• The Euro has been a little bit positive in the early part of the trading session here on Thursday, but we continue to see a little bit of hesitation between the 1.18 level and the 1.1850 level.

• There are a lot of things going on, not the least of which will be the war of course in the Middle East, but the market has seen quite a bit of volatility based on positive news flow coming out of the Middle East and then eventually negative.

It’s also worth noting that the non-farm payroll announcement comes out on Friday, so you have to be a little cautious with this, recognizing that we have a situation where there will be a lot of volatility during the session on Thursday going into Friday and as a result, caution is the better part of valor.

The Impact of Non-Farm Payrolls and Fed Policy

I do think that there is going to be a very immense amount of pressure above that could cause quite a few headaches for traders who are trying to get long. 1.1850 being broken to the upside would obviously be a very bullish turn of events; it could show the EUR/USD market as ready to break higher, perhaps the 1.20 level and beyond.

That being said, what you need is a reason for the Federal Reserve to look like they are not going to stay tighter for longer. In this environment, there is a lot of positivity out there based on some comments coming out of Tehran and Washington DC, but the jobs market, if it’s still really hot, that could kill some of that US dollar weakness as it will make the Federal Reserve have to sit on its hands even longer.

If we do fall from here, I expect the 50-day EMA near the 1.1685 level to offer support. I think we’re just stuck in this compression pattern at the moment.

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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 settles in sideways range near 212.80 level, affected by the contradiction of the main indicators, to delay activating the previously suggested negative trend.

The price might recover more of the losses by its rally towards 213.50, reaching the moving average 55 near 213.85, but it will not affect the main bearish scenario, depending on the continuation of forming main barrier at 214.30 level against the current trading, note that breaking 211.80 level will ease the mission of forming strong waves, to expect reaching 211.20, repeating the pressure on 210.45 support.

The expected trading range for today is between 211.80 and 213.50

Trend forecast :fluctuated

– Written by


Tim Boyer

STORY LINK GBP/USD Forecast: Dollar Slides on Hopes for US-Iran Peace Deal

The Pound US Dollar (GBP/USD) exchange rate edged higher on Thursday, as improving risk appetite helped lift the pairing.

At the time of writing, GBP/USD was trading at $1.3622, up roughly 0.2% on the day.

The US Dollar (USD) weakened on Thursday as a firmer risk tone reduced demand for the safe-haven ‘Greenback’.

Markets were buoyed by hopes of a possible US-Iran peace agreement, after US President Donald Trump suggested a deal to end the conflict was ‘very possible’ following negotiations over the previous 24 hours.

The prospect of easing tensions in the Middle East lifted global equities and encouraged investors away from safer assets.

This left the US Dollar under pressure through Thursday’s trade, with risk-sensitive currencies advancing as the ‘Greenback’ faced broad-based selling.

The Pound (GBP) strengthened against the US Dollar on Thursday, as its increasingly risk-sensitive nature left it well placed to benefit from the brighter market mood.

However, Sterling’s gains were limited by caution ahead of the UK local election results.

Labour is widely expected to suffer setbacks, with investors watching closely to see the scale of the losses. A sharper-than-forecast defeat could intensify pressure on Prime Minister Keir Starmer, especially after some Labour MPs have already called for him to resign.

As a result, the Pound’s upside was capped, with improved risk appetite partly offset by fears that the elections could trigger renewed political uncertainty in the UK.

Near-Term GBP/USD Forecast: Pound to Face Election Fallout as US Dollar Awaits NFP Data?

Looking ahead, the UK local election results are likely to take centre stage for Pound investors on Friday.

Sterling may find support if Labour’s losses prove relatively contained, as this could calm concerns over Prime Minister Keir Starmer’s leadership.

However, a heavier defeat could revive speculation over a possible leadership challenge. If the results heighten fears of political instability in the UK, rising bond yields may add further pressure to the Pound.

At the same time, USD investors will be focused on the latest non-farm payrolls report. Economists expect US jobs growth to have slowed in April, which could strengthen bets on a Federal Reserve interest rate cut this year and drag on the ‘Greenback’.

Risk sentiment may also remain a key driver for the US Dollar. Should the market mood stay upbeat, the safe-haven ‘Greenback’ could struggle to regain ground.

