Important DisclaimersThe content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party’s services, and does not assume responsibility for your use of any such third party’s website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.Risk DisclaimersThis website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
The British pound has fallen a bit during the trading session on Friday, but it does look like it’s trying to find a little bit of support at the 1.32 level. It is worth noting that we stalled right at the 50-day EMA and the 200-day EMA indicator on Thursday. So, a lot is going on here. We’ll see if the downward trajectory continues. Right now, I’m still a bit bearish, although we may find ourselves trying to form some type of range in the short term.
EUR/GBP Technical Analysis
The euro has shown itself to be slightly negative. After initially rallying against the British pound during Friday’s trading session, we are sitting right at the 50-day EMA and the 0.8750 level, an area that, of course, is a massive previously resistant area. And now you would think there should be a certain amount of market memory here. If we can bounce from here, then we could go back to the 0.8850 level, but without the weight, see whether or not that actually happens. If we fall, then I’ll be paying attention to the 0.87 level, which is the next little cluster of support.
For a look at all of today’s economic events, check out our economic calendar.
The Pound Sterling (GBP) staged an impressive recovery against the US Dollar (USD), as GBP/USD clinched fresh monthly highs above the 1.3250 psychological level.
Pound Sterling capitalized on the UK Budget relief
Amidst increased odds of interest rate cuts by the Bank of England (BoE), GBP/USD found its feet, thanks to the UK Autumn Budget and growing expectations surrounding a US Federal Reserve (Fed) December rate reduction.
The CME Group’s FedWatch Tool showed an 85% chance of the Fed lowering rates next month against a 40% probability seen a week ago. Dovish commentary from Fed officials and mixed US data ramped up odds for such a move by the central bank.
New York Fed President John Williams said on November 21 that “US interest rates could fall without putting the Fed’s inflation goal at risk, while helping guard against a slide in the job market,” per Reuters.
Earlier in the week, Fed Governor Christopher Waller also favored a rate cut before the end of the year and expressed concerns about a “still fragile” labor market.
San Francisco Fed President Mary Daly also noted that “the Fed shouldn’t hold off on cutting rates now out of fear it may need to reverse course later.”
Later in the week, the Pound Sterling recovery gained traction due to the UK Budget announcement, which eased pressures surrounding fiscal concerns and bolstered GBP/USD.
Citing analysts, Reuters reported, “fears about slow growth, weak productivity and sticky inflation are not reflective of an attractive investment backdrop.”
Chancellor of the Exchequer Rachel Reeves’ budget was well received by markets despite the Office for Budget Responsibility (OBR) downward revision of the economic growth for 2025.
However, the pair’s upswing remained restricted because of the details of the Budget, entailing back-loaded tax measures.
Next of note for markets remains the monthly ADP Employment Change report on Wednesday, followed by the US ISM Services PMI release.
On Thursday, the weekly Unemployment Claims will be reported ahead of the release of the Fed’s preferred inflation measure, the Personal Consumption Expenditures Price Index, on Friday.
Besides the economic data, speeches from BoE policymakers and updates on the US-Ukraine discussions on the potential peace deal will also be closely followed.
GBP/USD Technical Analysis
The 20-day Simple Moving Average (SMA) has started to turn higher but remains below the 50- and 100-day SMAs. The 50- and 100-day SMAs extend their decline, while the 200-day SMA rises; price stays below the 50-, 100- and 200-day SMAs but above the 20-day. The Relative Strength Index (14) prints at 53 (neutral), signaling modest momentum recovery. Measured from the 1.3675 high to the 1.3011 low, the 38.2% retracement at 1.3264 acts as near-term resistance, with the 50% at 1.3343 above.
Bias remains uneven, with improving short-term momentum yet persistent overhead hurdles. The 20-day SMA currently stands at 1.3142 and offers nearby support, while the 200-day SMA at 1.3313 acts as dynamic resistance; the 50- and 100-day SMAs continue to slope lower. RSI holding above 50 would increase the odds of an upside extension, while a pullback would expose the 20-day SMA as the first line of defense.
(The technical analysis of this story was written with the help of an AI tool)
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data.
Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates.
When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money.
When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP.
A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period.
If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
The USD/JPY pair lacks any firm intraday directional bias on Friday and seesaws between tepid gains/minor losses, above the 156.00 mark, through the first half of the European session. Concerns about Japan’s ailing fiscal position, along with the upbeat market mood, offset higher-than-forecast consumer inflation figures from Tokyo. Moreover, a modest US Dollar (USD) uptick acts as a tailwind for the currency pair. That said, speculations that Japanese authorities could step in to stem weakness in the domestic currency and the divergent Bank of Japan (BoJ)-US Federal Reserve (Fed) policy expectations cap spot prices.
