• USD/JPY rebounded sharply from 140.00 to 148.65 but quickly reversed, showing signs of a failed bullish breakout amid profit-taking and technical resistance.
• The Bank of Japan held rates steady and cut its growth forecast, reinforcing expectations of a slower pace of policy normalization in 2025.
• US-Japan 10Y and 2Y yield spreads continue to narrow, putting downside pressure on USD/JPY and signalling weakening dollar-yen fundamentals.
• Bearish momentum resurfaced in USD/JPY, but a break above 149.00 would invalidate the bearish scenario and open the door to 151.30–154.50.

This is a follow-up analysis of our prior report “”, dated 17 April 2025.

Since our last publication, the has staged an initial push down to test the first medium-term support zone of 140.30/140.00, as highlighted (it printed an intraday low of 139.89 on 22 April).

Before the expected relief US dollar bounce took shape, the USD/JPY rallied by 4.4% to hit an intraday high of 145.93 on 2 May.

A setback occurred, causing it to slide towards an intraday low of 142.35 on 6 May.

A Pause in JPY Strength Due to BoJ and Risk-On Sentiment

The initial two weeks of US dollar strength against the Japanese yen have been reinforced by the recently concluded Bank of Japan (BoJ) monetary policy decision meeting last Thursday, 1 May. The BoJ switched into a “dovish hold” stance by keeping its short-term policy unchanged at 0.5% but slashed its current fiscal year growth forecast to 0.5% from 1.1%, citing trade tariff uncertainty.

However, the Japanese yen’s strength against the US dollar was short-lived as the USD/JPY managed to propel higher by 4.4% to hit a high of 148.65 on Monday, 12 May, triggered by a renewed bout of risk-on sentiment over the growing optimism of US-China trade tensions de-escalation.

BoJ’s Normalisation Monetary Policy Is Likely to Be Less Hawkish

Fig 1: Japan implied forward short-term interest rate curve as of 15 May 2025 (Source: Macro Micro)

Market expectations for Bank of Japan rate hikes in 2025 have softened compared to three months ago. The forward-implied short-term policy rate, derived from interest rate futures, has shifted lower, now projected at 0.66% by December 2025, down from 0.83% previously. However, this remains slightly above the 0.57% level seen just a month ago (see Fig 1).

However, other factors can support a potential resurgence of Japanese yen strength.

US Treasuries-JGBs Yield Spreads Remain Below Key Resistances

Fig 2: 10-YR & 2-YR yield spreads of US Treasuries/JGBs medium-term trends as of 16 May 2025 (Source: TradingView)

Since 6 January 2025, the and yield spreads of the US Treasury notes over Japanese Government Bonds (JGBs) have continued to narrow (trended downwards) below their respective key medium-term pivotal resistances of 3.60% and 3.84%, respectively.

If their downward trajectory remains intact, the 10-year and 2-year yield spreads of the US Treasury notes over JGBs may see further downside towards 2.47% and 2.90% next, which in turn may trigger further downside pressure on the USD/JPY (see Fig 2).

A Failure Bullish Breakout in the USD/JPY Technical Chart

Fig 3: USD/JPY medium-term trend as of 16 May 2025 (Source: TradingView)

The USD/JPY’s swift intraday rally of 2.1% seen on Monday, 16 May, is the best single-day gain of the USD/JPY since 17 June 2022.

Interestingly, the bullish momentum of the US dollar’s strength was short-lived, and the USD/JPY staged a decline of -2.5% to print an intraday low of 144.92 on Friday, 16 May at the time of writing, which wiped out its initial gains (see Fig 3).

In addition, the price actions of the USD/JPY have reintegrated back below its 50-day moving average and the medium-term descending trendline from its 10 January 2025 swing high, coupled with a bearish momentum condition being flashed out on its daily RSI momentum indicator.

Hence, the rally of 16 May is likely considered a “head fake” failure, a bullish breakout. Watch the 149.00 key medium-term pivotal resistance (also the key 200-day moving average), and a break below the 144.10 key intermediate support may see further weakness on the USD/JPY to retest 140.30/140.00 medium-term support in the first step before exposing the next medium-term supports at 138.90 and 137.10/136.50.

On the other hand, a clearance above 149.00 invalidates the bearish scenario for a recovery towards the next medium-term resistances at 151.30 and 154.50.

Original Post

The GBPJPY pair affected by the bearish correctional bias domination, to settle near the support at 193.15, the continuation of the main indicator’s contradiction might force the price to provide new mixed trading, but its stability above the mentioned support will increase the chances for renewing the bullish attempts, which targets 194.55 level, to extend the trading towards the next resistance at 195.70.

