• The USD/JPY forecast shows a decline in expectations for Fed rate cuts.

• The annual US CPI accelerated from 2.4% to 2.7%.

• Trump has threatened to impose a 25% tariff on Japan.

The USD/JPY forecast indicates a decline in Fed rate cut expectations, which has dashed hopes of a narrowing rate gap between the US and Japan. As a result, US Treasury yields soared while the yen collapsed to fresh lows. At the same time, market participants are worried about a likely 25% tariff on Japanese exports to the US. 

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Initially, market participants were optimistic about the yen. The Fed and the Bank of Japan were following different monetary paths that would lead to a smaller gap in rates between Japan and the US. The Fed was looking to lower borrowing costs while the BoJ was hiking. 

However, all this paused when Trump started his aggressive tariffs campaign. The BoJ paused to assess the impact on Japan’s economy. Meanwhile, the Fed delayed cuts due to concerns about a potential spike in inflation. 

Data on Tuesday confirmed some of the Fed’s fears about tariffs boosting inflation. The annual headline CPI accelerated from 2.4% to 2.7%. At the same time, the monthly figure jumped from 0.1% to 0.3%. The data led to a decline in Fed rate cut expectations. 

At the same time, Trump has threatened to impose a 25% tariff on Japan. Such a move would pause the BoJ’s rate hike campaign.

USD/JPY key events today

USD/JPY technical forecast: Bulls approaching the 150.00 level 

On the technical side, the USD/JPY price has reached a new high above the key 148.02 resistance level. This has solidified the bullish bias. The price now trades well above the 30-SMA, showing bulls have a strong lead. At the same time, the RSI trades in the overbought region, indicating solid momentum. 

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The price has maintained a bullish trend since it broke above the 30-SMA. It has made a series of higher highs and lows, respecting the SMA as support. Given the strong bullish bias, the uptrend is likely to continue. However, after making a solid swing, bulls might need to pause before reaching new highs. 

Therefore, the price might pull back to retest the 148.02 level as support. If it holds firm, the next target will be at the 150.00 key psychological level.

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• The euro fell significantly during the trading session on Tuesday after initially trying to rally, as the Consumer Price Index in the United States came out at 0.2% month over month, and instead of the expected 0.3%.
• Because of this, it suggests that the Federal Reserve is further away from cutting rates than most traders had dreamed of, which quite frankly has been a bit frustrating as it looks a whole lot like the trading public is just now starting to see the reality of the situation.

Trend Remains

Despite the fact that I think the US dollar is oversold, especially considering that the Federal Reserve is likely to cut rates in the short term, the reality is that the trend is still to sell the US dollar. That has not changed during the trading session on Tuesday, despite the fact that the Euro has plunged toward a crucial support level.

That support level, the 1.16 level, has a certain amount of market memory priced into it due to the fact that it was previous resistance, so I do think this is an area that could cause a bit of a bounce. Even if we were to fall from here, the 1.15 level is even more important, as it is a large, round, psychologically significant figure, but also features the 50 Day EMA, which of course a lot of people will be watching for potential dynamic support.

If we were to turn around and bounce from the 1.16 level, which is where we are as I write this, we could make a bit of a move toward the 1.17 level, possibly even the 1.18 level. However, I think it’s going to take a lot for the euro to continue higher without some type of conflicting information. The euro has been overdone for a while, so I think you’ve got a situation where this might just be the excuse that the market needed to sell and start taking some of the gains that they have enjoyed over the last couple of months.

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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.

July 15, 2025 – Written by Ben Hughes

STORY LINK Pound to Dollar Rate Today: GBP/USD Sub 1.34 After Mixed US Inflation

Looking ahead, the focus for the Pound US Dollar exchange rate (GBP/USD) now turns to the release of the UK’s own CPI figures on Wednesday.

Economists predict inflation will have held at 3.4% last month. While this remains above the BoE’s target range, unless the figures deviate significantly from forecasts, their impact on the GBP/USD may be limited amid the BoE’s focus on the UK jobs market.

On the US side, the producer price figures for June could offer support to the US Dollar if they show rising input costs, which typically feed through to consumer prices in the months ahead.

