The US dollar has plunged against the Japanese yen during the trading session like you would expect. But we are sitting right at the 50 day EMA and we’re still very much within the consolidation area that we have been in for quite some time. With that being the case, I think you’ve got a scenario where not much has changed again. And we’ve seen candlesticks like this recently. So, it’s really not until we break down below 146 yen that I think anything has changed here either.
AUD/USD Technical Analysis
The Australian dollar has rallied quite nicely, but again, it hasn’t really reached escape velocity. We have a much sloppier area to deal with here, with 0.66 offering resistance. If we were to break above there, then we can start to have a conversation about a much bigger move. Short-term pullbacks, I think, continue to be a very real possibility, but if we were to break above the top of the candlestick on Thursday, July 24, I think at that point, you really start to see the Australian dollar take off.
This will be a US dollar centric move. So, you’ll see the dollar fall apart everywhere. And then you’ll see it play out here, which the Australian dollar, for what it’s worth, has been a laggard.
For a look at all of today’s economic events, check out our economic calendar.
The pound is trading in volatile fashion against the dollar as GBP/USD hovers around 1.3515, rising 0.6% on the day after dismal U.S. labor data. Nonfarm payrolls added just 22,000 jobs in August compared with forecasts of 75,000, while unemployment ticked up to 4.3% from 4.2%. The weak jobs print sent U.S. 10-year yields tumbling 2% to below 4.1%, dragging the dollar index to its lowest since July at 97.50. This collapse in dollar momentum allowed sterling to reclaim levels above 1.35 despite deep concerns surrounding the UK’s fiscal position and sticky yields.
UK Fiscal Concerns Limit Sterling Upside
While the dollar’s slump has temporarily lifted GBP/USD, investors remain cautious about the UK outlook. Thirty-year gilts recently touched their highest yield since 1998, reflecting market worries about Britain’s debt trajectory ahead of the November budget. Sterling peaked near $1.38 in July, but analysts expect sideways trade below 1.35 in the short term as fiscal risks cap bullish attempts. The market currently sees just an 18% chance of a Bank of England cut in November compared with 67% one month earlier, showing how sharply rate expectations have shifted with yields projected to stay higher than peers for longer.
U.S. Labor Weakness Reframes Fed Policy Bets
The weak NFP print has reshaped expectations for the Federal Reserve, with CME FedWatch showing 75% odds of consecutive 25-basis-point cuts in September and October. ADP data had already hinted at labor fragility with just 54,000 private-sector jobs added in August compared with 106,000 in July. Fed speakers have acknowledged risks, with Chicago’s Goolsbee highlighting deterioration in the job market, while New York’s Williams maintained that gradual easing remains an option if inflation allows. The dovish tilt is pulling the dollar lower across the board, but market positioning remains sensitive to every labor release.
Technical Picture for GBP/USD
On the charts, GBP/USD trades within a bearish channel but currently sits above its 30-period SMA with RSI above 50, signaling bulls are trying to seize momentum. A push through channel resistance could lift the pair toward 1.3575, confirming another impulsive move higher after the recent corrective phase. If momentum stalls, immediate support lies near 1.3416, followed by 1.3376 and 1.3341. Failure to defend those levels would re-expose the August low at 1.3142. On the topside, resistance zones cluster around 1.3489, then 1.3543, with a breakout targeting July’s 1.3789 peak.
Sterling’s Relative Strength Against Majors
The heat map of currency performance shows sterling was strongest against the dollar, gaining 0.66%, while only marginally weaker versus the euro at -0.09%. GBP also outperformed the Canadian dollar by 0.53% and gained 0.92% against the Australian dollar, underscoring how much dollar weakness drove the move. Despite this strength, sentiment remains fragile as traders recognize sterling’s rally is built more on U.S. weakness than UK strength. The UK’s fiscal risk premium means any rebound in dollar yields could quickly unwind recent gains.
