The Federal Open Market Committee approved the following statement for release by a 9 – 3 vote: The Committee decided to maintain the target range for the federal funds rate at 3-1/2 to 3-3/4 percent, in support of the Federal Reserve’s dual mandate. The Committee is continuing its policy of maintaining ample reserves in the banking system. Economic activity is expanding at a solid pace despite elevated uncertainty that owes, in part, to the conflict in the Middle East. Productivity growth and capital investment are strong. Job gains have kept pace with the workforce, and the unemployment rate has changed little. Inflation remains elevated relative to the Committee’s 2 percent goal, in part reflecting supply shocks that have driven price increases in certain sectors, including energy. The Committee will deliver price stability. Voting against the monetary policy action were Beth M. Hammack, Neel Kashkari, and Lorie K. Logan, who preferred to raise the target range for the federal funds rate by 1/4 percentage point at this meeting. *fed: Hammack, Kashkari And Logan Dissent In Favor Of Rate Hike Fomc Statement Compare Fed: Economic activity is expandng at solid pace despite elevated uncertainty. Fed: FOMC is continuing policy of maintaining ample reserves in the banking system.

The EURJPY pair succeeded in resuming the bullish trend by surpassing the barrier at 186.65, opening the way for reaching the extra positive stations to notice recording some previously suggested targets by reaching 187.45 level.

The stability of the trading within the bullish channel’s levels and providing positive momentum by the main indicators makes us expect reaching 187.80, surpassing it will open the way for recording new historical gains that might begin at 188.25 and 188.80.

The expected trading range for today is between 186.65 and 187.80

Trend forecast: Bullish

– Written by


Ben Hughes

STORY LINK Pound-to-Dollar Forecast: Safe-Haven USD Demand Caps GBP Recovery

The Pound to US Dollar (GBP/USD) exchange rate remained close to a three-week low on Tuesday as another bout of weakness in technology shares dampened market sentiment.

At the time of writing, GBP/USD was trading at around $1.3228, slightly down from Tuesday’s opening levels.

The US Dollar (USD) retained a firm footing on Tuesday as investors continued to seek the safety of the ‘Greenback’ amid a prolonged selloff in global technology stocks.

The latest wave of risk aversion was driven by heavy losses across semiconductor and artificial intelligence-related companies, with investors becoming increasingly concerned about the scale of borrowing undertaken to finance AI infrastructure projects.

At the same time, growing competition from Chinese chip manufacturers added to pressure in global equity markets.

Even so, broader gains for the US Dollar remained limited as the improving geopolitical backdrop in the Middle East helped temper demand for traditional safe-haven assets.

The Pound (GBP) traded without a clear direction on Tuesday as the lack of significant UK economic data left investors with little fresh incentive to reposition.

Sterling also remained anchored by caution ahead of Thursday’s Bank of England (BoE) policy announcement.

Markets overwhelmingly expect policymakers to leave interest rates unchanged at 3.75%, meaning the accompanying guidance is likely to determine the Pound’s next move.

Should the BoE refrain from hinting that further policy tightening remains a possibility later this year, Sterling could struggle to attract meaningful support.

Near-Term GBP/USD Forecast: Fed Decision to Drive Midweek Trade

Attention will shift to the Federal Reserve on Wednesday as the US central bank announces its latest interest rate decision.

Although the Fed is expected to leave borrowing costs unchanged, investors will closely scrutinise the accompanying statement for clues on the future path of monetary policy.

While Chair Kevin Warsh has moved away from providing explicit forward guidance, markets will still be looking for signals that policymakers remain open to another interest rate increase in September.

Until then, the Pound to US Dollar (GBP/USD) exchange rate may remain trapped within a narrow range as traders await the outcome of both the Federal Reserve and Bank of England meetings.

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Economists say the Dollar-Yen could extend higher unless the BoJ signals faster rate hikes, with its three-month forecast at 159 now requiring several factors to align.

The US Dollar traded close to 163.84 against the Japanese Yen on Wednesday, holding near its highest level of 2026 as markets awaited policy decisions from both the Federal Reserve and Bank of Japan.

USD/JPY has gained around 4.5% since the end of December and approximately 0.8% in July alone. The pair has also risen in five of the past six months, leaving the Yen under sustained pressure.

Rabobank says Friday’s BoJ meeting will come with one advantage: policymakers will already know the outcome of the Fed decision.

That matters because the bank believes the FOMC “may have more impact on the USD/JPY exchange rate than” the BoJ’s own announcement.

A surprise Fed hike would likely deliver another powerful Dollar boost. Rabobank does not expect that outcome, however, and says unchanged US rates could instead trigger “a little profit-taking on long USD positions”.

The Yen’s bigger test comes a day later.

Rabobank argues that recent BoJ comments may have been “specifically aimed at preparing markets for hawkish signals” from Friday’s meeting. Without them, the risk is straightforward: “an absence of hawkish signals from the BoJ this week could open the door for further upside pressure on USD/JPY”.

USD/JPY’s path this year helps explain why Rabobank thinks the BoJ cannot afford an ambiguous message. The pair has not simply spiked towards 164; it has rebuilt its advance in stages since May, repeatedly recovering from shallow setbacks.

