The Pound Sterling (GBP) staged a stellar recovery from near four-month lows against the US Dollar (USD) and clinched two-month highs just shy of the 1.3500 threshold.

Pound Sterling bulls returned with a bang

The week started with the domination of safe-haven flows and the risk-sensitive Pound Sterling in multi-month troughs.

Markets remained nervous as they weighed US President Donald Trump’s social media threat posted on Sunday, in which he ratcheted up pressure on Iran, while extending the deadline to reopen the Strait of Hormuz to Tuesday at 8 PM Eastern Time or Wednesday 00:00 GMT.

On the other side, Iran mulled a “much more devastating” retaliation if civilian targets are hit.  Against the deepening escalation in the Middle East conflict, investors scurried for safety in the world’s reserve currency, the USD, once again, extending its recovery.

The Greenback also capitalized on the increased expectations about the US Federal Reserve’s (Fed) interest rate outlook, especially after a blockbuster February jobs report.

Data released by the Bureau of Labor Statistics (BLS) on Friday showed that US Nonfarm Payrolls jumped by 178K in March, against the consensus of +60K and a 133K drop recorded in February (revised down from -92K). The Unemployment Rate unexpectedly fell to 4.3%, vs. 4.4% consensus and 4.4% prior.

However, the GBP/USD showed some resilience and embarked upon a recovery as the USD failed to sustain at higher levels against its major counterparts. The tide entirely turned against the buck following Trump’s TACO trade early Wednesday, which provided legs to the GBP/USD rebound.

Risk-on flows returned with a bang after the United States (US) and Iran brokered a two-week ceasefire and agreed to enter negotiations on April 10, potentially paving the way for a lasting peace in the Middle East and resumption of Gulf oil and gas exports through the vital Strait of Hormuz.

In light of the de-escalation, the currency pair stretched higher and reached the highest levels in two months just below 1.3500.

However, GBP/USD sellers quickly jumped in and triggered a sharp retracement amid investors’ concerns over whether Trump would stick to the ceasefire agreement ahead of Friday’s negotiations on the ten-point proposal.

The Iranian proposal submitted to the US on Wednesday included maximalist demands that the Trump administration previously rejected.

The Greenback regained its safe-haven bid in the latter part of the week as doubts about the Mideast ceasefire countered the dovish Minutes of the Fed’s March monetary policy meeting.

Israel continued its attacks on the Iran-aligned militant group, Hezbollah, in Lebanon. Iranian Foreign Minister Abbas Araghchi noted that the announcement said that the ceasefire included Lebanon.

On Friday, Israeli Prime Minister Benjamin Netanyahu said that there is “no ceasefire in Lebanon” and Israel would continue “to strike Hezbollah with full force”. Late Thursday, Netanyahu had issued an instruction to start direct negotiations with Lebanon “as soon as possible,” per the Washington Post.

Also, sentiment remained fragile and kept the pair on the back foot ahead of the highly-anticipated US-Iran peace talks and the top-tier Consumer Price Index (CPI) report from the US.

The BLS reported ahead of the weekend that annual inflation in the US, as measured by the change in the CPI, climbed to 3.3% in March from 2.4% in February. This print came in line with the market expectation. Additionally, the core CPI, which excludes volatile food and energy prices, rose 0.2% on a monthly basis, compared to analysts’ estimate of 0.3%. The USD struggled to gather strength following these data and allowed GBP/USD to remain in the upper half of its weekly range.

Middle East updates and Bailey’s speech on tap

After an eventful week, the focus will continue to remain on any signs of de-escalation in the Middle East conflict following Friday’s US-Iran negotiations.

The economic calendar is relatively light in the US, while the UK docket has several appearances of the Bank of England (BoE) Governor Andrew Bailey throughout the week.

Monday is devoid of any high-impact macro releases, while Tuesday features the US ADP four-week Employment Change and Producer Price Index (PPI) data.

Bailey is scheduled to participate in a moderated discussion about the future of central banking at Columbia University, in New York, later on Tuesday. A bunch of Fed policymakers are also lined up that day.

Bailey will speak on Wednesday at two separate events. On Thursday, the UK monthly growth and industrial numbers will be reported, followed by the US weekly Jobless Claims data.

The Fed and BoE officials are set to deliver their speeches on Friday, filling up the data-dry calendar.

Beyond the statistics and speeches from the central bank officials, developments on the US-Iran war will remain the main market driver.

