USD/JPY Falls Further Ahead of the NFP Report

is falling as the dollar struggles across the board, while the yen continues to outperform following Prime Minister Takaichi’s landslide election victory at the weekend.

Expectations had been for the yen to weaken if Takaichi, a fiscal dove, won a landslide victory, but the reality is the yen has strengthened amid optimism over the growth prospects, the potential for a more hawkish Bank of Japan and political clarity, which is encouraging speculators to scale back on short yen positions.

Meanwhile, the is falling across the board, extending yesterday’s weakness, after slower-than-expected December and as investors look ahead to today’s nonfarm payrolls report.

The delayed , due to the government shutdown, is expected to show that 70,000 jobs were created last month, up from 50,000 in December.

The data comes at a time when the market is trying to decide whether the US economy is merely slowing towards trend or if the labour market is weakening in a way that would force the sooner.

The data could help shape expectations for Federal Reserve policy. The markets are currently pricing in 60 basis points of Fed easing by the end of the year. Weak data could lift Fed rate cut bets, weighing on USD/JPY

USD/JPY Forecast – Technical Analysis

After running into resistance at 157.65 USD/JPY rebounded lower, breaking below 154.50 support to test the rising trendline at 152.80.

Sellers supported by the RSI below 50 will look to break below the trendline to test 152, the 2026 low. A break below here creates a lower low and exposes the 200 SMA at 150.30.

Resistance is seen at 154.50, the mid-December low, with a rise above this level opening the door to 156.00. A rise above 157.80 creates a higher high.

DAX Falls on AI Disruption Concerns and Ahead of the NFP Report

European stocks are under pressure on Wednesday, pulled lower by tech and financial stocks amid ongoing worries that new AI models could hurt traditional software businesses

While worries that AI is disrupting software companies hit tech stocks particularly hard in the US last week, those worries are also in Europe. French company Dassault’s shares are down almost 20% and on track for their largest daily drop after the software maker posted disappointing Q4 revenue growth and a weak outlook for this year.

Fears over AI disruption are not only affecting software firms; they are also spreading to other parts of the market, including insurers, asset managers, and index providers, following the release of several new AI tools.

On the macro front, attention is on the US jobs report later today, which could help gauge expectations for Federal Reserve rate cuts this year.

The report is expected to show 70,000 jobs added, up from 50,000 in December, and is expected to rise to 4.5%, up from 4.4%.

Slightly weaker jobs data could support expectations for Fed cuts, which would be positive for risk assets globally.

DAX Forecast – Technical Analysis

The rebounded from the rising trendline support, moving above the 50 SMA before encountering resistance around 25,000 as momentum faded. Buyers will look to rise above the 25,000 level towards 25,500 and fresh record highs.

Immediate support is seen at 24,650, the October and July high and the 50 SMA. A break below 24,200, the February low creates a lower low.

Original Post

Natural gas price continued forming negative pressures to keep its positive stability above the bullish channel’s support at $3.050, forming weak sideways trading due to the contradiction of the main indicators by providing negative momentum in the last period.

Note that the stability above the support level makes us wait for gathering the bullish momentum, to ease the mission of forming bullish waves, to target $3.450 reaching $3.910 level, while breaking the support and holding below it will force it to resume the decline, suffering big losses by reaching $2.850 and $2.660.

The expected trading range for today is between $3.000 and $3.450

Trend forecast: Bullish

The EURJPY pair was under strong bearish pressure yesterday, to press on the bullish channel’s support, represented by 183.45 level, to begin this morning trading with new negative trading by its exit from the bullish track and suffering extra losses by reaching 182.60 level.

Providing negative momentum by the main indicators confirms the price surrender to the bearish scenario, to expect to continue targeting negative stations until reaching 182.00, to attempt to test the next support near 181.05.

The expected trading range for today is between 181.05 and 183.50

Trend forecast: Bearish

BitcoinWorld

EUR/GBP Forecast: Critical Resistance Battle Looms as Pair Hovers Below 0.8720 and 0.8745 Levels

London, March 2025 – The EUR/GBP currency pair currently faces a decisive technical juncture, hovering below significant resistance levels at 0.8720 and 0.8745. This positioning follows several weeks of consolidation within a narrowing trading range. Market participants closely monitor these technical barriers as they could determine the pair’s directional bias for the coming trading sessions. Meanwhile, fundamental factors from both the Eurozone and United Kingdom continue to influence price action through monetary policy expectations and economic data releases.

