• GBP/USD climbs toward 1.3600 in the European session on Tuesday.
• The technical outlook suggests that the pair is about to turn overbought.
• GBP/USD could preserve its bullish momentum if the BLS announces significant downward revisions to NFP.

GBP/USD gains traction in the European session on Tuesday and advances toward 1.3600 after posting modest gains on Monday. Although the technical picture starts showing overbought conditions for the pair, investors could refrain from positioning themselves for a correction unless there is a convincing recovery in the US Dollar (USD).

Last Friday’s disappointing labor market data from the US, which showed an increase of only 22,000 in Nonfarm Payrolls (NFP) in August, caused the US Dollar to start the week under bearish pressure and allowed GBP/USD to push higher.

Meanwhile, the upbeat market mood further supported the pair in the American session, as Wall Street’s main indexes remained in positive territory after the opening bell. Early Tuesday, US stock index futures trade mixed.

In the second half of the day, the Bureau of Labor Statistics (BLS) will publish preliminary benchmark revisions to employment data. According to the CME FedWatch Tool, markets are currently pricing in about an 88% probability of a 25 basis-points (bps) and a 12% chance of a 50 bps Federal Reserve (Fed) rate cut at next week’s policy meeting.

In August 2024, the BLS announced the significant downward revisions to the past Nonfarm Payroll readings and paved the way for a 50 bps cut in September.

If the BLS’ revisions show that the NFP growth was much weaker than originally reported, markets could expect a similar scenario to play out and ramp up bets for a large rate cut. In this case, the USD could come under heavy selling pressure and trigger another bullish rally in GBP/USD. Conversely, the USD could rebound and weigh on GBP/USD in case the BLS announces positive revisions, or leaves NFP data largely unchanged.

GBP/USD Technical Analysis

The Relative Strength Index (RSI) indicator on the 4-hour chart climbed slightly above 70, suggesting that GBP/USD is turning technically overbought.

On the upside, 1.3600 (static level, round level) aligns as the first resistance level before 1.3640 (Fibonacci 78.6% retracement of the latest downtrend) and 1.3700 (static level, round level). Looking south, support levels could be seen at 1.3500 (20-day Simple Moving Average (SMA), static level), 1.3470-1.3460 (50-day MA, 100-day SMA) and 1.3440 (200-period SMA).

• The USD/JPY price analysis points south as the yen finds relief from political uncertainty.
• Traders are pricing a 12% chance of a massive Fed rate cut in September.
• The US will release benchmark revisions for jobs data between April 2024 and March 2024.

The USD/JPY price analysis points south as the yen finds relief from political uncertainty due to a weak dollar. The US dollar traded near a 7-week low against its peers as traders awaited benchmark revisions for US jobs data. At the same time, market participants are anticipating the US consumer inflation report.

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The dollar remained fragile on Tuesday as Fed rate cut expectations increased after Friday’s poor jobs report. The shift to poor employment figures in the US was sudden and unexpected. As a result, the outlook for Fed rate cuts has changed drastically.

Friday’s report revealed an addition of only 22,000 jobs in August. This is a significant slowdown from previous months and puts more pressure on the Fed to lower rates. Currently, market participants are pricing three rate cuts before the end of the year. Additionally, they are pricing a 12% chance of a massive cut in September. Benchmark revisions for jobs data between April 2024 and March 2024 could reveal further weakness. This might increase the likelihood of a huge cut.

As a result, the yen recovered on Tuesday after dipping at the start of the week amid political uncertainty in Japan. The resignation of Prime Minister Ishiba could reshape monetary policy in the country.

USD/JPY key events today

Traders are not anticipating any high-impact releases from Japan or the US today.

USD/JPY technical price analysis: Bears test a solid channel support

On the technical side, the USD/JPY price has dropped to its channel support, where bulls could emerge to push the price higher. However, the bearish bias within the channel is strong, with the price well below the SMA and the RSI under 50.