Outlook for GBP/USD
Short-term dynamics are dominated by U.S. labor data and Fed policy bets. If the Fed confirms rate cuts in September and October, GBP/USD could extend toward 1.36–1.38, though UK fiscal risks may prevent a sustainable break higher. Conversely, stronger-than-expected U.S. data or hawkish Fed pushback could see the pair retest 1.33 or lower. With MUFG projecting 1.40 for GBP/USD by Q2 2026 on expected dollar weakness, the longer-term trajectory remains bullish, but near-term trading is likely to remain volatile within a broad 1.3140–1.3595 band.
USD/JPY Price Under Pressure as Fed Rate Cut Bets Rise
The USD/JPY pair is pinned between technical barriers and shifting macroeconomic winds as traders brace for the dual impact of U.S. labor market weakness and Japan’s evolving monetary stance. The dollar index has been dragged lower after the latest nonfarm payrolls report showed only 22,000 new jobs in August, well below the forecast of 75,000. Unemployment ticked higher to 4.3%, while Treasury yields slipped, with the 10-year benchmark down 2% on the day to 4.09%, the lowest since July. This soft data has bolstered market conviction that the Federal Reserve will deliver a 25 bp rate cut in September and another in October, with CME FedWatch now showing combined odds above 75%.
Technical Setup for USD/JPY Between 147.80 and 149.00
On the charts, USD/JPY has struggled to break above its 200-day moving average near 148.79, with repeated rejections keeping resistance locked around the 148.65–149.00 zone. An attempted breakout this week quickly reversed, pulling the pair back to 147.88, which now acts as immediate support. Failure to defend that level exposes the August low near 147.00, and if that breaks, deeper downside toward 146.00 and 145.00 could unfold. On the upside, only a decisive close above 149.20 would re-open the path toward 150.92, the August peak, and then the 151.00 level. Momentum indicators are neutral, with RSI hovering in the mid-50s, reflecting indecision as traders await stronger catalysts.
Bank of Japan Policy Path Clouded by Political Uncertainty
Japan’s domestic backdrop adds complexity. Wage growth accelerated to 4.1% year-on-year in July, up from 2.5% in June, while household spending rebounded 1.7% month-on-month after a 5.2% slump. Rising wages and improved consumption strengthen the case for the Bank of Japan to consider another rate hike later this year. However, political uncertainty continues to weigh, with resignations in the ruling LDP raising questions about whether leadership changes could pressure the BoJ to slow policy normalization. Despite turbulence, analysts still expect a rate hike by October or year-end, which, if confirmed, would strengthen the yen and pressure USD/JPY lower.
U.S. Data Flow and Fed Expectations Remain in Focus
The U.S. economy presents a split picture. The ISM services PMI rose to 52.0 in August, up from 50.1, showing resilience in non-manufacturing activity, while jobless claims and ADP private payrolls disappointed. This divergence has left the dollar’s outlook fragile, but the market is firmly leaning dovish. Fed officials, including New York’s John Williams and Chicago’s Austan Goolsbee, have acknowledged softening labor conditions while stressing inflation risks, leaving the Fed cautious but clearly biased toward easing. Should the Fed cut in back-to-back meetings, USD/JPY could see structural pressure back toward 145.00, aligning with Rabobank’s three-month projection.
Global Risk Sentiment and Correlation with Equities
Wall Street’s record-setting run has complicated flows into the yen. The S&P 500 closed above 6,500, with optimism around Fed easing fueling risk appetite and weakening the safe-haven yen. However, if U.S. equities retrace or if Treasury yields fall further, USD/JPY may decouple from risk-on sentiment and align more closely with interest rate differentials. Japan’s 30-year government bond yield, at its highest since 1998 earlier this week, underscores the divergence in bond markets that continues to drive volatility in the pair.
USD/JPY Outlook and Investment View
At 148.30, USD/JPY is locked in a tug-of-war between bullish dollar bets looking for a rebound to 150 and the bearish narrative of Fed cuts combined with a hawkish BoJ. The decisive catalyst remains the trajectory of U.S. labor data and the BoJ’s willingness to tighten policy despite political noise. With rate markets fully pricing in Fed easing, the downside risk may outweigh upside potential in the near term. Unless bulls can secure a close above 149.20, the bias leans bearish toward 147.00 and potentially 145.00. Medium term, however, volatility will remain elevated, making the pair a tactical trading opportunity rather than a straightforward directional play.
