May 13, 2025 – Written by Tim Boyer

STORY LINK GBP/USD Forecast: Pound Climbs vs Dollar on Soft US Inflation Data

The Pound US Dollar exchange rate gained ground on Tuesday as the US released its latest inflation reading.

At the time of writing, GBP/USD was trading at approximately $1.3245, up roughly 0.5% from the start of Tuesday’s session.

The US Dollar (USD) came under pressure on Tuesday following the publication of a softer-than-expected US inflation print.

April’s consumer price index (CPI) showed headline inflation easing to 2.3%, down from 2.4%, marking the lowest rate in more than four years and falling short of forecasts for a steady reading.

The unexpected decline prompted traders to reassess the Federal Reserve’s policy trajectory, dragging the ‘Greenback’ lower.

Adding to the downside, a generally upbeat market mood saw investors shy away from the safe-haven currency, intensifying the USD’s losses.

The Pound (GBP) faced early pressure on Tuesday after disappointing UK labour market figures dented investor confidence.

According to the latest ONS (Office for National Statistics) report, unemployment climbed to 4.5% in March, reaching its highest level since summer 2021, while wage growth (excluding bonuses) cooled more than anticipated, slipping from 5.9% to 5.6%.

The figures fell short of forecasts and raised fresh concerns about the strength of the UK jobs market.

Despite the initial downturn, Sterling found firmer footing later in the session, particularly against safe-haven currencies like the US Dollar.

A risk-on mood helped offset earlier losses, with the Pound’s sensitivity to risk sentiment offering it modest support into the afternoon.

In the absence of fresh economic data from either side of the Atlantic, the spotlight is now on central bank commentary to drive movement in the GBP/USD exchange rate.

Following the Bank of England’s (BoE) hawkish commentary at its most recent policy meeting, further optimistic signals could offer the Pound additional support during Wednesday’s European session.

For the US Dollar, if the Federal Reserve responds to Tuesday’s cooler-than-forecast inflation figures with dovish signals, the US Dollar may come under renewed pressure as the week unfolds.

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TAGS: Pound Dollar Forecasts

EUR/USD Analysis Summary Today

• Overall Trend: In a bearish shift.
• Today’s Euro/Dollar Support Levels: 1.1050 – 1.0975 – 1.0880.
• Today’s Euro/Dollar Resistance Levels: 1.1170 – 1.1270 -1.1400.

EUR/USD Trading Signals:

• Buy the EUR/USD from the support level of 1.0970, target 1.1150, and stop 1.0880.
• Sell the EUR/USD from the resistance level of 1.1220, target 1.1000, and stop 1.1330.

EUR/USD Technical Analysis Today:

Ahead of the important US inflation figures announcement today, the EUR/USD currency pair is facing selling pressures that pushed it towards the 1.1065 support level, the lowest for the pair in a month, before stabilizing around the 1.1086 level at the start of trading today, Tuesday. Across licensed trading company platforms, selling pressure on EUR/USD increased amidst easing trade tensions between Washington and Beijing. Recently, the United States and China agreed to reduce tariffs for 90 days following talks in Geneva, representing a significant de-escalation in the trade war that erupted last month.

Under the US/China agreement, US tariffs on Chinese goods will decrease from 145% to 30%, while Chinese tariffs on US imports will decrease from 125% to 10%. In other geopolitical developments, Ukrainian President Zelensky announced his readiness to meet Russian President Putin in Turkey next Thursday, while the fragile ceasefire between India and Pakistan continued.

Overall, according to Forex market trading, this news revived risk appetite, but this time it favoured the US dollar over the Euro, as traders prepared to reassess Federal Reserve policy expectations. Analysts anticipate that Federal Reserve officials will adjust their interest rate forecasts in light of receding inflation risks following the easing of trade tensions.

Trading Tips:

Be cautious. Increasing market optimism about resolving the global trade dispute will increase the US dollar’s gains and put the Euro under stronger downward pressure.

Regarding the monetary policy of global central banks, money markets now price the European Central Bank’s deposit facility rate at 1.75% by the end of the year – returning to levels last seen in mid-April, before the ECB hinted at a possible interest rate cut to counter the potential economic repercussions of US tariffs. As of April 25, 2025, financial markets were expecting an interest rate below 1.55%, rising to 1.67% by late Friday.

