April 25, 2025 – Written by David Woodsmith

STORY LINK Pound Sterling to Euro Forecast: Dollar Slide Could Enable Strong GBP Gains

The Pound to Euro exchange rate hit a 2-week peak just above the key level of 1.1730 on Friday before settling around 1.1725 with a firm underlying tone.

Equity markets again helped underpin the Pound Sterling on the day. The FTSE 100 has already risen for the last nine trading sessions as trade war tensions have cooled, the longest run since December 2019.

According to ING; “EUR/GBP breaking under 0.8520/25 could lead to a much deeper correction.” (Strong GBP/EUR gains if it can sustain a move above 1.1730.)

Credit Agricole added; “we note that our estimates of short-term fair value that are based on FX drivers like relative rate spreads and risk aversion suggest that the GBP is looking quite undervalued vs the EUR.”

It added; “An important question for FX investors is whether the upcoming UK data releases and global developments next week and the outcome of the BoE policy meeting on 8 May could trigger a reversal of recent market trends.”

Scotiabank, however, sees GBP/EUR at 1.1630 at the end of the second quarter.

MUFG expects a focus on inflation; “Given the labour market and the recent strength of the economy, along with a minimum wage increase, inflation risks remain much higher in the UK.”

If the Bank of England remains cautious over rate cuts and risk appetite is less hostile, the Pound could benefit.

UK data was mixed on Friday with stronger than expected retail sales data offset by a further dip in consumer confidence

Retail sales volumes increased 0.4% for March compared with consensus forecasts of a 0.3% decline, although the February increase was revised to 0.7% from the original reading of 1.0%.

Favourable weather boosted demand for clothing and outdoor sales which was offset partly by a decline in supermarket sales.

First-quarter sales increased 1.6% from the fourth quarter of 2024, the strongest increase since July 2021.

According to SocGen chief FX strategist Kit Juckes; “Sterling has got a little bit of comfort from this. I wouldn’t overstate it, but it had a decent run and was threatening to fall back and got a little bit of help from the data, temporarily at least.”

There were still doubts whether spending would be sustained.

The GfK consumer confidence index declined to -23 for April from -19 previously, slightly worse than expectations of -21 and the lowest reading since November 2023 with all components declining on the month.

Neil Bellamy, Consumer Insights Director at GfK, an NIQ Company, commented; “Consumers have not only been grappling with multiple April cost increases in the form of utilities, council tax, stamp duty, and road tax, but they are also hearing dire warnings of renewed high inflation on the back of the Trump Tariffs.”

He added; “Are we now on the verge of another round of rapidly increasing prices? If so, consumer confidence is likely to collapse and the broad gains seen since the disastrous September 2022 minibudget, when confidence hit a record low of -49, could quickly be eroded.”

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TAGS: Currency Predictions Pound Euro Forecasts

April 25, 2025 – Written by Tim Boyer

STORY LINK Pound to Dollar FX Forecast: GBPUSD “Trend Remains Bullish”

The Pound to Dollar rate found support below 1.3300 on Friday and traded around 1.3320.

UK equities were able to make further gains, potentially advancing for the 10th successive session which would be the strongest run for over five years.

Scotiabank commented on GBP/USD; “the trend remains bullish, given the sequence of higher lows and higher highs. The RSI is softening but still in bullish territory. Near-term price action appears to have settled within a range roughly bound between support in the low 1.32s and resistance above 1.3400.”

According to Credit Agricole; “GBP is starting to look expensive vs the USD. An important question for FX investors is whether the upcoming UK data releases and global developments could trigger a reversal of recent market trends in the near term.”

US data releases will also be under close scrutiny in the near term given that markets want to see whether tariffs and uncertainty have triggered an impact in the real economy.

Scotiabank commented; “Hard data reports have held up relatively well—perhaps reflecting a burst of activity before tariffs really bite—but optimism on the US economic outlook has been replaced with growing recession concerns.”

Friday’s release reported that there was a small recovery in the April University of Michigan (UoM) consumer confidence index to 52.2 from the flash reading of 50.8, but still below the March reading of 57.0. The revision was due to gains in current conditions while expectations made only a marginal recovery.