EUR/GBP Technical Analysis: Current Price Structure

The EUR/GBP exchange rate demonstrates clear technical characteristics as it approaches critical resistance zones. Currently trading around 0.8705, the pair has tested the 0.8720 level three times in the past two weeks without sustaining a breakthrough. Each rejection has resulted in modest pullbacks toward the 0.8680 support area. The 0.8745 resistance represents a more significant barrier, corresponding with the 61.8% Fibonacci retracement level from the January decline. Technical analysts note that the pair maintains position above its 50-day moving average at 0.8682, suggesting underlying support remains intact despite resistance challenges.

Volume analysis reveals decreasing participation during recent resistance tests, potentially indicating weakening selling pressure at these levels. The Relative Strength Index (RSI) currently reads 58, positioned in neutral territory with room for movement in either direction. Bollinger Bands show contraction, typically preceding significant price movements. Furthermore, the Average Directional Index (ADX) registers at 22, suggesting the current trend lacks strong directional conviction. These technical indicators collectively paint a picture of a market awaiting a catalyst for decisive movement.

Fundamental Drivers Influencing Euro-Pound Dynamics

Multiple fundamental factors currently influence the EUR/GBP exchange rate, creating a complex backdrop for price action. The European Central Bank maintains a cautious approach to monetary policy normalization, with inflation in the Eurozone showing signs of moderation toward target levels. Recent ECB communications suggest a measured pace of interest rate adjustments, contrasting with more aggressive approaches seen in previous cycles. Meanwhile, the Bank of England faces its own policy challenges as UK economic data presents mixed signals about growth and inflation persistence.

Comparative Economic Performance and Policy Outlook

Economic indicators from both regions reveal important divergences affecting currency valuations. Eurozone manufacturing PMI data recently improved to 47.8, though remaining in contraction territory. Services sector performance shows greater resilience at 52.3. UK economic data presents a different picture, with services PMI at 53.5 but manufacturing struggling at 46.2. These sectoral differences influence central bank policy expectations and consequently currency valuations. Additionally, political developments in both regions contribute to market uncertainty, with European Parliament elections approaching and UK political dynamics continuing to evolve post-Brexit.

Interest rate differentials remain a crucial factor for EUR/GBP direction. Current market pricing suggests approximately 75 basis points of ECB easing priced in for 2025, compared to 50 basis points from the Bank of England. This differential creates inherent support for sterling against the euro, though actual policy implementation may diverge from market expectations. Trade balance data also influences currency flows, with the UK maintaining a substantial goods trade deficit partially offset by services surplus, while the Eurozone shows more balanced external accounts.

Key Resistance Levels: Technical Significance and Market Psychology

The 0.8720 resistance level holds particular technical importance as it represents the convergence of multiple analytical factors. This price point aligns with the early March high and corresponds to the upper boundary of a descending trendline from the January peak. Additionally, option barriers reportedly cluster around this level, potentially amplifying its significance. The 0.8745 resistance carries even greater weight as it represents the 61.8% Fibonacci retracement of the January-February decline, a level many technical traders monitor for trend continuation or reversal signals.

Market positioning data reveals interesting dynamics around these resistance levels. According to recent Commitment of Traders reports, speculative positioning in EUR/GBP remains relatively balanced with a slight net long euro position. This contrasts with more extreme positioning seen in other major currency pairs. The balanced positioning suggests market participants await clearer directional signals before committing to substantial positions. Order flow analysis indicates substantial sell orders clustered above 0.8720, potentially explaining recent rejections at this level.

Several technical patterns warrant attention in the current EUR/GBP price structure. The pair has formed a symmetrical triangle pattern over the past six weeks, with converging trendlines suggesting impending volatility expansion. Additionally, a bullish divergence appeared on the daily chart earlier this month, with price making lower lows while momentum indicators formed higher lows. This classic technical signal often precedes trend reversals, though confirmation requires price breaking above resistance levels. The 200-day moving average currently sits at 0.8665, providing additional context for the broader trend direction.