Government data showed earlier today that the headline Tokyo Consumer Price Index (CPI) rose 2.7% YoY in November, while a gauge, which excludes volatile fresh food prices, came in at 2.8% YoY. Moreover, the core CPI, excluding both fresh food and energy prices, held steady at 2.8%. The data points to sticky inflation in Japan’s capital city and backs the case for further policy tightening by the Bank of Japan (BoJ). However, BoJ board member Asahi Noguchi signaled on Thursday that the monetary tightening must follow an incremental path, forcing investors to reassess expectations for the central bank’s next policy move.
Meanwhile, Japanese Prime Minister Sanae Takaichi’s cabinet on Friday approved a draft supplementary budget worth ¥18.303 trillion for the fiscal year ending March 2026, stoking concerns about the nation’s fiscal health. The extra budget will be financed by additional bond issuance of at least ¥11.5 trillion. Expectations about the supply of new government debt had pushed longer-dated government bond yields to their highest in more than two decades earlier this month and contributed to the JPY’s relative underperformance. Furthermore, hopes for a Russia-Ukraine peace deal fail to assist the JPY to attract any buying.
The USD, on the other hand, looks to build on Thursday’s modest bounce from an over one-week low and further supports the USD/JPY pair. The upside for the USD, however, seems limited in the wake of dovish Federal Reserve (Fed) expectations. Comments from several Fed officials recently suggested that another interest rate cut in December is a live option. Moreover, reports that White House economic adviser Kevin Hassett has emerged as the frontrunner to become the next Fed Chair, and is expected to enact US President Donald Trump’s calls for sharply lower interest rates, hold back the USD bulls from placing aggressive bets.
Moving ahead, there isn’t any relevant market-moving economic data due for release from the US on Friday. Moreover, the aforementioned mixed fundamental backdrop warrants some caution before placing fresh directional bets and positioning for an extension of this week’s retracement slide from the 158.00 neighborhood, or the highest level since mid-January.
USD/JPY 1-hour chart
Technical Outlook
The USD/JPY pair is flirting with the 100-hour Simple Moving Average (SMA) pivotal resistance, just below mid-156.00s, which, if cleared decisively, should pave the way for additional gains. The subsequent move up could allow spot prices to reclaim the 157.00 mark and climb further toward the 157.45-157.50 intermediate hurdle before aiming to challenge the multi-month high, just ahead of the 158.00 round figure.
On the flip side, the 156.00 round figure could protect the immediate downside. This is followed by the weekly low, around the 155.70-155.65 region, below which the USD/JPY pair could accelerate the fall to the 155.00 psychological mark. A convincing break below the latter will be seen as a fresh trigger for bearish traders and set the stage for an extension of a one-week-old downtrend.
Despite the weakness of the GBPJPY pair’s trading, there are positive factors that begin by the main stability within the bullish channel’s levels, by the continuation of forming extra support at 205.20 level, these factors confirm the continuation of the positivity in the near and medium period.
Providing positive momentum by stochastic reach towards overbought level makes us prefer attacking the resistance of the bullish channel on 207.70, confirming that breaching it is important to record new gains by its rally towards 208.25 and 208.70.
The expected trading range for today is between 206.25 and 207.70
No news for EURJPY pair’s new sideways trading and its fluctuating near 181.15, but its stability above the support level near 179.40 and attempting to form extra support at 180.25 level, these factors support the chances of renewing the bullish attempts, attempting to breach the barrier at 181.75, targeting new positive stations that might begin at 182.30 reaching the main target at 183.05.
Note that stochastic approach from 80 level will increase the chances of achieving extra bullish momentum, to pave the way for achieving the breach and reaching the suggested targets.
The expected trading range for today is between 180.35 and 182.30
GBP/USD forecast remains higher as the UK budget provides near-term support.
The US dollar remains weak amid soft economic data and increased dovish expectations from the Fed.
Technically, the prices remain protected by the 200-MA support.
The GBP/USD forecast remains elevated as the pair rallied for its seventh straight session, trading near 1.3240 in Friday’s earlier session. The US dollar remains weak amid aggressive expectations for a Fed rate cut. The CME FedWatch tool now shows the market pricing in an 87% probability of a rate cut at the December meeting, a dramatic jump from last week’s lows of 31%. Markets now anticipate three more cuts in 2026 as well. The shift accelerated after reports that Kevin Hasset is the leading candidate to succeed Fed Chair Powell, as he’s considered rate-friendly, aligning with Trump’s preference for low rates.