DAILY RECAP:

The Pound‑to‑Dollar (GBP/USD) pair remained largely unchanged on Tuesday, hovering just below Monday’s three‑week low.

At the time of writing, it was trading near $1.3438. Almost unchanged from the start of Tuesday’s session.

The US Dollar (USD) showed limited movement on Tuesday as traders absorbed the latest US consumer price index report from the US Bureau of Labor Statistics.

US headline inflation rose from 2.4% to 2.7% in June, matching expectations and marking the highest reading since February.

In contrast, core inflation came in at 2.9%, slightly below consensus forecasts that it would reach 3%,

The slightly weaker-than-expected core inflation figures applied some pressure to the US dollar, as they are likely to be welcomed by the more dovish members of the Federal Reserve, and cement bets for a September interest rate cut.

Despite this, the USD selling pressure remained very modest in scope, with the unpredictability surrounding US President Donald Trump’s tariff policy continuing to cloud the US inflation outlook.

The Pound (GBP) remained mostly range‑bound on Tuesday as investors took a cautious stance ahead of key UK economic releases later in the week.

Attention has now shifted to Thursday’s UK jobs report, following recent commentary from Bank of England (BoE) Governor Andrew Bailey, who warned persistent labour-market weakness could warrant faster rate cuts.

Moreover, uncertainty surrounding UK fiscal policy, including speculation over autumn tax changes following the government’s reversal of welfare reforms, continues to weigh on Pound sentiment.

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Coffee price suffered strong positive pressures by forming a new support base at 275.85 level might prevent it changing the bullish track besides stochastic rally above 50 level, forming several bullish waves, surpassing the resistance at 297.70 to settle again within the bullish channel’s levels as appear in the above image.

We will depend on forming an important support at 50%Fibonacci correction level by its stability near 292.90, reinforcing the chances for recovering the previous losses by targeting 312.20 level, reaching the next barrier at 326.25.

The expected trading range for today is between 292.50 and 312.20

Trend forecast: Bullish

The GBPJPY pair continued to provide mixed trading within the bullish channel’s levels, approaching from the correctional target at 197.85, affected by stochastic negativity that fluctuates below 50 level as appears in the above image.

Reminding you that the bullish scenario will remain valid unless the price settles above the extra barrier at 198.80, increasing the chances for reaching 197.85 and 197.40, while the price success to breach the barrier will open the way towards recording several gains that might begin at 199.60 and 200.35.

The expected trading range for today is between 197.85 and 199.00

Trend forecast: Fluctuated within the bullish track

July 15, 2025 – Written by David Woodsmith

STORY LINK Euro to Pound Sterling Forecast: Possible “Break Through 0.8670”

Foreign exchange analysts warn that this week’s data could drive further gains in the Euro to Pound exchange rate, with a potential break above 0.8670 paving the way for a test of April’s high near 0.8735.

Pound Sterling (GBP) was subjected to renewed pressure against the Euro (EUR) late last week and, on Monday, was unable to take advantage of President Trump’s threat to impose 30% tariffs on the EU.

The Pound to Euro exchange rate (GBP/EUR) dipped to 3-month lows close to 1.1530 before a marginal recovery.

According to ING there is GBP/EUR resistance close to 1.1630.

It noted; “This week’s data could see EUR/GBP break through 0.8670 resistance in a move to challenge April’s spike high at 0.8735. (A break below 1.1530 for GBP/EUR would potentially lead to 1.1450).

MUFG maintains a GBP/EUR target of 1.1300.

The UK Recruitment and Employment Confederation (REC) and KPMG survey stated that their index of staff availability rose to 66.1 from 63.3 in May, the highest reading since November 2020.only the 2008/09 financial crisis and 2020 pandemic resulted in higher readings.

KPMG chief executive Jon Holt commented; “Ongoing geopolitical turbulence and the threat of rising costs, alongside the promise of technology efficiencies, mean companies continue to wait and see with their hiring.”

The latest UK labour-market survey will be released on Thursday.

ING commented; “In May, payrolled employees fell by quite a large 109k. Most expect this number to be revised up.”

It added; “If not, perhaps the UK labour market is in a weaker position after all, and the Bank of England (BoE) will have to cut rates more quickly.”

