The forex market remains sideways, but the key levels are incredibly appealing. In today’s forecast, I’ll share the levels to watch and scenarios to be aware of for next week.

Watch the video below for key insights on the DXY, EURUSD, GBPUSD, USDJPY, and USDCHF. Don’t forget to scroll down to save the annotated charts before trading next week.

US Dollar Index (DXY) Forecast

The DXY remained mostly indecisive this week after testing the 101.80 confluence of resistance. The lack of movement made trading the major currency pairs less than exciting.

However, times like this often foreshadow aggressive moves. This week’s sideways movement is the market’s way of coiling before its next big move.

Although we don’t know the direction of the next move, the DXY key levels couldn’t be more straightforward. Key support is 100.20, and the February descending channel provides overhead resistance near 101.30.

For the US dollar to move higher next week, bulls must take out 101.30 and 101.80. A sustained break above these zones on the high time frames would open the door to the 103.40 pivot from March and April.

On the other hand, a sustained break below 100.20 next week would pave the way toward the recent 98.00 low. Notice how the DXY didn’t thoroughly retest the 97.70 level from March 2022. That could become a factor if 100.20 fails next week.

EURUSD Forecast

This week, EURUSD traders have been at a stalemate. On one hand, sellers are defending 1.1200, which failed on Monday, and on the other, buyers are protecting 1.1060 support.

As discussed in previous videos, I’m waiting for this week’s close. A weekly close below 1.1200 could signal weakness going into next week.

However, a weekly close above 1.1200 would keep buyers in the game. EURUSD would need to reclaim 1.1200 and 1.1275 to convince me that the uptrend is alive. The bottom line is that euro bulls have work to do.

One note about this week’s close. The EURUSD needs to close convincingly below 1.1200 to confirm a buy-side fakeout. It won’t be enough to see the pair close the week at 1.1200 or a few pips below. It must be convincing.

GBPUSD Forecast

GBPUSD is another currency pair that has stalled this month. Since climbing above 1.3200 one month ago, the pound has consolidated in a 300-pip range.

It isn’t surprising to see the pair take a breather. The April rally was incredibly aggressive, so profit-taking from buyers is expected. 1.3440 is also significant resistance, so sellers will naturally defend it.

One thing I’m watching as we head into next week is the potential for a bull flag pattern. Given this choppy price action, I’m not yet convinced, but the potential exists.

GBPUSD must break channel resistance near 1.3330/40 to confirm the bull flag. Just above that is the multi-month resistance at 1.3440. A sustained break above that on the high time frames opens the door to 1.3630 and 1.3750.

Key support for GBPUSD is 1.3200. The pair fell below that on May 12th but quickly rebounded. That shows strength from bulls, but they have more work to do.

Lastly, I can’t rule out the potential for a deeper retracement to 1.3050 while below channel resistance. But as mentioned in Thursday’s video, the price action during this pullback favors bulls for now.

USDJPY Forecast

USDJPY has been a difficult pair to trade. On the other hand, the yen basket of currencies is an incredibly clean chart on the high time frames. See the video above for details.

If the Japanese yen holds above its March 2020 trend line on the weekly and monthly charts, pairs like USDJPY could suffer. That’s especially true if the DXY breaks below 100.20.

However, if the yen fails to hold above its March 2020 trend line, it would confirm a failed breakout. A fakeout on the high time frames would likely trigger a move in the opposite direction.

That could trigger a rally for USDJPY, but only if the yen index fails to hold support. I discuss this scenario in detail in today’s video (above).

USDCHF Forecast

USDCHF is one of the more promising-looking charts for dollar bulls. The pair reclaimed the 0.8330 level I discussed in recent videos. Monday’s rally flipped the 0.8330 area to new support.

However, the 0.8475 lows attracted sellers during Monday’s rally. 0.8475 is the other level I mentioned recently that could be a significant hurdle for USDCHF bulls.

A view of the weekly time frame (see the video above) isn’t as convincing for bulls. USDCHF is trading above the 2023 low, but to turn higher, it must also close above the August and September 2024 lows.

Currently, USDCHF is between 0.8330 and 0.8400, so the stalemate continues. I’m keeping the pair on my radar for now, but this week’s price action has been less than convincing.