In case reaching below the current support, we recommend the neutrality and monitoring the price behavior due to the factors that assist to decrease the negativity, starting from the moving average 55 stability below the current trading and its stability near 192.05, besides the continuation of forming a solid support at 191.40 level, to decrease the chances for renewing the negative attack on the upcoming trading.

The expected trading range for today is between 193.00 and 194.55

Trend forecast: Bullish

The GBPJPY pair affected by the bearish correctional bias domination, to settle near the support at 193.15, the continuation of the main indicator’s contradiction might force the price to provide new mixed trading, but its stability above the mentioned support will increase the chances for renewing the bullish attempts, which targets 194.55 level, to extend the trading towards the next resistance at 195.70.

In case reaching below the current support, we recommend the neutrality and monitoring the price behavior due to the factors that assist to decrease the negativity, starting from the moving average 55 stability below the current trading and its stability near 192.05, besides the continuation of forming a solid support at 191.40 level, to decrease the chances for renewing the negative attack on the upcoming trading.

The expected trading range for today is between 193.00 and 194.55

Trend forecast: Bullish

Gold price struggles to capitalize on the previous day’s solid rebound from over a one-month low and consolidates below the $3,250 level during the Asian session amid the US-China trade deal optimism. Meanwhile, signs of easing inflation in the US and weaker consumer spending data lift Fed rate cut bets. The outlook drags the US bond yields lower and undermines the USD, supporting the non-yielding yellow metal.

May 15, 2025 – Written by David Woodsmith

STORY LINK Euro to US Dollar Forecast: EUR Drifts Into “Bearish Territory”

The Euro to Dollar exchange rate (EUR/USD) has fluctuated around 1.1200 on Thursday and settled close to this level after the raft of US data.

Scotiabank notes that overall volatility has eased and added; “Near-term support is expected below 1.1100 and recent resistance has been observed above 1.1250.”

According to ING; “We see EUR/USD trading in a 1.11-1.15 range over the coming weeks and months, although risks are skewed to the upside. 1.1265 is now decent intra-day resistance.”

US retail sales increased 0.1% for April, in line with consensus forecasts and followed an upwardly-revised 1.7% gain the previous month. Underlying sales also increased 0.1% on the month, but the control group recorded a 0.2% monthly decline compared with expectations of a 0.3% gain.

Producer prices declined 0.5% for the month compared with expectations of a 0.2% gain while core prices declined 0.4%.

There was no significant shift in interest rate expectations following the data.

As far as business confidence is concerned, the New York manufacturing index edged lower to -9.2 for May from -8.1 previously.

Companies were marginally more positive on the outlook with mixed inflation pressures.

The Philadelphia Fed index improved to -4 for May from -26.4 in April while there was stronger upward pressure on prices. Companies were notably more optimistic over the outlook with on-going inflation pressures.

The dollar’s fundamental outlook remained a key market focus. US bond yields edged lower as markets considered the longer-term fiscal outlook.

According to ING; “The topic involves a lot of speculation about what might happen, but the evidence is also starting to support the diversification thesis.”

There was evidence of strong buying of Japanese bonds and equities for the month.

ING added; “instead of April being a month of deleveraging and global asset managers merely downscaling and repatriating, April proved a month of diversification into Japanese assets by foreign accounts. That looks like a big tick in the box of the diversification element of de-dollarisation.”

The US Treasury has denied that it is looking to weaken the dollar, but Commerzbank is not convinced and considers that there are slightly more subtle ways of achieving the objective.

It noted; “it can also be achieved with a sufficient number of bilateral agreements. One with South Korea, one with Japan, and so on. Now, it is by no means plausible that these countries want to revalue their own currencies against the dollar. But it is easier – at least from the perspective of the US president and his ‘neorealist’ advisors – to force them to do so one by one.”

Danske Bank added; “a negative risk premium remains embedded in the USD, which continues to trade meaningfully away from fundamentals and pre-Liberation Day levels, reflecting eroding confidence in the greenback.”

It added; “Longer term, structural challenges like US and euro area political shifts, trade uncertainty, and capital rotation out of US assets suggest considerable USD downside.”

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TAGS: Currency Predictions Euro Dollar Forecasts

May 15, 2025 – Written by Frank Davies

STORY LINK Pound-to-Dollar Forecast: GBP Advances vs USD on Slowing US Retail Sales

The Pound US Dollar exchange rate gained ground on Thursday as the US released its latest retail sales index and the UK released its latest GDP reading.