Historical Context and Seasonal Patterns

Historical analysis of EUR/GBP price action provides valuable context for current market conditions. The pair has demonstrated notable seasonal tendencies, with March typically showing increased volatility as financial year-ends approach in multiple jurisdictions. Over the past decade, March has produced positive returns for EUR/GBP in six of ten years, with an average monthly movement of approximately 1.8%. This historical context suggests the current consolidation may resolve with increased directional movement as the month progresses.

Longer-term charts reveal that the 0.8720-0.8745 resistance zone previously served as support during the latter half of 2023. This role reversal from support to resistance represents a common technical phenomenon that often creates significant price reactions. The psychological importance of round numbers in forex trading further amplifies the significance of these levels, with many algorithmic trading systems programmed to respond to tests of such technical thresholds. Market memory of previous price action around these levels may influence current trader behavior and order placement.

Institutional Perspectives and Risk Scenarios

Major financial institutions offer varied perspectives on EUR/GBP’s near-term direction. Several investment banks highlight the importance of the 0.8745 level, suggesting a sustained break above could trigger momentum buying toward 0.8800. Conversely, other analysts emphasize downside risks should the pair fail to overcome current resistance, with potential declines toward 0.8600. These divergent views reflect genuine uncertainty in markets about the fundamental drivers and their relative importance.

Multiple risk scenarios could influence EUR/GBP direction in coming sessions. A breakthrough of 0.8745 resistance could trigger:

• Stop-loss buying from short positions
• Momentum-based algorithmic buying
• Increased hedging demand from corporates
• Potential for rapid movement toward 0.8800

Conversely, rejection at current levels might prompt:

• Technical selling from range-bound strategies
• Increased hedging against euro weakness
• Position unwinding by speculative accounts
• Potential test of 0.8650 support

Market Microstructure and Trading Implications

Trading volume patterns around key technical levels provide insights into market dynamics. Recent sessions show increased volume during European trading hours when the pair approaches resistance, suggesting institutional participation in these price tests. Asian session volume remains subdued, while North American participation varies with broader dollar dynamics. Liquidity conditions remain adequate, though bid-ask spreads occasionally widen during volatile periods, particularly around economic data releases from either region.

Options market activity reveals interesting positioning around current price levels. Implied volatility for at-the-money options remains elevated compared to historical averages, reflecting market uncertainty about near-term direction. Risk reversals show slight skew toward euro puts (sterling calls), indicating modest hedging demand for euro downside protection. This options market positioning provides additional context for spot price action and potential volatility events.

Conclusion

The EUR/GBP forecast remains contingent on the pair’s ability to overcome significant resistance at 0.8720 and 0.8745. Technical indicators suggest consolidation within a narrowing range, typically preceding directional movement. Fundamental factors present a mixed picture, with monetary policy expectations and economic data from both regions influencing trader sentiment. Market participants should monitor these resistance levels closely, as sustained breaks above could trigger momentum-based buying, while rejections might prompt renewed testing of support areas. The current technical setup, combined with fundamental uncertainties, creates conditions for potentially significant price movement once the consolidation phase resolves.

FAQs

Q1: What are the key resistance levels for EUR/GBP?
The primary resistance levels are 0.8720 and 0.8745. The 0.8720 level represents recent highs and trendline resistance, while 0.8745 corresponds with the 61.8% Fibonacci retracement level from January’s decline.

Q2: What fundamental factors currently influence EUR/GBP?
Monetary policy expectations from the ECB and Bank of England, economic data from both regions, interest rate differentials, and political developments in Europe and the UK all influence the pair’s direction.

Q3: What technical patterns are visible in EUR/GBP charts?
The pair shows a symmetrical triangle pattern with converging trendlines, suggesting impending volatility expansion. The price also maintains position above its 50-day moving average while facing resistance from higher time frame levels.

