• GBP/JPY falls to 193.28, ending three-day rally after failing to surpass 195.00 and 200-day SMA at 194.18.
• Trading sideways; support at 193.23 (100-day SMA) and 192.28 (Senkou Span B) maintains range-bound status.
• Break below 192.28 could target 191.83 (Tenkan-sen); push above 194.89 may challenge 195.00 resistance.

The GBP/JPY retreats after rallying for three straight trading days since last Friday. However, it struggled to clear the 195.00 figure and the 200-day Simple Moving Average (SMA), which exacerbated a drop in the cross pair beneath the 193.50 area. At the time of writing, the pair hovers near 193.28, virtually unchanged.

GBP/JPY Price Forecast: Technical outlook

The GBP/JPY trades sideways for the second straight day, capped on the downside by the 100-day Simple Moving Average (SMA) at 193.23 and the Senkou Span B near 192.28. On the top side, the 200-day SMA at 194.18 would likely keep the pair trading range bound.

Additionally, despite being bullish, the Relative Strength Index (RSI) is flat. Hence, buyers and sellers lack the strength to break the trading range.

If GBP/JPY falls below 192.28, the next support would be the Tenkan-sen at 191.83, followed by the Kijun-sen at 191.24. Conversely, if GBP/JPY climbs past the 200-day SMA, the next resistance would be the March 18 peak at 194.89, ahead of 195.00.

GBP/JPY Price Chart – Daily

March 19, 2025 – Written by Tim Boyer

STORY LINK Euro to Dollar Forecast: EUR/USD Consolidates as Two Major Drivers Conclude

EURUSD has rallied 5% to 1.09 in March. This was partly driven by US dollar weakness, but the primary driver was fiscal spending packages in the EU. Germany has now agreed its massive spending plan.

Ukraine/Russia negotiations have advanced but are being stalled by Russian demands.

The first of this week’s five central bank meetings took place on Wednesday in Japan with the BoJ. Rates were held steady, as expected, but the bank paved the way for another rate hike, although Governor Ueda would not commit to a set date. Indeed, the threat of tariffs from the US may make the central bank cautious over its hiking policy. Markets appear to have been positioned for a more hawkish outcome as the yen is lower following the meeting, and USDJPY is higher by 0.5%. As ING note:

“The BoJ statement showed that its assessment of inflation and growth hasn’t changed much. However, there was much more emphasis on the uncertainties surrounding US trade policy. Governor Ueda also made several comments on tariff risks during his press conference. Ueda indicated that he would wait and see how the US tariff issues unfold, so markets may be betting more on a July hike than a May hike.”

The “wait and see” approach may be a common theme in the remainder of this week’s central bank meetings as uncertainty of tariffs hangs over decisions. This may change in April when the US Commerce Department releases its report on reciprocal tariffs and we will at least know which countries will be in the firing line. Any significant tariffs on Japan may prevent the BoJ from hiking again.

Later on Wednesday, the US Federal Reserve will announce its rate decision, with no change expected. Markets will focus on the Fed’s

Summary of Economic Projections (SEP), particularly the dot plot, which outlines policymakers’ forecasts for interest rates, growth, and inflation. Any significant revisions from December’s projections could reshape market expectations.

Markets expect dovish adjustments from the Fed, but a significant shift may be premature given that economic data remains solid and the impact of tariffs is still unfolding.

If the Fed holds its current stance and dot plot, the USD could strengthen, while stocks may face pressure. However, these moves may be temporary—rate cut expectations for May/June remain high. Further tariffs in April and potential economic softening could increase the chances of additional cuts later this year.

Euro In Need of New Drivers

The euro has made an impressive rally in March and is by far the best performing currency in the G7. EURUSD is trading at 1.09 after a gain of 5%. This was primarily driven by the massive fiscal spending packages rolled out across the EU in response to the US withdrawing support for Ukraine. The largest of these came from Germany as the new government pushed through a huge €500bn infrastructure fund and changes to the debt brake. This ran into some resistance but was finally concluded this week with agreement between CDU/CSU, SPD and the Greens.

