.2% from Wednesday’s opening levels.

The US Dollar (USD) weakened during Wednesday’s session as investors rotated away from defensive assets amid growing confidence that tensions in the Middle East could continue to ease.

Markets were encouraged by reports that negotiations involving the US, Iran and Oman over reopening the Strait of Hormuz were progressing well, fuelling expectations that an agreement could be reached in the near future.

The ‘Greenback’ also faced headwinds from a run of underwhelming US economic releases.

The latest ADP employment survey revealed private payroll growth slowed to just 44,000 in July, while the ISM services PMI also disappointed, indicating activity in the dominant services sector lost more momentum than expected.

The Pound (GBP) found modest support on Wednesday after revised survey data pointed to a healthier performance from the UK’s services sector.

July’s final S&P Global services PMI was revised higher from the preliminary estimate, signalling a stronger rebound in business activity after weakness earlier in the summer.

The improved figures reinforced expectations that the Bank of England (BoE) could still retain a relatively hawkish stance later this year if domestic economic resilience persists.

Near-Term GBP/USD Forecast: Payrolls Report to Set the Tone for USD?

Looking ahead, trading in the Pound to US Dollar (GBP/USD) exchange rate may remain cautious as investors await Friday’s US non-farm payrolls report.

The employment figures are expected to play a pivotal role in shaping expectations for the Federal Reserve’s next policy move. Another disappointing labour market update would likely weaken confidence in a September rate hike and place further pressure on the US Dollar.

Meanwhile, with the UK economic calendar relatively quiet, Sterling’s direction is likely to remain closely linked to broader market sentiment. Should optimism surrounding the Strait of Hormuz continue to improve, the Pound may remain well supported against the safe-haven US Dollar.

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TAGS: Pound Dollar Forecasts

Created on August 06, 2026

The US dollar dropped slightly on Wednesday, as we continue to dance around the 200 Day EMA

USD/JPY

The US dollar has pulled back ever so slightly against the Japanese yen and some other currencies as well, as the interest rates initially fell during the trading session. But as we roll into the afternoon in New York, we are starting to see those rates pick up just a touch. That should provide a little bit of strength for the dollar, and we are seeing a return to that strength in this pair as well, just a touch. We are hanging on to a trend line that goes all the way back to the lows at the end of March.

The question now is, will the Federal Reserve, the US Treasury Department, the Bank of Japan, everybody else continue to squash this pair, or will it change things? There are a lot of pundits out there who think mixed thoughts. One particular bank that I’m thinking of right now suggested that 2 billion dollars wasn’t enough to change the trend. I tend to agree with that.

200-Day EMA and Key Technical Support

That being said, we are in an area, the 200-day EMA, that will capture a lot of attention. I suspect this is going to be more of the same. It’s just a shot across the bow trying to slow down the hot money, while the longer-term investors watching a gradual climb aren’t so much the concern. It’s not necessarily the value of the yen that is the biggest problem; it is the rate of decay. It’s all about the second derivative, if you will.

Ultimately, I’m still in a position in this market. I have again added a small position on top of when I got involved back in the middle of September. This pays me at the end of every day, and it pays me triple swap on Wednesdays, so that could be something to watch on the way out the door.

Pay attention to the 158-yen level. If that gets broken to the upside, that could signal more buying as well. As far as selling is concerned, or getting out of a position, if we broke down below the hammer, I might do that and then focus maybe more on the dollar against the Swiss franc. But as things stand right now, I think we’re going to see some sideways action and then an eventual climb. That’s what’s happened the previous 3 times we’ve seen intervention, and of course, history does tend to repeat itself.

Want to trade our USD/JPY forex analysis and predictions? Here’s a list of forex brokers in Japan to check out.

Christopher Lewis is a technical analyst and market commentator at DailyForex with more than two decades of trading experience in Forex and other leveraged markets. Based in Columbus, Ohio, he specializes in chart-based analysis of major currency pairs, stock indices, commodities, and energy markets, focusing on clear support and resistance levels, trend structure, and risk management. Christopher produces daily written and video analysis for traders who rely on technical setups to navigate volatile market conditions

As seen on: Pairs Of Aces Podcast,The Trader Guy, FXEmpire

BitcoinWorld

EUR/USD Forecast: UOB Sees Mild Upside Capped at 1.1565

Singapore-based United Overseas Bank (UOB) Group’s FX analysts maintained their view that the Euro is likely to see mild upside against the US Dollar, with resistance capped at 1.1565. The forecast, released in their latest note, suggests that while the single currency retains a modestly positive bias, the room for appreciation remains limited in the near term.

UOB’s Technical Outlook for EUR/USD

According to UOB’s technical analysis, the Euro’s movement against the Dollar is expected to stay within a narrow range, with any advance likely to encounter strong selling interest near the 1.1565 level. This level has acted as a significant resistance point in recent trading sessions, and the bank’s analysts do not anticipate a decisive break above it in the immediate future.

The forecast is based on a combination of technical indicators and prevailing market sentiment. UOB notes that while the Euro has shown some resilience, the overall momentum is not strong enough to push the pair beyond the mentioned cap. The bank’s view aligns with the broader market consensus that the EUR/USD pair is likely to remain range-bound until clearer directional cues emerge from economic data or central bank policy signals.

