• GBP/USD fluctuates in a tight range below 1.3500 on Friday.
• The near-term technical picture highlights the pair’s indecisiveness.
• The US economic calendar will feature PCE inflation data for April.

GBP/USD managed to rebound from the multi-day low it set early Thursday and ended the day with small gains. The pair struggles to gather directional momentum early Friday and trades in a narrow band below 1.3500.

The US Dollar (USD) failed to preserve its strength on Thursday as the Court of Appeals for the Federal Circuit decided to reinstate US President Donald Trump’s reciprocal tariffs, which were blocked by the Court of International Trade on Wednesday.

Additionally, the worse-than-expected weekly Initial Jobless Claims data further weighed on the USD, allowing GBP/USD to shake off the bearish pressure.

The US economic calendar will feature the Personal Consumption Expenditures (PCE) Price Index data, the Federal Reserve’s preferred gauge of inflation, for April later in the day.

Markets expect the core PCE Price Index, which excludes volatile food and energy prices, to rise by 0.1% on a monthly basis in April after remaining unchanged in March. In case the data comes in at 0.3%, or higher, investors could see this as a development that could delay the Federal Reserve’s next rate cut to beyond July. In this scenario, the USD could outperform its rivals and cause GBP/USD to push lower. On the other hand, a negative print in this data could feed into market expectation for a July rate cut and hurt the USD.

According to the CME FedWatch Tool, markets are currently pricing in about a 25% probability of a 25 basis points reduction in the policy rate in July.

GBP/USD Technical Analysis

The Relative Strength Index (RSI) moves sideways slightly below 50 and GBP/USD trades at around the 50-period and the 20-period Simple Moving Averages (SMA) on the 4-hour chart, reflecting a lack of directional momentum.

On the upside, 1.3500 (mid-point of the ascending channel, round level) could be seen as the first resistance level ahead of 1.3600 (end-point of the uptrend).

Looking south, interim support could be seen at 1.3430 (static level) before 1.3380-1.3370, where the Fibonacci 23.6% retracement level, the 20-day Simple Moving Average (SMA) and the 100-period SMA on the 4-hour chart align. A daily close below this area could attract technical sellers and open the door for another leg lower toward 1.3300 (static level, round level).

EUR/USD Technical Analysis

The euro initially tried to rally a bit during the early hours on Friday, only to see the market turn around and fall apart. By doing so, the market looks very much like it is still stuck with consolidation here. And I think we are probably trying to settle into a new range that we are comfortable with. That being said, I also recognize that if we break down below the 1.12 level, that’s a big win for the US dollar. Now, I don’t expect that in the next trading session or two, but the reality is, we have run out of upward momentum and that is something to keep an eye on.

USD/JPY Technical Analysis

The dollar initially fell against the Japanese yen, but it looks like it’s trying to fight back. So, we’ll have to see how things play out. If we can recapture the 145 yen level, I think that would be strong for the U.S. against the Japanese yen. And it’s worth noting that there is an interest rate differential that is quite wide in this market. So, you can take advantage of that while you’re waiting for the uptrend to continue. However, if we break down below the 142 yen level, we could see this market drop down to the 140 yen level. Although right now, I think there’s enough pushback that at best, we’re probably looking at range bound bottoming with an upward tilt.

The GBPJPY pair touched 196.30 level, to face a strong obstacle against the attempts of resuming the bullish attack, which forces it to form a strong bullish rebound, to settle below the extra support at 194.20, announcing its surrender to the bearish correctional bias domination again.

The stability below the broken extra support and providing negative momentum by stochastic will increase the chances for suffering extra losses that might extend to 193.10 reaching to 192.45, while regaining the bullish bias requires a positive close above 195.35 level, reinforcing the chances for breaching the mentioned barrier and moving to a new positive station.

The expected trading range for today is between 193.10 and 194.90

Trend forecast: Bearish

The GBPJPY pair touched 196.30 level, to face a strong obstacle against the attempts of resuming the bullish attack, which forces it to form a strong bullish rebound, to settle below the extra support at 194.20, announcing its surrender to the bearish correctional bias domination again.

The stability below the broken extra support and providing negative momentum by stochastic will increase the chances for suffering extra losses that might extend to 193.10 reaching to 192.45, while regaining the bullish bias requires a positive close above 195.35 level, reinforcing the chances for breaching the mentioned barrier and moving to a new positive station.

The expected trading range for today is between 193.10 and 194.90

Trend forecast: Bearish

May 29, 2025 – Written by Frank Davies

STORY LINK Pound to Dollar Forecast: “Downward Bias Toward 1.3395” say UoB

The dollar secured net gains on Thursday after a US court ruled that the US Administration unilateral tariffs based on emergency legislation were not constitutional.

