USD/JPY (JPY=X) Holds 146.99 as Dollar Strength Offsets BoJ Caution

The USD/JPY (JPY=X) pair closed the week at 146.99, extending a period of tight trading inside the 146.20–148.76 corridor. The market remains indecisive, yet technicals and macro conditions suggest an imminent breakout. A decisive push above 148.76 would reopen the path toward the July high at 150.90, while a sustained break under 146.20 would flip momentum lower, exposing 142.66 as the next support zone.

Federal Reserve Policy Keeps USD Momentum Intact

Dollar resilience continues to hinge on U.S. macro strength and the Federal Reserve’s tone. Second-quarter GDP expanded at an annualized 3.3%, far outpacing the 3.1% forecast and reversing the contraction seen earlier in the year. Jobless claims at 229,000 underscored labor market resilience, while the PCE Price Index rose 0.2% MoM in July, with the core figure advancing 0.3% MoM and 2.9% YoY. With inflation still running hot, the Fed held its policy rate steady at 4.25%–4.50%, but markets are pricing in an 85% chance of a September rate cut. The hesitation from Chair Powell to commit to easing supported the dollar, with Treasury yields hovering near 4.20%, keeping USD/JPY underpinned.

Bank of Japan’s Reluctance to Tighten Widens Policy Gap

The Bank of Japan left its policy rate anchored at 0.40%–0.50%, signaling that it is prepared to adjust higher if inflation stays persistent, but avoiding premature moves that could destabilize growth. This stance preserves a rate differential of over 400 basis points against the U.S., continuing to weigh on the yen. Intervention risk remains in play if USD/JPY retests the 150–151 zone, but so far, policymakers have opted for patience rather than direct currency action.

Technical Landscape for USD/JPY

The broader structure shows USD/JPY still digesting the correction from the 161.94 peak in 2024 to the 139.87 low in mid-2025. The retracement band between 151.22 (61.8% Fibonacci of the 158.86–139.87 leg) and 161.94 represents the long-term bullish hurdle. If USD/JPY clears these levels, the uptrend that began from 102.58 in 2021 would likely resume toward fresh highs. On the downside, the 38.2% retracement at 139.26 stands as a critical floor should sellers regain control below 146.20.

Macro Environment Pressuring Yen via Trade and Energy Costs

Japan’s trade balance remains under stress from elevated import costs, especially natural gas and LNG, which are denominated in U.S. dollars. European TTF benchmark futures remain above €31 per MWh, keeping energy prices elevated for importers. With USD/JPY above 146, Japan’s import bill expands further, complicating fiscal dynamics and applying more downside to the yen. Global risk appetite also favors dollar holdings, as equity markets in the U.S. continue to attract flows despite rising volatility.

Market Positioning and Risk of Intervention

Speculative data shows net shorts remain dominant against the yen, reflecting expectations that the BoJ will lag its peers for months to come. Corporate hedging activity has increased around the 145–147 range, with exporters using the recent dollar strength to lock in revenue protection. While authorities have intervened before at the 150 level, they appear content for now to tolerate yen weakness as long as moves are orderly. Any sudden spike above 150.90 could revive direct action, but until then, verbal warnings may remain the main tool.

Investment View on USD/JPY (JPY=X)

At 146.99, USD/JPY is sitting at a critical junction. Dollar strength from resilient U.S. data and delayed Fed easing continues to favor upside, while the BoJ’s reluctance to move reinforces structural weakness in the yen. Immediate support rests at 146.20, with failure to defend it risking a slide toward 142.66. Resistance is firm at 148.76, and a breakout above that level would almost certainly send the pair back toward 150.90. Given the data and rate gap, the stance leans Buy on dips above 146.20, with risk management around the downside pivot.

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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.

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STORY LINK Pound Sterling to Dollar Forecast: GBP Could Extend Rally if Dollar Slide Deepens

The latest Pound to Dollar (GBP/USD) forecast turned more upbeat after Sterling rebounded from 1.3420 lows and pushed back above 1.3500 towards the end of the week.

US Dollar weakness continues to dominate as political pressure on the Federal Reserve unsettles markets, leaving GBP/USD poised against key resistance near 1.3575.

