Created on September 16, 2025

• The British pound is trying to break out against the US dollar during Monday trading as it looks like we are in fact going to continue to be very noisy.
• You do have to keep in mind that we have an interest rate decision from both of these central banks, the United States and England this week. And that in and of itself could cause quite a bit of volatility.
• With this, I think you also have to recognize that we are in a scenario where traders are trying to sort out whether or not the Federal Reserve cutting rates is a good thing or if it is a bad thing.

Generally speaking, most stock traders and forex traders look at rate cuts as a good way to short the dollar. The question at this point is going to be more along the lines of “Is there something ugly out there that the Federal Reserve knows that we don’t?” That’s always the fear. Ultimately though, you’ll also have to pay attention to London on Thursday.

A Noisy Market Ahead

So, I think this ends up being a very noisy market. I do think it favors the upside as things stand right now. And if we can get a sustained break above the 1.36 level, we could very well see the market try to get to the 1.38 level, but we also probably will see the occasional erratic and violent pullback.

So that is something to be cognizant of. If we do pull back, I would anticipate the 50 day EMA offering support, which is at the 1.3477 level. And then after that, you would have support at the 1.34 level. In general, I like buying dips, but you never know. The Federal Reserve could spook the market, so be very cautious.

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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.

Despite the positive momentum in the last trading, the GBPJPY pair price keeps providing weak sideways trading, affected by the stability of the barrier at 200.40, which decelerates the chances of resuming the bullish attack until this moment.

We will keep the bearish correctional track, depending on the stability of the barrier, reminding you that the correctional targets are located near 198.60 and 197.85, while breaching the barrier and holding above it will open the way for recording new gains that might extend to 201.55 reaching 161.8%Fibonacci extension level near 202.45.

The expected trading range for today is between 198.60 and 200.40

Trend forecast: Bearish

GBP/USD climbs as Fed-BoE policy divergence favors Sterling

USD/JPY Technical Analysis

The US dollar is down ever so slightly against the Japanese yen in early trading, but we are stuck between the 50 day EMA and the 200 day EMA. If the market were to break to the upside, we could go looking to the 149 yen level. If we break down from here, the 146.50 yen level continues to offer support. I expect very sideways action here.

AUD/USD Technical Analysis

The Australian dollar is a little bit stronger in the early trading hours of Monday. We are approaching a significant swing high near the 0.67 level, so we may hesitate a bit here, but clearly over the last week or so, we’ve seen the Australian dollar outperform many of its contemporaries. And therefore, I think if things play out the way they have been, we’ll continue to see the Aussie grind to the upside, breaking the 0.67 level could really free it to go much higher. We’ll just have to wait and see. However, do keep in mind that Federal Reserve cutting rates a lot of times signals the end of good times. And if that’s the case, you may suddenly see the US dollar reverse.

I’d be very careful with that. A lot of this is going to come down to the press conference and how fearful the Federal Reserve sounds. If we do pull back at this point, keep an eye on that 0.6550 level. It’s been like a magnet for price. And at this point in time, it’s basically where I think the market’s most comfortable. That could change. We certainly have made a strong push to the upside. We’ll just have to see if it holds.

For a look at all of today’s economic events, check out our economic calendar.

• The GBP/USD outlook shows a rally in the pound as traders await key policy decisions.
• The dollar fell last week after data revealed an unexpected jump in unemployment claims.
• The Bank of England has grown more cautious amid high inflation.

The GBP/USD outlook shows a rally in the pound as traders await policy decisions in the US and the UK. After downbeat employment figures, the Fed is set to cut rates by 25-bps. Meanwhile, the Bank of England will likely keep interest rates unchanged.

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The dollar fell last week after data revealed an unexpected jump in unemployment claims. It was the last nail in the coffin that pointed to a deteriorating labor market in need of support. Meanwhile, inflation was slightly hotter-than-expected. Nevertheless, it was not enough to dampen Fed rate cut expectations.

