USD/JPY Technical Analysis

The US dollar has flexed its muscles against the Japanese yen and it’s interesting that the 145 yen level has been like a brick wall. If we can make a fresh high above the early part of the week and the 50 day EMA, I think that will bring in a lot more buyers of US dollars and people willing to take advantage of the interest rate differential as it certainly favors the US dollar. At that point in time, we could be looking at a move to the 148 yen level. In the meantime, I think short-term pullbacks continue to be buying opportunities as it looks like we’re trying to base here.

AUD/USD Technical Analysis

The Australian dollar initially tried to rally but has given back gains. We are getting dangerously close to seeing a reversal here as well. A move below the 50 day EMA is enough for me. At that point in time, I start shorting. I think it was obvious after the Federal Reserve meeting that the Fed is not going to cut rates in June, unlike what most of the trading community seemed to be banking on.

And now, the odds of a rate cut later this year are starting to drop a little bit as well. People still believe in a couple of rate cuts coming out of the Federal Reserve, but at the same time, he made it pretty clear during the press conference yesterday that he really didn’t know what they were going to do because there were far too many variables out there that caused confusion.

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

May 8, 2025 – Written by Ben Hughes

STORY LINK GBP/USD Forecast: Pound Rebounds Against Dollar as BoE Strikes Cautious Tone

The Pound-to-Dollar exchange rate wavered on Thursday but ultimately found a foothold, bolstered by a slightly more hawkish tone from the Bank of England (BoE) and renewed optimism over UK-US trade ties.

At the time of writing, GBP/USD was trading around $1.3329, having rebounded from earlier lows following a turbulent twenty-four hours.

The Pound (GBP) initially struggled on Thursday ahead of the BoE’s widely expected interest rate cut, but quickly rallied as markets digested the tone of the central bank’s messaging.

While the Monetary Policy Committee (MPC) voted to reduce the Bank Rate by 25 basis points, the decision was not unanimous, with two members voting to keep rates unchanged.

This dissent, alongside only a modest revision to the BoE’s inflation outlook, hinted at a more cautious approach to future cuts than investors had anticipated. As a result, Sterling clawed back earlier losses and even advanced against some major peers.

Adding to the Pound’s resilience was the recent optimism around UK-US trade relations. After hinting at a deal overnight on Wednesday, President Donald Trump then confirmed that a ‘full and comprehensive’ deal between the UK and US would be the first agreement announced since he introduced his ‘liberation day’ tariffs.

Coming on the heels of a UK-India agreement and amid broader signs of rebuilding post-Brexit relations with the EU, markets welcomed the news as a potential positive for the UK economy.

Meanwhile, the US Dollar (USD) managed to avoid significant losses, helped by residual strength from Wednesday’s Federal Reserve decision. The Fed opted to keep interest rates steady, as expected, but struck a tone that suggested policymakers were in no hurry to ease monetary policy.

Fed Chair Jerome Powell reinforced this view during the post-decision press conference, indicating that the bank would prefer to wait and see how tariffs impact the US economy before acting again. He also flagged inflation risks as a key concern, which prompted investors to dial back expectations of a near-term rate cut.

This shift in outlook gave the US Dollar a lift midweek and helped it avoid steeper losses on Thursday, even as the Pound regained some traction.

Looking ahead, GBP/USD could remain sensitive to commentary from key central bank figures due to speak on Friday.

BoE Governor Andrew Bailey is due to speak in the morning, and any indication that the British central bank might speed up rate cuts if inflation cools more quickly could weigh on the Pound.

Later in the day, a string of speeches from Fed officials will be closely watched. If the messaging echoes Powell’s stance – favouring a cautious and data-driven approach – the US Dollar could remain supported. Conversely, if recession risks or concerns over the labour market come to the fore, the ‘Greenback’ may weaken.

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TAGS: Pound Dollar Forecasts

May 8, 2025 – Written by David Woodsmith

STORY LINK Euro to Dollar Forecast: “Remains Range Bound” Between 1.12-1.15

The Federal Reserve’s refusal to consider any near-term cut in interest rates has supported the dollar in global markets with the Euro to Dollar (EUR/USD) exchange rate trading around 1.1300 from 1.1270 lows.

The dollar is still being hampered by fragile underlying confidence.

ING commented; “We think there will be sustained support around the 1.1250-1.130 area in EUR/USD in the near term.”

According to Scotiabank; “EURUSD remains range bound, and its movement since mid-April has been limited between support in the mid-1.12s and resistance above 1.15.”

The Euro could gain some support if the trumpeted UK-US trade deal is short on content.