At the time of writing, GBP/USD was trading at approximately $1.3300, up roughly 0.3% from the start of Thursday’s session.

The US Dollar (USD) weakened across the board on Thursday as markets reacted to discouraging retail sales figures from April.

Consumer spending growth nearly came to a halt last month, with the retail sales index slipping sharply from March’s 1.5% reading to just 0.1%, coming in only slightly above forecasts for flat growth.

This underwhelming performance added to growing concerns about the US’s economic outlook, especially on the back of Tuesday’s subdued inflation reading.

The US Dollar came under additional strain after data showed a surprise dip in producer prices for April, marking the first time producer inflation had fallen since 2023, and deepened worries about weakening inflationary momentum in the US economy.

As investor confidence waned, the Dollar faced renewed pressure and retreated against most major currencies.

The Pound (GBP) strengthened on Thursday following the release of upbeat UK growth figures for Q1 2025.

Official data from the Office for National Statistics (ONS) showed the economy expanded by 0.7% over the first three months of the year, exceeding forecasts and registering the strongest performance among the G7 nations.

The unexpected acceleration in growth helped bolster confidence in the UK’s economic outlook, lending support to Sterling during the day’s European trading session.

As the week draws to a close, attention for the GBP/USD exchange rate is expected to shift towards upcoming US economic data.

The University of Michigan’s preliminary consumer sentiment reading for May is due for release, with projections suggesting sentiment will remain subdued, hovering near the lowest levels since July 2022, as noted in last months report.

If the index holds at these levels, it could weigh on the US Dollar (USD) by further fuelling concerns over the resilience of the American economy.

Meanwhile, with no notable UK data scheduled for Friday, Sterling may struggle to find a clear trajectory, potentially leading to more subdued or directionless movement in the GBP/USD pairing.

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TAGS: Pound Dollar Forecasts

Major Currency Pairs Forecasts: this analysis focuses on four major currency pairs: EUR/USD, USD/JPY, GBP/USD, and USD/CHF. Understanding the factors influencing these pairs can provide insights into potential future movements.

EUR/USD Forecast

The EUR/USD pair is the most traded currency pair globally, representing the economic relationship between the Eurozone and the United States. Several factors influence its movement:

Economic Indicators
The economic health of both the Eurozone and the U.S. plays a crucial role in determining the direction of this pair. Key indicators include GDP growth, employment figures, and inflation rates. Recent trends suggest that while the U.S. economy has shown resilience, the Eurozone faces challenges such as slower growth and inflationary pressures.

Central Bank Policies
The European Central Bank (ECB) and the Federal Reserve (Fed) have differing monetary policies that significantly impact the EUR/USD exchange rate. If the Fed continues to adopt a hawkish stance while the ECB remains dovish, the U.S. dollar may strengthen against the euro. Conversely, any shift towards tighter monetary policy by the ECB could bolster the euro.

Market Sentiment
Market sentiment, influenced by geopolitical events and economic forecasts, can lead to volatility in the EUR/USD pair. Traders often react to news regarding trade relations, political stability, and economic forecasts, which can create short-term fluctuations.

USD/JPY Forecast

The USD/JPY pair is heavily influenced by interest rate differentials between the U.S. and Japan, as well as broader market sentiment.

Interest Rate Differentials
The Bank of Japan (BoJ) has maintained a low-interest-rate environment for an extended period, while the Fed has been more aggressive in adjusting rates. This divergence can lead to a stronger U.S. dollar against the Japanese yen, particularly if the Fed signals further rate hikes.

Safe-Haven Demand
The Japanese yen is often viewed as a safe-haven currency. During times of global uncertainty or market volatility, demand for the yen may increase, leading to appreciation against the U.S. dollar. Conversely, if market sentiment improves, the yen may weaken as investors seek higher returns elsewhere.

Economic Data Releases
Key economic data from both the U.S. and Japan, such as employment reports and inflation data, can significantly impact the USD/JPY pair. Positive data from the U.S. may strengthen the dollar, while disappointing figures from Japan could lead to yen depreciation.

GBP/USD Forecast

The GBP/USD pair, often referred to as “Cable,” is influenced by various factors, including economic performance, political developments, and market sentiment.

Economic Performance
The economic outlook for the United Kingdom is critical for the GBP/USD pair. Factors such as GDP growth, inflation, and employment rates can influence the strength of the British pound. Recent economic challenges, including those related to Brexit, have created uncertainty, which can lead to volatility in this pair.