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• GBP/USD trades slightly below 1.3300 in the European session on Friday.
• The technical outlook points to a lack of buyer interest in the near term.
• The US economic calendar will feature UoM Consumer Sentiment Index data for May.

GBP/USD stays under modest bearish pressure in the European session on Friday and trades below 1.3300 after posting small gains on Thursday. The pair’s near-term technical picture highlights a lack of buyer interest.

The US Dollar (USD) struggled to find demand after mixed macroeconomic data releases on Thursday and helped GBP/USD stays in positive territory in the second half of the day.

The data published by the US Bureau of Labor Statistics showed that the annual producer inflation, as measured by the change in the Producer Price Index, declined to 2.4% in April from 2.7% in March. Meanwhile, Retail Sales increased 0.1% on a monthly basis in April, and US Department of Labor Reported that there were 229,000 weekly Initial Jobless Claims, matching the previous week’s reading and the market expectation.

The University of Michigan will release the Consumer Sentiment Index data for May later in the day. The one-year Consumer Inflation Expectation component of the survey rose for five consecutive months and reached 6.5% in April, compared to 2.6% in November 2024. In case there is a noticeable decline in this data, the immediate reaction could hurt the USD and open the door for a rebound in GBP/USD. On the flip side, another increase could boost the USD, causing the pair to stretch lower heading into the weekend.

GBP/USD Technical Analysis

The Relative Strength Index (RSI) indicator on the 4-hour chart declines toward 50, reflecting buyers’ hesitancy.

On the upside, the first resistance level is located at 1.3300 (100-period Simple Moving Average (SMA) on the 4-hour chart, 20-day SMA) before 1.3400 (static level) and 1.3450 (end-point of the latest uptrend).

Looking south, supports could be located at 1.3260 (Fibonacci 23.6% retracement) of the latest uptrend, 1.3200 (static level, 200-period SMA) and 1.3160 (Fibonacci 38.2% retracement).

• USD/JPY rebounded sharply from 140.00 to 148.65 but quickly reversed, showing signs of a failed bullish breakout amid profit-taking and technical resistance.
• The Bank of Japan held rates steady and cut its growth forecast, reinforcing expectations of a slower pace of policy normalization in 2025.
• US-Japan 10Y and 2Y yield spreads continue to narrow, putting downside pressure on USD/JPY and signalling weakening dollar-yen fundamentals.
• Bearish momentum resurfaced in USD/JPY, but a break above 149.00 would invalidate the bearish scenario and open the door to 151.30–154.50.

This is a follow-up analysis of our prior report “”, dated 17 April 2025.

Since our last publication, the has staged an initial push down to test the first medium-term support zone of 140.30/140.00, as highlighted (it printed an intraday low of 139.89 on 22 April).

Before the expected relief US dollar bounce took shape, the USD/JPY rallied by 4.4% to hit an intraday high of 145.93 on 2 May.

A setback occurred, causing it to slide towards an intraday low of 142.35 on 6 May.

A Pause in JPY Strength Due to BoJ and Risk-On Sentiment

The initial two weeks of US dollar strength against the Japanese yen have been reinforced by the recently concluded Bank of Japan (BoJ) monetary policy decision meeting last Thursday, 1 May. The BoJ switched into a “dovish hold” stance by keeping its short-term policy unchanged at 0.5% but slashed its current fiscal year growth forecast to 0.5% from 1.1%, citing trade tariff uncertainty.

However, the Japanese yen’s strength against the US dollar was short-lived as the USD/JPY managed to propel higher by 4.4% to hit a high of 148.65 on Monday, 12 May, triggered by a renewed bout of risk-on sentiment over the growing optimism of US-China trade tensions de-escalation.

BoJ’s Normalisation Monetary Policy Is Likely to Be Less Hawkish

Fig 1: Japan implied forward short-term interest rate curve as of 15 May 2025 (Source: Macro Micro)

Market expectations for Bank of Japan rate hikes in 2025 have softened compared to three months ago. The forward-implied short-term policy rate, derived from interest rate futures, has shifted lower, now projected at 0.66% by December 2025, down from 0.83% previously. However, this remains slightly above the 0.57% level seen just a month ago (see Fig 1).

However, other factors can support a potential resurgence of Japanese yen strength.

