• GBP/USD trades above 1.3300 in the European session on Tuesday.
• The US economic calendar will not feature high-impact data releases.
• The near-term technical outlook fails to offer a directional clue.

GBP/USD stays in positive territory above 1.3300 in the European session on Tuesday after posting small gains on Monday. The technical outlook, however, fails to provide any directional clues as investors remain reluctant to take large positions ahead of the Federal Reserve (Fed) and the Bank of England’s (BoE) monetary policy meetings.

The US Dollar (USD) found support in the second half of the day on Monday and limited GBP/USD’s upside as markets assessed the US data.

The ISM Services Purchasing Managers Index (PMI) rose to 51.6 in April from 50.8 in March. Additionally, the Prices Paid Index of the PMI survey, the inflation component, climbed to 65.1 from 60.9, pointing to an acceleration in the input inflation in the service sector.

Meanwhile, growing optimism about the US coming to terms with its partners on trade helped the USD hold its ground. US Commerce Secretary Howard Lutnick told Fox Business that they are hoping to announce trade deals soon, while US Treasury Scott Bessent said that they are very close to reaching some agreements on trade.

Early Tuesday, the cautious market mood makes it difficult for GBP/USD to gather bullish momentum. At the time of press, US stock index futures were down between 0.6% and 1%. Nevertheless, a bearish opening in Wall Street could hurt the USD in the American session and allow GBP/USD to keep its footing.

GBP/USD Technical Analysis

The Relative Strength Index (RSI) indicator on the 4-hour chart stays flat slightly above 50 and GBP/USD continues to fluctuate at around the 100-period, 50-period and 20-period Simple Moving Averages (SMA), highlighting a lack of directional momentum.

Looking south, first support could be seen at 1.3270 (Fibonacci 23.6% retracement of the latest uptrend) before 1.3240 (20-day SMA) and 1.3165 (Fibonacci 38.2% retracement). On the upside, immediate resistance is located at 1.3330-1.3340 (50-period SMA, static level) ahead of 1.3400 (round level, static level) and 1.3450 (static level).

• During the trading session on Monday, we have seen the US dollar fall significantly, only to turn around and show signs of life again.
• All things being equal, it is worth paying close attention to the ¥143.50 level, an area that was short term resistance before, and is now starting to offer a little bit of support.
• Furthermore, we have a lot of headlines out there that could cause all kinds of problems for currency pairs.
• This is especially true for the USD/JPY pair, as it is so highly sensitive to risk appetite in general.

Technical Analysis and the Federal Reserve

If we can break above the 50 Day EMA, marked in red on the accompanying chart, and sitting at the ¥146.33 level, I think there’s a real shot that the US dollar continues to go much higher. All things being equal, I suspect that we will probably go more sideways over the next several sessions, especially as the FOMC meeting and announcement comes out on Wednesday, which makes the market take a bit of a breather as we will have to wait to see what the Federal Reserve says.

It’s not so much what the Federal Reserve does, because they are not expected to cut interest rates, but it is going to be more or less the statement and the press conference that gives people the idea as to where the Federal Reserve may go with interest rates.

The Bank of Japan has already essentially flinched, meaning that they did not tighten monetary policy as they were worried about the overall tariff war, and this of course might be the excuse that lot of businesses and central banks use. In fact, we are already seen on Wall Street, with corporations using that as a way to get out of giving guidance. In general, I think the real story is that the Japanese cannot tighten rates, and the US dollar should rise over the longer term.

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May 6, 2025 – Written by Tim Boyer

STORY LINK Euro to Dollar Forecast: 1.130 Level “Remains Anchor in EUR/USD”

The Euro to Dollar exchange rate (EUR/USD) has found support below 1.1300 and is trading around 1.1320, but rallies have met selling interest.

The Euro was hampered by German CDU leader Merz failing to win a vote in the Bundestag that would have approved him as Chancellor. Another vote may be held in the short term.

EUR/USD is still trading above levels that would be justified by interest rates alone and a key question is whether the dollar discount is justified.

US data, tariff developments and Asian currency-market dynamics will remain extremely important in the short term.

High-profile US data has not suggested any notable deterioration in the economy at this stage, but data is lagging and indicators such as freight transport suggest that major stresses could be on the horizon.

ING commented; “The dislocation between FX and short-term rate differentials however doesn’t tend to last too long, and in this case would need to be fuelled by further unwinding of USD reserve positions.

It added; “If that doesn’t happen, the overbought and overvalued EUR remains at risk of more downside pressure. The 1.130 level remains the anchor in EUR/USD – a decisive break lower can see the 1.120 support being cleared soon.”