GBP/USD technical analysis

In the daily chart, GBP/USD trades at 1.3468, holding a constructive bullish tone as spot sits above the 20-, 50-, 100- and 200-day simple moving averages clustered between roughly 1.3324 and 1.3435. This stacked moving average support suggests the recent recovery remains intact, while the Relative Strength Index (14) around 58 leans positive without yet flagging overbought conditions, hinting that buyers still retain control in the near term.

On the topside, initial resistance emerges at the horizontal barrier near 1.3555, ahead of a stronger cap at 1.3700, where sellers may look to fade extended advances. On the downside, immediate protection is provided by the tight cluster of the 50-day SMA at 1.3435, the 100-day SMA at 1.3434 and the 200-day SMA at 1.3413, with the 20-day SMA lower at 1.3324 before more substantial horizontal support at 1.3221, 1.3160 and 1.3034.

(The technical analysis of this story was written with the help of an AI tool.)

Created on April 10, 2026

• The US dollar continues to bounce against the yen, waiting to see if we can break higher.

• The US dollar has rallied a bit against the Japanese yen during trading on Thursday as we continue to see a lot of noise in the interest rate environment.

• The 158-yen level on the bottom of the range and the 160-yen level on the top is how I see the market right now.

Obviously, there is a lot going on that could greatly influence what happens next, not the least of which of course would be any ceasefire talks in the Middle East, but I would also watch very closely the 10-year yield in both countries, but specifically the United States.

The longer it stays above 4.3% the more likely it is the US dollar breaks out. It has fallen back below there during this session so we will see how that plays out. I suspect probably what you are going to see more than anything else is a lot of volatility over the next couple of days because we have those ceasefire talks on Friday in Islamabad, so we will have to see how that plays out.

Market Volatility and Key Resistance

It certainly looks like the USD/JPY market is pricing in some type of good news when I look at other assets. So, I anticipate that the US dollar may weaken a bit but ultimately this is a market that I also pay close attention to the 160.4-yen level because that would be an area that if we could break above it could really spell serious trouble for the Japanese yen.

That is a 1990 high that the US dollar made against the Japanese yen and if we were to break that, things could get ugly really fast. All things being equal, I do think this is a scenario where traders are going to have to be very patient, but I do think it also remains a buy-on-the-dip type of scenario as clearly the interest rate differential will continue to favor the US dollar.

Again, I think the 158-yen level continues to be a major support for the greenback right now and I do like the idea of buying closer to that, in fact I did overnight. But you can see just how noisy this market might end up being and with that being the case you do have to be somewhat cautious with your position sizing, but ultimately, I believe this is a market that will threaten that 160.4-yen level which is so important.

If we were to break down below the 50-day EMA then that obviously would be a major breakout just waiting to happen and, in that way, the Japanese yen probably strengthens across the board for not only moving against US dollar but maybe other currencies. The 156-yen level at that point for me would be the next support level.

Want to trade our USD/JPY forex analysis and predictions? Here’s a list of forex brokers in Japan to check out.

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 CADJPY ended the bullish corrective rally by facing a strong barrier at 210.65, as it represents %100 Fibonacci extension level, forcing it to form sideways trading by its stability near 201.40.

The stability below the current barrier and stochastic attempt to provide negative momentum will increase the chances of forming bearish waves, to attempt to reach 200.70 and 200.25, while breaching the barrier will ease the mission of recording extra gains that might extend towards 212.20 initially.

The expected trading range for today is between 200.70 and 201.60

Trend forecast: Bearish

The GBPJPY pair is under strong positive pressures, pushing it to surpass the resistance at 213.30, to settle above it to confirm regaining the bullish bias by its stability within the minor bullish channel’s levels, recording 213.85 level.

The continuation of providing positive closes above 213.30 level will allow it to take advantage from the main indicators, to begin targeting new positive stations that might begin at 214.10 and 215.00, while the return to settle below 213.30 will force it to activate the bearish corrective scenario again, forming the initial negative targets at 211.90 level.

The expected trading range for today is between 213.30 and 215.00

Trend forecast: Bullish

BitcoinWorld

EUR/GBP Forecast: Crucial Support Zone Expected to Hold Through 2025 – ING Analysis

Financial markets in London and Frankfurt are closely monitoring the EUR/GBP currency pair as ING analysts project a crucial support zone will hold through 2025, potentially stabilizing the cross-rate amid diverging monetary policies between the European Central Bank and Bank of England. The euro-pound exchange rate, currently trading around 0.8550, faces significant technical and fundamental tests as central banks navigate inflation challenges while economic growth patterns diverge across European economies.