EUR/USD Holds Near 1.1670 as Traders Brace for Fed Cut Bets
The EUR/USD pair is locked in a critical range, trading around 1.1670, supported by a rising trendline from late August and holding above the 50-EMA at 1.1659 and the 200-EMA at 1.1656. Despite three consecutive sessions of selling pressure earlier this week, the euro has managed to recover intraday, keeping the bias tilted toward upside while awaiting confirmation from U.S. labor data.
Weak U.S. Jobs Data Reshapes Dollar Outlook
The dollar’s recent strength has been undermined by increasingly fragile labor readings. ADP private payrolls showed just 54,000 jobs in August, sharply lower than July’s revised 106,000 and well below expectations of 65,000. Weekly jobless claims also rose to 237,000, the highest since June. These numbers have solidified market conviction of a September rate cut, with CME FedWatch now pricing a 99.4% chance of a 25-basis-point reduction. The broader U.S. Dollar Index (DXY) is stabilizing near 98.13, but downside risks remain should nonfarm payrolls confirm the slowdown.
Fed Policy Under Spotlight as Inflation Still Elevated
While rate cut bets dominate, inflation remains sticky. Core CPI above 3% and Core PCE at 2.9% keep the Fed cautious about how far and how fast it can ease. Fed officials such as John Williams have suggested gradual cuts are possible, while Austan Goolsbee flagged a “live” September meeting due to deteriorating labor conditions. Markets are currently projecting at least three cuts by year-end, but the balance between weakening jobs and still-firm inflation leaves EUR/USD highly sensitive to Fed communications.
ECB Policy Steady as Eurozone Growth Slows
The European Central Bank (ECB) provides a contrasting backdrop, with its ECB Watch Tool showing an 83.8% probability of rates staying at 2.00% at the September 10 meeting. Growth has slowed—Q2 GDP is expected at 0.1%, down from 0.6% in Q1—but policymakers have signaled stability rather than fresh easing. This divergence means that if the Fed cuts aggressively while the ECB holds steady, euro-denominated assets could gain relative appeal, lending medium-term support to EUR/USD.
Technical Structure Shows Bull Pennant and Inverse Head-and-Shoulders
Chart patterns are reinforcing bullish potential. On the daily timeframe, EUR/USD is forming a bull pennant, consolidating gains since August in a symmetrical triangle that often resolves higher. On shorter-term charts, an inverse head-and-shoulders has developed, pointing to a potential breakout if resistance levels are cleared. Immediate resistance sits at 1.1682, followed by 1.1708 and 1.1735. A decisive move above these thresholds could open the door for a run toward 1.2000, where structural supply sits. Support is anchored at 1.1614 and deeper at 1.1578, the 23.6% Fibonacci retracement.
Market Volatility Expected Around NFP Print
The nonfarm payrolls release is the pivotal driver in the immediate term. Consensus is for 75,000 jobs and unemployment at 4.3%, but revisions and wage growth will matter as well. Average Hourly Earnings are projected at 3.7% YoY, down from 3.9%, with monthly growth at 0.3%. A weaker-than-expected print would likely accelerate dollar losses and push EUR/USD through resistance, while a surprise beat could stall momentum and re-anchor the pair closer to 1.1610–1.1630 support.
Cross-Market Dynamics Add to Euro Strength
Global risk appetite has also been leaning toward the euro. German and French 30-year yields have retreated from recent highs, calming fears of European bond instability, while easing U.S. yields continue to undermine the dollar’s edge. Traders have noted the euro’s outperformance in the currency heatmap, where it has gained broadly across majors. Comparisons with other pairs—such as GBP/USD consolidating at 1.3454 and USD/JPY testing resistance near 149.23—show EUR/USD in a stronger technical setup, particularly as the euro represents 57.6% of the DXY basket.