GBP/USD Forecasts: Break Above 1.3500

The Pound to Dollar exchange rate (GBP/USD) rebounded strongly from lows around 1.3420 on Wednesday and continued to make ground on Thursday as it edged above the 1.3500 level.

Unease over the politicising of the Fed is damaging the dollar with no major Pound developments.

Crucial resistance comes in the 1.3575-90 range with the pair failing in this area during July and August.

According to UoB progress will be limited; “The major resistance at 1.3575 is unlikely to come into view.”

Federal Reserve policy and Administration efforts to exert much greater influence on the central bank remain key elements for the dollar and global markets.

ING expects the political dimension to increase further and noted; “It is hard to see the debate not falling across partisan lines, with some of the most excoriating criticism of the White House action coming from the likes of former Fed and Treasury representatives Janet Yellen and Lael Brainard – both Democrats.

Fed Governor Cook is not accepting her attempted dismissal by President Trump with a legal challenge.

ING added; “The Cook issue looks set to be tied up in court for the remainder of the year, with the key point being whether she can continue to vote on the FOMC during this period. Alongside Stephen Miran’s recent appointment to the Fed governing board, 17 September is shaping up to be quite a meeting.”

The battle has also widened to regional Fed banks.

Jeffries stated that the battle over Cook; “exemplifies the expansion of executive power, which may open the path for the administration to oust Powell or other regional Fed presidents, raising risk for U.S. assets.”

It added; “The risk of non-renewal or dismissal of regional presidents — especially those perceived as policy dissenters — has become material.”

Investment banks will continue to discuss the longer-term outlook for interest rates.

Rabobank commented; “This week’s events underline our view that the FOMC may continue to resist delivering the amount of rate cuts that President Trump desires this year.”

Nevertheless, it expects a different environment in 2026; “next year the data are likely to matter less in monetary policy decisions and we expect the pace of the cutting cycle to pick up.”

It added; “What’s more, as we discussed in our Jackson Hole comment, we are likely see a major overhaul of the Fed. Stephen Miran is not going to the Fed just to vote for rate cuts, more importantly he is sent there by Trump as a quartermaster for the MAGA makeover.”

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• The EUR/USD outlook shows steady Eurozone consumer inflation expectations. 

• Consumers expect Eurozone inflation to average 2.6% in the next year. 

• The preliminary US GDP revealed a 3.3% expansion, bigger than the forecast of 3.1%.

The EUR/USD outlook shows the euro recovering after an ECB survey revealed steady consumer inflation expectations. However, the currency pulled back in the previous session after upbeat US data briefly boosted the dollar. 

An ECB survey revealed that consumers expect Eurozone inflation to average 2.6% in the next year. This was unchanged from the June expectations. Moreover, it means that the European Central Bank can maintain the interest rates at 2.0%. Therefore, traders do not expect a rate cut in September. 

Meanwhile, the dollar got some relief in the previous session after data revealed solid economic growth. The preliminary GDP revealed a 3.3% expansion, bigger than the forecast of 3.1%. The data eased some recent concerns about the state of the economy. It also eased pressure on the Fed to lower borrowing costs. Additionally, unemployment claims fell more than expected, easing worries about a rapid slowdown in the labor market.

Nevertheless, the greenback is heading for a monthly loss against the euro due to an increase in Fed rate cut expectations. Traders are now looking forward to the nonfarm payrolls report next week that will continue to shape the outlook for rate cuts.

EUR/USD key events today

• US core PCE price index m/m

EUR/USD technical outlook: Bears attempt again at range resistance

On the technical side, the EUR/USD price trades above the 30-SMA, with the RSI above 50, suggesting a bullish bias. However, on a larger scale, the price trades in a consolidation between the 1.1600 support and the 1.1700 resistance levels. 

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Initially, the trend turned bullish after meeting the 1.1400 support level. However, it soon started a corrective phase after bulls failed to break above the 1.1700 key resistance level. Since then, they have made several attempts to break out of the consolidation but have failed. At the same time, the RSI has made lower highs, indicating fading bullish momentum. 

If bulls regain strength, the price might finally break out of consolidation and continue the uptrend. On the other hand, if they don’t, bears might take over and retest the 1.1400 support level.