On a longer-term view, Natixis has an end-2025 EUR/USD forecast of 1.20; “As we anticipate a technical recession in the US economy, the dollar will resume its decline, given that it remains overvalued in terms of real effective exchange rates.”

The Federal Reserve held interest rates at 4.50% at the May meeting, in line with strong consensus forecasts.

Chair Powell commented that inflation and unemployment are both likely to increase due to the impact of tariffs.

Powell repeated recent commented that the inflation and employment goals are liable to be in tension which will make it difficult for the central bank to set policy.

His key message, however, was that the Fed needed to be patient and wait for the economic data to judge the correct policy response.

Commonwealth Bank of Australia head of international and sustainable economics Joseph Capurso commented; “The FOMC does not want to pre-empt changes in the U.S. economy – it wants to wait for ‘hard’ economic data to guide its policy actions.”

He added; “From here, we expect communication from Chair Powell and other FOMC members to focus on making sure inflation expectations are anchored.”

There has been a sharp shift in market pricing with traders considering that the chance of a June rate cut has dipped to near 20%.

As far as US data is concerned, US initial jobless claims declined to 228,000 from 241,000 the previous week and slightly below consensus forecasts of 230,000 while continuing claims retreated to 1.88mn from 1.91mn.

According to ING; “Another hold from the Federal Reserve with an acknowledgement that uncertainty has increased with more upside risk for both inflation and unemployment. This suggests little inclination to move until they are confident of the direction the data is heading, meaning rate cuts could be delayed, but risk being sharper when they come.”

MUFG took a similar view; “We expect the Fed to resume rate cuts when evidence emerges that the US labour market is loosening in response to trade disruption and heightened policy uncertainty supporting our outlook for further US dollar weakness in the 2H of this year.”

According to the bank; “A delay to Fed rate cuts may help to offer some much needed support for the US dollar in the near-term although the link with short-term yield spreads has broken down recently.”

ING noted that the dollar still trades with a sizeable risk premium.

It added; “In EUR/USD that translates into around 4% overvaluation in our estimates, but the path to make markets comfortable with a substantially smaller risk premium isn’t going to be smooth. A constant flow of positive news on trade risk de-escalation is necessary, but probably not sufficient in the face of the damage markets think tariffs are already inflicting on the US economy.”

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TAGS: Euro Dollar Forecasts

• The euro has rallied quite nicely during the trading session on Wednesday against the Japanese yen as we had bounced from a significant support level.
• The 200 day EMA is sitting right there right along with the 50 day EMA in fact, it looks like they are getting ready to cross and that suggests that we are going to see the golden cross soon.
• This is a market that probably tries to go higher based on this, assuming that we have the overall attitude staying in the market, which looks like it is favoring shorting the Japanese yen with some of the better performing currencies such as the Euro.

A rally from here probably opens up the possibility of a move towards the 165 yen level, which has been like a pretty significant ceiling here for some time. If we can clear that level, then we have the chance of breaking out. Underneath, if we were to break down below the moving averages, then we could move down to the 160 yen level, which is basically the middle of the overall consolidation.

Three Levels I am Watching

You’ll notice on the charts that I have the 155 yen level and the 165 yen level drawn out with the 160 yen level right in the middle, you can see where price has flipped there multiple times. The interest rate differential does favor the euro, although not drastically, but at the end of the day, that is something that matters.

Furthermore, I am starting to see the Japanese yen give up some of its grip on other currencies, so that might translate into higher prices here as well. Keep in mind that the Bank of Japan recently flinched when it came time to tighten monetary policy, and it’s difficult to imagine a scenario where traders forget that. I do favor the upside.

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• Ahead of the Bank of England’s announcement today, Thursday, the GBP/USD currency pair is attempting to maintain its upward rebound gains, which reached the 1.3400 resistance level before the pound/dollar price stabilized around the 1.3285 level at the time of writing this analysis.
• According to Forex market trading, market participants appeared cautious, avoiding any significant moves before the Bank of England’s (BoE) widely anticipated interest rate announcement later this afternoon.
• However, Sterling trading found some support, buoyed by optimism surrounding the UK-India trade agreement, which lifted sentiment regarding the UK’s economic prospects ahead of the central bank’s upcoming decision.

Is the British Pound at Risk of a Rate Cut Today?

Forex market experts anticipate a surprise today, Thursday. The Bank of England’s interest rate meeting is widely expected to result in a 25-basis point cut to 4.25%. However, some analysts see a possibility of a more aggressive move. Moreover, what has caught the attention of Bank of England watchers is the unusual number of Monetary Policy Committee (MPC) members scheduled to deliver speeches in the aftermath of the decision.