UoM surveys of Consumers Director Joanne Hsu commented; “Consumer sentiment fell for the fourth straight month, plunging 8% from March. While the April decline in current conditions was modest, the expectations index plummeted with drop-offs in personal finances as well as business conditions. Expectations have fallen a precipitous 32% since January, the steepest three-month percentage decline seen since the 1990 recession.”

ING commented; “As to the dollar more broadly, it could find a little support as trade tensions calm a little. The next big chapter here will be whether all this volatility has hit real world decisions – especially in the US jobs market. There is plenty of US jobs data released next week and any deterioration here could trigger another round of dollar losses.”

Danske Bank maintains a negative dollar stance; “Longer term, structural challenges like US political shifts, the trade war, and capital rotation away from US assets suggest significant USD downside.”

UK retail sales volumes increased 0.4% for March after a revised 0.7% gain the previous month and compared with consensus forecasts of a 0.3% decline.

According to Scotiabank; “The release is unlikely to influence policymakers ahead of the May 8 BoE rate decision, given the well communicated bias to further accommodation. Markets are pricing in 27bpts of easing for the meeting.”

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TAGS: Pound Dollar Forecasts

April 25, 2025 – Written by Tim Boyer

STORY LINK Euro to Dollar Forecast: US Equities “Could Drag EUR/USD to 1.1250”

The US Dollar has made some headway on Friday with gains against the Euro and across all other majors amid hopes that the US Administration is backing away from the more destabilising policy stance.

According to Scotiabank; “Technicals remain bullish given the clear sequence of higher lows and higher highs. The near-term range is roughly bound between support in the upper 1.12s and resistance around 1.1550.”

ING commented; “What we would say is that some further modest advance in US equities could drag EUR/USD back to the 1.1250 area.”

ING added; “it may be there – 1.1250 – where all the ‘structural’ dollar sellers could re-emerge if you believe Washington’s destruction of the rules-based international order has permanently damaged the dollar’s status as the leading reserve currency.”

Overall risk appetite has continued to settle on Friday amid hopes that the US can make headway on trade deals and, potentially, lower the temperature with China to some extent.

Recently, the dollar has tended to benefit when risk conditions improve.

ING commented; “Over recent weeks we had mentioned that an extreme 5-6% risk premium in the dollar could see EUR/USD briefly trade 1.15/16 – which we saw on Monday – but that risk premium is now starting to come out of the dollar as the mood music on trade improves and the President has backed Fed Chair Jerome Powell.”

There is still a high degree of uncertainty across the board, especially given White House spin.

MUFG remained cautious; “Even if reports are correct that there will be some easing of tariff rates, a hit to US growth is still coming that will ensure volatility levels remain higher, equity markets are pressured to the downside and the global backdrop remains unfavourable for any sustained move higher.”

According to Scotiabank; “Trade hopes spring eternal for markets but it is far from clear that there are grounds for any real optimism at this point. China is playing the long game and the position the US has left itself in suggests few will be rushing to make any concrete trade deals any time soon.”

Geo-political considerations will also be monitored closely with markets monitoring the Russia-Ukraine war developments closely.

The US is pushing for a rapid move towards a deal and any evidence of a credible ceasefire could underpin the Euro, but there are still major barriers to a deal.

As far as data is concerned, there was a small recovery in the April University of Michigan consumer confidence index to 52.2 from the flash reading of 50.8, but still below the March reading of 57.0.

The ECB policy stance has remained dovish with council member Holzmann stating that a 50 basis-point cut was possible for June.

Markets have now fully priced in a 25 basis-point cut at that meeting.

As far as the Federal Reserve is concerned, markets are pricing in a 60% chance of a June rate cut. Cleveland Fed President Hanmmack stated that a June cut was possible if there was clear and convincing data.

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Created on April 25, 2025

• On Thursday, we have seen the British pound dip slightly against the Japanese yen, only to turn around and show signs of life again.
• By doing so, the market looks as if it is trying to turn to the upside and perhaps continue the recovery that we have seen over the last several days.
• This suggests a little bit of a “risk on move” in the markets, and of course we have seen play out in the equity markets as well, so this is not a huge surprise.

The Bank of Japan can do very little to tighten monetary policy, so the interest rate differential will continue to be quite large between these 2 currencies. If that is going to be the case, then it makes sense that the British pound continues to see success against the Japanese yen. The pair is notorious for being very volatile, and if we suddenly get a lot of risk on behavior around the world, I think that bodes quite well for higher pricing.