This week, traders will wait to see the tone during the meeting to determine future policy moves. If policymakers are more dovish than expected, the dollar will collapse. Meanwhile, if they remain relatively cautious about rate cuts, the US currency could recover.

On the other hand, the Bank of England has grown more cautious amid high inflation. As a result, traders expect policymakers to keep interest rates unchanged. This is giving the pound an edge over most of its peers, especially the dollar. However, there is uncertainty about the UK’s financial health. Market participants are keeping an eye on the upcoming November budget for clues on the country’s financial outlook.

GBP/USD key events today

Traders are not anticipating any high-impact economic releases today. Therefore, they will keep an eye on upcoming central bank meetings.

GBP/USD technical outlook: Bulls intensify above 1.3575

On the technical side, the GBP/USD price is on the verge of closing above the 1.3575 key resistance level. Such an outcome would make a higher high, confirming a continuation of the previous uptrend.  Moreover, the price trades above the 30-SMA, with the RSI nearing the overbought region, suggesting solid bullish momentum.

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Initially, the price was trading in a bullish trend before pausing near the 1.3575 resistance level. After this, I entered a corrective phase where it was chopping through the 30-SMA. However, the corrective move found support near the 1.3350 level. Afterwards, bulls took charge, pushing the price above the 30-SMA and respecting it as a support.

The break above the 1.3575 level shows that bulls are ready to resume the previous uptrend. Therefore, GBP/USD could soon retest higher resistance levels.

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Created on September 15, 2025

• The US dollar rallied a bit against the Japanese yen in the early hours of trading on Friday, as we are threatening the 200 Day EMA.
• By doing so, it looks as if the market is trying to sort itself out and determine whether or not it can break to the top of the range that we have been in.
• That range, defined as ¥146.50 on the bottom in ¥149 on top, has held quite nicely for several weeks now. It’s also worth noting that the 200 Day EMA is sitting in a very flat angle, suggesting that we just don’t have anywhere to be.

Federal Reserve

The Federal Reserve has an interest rate decision on Thursday of next week, and it’s very likely that we will continue to see a fine line to walk, as although they are expected to cut interest rates on Thursday, the reality is that people will be watching the statement and the press conference very closely, because it could potentially give us a bit of a “heads up” as to where we are going over the next several months. The interest rate differential between the United States and Japan still remain very large, but if they start to shrink bed, then traders may try to reprice the entire situation. Ultimately, this is a market that has been stuck in a range, and it might take the Federal Reserve to finally break it out of that range.

Ultimately, I am in favor the US dollar at the moment due to the interest rate swap, and I think a lot of people will continue to simply cash in the swap return at the end of every day, and that might be part of what has been keep in the market somewhat lifted. As long as that’s the case, I continue to buy on dips, and wait to see whether or not we can break out and above the ¥149 level.

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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.

The price of (EURUSD) rose in its last intraday trading, to breach the resistance level at 1.1730, supported by its continued trading above EMA50, and under the dominance of the bullish trend and its trading alongside bias line on the short-term basis, besides the emergence of the positive signals on the (RSI), despite reaching overbought levels, reinforcing the rise in the near-term basis.

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The EURJPY pair ended its last attempts with clear failure, to breach 173.50 barrier, which forces it to delay the bullish attack and begin forming bearish correctional waves, to settle near 172.90.

The price might keep forming correctional trading to gather some of the gains, to target 171.60, keeping its main stability within the bullish channel that appears in the above image, while its success in breaching the barrier and holding above it will allow it achieve more of the gains, to reach 174.25 followed by the next main target at 175.20.

The expected trading range for today is between 171.60 and 173.50

Trend forecast: Fluctuated within the bullish track

Created on September 15, 2025

• The euro has shown itself to be rather bullish in the early part of the trading session here on Friday as it looks like we are trying to break to the upside.
• All things being equal you can make an argument for an ascending triangle that we are trying to break out of but at this point, I think it is a situation where traders are basically trying to find some type of yield.
• You do get a positive swap while holding this pair to the upside. If we do pull back the uptrend line from the ascending triangle and the 50 day EMA offer support somewhere, we’ll just call it the 172 yen level to the upside. This isn’t a clearcut level, rather an “area of interest” I am watching if we take off to the upside.

