Natural gas price continued providing weak sideways trading, affected by the contradiction between the main indicators besides forming a significant obstacle against the attempts to renew the bullish attack, fluctuating near $3.850.
There is a chance for forming new bearish waves, to press on the moving average 55 at $3.450, and surpassing it might extend the losses towards $3.050, facing the extension of historical support, while the price success in surpassing $4.000 level and holding above it will allow it to renew the bullish attempts, to expect targeting $4.220 and $4.450 level.
The expected trading range for today is between $3.450 and $4.050
The British pound initially fell a bit during the trading session on Wednesday, only to see buyers at the same place again. This market continues to show resilience, and stability, despite the noise in the markets overall.
GBPJPY
The British pound initially fell a bit during the trading session on Wednesday but continues to see the 210 yen level as an area of support. I like this pair a lot, and I do think that it is probably only a matter of time before we start buying again.
Short-term pullbacks offer enough value that I definitely like watching for a bounce that I can take advantage of the continued longer-term uptrend. The 215-yen level is an area I would be watching as well.
Market Resilience and Technical Indicators
As a side note, the United States government has come out and explicitly denied any intervention in the Japanese yen, so we will see how that plays out. The US dollar against the Japanese yen has been hammered, but in that same time frame, we have only seen the British pound test the bottom of the recent consolidation.
I think this is a sign that this pair is going to remain rather resilient. The 50-day EMA sits just below the 210-yen level as well, so I think all of this comes together to offer value each and every time we drop.
If we can break above the 215-yen level, that really gets this pair going, but I think in the short term, this is a buy the dip, maybe sell the rip type of situation where we take advantage of a well-defined 500-point range. If we were to break down below the 50-day EMA, then we might have to reset closer to 208. This is a level that I would be very interested in as well.
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 EURJPY pair repeated providing sideways trading since yesterday, due to the contradiction between the main indicators, to keep its stability near 183.45, taking advantage of forming extra support at 182.70 level.
In general, the stability above the main bullish channel’s support at 182.15 makes us wait for gathering bullish momentum to allow it to surpass 184.00 barrier, to confirm its readiness to record extra gains that might begin at 184.55 and 184.85.
The expected trading range for today is between 182.80 and 184.00
The Pound to US Dollar exchange rate (GBP/USD) edged lower during Wednesday’s European session, easing after briefly touching its strongest levels in nearly four years.
At the time of writing, GBP/USD was trading close to $1.3786, down roughly 0.4% from the start of the day’s trade.
After tumbling to fresh multi-year lows late on Tuesday, the US Dollar (USD) found some footing on Wednesday, recovering a fraction of its recent losses.
The greenback has faced sustained selling pressure over the past ten days, shedding around 3% since mid-January. Confidence in the currency has been undermined by ongoing uncertainty surrounding US trade, foreign and economic policy.
Losses deepened overnight after President Donald Trump appeared to welcome the Dollar’s decline, describing the move as ‘great’ and suggesting the currency should be allowed to ‘find its own level’.
By Wednesday morning, however, some USD investors began to reassess positions as attention shifted to the Federal Reserve’s upcoming interest rate decision.
While no change in policy is expected from the Fed at its first meeting of the year, the prospect of firmer guidance was enough to lend the Dollar some modest support.
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The Pound (GBP) struggled to hold its ground against most major counterparts on Wednesday.
With no significant UK economic releases on the calendar, Sterling found itself short of fresh drivers, leaving it vulnerable to shifts in broader market sentiment.
Adding to the pressure, expectations for Bank of England (BoE) interest rates were nudged slightly lower, despite a run of stronger-than-forecast UK data releases last week.
GBP/USD Forecast: Political Deadlock to Weigh on the Dollar?
As the week progresses, the Pound to US Dollar exchange rate could regain upward momentum if political risks in Washington intensify.
Ongoing disputes between Senate Democrats and Republicans over Department of Homeland Security funding mean a partial government shutdown appears increasingly likely when current funding expires on Saturday. Such concerns are continuing to inflate the US Dollar’s risk premium.