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For some time now, USD/JPY has traded within a shallow bullish channel. The price has been chopping through the SMA with no clear direction. At the same time, bears and bulls have shown almost equal strength. However, before the price entered this period of correction, bears had reversed the trend and were showing massive strength.

Therefore, the next impulsive move that breaks out of the shallow channel could be bearish. Nevertheless, bears would also have to break below the 146.50 support to confirm a continuation of the previous decline. Meanwhile, if the channel support holds, the price will likely retest the 149.00 resistance.

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Platinum price returned to settle above $1382.00 level, increasing the efficiency of the bullish track, fluctuating near the initial target at $1400.00, the continuation of the attempts to provide positive momentum by the main indicators will increase the chances of resuming the bullish attack, to expect its rally towards $1412.00, then attempts to press on the barrier near $1435.00.

While the price return to settle below $1382.00 will force it to delay the bullish attack and form new correctional waves, which forces it to suffer some of the losses before resuming the main bullish attack by reaching $1362.00.

The expected trading range for today is between $1382.00 and $ 1412.00

Trend forecast: Bullish

Platinum price returned to settle above $1382.00 level, increasing the efficiency of the bullish track, fluctuating near the initial target at $1400.00, the continuation of the attempts to provide positive momentum by the main indicators will increase the chances of resuming the bullish attack, to expect its rally towards $1412.00, then attempts to press on the barrier near $1435.00.

While the price return to settle below $1382.00 will force it to delay the bullish attack and form new correctional waves, which forces it to suffer some of the losses before resuming the main bullish attack by reaching $1362.00.

The expected trading range for today is between $1382.00 and $ 1412.00

Trend forecast: Bullish

– Written by


Frank Davies

STORY LINK Pound Sterling to Dollar Forecast: Analysts Warn GBP Gains Limited Before Fed Cut

The Pound to Dollar (GBP/USD) exchange rate found support below 1.3500 on Monday and pushed towards 1.3540, helped by softer US bond yields and a weaker dollar index at 6-week lows. Analysts see Sterling locked in a near-term range, with momentum capped below 1.3590 ahead of the September Federal Reserve decision.

GBP/USD Forecasts: Range-Bound for Now

UoB said;

“Coming off the previous steep decline, the sharp rebound did not translate into a meaningful build-up in upward momentum. Overall, we view the current price movements as part of a broad range, likely between 1.3430 and 1.3595.”

Scotiabank echoed the range view;

“We look to a near-term range of 1.3480 and 1.3580.”

Both banks see a decisive break above 1.3590 as crucial for GBP/USD to build a stronger rally.

Weaker US jobs data last week reinforced expectations that the Fed will cut rates in September, with markets pricing a 10% chance of a larger 50-point cut.

MUFG commented;

“There is clear evidence that the US labour market deteriorated sharply after President Trump’s Liberation Day tariffs announcement in April.”

Danske Bank was more cautious;

“While political pressure to accelerate policy easing inarguably complicates the outlook, we think risks are skewed towards slower, rather than faster, rate cuts given the risk of more persistent inflation.”

ING noted potential for a short-term dollar bounce;

“We think the US corporate tax payment deadline of 15 September could provide the dollar with some support this week. Seasonally, the dollar does OK in September. We suspect that the DXY could be driven a little higher this week, before a bearish switch into next Wednesday’s FOMC meeting.”

UK fiscal pressures remain in focus after the sharp rise in gilt yields earlier this month.

Rabobank warned;

“Fixing bloated fiscal positions without clobbering the economy and simultaneously finding ways to finance spending priorities has become a policy paradox. Is it simply ‘too late’ to fix? Or can out of the box economic thinking still find a solution?”

Scotiabank’s Shaun Osborne noted some upside for Sterling sentiment after the cabinet reshuffle;

“Markets appear to be endorsing the change, and risk reversals in the options market are showing signs of a shift following their recent dramatic (bearish) turn.”

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– Written by


Frank Davies

STORY LINK Euro to Dollar Forecast: EUR/USD Buyers Pause Ahead of French Government Vote

The Euro to Dollar (EUR/USD) outlook is caught between European politics and US economic weakness this week.