EUR/GBP Technical Analysis and Support Zone Dynamics

Technical analysts at ING have identified a critical support zone between 0.8520 and 0.8480 for the EUR/GBP pair. This zone represents a confluence of multiple technical factors that historically provided substantial buying interest. The 200-day moving average currently intersects this region, creating additional technical significance. Furthermore, Fibonacci retracement levels from the 2024 rally align with these price points, strengthening the zone’s importance.

Market participants observe several key technical indicators suggesting potential stabilization. The Relative Strength Index (RSI) recently approached oversold territory near 30, typically preceding corrective bounces in trending markets. Additionally, trading volume patterns show increased activity near the support zone, indicating heightened institutional interest at these levels. Bollinger Band analysis reveals the pair testing the lower band boundary, a condition that often precedes mean reversion moves in currency markets.

Historical Context of EUR/GBP Support Levels

The identified support zone carries historical significance dating back to pre-Brexit trading ranges. Market memory often creates psychological barriers at price levels where previous reversals occurred. Technical analysts note that this zone previously acted as resistance during 2023’s downward trend before breaking higher in early 2024. Such role reversals between support and resistance frequently create stronger technical barriers, as multiple market participants establish positions around these levels.

Fundamental Drivers Behind EUR/GBP Movements

Monetary policy divergence represents the primary fundamental driver for EUR/GBP movements in 2025. The European Central Bank maintains a cautious approach toward interest rate adjustments, prioritizing inflation control over growth stimulation. Conversely, the Bank of England faces different economic pressures, particularly regarding consumer spending patterns and housing market stability. This policy divergence creates natural currency valuation pressures that technical levels must withstand.

Economic growth differentials further influence the currency pair’s trajectory. Eurozone economies demonstrate varying recovery paces, with Germany’s manufacturing sector showing signs of stabilization while Southern European nations experience stronger service sector growth. Meanwhile, UK economic indicators reveal persistent challenges in productivity growth and trade balance improvements. These fundamental factors create underlying currents that technical analysis must incorporate for accurate forecasting.

Key economic indicators affecting EUR/GBP:

• Interest rate differentials between ECB and BoE
• Inflation convergence or divergence patterns
• Manufacturing PMI comparisons across regions
• Trade balance developments and current account positions
• Labor market strength and wage growth trends

Central Bank Policy Implications for Currency Markets

Central bank communications increasingly influence currency valuations beyond mere policy decisions. The European Central Bank’s forward guidance emphasizes data dependency, creating uncertainty about the timing and magnitude of future rate adjustments. This uncertainty typically increases currency volatility but may also strengthen support zones as markets price in various scenarios. The Bank of England faces similar communication challenges while managing market expectations about inflation persistence.

Quantitative tightening programs represent another crucial factor. Both central banks continue balance sheet reduction efforts, though at different paces and scales. The relative speed of these programs affects currency supply dynamics, potentially strengthening the currency of the central bank pursuing more aggressive balance sheet normalization. Market participants closely monitor these technical aspects of monetary policy implementation, as they directly impact currency valuation models.

Institutional Positioning and Market Sentiment

Commitments of Traders reports reveal changing institutional positioning around the EUR/GBP support zone. Hedge funds and asset managers adjusted their exposure throughout 2024, with recent data showing reduced net short positions as the pair approached technical support. This positioning shift suggests professional traders anticipate potential stabilization or reversal near current levels. Meanwhile, retail trader sentiment indicators show increased caution, typically a contrarian signal in currency markets.

Comparative Analysis of European Economic Conditions

The eurozone and United Kingdom face distinct economic challenges that influence their respective currencies. Eurozone integration efforts continue affecting currency stability, particularly regarding fiscal policy coordination and energy market reforms. These structural factors create longer-term currency valuation pressures that technical analysis must consider. Meanwhile, UK-specific factors including post-Brexit trade arrangements and financial services competitiveness create unique pound sterling dynamics.

Risk Factors That Could Break EUR/GBP Support

Several risk factors threaten the integrity of the identified EUR/GBP support zone. Geopolitical developments in Eastern Europe continue affecting energy markets and European economic stability. Any escalation in regional conflicts could disproportionately impact eurozone economies through energy price channels. Additionally, political developments within European Union member states create uncertainty about fiscal policy coordination and structural reform implementation.

UK-specific risks include persistent inflation surprises that might force more aggressive Bank of England action than currently anticipated. Housing market vulnerabilities represent another concern, particularly if mortgage rate resets create consumer spending constraints. Furthermore, trade relationship developments with both European Union and non-EU partners could significantly impact pound sterling valuations through current account effects.