In comments over the weekend, BoE Governor Bailey commented; “I think the path [for interest rates] is down. I really do believe the path is downward.”

He added; “But we continue to use the words ‘gradual and careful’ because some people say to me ‘why are you cutting when inflation’s above target?”‘

Bailey did, however, note that there could be scope for a faster pace of interest rates if there is evidence of faster labour-market deterioration.

Over the weekend, President Trump stated that 30% tariffs would be imposed on the EU from August 1st.

The EU has adopted a controlled response at this stage and will not adopt counter measures until after August 1st.

Commonwealth Bank of Australia currency strategist Carol Kong commented; “It seems like financial markets have become insensitive to President Trump’s tariff threats now, after so many of them in the past few months.”

She added; “Judging by the limited market reaction, markets might think that the latest threat from Trump is actually a manoeuvre to extract more concessions.”

According to Rabobank; “it’s Trump’s negotiating style to put more pressure on the other side in the final stages before a deal is reached. And, as one official put it, Trump will never go through with this.”

ING noted the high degree of uncertainty; “We have given up speculating about any longer-term strategies in these trade negotiations. What the letters of the last days, and in particular the letters to the EU and Mexico, show is that we are nearing a make-it-or-break-it moment.”

Assuming there is no extension of the August 1st deadline, ING considers that the US pressure could lead to tangible results or the US Administration decides to scale back the tariff threat which would be positive outcomes.

It does consider a third option would be an all-out trade war which would inevitably destabilise economies and damage risk conditions.

Given that the KPMG survey noted that geo-political stresses were important in curbing recruitment, there will be further concerns that the trade uncertainty will damage the UK labour market and economy.

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July 15, 2025 – Written by Frank Davies

STORY LINK Pound to Dollar Forecast 2025: 1.40 by 2026, Then Rebound

The Pound to Dollar exchange rate (GBP/USD) dipped to 3-week lows, fractionally above 1.3450, on Monday before a tentative recovery to 1.3485.

The Pound has been undermined by increased chatter of a more aggressive Bank of England agenda to cut interest rates. The dollar has held firm, but there is still a high degree of uncertainty over Federal Reserve policy amid major economic and political dimensions.

According to UoB; “Looking ahead, if GBP were to break and hold below 1.3445, it may trigger a deeper decline towards June’s low, near 1.3375.”

Scotiabank commented that GBP/USD will need to regain the 1.3500 area quickly to alleviate the pressure for further losses.

Credit Agricole has a year-end GBP/USD forecast of 1.40 with scope for a Pound rebound.

In comments over the weekend, Bank of England Governor Bailey stated that he is convinced that interest rates will continue to decline. He also stated that the gradual and cautious policy towards rate cuts is still justified.

He did, however, add on the labour market; “If we saw the slack opening up much more quickly, that would lead us to a different conclusion.”

In this context, UK data will be watched closely this week with the inflation data on Wednesday and labour-market release on Thursday.

Interactive Investor head of investment Victoria Scholar commented; “Friday’s disappointing GDP figures, combined with these weak jobs figures boost the case for the Bank of England to cut interest rates in August.”

She added; “All eyes are on Wednesday’s inflation report with CPI expected to remain at remain around 3.4% in June, roughly unchanged for the third consecutive month.”

The core rate is forecast to hold at 3.5% for the month.

Marekts are now pricing to over an 85% chance of an August cut with a further cut before year-end.

Weak labour-market data and high inflation would be potentially toxic for the Pound with increased stagflation fears.

The US will release the latest consumer prices inflation data on Tuesday. Consensus forecasts are for the headline inflation rate to increase to 2.6% from 2.4%.

Markets will also focus strongly on the core data.

ING commented; “This is expected to start ticking back up to 0.3% month-on-month increases as the effects of tariffs finally start to show up, although the effects might be more sizeable in the July-September data than the June data.”

It added that expectations of a September cut could dip further and; “prove slightly positive for the dollar.”

Weaker than expected data would trigger fresh speculation over near-term interest rate cuts and increase US Administration demands for the Fed to act aggressively.

Over the weekend, there was further speculation that President Trump would look to dismiss Fed Chair Powell.