Forecast for EUR/USD in the Coming Sessions
With EUR/USD consolidating near 1.1670 and holding its bullish chart formations, the balance of risk favors an upside breakout if U.S. labor data confirms weakness. A sustained move through 1.1720–1.1735 would invite momentum traders, with potential extensions toward 1.1850 and eventually 1.2000. However, if NFP surprises and the Fed remains more cautious than expected, EUR/USD could retreat back into the 1.1575–1.1610 zone. The pair’s trajectory into September hinges on this policy divergence: a Fed ready to cut against an ECB holding steady creates conditions for euro appreciation, but only if economic data aligns.
GBP/USD recovers above 1.3450 following Thursday’s choppy action.
Investors await August employment data from the US.
The pair could face a stiff resistance at 1.3480.
After failing to make a decisive move in either direction on Thursday, GBP/USD gathers bullish momentum and trades above 1.3450 in the European session on Friday. The pair faces a strong resistance at 1.3480 as investors await the August labor market data from the United States (US).
Pound Sterling Price This week
The table below shows the percentage change of British Pound (GBP) against listed major currencies this week. British Pound was the weakest against the US Dollar.
USD
EUR
GBP
JPY
CAD
AUD
NZD
CHF
USD
0.12%
0.21%
0.80%
0.42%
0.03%
0.23%
0.47%
EUR
-0.12%
0.08%
0.62%
0.30%
-0.09%
0.11%
0.36%
GBP
-0.21%
-0.08%
0.44%
0.22%
-0.17%
0.03%
0.32%
JPY
-0.80%
-0.62%
-0.44%
-0.31%
-0.75%
-0.53%
-0.29%
CAD
-0.42%
-0.30%
-0.22%
0.31%
-0.38%
-0.19%
0.10%
AUD
-0.03%
0.09%
0.17%
0.75%
0.38%
0.20%
0.49%
NZD
-0.23%
-0.11%
-0.03%
0.53%
0.19%
-0.20%
0.29%
CHF
-0.47%
-0.36%
-0.32%
0.29%
-0.10%
-0.49%
-0.29%
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
The US Dollar (USD) struggled to gather strength against its rivals as investors refrained from taking large positions following the mixed macroeconomic data releases. The Institute for Supply Management’s (ISM) Services Purchasing Managers’ Index (PMI) rose to 52 in August from 50.1 in July, surpassing the market expectation of 51. On the other hand, the Automatic Data Processing’s (ADP) monthly report showed that private sector payrolls rose by 54,000 in August. This print missed analysts’ estimate of 65,000.
Nonfarm Payrolls (NFP) in the US are expected to increase by 75,000 in August and the Unemployment Rate is seen edging higher to 4.3% from 4.2% in July.
Although the CME FedWatch Tool suggests that markets are nearly fully pricing in a 25 basis-points (bps) rate cut in September, the employment report could still influence the probability of one more rate cut in October, currently at 55%, and drive the USD’s valuation.
In case the NFP comes in at or below 50K and feeds into growing fears over worsening conditions in the labor market, the USD could come under heavy selling pressure heading into the weekend and allow GBP/USD to push higher. Conversely, the USD could outperform its rivals on a positive surprise of 100K, or above, and cause the pair to reverse its direction.
GBP/USD Technical Analysis
The Relative Strength Index (RSI) indicator on the 4-hour chart rose slightly above 50, reflecting sellers hesitancy.
The 20-day, 50-day and the 100-period Simple Moving Averages (SMAs) converge near 1.3480 to form a strong resistance level. In case GBP/USD manages to clear this hurdle, it could face the next resistance at 1.3540 (Fibonacci 61.8% retracement of the latest downtrend) before 1.3600 (static level, round level).
Looking south, support levels could be spotted at 1.3440 (200-period SMA), 1.3390-1.3400 (Fibonacci 38.2% retracement, round level) and 1.3330 (static level).