Q4: How does market positioning affect EUR/GBP price action?
According to Commitment of Traders reports, speculative positioning remains relatively balanced with a slight net long euro position. This balanced positioning suggests traders await clearer directional signals before establishing substantial positions.

Q5: What happens if EUR/GBP breaks above 0.8745 resistance?
A sustained break above 0.8745 could trigger momentum buying, stop-loss activation on short positions, and potentially rapid movement toward the next resistance area around 0.8800, depending on accompanying volume and fundamental developments.

This post EUR/GBP Forecast: Critical Resistance Battle Looms as Pair Hovers Below 0.8720 and 0.8745 Levels first appeared on BitcoinWorld.

– Written by


David Woodsmith

STORY LINK GBP/USD Forecast: Pound Sterling Drifts Near $1.36

The Pound to US Dollar exchange rate (GBP/USD) struggled to gain momentum on Tuesday, with renewed political uncertainty in the UK weighing on Sterling sentiment.

At the time of writing, GBP/USD was trading around $1.3679, down close to 0.2% on the session as investors remained cautious.

The Pound stayed on the back foot as markets continued to digest a turbulent period for the UK government. Confidence was shaken by the resignation of two senior aides and renewed scrutiny of Prime Minister Keir Starmer’s leadership.

Adding to the pressure, Scottish Labour leader Anas Sarwar publicly urged Starmer to step aside, reigniting debate over the Prime Minister’s grip on power. While Starmer has resisted calls to resign, attention is already shifting to the upcoming Manchester by-election, where a poor result for Labour could intensify leadership concerns and keep Sterling exposed.

The US Dollar initially traded firmer, benefiting from a broader recovery in US markets. However, the Greenback’s upside proved limited after the release of disappointing US retail sales data.

Figures showed sales growth flatlined in December, undershooting expectations for a 0.4% rise. The miss revived concerns about the strength of US consumer spending and nudged markets toward more dovish Federal Reserve rate expectations, capping USD gains.

GBP/USD Forecast: Jobs Data and UK GDP in Focus

Looking ahead, the Pound to Dollar exchange rate could see increased volatility with the release of the latest US non-farm payrolls report. Forecasts point to job growth of around 70,000 in January, up from December’s 50,000 gain.

Given the recent run of weaker labour indicators, another soft reading could reinforce expectations for Fed rate cuts and place renewed pressure on the Dollar.

For Sterling, attention will turn to Thursday’s UK GDP figures. With domestic data scarce and political risks elevated, the Pound may struggle to find clear direction unless growth data delivers a meaningful surprise.

Like this piece? Please share with your friends and colleagues:

International Money Transfer? Ask our resident FX expert a money transfer question or try John’s new, free, no-obligation personal service! ,where he helps every step of the way,
ensuring you get the best exchange rates on your currency requirements.

TAGS: Pound Dollar Forecasts

Created on February 11, 2026

The US dollar tried to rally on Tuesday but failed miserably against the Japanese yen.

USD/JPY

The US dollar initially rallied on Tuesday to break above the 50-day EMA but then fell rather significantly. At this point in time, the Japanese yen continues to strengthen, and I think part of this might be due to the fact that the elections in Japan probably were front run by the market, and I also believe that the market will eventually bounce and go higher.

The 200-day EMA sitting at the 152.37 level will be supported right along with the 152-yen level. Ultimately, I do think that buying this pair is the right thing to do but we just don’t have the setup yet. A little bit of a bounce that I can buy on the right-hand side of the V is what I’m looking for.

Long-Term Resistance and Policy Outlook

If we do break down below the 152-yen level, then the market could drop to the 148-yen level, kicking off an even deeper correction. Ultimately, this is a market that I think is going to continue to see plenty of people willing to come in and collect that swap at the end of the day.

I recognize that this has been a rough couple of days, but quite frankly, when you look at it, it is not a huge surprise because 158 yen has been important multiple times over the last couple of years. If we can break above there, it is worth noting that it is a major break that goes back to something like 1990.

If we break above there, who knows where we end up, but it is going to be much higher. I believe demographics and the fact that the Bank of Japan is essentially stuck at this point with loose monetary policy—I think that happens. But that is not going to happen easily and therefore you have to be vigilant; you have to be patient.