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Platinum price recorded some of yesterday’s gains by hitting $1362.00 level, but its neediness for positive momentum pushed it to decline below $1355.00 barrier, to reach $1342.00, to face the moving average 55.

The contradiction between the main indicators might force the price to provide intraday mixed trading, to keep waiting for gathering the positive momentum to confirm breaching the barrier and reaching the positive targets near $1383.00 and $1398.00.

The expected trading range for today is between $1340.00 and $1383.00

Trend forecast: Bullish

Created on August 29, 2025

• Thursday has seen a bit of bullish pressure for the British pound against the US dollar, as we continue to see a lot of noisy behavior.
• Ultimately, this is a market that I think is still very much in the throes of consolidation.
• This is despite the fact that we did bounce ever so slightly over the last couple of days. In fact, you can even make an argument that there is a bit of a “double bottom” at the 1.34 level below, but at this point I think it has more to do with a simple lack of momentum.

Technical Analysis

Speaking of the 1.34 level, this is an area that I think a lot of people would be looking at as a potential support level going forward, as it has proven itself to be important multiple times, going back several months. It’s also worth noting that the 50 Day EMA sits between here and there, so I think there is a lot of support just waiting to jump into the market.

However, the 1.36 level above is a significant amount of resistance, an area where we have seen selling pressure previously. If the market were to reach that area, I’d be watching to see if there are signs of exhaustion that I can start shorting. Quite frankly, I think that we are on the precipice of something kind of big as far as the global economy is concerned, and if that does in fact change for a more negative tone, the US dollar becomes much more attractive to currency traders as a form of safety.

Time of Year

Keep in mind that the time of year is typically low volume, so simply sitting in this area makes quite a bit of sense. At this point, if we can break out of this range opens up the possibility of the 200 pip move. If we break above the 1.36 level, it could move the market to the 1.38 level. If we break down below the 1.34 level, then we could drop down to the 1.32 level. The 200 Day EMA is closer to the 1.32 level, so that of course could offer a significant amount of support.

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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.

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.

– Written by


Tim Boyer

STORY LINK GBP/USD Price Forecast: Pound Sterling at $1.351 as Dollar Loses Ground

The Pound US Dollar exchange rate traded mostly flat on Thursday as the US published its latest GDP estimate for the second quarter of 2025.

At the time of writing, GBP/USD was trading at approximately $1.3505, virtually unchanged from the start of Thursday’s session.

The US Dollar (USD) lost ground on Thursday, slipping against several major peers despite the release of stronger-than-expected US data.

The second-quarter GDP showed the American economy rebounded more sharply than forecast, accelerating from -0.5% to 3.3%, surpassing expectations for a 3.1% rise.

Ordinarily, such robust growth figures would have bolstered the ‘Greenback’. However, the upbeat market mood during Thursday’s session reduced demand for the safe-haven currency, leaving USD on the defensive.

The Pound (GBP) lacked direction on Thursday, trading in a tight range against most major currencies as investors were left without new UK data to drive movement.

During Wednesday’s trading session, Sterling had gained some ground after interim PPI figures from the Office for National Statistics (ONS) pointed to lingering inflationary pressures, reinforcing speculation that Bank of England (BoE) may maintain a hawkish stance.

However, with no fresh catalysts emerging, this support quickly faded.

As a result, the Pound was left treading water through much of Thursday’s European session, with broader market sentiment dictating GBP exchange rate movements.

GBP/USD FORECAST:

Looking ahead to Friday’s European session, movement in the GBP/USD exchange rate is set to be shaped by a key US release.

The spotlight will fall on July’s core PCE price index, the Federal Reserve’s preferred measure of inflation, which is forecast to edge higher from 2.8% to 2.9%.

Should the data meet expectations, it could strengthen the US Dollar by dampening speculation over potential Fed interest rate cuts, reinforcing demand for the ‘Greenback’ as the week draws to a close.

In contrast, the UK calendar will remain quiet, leaving Sterling without an economic catalyst.

This could see GBP trade largely on external factors. As a risk-sensitive currency, any improvement in market sentiment could lend the Pound some modest support, especially against the safe-haven US Dollar.

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TAGS: Pound Dollar Forecasts