Another key driver in the EU is the ceasefire between Ukraine and Russia which advanced on Tuesday when Putin and President Trump spoke on the phone. Putin agreed to temporarily stop attacking Ukraine’s energy infrastructure but made a series of demands for a full ceasefire, including the halt of all foreign support of Ukraine’s military. This is unlikely but is at least a starting point for further negotiations. While this is encouraging, the euro has not rallied further and fresh drivers may be needed to propel EURUSD over 1.10. A period of consolidation and rest now looks likely, especially now that markets are eagerly awaiting the next round of the trade war in early April, with the EU likely to be the focal point of US tariffs.

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• EUR/JPY may face key resistance at the upper boundary of the ascending channel near 164.50. 
• The 14-day Relative Strength Index stays above 50, strengthening the bullish outlook. 
• Initial support is seen at the nine-day EMA around 161.57.

EUR/JPY pauses its three-day winning streak, hovering around 162.60 during early European trading on Wednesday. Technical analysis of the daily chart suggested that the currency cross is trending higher within an ascending channel, indicating a continued bullish bias.

Additionally, the 14-day Relative Strength Index (RSI) remains above 50, reinforcing the bullish outlook for the EUR/JPY cross. Furthermore, the currency cross’s position above the nine- and 50-day Exponential Moving Averages (EMAs) underscores strong short- and medium-term price momentum, supporting the potential for further gains.

On the upside, the EUR/JPY cross may encounter its first key resistance at the upper boundary of the ascending channel near 164.50, followed by the four-month high of 164.90, recorded on December 30. A decisive break above this critical zone could strengthen the bullish bias, paving the way for a potential test of the eight-month high at 166.69.

The EUR/JPY cross may find initial support at the nine-day EMA of 161.57. A break below this level could weaken short-term price momentum, leading the currency cross toward the 50-day EMA at 160.13, followed by the lower boundary of the ascending channel at 159.30.

A further decline below this critical support zone could erode medium-term momentum, increasing downward pressure on the currency cross. This could push the EUR/JPY cross toward its monthly low of 155.59, recorded on March 4, and potentially to 154.41, the lowest level last seen in December 2023.

EUR/JPY: Daily Chart

March 19, 2025 – Written by David Woodsmith

STORY LINK Pound to Dollar Week Ahead Forecast: GBP/USD Dips as Markets Await Fed

The Pound Sterling (GBP) lost ground against the U.S. Dollar (USD) during Wednesday’s European trading session as investors exercised caution ahead of the Federal Reserve’s latest policy announcement.

At the time of writing, the Pound US Dollar exchange rate (GBP/USD) was trading at around $1.2973, down approximately 0.2% from Wednesday’s opening levels.

The US Dollar (USD) strengthened on Wednesday as investors positioned themselves ahead of the Federal Reserve’s upcoming interest rate decision.

While the Fed is widely expected to keep rates unchanged this month, the primary market focus will be on the bank’s forward guidance.

This has the potential to drive volatility in USD exchange rates, given the uncertainty surrounding the Fed’s policy trajectory.

If Fed Chair Jerome Powell signals growing concerns about a potential US recession, it’s likely to signal a more dovish approach to policy going forward, leading the US Dollar to retreat to multi-month lows.

Conversely, if Powell emphasises the inflationary risks linked to President Donald Trump’s latest tariff policies, speculation could grow that the Fed will maintain a hawkish position to counteract rising prices, potentially boosting USD demand.

The Pound (GBP) was largely directionless on Wednesday as traders refrained from making significant moves ahead of the Bank of England’s (BoE) upcoming interest rate decision.

Similar to the Fed, the BoE is expected to leave rates unchanged this month.

Previously, markets anticipated the next rate reduction would come in May. However, recent data has suggested that inflationary pressures in the UK remain persistent.

If the BoE signals a reduced likelihood of a near-term rate cut, the Pound could strengthen.

Looking to the second half of the week, the Bank of England’s rate decision is expected to be a key driver of movement in the Pound to US Dollar exchange rate.

Before that, however, the UK’s latest employment data is set to be released on Thursday morning.

Economists predict that while unemployment remained stable in January, wage growth likely slowed.

If wage growth has softened, it could weigh on the Pound as it may add to expectations that the BoE will need to loosen policy sooner rather than later.

Meanwhile, US initial jobless claims figures will also be in focus. If the latest data points to a weakening US labour market, the US Dollar could face some downward pressure.