Danske Bank still sees net dollar selling; “With markets arguably having priced in some degree of slowdown, the next leg lower in the USD is likely to unfold more gradually, barring a fresh policy shock. We remain tactically inclined to buy EUR/USD on dips and maintain our structural bearish USD view.”

According to Scotiabank; “EURUSD continues to trade within its mid-1.12/upper-1.15 range from early April. We look to near-term support below 1.13 and resistance above 1.14.

Tuesday’s Asian session was more subdued after wild Taiwan dollar gains on Friday and Monday.

National Australia Bank strategist Rodrigo Catril commented; “A bit of calmness before another leg in the trade storm. Forex markets, especially Asia forex markets, are taking a breather as we wait for new US trade information.”

The sharp Taiwan dollar gains have, however, sparked further speculation of wider Asian currency gains and a weaker dollar in global markets.

According to Chris Weston, head of research at Pepperstone; “the factor many talk about is whether these countries with historically ‘weak’ and heavily managed currencies are now appealing to Trump through the currency channels and are now allowing for an appreciation of the currency as part of the trade negotiations.”

MUFG noted the potential for shifts in asset allocations; “Asian markets also have been over time increasing their exposure towards US assets. To the extent that trade positions with the US changes more fundamentally, there could also be a more fundamental rebalancing, even if not repatriating back home, certainly some rebalancing towards other global assets might be reasonable.”

Danske Bank considers that the dollar is still vulnerable; “Despite the USD stabilizing over the past week – supported by a rebound in US equities, better-than-expected US figures and signs that the Trump administration is stepping back from its most aggressive tariff threats – there still appears to be a negative risk premium embedded in the greenback.”

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Platinum price remains affected by the contradiction between the main indicators, which forces it to delay the negative attack by its repeated fluctuation above the extra support at $950.00, achieving some gains by reaching $973.00.

Reminding you that the stability of the price below $983.00 level, will increase the chances for renewing the negative trading in the current trading, to keep waiting for attacking the support at $950.00, while surpassing the barrier will cancel the negative suggestion, to open the way towards activating the bullish rally, which might target $1000.00 level initially.

The expected trading range for today is between $950.00 and $983.00

Trend forecast: Fluctuated within the bearish track

Platinum price remains affected by the contradiction between the main indicators, which forces it to delay the negative attack by its repeated fluctuation above the extra support at $950.00, achieving some gains by reaching $973.00.

Reminding you that the stability of the price below $983.00 level, will increase the chances for renewing the negative trading in the current trading, to keep waiting for attacking the support at $950.00, while surpassing the barrier will cancel the negative suggestion, to open the way towards activating the bullish rally, which might target $1000.00 level initially.

The expected trading range for today is between $950.00 and $983.00

Trend forecast: Fluctuated within the bearish track

• GBP/USD faces initial resistance at the nine-day EMA of 1.3303.
• The 14-day RSI remains above 50, suggesting a bullish bias is still in play.
• A break below the 50-day EMA of 1.3054 could weaken the medium-term price momentum.

The GBP/USD pair attempts to maintain its position after registering gains in the previous session, trading around 1.3300 during the Asian trading hours on Tuesday. Technical analysis on the daily chart suggests a neutral short-term price momentum, as the pair is hovering around the nine-day Exponential Moving Average (EMA).

However, the GBP/USD pair continues to trade above the 14-day Relative Strength Index (RSI) holds above 50, suggesting a bullish bias is still in play. Further movements will offer a clear directional trend.

The GBP/USD pair faces initial resistance at the nine-day EMA of 1.3303. A successful break above this level could improve the short-term price momentum and support the pair to test the psychological 1.3400 level, followed by 1.3445, reached on April 28 and the lowest since February 2022.

On the downside, the GBP/USD pair could find its initial support at the 50-day EMA of 1.3054. A break below this level could weaken the medium-term price momentum and put downward pressure on the pair to navigate the region around its monthly low at 1.2708, recorded on April 7. Further support appears at the two-month low of 1.2577, recorded on March 3.

GBP/USD: Daily Chart

• Yen strengthens as investors seek safety amid unconfirmed trade deal rumors between US and China.
• USD/JPY finds support at 20-day SMA; daily close above 144.00 needed to regain bullish traction.
• Break below 143.00 could expose 141.97 and the YTD low at 139.88.