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USD/JPY is moving higher as traders shrug off intervention risks and focus on higher yields in the U.S. The yield of 2-year Treasuries climbed back towards the 3.90% level, while the yield of 10-year Treasuries settled above 4.37%.

If USD/JPY settles above the 156.00 level, it will head towards the key resistance level at 158.00 – 158.50. Yesterday, BoJ defended the 158.00 level and briefly pushed USD/JPY towards 155.00.

However, the yen is fundamentally weak, and traders are ready to use pullbacks as an opportunity to buy USD/JPY. The Bank of Japan cannot intervene on a daily basis as the yen would lose the status of a free-floating currency. USD/JPY bulls bet that BoJ will be forced to move away from the forex market after several unsuccessful attempts to defend the yen.

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The US dollar has pulled back slightly against the Canadian dollar, but it still looks like it is in a basing pattern, and it is trying to find a reason to go higher. If we do drop from here, the 1.36 level might be short-term support, and the 1.3550 level most certainly is; it has proven itself multiple times. Pay attention to those US rates. If they turn around, that probably continues the bounce here.

AUD/USD Technical Analysis

The EURJPY pair reached %23.6 Fibonacci correction level at 182.00, to form strong support to provide chances for recovering some losses by its rally near 183.70 level.

In general, the bearish scenario will remain valid depending on forming main barrier by 185.45 level against the current trading, which makes us wait for gathering negative momentum, which allows it to renew the negative attempts that might target 182.80 level, to attempt to renew the pressure on 182.00 support, while breaching the main barrier and holding above it will confirm its move to a positive station, to begin targeting several positive stations by its rally towards 186.00 and 186.60.

The expected trading range for today is between 182.80 and 184.30

Trend forecast: Bearish

We have seen some big moves across financial markets today with oil prices sliding more than 10% amid optimism about a deal between the US and Iran to end the blockade in the Strait of Hormuz, before prices bounced back as fresh doubts emerged. With oil plunging earlier, stagflation worries receded sharply, and investors piled back into European stocks, metals and foreign currencies, while selling the US dollar. The USD/JPY was apparently hit again by further dollar selling from Japan overnight, causing it to drop to near the 155.00 handle. The near-term USD/JPY forecast remains tilted to downside amid ongoing FX intervention and the dollar selling, but a lot now depends on what oil prices do from here. Will the two sides agree to any deal?

Risk appetite improves as crude oil takes a plunge

Risk appetite has picked up sharply today, with equities pushing higher as oil prices slide. The move follows a string of encouraging headlines on the US-Iran front. Late yesterday, US Secretary of State Marco Rubio confirmed that “Operation Epic Fury” had concluded, with its objectives met. Shortly after, Donald Trump announced a pause to “Project Freedom”, signalling room for negotiations with Iran. This was a step markets quickly interpreted as progress towards a deal, and so oil sold off after futures re-opened. Since then, prices haven’t looked back much, with Brent sliding now to below $100.

Momentum built further on reports from Axios suggesting both sides are close to agreeing a one-page framework to end hostilities, with a response from Tehran expected within 48 hours. Unsurprisingly, that combination has fuelled optimism across risk assets. Market’s reaction suggests that the situation could soon be resolved. Let’s hope that is the case and we don’t see any fresh escalations. But for now, Brent oil was still holding above its mid-April lows, where the latest rally began when talks broke down.

Trump’s fresh ultimatum halts oil-slide

After the big drop in oil prices, Trump has just posted the following:

“Assuming Iran agrees to give what has been agreed to, which is, perhaps, a big assumption, the already legendary Epic Fury will be at an end, and the highly effective Blockade will allow the Hormuz Strait to be OPEN TO ALL, including Iran. If they don’t agree, the bombing starts, and it will be, sadly, at a much higher level and intensity than it was before. Thank you for your attention to this matter!”

Markets have reacted slightly negatively to this latest post, but essentially it doesn’t change anything. The key sticking point is whether Iran would agree to remove its highly enriched uranium from the country. That’s what the US president is presumably referring to. This is something Iran has rejected until now.

USD/JPY forecast: Attention to turn to US data

In recent days, the US dollar was regaining momentum as talks between the two sides had stalled and oil prices went high. On top of this, the Federal Reserve appeared to be gradually stepping back from its easing bias, and this was also supported by resilient US data and company earnings.