The pair held above 1.1700 on Monday after last week’s weak jobs report, but traders remain cautious ahead of France’s no-confidence vote, which could trigger fresh elections.

While political risk clouds the Euro, the US labour market remains the dominant driver, with Fed rate cuts seen as inevitable and EUR/USD forecast to push higher into year-end.

EUR/USD Forecasts: The Rally Stalls

The French government confidence vote will be an important short-term issue, although the US economy is liable to remain dominant overall dollar moves.

The Euro to Dollar (EUR/USD) exchange rate has held above 1.1700 on Monday, but held below Friday’s 1.1750 peak triggered by another weak labour-market report.

Dollar sentiment remains weak on expectations of Fed rate cuts, but the French confidence vote has injected caution.

ING commented; “More volatility in a 1.1650-1.1750 range looks likely for EUR/USD this week, and we doubt Thursday’s ECB meeting will be a big market mover.”

Credit Agricole sees the risk of EUR/USD losses beyond 1.1650 if there are fresh elections.

MUFG is bearish on the dollar over the medium term; “Policy divergence between the ECB and Fed heading into year-end supports our forecast for EUR/USD to rise back above the 1.2000-level.”

The US labour market remains a key market focus following last week’s labour-market report.

MUFG added; “The Fed had already signalled it was becoming more concerned by downside risks to the US labour. Those concerns will have been heightened by the August employment report revealing that the US economy added only 22k jobs in August. More worrying for the Fed, the US economy lost -13k jobs in June after further downward revisions to prior months.”

Markets are pricing in a 100% chance of a Fed rate cut next week with a 10% chance of a 50 basis-point cut. Traders are also increasingly confident that rates will be cut three times before the end of 2025.

There is the potential for a further negative development on Tuesday with benchmark revisions.

ING noted; “Tomorrow sees the preliminary annual benchmark revision to the 2025 nonfarm payrolls report. A number in the -500 to 800k is expected. The Fed’s Christopher Waller implied a number of around -720k in his speech just over a week ago. A big downward revision to NFP could trigger some limited dollar weakness.”

The French government is facing a no-confidence vote on Monday with strong expectations that it will lose.

President Macron will have to decide between attempting to form another government or calling a general election.

The latest chatter suggests that Macron may attempt to forge a coalition with the socialists, although this would undermine attempts to curb the budget deficit.

ING sees limited scope for Euro-zone contagion; “we are not looking for a eurozone-wide period of stress. Italy and Spain have been enjoying sovereign upgrades recently, and the European Central Bank has its Transmission Protection Instrument (TPI) if things really get out of hand.”

Credit Agricole does see Euro risks; “a new PM could leave the EUR struggling to hold on to its gains.”

MUFG commented; “We are not expecting the pick-up in political uncertainty in France to derail the euro’s current upward trend and/or encourage the ECB to cut rates further at the current juncture.”

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– Written by


David Woodsmith

STORY LINK GBP/USD Price Forecast: Dollar Extends Payrolls Weakness, Pound Holds $1.35

The Pound to US Dollar (GBP/USD) exchange rate edged higher at the start of the week, as the fallout from Friday’s weak US payrolls report continued to weigh on the Greenback.

At the time of writing, GBP/USD was trading at around $1.3522, up around 0.2% from Monday’s opening level.

The US Dollar (USD) remained under pressure on Monday as investors continued to absorb Friday’s disappointing non-farm payroll release.

The Bureau of Labor Statistics revealed just 22,000 jobs were added in August, compared to forecasts of 73,000. Adding to the gloom, June’s figure was revised lower to show a loss of 13,000 jobs.

The data has reinforced fears that the US labour market is rapidly losing momentum and fuelled speculation that the Federal Reserve will have to accelerate its easing cycle.

Markets are now pricing in rate cuts totalling at least 75 basis points, while odds of a 50bps move this month have climbed to around 10%.