Typically, the speaker list is distributed over the following weeks. If the British central bank decides to cut the interest rate by 50 basis points, it will need to convey a strong message and narrative for this move. This is because such a cut would come against a backdrop of elevated inflation, pushing the bank further away from its 2.0% target. Therefore, a 50-basis point rate cut would risk its credibility and require policymakers to do some serious “marketing” of the decision.

Regarding currency prices and the British pound, a 50-basis point rate cut would be surprising and would initially lead to a sharp downward adjustment. The pound might soon recover its losses if financial markets perceive the 50-basis point rate cut as a pre-emptive move that reduces the need for further cuts later. This makes the possibility of a rate cut in June plausible and could explain the flurry of messages from MPC speakers in the following days.

More interest rate cuts, at a faster pace, would negatively impact the British pound.

According to some currency experts, “A more dovish update from the Bank of England could cause a setback after the pound’s recent recovery, although the recent dovish repricing would cushion any sterling sell-off if there is a slight change in guidance.” However, economists warn that the bank risks its reputation by trying to boost growth with rate cuts at the expense of its inflation responsibility.

Trading Tips:

Keep in mind that the British pound still has strong factors, and any pullback could be opportunities for bargain hunters to buy.

For his part, Andrew Sentance, a former member of the Bank of England’s Monetary Policy Committee, believes that now is not the right time to cut interest rates, as he expects inflation to rise to 4-5% in the coming months. Higher national insurance contributions for companies are considered a major driver of costs facing businesses, which are expected to be passed on to consumers. Meanwhile, food prices are expected to start rising again, ending a period of negative food price inflation that recently helped the Bank of England.

On the other hand, the British pound will receive support if the Bank of England continues to signal satisfaction with the pace of its current quarterly interest rate cuts. This comes amid continued declines in financial market volatility, as investors remain optimistic about the prospects for trade deals after “Liberation Day.”

Technical Analysis for the GBP/USD pair today:

According to the performance on the daily timeframe chart, the GBP/USD trading has remained on its path to a bullish shift, and the 1.3400 resistance will remain a catalyst and confirmation of the bulls’ strong control. According to the 14-day Relative Strength Index (RSI) reading around the 60 level, this confirms the upward shift but has not yet reached the overbought zone, and the MACD indicator for the 12.26 closing is still in the overbought zone. Over this time frame, a break of the upward trend will not occur without the bears moving the currency pair to the vicinity of the support levels of 1.3240 and 1.3180, respectively. Caution is advised, as if the pound does not gain momentum today, the GBP/USD pair may be subject to profit-taking selloffs.

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• According to Forex market trading, we observed a decline in the Japanese Yen against other major currencies, ending a three-day upward wave.
• This was driven by news of upcoming US-China trade talks in Switzerland, which eased investor concerns and reduced demand for safe-haven assets.
• Sentiment across Asia was boosted by the People’s Bank of China’s announcement of an interest rate cut aimed at stimulating economic growth.
• The USD/JPY pair gained positive momentum, stabilizing around the resistance level of 144.46 at the time of writing this analysis and before the US event. Through our free trading recommendations page, we recommended buying from the support level of 142.50.

Forex traders also closely monitored the progress in US-Japan trade negotiations, with Tokyo striving to reach a bilateral agreement by June. On the economic front, Japan’s April Services PMI was revised upwards, highlighting the strongest increase in new orders in nearly a year. Meanwhile, the Bank of Japan last week kept its benchmark interest rate at 0.5% and lowered its growth and inflation forecasts, indicating that any future interest rate hikes remain unlikely for the time being.

According to currency market trading, the latest developments between China and the United States represent the latest progress in easing global trade tensions, welcomed by global investors who hope these measures will boost economic growth. The Japanese yen, a safe-haven currency, benefited from the escalation of trade tensions following Donald Trump’s announcement of tariffs on “Liberation Day” on April 2, which proved to be more severe than expected.

Trading Tips:

We still recommend buying the dollar against the Japanese yen at every downward trend without risk and monitoring the factors affecting the currency pair.

The US Federal Reserve Keeps Interest Rates Unchanged

As expected, the US Federal Reserve kept its federal funds rate target range unchanged at 4.25%-4.50% for its third consecutive meeting in May 2025, in line with expectations. Officials are adopting a wait-and-see approach amid concerns that President Trump’s tariffs could lead to higher inflation and slower economic growth. At the same time, policymakers noted increasing uncertainty about the economic outlook and rising risks of higher unemployment and inflation. The US central bank also reported that despite the impact of fluctuations in net exports on the data, recent indicators suggest that economic activity continues to expand at a solid pace. The country’s unemployment rate has stabilized at a low level in recent months, and labor market conditions have remained steady. Inflation remains somewhat elevated.