Primary risk scenarios for EUR/GBP:

• Unexpected ECB policy pivot toward earlier easing
• UK inflation persistence requiring additional rate hikes
• European recession signals deepening beyond expectations
• Significant divergence in energy price impacts between regions
• Political instability affecting fiscal policy coordination

Market Structure and Liquidity Considerations

Currency market structure evolution affects how support zones function in modern trading environments. Algorithmic trading participation continues growing, potentially amplifying moves toward technical levels while also providing liquidity near those levels. The EUR/GBP pair benefits from deep liquidity pools during European trading hours, though Asian and American session liquidity varies significantly. This liquidity pattern creates potential for overnight gaps that technical analysts must consider when evaluating support zone reliability.

Market microstructure analysis reveals changing transaction patterns around key technical levels. Order book data shows concentrated liquidity accumulation near the 0.8520 support level, with both resting orders and algorithmic liquidity provision creating a buffer against rapid declines. This market structure development supports ING’s analysis that the zone should hold against normal market volatility, though exceptional events could overwhelm these technical defenses.

Conclusion

ING’s EUR/GBP analysis presents a technically grounded forecast suggesting the identified support zone between 0.8520 and 0.8480 should hold through 2025’s market conditions. This projection combines rigorous technical analysis with fundamental understanding of central bank policies and economic divergences. While risk factors exist that could challenge this support zone, the confluence of technical indicators, institutional positioning, and market structure developments creates substantial evidence for the zone’s durability. Currency traders and risk managers should monitor this EUR/GBP support zone closely, as its integrity will significantly influence cross-rate volatility and directional bias throughout the coming year.

FAQs

Q1: What specific price levels define the EUR/GBP support zone according to ING?
ING analysts identify the critical support zone between 0.8520 and 0.8480, representing a confluence of technical factors including the 200-day moving average and key Fibonacci retracement levels.

Q2: How does monetary policy divergence affect the EUR/GBP exchange rate?
Divergence between European Central Bank and Bank of England policies creates natural currency valuation pressures, with interest rate differentials and quantitative tightening pace differences directly impacting the exchange rate’s fundamental valuation.

Q3: What technical indicators support the analysis that this zone will hold?
Multiple technical indicators suggest potential stabilization, including RSI approaching oversold conditions, Bollinger Band positioning, historical support/resistance role reversal, and volume patterns showing increased activity near these levels.

Q4: What are the main risk factors that could break this EUR/GBP support?
Primary risks include unexpected central bank policy pivots, geopolitical developments affecting European energy markets, UK inflation persistence requiring additional rate hikes, and significant economic divergence beyond current expectations.

Q5: How does market structure affect support zone reliability in modern currency trading?
Algorithmic trading participation and order book liquidity concentration near technical levels can both amplify moves toward support zones and provide defensive liquidity, creating more defined technical barriers than in previous market eras.

This post EUR/GBP Forecast: Crucial Support Zone Expected to Hold Through 2025 – ING Analysis first appeared on BitcoinWorld.

The Pound US Dollar (GBP/USD) exchange rate traded in a narrow range on Thursday as markets adopted a cautious tone amid uncertainty over the durability of the US-Iran ceasefire.

DAILY RECAP:

The US Dollar (USD) was relatively muted as investors weighed conflicting signals surrounding the US-Iran ceasefire.

While the agreement initially sparked a strong improvement in market sentiment, signs of strain quickly emerged, leaving traders cautious.

Markets appeared caught between optimism that the ceasefire would hold and concerns that tensions could escalate again.

This uncertainty kept demand for the safe-haven US Dollar contained, resulting in limited movement.

Meanwhile, the increasingly risk-sensitive Pound (GBP) was also subdued.

A lack of UK economic data left Sterling without a clear catalyst, while the cautious market mood discouraged strong directional positioning.

As a result, GBP/USD remained rangebound through the session.

GBP/USD Exchange Rate Forecast: Jump in US Inflation to Boost the ‘Greenback’?

Looking forward, high-impact US economic data could influence the Pound US Dollar exchange rate.

The key release is the US consumer price index for March, which will provide insight into inflation dynamics.

Markets expect headline inflation to rise, which could support the US Dollar by dampening expectations for Federal Reserve interest rate cuts.

Attention will also turn to the University of Michigan’s preliminary consumer sentiment index.

Meanwhile, developments in the Middle East will remain a key driver, with shifts in risk appetite likely to influence the direction of GBP/USD.

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