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Weak Retail Sales Data Raises Concerns Over U.S. Economic Growth

Investors are closely watching the Federal Reserve’s updated economic projections for clues on the future of interest rates. Any hawkish shift from policymakers could provide some support for the dollar, but recent economic data paints a mixed picture.

The U.S. Census Bureau reported that Retail Sales rose just 0.2% in February, falling short of the expected 0.7% increase. This follows a downward revision of January’s figures, which now show a -1.2% decline, previously estimated at -0.9%. Year-over-year growth slowed to 3.1%, down from a revised 3.9% in January.

These figures indicate slowing consumer spending, raising concerns over economic momentum. With inflation still a key factor in the Fed’s decision-making, the weaker retail sales data has intensified speculation over potential rate cuts, which could weigh on the USD by lowering yield expectations.

Geopolitical Risks and Trade Tariffs to Influence USD Outlook

Beyond economic data, geopolitical risks remain a major driver of USD performance. On Tuesday, Donald Trump and Vladimir Putin agreed to pause strikes on Ukraine’s energy infrastructure for 30 days, but Putin refused a broader ceasefire, keeping tensions elevated.

Meanwhile, Trump confirmed that new tariffs on steel, aluminum, and automobiles will take effect on April 2 with no exemptions. These trade restrictions could fuel market volatility and slow global economic growth, adding another layer of uncertainty to the USD’s trajectory.

With the Federal Reserve decision, trade tensions, and geopolitical risks in focus, investors will be watching closely for clearer direction in the coming days.

• The USD/JPY price analysis indicates a slight decline in BoJ rate hike expectations.

• The Bank of Japan kept interest rates unchanged as expected on Wednesday.

• The dollar held steady as market participants prepared for the FOMC policy meeting.

The USD/JPY price analysis indicates a slight decline in BoJ rate hike expectations after a cautious tone during the central bank’s policy meeting. The ongoing global trade wars have overshadowed recent upbeat data from Japan. Policymakers are now worried about the likely impact of Trump’s tariffs on the local economy. 

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The Bank of Japan kept interest rates unchanged as expected on Wednesday. Moreover, policymakers emphasized the need for time to assess the likely impacts of US trade policies. This means the central bank might be cautious in making any more moves. Nevertheless, Governor Ueda noted that wage growth and consumption were strong. Therefore, economic factors are lining up for more rate hikes. 

The yen has pulled back sharply from recent peaks due to economic concerns. If Trump’s tariffs affect Japan’s economy, the BoJ will be forced to pause its rate hike campaign to preserve growth. 

On the other hand, the dollar held steady as market participants geared up for the FOMC policy meeting. Economists expect the Fed to keep interest rates unchanged. Therefore, traders will focus on the messaging for clues on future moves. Recent downbeat US data has raised expectations for rate cuts. However, Trump’s tariff moves have raised inflation expectations. Therefore, the Fed has to balance growth and inflation.

USD/JPY key events today

• Federal Funds Rate
• FOMC Economic Projections
• FOMC Statement
• FOMC Press Conference

USD/JPY technical price analysis: Rally pauses after new high

On the technical side, the USD/JPY price has paused its rally and pulled back slightly. However, it still sits above the 30-SMA with the RSI above 50, supporting a strong bullish bias. Moreover, the price still trades in a bullish channel.

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The pause might allow the price to retest the channel’s support and the 149.00 level before the rally continues. The next target for bulls is at the 151.01 resistance level. A break above this level will strengthen the bullish bias. 

On the other hand, if bears overpower bulls, they might push the price below the 30-SMA and the channel support. Such an outcome would indicate a bearish shift in sentiment. It would allow USD/JPY to revisit the 147.02 support level.

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• EUR/USD retreats below 1.0900 after closing in positive territory for three consecutive days.
• The Fed is widely expected to leave the policy rate unchanged.
• The revised Summary of Economic Projections and Powell presser could ramp up volatility.

After reaching a multi-month high above 1.0950 on Tuesday, EUR/USD corrects lower and trades below 1.0900 in the European morning on Wednesday. Investors await the Federal Reserve’s (Fed) monetary policy announcements.