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.

Image © European Union, 2025. Photographer: Xavier Lejeune.

ECB would cut rates in the event of a significant rise in the euro says European bank.

ING backs ongoing gains by the dollar, but warns the European Central Bank (ECB) will have a pain threshold.

In a new research note, ING says “appetite for the dollar is waning.”

At the same time, “the strong demand for pro-cyclical currencies, including the euro, is one factor drawing money away from the US.”

Uncertainties about U.S. policy into the U.S. midterm elections in November, which the Republicans are expected to find difficult, are anticipated to be another USD headwind.

“That is certainly the message from the options market, where dollar puts are in demand,” says ING.

But because U.S. growth remains reasonably strong, we’re facing “a dollar dip, not a collapse.”

“Unless the outlook for US bond and equity market returns deteriorates substantially (not our base case), we continue to favour EUR/USD edging up to 1.22 area in an orderly manner,” forecasts ING.

However, there could be a line in the sand that policy makers won’t want crossed. “Any overshoot to 1.25 could well prompt a European Central Bank rate cut,” says ING.

The ECB tends to not comment on the euro’s value, judging that silence is in itself a compelling policy tool.

However, it does plug into inflation forecasts, and a materially stronger euro implies materially lower import costs, which would weigh on inflation and invite speculation of a cut.

🎯 EUR/USD year-ahead forecast: Consensus targets from our survey of over 30 investment bank projections. Request your copy.

The EURJPY pair lost its bullish momentum due to stochastic exit from the overbought level, which forces it to delay the previously suggested bullish rally, reaching 184.85 level to find an exit to motivate the dominance of the bearish corrective trend in the current period.

Our bullish scenario depends on forming main barrier at 186.20 level, note that the continuation of the negative pressures might force the price to suffer some losses by reaching 184.10, then attempts to press on the bullish channel’s support at 183.55, which represents a confirmation key for the next trend in the upcoming trading.

The expected trading range for today is between 184.20 and 186.00

Trend forecast: Bearish

BitcoinWorld

EUR/USD Analysis: ECB’s Cautious Stance on Strong Euro Reveals Critical Policy Dilemma

FRANKFURT, Germany – January 15, 2025: The European Central Bank maintains heightened vigilance regarding the euro’s persistent strength against the U.S. dollar, according to recent analysis from Commerzbank. This EUR/USD dynamic presents significant challenges for European monetary policymakers as they navigate complex economic crosscurrents in early 2025. Market participants closely monitor these developments, particularly as currency valuations influence inflation trajectories and export competitiveness across the Eurozone.

ECB’s Monetary Policy Framework and Currency Considerations

The European Central Bank operates within a dual mandate framework focusing on price stability and supporting economic growth. Currency valuation directly impacts both objectives through multiple transmission channels. A stronger euro typically exerts downward pressure on import prices, potentially helping to contain inflationary pressures. Conversely, currency appreciation can reduce export competitiveness, potentially dampening economic activity in export-dependent Eurozone economies.

Commerzbank’s foreign exchange strategists highlight the ECB’s delicate balancing act. They note that while the central bank doesn’t target specific exchange rate levels, policymakers carefully monitor EUR/USD movements for their macroeconomic implications. Historical data reveals that significant euro appreciation episodes have preceded periods of monetary policy adjustment, particularly when currency movements threatened to undermine the ECB’s inflation mandate.

Historical Context of ECB Currency Interventions

The European Central Bank has demonstrated varying approaches to currency strength throughout its history. During the euro’s initial decade, policymakers frequently expressed concerns about excessive appreciation. More recently, the institution has adopted a more nuanced communication strategy. Verbal interventions have replaced direct market operations as the primary tool for influencing currency perceptions.

Commerzbank’s analysis references several key historical episodes:

• 2017-2018 Appreciation Cycle: The euro strengthened approximately 15% against the dollar, prompting ECB concerns about inflation undershooting
• 2020 Pandemic Response: Currency considerations influenced the scale and composition of emergency asset purchase programs
• 2022-2023 Inflation Battle: Euro weakness contributed to imported inflation, accelerating monetary tightening

Current Economic Indicators and Policy Implications

Recent Eurozone economic data reveals several conflicting signals for policymakers. Manufacturing PMI readings remain below expansion thresholds in several member states, suggesting vulnerability to currency strength. Meanwhile, services sector activity demonstrates greater resilience. Inflation metrics show gradual moderation, though core measures remain above target levels.

