• GBP/JPY extends the overnight pullback from the vicinity of over a two-month high.
• BoJ rate hike bets and the flight to safety underpin the JPY, exerting some pressure.
• A mixed technical setup warrants caution for bulls ahead of the BoE policy decision. 

The GBP/JPY cross attracts sellers for the second successive day on Thursday and extends this week’s retracement slide from the vicinity of the 195.00 psychological mark, or over a two-month high. Spot prices weaken further below the 193.00 round figure during the Asian session and seem vulnerable to slide further amid a broadly stronger Japanese Yen (JPY).

Expectations that strong wage growth could boost consumer spending and contribute to rising inflation give the Bank of Japan (BoJ) headroom to keep hiking interest rates. Apart from this, the uncertainty over US President Donald Trump’s trade policies and geopolitical risks underpin the safe-haven JPY, which, in turn, is seen exerting pressure on the GBP/JPY cross. The British Pound (GBP), on the other hand, struggles to gain any traction as traders opt to wait for the Bank of England (BoE) decision. 

From a technical perspective, spot price earlier this week struggled to find acceptance above the very important 200-day Simple Moving Average (SMA) and the subsequent fall could be seen as a key trigger for bearish traders. That said, oscillators on the daily chart are still holding in positive territory. Adding to this, the recent breakout through the 192.50 horizontal resistance warrants some caution before positioning for any further depreciating move heading into the key central bank event risk.

In the meantime, the aforementioned resistance breakpoint could protect the immediate downside, below which the GBP/JPY cross could accelerate the slide towards the 192.00 mark en route to the 191.35-191.30 support zone. Some follow-through selling has the potential to drag spot prices below the 191.00 round figure, towards the next relevant support near the 190.45-190.40 area en route to the 190.00 psychological mark and the 189.70-189.65 region. 

On the flip side, any positive move might now confront resistance near the 194.00 round-figure mark ahead of the 200-day SMA, currently pegged around the 194.30 region. This is followed by the 194.90 region, or a multi-month peak touched earlier this week, which if cleared decisively should pave the way for additional gains. The GBP/JPY cross might then climb to the 196.00 mark en route to the 196.40 horizontal zone before aiming to reclaim the 197.00 round figure for the first time since January. 

GBP/JPY daily chart

The GBP/USDpair rose in intraday trading and pierced the resistance of $1.2985, buoyed by trading within a secondary price channel, and under the dominance of the main upward trend, with positive signals from the Stochastic after the pair vented off overbought saturation that was apparent previously, with ongoing positive support due to trading above the 50-candle SMA. 

The GBP/USDpair rose in intraday trading and pierced the resistance of $1.2985, buoyed by trading within a secondary price channel, and under the dominance of the main upward trend, with positive signals from the Stochastic after the pair vented off overbought saturation that was apparent previously, with ongoing positive support due to trading above the 50-candle SMA. 

• 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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