EUR/USD registered gains on Tuesday but lost its bullish momentum in the second half of the day as the US Dollar managed to limit its losses following the upbeat macroeconomic data releases. 

Later in the day, the Fed is widely expected to leave its monetary policy settings unchanged. Investors will pay close attention to the changes in the Summary of Economic Projections (SEP), the so-called dot plot.

A downward revision to growth projections could hurt the US Dollar (USD) with the immediate reaction. On the flip side, the USD could rally if the dot plot reveals that policymakers now project only one rate cut this year, down from the two rate cuts reported in December’s publication.

In case Fed Chairman Jerome Powell adopts a cautious tone regarding the economic outlook in the post-meeting press conference, citing the potential negative impact of US President Donald Trump’s tariffs on the activity, the USD could have a difficult time outperforming its rivals. On the flip side, the USD could hold its ground, if Powell downplays growth concerns and puts more emphasis on the uncertainty surrounding the inflation outlook.

EUR/USD Technical Analysis

The Relative Strength Index (RSI) indicator on the 4-hour chart retreated below 50, reflecting a lack of buyer interest. On the downside, the lower limit of the ascending channel aligns as first support at 1.0840 ahead of 1.0800 (round level, static level) and 1.0730 (200-day Simple Moving Average). 

Looking north, first resistance could be spotted at 1.0950 (static level), 1.1000-1.1020 (round level, mid-point of the ascending channel) and 1.1100 (round level, static level).

The EUR/USD pair managed to close higher for the third straight session, tackling the pivotal and stubborn resistance of  $1.0945, with support due to trading above the 50-day SMA, and amid the dominance of the main upward trend, while the price trades within a secondary price channel in the intraday levels.

March 18, 2025 – Written by James Fuller

STORY LINK Pound Sterling Forecast vs Euro Ranges: Strong Support on Dips to 1.177

On Tuesday, the German parliament (Bundestag) approved the constitutional change to exempt defence and security spending from the debt brake. The huge German spending commitment is in stark contrast to UK pressure to tighten policy.

The Euro had priced in the approval, limiting scope for further buying, but did secure limited further support following the vote and the Pound to Euro (GBP/EUR) exchange rate settled around 1.1880.

Risk appetite took another dip lower which also limited wider Pound support.

Rabobank expects the Pound will be resilient close to current levels with strong GBP/EUR support on any dips to 1.1770.

ING also expects GBP/EUR support at 1.1765.

The Bundestag secured 512 votes in favour of the change, above the two-thirds majority of 489 needed.

As well as increased defence spending, there was also approval for a EUR500bn infrastructure fund.

The Bundesrat upper house will vote on Friday to approve the legislation formally.

According to Rabobank; “This should allow for greater spending on defence in addition to setting the stage for a EUR500 bln debt-financed infrastructure fund and allowing the German states to run modest budget deficits.”

The German ZEW investor confidence index strengthened sharply to 51.6 for March from 26.0 previously and above consensus forecasts of 48.0.

The current conditions index, however, improved only slightly to -87.6 from -88.5 in February and compared with expectations of -80.5, illustrating that there are still very important concerns over the outlook.

Attention will move towards UK fiscal policy with the budget statement on the 26th. The government announced welfare reform plans on Tuesday amid pressure to control spending.

According to the Resolution Foundation, Chancellor Reeves has a £4.4bn shortfall in meeting the fiscal rules compared with a £10bn surplus in October.

The OECD lowered its forecast for British growth this year to 1.4% from its December forecast of 1.7% ahead of the budget update, illustrating structural concerns.

According to Credit Agricole; “the UK Chancellor could be forced to unleash spending cuts in order to meet her own long-term budget rules. That contrasts quite starkly with the recent spending plans announced by the EU to in particular boost defence spending, which could then put the UK macro outlook at risk of falling behind most of Europe in the coming years.”

It added; “While more details and confirmation still awaits, the GBP may then only rely on its carry advantage and reduced geopolitical/tariff threats to eventually fare better than the EUR.”

Rabobank does consider that the Pound will need stronger growth to make any headway; “Hopes for a better growth outlook in the Eurozone have altered the dynamic for EUR/GBP. Our year end forecast of EUR/GBP0.83 assumes that UK growth can recover during the course of the year and most recent UK GDP indications have not been encouraging.”

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