USD/JPY Technical Analysis and Expectations Today:

According to the performance on the daily timeframe chart, the USD/JPY currency pair is still in the early stages of forming an upward channel and currently lacks sufficient momentum to confirm the upward shift. This could occur if the bulls succeed in breaking towards the resistance levels of 145.60 and 147.00, respectively. The MACD indicator for the 12.26 closing suggests an upward shift but has not yet reached the overbought zone, giving the bulls opportunities for an upward rebound. At the same time, the Relative Strength Index (RSI) remains below the midline, confirming that the bulls need more stimulus before confirming the bullish shift.

On the negative side, the bullish outlook for the USD/JPY will be affected by the bears moving the currency pair towards the support level of 142.30 and lower. So far, we still prefer the strategy of buying the US dollar against the Japanese Yen from every downward level.

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• EUR/USD struggles to stabilize above 1.1300 after closing in the red on Wednesday.
• Technical sellers could take action in case the pair breaks below 1.1270.
• Markets see a diminishing chance of a Fed rate cut in June.

EUR/USD came under bearish pressure in the American session on Wednesday and closed the day deep in negative territory. The pair stays on the back foot early Thursday and trades slightly below 1.1300.

The Federal Reserve (Fed) announced on Wednesday that it left the policy rate, federal funds rate, unchanged at the range of 4.25%-4.5% following the May meeting, as widely anticipated. In the policy statement, the US central bank acknowledged that the uncertainty surrounding the economic outlook has increased further.

While speaking during the post-meeting press conference, Fed Chairman Jerome Powell noted that near-term inflation expectations have moved up because of tariffs and reiterated that they need to wait before adjusting the policy. According to the CME FedWatch Tool, the probability of a 25 basis points (bps) rate cut in June dropped to 20% from about 30% before the Fed event. As a result, the US Dollar (USD) gathered strength against its rivals in the American session, causing EUR/USD to push lower.

The US economic calendar will feature the weekly Initial Jobless Claims data on Thursday. Additionally, the Bureau of Labor Statistics will publish preliminary Unit Labor Costs data for the first quarter. In case there is a noticeable decline in the number of first-time applications for unemployment benefits, with a reading near 200,000, the USD could continue to outperform its rivals. On the other hand, a print above 250,000 could have the opposite impact on the currency’s valuation. Nevertheless, investors could refrain from betting on a significant weakening of the USD following the hawkish Fed event.

EUR/USD Technical Analysis

The Relative Strength Index (RSI) indicator on the 4-hour chart stays below 50 and EUR/USD closed the last four 4-hour candles below the 100-period, 50-period and 20-period Simple Moving Averages (SMA), highlighting a bearish tilt in the near-term outlook.

On the downside, 1.1270 (Fibonacci 38.2% retracement of the latest uptrend) aligns as immediate support before 1.1175 (Fibonacci 50% retracement) and 1.1080 (Fibonacci 61.8% retracement). Looking north, resistances could be spotted at 1.1380 (100-period SMA, Fibonacci 23.6% retracement, 1.1430 (static level) and 1.1500 (static level, round level).

The GBPJPY pair announced delaying the bearish trading by its stability above the support of the sideways range at 190.75 level, recording some gains by its stability near 191.70, facing the moving average 55.

We expect providing mixed trading, noting that 192.45 level represents an extra barrier that might assist in renewing the negative attempts, to ease the mission of breaking the current support and begin targeting the negative stations that are located near 189.90 and 189.20.

The expected trading range for today is between 191.00 and 192.40

Trend forecast: Sideways

The EURJPY pair didn’t move anything since yesterday, fluctuating again below the barrier at 163.25, confirming the stability of the suggested negative scenario, gathering the negative momentum is important to ease the mission of pressing on the moving average 55, as its stability near 161.45 represents an obstacle against the negative attack.

Reminding you that the price success to reach below the moving average 55 and holding below it will ease the mission of targeting the negative stations, which might begin at 160.85 and 160.20.

The expected trading range for today is between 161.45 and 163.00

Trend forecast: Bearish

GBP/USD pauses rally as traders eye Fed, BoE’s decisions

The Pound Sterling (GBP) retreated after posting back-to-back days of gains versus the US Dollar (USD). Still, positive news related to a possible de-escalation of the China-US tensions lent a lifeline to the Greenback, which remains firm in early trading. At the time of writing, GBP/USD trades at 1.3360, virtually unchanged.Read More…