The bigger impact was a further decline in demand for safe-haven currencies with the yen and Swiss franc posting sharp losses. Asian currencies overall lost ground while the Pound was resilient in global markets.

The dollar failed to hold its best levels as Trump will not roll over and accept the Court’s judgement with all avenues explored to pursue his trade policy.

The decision will also inject another level of economic uncertainty, especially as the Administration will appeal against the ruling.

There was still an immediate boost to risk appetite with strong gains for equity futures.

US S&P 500 futures were around 1.5% higher and the FTSE 100 index will open higher

The Pound was also cushioned by stronger risk conditions with the Pound to Dollar (GBP/USD) exchange rate near 1.3450 from 1.3415 lows.

According to UoB; “Today, we expect GBP to trade with a downward bias toward 1.3395. A sustained break below this level seems unlikely.”

On a slightly longer-term view, it expects a 1.3330/1.3530 range rather than of a sustained decline

The Court of International Trade ruled that an emergency law invoked by the White House does not give the president unilateral authority to impose tariffs on international countries.

According to Court the US Constitution gives Congress exclusive powers to regulate commerce with other nations and this is not superseded by the president’s remit to safeguard the economy.

It added that the International Emergency Economic Powers Act (IEEPA), a 1977 law that Trump cited to justify the tariffs, does not give him the power to impose the sweeping tariffs.

Tariffs based on the crackdown of fentanyl smuggling were also declared unconstitutional.

The sectoral tariffs in areas such as Aluminium and steel are not affected.

It gave the Administration 10 days to remove the tariffs.

The Administration will appeal against the decision and the tariffs will continue to be collected until the appeals are heard.

If the ruling is upheld, tariffs collected so far will have to be repaid.

MUFG commented; “The Trump administration has filed a notice of appeal with the US Trade Court, where it is very likely to go not just to the Court of Appeal but likely up to the US Supreme Court.”

Yunosuke Ikeda, head of macro research at Nomura commented; “It’s almost impossible to know if the tariffs will be completely unwound by this. But in the hypothetical situation that they are, it’s natural to see dollar appreciation.”

He added; “Trump’s tariffs will lead to stagflation pressure on the U.S. economy, so reversing those tariffs would be a positive for the dollar.”

There will still be a high degree of uncertainty, especially as there will be an impact on tax revenue which will feed through into underlying market concerns over the budget deficit.

It is highly unlikely that the Administration will drop its trade campaign and it will explore all avenues to negate any legal impact.

MUFG added; “Our best sense right now for Asia FX markets is that the knee jerk reaction seen today in Asian currencies weakening and Dollar strengthening may not last. The crucial reasons are that the tariffs on Asia are likely to stay amidst the legal battle, coupled with the legal uncertainty also potentially crimping US growth and investment plans further.”

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USD/JPY Technical Analysis

The US dollar initially shot higher against the Japanese yen and then has collapsed. There has been a lot of selling above 146 yen. The question is, can we turn things around? I still think we’re in the midst of trying to reach the bottom. But right now, it’s just so messy that it’s really difficult to get aggressive to the upside. Nonetheless, I do think that there is an opportunity on pullbacks to buy the US dollar due to interest rate differential, which is going to remain sky high, especially as the Japanese are having trouble finding buyers for their bonds again.

AUD/USD Technical Analysis

The Australian dollar is slightly positive, but it’s still just messy sideways trading, really, when you look at this. The 200 day EMA is relatively flat and offers a little bit of support, but the 0.64 level is even more important. Underneath there you have the 0.635 zero level, which should offer support. Clearing both of those to the downside probably opens a trap door trade against the Aussie where we just fall off of a cliff. On the other hand, if we can turn around a break above the 0.65 level, that allows the Australian dollar to go much higher. We did peak above there on Monday, but Monday, of course, was Memorial Day, meaning that there was a serious lack of liquidity.

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

The EURJPY pair kept positive stability, taking advantage of forming extra support at 163.35 level, to begin achieving some of the gains by its rally towards the initial target by hitting 164.20 level.

The positive factors are represented by the continuation of forming main support at 162.00 level, and providing positive momentum by the main indicators, so that confirms the continuation of the positivity, which might target 164.80 level, to attempt to breach the obstacle near 165.20, to reinforce the continuation of the positivity in the upcoming period.

The expected trading range for today is between 163.30 and 165.20

Trend forecast: Bullish

• The British pound did try to rally initially during the day on Wednesday but gave back that momentum and then went falling toward the 1.3450 level.
• The 1.3450 level is an area that a lot of people will be paying close attention to, as it was the previous area of resistance that we had been fighting in April and early May.
• Now that we are approaching that level again, the question of course will be whether or not there is any “market memory” in that general vicinity.

United Kingdom and the United States

The one thing that makes the British pound a little bit different than most of the other currencies that I follow is that the United Kingdom actually has a trade agreement with the United States, so it should continue to outperform other currencies on the whole, in relation to the US dollar. Quite frankly, this should facilitate more trade between the Americans and the British, which should be a good thing for the United Kingdom, as well as the United States. In this currency pair, we see markets focusing on the interest rate path of both currencies and central banks, and they are about as even as it gets right now, so there’s not a lot to push the markets around.

That being said, you should keep in mind that the US dollar strengthening around the world will have a bit of a “knock on effect” in this market, as it doesn’t operate in a vacuum. This doesn’t mean that the British pound has to meltdown that the US dollar strengthens against other currencies, it just made a “fall less.” This is exactly what we saw last year, so even if this market does break down, I’m not necessarily too excited to short the British pound, not what I kid short something like the euro.

Because of this, I’ll be watching the 1.34 level closely. If that breaks down and we start dropping below there, I probably will short other currency pairs such as the EUR/USD, NZD/USD, and go long in other pairs like USD/CAD, and the USD/CHF pair. It’ll be interesting to see how this plays out, but ultimately, I think we’ve got a situation where the GBP/USD pair could very well end up being a tertiary indicator for other trading.

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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 US dollar initially did dip against the Japanese yen but has turned around to show signs of life during the session on Wednesday.
• All things being equal, I think this is a market that continues to see a lot of questions asked of the 145 yen level which obviously is an important large round, psychologically significant figure.
• With that being the case, I think you need to look at this through the prism of whether or not we can break above there.
• If we can in fact break above the 145 yen level, at least cleanly, then we have a situation where we will test the 50-day EMA and then perhaps continue to go higher.

Ultimately, this is a market that I believe remains sketchy and noisy, but I do favor the upside overall. If we break above the 50-day EMA, then it’s likely that we will go looking at the 148 yen level, an area that previously had been significant resistance and where we are hanging around and watching the 200-day EMA appear.

Obviously, the 200-day EMA will continue to attract attention in and of itself. And with that, I look at this market as one that is trying to get there. Whether or not we can get there quickly is a completely different story, but I do recognize that we are at least in the process of trying to form some type of double bottom, if you will. And as we have exploded to the upside from the 142 yen level in the last couple of days, I am starting to look at the 142 yen level as your floor in the market, at least at the moment.

On a Break Lower

If we were to break down below there, then you have to look at 140 yen, which has been important multiple times in the past. So, it’s not a huge surprise to see a significant amount of bullish pressure at these very low levels. The question now is, will the interest rate differential continue to favor the green back over the Japanese yen, at least as far as market action is concerned, because the interest rate differential is very large between these two currencies.

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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 EUR/USD forecast turned bearish after falling below 1.1300 level.
• The US court decision supported the US dollar.
• All eyes are now on the US Q1 GDP for further impetus.

The EUR/USD forecast turned bearish after falling below the key 1.1300 level, marking fresh weekly lows. at 1.1210. The downtick move stemmed from a rise in the US dollar after a US federal trade court paused the imposition of broader tariffs on imports, stating it misuse of authority under IEEPA. The decision has reduced the fears of trade war.

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The US Dollar Index (DXY) surged above 100.40 due to improved risk sentiment and expected sharp rise in US bond yields. The recent court decision may provide a boost to US growth outlook and weigh on the Euro’s bullish trend.

According to ING analyst, Chris Turner, the EUR/USD is reasonably lower on US tariff news as the US growth outlook has slightly improved along with risk premium attached with the dollar. He also stated that the recent downturn move could lead to 1.1050, maintaining a broad range of 1.10 to 1.15.

Meanwhile, Trump’s delay on imposing tariffs on EU until July 09, offered some respite to the markets. However, uncertainty still persists. The ECB officials will announce policy decision next week. The consensus remains for another rate cut, some officials have turned hawkish, resisting further easing.

The recent Eurozone data added more traction to the sellers with France’s inflation slowing unexpectedly. On the other hand, the ECB policymaker and head of Slovak Central Bank, Peter kazimir was found guilty of corruption. This development has clouded the image of ECB and raised a political noise across the Europe.

On the other hand, the recent uptick move in the dollar could be temporary as the President Trump can seek alternatives to restore the tariffs which can eventually weigh on the dollar.

Today’s major economic data is US Q1 GDP which can provide further impetus to the market. The US dollar has erased some gains in anticipation of the data.

EUR/USD Technical Forecast: Recovery After a Pullback

The EUR/USD 4-hour chart shows the price remains well supported by the rising trendline. Today’s bearish move met solid support and recovered around 60 pips so far. However, the price is below 20-period SMA. Meanwhile, the RSI shows a sharp reversal from the oversold zone.

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Any upside will meet strong resistance around 1.1300 ahead of 1.1340 and then 1.1400. On the flip side, the pair may test today’s lows at 1.1210 ahead of 1.1150 and then 1.1050.

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