Commerzbank economists emphasize that the ECB’s reaction function depends on multiple factors:

Transmission Mechanisms and Economic Impact

Currency movements affect the Eurozone economy through several well-documented channels. The trade channel represents the most direct impact, as exchange rates influence the price competitiveness of European exports in global markets. Additionally, the financial channel operates through cross-border investment flows and balance sheet effects. The confidence channel affects business and consumer sentiment, potentially influencing spending and investment decisions.

Commerzbank’s research indicates that the current EUR/USD level presents manageable challenges for most Eurozone economies. However, significant further appreciation could trigger more explicit policy responses. The analysis suggests that the 1.18-1.20 range represents a potential threshold where currency considerations might more directly influence monetary policy decisions.

Comparative Central Bank Perspectives

The ECB’s approach to currency considerations differs notably from other major central banks. The Federal Reserve typically maintains a stronger dollar policy focus, while the Bank of Japan has historically demonstrated greater willingness to intervene directly in currency markets. The Swiss National Bank represents perhaps the most active major central bank regarding currency management, regularly citing franc strength as a policy concern.

This comparative context helps explain why the ECB maintains its cautious but non-interventionist stance. Institutional mandates, economic structures, and historical experiences shape each central bank’s currency policy framework. The Eurozone’s unique multi-country composition further complicates currency policy decisions, as exchange rate effects vary significantly across member economies.

Market Implications and Trading Considerations

Foreign exchange markets exhibit heightened sensitivity to central bank communications regarding currency levels. Commerzbank’s analysis suggests that EUR/USD volatility may increase around key ECB communications, particularly press conferences following monetary policy meetings. Options market pricing indicates growing investor attention to tail risks associated with potential policy shifts.

Several factors could amplify currency market reactions in coming months:

• Diverging Monetary Policies: Differing ECB and Fed policy trajectories
• Geopolitical Developments: Trade policy shifts and international tensions
• Economic Data Surprises: Unexpected inflation or growth figures
• Technical Factors: Key support and resistance levels in EUR/USD

Conclusion

The European Central Bank maintains appropriate vigilance regarding EUR/USD strength, balancing multiple policy objectives in a complex economic environment. Commerzbank’s analysis highlights the nuanced relationship between currency valuations and monetary policy decisions. While direct intervention remains unlikely under current conditions, verbal guidance and policy adjustments may respond to significant exchange rate movements. Market participants should monitor ECB communications closely for evolving perspectives on currency considerations, particularly as economic conditions continue to evolve throughout 2025.

FAQs

Q1: Why does the ECB care about the euro’s strength?
The European Central Bank monitors currency strength because it affects inflation through import prices and economic growth through export competitiveness. While not targeting specific levels, significant movements can influence monetary policy decisions.

Q2: What exchange rate level might trigger ECB action?
Commerzbank analysis suggests the 1.18-1.20 EUR/USD range represents a potential threshold where currency considerations might more directly influence policy, though specific triggers depend on accompanying economic conditions.

Q3: How does euro strength affect different Eurozone countries?
Effects vary significantly across member states. Export-dependent economies like Germany face greater challenges from currency appreciation, while countries with higher import dependence may benefit from reduced inflationary pressures.

Q4: What tools does the ECB have to influence the euro’s value?
The primary tools are verbal interventions through official communications. The ECB can also adjust monetary policy parameters, though these decisions consider multiple factors beyond currency valuations.

Q5: How does the ECB’s approach compare to other central banks?
The ECB maintains a more restrained approach than the Swiss National Bank but shows greater currency sensitivity than the Federal Reserve. This reflects the Eurozone’s unique economic structure and policy constraints.

This post EUR/USD Analysis: ECB’s Cautious Stance on Strong Euro Reveals Critical Policy Dilemma first appeared on BitcoinWorld.