That persistence is the uncomfortable part for Tokyo. Verbal warnings and earlier Ministry of Finance intervention have slowed the move at times, but neither has changed its direction for long. The chart therefore supports Rabobank’s view that intervention alone may be “too costly” when the underlying force is an appreciating US Dollar.

Rabobank notes that the MoF has not bought Yen in the open market since spending JPY11.73 trillion between late April and late May.

One explanation is cost. The bank says officials may simply consider it “too costly to push against an appreciating USD”, particularly while US rate expectations remain firm.

There are signs that Japanese policy support has had some impact. Although USD/JPY has climbed sharply, the Yen is still the fourth-best-performing G10 currency over the past three months because the Dollar has strengthened even more broadly.

Rabobank says this suggests “both the MoF’s intervention and the hawkish signals from the BoJ have had some impact in supporting the JPY”.

Near-Term USD/JPY Forecast: A Move Back to 159 Needs a Hawkish BoJ and Softer Fed Expectations

Rabobank maintains a three-month USD/JPY forecast of 159, but admits that target “currently looks optimistic”.

A faster BoJ tightening cycle would help. The bank says an October rate increase, rather than waiting until December, could provide the Yen with support.

Japan’s inflation backdrop gives policymakers room to sound firmer. The BoJ has said an underlying price measure remains well above its 2% target, while wage negotiations have delivered another strong result.

Even that may not be enough on its own.

Rabobank says a move to 159 would likely require “various factors to come together”: greater reassurance over Japan’s fiscal outlook, a clearly hawkish BoJ and a decline in fears of further Fed tightening.

The final ingredient may prove decisive. As the bank puts it, “how far the JPY can recover versus the USD, if at all, is likely to be determined” by the Fed Chair’s message.

Scotiabank analysts warn that options markets are pricing greater protection against Euro exchange rate weakness, while ING sees scope for EUR/USD to revisit 1.15 after the Fed.

The Euro to Dollar (EUR/USD) exchange rate traded around 1.1390 on Wednesday, holding within an unusually narrow range as markets waited for the Federal Reserve’s policy decision.

EUR/USD was marginally higher on the day after closing at 1.1386 on Tuesday. The pair has spent most of the past week between 1.1350 and 1.1420, with July’s broader range capped by a high near 1.1481 and a low around 1.1354.

Scotiabank described the Euro as “unchanged vs. the USD” as it consolidated within “an incredibly tight range in the mid/upper-1.13s”.

That calm in spot trading is not being matched in the options market.

Scotiabank flagged a “somewhat worrisome development”, noting that risk reversals were “pushing deeper into negative territory” and approaching their late-June lows.

The move indicates “a growing premium for protection against EUR weakness”, suggesting investors are paying more to hedge against a decline even though the spot rate itself remains stable.

The bank linked that deterioration to the latest positioning data, which showed a weakening speculative backdrop for the Euro. In other words, the surface looks quiet, but traders underneath it are becoming more defensive.

Fundamental support has not disappeared. Scotiabank said ECB rate expectations were steady after their recent pullback, “delivering fundamental support via yield spreads”.

German import prices also showed tentative evidence that the energy-driven surge may be reaching a peak after lifting the annual rate above 6%. The release was not large enough to shift the currency, leaving US developments as the dominant near-term driver.

The latest two-day chart above shows EUR/USD briefly climbing from below 1.1380 to around 1.1404 before giving back most of the move.

The pair then settled into an extremely compressed range, repeatedly finding buyers around 1.1383–1.1386 but struggling to maintain advances above 1.1395.

ING takes a more constructive view of what may follow the Fed decision.

The bank argues that precautionary positioning for a surprise US rate increase has helped keep the Dollar supported, but that resilience “will be tested heavily” if the Fed leaves rates unchanged as expected.

Markets were pricing roughly seven basis points of tightening, equivalent to around a 25–30% probability of a hike. A hold should therefore trigger some correction in short-dated US rates and allow investors to unwind defensive Dollar positions.

ING said a Fed hold could allow the Dollar “to reconnect with the signal from lower oil prices”, adding that “unless Fed Chair Kevin Warsh surprises with a hawkish spin, or we see more than two dissenters, we think the dollar will come under pressure today”.

For EUR/USD, that creates a potential route higher, although ING is not calling for an immediate breakout.

The bank said there was “a good chance the pair bottomed out last week” if markets retain a broadly constructive view on Middle East de-escalation.

A sustained move above 1.15 still requires “dovish Fed repricing” and a stabilisation in risk sentiment. Weakness in technology and semiconductor shares may cap the Euro even if the Dollar softens.

Near-Term EUR/USD Forecast: Scotiabank Watches 1.1350–1.1450 as ING Eyes a Return Towards 1.15

Scotiabank’s technical view remains “bearish/neutral”.

The relative strength index is showing “signs of a tentative recovery”, but remains below 50 and therefore still carries a bearish bias. The bank places near-term movement between 1.1350 and 1.1450, with the wider June range bounded by support in the low 1.13s and resistance near 1.1480.