Sterling was largely stable at the start of the week, with investors showing little reaction to Prime Minister Keir Starmer’s cabinet reshuffle following the departure of Deputy Prime Minister Angela Rayner.

Concerns over fiscal stability were eased somewhat by the decision to retain Rachel Reeves as Chancellor, which may also have helped limit volatility in the bond market after last week’s turbulence.

Meanwhile, lingering expectations that the Bank of England (BoE) will maintain a cautious stance on interest rate cuts helped underpin the Pound.

GBP/USD Forecast: Payroll Revisions to Drive Fresh Dollar Losses?

Looking forward, the release of the annual revision to non-farm payrolls on Tuesday could put the US Dollar back under heavy pressure.

Early estimates suggest payrolls for 2025 may be revised down by as much as 800,000, which would deal another blow to confidence in the strength of the US jobs market. Such a result could prompt traders to ramp up bets on a larger Fed rate cut this month.

That said, the Dollar may find some support as investors turn their attention towards this week’s US inflation report.

With no significant UK data scheduled over the next couple of days, Sterling’s movements are likely to remain largely dictated by global sentiment and shifts in Dollar demand.

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GBP/USD Forecast: Pound Sterling clings to bullish stance to start week

GBP/USD stays in a consolidation phase above 1.3500 after rising more than 0.5% on Friday. The pair remains technically bullish in the short term.

Growing expectations for multiple Federal Reserve (Fed) rate cuts following the disappointing August labor market data weighed heavily on the US Dollar (USD) heading into the weekend. Read more…

GBP/USD Weekly Forecast: Focus remains on stagflation and the BoE

In quite turbulent past few days for the Pound Sterling, GBP/USD eventually managed to close the week with decent gains above the key 1.3500 figure, reversing at the same time two weekly retracements in a row.

While the cautious stance from the Bank of England (BoE) continues to lend some cushion to the currency, speculation that a potential stagflationary scenario could be brewing raised extra concerns among market participants and seems to keep occasional bullish attempts contained. Read more…

• The EUR/USD forecast indicates continued weakness in the dollar after poor US jobs data.
• Market focus is now shifting to the US CPI report that will continue shaping the outlook for rate cuts.
• The European Central Bank will meet on Thursday.

The EUR/USD forecast indicates continued weakness in the dollar after a downbeat monthly employment report on Friday. Meanwhile, market participants are slowly shifting their focus to the ECB policy meeting, where policymakers could keep interest rates unchanged.

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Data on Friday revealed that the US economy added a dismal 22,000 jobs in August. Meanwhile, economists had expected an additional 75,000 jobs. At the same time, the unemployment rate increased from 4.2% to 4.3% as expected. The poor figures solidified bets for a September rate cut and increased the likelihood of a more dovish Fed in the future.

Market focus is now shifting to the US CPI report that will continue shaping the outlook for rate cuts. Soft figures will support the current outlook. On the other hand, hot figures could renew worries about the impact of tariffs on price pressures.

Meanwhile, the European Central Bank will meet on Thursday. Traders expect policymakers to keep rates unchanged. This will contrast sharply with the Fed, which will likely be more dovish this month. The divergence in policy and economic outlooks between the US and the Eurozone could send the euro higher in the coming months.

EUR/USD key events today

Market participants do not expect any key economic releases today. Therefore, the pair might extend the previous session’s move.

EUR/USD technical forecast: Bulls puncture the range resistance

On the technical side, the EUR/USD price is attempting to break out of its long-term range. Bulls are challenging the range resistance at the 1.1720 level. At the same time, the price trades above the 30-SMA, with the RSI near the overbought region, suggesting bulls are in the lead.

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EUR/USD has remained in consolidation for a long time, with the price moving sideways and chopping through the 30-SMA. However, before, the range, bulls were in the lead. Therefore, there is a high chance they will break out of this range to continue rallying.

A break above the range resistance would allow the price to retest the 1.1801 resistance level. On the other hand, if bulls fail to break above this level, the price will likely remain in consolidation.

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