Technical Analysis

The technical analysis for this GBP/JPY pair is becoming more and more bullish each day, and the fact that we could not hang on to a selloff during the trading session tells me that this is a pair that is likely to continue higher given enough time. This doesn’t necessarily mean that we need to be extraordinarily explosive to the upside, but I think it does suggest that we are going higher regardless.

Short-term pullbacks continue to look like they are being bought into, with the ¥188 level being a short-term support level, as we have seen the market take off from there. The fact that we are starting to show more aggressive momentum to the upside on short-term chart suggest that we have more distance to cover in this pair, and therefore I don’t have any interest in trying to short this market, but I do think that it’s only a matter of time before we try to reach that ¥192 level.

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The EURJPY pair was affected by some of the positive pressures, due to the continuation of forming extra support at 161.60, and stochastic rally towards the 80 level, to notice reaching the resistance at 162.90.

We couldn’t confirm regaining the bullish bias unless surpassing the resistance and providing positive closes above 163.25 level, therefore, we will keep preferring the negative attempts in the current period, which might target the support at 161.60, while achieving the conditions of regaining the bullish bias will ease the mission of recording several gains that might begin at 164.20 and 164.90.

The expected trading range for today is between 161.60 and 163.00

Trend forecast: Bearish

• GBP/USD retreats to the 1.3300 region following Thursday’s rebound.
• The technical outlook highlights a lack of buyer interest.
• Critical support level for the pair aligns at 1.3250.

GBP/USD stays on the back foot following Thursday’s rebound and trades slightly below 1.3300 in the European session on Friday. The renewed US Dollar (USD) strength makes it difficult for the pair to hold its ground as investors remain focused on latest developments surrounding the US-China trade relations.

US President Donald Trump said late Thursday that a meeting between Chinese and US officials took place earlier in the day. During the Asian trading hours, Bloomberg reported that China was considering suspending its 125% tariff on some US imports, including medical equipment and ethane, and officials were having discussions about waiving tariffs on plane leases.

Although China’s Foreign Ministry denied the news about US and China engaging in negotiations, investors remain optimistic about a further de-escalation of tensions. Hence, the USD Index stays in positive territory above 99.60 after losing 0.5% on Thursday.

The US economic calendar will feature the University of Michigan’s revision of the April Consumer Sentiment Index, which is unlikely to trigger a market reaction. In case market mood remains upbeat heading into the weekend, GBP/USD could have a hard time gaining traction. At the time of press, US stock index futures were up between 0.1% and 0.5% on the day, pointing to a bullish opening in Wall Street.

GBP/USD Technical Analysis

The Relative Strength Index (RSI) indicator on the 4-hour chart moves sideways near 50, suggesting that the pair is struggling to gather directional momentum.

GBP/USD faces a critical support level at 1.3250, where the Fibonacci 23.6% retracement of the latest uptrend is located. If this support fails, additional losses toward 1.3200 (static level) and 1.3150 (Fibonacci 38.2% retracement) could be seen. On the upside, 1.3300 (static level, 20-period Simple Moving Average (SMA), 50-period SMA) aligns as first resistance ahead of 1.3340 (static level) and 1.3400-1.3410 (round level, static level).

• The USD/JPY price analysis indicates accelerating price pressures in Japan.

• Tokyo’s CPI increased by 3.4%, which is above forecasted to be a 3.2% increase.

• The dollar regained appeal as trade tensions between China and the US eased.

The USD/JPY price analysis indicates accelerating price pressures in Japan, which may prompt the Bank of Japan to raise rates. However, policymakers remain concerned about the economic impacts of Trump’s tariffs. Meanwhile, easing trade tensions between China and the US supported the dollar.

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The yen strengthened briefly on Friday after data revealed that inflation in Tokyo beat estimates. The CPI increased by 3.4%, above forecasts of a 3.2% increase. Moreover, it recorded a massive jump from the previous reading of 2.4%. Accelerating inflation aligns with the BoJ’s recent message of more rate hikes. However, Trump’s tariffs have created uncertainty about the timing of the timing of the next move. 

On the other hand, the dollar regained its appeal as trade tensions between China and the US eased. Both countries appear ready to lower tariffs and begin negotiations. The US has said it can lower tariffs on Chinese goods to 50%. Meanwhile, China is ready to exempt some US goods from tariffs. A deal to end the trade war would boost the dollar and ease economic worries. Meanwhile, the yen might lose its safe-haven appeal and drop.