Political Developments
Political events, particularly those related to Brexit negotiations and domestic policies, can have a profound impact on the GBP/USD exchange rate. Any signs of progress or setbacks in negotiations can lead to significant fluctuations in the pound’s value.

Market Sentiment
Market sentiment plays a crucial role in the GBP/USD pair’s movements. Traders often react to news regarding economic forecasts, political stability, and global market trends. A shift in sentiment can lead to rapid changes in the exchange rate.

USD/CHF Forecast

The USD/CHF pair represents the relationship between the U.S. dollar and the Swiss franc, another currency often viewed as a safe haven.

Economic Stability
Switzerland’s economic stability and strong financial system contribute to the Swiss franc’s appeal. In times of global uncertainty, the franc may appreciate against the U.S. dollar as traders seek refuge in stable currencies.

Central Bank Policies
The Swiss National Bank (SNB) maintains a cautious approach to monetary policy, often keeping interest rates low. If the Fed continues to raise rates, the U.S. dollar may strengthen against the franc. However, any unexpected moves by the SNB could lead to volatility in the USD/CHF pair.

Geopolitical Factors
Geopolitical events can significantly impact the USD/CHF exchange rate. Tensions in global markets or economic crises can lead to increased demand for the Swiss franc, resulting in appreciation against the dollar.

Conclusion

The major currency pairs—EUR/USD, USD/JPY, GBP/USD, and USD/CHF—are influenced by a complex interplay of economic indicators, central bank policies, and market sentiment. As traders navigate this dynamic landscape, staying informed about economic developments and geopolitical events will be crucial for making informed decisions. Understanding these factors can provide valuable insights into potential future movements in these key currency pairs.

When considering shares, indices, forex (foreign exchange) and commodities for trading and price predictions, remember that trading CFDs involves a significant degree of risk and could result in capital loss.

Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice.

EUR/USD Analysis Summary Today

• Overall Trend: Moving after breaking the upward trend.
• Today’s Euro/Dollar Support Levels: 1.1130 – 1.1070 – 1.0980.
• Today’s Euro/Dollar Resistance Levels: 1.1230 – 1.1300 -1.1380.

EUR/USD Trading Signals:

• Buy the EUR/USD from the support level of 1.1020, target 1.1300, and stop 1.0940.
• Sell the EUR/USD from the resistance level of 1.1280, target 1.1000, and stop 1.1370.

EUR/USD Technical Analysis Today:

During yesterday’s trading session, bulls attempted a rebound in the EUR/USD currency pair, reaching the 1.1265 resistance level before quickly returning to stabilize around the 1.1170 level at the start of today’s Thursday session. The US dollar remains stronger against other major currencies amidst a recent easing of US-China and European trade tensions. The recent gains of the US dollar pushed the EUR/USD pair towards the 1.1065 support level. Amid the performance of the most traded currency pair in the Forex market, trading experts believe that the Euro/Dollar will face difficulty in making further progress; they anticipate some stability around the 1.120 level in EUR/USD in the coming days. During the current quarter, they expect a range for EUR/USD between the 1.10 support level and the 1.15 resistance level.

Trading Tips:

Be cautious. The direction of the EUR/USD will remain subject to some volatility if US policies continue to threaten the future of global economic recovery.

Technical Levels for EUR/USD in the Coming Days:

According to trading across licensed currency trading company platforms and based on the daily timeframe chart performance, the EUR/USD pair is in a phase of breaking the overall upward trend, and breaking the 1.10 support will remain important for the strength of bear control over the direction. After the recent losses, the 14-day Relative Strength Index (RSI) stabilized below the midline, preparing for a bearish shift. At the same time, the MACD indicator confirms the start of a downward move but has not yet reached the oversold stage.

Current EUR/USD trading will be on an important date with a package of European economic releases, led by the announcement of the Eurozone GDP growth reading, along with the industrial production rate and the change in employment for the bloc’s countries, all at 12:00 PM Egypt time. Then, during the more important US session, the US Producer Price Index (PPI) reading, US retail sales figures, and the number of weekly jobless claims will be announced, all at 3:30 PM Egypt time, followed minutes later by new statements from US Federal Reserve Governor Jerome Powell.