US Treasuries-JGBs Yield Spreads Remain Below Key Resistances

Fig 2: 10-YR & 2-YR yield spreads of US Treasuries/JGBs medium-term trends as of 16 May 2025 (Source: TradingView)

Since 6 January 2025, the and yield spreads of the US Treasury notes over Japanese Government Bonds (JGBs) have continued to narrow (trended downwards) below their respective key medium-term pivotal resistances of 3.60% and 3.84%, respectively.

If their downward trajectory remains intact, the 10-year and 2-year yield spreads of the US Treasury notes over JGBs may see further downside towards 2.47% and 2.90% next, which in turn may trigger further downside pressure on the USD/JPY (see Fig 2).

A Failure Bullish Breakout in the USD/JPY Technical Chart

Fig 3: USD/JPY medium-term trend as of 16 May 2025 (Source: TradingView)

The USD/JPY’s swift intraday rally of 2.1% seen on Monday, 16 May, is the best single-day gain of the USD/JPY since 17 June 2022.

Interestingly, the bullish momentum of the US dollar’s strength was short-lived, and the USD/JPY staged a decline of -2.5% to print an intraday low of 144.92 on Friday, 16 May at the time of writing, which wiped out its initial gains (see Fig 3).

In addition, the price actions of the USD/JPY have reintegrated back below its 50-day moving average and the medium-term descending trendline from its 10 January 2025 swing high, coupled with a bearish momentum condition being flashed out on its daily RSI momentum indicator.

Hence, the rally of 16 May is likely considered a “head fake” failure, a bullish breakout. Watch the 149.00 key medium-term pivotal resistance (also the key 200-day moving average), and a break below the 144.10 key intermediate support may see further weakness on the USD/JPY to retest 140.30/140.00 medium-term support in the first step before exposing the next medium-term supports at 138.90 and 137.10/136.50.

On the other hand, a clearance above 149.00 invalidates the bearish scenario for a recovery towards the next medium-term resistances at 151.30 and 154.50.

Original Post

The GBPJPY pair affected by the bearish correctional bias domination, to settle near the support at 193.15, the continuation of the main indicator’s contradiction might force the price to provide new mixed trading, but its stability above the mentioned support will increase the chances for renewing the bullish attempts, which targets 194.55 level, to extend the trading towards the next resistance at 195.70.

In case reaching below the current support, we recommend the neutrality and monitoring the price behavior due to the factors that assist to decrease the negativity, starting from the moving average 55 stability below the current trading and its stability near 192.05, besides the continuation of forming a solid support at 191.40 level, to decrease the chances for renewing the negative attack on the upcoming trading.

The expected trading range for today is between 193.00 and 194.55

Trend forecast: Bullish

The GBPJPY pair affected by the bearish correctional bias domination, to settle near the support at 193.15, the continuation of the main indicator’s contradiction might force the price to provide new mixed trading, but its stability above the mentioned support will increase the chances for renewing the bullish attempts, which targets 194.55 level, to extend the trading towards the next resistance at 195.70.

In case reaching below the current support, we recommend the neutrality and monitoring the price behavior due to the factors that assist to decrease the negativity, starting from the moving average 55 stability below the current trading and its stability near 192.05, besides the continuation of forming a solid support at 191.40 level, to decrease the chances for renewing the negative attack on the upcoming trading.

The expected trading range for today is between 193.00 and 194.55

Trend forecast: Bullish

Gold price struggles to capitalize on the previous day’s solid rebound from over a one-month low and consolidates below the $3,250 level during the Asian session amid the US-China trade deal optimism. Meanwhile, signs of easing inflation in the US and weaker consumer spending data lift Fed rate cut bets. The outlook drags the US bond yields lower and undermines the USD, supporting the non-yielding yellow metal.

May 15, 2025 – Written by David Woodsmith

STORY LINK Euro to US Dollar Forecast: EUR Drifts Into “Bearish Territory”

The Euro to Dollar exchange rate (EUR/USD) has fluctuated around 1.1200 on Thursday and settled close to this level after the raft of US data.

Scotiabank notes that overall volatility has eased and added; “Near-term support is expected below 1.1100 and recent resistance has been observed above 1.1250.”

According to ING; “We see EUR/USD trading in a 1.11-1.15 range over the coming weeks and months, although risks are skewed to the upside. 1.1265 is now decent intra-day resistance.”