Expected EUR/USD Trading Scenarios:

The most prominent bearish scenario for EUR/USD in Forex market trading is that bear control over the Euro/Dollar direction will strengthen by moving towards and below the psychological support level of 1.1000. Adding to the strength of the downward shift is the 14-day Relative Strength Index (RSI) moving strongly below the midline, with room and time to move towards stronger bearish levels before reaching the oversold zone. Following a similar path, but lagging, the MACD indicator lines are closer to the midline, increasing the chances of the current bearish shift for the EUR/USD pair.

According to the performance on the daily chart, the move of EUR/USD towards the 1.10 support will support a move towards the next stronger support levels of 1.0945 and 1.0880, respectively.

The expected bullish scenario for EUR/USD will not have an opportunity without the bulls returning the currency pair towards the resistance levels of 1.1285 and 1.1370 again; otherwise, the bearish shift for EUR/USD will remain stronger. The recent selling of EUR/USD will be influenced today by the announcement of the German ZEW Sentiment Index reading at 12:00 PM Egypt time, amidst expectations of a strong improvement in the index readings. Later the same day, the US Consumer Price Index (CPI) reading will be announced at 3:30 PM Egypt time, keeping in mind that the CPI results will affect market expectations for the future policies of the US Federal Reserve.

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• During the trading session on Monday, we have seen the British pound gap higher against the Japanese yen as there was a significant “risk on move” out there, due to the announcement that the United States and China are looking into cutting tariffs drastically and then giving themselves 90 days in which to come together with some type of agreement.
• This is obviously a very crucial thing for markets overall, because it can give you an idea that the risk appetite will either be better or worse.

Technical Analysis

The technical analysis is worth paying close attention to, because the ¥195 level is an area that began significant resistance. If we can break above the ¥196 then it opens up the possibility of the move to the ¥200 level that could very well happen. I also recognize that the gap below is going to be paid close attention to, as it typically will offer support after a move like that. The ¥193.40 level is an area that you will have to pay close attention to because of this. The 200 Day EMA sits just above the ¥192 level, which in and of itself will be crucial as well.

Risk appetite is a huge influence on how this market moves, and therefore if we see stock markets and other risk assets rally, then we could see the British pound take off against the Japanese yen which of course is a major “safety currency” for a lot of forex traders.

With this being the case, I think you’ve got a situation where we are a little extended, but if we truly take off to the upside when it comes to risk appetite due to the US/China talks, that could very well be a major boost for this pair as well, not to mention the fact that you get paid at the end of every session to hold onto it.

Begin trading our daily forecasts and analysis. Here is a list of Forex brokers in Japan to work with.

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.

May 13, 2025 – Written by David Woodsmith

STORY LINK Pound Sterling to Euro Forecast: GBP to Weaken to 1.15 vs EUR in 2025

GBP/EUR advanced to a five-week best exchange rate near 1.19. While ING sees potential further Pound Sterling gains ahead of the UK-EU summit, Nordea forecasts a gradual decline against the Euro to 1.15 by late 2025 amid weakening UK employment and cautious BoE signals.

Strong UK retail sales data and buoyant risk appetite continued to underpin the Pound on Tuesday and offset further evidence of a weaker labour market.

The Euro remained on the ropes amid a retreat in defensive support. In this environment, the Pound to Euro (GBP/EUR) exchange rate hit a fresh 5-week high at 1.1900 before a retreat to 1.1890 and will look to break this resistance area in the short term.

ING does see scope for further Pound gains ahead of the May 19th UK-EU summit; “Expect sterling to stay bid ahead of that – potentially even seeing EUR/GBP break below 0.84.” (GBP/EUR Above 1.19.)

Nordea, however, expects that GBP/EUR will fade gradually and weaken to 1.15 by the end of 2025.

There was a stronger than expected reading for retail sales with the BRC data reporting an annual 6.8% increase in like-for-like retail sales for April from 0.9% previously with sales boosted by favourable weather and a late Easter.

UK unemployment increased to 4.5% in the 3-months to March from 4.4% previously and the highest reading since the third quarter of 2021.

April Payrolls declined a provisional 33,000 for April following a 47,000 decline for March and vacancies have been declining for close to three years.

Headline wages growth slowed to 5.5% in the year to March from a revised 5.7% previously, but above expectations of 5.2%.

Markets are not expecting another rate cut at the June meeting.