Be careful; the reaction to these data results will affect the performance of the EUR/USD price and may shape the future weekly close of the currency pair. Technically, a bullish EUR/USD scenario requires stability above the 1.1370 resistance level once again. Overall, while declining trade tensions provide support for the US dollar in the near term, the risk of a rapid deterioration in incoming data remains. We emphasize that concerns about the outlook for stable US data are valid, and that asset allocation shifts away from US assets remain a headwind for the US dollar in the medium and long term. Commenting on currency exchange rates, German Bundesbank President Nagel noted: “The dollar is very important for the global financial system, and we still need a strong dollar

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May 15, 2025 – Written by Tim Boyer

STORY LINK GBP/USD Forecast: Pound GDP Boost Fades, Dollar Eyes Bonds

The Pound Sterling initially gained against the Euro and U.S. Dollar following the latest GDP data, but GBP was unable to make further headway with concerns that the data overstated the underlying performance.

Equity markets were also weaker which limited potential support, but the US Dollar remained fragile.

The Pound to Dollar exchange rate (GBP/USD) failed to hold 1.3300 and retreated to 1.3285 with evidence of buying on dips.

The dollar overall has struggled to hold gains amid fresh concerns that the combination of huge supply of US bonds and the risk of fading global demand for Treasuries will trigger higher yields and a weaker dollar.

ING is positive on the short-term GBP/USD outlook; “With the dollar looking a bit vulnerable, GBP/USD looks biased to the 1.3360/3400 area short term.”

UK GDP grew 0.7% for the first quarter of the year after a 0.1% gain for the final three months of 2024 and compared with expectations of 0.6% growth.

According to the provisional data, the UK first-quarter performance was the strongest within the G7 area.

Budget concerns will ease slightly, although there are still important underlying stresses in meeting the government’s fiscal rules.

ING noted potential seasonal distortions in the data, but considers the outlook is broadly encouraging.

The bank added; “the UK outlook does look ‘ok’, even if first-quarter GDP probably heavily overstates the underlying pace of growth. Uncertainty surrounding global trade is a headwind, though the direct impact of tariffs on the UK looks negligible. Remember too that government spending is rising significantly this year and that will be a firm tailwind.”

Exports were also boosted by shipments ahead of US tariffs.

According to Paul Dales, chief UK economist at Capital Economics; “Overall, the main reason why GDP was stronger than everyone expected appears to be because US and UK tax changes meant that more activity was pulled forward into Q1 from Q2 than everyone expected, rather than because the UK economy is fundamentally stronger.”

US developments are likely to be crucial later in the session.

Retail sales data will be released and there are also two important regional surveys with the New York and Philadelphia Fed data. There were sharp declines for April and the May data will be important for wider confidence in the US outlook.

US bond yields have also moved higher with markets fretting over the implications of huge budget deficits and the Republican tax bill.

The 10-year yield is above 4.50% with the 30-year yield near 5.00% and close to levels which triggered a U-turn on reciprocal tariffs in April.

Significantly, higher US yields have not supported the dollar.

Rabobank commented, “Perhaps we are about to find out whether it really was rising bond yields that forced the about-face on those reciprocal tariffs, or if Scott Bessent has some other rabbit to pull out of his hat to force long yields lower.”

MUFG noted the risk that bond-market fears would lead to Truss-style difficulties for the dollar.

Looking at the proposed legislation it added; “Much of the cost of this bill is merely to extend the status quo and other aspects could easily be crowded out by yields being higher than otherwise would be. That in our view means this development will not prove positive for the dollar.”

SocGen commented; “I’m sure that President Trump, with his desire to rebuild the global trade framework, is in favour of a less expensive dollar.

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• The euro initially did try to rally against the US dollar but really has struggled quite a bit during the trading session.
• Above the 1.12 level, the 1.12 level is an area that I had been talking about in the past.
• I think it does make a certain amount of sense that we continue to pay close attention to it due to the fact that when you look at the last couple of years, it’s been a major area of resistance.

We had a little bit of a throw over here in the last couple of weeks, but we also had one at the end of last year to the downside. So, the question is, are we re-entering this area yet again? It’s very possible. That’s exactly what happens. We’ll just have to wait and see. But I do think that you have to basically take this market as one that I think got a little overdone and therefore it does make a certain amount of sense that we pull back at the very least. That doesn’t necessarily mean that I am looking for a major meltdown, but I do think that a return to the 50-day EMA near the lows of the past couple of trading sessions is very viable.

On Further Selling

And then if we break down below there, we could be looking at the 1.0950 level, an obvious area of both support and resistance over the longer term. To the upside, if we do take out the 1.13 level, then we could start looking at the 1.15 level again, an area that has a certain amount of importance from both psychology and the longer term charge.

All things being equal with the interest rates in America climbing the way they did, it makes perfect sense that the US dollar continues to attract inflows.

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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.