The USD/JPY dropped late during the North American session as investors seeking safety bought the Japanese Yen (JPY) and ditched the US Dollar (USD) amid the lack of announcements of trade deals, despite rumors that the US and China are close to beginning talks. At the time of writing, the USD/JPY trades at 143.80, down 0.80%.

USD/JPY Price Forecast: Technical outlook

From a technical standpoint, the USD/JPY remains biased downward, hitting a lower low for the second consecutive trading day. Yet it found support at the 20-day Simple Moving Average (SMA) of 143.43 before buyers lifted the pair above the Kijun-seen at 143.70.

Although this could pave the way for a recovery, bulls need a daily close above 144.00 if they would like to test higher prices. Otherwise, if sellers push USD/JPY below 143.00, this clears the path to test the April 29 swing low of 141.97. If surpassed, the next stop would be the year-to-date (YTD) low of 139.88.

USD/JPY Price Chart – Daily

GBP/USD Forecast: Pound Sterling stays dangerously close to key support level

GBP/USD lost 0.3% last week and snapped a three-week winning streak. The pair enters a consolidation phase on Monday and trades below 1.3300.

GBP/USD closed virtually unchanged on Friday as the US Dollar (USD) struggled to gather strength following the April labor market data from the US. The Bureau of Labor Statistics (BLS) reported that Nonfarm Payrolls (NFP) increased by 177,000 in April. Read more…

GBP/USD Weekly Outlook: Pound Sterling awaits Fed-BoE policy decisions for fresh impetus

King Dollar regained its throne, booking the third weekly gain, due to receding tariff war fears and optimism emerging from potential trade deals between the United States (US) and its major Asian trading partners.

US President Donald Trump and some of his colleagues stuck to their rhetoric that trade negotiations continued with China even though Beijing dismissed such talks. Trump said during the week that he has “potential” trade deals with India, South Korea and Japan and that there is a very good chance of reaching an agreement with China. Read more…

• The USD/JPY outlook shows a stronger yen at the start of the week.

• The BoJ faces high food inflation, strong wage growth, and the possibility of a weak yen.

• US employers added 177,000 new workers, beating estimates of 138,000.

The USD/JPY outlook shows a stronger yen at the start of the week, as market participants maintain hopes for further BoJ tightening. Meanwhile, the dollar strengthened against the yen briefly on Friday after an upbeat US employment report. 

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The yen collapsed Thursday after the Bank of Japan kept interest rates unchanged. Furthermore, the central bank downgraded its outlook for growth and inflation due to the impact of Trump’s tariffs. Governor Ueda noted that Trump’s trade policies had created a lot of uncertainty. Experts took this to mean the policymakers would delay rate hikes. As a result, rate hike expectations dropped. 

However, Japan’s currency rebounded on Friday after the impact of the policy meeting faded. The BoJ has to face high food inflation, strong wage growth, and the chances of a weak yen. Therefore, hopes are still alive that policymakers will boost interest rates.

Meanwhile, the greenback got a brief boost from data showing a resilient labor market. The economy added 177,000 new workers, beating estimates of 138,000. The unemployment rate was unchanged at 4.2%. After the report, market participants priced a 35% chance of a June Fed rate cut, down from 58%. 

However, due to Trump’s tariffs, analysts expect employment to deteriorate in the coming months. 

USD/JPY key events today

USD/JPY technical outlook: Brief retreat meets solid support zone

On the technical side, bulls have found their footing above the 30-SMA. The trend recently reversed when bears failed to go below the 140.01 support level. The price broke above it resistance trendline and pulled back for a retest. After that, it made a higher high, confirming the new uptrend. 

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However, after a new high, the price has returned to retest the recently broken 144.02 key level. At the same time, it is trading nearer the 30-SMA, which is another support level. Still, the price is above the SMA and the RSI is slightly over 50, suggesting a bullish bias. 

Therefore, bulls might return at this support zone to seek new highs. A bounce higher will likely target the 148.01 resistance level. The trend will only change when the price breaks and stays below the SMA.

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The EURJPY pair is forced to form a bearish correctional rebound this morning, affected by the stability of the resistance at 164.80, suffering clear losses by its approach from the initial support at 163.25 level.

Providing positive momentum by stochastic might increase the efficiency of the negative track in the current period, to expect reaching below the initial support and begin targeting several negative stations by reaching 162.45 and 161.90, while the price rally above the mentioned resistance will reinforce the chances for regaining the bullish bias, to expect targeting 165.25 level, reaching the next target at 166.40.

The expected trading range for today is between 162.45 and 164.10

Trend forecast: Bearish