The EURJPY pair surrendered to the extra negative pressure that was caused by stochastic decline from the oversold level yesterday, which forces it to resume the attempts of profit-taking and forming new bearish corrective trading, to settle near the support at 172.20.

Note that the stability of the price within the bullish channel’s levels until now, and the stability of the current support at 172.20 will increase the chances of activating the bullish attempts, to breach 173.40 level and achieving some gains by its rally to 174.40, while facing new negative pressure and reaching below the current support will increase the chances of targeting the support of the bullish channel at 171.30, representing the confirmation of the main trend in the upcoming trading.

The expected trading range for today is between 172.20 and 173.50

Trend forecast: Bullish

Goldman Sachs has upgraded its GBP forecasts across major currency pairs, citing better-than-expected UK growth, fiscal discipline, and limited direct exposure to US tariffs. Sterling has also benefited from political stability, a stronger services sector, and supportive rate differentials. With risks skewed in the UK’s favor compared to the Eurozone and signs of renewed investor appetite for GBP assets, Goldman now expects higher GBP/USD and lower EUR/GBP through the remainder of 2025 and into 2026.

Key Points:

1️⃣ Forecast Revisions: GBP Upgraded Across the Board 🔼

• GBP/USD

  • Old Forecasts: 1.25 (3M), 1.28 (6M), 1.30 (12M)

  • New Forecasts: 1.28 (3M), 1.32 (6M), 1.35 (12M)

• EUR/GBP

  • Old Forecasts: 0.86 (3M), 0.85 (6M), 0.84 (12M)

  • New Forecasts: 0.84 (3M), 0.83 (6M), 0.82 (12M)

2️⃣ Domestic Data and Political Factors Support GBP 📊

3️⃣ Tariff Exposure Lower Than Eurozone ⚖️

• UK is less exposed to looming US tariffs, reducing downside risks relative to EUR.

• Tariff-driven risk-off flows are less likely to hurt GBP than EUR.

4️⃣ Rate Differential Still Attractive 💷

Conclusion:

Goldman Sachs now expects stronger GBP performance across both USD and EUR pairs, driven by UK macro resilience, limited tariff exposure, and constructive investor sentiment. With GBP/USD revised up to 1.35 and EUR/GBP expected to slide to 0.82 by 12 months, the bank sees sterling as well-positioned for further gains, especially relative to the Euro.

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– Written by


Tim Boyer

STORY LINK Euro to US Dollar Forecast: EUR Rallies, USD Slides on Fresh Jobs Shock

The Euro to Dollar (EUR/USD) exchange rate posted gains on the US shutdown and following weaker than expected US jobs data. It failed to hold initial 1-week highs amid a retreat on the crosses, but traded above 1.1750 and close to 1-week highs.

Scotiabank commented; “We are somewhat heartened by the prior break of the descending trend line drawn from the descending July highs and see little in terms of resistance ahead of 1.18 and the mid-September high just above 1.19.”

ING is also positive on the outlook; “we think the US government shutdown and the softer dollar story should dominate today and could be enough to drag EUR/USD to 1.1800/1820.”

Most investment banks, including ING, Scotiabank and MUFG expect medium-term EUR/USD gains to 1.20.

ADP reported a decline of 32,000 in private-sector jobs for September compared with consensus forecasts of an increase close to 50,000 while the August data was revised to slow a decline on 3,000 compared with the original reading of a 54,000 increase.

Chief Economist Dr. Nela Richardson commented; “Despite the strong economic growth we saw in the second quarter, this month’s release further validates what we’ve been seeing in the labor market, that U.S. employers have been cautious with hiring.”

Overnight, the US Senate failed to break the impasse on government funding and the government started to close down.

The shutdown comes at a particularly difficult time given uncertainty over the labour market and economy. The jobless claims data and employment report are liable to be postponed.

President Trump has also threatened to fire thousands of workers, adding to the uncertainty.

Scotiabank commented; “The shutdown may trigger government worker furloughs or layoffs and will halt the publication of key government data releases—such as Friday’s NFP report—which will compound investor concerns about the status of the US economy.”

MUFG sees scope for further vulnerability; “If Trump does follow through with firing workers and the shutdown becomes prolonged, the rates market will at least look to price a greater prospect of a rate cut in October and December, a scenario still not fully priced, which will likely weigh on dollar performance over the short-term.”

Following the data, markets were pricing in close to a 100% chance of a Fed rate cut at the October meeting and the chances of a further cut in December increased to near 90%.

The Euro-Zone inflation data met market expectations with the headline rate increasing to 2.2% from 2.0% with the core rate holding at 2.3%.

The data reinforced expectations that the ECB would hold rates steady in the short term.

According to Scotiabank, there is a green light for further Euro gains; “EUR fundamentals remain supportive as we note the renewed rise in Germany-US yield spreads, and sentiment is providing an added boost as the options market prices a greater premium for protection against EUR strength.”

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– Written by


James Fuller

STORY LINK GBP/USD Forecast: Pound Sterling Climbs to $1.352 as Shutdown Pressures Greenback

The Pound to US Dollar (GBP/USD) exchange rate strengthened on Wednesday as the Dollar was hobbled by a US government shutdown and some underwhelming data releases.

At the time of writing, GBP/USD was trading at approximately $1.3521, up roughly 0.6% from the start of Wednesday’s session.

The US Dollar (USD) weakened through Wednesday’s European session, coming under sustained pressure amid renewed political and economic concerns.

In early trade, the ‘Greenback’ was undermined by market jitters surrounding the US government shutdown, which dampened investor confidence in the currency.

Losses deepened later in the day following the release of disappointing US data.

September’s ADP employment change slumped sharply, dropping from -3k to -32k, in stark contrast to forecasts of a 50k increase.

Meanwhile, although the ISM manufacturing PMI exceeded expectations, the index remained below the 50-point threshold, signalling continued contraction in the sector.

Together, the data compounded selling pressure on USD, leaving the currency broadly weaker by the close of mid-week trade.

The Pound (GBP) traded in a relatively steady fashion against most of its peers during Wednesday’s European session, despite the release of underwhelming domestic data.

The UK’s latest manufacturing PMI for September, while less closely watched than the services index, remained an important gauge of industrial performance.

The reading fell from 47.0 to 46.2, extending deeper into contraction territory, though it broadly aligned with market expectations.

Even with the weaker data, GBP held its ground, supported by a generally upbeat market mood, as the day’s risk-on sentiment helped the increasingly risk-sensitive Sterling maintain stability throughout Wednesday’s trading session.

GBP/USD Forecasts: US Shutdown to Fuel Fresh Volatility?

Looking ahead to Thursday’s European session, the GBP/USD exchange rate may continue to find support as investor focus remains on the ongoing US government shutdown.

With the closure disrupting scheduled economic publications, key releases such as the latest initial jobless claims and factory orders will not be published.

The absence of this data could keep the ‘Greenback’ under pressure, as uncertainty over the political situation in the US weighs on sentiment.

On the UK side, no major domestic releases are due on Thursday’s calendar.

As a result, Sterling may lack fresh direction of its own, leaving GBP exchange rates vulnerable to shifts in broader market sentiment and external developments.

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TAGS: Pound Dollar Forecasts