Meanwhile, with the UK data calendar remaining thin, movements in Sterling are likely to stay closely tied to wider global market dynamics.
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The Euro has finally made a decision to break out. However, the one problem is that it did it the day before a FOMC press conference. Still a bullish look though.
EUR/USD
The Euro has actually done something for once. This is a pair that as an analyst it is very painful to cover at times because it has a history of doing a lot of nothing, jumping for a few weeks, and then doing more nothing. That being said, we have broken above an area on the EUR/USD currency pair that I have had circled since about September 17. This was when Jerome Powell’s press conference really rattled the market. Well, we are above there now, which is a very good sign for the Euro.
When you take the technical analysis from the consolidation area, it is 450 pips, give or take a few. That suggests that we could go to the 1.23 level. So I look at this and I realize that it is an area that has mattered more than once. This is an area that has been a significant top multiple times going back about a decade, and then you can see that there is action all the way back to 2015, and even 2012 and 2010. In other words, it is an area that the market likes.
The FOMC Factor
I think that might be where we head because technical analysis suggests that, momentum suggests that, but I don’t think we have all clear quite yet. Quite frankly, we have a press conference after the FOMC decision on Wednesday and Jerome Powell could really throw a monkey wrench into this not even meaning to. If he starts talking about sticky inflation, that has people pushing back the time frame of Federal Reserve cuts even further.
So, we will have to see how that plays out. I think a pullback towards the 1.18 level or maybe 1.1850 offers a bit of an opportunity, but you have to see the bounce first. Again, it wouldn’t surprise me for this pair to go to 1.23. We have probably seen it 10 to 12 times in my career, so it is a familiar level.
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 British pound has been somewhat noisy against the Japanese yen during trading on Tuesday, but that will have been expected as the Bank of Japan and others have intervened.
GBP/JPY
The British pound has been somewhat noisy against the Japanese yen during trading on Tuesday, but that will have been expected as we’ve recently seen some form of intervention to favor the Japanese yen in order to combat some of the massive selling pressure that has been a mainstay here.
That being said, the British pound does look like it is fairly well supported at the 210 yen level, and not only is it seeing a bit of structural support as this was an area that was supported previously, we also have the 50-day EMA ranked there as well, which of course offers a significant amount of support.
Technical Support and Market Outlook
If we were to break down below the 50-day EMA, the 205 yen level could be the target, possibly even the 200-day EMA, which is currently trading at the 202.45 level and rising.
All things being equal, this is a market that I think remains very bullish, and of course you do get paid at the end of every day to hang onto it, so I’m still bullish on this pair. I also recognize that we need some of the noise to soften in the yen denominated markets overall in order to get large with the position.
The US dollar is struggling quite a bit more against the yen than the British pound, but that makes sense considering the US dollar has its own concerns. That is why I’m focusing on this pair, because I’m trying to match up strength with inherent weakness. Yes, the central banks may have done something, but that’s not the sign of a strong currency; quite frankly, it’s mainly the opposite that it gives an impression of. All things being equal, this is a pair that I think will try to get to the 215 yen level eventually.
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 GBPJPY pair kept its stability since yesterday’s trading above 210.40 level, increasing the chances of gathering the required bullish momentum to motivate the suggested bullish trend, reminding you that the initial positive target is located near 211.70 level, and surpassing the moving average 55 will reinforce the chances of recording extra gains by its rally towards 212.15, to press on the previously broken bullish channel’s support that appears in the above image.
Facing new bearish pressure and reaching below the previously mentioned support will confirm its surrender to the bearish corrective bias dominance, which forces it to suffer extra losses by reaching 209,60 followed by 209.00.
The expected trading range for today is between 210.65 and 212.15
The GBP/USD forecast points to further gains to 1.4000 provided the Fed shows a dovish stance in today’s meeting.
Sterling remains at an advantage against the dollar amid recent upbeat UK data, pushing the BoE to rethink its aggressive easing policy.