USD/JPY key events today

Traders do not expect any high-impact economic releases from the US or Japan. Therefore, they will keep watching trade war developments.

USD/JPY technical price analysis: Channel breakout signals new trend

On the technical side, the USD/JPY price has broken out of its bearish channel. Immediately after the breakout, the price pulled back to retest the channel resistance and is now climbing higher. The channel breakout indicates a bullish shift in sentiment. The price now trades above the 30-SMA, and the RSI is above 50. Therefore, the bullish bias is strong. 

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Bears had a strong lead, maintaining a downtrend, with the price mostly below the 30-SMA. However, they could not go past the 140.01 support level. Consequently, bulls took over by pushing the price above the SMA and past the channel resistance. 

Given the strong bullish bias, USD/JPY could soon retest the 145.02 resistance level. A break above this level will confirm a new uptrend.

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Created on April 25, 2025

• The Euro has initially tried to rally during the trading session on Thursday, but gave back some of the gains as you can see.
• And it looks to me like a market that is probably trying to sort itself out as to whether or not we can continue to go higher.
• I think more likely than not, what we are going to see is a situation where traders look to establish some type of range.

I do think that the range could be between 1.12 and 1.15, but that of course remains to be seen. We’ll just have to wait to see how that plays out. I certainly think that it’s hard to short this pair, although the US dollar is most certainly oversold. This is true not only here, but many other currency pairs as well.

Noise Would be Expected Here

The reality is this is a market that will continue to be very noisy and front and center in the sense that the trade talks between the United States and Europe haven’t progressed yet. If and when they do, it’ll be interesting to see how that plays out here, mainly due to the fact that Germany is pulling out of a recession and there is talk at least of the United States heading into one. So interesting days we live in right now.

I think ultimately you have a situation where traders will look at this through the prism of perhaps trying to take advantage of a range in the short term. But if we were to break down below the 1.12 level, that could change a lot of things for a lot of people. We’ll just have to wait and see. I’m pretty neutral at the moment. I do think that we’ve got some work to do. If nothing else, we’ve got to work off some of this excess fraud.

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Gold price rose in its recent intraday trading, taking advantage of the bullish trend domination on the short-term basis, where the price moves along minor positive line, reinforcing its gains by a clear support from its stability above EMA50.

The positive momentum was supported by the continuation of the positive signals emergence on the (RSI), which confirms the strength of the current pressures towards the upside.

Therefore, the positive scenario remains preferred as long as the price settled above $3,290 support, to target the main resistance at $3,400, if the price managed to surpass this resistance we might witness recording new highs.

The expected trading range is between $3,290 support and $3,400 resistance.

Today’s forecast: Bullish

• EUR/JPY is likely to encounter initial resistance around the “pullback resistance” level near 164.50.
• The 14-day RSI holding above 50 reinforces the bullish bias.
• The initial support is seen at the nine-day EMA of 162.20, followed by the 50-day EMA at 161.34.

EUR/JPY extends its gains for the third successive session, trading around 162.80 during the Asian hours on Friday. Technical analysis of the daily chart shows the currency cross consolidating within an ascending channel, reinforcing a bullish outlook.

Moreover, the 14-day Relative Strength Index (RSI) holds above the 50 mark, reinforcing the bullish bias. The currency cross also trades above the nine-day Exponential Moving Average (EMA), indicating solid short-term momentum and the potential for continued upside.

On the upside, the EUR/JPY cross may face initial resistance at the “pullback resistance” near the 164.50 level. If this is surpassed, the next significant obstacle is at 166.69, which marks a nine-month high last seen in October 2024. A break above this level could open the doors for the currency cross to explore the region around the upper boundary of the ascending channel near the 169.00 level.

The EUR/JPY cross could encounter initial support at the nine-day EMA around 162.20, followed by the 50-day EMA at 161.34. A break below these levels might weaken the short- and medium-term price momentum, potentially applying downward pressure to test the lower boundary of the ascending channel at 160.50. A further decline could bring the currency cross to its two-month low of 155.59, recorded on March 4, followed by 154.41, its lowest level since December 2023.

EUR/JPY: Daily Chart