-Are you looking for the best AI Trading Brokers? Check our detailed guide-
The British pound is also benefiting from domestic narratives, as markets digest Rachel Reeves’ UK Autumn Budget. Although the OBR’s forecasts leaked earlier, causing volatility, the larger-than-expected £22 billion fiscal buffer, lower gilt yields, and stable financial outlook helped sterling recover. Growth projections were revised lower, while tax burden is expected to climb toward historic highs. However, the near-term fiscal space restrained the downside for GBP. The pair reached the 4-week top near 1.3280 before consolidating gains during the thin liquidity sessions amid the Thanksgiving holidays.
On the monetary front, traders remain convinced that the Bank of England will cut rates at its next meeting, with the probability rising to 70%. Softer wage data, declining inflation pressures, and weak retail sales are pushing the central bank to ease policy. Governor Bailey noted that the disinflation trend remains in line with expectations, allowing room for more flexibility.
On the other hand, the dollar remains weak as sluggish durable goods orders and weak Chicago PMI data put further pressure on it. Although thin liquidity is preserving further movement, the downside bias in the dollar remains intact.
GBP/USD Technical Forecast: Correction Paused by 200-MA
GBP/USD 4-hour chart
The 4-hour chart for the GBP/USD pair shows a mild correction, finding support near the 200-period MA. The news-led spike on Wednesday formed a bullish pinbar pattern, protecting the pair from a deeper fall. The RSI is tilting downwards, suggesting consolidation around the 1.3200 area.
-Are you looking for the best MT5 Brokers? Check our detailed guide-
The bullish scenario for the pair could propel prices higher, aiming for a 4-week high near 1.3280, ahead of 1.3300. However, a bearish reversal could push prices below 1.3200 and target 1.3160, with a potential aim of 1.3100.
Looking to trade forex now? Invest at eToro!
75% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
Crucially, rising expectations of a BoJ rate hike clash with bets on a December Fed rate cut, signaling a reversal of USD/JPY’s November gains.
Tokyo Inflation and Retail Sales Spotlight the BoJ
Headline inflation for Tokyo increased 2.7% year-on-year in November, easing from 2.8% in October. However, the so-called core-core inflation rate held steady at 2.8%, well above the BoJ’s 2% target.
November’s data supported economists’ predictions for a December rate hike. In the November Reuters poll, conducted between November 11 and 18, 43 of 81 economists expected the BoJ to raise interest rates by 25 basis points to 0.75% on December 19.
Meanwhile, consumers opened their purse strings in October, indicating an economic recovery in the fourth quarter. Retail sales rose by 1.7% year-on-year, up sharply from a 0.2% increase in September. Rising consumer spending may fuel demand-driven inflation, bolstering the case for tighter monetary policy, given that inflation remains well above the BoJ’s target.
Wage Growth Trends Strengthen the Policy Narrative
Friday’s data followed updates from wage negotiations, with Japanese labor unions calling for another hefty wage hike in the spring of 2026. Notably, early signs of strong wage growth would ease the BoJ’s concerns over US tariffs having a longer-term impact on the Japanese economy. Higher wages could boost private consumption, which accounts for around 55% of GDP.
For context, the Japanese economy contracted by 0.4% quarter-on-quarter in the third quarter after expanding by 0.6% the previous quarter. Private consumption increased just 0.1% in the quarter, down from 0.4% in the second quarter.
The Pound to US Dollar exchange rate (GBP/USD) drifted on Thursday as investors continued to absorb the details of the UK’s autumn budget and assess its broader implications.
At the time of writing, GBP/USD was hovering near $1.3243, slightly below the session’s earlier peak of $1.3267.
The Pound (GBP) began Thursday on solid ground, still benefitting from the initial wave of optimism following the unveiling of the UK’s autumn budget.
However, that momentum quickly faded. As traders scrutinised the finer points of Chancellor Rachel Reeves’s fiscal plans, some of the early cheer gave way to caution, pushing Sterling back onto a softer footing.
Markets had initially welcomed Reeves’s move to carve out £22bn in fiscal headroom, but unease grew over the structure and timing of the tax measures. Much of the adjustment is pushed into the later years of the forecast period — close to the next general election — raising questions over whether those measures will be fully implemented.
Meanwhile, expectations for a December Bank of England (BoE) interest rate cut edged higher, with markets placing the probability closer to 90%. This further dampened appetite for the Pound.