A Major Level Above

The 175.50 yen level is an area that had been a swing high back in the middle of 2024. And I think there might be a little bit of market memory in that area causing some resistance, but there’s really nothing on this chart to suggest that we can get there. And if you take the measured move of the triangle itself, you’re looking at about 177 yen as a target.

I have no interest in shorting this market unless we break down below the 169.70 level. At that point, one would have to assume that the yen is strengthening against many other currencies, not just the Euro.

All things being equal, you have to pay close attention to the risk appetite. And if risk appetite continues to be fairly decent, that should send this market higher because of course the Euro is considered to be riskier than the Japanese yen.

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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.

– Written by


Frank Davies

STORY LINK Euro to Dollar Forecast: EUR/USD Gains Capped, 1.20 Still in Sight

The Euro to Dollar exchange rate (EUR/USD) edged higher to 1.1750 on Thursday before fading back towards 1.1700 as traders weighed mixed US inflation data against rising expectations of Fed rate cuts.

While the ECB held rates at 2.00% and signalled its cutting cycle is likely over, the Fed’s shift towards prioritising the weak labour market keeps medium-term EUR/USD forecasts pointed higher, with banks still eyeing 1.20.

EUR/USD Forecasts: Tentative Gains Only

The Euro to Dollar (EUR/USD) exchange rate strengthened to near 1.1750 on Thursday before stalling and drifting back towards 1.1700.

UoB commented; “The rebound has scope to extend but given that there has been no significant increase in upward momentum, any advance is likely to be limited to a test of 1.1760. The major resistance at 1.1790 is not expected to come under threat.”

Scotiabank maintains a positive underlying EUR/USD outlook; “We see limited resistance ahead of 1.18 and the July 1 high 1.1829. We look to a near-term range bound between 1.1650 and 1.1750.”

Yield spreads will remain a key element, although political developments will also be monitored closely with Fitch due to announce its French credit rating update late on Friday.

According to Scotiabank; “A credit downgrade may provide additional turbulence for French OATs, however we feel it important to highlight that markets are already pricing considerable credit risk for France as its 10Y yield now trades in tandem with Italy’s.”

ING considers that yield spreads will hurt the dollar; “our model shows that the greenback is expensive relative to the latest short-term rate swings against most of the G10. We expect dollar weakening as the Fed starts cutting, even if now priced in, as cheaper funding costs can further encourage USD selling for hedging purposes.”

The bank still expects medium-term EUR/USD gains to 1.20.

As far as Federal Reserve policy is concerned, there are strong expectations that the central bank will cut interest rates next week and the dollar lost ground on Thursday even though inflation data was mixed.

Rabobank commented; “The market reaction underscores that the Fed’s (perceived) reaction function has shifted from inflation to the labour market. Fed funds futures-implied odds of rate cuts rose, even as the central bank is still somewhat torn between above-target inflation and the cooling jobs market.”

In contrast, there are fresh doubts whether the ECB will sanction further cuts, underpinning Euro yields.

The ECB held interest rates at 2.00% at the latest policy meeting, in line with consensus forecasts.

There was little in the way of formal guidance, but comments from bank President Lagarde were significant.

According to Lagarde, the outlook for the economy is now more balanced and she stated that the process of disinflation had ended.

Following the comments, there were further doubts whether the central bank would cut interest rates again in the current cycle.

According to Danske Bank; “With growth holding up better than expected core inflation above the 2% target due to sticky wage growth, and the outlook for fiscal easing in 2026 we do not expect the ECB to deliver a final cut in the coming six months, contrary to market expectations.”

It added; “We keep our call that the ECB will not make any policy rate changes in 2025 or 2026.”

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