Market Context and Implications

The Euro’s performance against the Dollar has been influenced by a variety of factors, including divergent monetary policy expectations between the European Central Bank (ECB) and the Federal Reserve. While the Fed has signaled a more hawkish stance to combat inflation, the ECB has maintained a relatively accommodative posture, which has limited the Euro’s upside potential.

Additionally, geopolitical tensions and concerns about global economic growth have contributed to a cautious sentiment in the currency markets. Investors are closely watching upcoming economic data releases, such as inflation figures and employment reports, for clues about the future direction of monetary policy. These factors are likely to play a crucial role in determining whether the Euro can challenge the 1.1565 level or if it will remain subdued.

What This Means for Traders and Investors

For traders, the UOB forecast suggests that any rallies toward 1.1565 could present selling opportunities, while dips may be seen as buying chances within the established range. However, a break above this level could signal a shift in momentum, potentially opening the door for further gains. As always, risk management and careful monitoring of economic indicators are essential in navigating the currency market.

Conclusion

UOB’s projection of mild upside capped at 1.1565 reflects a cautious but not overly bearish outlook for the Euro. The pair is likely to remain within a well-defined range in the near term, with the 1.1565 level acting as a key barrier. Traders should keep an eye on upcoming data and central bank commentary for potential catalysts that could alter the current dynamics.

FAQs

Q1: What is the significance of the 1.1565 level for EUR/USD?
The 1.1565 level is identified by UOB as a strong resistance point. In technical analysis, resistance is a price level where selling pressure is expected to be strong enough to prevent the price from rising further. A break above this level could indicate a shift in market sentiment and potentially lead to further gains.

Q2: Why is the Euro’s upside limited against the Dollar?
The Euro’s upside is limited primarily due to the monetary policy divergence between the ECB and the Fed. The Fed’s more aggressive interest rate hikes have strengthened the Dollar, while the ECB’s more cautious approach has kept the Euro under pressure. Additionally, broader market uncertainties and geopolitical risks contribute to a cautious outlook.

Q3: How can traders use this forecast?
Traders can use this forecast to identify potential trading levels. For instance, they might consider selling near the 1.1565 resistance level or buying on dips within the expected range. However, it’s important to combine such forecasts with other analysis and risk management strategies, as currency markets can be unpredictable.

This post EUR/USD Forecast: UOB Sees Mild Upside Capped at 1.1565 first appeared on BitcoinWorld.

Created on August 05, 2026

The USD/JPY pair continues to see a lot of stability on Tuesday, as we are looking to see if the selling is over.

USD/JPY

The US dollar has stabilized against the Japanese yen right around the 200-day EMA after forming a nice hammer during the Monday session. The 158-yen level seems to be a short-term barrier at the moment, or maybe you could just say the 200-day EMA. It’s basically the same thing.

Keep in mind that the interest rate differential still favors the U.S. by a wide margin. It’s well over 3%; it’s a little closer to 3.5. So therefore, you get paid to hold this position. Now, I’ve been long in this market for months and have remained so despite the intervention because of the longer-term outlook for Japan.

While there are concerns about the carry trade potentially causing chaos in the financial system, the reality is the markets will do what the markets will do. And we’ve already seen them push back a little bit from this. You cleared out a lot of the hot latest money to come into the market. That’s generally what these things do. And then the overall trend will eventually follow where we were going in the first place.

Technical Analysis

From a technical analysis standpoint, that was about 224. That’s still true, despite the fact that we’ve had three really bad days. The real question is going to be over the next several sessions, maybe even the next couple of weeks, do we get more sideways or upward pressure? If we do, then I think that sets us up for another showdown down the road. This is all about position sizing.

Now, if we were to break down below maybe 154, then the trend’s broken completely. Then you start to have a completely different conversation. I’m not going to short this pair even if that’s the case, because quite frankly, why do I want to pay swap at the end of every day for a swing position? If I was going to buy the yen, I would find something that yields less. Without looking at it right now, maybe the Swiss franc against the Japanese yen might be a good pair.

Ultimately, though, inflationary numbers in the United States started to come down, but yesterday’s manufacturing PMI numbers were the hottest they’ve been in 12 years. And I can assure you as somebody that lives in the United States, people have not stopped shopping. The malls and the stores are just packed. And that doesn’t even include Amazon. So, we’ve seen a couple of these weird bumps in the road with US data since COVID. I think we’re in the middle of that again.

Ultimately, this is going to come down to the interest rate differential. Still, the rates are dropping over the last couple of days. Makes sense. People believe that the situation in the Middle East is closer to being solved somehow. And as long as that’s the case, then rates may drift a little bit. But I’m watching this very closely over the last couple of days. I’ve been on for about a year and three or four months, maybe.

I still think ultimately the Japanese yen is going to be just absolutely obliterated. The law of large numbers is still working against it. Quite frankly, they had to have the Americans come and bail them out.

Want to trade our USD/JPY forex analysis and predictions? Here’s a list of forex brokers in Japan to check out.

Christopher Lewis is a technical analyst and market commentator at DailyForex with more than two decades of trading experience in Forex and other leveraged markets. Based in Columbus, Ohio, he specializes in chart-based analysis of major currency pairs, stock indices, commodities, and energy markets, focusing on clear support and resistance levels, trend structure, and risk management. Christopher produces daily written and video analysis for traders who rely on technical setups to navigate volatile market conditions

As seen on: Pairs Of Aces Podcast,The Trader Guy, FXEmpire