However, today, that trend has changed. While oil still remains elevated compared to pre-war levels, if the Strait of Hormuz fully reopens prices could fall even more. If so, that could further weigh on the dollar in the near term as rate cut expectations creep back higher. That should also allow attention to shift back to fundamentals.

It is worth pointing out that any sustained rebound in economic activity following any resolution could just as easily keep inflation sticky, preventing the dollar from sliding too much in the longer run.  For now, though, markets are leaning into the positive narrative, which is benefiting the EM currencies the most. The likes of the euro and yen, currencies that had come under pressure because of the oil shock, were also benefitting largely from this slide in oil prices.

Meanwhile, today’s US ADP employment report (expected at +120k) could also prove influential. A downside surprise would likely reinforce the softer dollar narrative.

For now, the tone remains tilted towards risk-on and a softer greenback, keeping the short-term USD/JPY forecast tiled to the downside.

Technical USD/JPY forecast and key levels to watch

Additional pressure on the dollar may have come from renewed Japanese activity in FX markets, as we saw renewed sudden drops in the USD/JPY overnight.

Technically, the pair has now reached and reacted from the key short-term support around 155.00-155.50 area. This is where recent lows meet the support trend of the bullish channel. A break below here could pave the way for fresh selling in the days and weeks to come, data and oil permitting. Key resistance is now at 157.50 to 158.00 area. Lots of other short-term levels in between.

— Written by Fawad Razaqzada, Market Analyst

Follow Fawad on Twitter @Trader_F_R

– Written by


Frank Davies

STORY LINK Pound Sterling to Dollar Forecast: Can GBP Sustain Gains Above 1.36?

The Pound to Dollar exchange rate (GBP/USD) has pushed above 1.3600 as markets weigh persistent geopolitical risks against growing political uncertainty in the UK.

Sterling continues to draw support from elevated UK yield expectations, but investors remain cautious ahead of this week’s local elections and key US economic data, with Middle East tensions and energy prices still dominating broader market sentiment.

GBP/USD Forecasts: Holds Above 1.3500

The Pound to Dollar (GBP/USD) exchange rate has held above 1.3500, but struggled to make much headway and traded close to 1.3550.

According to Scotiabank; “We see support around 1.3450 and look to a near-term range bound between 1.3500 and 1.3600.”

The dollar drew support from fresh concerns surrounding the Middle East situation with the Strait of Hormuz still effectively closed.

ING commented; “Unless there are clear signs of moves towards sustainable peace in the Gulf – and there is some focus that President Trump wants a deal before his trip to China on 14/15 May – we suspect high oil prices can keep short-dated US rates and the dollar bid.”

Domestically, the Pound is liable to face headwinds from political uncertainty which will be offset by support from high yields. Local elections, together with Welsh and Scottish assembly votes will be held on May 7th.

Rabobank head of FX strategy Jane Foley commented; “The biggest story for sterling since the start of this war has been the change in money market pricing of Bank of England interest rate hikes.”

Scotiabank; “The outlook for relative central bank policy is bullish for GBP as market participants consider the hawkish guidance and last week’s tightening vote from uber-hawkish Chief Economist Pill.”

The bank noted political risks; “The greatest near-term risk lies with Thursday’s local elections, seen as the latest litmus test for PM Starmer’s leadership.”

Nevertheless, it sees asymmetric risks; “Relief for Starmer (and markets) could fuel near-term strength for the pound, while disappointment would offer little to market participants already positioned for a negative outcome.”

US monetary policy will also be a potentially important influence on currencies.

The latest US jobs data will be released this week with markets also monitoring inflation pressures amid the surge in oil prices. Inflation pressures will create pressure for a tiger policy.

According to ING, the dollar could draw some support; “It’s no longer just a question of delayed Fed easing, but whether the Fed will respond to this inflation shock after all with tighter policy.”

It expects jobs data will be important this week.

MUFG is less convinced that the dollar can make headway; “The relatively dovish leadership of the Fed continues to encourage expectations that it will look through the energy price shock while European central banks are more likely to tighten policy creating a headwind for US dollar performance.”

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TAGS: Pound Dollar Forecasts