US retail sales increased 0.1% for April, in line with consensus forecasts and followed an upwardly-revised 1.7% gain the previous month. Underlying sales also increased 0.1% on the month, but the control group recorded a 0.2% monthly decline compared with expectations of a 0.3% gain.

Producer prices declined 0.5% for the month compared with expectations of a 0.2% gain while core prices declined 0.4%.

There was no significant shift in interest rate expectations following the data.

As far as business confidence is concerned, the New York manufacturing index edged lower to -9.2 for May from -8.1 previously.

Companies were marginally more positive on the outlook with mixed inflation pressures.

The Philadelphia Fed index improved to -4 for May from -26.4 in April while there was stronger upward pressure on prices. Companies were notably more optimistic over the outlook with on-going inflation pressures.

The dollar’s fundamental outlook remained a key market focus. US bond yields edged lower as markets considered the longer-term fiscal outlook.

According to ING; “The topic involves a lot of speculation about what might happen, but the evidence is also starting to support the diversification thesis.”

There was evidence of strong buying of Japanese bonds and equities for the month.

ING added; “instead of April being a month of deleveraging and global asset managers merely downscaling and repatriating, April proved a month of diversification into Japanese assets by foreign accounts. That looks like a big tick in the box of the diversification element of de-dollarisation.”

The US Treasury has denied that it is looking to weaken the dollar, but Commerzbank is not convinced and considers that there are slightly more subtle ways of achieving the objective.

It noted; “it can also be achieved with a sufficient number of bilateral agreements. One with South Korea, one with Japan, and so on. Now, it is by no means plausible that these countries want to revalue their own currencies against the dollar. But it is easier – at least from the perspective of the US president and his ‘neorealist’ advisors – to force them to do so one by one.”

Danske Bank added; “a negative risk premium remains embedded in the USD, which continues to trade meaningfully away from fundamentals and pre-Liberation Day levels, reflecting eroding confidence in the greenback.”

It added; “Longer term, structural challenges like US and euro area political shifts, trade uncertainty, and capital rotation out of US assets suggest considerable USD downside.”

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May 15, 2025 – Written by Frank Davies

STORY LINK Pound-to-Dollar Forecast: GBP Advances vs USD on Slowing US Retail Sales

The Pound US Dollar exchange rate gained ground on Thursday as the US released its latest retail sales index and the UK released its latest GDP reading.

At the time of writing, GBP/USD was trading at approximately $1.3300, up roughly 0.3% from the start of Thursday’s session.

The US Dollar (USD) weakened across the board on Thursday as markets reacted to discouraging retail sales figures from April.

Consumer spending growth nearly came to a halt last month, with the retail sales index slipping sharply from March’s 1.5% reading to just 0.1%, coming in only slightly above forecasts for flat growth.

This underwhelming performance added to growing concerns about the US’s economic outlook, especially on the back of Tuesday’s subdued inflation reading.

The US Dollar came under additional strain after data showed a surprise dip in producer prices for April, marking the first time producer inflation had fallen since 2023, and deepened worries about weakening inflationary momentum in the US economy.

As investor confidence waned, the Dollar faced renewed pressure and retreated against most major currencies.

The Pound (GBP) strengthened on Thursday following the release of upbeat UK growth figures for Q1 2025.

Official data from the Office for National Statistics (ONS) showed the economy expanded by 0.7% over the first three months of the year, exceeding forecasts and registering the strongest performance among the G7 nations.

The unexpected acceleration in growth helped bolster confidence in the UK’s economic outlook, lending support to Sterling during the day’s European trading session.

As the week draws to a close, attention for the GBP/USD exchange rate is expected to shift towards upcoming US economic data.

The University of Michigan’s preliminary consumer sentiment reading for May is due for release, with projections suggesting sentiment will remain subdued, hovering near the lowest levels since July 2022, as noted in last months report.

If the index holds at these levels, it could weigh on the US Dollar (USD) by further fuelling concerns over the resilience of the American economy.

Meanwhile, with no notable UK data scheduled for Friday, Sterling may struggle to find a clear trajectory, potentially leading to more subdued or directionless movement in the GBP/USD pairing.

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Major Currency Pairs Forecasts: this analysis focuses on four major currency pairs: EUR/USD, USD/JPY, GBP/USD, and USD/CHF. Understanding the factors influencing these pairs can provide insights into potential future movements.