By late morning, Sterling had slipped back from recent highs and settled into a narrow, cautious range, mirroring the more subdued market mood.
Save on Your GBP/USD Transfer
Get better rates and lower fees on your next international money transfer.
Compare TorFX with top UK banks in seconds and see how much you could save.
The US Dollar (USD) traded sideways on Thursday, muted by the Thanksgiving holiday closure in US markets.
The lack of liquidity offered the ‘Greenback’ a measure of insulation, softening the impact of modest risk-on sentiment and lingering expectations that the Federal Reserve could cut interest rates in December.
With trading activity significantly thinned and few fresh catalysts emerging, USD movement remained restrained throughout the session.
Pound to US Dollar Outlook: Market Mood to Drive Movement?
With limited UK and US data scheduled for Friday, the Pound to US Dollar exchange rate is likely to take its direction from broader market sentiment.
Risk appetite may prove the primary driver. A more upbeat tone would typically support the increasingly risk-sensitive Pound, allowing it to gain ground against the US Dollar. Conversely, if sentiment sours — for instance, if optimism surrounding potential progress in Ukraine–Russia peace discussions begins to fade — the safe-haven ‘Greenback’ could firm and exert downward pressure on GBP/USD.
At the same time, markets will continue digesting the UK’s autumn budget. Rising expectations of further BoE rate cuts, fiscal concerns, and ongoing doubts about the UK’s growth outlook may all temper Sterling’s ability to hold onto this week’s gains.
Like this piece? Please share with your friends and colleagues:
International Money Transfer? Ask our resident FX expert a money transfer question or try John’s new, free, no-obligation personal service! ,where he helps every step of the way,
ensuring you get the best exchange rates on your currency requirements.
Support Levels for EUR/USD Today: 1.1565 – 1.1480 – 1.1400
Resistance Levels for EUR/USD Today: 1.1660 – 1.1720 – 1.1800
EUR/USD Trading Signals:
Buy EUR/USD from the support level of 1.1520 with a target of 1.1700 and a stop-loss at 1.1450.
Sell EUR/USD from the resistance level of 1.1720 with a target of 1.1500 and a stop-loss at 1.1800.
Technical Analysis of EUR/USD Today:
Ahead of today’s US holiday, liquidity and investor appetite for new trades may weaken. This has enabled the EUR/USD pair to rebound, reaching the resistance level of 1.1615 and currently holding steady around its gains at the time of writing. On reputable trading platforms, the EUR/USD pair has been attempting to recover from the losses of the recent downward reversal, which pushed it towards the support level of 1.1491, the lowest point for the currency pair in three weeks. Today, the euro is up 0.20% against the dollar, marking its third consecutive session of gains. Over the past three sessions, the euro has risen 0.70%. Since the beginning of November, it has gained 0.49% against the dollar. And since the beginning of 2025, the euro has risen 11.96% against the US dollar.
The Upward Reversal for the Euro/Dollar is Still Early
Based on trading on the daily chart, the recent gains in the EUR/USD have not amounted to a shift in the overall trend to bullish but rather a return to the neutral zone. Confirming this is the stability of the 14-day Relative Strength Index (RSI) around a reading of 53 (above the neutral line of 50), and the MACD indicator lines are starting to turn upwards. To confirm a bullish reversal in the currency pair’s trend, a push towards the resistance levels of 1.1720 and 1.1800 sequentially is necessary.
Conversely, over the same timeframe, the EUR/USD trajectory will return to bearish if the bears succeed in pushing the pair back towards the support levels of 1.1520 and 1.1440 sequentially. It should be taken into account that with the US holiday, there are no significant European economic releases, which confirms that the Euro/Dollar price will be influenced by the reaction to the latest US economic data announcements and investor sentiment towards risk-taking.
Trading Advice:
Keep in mind that the upward reversal for the Euro/Dollar is just beginning. Wait for stronger positive stimulus factors and stronger gains to firmly confirm the upward shift.
Eurozone Bond Yields Under Pressure
Based on recent trading, Eurozone government bond yields fell slightly after the weaker-than-expected German IFO Business Climate Survey showed, maintaining concerns about the economy’s fragility. As recently announced, the IFO Business Climate Index fell to 88.1 in November, below expectations in a Wall Street Journal survey for a slight rise to 88.5. The probability of a US interest rate cut also increased after New York Fed President John Williams stated on Friday that another near-term US interest rate cut might be warranted. However, the yield declines remain limited as equity prices rise.
Finally, tradeweb data showed that the yield on Germany’s 10-year Bund fell by 1.2 basis points to 2.682%.