Technically, the price remains in a strong uptrend with a risk of profit-taking before further upside.
The British pound approached 1.3800 on Wednesday as the US dollar encountered selling pressure ahead of the Fed’s first policy decision of 2026. The Fed is anticipated to keep interest rates at 3.50%-3.75%. However, political tensions over the central bank’s independence are weighing on the dollar. As rumors of administrative pressure on Chair Powell increase concerns about future US monetary policy, investors are pricing in a “governance premium”.
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Sterling has a clear runway due to dollar weakness and solid domestic data. December retail sales rose 0.4%, easing recession fears and suggesting that UK consumers are coping with high borrowing prices better than expected. These numbers have prompted the Bank of England to rethink its aggressive easing cycle, which runs counter to the Fed’s policy.
The pair’s momentum is boosted by global macro trends that favor commodities and high-beta currencies over the dollar. Gold prices have reached record highs, and new US tariff threats are disrupting global trade, making the pound a significant beneficiary of capital rotation out of dollar-denominated assets. UK inflation remains at 2.1%, supporting the Bank of England’s cautious stance and the pound’s yield advantage.
Markets are increasingly focused on the FOMC press conference in the late New York session. Any evidence that the Fed caves to political pressure to cut rates might break the 1.4000 resistance level. On the other hand, if Powell remains data-dependent and hawkish, traders may cover short dollar positions, reversing the sterling rally.
GBP/USD Technical Forecast: Buyers Aiming for 1.4000
GBP/USD 4-hour chart
The GBP/USD price broke above the 1.3800 level, marking a fresh 4-year top at 1.3860 before correcting down to the 1.3790 area. The broken supply zone around 1.3800 is now acting as support, with projections pointing to a test of the swing high at 1.3860, then 1.3900, and finally the psychological level at 1.4000.
However, the RSI remains extremely overbought, which could trigger a correction to test the 20-period MA at 1.3700, ahead of 1.3600. Only a sustained weakness below the 20-period MA could trigger a trend reversal.
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In my view, warnings of yen intervention, a hawkish BoJ policy stance, and expectations of Fed rate cuts support a negative price trajectory. However, Japan’s upcoming election, US economic indicators, and Fed Chair Powell’s speech will be key, given recent price action.
Furthermore, a higher BoJ neutral interest rate level (potentially 1.5%-2.5%) would signal a narrower US-Japan interest rate differential. A sharply narrower rate differential may trigger a yen carry unwind, as seen in mid-2024. An unwind of yen carry trades would likely send USD/JPY toward 140 over the longer term.
However, upside risks to the bearish outlook include:
Dovish BoJ rhetoric and a lower neutral interest rate (potentially 1% – 1.25%).
Fed Chair Powell downplays the chances of an H1 2026 cut.
Robust US economic data dampens bets on an H1 2026 Fed rate cut.
These factors would send USD/JPY higher. However, ongoing warnings of yen intervention are likely to cap the upside at the 155 level.
Read the full USD/JPY forecast, including chart setups and trade ideas.
Conclusion: Politics, the BoJ, and the Fed in the Spotlight
In summary, the USD/JPY trends will hinge on Japan’s election result, Prime Minister Takaichi’s fiscal spending plans, the BoJ’s policy stance, the Fed’s rate path, and Trump’s tariff policies.
A higher BoJ neutral rate (1.5%-2.5%) would signal a hawkish BoJ rate path, strengthening the yen. Meanwhile, Prime Minister Takaichi’s snap election will also be crucial for the near-term USD/JPY trends, given her fiscal policy goals. Additionally, dovish Fed rhetoric would suggest narrower rate differentials, reaffirming the bearish medium-term outlook for USD/JPY.
A stronger yen and the unwinding of yen carry trades would likely push USD/JPY toward 140 over the longer 6-12 month timeline.
For more in-depth analysis, review today’s USD/JPY trading setups in our latest reports and consult the economic calendar.