EUR/USD Forecast

The EUR/USD pair is the most traded currency pair globally, representing the economic relationship between the Eurozone and the United States. Several factors influence its movement:

Economic Indicators
The economic health of both the Eurozone and the U.S. plays a crucial role in determining the direction of this pair. Key indicators include GDP growth, employment figures, and inflation rates. Recent trends suggest that while the U.S. economy has shown resilience, the Eurozone faces challenges such as slower growth and inflationary pressures.

Central Bank Policies
The European Central Bank (ECB) and the Federal Reserve (Fed) have differing monetary policies that significantly impact the EUR/USD exchange rate. If the Fed continues to adopt a hawkish stance while the ECB remains dovish, the U.S. dollar may strengthen against the euro. Conversely, any shift towards tighter monetary policy by the ECB could bolster the euro.

Market Sentiment
Market sentiment, influenced by geopolitical events and economic forecasts, can lead to volatility in the EUR/USD pair. Traders often react to news regarding trade relations, political stability, and economic forecasts, which can create short-term fluctuations.

USD/JPY Forecast

The USD/JPY pair is heavily influenced by interest rate differentials between the U.S. and Japan, as well as broader market sentiment.

Interest Rate Differentials
The Bank of Japan (BoJ) has maintained a low-interest-rate environment for an extended period, while the Fed has been more aggressive in adjusting rates. This divergence can lead to a stronger U.S. dollar against the Japanese yen, particularly if the Fed signals further rate hikes.

Safe-Haven Demand
The Japanese yen is often viewed as a safe-haven currency. During times of global uncertainty or market volatility, demand for the yen may increase, leading to appreciation against the U.S. dollar. Conversely, if market sentiment improves, the yen may weaken as investors seek higher returns elsewhere.

Economic Data Releases
Key economic data from both the U.S. and Japan, such as employment reports and inflation data, can significantly impact the USD/JPY pair. Positive data from the U.S. may strengthen the dollar, while disappointing figures from Japan could lead to yen depreciation.

GBP/USD Forecast

The GBP/USD pair, often referred to as “Cable,” is influenced by various factors, including economic performance, political developments, and market sentiment.

Economic Performance
The economic outlook for the United Kingdom is critical for the GBP/USD pair. Factors such as GDP growth, inflation, and employment rates can influence the strength of the British pound. Recent economic challenges, including those related to Brexit, have created uncertainty, which can lead to volatility in this pair.

Political Developments
Political events, particularly those related to Brexit negotiations and domestic policies, can have a profound impact on the GBP/USD exchange rate. Any signs of progress or setbacks in negotiations can lead to significant fluctuations in the pound’s value.

Market Sentiment
Market sentiment plays a crucial role in the GBP/USD pair’s movements. Traders often react to news regarding economic forecasts, political stability, and global market trends. A shift in sentiment can lead to rapid changes in the exchange rate.

USD/CHF Forecast

The USD/CHF pair represents the relationship between the U.S. dollar and the Swiss franc, another currency often viewed as a safe haven.

Economic Stability
Switzerland’s economic stability and strong financial system contribute to the Swiss franc’s appeal. In times of global uncertainty, the franc may appreciate against the U.S. dollar as traders seek refuge in stable currencies.

Central Bank Policies
The Swiss National Bank (SNB) maintains a cautious approach to monetary policy, often keeping interest rates low. If the Fed continues to raise rates, the U.S. dollar may strengthen against the franc. However, any unexpected moves by the SNB could lead to volatility in the USD/CHF pair.

Geopolitical Factors
Geopolitical events can significantly impact the USD/CHF exchange rate. Tensions in global markets or economic crises can lead to increased demand for the Swiss franc, resulting in appreciation against the dollar.

Conclusion

The major currency pairs—EUR/USD, USD/JPY, GBP/USD, and USD/CHF—are influenced by a complex interplay of economic indicators, central bank policies, and market sentiment. As traders navigate this dynamic landscape, staying informed about economic developments and geopolitical events will be crucial for making informed decisions. Understanding these factors can provide valuable insights into potential future movements in these key currency pairs.

When considering shares, indices, forex (foreign exchange) and commodities for trading and price predictions, remember that trading CFDs involves a significant degree of risk and could result in capital loss.

Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice.