Natural gas price repeated their fluctuation above the extra support at $2.620, to begin forming some corrective wave, to settle near $2.800, affected by stochastic attempt to exit the oversold level.

The price may record intraday gains by its rally towards $3.000 reaching $3.180 resistance, while reaching below the extra support and providing negative close will confirm its readiness to resume the negative trend, reminding you that the stability of the negative targets near $2.390 reaching $2.250. 

The expected trading range for today is between $2.620 and $3.000

Trend forecast: Fluctuating within the bearish trend

– Written by


Tim Boyer

STORY LINK Pound Sterling to Dollar Forecast: GBP Hits 1.36 Ahead of Key US PMI Data

The Pound to Dollar exchange rate (GBP/USD) has pushed higher to around 1.3600, marking fresh upside momentum as the dollar remains under pressure following the Federal Reserve decision and cautious policy signals.

Markets are now turning their focus to the upcoming US ISM Manufacturing PMI release, with expectations for a modest improvement. The data will be crucial in determining whether GBP/USD can sustain gains above 1.36 or faces renewed dollar support.

GBP/USD Forecasts: Stall Below 1.3550

The Pound to Dollar (GBP/USD) exchange rate found support just above 1.3450 and rallied to above 1.3500 as the dollar failed to hold gains.

GBP/USD failed to hold peak levels, however, as the BoE played down the likelihood of a series of rate hikes.

According to Scotiabank; “The local range is bound between support around 1.3450 and resistance in the upper-1.35s. The longer-term trend from January 2025 is bullish.”

Oil prices surged to 4-year highs late on Wednesday following concerns that the US could engage in renewed attacks against Iran.

ING commented; “All this is raising upside risks for USD, and the end of month-end flows could unlock further upside for the greenback.” It expects GBP/USD to retreat to 1.33.

The BoE Monetary Policy Committee (MPC) held interest rates at 3.75%, in line with market expectations. There was an 8-1 vote for the decision with Pill voting for an increase to 4.00%.

The committee outlined three scenarios for the outlook with very little, limited or substantial second-round effects.

Most members were hopeful that there would be only limited second-round effects, but they did not want to dismiss the potential for much higher inflation which would require a forceful stance.

It warned that a worse-case scenario, inflation could jump to 6.2% by the first quarter of 2027.

The statement added; “Some MPC members “might prefer to act early” to stave off the risk of inflation getting stuck too high while others could prefer waiting for more evidence of that risk crystallising.”

Governor Bailey summarised; “Where we go depends on size and duration of energy shock.”

Following the statement, markets were very close to pricing in three rate hikes by the end of 2026.

Schroders Head Of Global Economics David Rees expressed some scepticism; “With some slack emerging in the labour market and growth likely to weaken if disruption drags on, we doubt the Bank will tighten unless economic activity stays strong enough to absorb it.”

The Federal Reserve held interest rates at 3.75% at the latest policy meeting, in line with consensus forecasts.

There was, however, a 8-4 vote for the decision as Miran voted for a cut while three regional Fed Presidents protested against the underlying policy easing bias.

Chair Powell stated that there was no majority for moving to a neutral bias at this time, but risks were increasing.

According to Commerzbank forex strategist Michael Pfister; “Now would be a good time to cut interest rates and Warsh should convince his colleagues on the FOMC to take such action.”

Nevertheless he added; “Yesterday’s dissenters show that this will not be easy, if he even wants to.”

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EUR/GBP Price Forecast: Bearish Hesitation Above 0.8655 Signals Persistent Downside Risk

The EUR/GBP price forecast reveals a market stuck in hesitation above the 0.8655 support level. Despite this pause, bears retain firm control over the pair. This technical standoff raises critical questions for traders monitoring the Euro and Pound Sterling. Understanding the forces behind this stalemate is essential for navigating the current landscape.

EUR/GBP Price Forecast: Technical Analysis of the 0.8655 Level

The EUR/GBP price forecast hinges on the 0.8655 mark. This level has acted as a floor since early December. However, repeated tests show weakness. The pair struggles to hold gains above this point. Each bounce lacks momentum. This pattern signals seller dominance.

Bears push the price down quickly after any minor rally. The 0.8655 level now faces increasing pressure. A break below this support would confirm the bearish outlook. Such a move could target the next floor near 0.8600. The current hesitation does not indicate strength. It reflects a market waiting for a catalyst.

Key Resistance Levels in the EUR/GBP Bearish Outlook

For the EUR/GBP bearish outlook to change, bulls must reclaim 0.8700. This level now acts as strong resistance. The 20-day moving average sits near 0.8685. It adds another barrier to upside moves. The 50-day moving average at 0.8725 reinforces the bearish structure.

Traders watch these levels closely. A failure to break above 0.8700 keeps the pressure on. The EUR/GBP price forecast suggests more downside if resistance holds. Volume analysis supports this view. Selling volume increases on dips. Buying volume remains weak on rallies.

Momentum Indicators Confirm Bearish Control

The Relative Strength Index (RSI) stays below 50. This reading confirms bearish momentum. The Moving Average Convergence Divergence (MACD) sits below its signal line. Both indicators align with the EUR/GBP bearish outlook. They show no signs of a reversal yet.

The stochastic oscillator recently entered oversold territory. This condition could trigger a short-term bounce. However, such bounces typically fail in strong downtrends. The EUR/GBP price forecast warns against chasing these moves. Wait for confirmation before entering long positions.

Fundamental Factors Driving the EUR/GBP Price Forecast

Fundamental factors support the EUR/GBP bearish outlook. The Bank of England (BoE) maintains a hawkish stance. It keeps interest rates higher for longer. This policy supports the Pound. In contrast, the European Central Bank (ECB) signals potential rate cuts. This divergence weighs on the Euro.

Economic data reinforces this gap. UK inflation remains sticky. UK services PMI stays above 50. Eurozone data shows slower growth. German industrial production contracts. These trends favor the Pound over the Euro.

The EUR/GBP price forecast reflects this fundamental reality. The market prices in a weaker Euro outlook. Any ECB dovish comment could accelerate the decline. Traders should monitor central bank speeches closely.

Geopolitical and Risk Sentiment Influences

Risk sentiment also affects the EUR/GBP bearish outlook. The Euro often suffers during risk-off periods. Recent geopolitical tensions increase safe-haven demand for the Pound. This dynamic adds to the pair’s downside pressure.

Brexit-related headlines occasionally cause volatility. However, their impact has diminished. The market now focuses on monetary policy divergence. The EUR/GBP price forecast will likely follow this trend for weeks.

Trading Strategy for the EUR/GBP Bearish Outlook

Develop a clear strategy based on the EUR/GBP price forecast. Short positions offer the best risk-reward ratio. Enter near resistance levels around 0.8680-0.8700. Place stops above 0.8725. Target the 0.8600 area for initial profits.

Consider these key points for your trading plan:

• Resistance zone: 0.8680 to 0.8700
• Stop-loss level: Above 0.8725
• First target: 0.8600
• Second target: 0.8550
• Support level: 0.8655 (critical)

A break below 0.8655 triggers additional selling. This move could accelerate the decline. The EUR/GBP price forecast supports a bearish bias until key resistance breaks.

Risk Management Considerations

Risk management remains crucial. The EUR/GBP bearish outlook includes potential for sharp reversals. News events can trigger sudden moves. Keep position sizes small. Use trailing stops to protect profits.

Avoid adding to losing positions. The market may consolidate before breaking lower. Patience pays in this environment. Wait for clear signals before acting. The EUR/GBP price forecast does not guarantee immediate movement.

Comparison with Other Currency Pairs

The EUR/GBP bearish outlook contrasts with other Euro pairs. EUR/USD shows more range-bound behavior. EUR/JPY benefits from Yen weakness. This comparison highlights the Pound’s relative strength.

Traders can use this information for pair selection. Focus on EUR/GBP for directional bearish trades. Other pairs may offer different opportunities. The EUR/GBP price forecast provides a clear bearish signal not seen elsewhere.

Historical Context of the 0.8655 Level

The 0.8655 level has historical significance. It acted as resistance in August 2022. It later became support in March 2023. The price respected this level multiple times. This history adds weight to its importance.

A break below 0.8655 would mark a major shift. It would open the door to levels not seen since 2022. The EUR/GBP price forecast considers this possibility. Traders should prepare for such a scenario.

Expert Insights on the EUR/GBP Bearish Outlook

Market analysts share a cautious view. Most expect the EUR/GBP bearish outlook to persist. They cite the interest rate differential as the main driver. The BoE-ECB policy gap will likely widen further.

Some experts note the potential for a short-term squeeze. Positioning data shows heavy short bets. A sudden reversal could trigger a sharp rally. However, this scenario remains unlikely without a catalyst. The EUR/GBP price forecast leans bearish for now.

Timeline and Potential Catalysts

Key events could shift the EUR/GBP price forecast. The BoE meeting in February may provide clarity. Any hints of rate cuts would weaken the Pound. The ECB meeting in March could confirm or delay cuts.

UK GDP data releases also matter. Strong growth supports the Pound. Weak data could change the outlook. Eurozone inflation figures will influence ECB decisions. Traders should mark these dates on their calendars.

Conclusion

The EUR/GBP price forecast highlights hesitation above 0.8655 with bears firmly in control. Technical indicators, fundamental factors, and market sentiment all point lower. A break below support could trigger significant downside. Traders should maintain a bearish bias while managing risks carefully. The pair’s direction depends on central bank policies and economic data. Stay informed and trade accordingly.

FAQs

Q1: What does hesitation above 0.8655 mean for the EUR/GBP price forecast?
It means the pair struggles to move higher despite holding support. This indicates seller dominance and potential for a breakdown.

Q2: Why do bears remain in control of EUR/GBP?
Bears control the pair due to interest rate divergence. The BoE keeps rates high while the ECB signals cuts. This supports the Pound over the Euro.

Q3: What is the next key support level below 0.8655?
The next major support lies near 0.8600. A break below 0.8655 targets this level. Further downside could reach 0.8550.

Q4: How can I trade the EUR/GBP bearish outlook?
Sell near resistance at 0.8680-0.8700. Place stops above 0.8725. Target 0.8600 initially. Use proper risk management.

Q5: What could reverse the EUR/GBP price forecast?
A hawkish ECB surprise or a dovish BoE shift could reverse the outlook. Strong Eurozone data or weak UK data might also change the trend.

This post EUR/GBP Price Forecast: Bearish Hesitation Above 0.8655 Signals Persistent Downside Risk first appeared on BitcoinWorld.

– Written by


David Woodsmith

STORY LINK Pound Sterling to Dollar Forecast: GBP Below 1.35 After Fed Holds Rates

The Pound to Dollar exchange rate (GBP/USD) has edged lower to around 1.3485 after the Federal Reserve held interest rates steady, with markets reacting to a cautious tone and ongoing uncertainty surrounding the Iran situation.

Sterling struggled to hold recent highs near 1.36 as the dollar found modest support following a split policy signal from the Fed, while investors remain wary over whether GBP/USD can sustain upside momentum amid lingering geopolitical and economic risks.

GBP/USD Forecasts: Near 1.35

The Pound to Dollar (GBP/USD) exchange rate found support close to 1.3460 on Tuesday and moved back to the 1.3500 area with caution ahead of key central bank meetings and an on-going focus on energy prices.

Scotiabank commented; “We remain neutral absent a break of the local range roughly bound between 1.3450 and the mid/ upper-1.35s.

Nevertheless, the bank added; “The recent widening of UK-US spreads is extending and threatening fresh highs, offering fundamental support to the GBP. The longer-term trend from January 2025 remains bullish.”

There has been further upward pressure on oil prices with Brent hitting 3-week highs near $107 p/b. There has been no headway in re-opening the Strait of Hormuz which will have a growing impact in squeezing global supply as inventories continue to decline.

Higher energy prices will tend to hamper GBP/USD.

The Federal Reserve will announce the latest policy decision on Wednesday. There are very strong expectations that interest rates will be held at 3.75%.

There will be no updated economic forecasts at this meeting with the focus on the statement and Chair Powell’s comments.

ING commented; “The latest signs from the Middle East are not encouraging. While Powell’s signals may be taken with some caution, given that this should be his last press conference, the risks are that he errs on the hawkish side.”

This is Powell’s last scheduled meeting as Chair with nominee Warsh due to take charge at the next meeting, assuming that he is confirmed in time.

Powell, however, still has a position as Governor. Commonwealth Bank of Australia currency strategist Carol Kong commented; “The question is what Powell is going to do, because he still holds the governor seat until 2028.”

She added; “Powell has previously said that he will stay on if he thinks that Fed independence is under threat, so I think his decision will depend on his perception of Fed independence.”

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Copper price ended the last corrective decline by reaching the target at $5.8100, forming an obstacle against the negative trading, to notice its sideways fluctuation near $5.8500.

The contradiction of the main indicators might reduce the chances of forming bullish waves, specifically by forming extra barrier at $5.9700 level, while providing negative momentum by stochastic might push the price to break $5.8100 level, which forces it to suffer extra losses that might extend towards $5.7000 and $5.5900.

The expected trading range for today is between $5.7000 and $5.9100

Trend forecast: Bearish

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The ECB’s ‘hawkish’ tone won’t eclipse building fears about oil price dynamics.

The euro-dollar exchange rate will find little support from the European Central Bank (ECB) owing to a deterioration in geopolitical sentiment and oil markets.

The ECB is expected to strike a ‘hawkish’ tone later today and hint at rate rises, which would usually benefit euro-dollar. However, ahead of the event brent crude oil prices are trading at four-year highs at $126 a barrel.

It’s reported Thursday that U.S. President Donald Trump will soon receive a briefing on new military options for action in Iran as negotiations are apparently going nowhere.
The rise in oil prices signals markets are positioning for fresh escalation and the realisation that there’s no imminent reopening of the Strait of Hormuz, the key shipping lane through which about a fifth of the world’s oil and natural gas flows.

“With the latest deterioration in market sentiment about the Middle East conflict, we don’t think the ECB will be hawkish enough to lift EUR/USD on its own,” says Francesco Pesole, FX Strategist at ING Bank. “Unless oil starts turning lower today, risks remain towards a move to 1.160.”

The U.S. President has made it clear he wants Iran to completely abandon ambitions to build a nuclear weapon, which Tehran’s leadership – now dominated by the military – refuses to do.

“The oil market has moved from ignoring headlines and hoping for resolution to fixating squarely on the physical scarcity and long-term threat to supply with the possible escalation of conflict now looming,” says Neil Wilson, UK Investor Strategist at Saxo Bank.

The Eurozone is a net importer of oil and gas, meaning its economy is particularly exposed to higher import prices. The U.S. is a net exporter of oil, and is now the primary supplier to the Eurozone.
For euro-dollar, that dynamic is a headwind.

“The higher oil climbs, the more it weighs on European assets and the EUR/USD outlook,” says Fawad Razaqzada, Market Analyst at City Index.