There were comments from National Economic Council Director Kevin Hassett that Trump does have the authority to fire Powell if there is cause.

In this context, there has been further chatter that allegations of excess spending on the Fed renovation programme would be used to justify the move.

Former Fed Governor Warsh also criticised the Fed; “It’s lost, lost its way in supervision, it’s lost its way in monetary policy, and all this big money on big, fancy buildings is just another indication.”

Importantly, these two have been cited as being on the short list to replace Powell.

Rabobank commented; “Is the Trump administration creating another bit of pre-text for firing Powell?”

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• I’m watching this pair very closely because we are at a crucial area in the form of the 148 yen level.
• The 148 yen level is a large round psychologically significant figure, but it’s an area where we’ve seen a lot of action in the past.
• In fact, we are also approaching the crucial 200 day EMA.

So, I think a lot of things will come together here for a bigger move. If we can break above the 148 yen level, then I think the market goes looking to the 151 yen level and then possibly much higher than that. After all, we’ve been grinding sideways for a while, and this is a pair that’s interesting because interest rates in the United States are climbing via the bond market.

At the same time, we have the Japanese government bonds out there getting “no bid” days, meaning that nobody is willing to buy Japanese debt. If that continues, that means that we have a situation where the Bank of Japan may have to step into the marketplace and buy bonds in order to finance the debt of Japan. That is quantitative easing. That is the purest form of quantitative easing. And that would be the end of any Japanese yen strength.

Looking at the Larger Charts

When you zoom out, you can see that the area that we are trying to escape from has been important multiple times in the past. And this would end up being a triple bottom. Now the question is, do we go to all-time highs or anything crazy like that? Well, no, because all-time highs are about 150 handles north a year, maybe even further than that. But a new high, that’s very possible thing here with the 162 yen level being a potential target over the longer term.

It just comes down to what the Federal Reserve has to do with its interest rate policy. Right now, a lot of people are betting that the Americans are going to start cutting rapidly. The problem is that the economic numbers coming out of America don’t necessarily support that argument, at least not for a longer term move. Ultimately, though, I think this is a Japanese yen problem. So on a breakout on the buyer on a pullback towards the 145 yen level and the 50 day EMA by extension. I’m a buyer there on a bounce.

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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.

USD/JPY Technical Analysis

The US dollar is higher against the Japanese yen after initially gapping lower. The 148 yen level above continues to be an area I would be watching pretty closely, mainly due to the fact that it not only has been a bit of resistance as of late, but it also features the 200 day EMA, which of course in and of itself will attract a certain amount of attention. I don’t necessarily want to buy the US dollar up here, but I don’t like the idea of shorting either.

Japan has plenty of its own issues at the moment and therefore, you have to look at the Japanese yen a little bit differently than other currencies against the dollar. With the Japanese government bond market seeing no bid days recently, that means the Bank of Japan will eventually have to step in and start monetizing the debt again. And that’s absolutely toxic for a currency. Pullbacks continue to be potential buying opportunities, with special attention paid to the 145 yen level.

AUD/USD Technical Analysis

The Australian dollar gapped lower, rallied a bit, and then started to fall again. This is a market that I think is probably pretty close to having to make a bigger decision, but as things stand right now, it’s just in this kind of choppy and perhaps even sloppy channel that we have been trying to kind of sort out here for three months. At this point in time, it does favor the upside, I guess, a little bit over the longer term, but you have to be extraordinarily patient. I do think that a pullback is probably more likely than not, but that pullback should attract a certain amount of attention near the now infamous 0.6550 level and then again at the 50 day EMA underneath there.

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

The GBPJPY pair continued to provide mixed trading within the bullish channel’s levels, approaching from the correctional target at 197.85, affected by stochastic negativity that fluctuates below 50 level as appears in the above image.

Reminding you that the bullish scenario will remain valid unless the price settles above the extra barrier at 198.80, increasing the chances for reaching 197.85 and 197.40, while the price success to breach the barrier will open the way towards recording several gains that might begin at 199.60 and 200.35.

The expected trading range for today is between 197.85 and 199.00

Trend forecast: Fluctuated within the bullish track