GDP FAQs
A country’s Gross Domestic Product (GDP) measures the rate of growth of its economy over a given period of time, usually a quarter. The most reliable figures are those that compare GDP to the previous quarter e.g Q2 of 2023 vs Q1 of 2023, or to the same period in the previous year, e.g Q2 of 2023 vs Q2 of 2022.
Annualized quarterly GDP figures extrapolate the growth rate of the quarter as if it were constant for the rest of the year. These can be misleading, however, if temporary shocks impact growth in one quarter but are unlikely to last all year – such as happened in the first quarter of 2020 at the outbreak of the covid pandemic, when growth plummeted.
A higher GDP result is generally positive for a nation’s currency as it reflects a growing economy, which is more likely to produce goods and services that can be exported, as well as attracting higher foreign investment. By the same token, when GDP falls it is usually negative for the currency.
When an economy grows people tend to spend more, which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation with the side effect of attracting more capital inflows from global investors, thus helping the local currency appreciate.
When an economy grows and GDP is rising, people tend to spend more which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold versus placing the money in a cash deposit account. Therefore, a higher GDP growth rate is usually a bearish factor for Gold price.
The euro has gone back and forth during the trading session here on Thursday as traders continue to look to try to sort out where we’re going to go with the US dollar longer term.
That being said, the market is basically stuck in a range at the moment. And I do think that makes a lot of sense considering that the non-farm payroll announcement comes out on Friday, the Thursday session will probably be very quiet.
Therefore you cannot read too much into the price action as we are just sitting in the middle of the same consolidation that we have been in for quite some time.
Interestingly enough, we have seen the 50 day EMA come into the fold, offering support right along with the 1.16 level. To the upside, the 1.1750 level is resistance that extends all the way to the one point one eight level.
More Sideways Action?
All things being equal, this is a market that has gone sideways after a nice uptrend. And I think traders are starting to wonder whether or not the Federal Reserve possibly cutting interest rates, supposedly cutting interest rates that is in September, isn’t the sign of something a little bit more ominous for the global economy. If it does end up being that way, then the US dollar will get a bit of a bid in a simple safety trade type of situation. Ultimately, I think this is a market that has a lot of decisions that will have to be made soon.
But ultimately, we are currently looking at this through the prism of trying to sort out where to go next. If we can break down below the 1.16 level, then the 1.14 level could be your target. A break above 1.18 opens up the possibility of 1.20.
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 attempted to face the attempts of activating the bearish correctional track, taking advantage of providing positive momentum by stochastic, but it didn’t make it surpass the barrier at 200.40, to keep providing mixed sideways trading by its stability near 199.50.
The expected trend depends on the strength of the mentioned barrier, the continuation of the price stability below it will increase the chances of activating the negative attempts that might target 198.60 level, reaching the support at 197.85, while breaching the barrier and holding above it will activate the bullish track, to reach 200.90 followed by the next positive target at 202.45.
The expected trading range for today is between 197.85 and 199.80
The GBPJPY pair attempted to face the attempts of activating the bearish correctional track, taking advantage of providing positive momentum by stochastic, but it didn’t make it surpass the barrier at 200.40, to keep providing mixed sideways trading by its stability near 199.50.
The expected trend depends on the strength of the mentioned barrier, the continuation of the price stability below it will increase the chances of activating the negative attempts that might target 198.60 level, reaching the support at 197.85, while breaching the barrier and holding above it will activate the bullish track, to reach 200.90 followed by the next positive target at 202.45.
The expected trading range for today is between 197.85 and 199.80
The British pound has gone back and forth during the trading session on Thursday as we wait for the Non-Foreign Payroll announcement on Friday.
After all, that will have a major influence on where markets go, as traders are trying to figure out what to do with the US dollar in general.
Ultimately, the British pound is a currency that has done fairly well against the US dollar over the last several months, but recently, we have seen more of a sideways action than anything else.
Technical Analysis
The technical analysis for this market is relatively flat over the last couple of weeks, but there are a couple of levels that I will be looking at very closely. The first one would be the 1.34 level, which has offered support over the last couple weeks, and previously has been significant resistance previously. If we were to break down below the last couple of candlesticks, then we could see the British pound drop down to the 1.32 level. That’s an area that’s been support, but we also have the 200 Day EMA, so ultimately this is a situation where we have a lot of interest.