According to MUFG; “Wage growth remains too high and is not consistent with the BoE’s 2.0% inflation target.”

PwC economist Paige Tao focussed on clear evidence of a slowdown; “If last month’s labour market data hinted at an early response to upcoming employer tax rises, this month’s figures confirm a clearer weakening.”

She added; “As the Bank of England continues to balance inflation risks with growing weakness in the UK growth outlook, today’s figures may indicate a green light for another rate cut at next month’s MPC meeting.”

Wages and inflation implications will remain a key element for the Bank of England.

In comments on Monday MPC member Lombardelli stated that her vote for a cut at the May meeting was finely balance and was justified as an insurance against economic slowdown due to global trade wars.

In contrast, MPC member Taylor stated that the neutral level of interest rates is 2.75-3.00% with rates, therefore still a long way above this level.

According to Taylor, erosion of business confidence has continued and that there is a sense of caution and concern. The remarks were clearly on the dovish side.

MUFG summarised; “Overall the labour market data looks consistent to us with the BoE easing policy but in a careful and gradual manner.”

The German ZEW investor confidence index surged to 25.2 for May from -14.0 previously and above consensus forecasts of -3.5.

The current conditions index, however, edged lower to -82.0 from -81.2 previously which indicated further short-term stagnation.

Danske Bank commented; “Expectations will likely rebound partly due to the less negative signals on trade barriers from the Trump administration like we saw in the Sentix indicator. Focus will thus centre on whether the current situation has deteriorated due to the tariff uncertainty.”

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TAGS: Currency Predictions Pound Euro Forecasts

May 13, 2025 – Written by Tim Boyer

STORY LINK GBP/USD Forecast: Pound Climbs vs Dollar on Soft US Inflation Data

The Pound US Dollar exchange rate gained ground on Tuesday as the US released its latest inflation reading.

At the time of writing, GBP/USD was trading at approximately $1.3245, up roughly 0.5% from the start of Tuesday’s session.

The US Dollar (USD) came under pressure on Tuesday following the publication of a softer-than-expected US inflation print.

April’s consumer price index (CPI) showed headline inflation easing to 2.3%, down from 2.4%, marking the lowest rate in more than four years and falling short of forecasts for a steady reading.

The unexpected decline prompted traders to reassess the Federal Reserve’s policy trajectory, dragging the ‘Greenback’ lower.

Adding to the downside, a generally upbeat market mood saw investors shy away from the safe-haven currency, intensifying the USD’s losses.

The Pound (GBP) faced early pressure on Tuesday after disappointing UK labour market figures dented investor confidence.

According to the latest ONS (Office for National Statistics) report, unemployment climbed to 4.5% in March, reaching its highest level since summer 2021, while wage growth (excluding bonuses) cooled more than anticipated, slipping from 5.9% to 5.6%.

The figures fell short of forecasts and raised fresh concerns about the strength of the UK jobs market.

Despite the initial downturn, Sterling found firmer footing later in the session, particularly against safe-haven currencies like the US Dollar.

A risk-on mood helped offset earlier losses, with the Pound’s sensitivity to risk sentiment offering it modest support into the afternoon.

In the absence of fresh economic data from either side of the Atlantic, the spotlight is now on central bank commentary to drive movement in the GBP/USD exchange rate.

Following the Bank of England’s (BoE) hawkish commentary at its most recent policy meeting, further optimistic signals could offer the Pound additional support during Wednesday’s European session.

For the US Dollar, if the Federal Reserve responds to Tuesday’s cooler-than-forecast inflation figures with dovish signals, the US Dollar may come under renewed pressure as the week unfolds.

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

• The US dollar has rallied rather significantly during the trading session on Monday as we kick off the week on a risk on type of note.
• That being said, a lot of this is going to be based on the idea of swap being paid at the end of every day and then, we get some type of tariff relief coming from the United States and China.
• That makes people think about risk on behavior and therefore you start to see the Japanese yen fall.

Furthermore, it’s worth noting that the United States is definitely seeing inflows during the trading session on Monday, not only in the currency markets, but also the stock market.

Short Term Pullbacks

So, with that being said, I think we’ve got a situation where short-term pullbacks offer buying opportunities like I’ve been saying for some time. I think the 140 yen level is going to end up being a massive floor in the market but do keep in the mind that if we get a lot of concern in the market again, we could see the Japanese yen strengthen.