ING’s immediate target sits inside that same range. As a baseline response to a modestly dovish Fed surprise, it expects EUR/USD to return to 1.1400–1.1450 over the coming days.

The contrast between the two banks is useful. Scotiabank sees defensive positioning and options demand warning that the Euro remains vulnerable; ING thinks much of the Dollar’s pre-Fed support may unwind once the decision is out.

A break above 1.1450 would strengthen ING’s argument that last week marked the low and bring 1.1480–1.1500 back into focus. A move beneath 1.1350 would validate the caution showing up in options markets and expose the lower part of the June range.

The spot market is quiet. The hedging market is not. Wednesday’s Fed decision should reveal which one has read the risk more accurately.

The EURGBP continued forming bullish corrective waves, benefiting from stochastic positivity, to notice surpassing the barrier at 0.8555 barrier to ease the mission of achieving some gains by reaching 0.8573 level.

Forming corrective attempts is expected to target 0.5885 and 0.8595 level, while activating the negative trend requires forming a sharp decline to settle below 0.8540 level, to begin targeting negative stations that are represented by 0.8510 and 0.8480 level.

The expected trading range for today is between 0.8540 and 0.8585

Trend forecast: Bullish

The EURJPY pair renewed the bullish attempts yesterday, facing 186.65 barrier, which formed a strong obstacle against the attempts of resuming the bullish trend.

Reminding you that the stability within the bullish channel’s levels, and its main support is located at 185.60 represents a main factor to activate the bullish attempts, therefore, we will keep waiting for breaching the current barrier to open the way for reaching extra stations, which might begin at 186.95 and 187.65.

The expected trading range for today is between 185.70 and 186.95

Trend forecast: Bullish

Nomura expects USD/JPY to remain in a 162.00–165.50 range as rising US yields and Fed expectations support the US Dollar, although the risk of Japanese currency intervention is increasing as the pair approaches fresh multi-decade highs.

The US Dollar to Japanese Yen exchange rate is expected to remain elevated in the near term, with Nomura arguing that strong US fundamentals and higher Treasury yields continue to outweigh growing intervention risks from Japanese authorities.

USD/JPY has climbed back towards the 164 level, close to its highest levels since the 1980s, as rising oil prices, resilient US economic data and renewed expectations of further Federal Reserve tightening have boosted demand for the Dollar.

Nomura believes those factors should keep the pair trading within a 162.00 to 165.50 range, although it warns that official action becomes increasingly likely if the exchange rate pushes higher.

The Japanese Yen has weakened against the US Dollar over recent weeks as higher US yields have widened interest-rate differentials.

According to Nomura, markets are effectively testing Japan’s tolerance for further Yen weakness.

The bank notes that although Finance Minister Katayama has reiterated that authorities stand ready to take “decisive action whenever necessary”, verbal warnings have yet to intensify significantly and there has been no evidence of fresh currency intervention.

Instead, investors remain focused on the widening gap between US and Japanese interest rates.

Higher crude oil prices have also weighed on the Yen by worsening Japan’s import bill, while stronger-than-expected US labour-market data have reinforced expectations that the Federal Reserve may need to keep monetary policy restrictive for longer.

Nomura believes those forces continue to favour Dollar strength despite the growing political sensitivity surrounding Yen depreciation.

MUFG shares a similar view, arguing that persistent US rate-hike expectations remain the dominant driver of USD/JPY.

The bank said stronger US inflation risks and resilient employment data have pushed Treasury yields higher, offsetting expectations that the Bank of Japan will continue gradually normalising policy.

Bank of Japan Signals Could Be Key for the Yen

Attention now turns to this week’s Bank of Japan policy meeting, where rates are widely expected to remain unchanged.

Nomura says any indication that policymakers are becoming more willing to raise rates at the September meeting could help stabilise the Yen by narrowing expected policy divergence with the Federal Reserve.

The bank also believes markets will closely watch Governor Ueda’s press conference and any changes in the voting pattern for clues that the BOJ is becoming less tolerant of above-target inflation.

Goldman Sachs likewise expects the BOJ to leave policy unchanged, with investors instead focusing on the latest Tokyo inflation figures and industrial production data for guidance on the timing of future tightening.

For now, however, the US Dollar continues to enjoy a substantial yield advantage.

Nomura expects that to keep USD/JPY supported within its projected 162.00–165.50 range, while warning that any move towards the upper end of that band could significantly increase the likelihood of intervention by Japanese authorities.

Our currency coverage draws on live market data, official economic releases and published bank research.

The GBPJPY pair remains affected by the contradiction of the main indicators, delaying the bullish trend and it settles near the initial support level at 217.65 level, facing the moving average 55.

Reminding you that the positive scenario will remain valid by holding above 216.55 level, which forms initial main support against the bullish attempts, therefore, we will keep waiting for gathering positive momentum to help it form bullish waves, to target 218.65 level and surpassing this barrier will extend the trading towards 219.40 reaching 220.00.

The expected trading range for today is between 217.30 and 218.65

Trend forecast: Bullish