If we were to break to the upside, and break above the 50 Day EMA, the market is likely to go looking at the 1.36 level. The 1.36 level is a major resistance barrier, and is a bit important going forward, if we can break above there, then it’s likely that we really could see the US dollar fall, and the British pound really started to take off.
I think at this point we need to be very cautious, as there is a lot of back and forth noise. In general, this is a market that I think continues to see a lot of volatility, but as things stand right now, we are basically in the middle of the larger 400 pip trading range.
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 USD/JPY pair has stabilized above the 148 handle, climbing to 148.75 with a 0.30% daily gain after wiping out yesterday’s decline. The rebound comes as U.S. data eased concerns about a stalling economy highlighted in the Beige Book, with traders repositioning ahead of Friday’s nonfarm payrolls. The pair’s price action since mid-August continues to confirm a sequence of higher lows and higher highs, reinforcing the short-term bullish channel that targets 149.00 and 150.75 if momentum persists.
Labor Market Signals Pressure the Fed Outlook
U.S. economic data shows clear signs of cracks in the labor market. Job openings fell to 7.18 million in July from 7.36 million in June, the lowest in nearly a year. ADP reported private sector hiring of just 54,000 in August, down from July’s 104,000, while layoffs are ticking higher. The ISM Services survey showed employment stuck in contraction even as new orders remained firm. These signals highlight a cooling jobs market, bolstering expectations that the Federal Reserve will proceed with its widely anticipated 25 bps rate cut at the September 16–17 meeting. CME FedWatch places probability of the move above 95%, with a 53% chance of another cut on October 29. Fed’s John Williams reinforced the cautious easing stance, calling policy only “modestly restrictive” and leaving the door open for gradual rate reductions if inflation cools further.
BoJ Policy and Political Turmoil Keep Yen Heavy
The Bank of Japan remains cautious despite its first steps toward normalization earlier this year. Governor Kazuo Ueda has reiterated a gradual pace of rate hikes, contingent on inflation and growth alignment, but recent comments from Deputy Governor Ryuzo Himino stressed that uncertainty is too high to justify urgency. Current pricing assigns less than a 30% probability of a September hike. At the same time, Japan’s political backdrop is weakening the yen. Ruling party secretary-general Hiroshi Moriyama’s resignation, combined with speculation that Prime Minister Shigeru Ishiba may also step down, has fueled expectations that Sanae Takaichi—known for supporting ultra-low rates—could emerge as a successor. Political risk and the likelihood of continued accommodative BoJ policy underpin yen softness, helping drive USD/JPY back toward five-week highs near 149.14.
Technical Outlook: Bulls Defend 147.85, Resistance at 149.10
Technically, USD/JPY has been consolidating between the 147.85 support—coinciding with the 200-day EMA—and resistance near 149.10. A close above 149.12 would extend the rebound from 146.20 and retest the 150.90 zone, which represents both the prior high and the 61.8% Fibonacci retracement of the January–April downtrend. If bulls clear this hurdle, the path opens toward 151.22 and possibly 154.60. Momentum indicators support the bullish case: the MACD on the daily chart is preparing for a bullish crossover, and RSI remains in neutral territory with room to climb. On the downside, a break under 146.65 would end the bullish sequence, exposing 145.35 and the 23.6% Fibonacci retracement at 144.35 as deeper supports.
Market Balance Ahead of Nonfarm Payrolls
With USD/JPY pinned at 148.65–148.75 into Thursday’s U.S. close, traders are balancing Fed dovish expectations with BoJ’s cautious stance. Friday’s NFP will be decisive: consensus stands at 75,000 jobs added, barely above last month’s 73,000. A miss would accelerate dollar selling and test 147.85, while a stronger print could price out aggressive Fed cuts and propel the pair toward 151.00. Japanese household spending and labor earnings data due the same day will also provide insight into domestic demand, influencing how much leeway the BoJ has for policy shifts.