Short-term pullbacks offer those buying opportunities I’ve been talking about, especially near the 50 day EMA. The 200 day EMA sits just below the 150 yen level, which has a lot of psychology attached to it.

So, if we can break above there, that’s a very bullish sign. But right now, I think we’ve got a situation where we’ve definitely started to see some short covering. We definitely are starting to see a certain amount of momentum. All things being equal, this is a market that I think will continue to find value hundreds, especially considering, like I said, you get paid at the end of every day.

Want to trade our USD/JPY forex analysis and predictions? Here’s a list of forex brokers in Japan to check out.

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 Euro gapped lower to kick off the trading session on Monday, only to turn around to fill the gap and then start falling again.
• We’re well below the 1.12 level, but it does look like the 50-day EMA is trying to offer a bit of support.
• Breaking down below the 50-day EMA opens up the possibility of a move to the 1.0950 level, which was a major area of demand.

Anything below there opens up the possibility of a move to the 1.0750 level. On the other hand, if we turn around and rally from here, the 1.12 level is an area of potential resistance as we have seen over the last several months, a couple of different times. Ultimately, the euro has gotten a little bit of a barrier to deal with due to the fact that the China and US trade tariff talks actually went fairly well over the weekend. And this could isolate Europe if they are not careful.

The US Will Not Be Starved of Capital

After all, a lot of this comes down to the idea of the United States starving itself of capital coming in and goods coming in, which of course will not be the case regardless. But at this point in time, Europe is starting to show signs of cracks in several places. It’s more risk on in Europe in the indices than it is the currency.

The Euro, you know, it probably settles back into the range that we had been in for several years now between 1.05 and 1.09 or so. We’ll just have to wait and see. But at this point, I’m still relatively bearish. I do recognize there may be a bounce or two, but I think going down to the 1.0950 level at the very least makes the most sense. I would not be looking to buy this market, at least not right now.

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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 continued forming bullish trading, to face 23.6%Fibonacci correction level at 159.80, forming the previously suggested main target, to notice forming mixed trading due to stochastic reach to the overbought level, which makes us prefer the domination of the sideways bias temporarily until breaching the current barrier, which allows it to target new positive stations that might begin at 196.60.

While the failure to breach the barrier might assist the price to activate the bearish correctional track, which forces the price to suffer several losses by reaching 193.85 followed by 193.30 level, to close the last price gap.

The expected trading range for today is between 194.40 and 196.60

Trend forecast: Bullish

The GBPJPY pair continued forming bullish trading, to face 23.6%Fibonacci correction level at 159.80, forming the previously suggested main target, to notice forming mixed trading due to stochastic reach to the overbought level, which makes us prefer the domination of the sideways bias temporarily until breaching the current barrier, which allows it to target new positive stations that might begin at 196.60.

While the failure to breach the barrier might assist the price to activate the bearish correctional track, which forces the price to suffer several losses by reaching 193.85 followed by 193.30 level, to close the last price gap.

The expected trading range for today is between 194.40 and 196.60

Trend forecast: Bullish

USD/JPY Technical Analysis

The US dollar has skyrocketed against the Japanese yen, although it does seem to be finding a little bit of trouble around the 148 yen level. But nonetheless, remember, people get paid to hold this currency pair. So not only were we forming a bottoming pattern around the 140 yen level, but you were collecting swap along the way. Now that some of the trade tensions seem to be disappearing, it makes perfect sense that this pair would rally.

This pair does tend to rally with risk appetite and risk appetite, according to the stock markets at least, which has gone through the ceiling during the trading session. So, I expect an attempt to get back to the 200 day EMA before it’s all said and done, with the occasional pullback offering buying opportunities.

AUD/USD Technical Analysis

The US dollar has strengthened against the Australian dollar a bit, as the Aussie initially tried to rally in celebration of perhaps Chinese growth due to the trade deal, only to turn around and fall as the US dollar has strengthened against almost everything. At this point, I’m watching the 0.635 zero level because if we break significantly below there, we are going much lower.

On the other hand, if we turn around and take out the 0.65 level to the upside on a daily close, then I think the Aussie has a chance of going all the way to 0.67 followed by 0.69. Remember though, the Australian dollar is highly levered to China, so we’ll have to see how that plays out.

For a look at all of today’s economic events, check out our economic calendar.