The euro continues to see a lot of upward pressure on Tuesday, but at this point in time, the market continues to see a lot of selling pressure above the 1.05 level.
This is an area that we would see a lot of trouble at, which has been the case so far.
Ultimately, the market continues to see a lot of questions asked about the US dollar, and of course the euro, as the European Union continues to struggle with the overall economic conditions, and of course the war in Ukraine.
The technical analysis for the pair EUR/USD continues to look sideways, but short term bullish. The area that we are testing has been important more than once, as the barrier could very well stretch all the way to the 1.06 level above. The 200 Day EMA is roughly in that area as well, as this is a situation that would cause a lot of attention in the markets and the financial websites.
On the other hand, if the market were to break below the 50 Day EMA, then the market could drop to the 1.03 level, possibility even the 1.02 level. This is an area that will continue to be an area where a lot of people are watching, as a break below there would be a sign that the euro could very well drop to the parity level.
In that situation, the US dollar would probably be getting stronger against almost everything as far as the currencies are concerned. This would be a market wide phenomenon, and you would obviously be aware of this.
On the other hand, if we were to break above that crucial 1.06 level, and the 200 Day EMA, I would be looking at the EUR/USD pair travelling all the way to the 1.10 level, an area that has been important more than once as well. Ultiamtely, I think this isn’t likely, but it is a potential possibility if things line up correctly.
It’s been quite a wild day during the trading session on Tuesday, as we have been all over the place going back and forth in the British pound against the Japanese yen as the market tries to determine risk on or risk off.
The 190 yen level of course is an area that a lot of people will be paying attention to, as it is a large round psychologically significant figure and an area that has been support more than once, so therefore you would have to assume there’s a certain amount of market memory in this area as well. All of that being said, the fact that we initially rallied, then turned around and plunged, only to turn around and show signs of resiliency again, suggests to me that we are building up inertia for a bigger move.
The question of course is going to be where does the market go from here? What is that bigger move going to look like? If we can break above the 190 yen level, then I become bullish, at least for the time being, and the market could go looking at the 50 day EMA right around the 192 yen level. On the other hand, if we break down below the lows of the last couple of days, basically 188 yen, we could go down to the 185 yen level as well.
This is a market that I think is going to be very sensitive to everything else that’s going on around the world right now, which is basically chaos. So, I think you continue to see a lot of volatility, but what you need to see is some type of impulsive candlestick that you can follow. For example, a nice big positive candlestick that closes above 190 yen would do wonders for my confidence of the market recapturing the upside. Of course, I can say the same thing if we break down and get a significantly negative candlestick that breaks the 188 yen level. Short-term traders will probably look at this through a range-bound lens, but those of us who are a little bit more like swing traders it’s a market that’s building up inertia. You just want to follow whatever direction it breaks.
GBP/USD consolidates Tuesday’s gains, holds near 1.2650 early Wednesday.
Technical buyers could remain interested if the pair confirms 1.2650 as support.
The US economic calendar will not offer any high-impact data releases.
GBP/USD benefited from the selling pressure surrounding the US Dollar (USD) on Tuesday and ended the day in the positive territory. The pair stays in a consolidation phase near 1.2650 in the European session on Wednesday.
British Pound PRICE This week
The table below shows the percentage change of British Pound (GBP) against listed major currencies this week. British Pound was the strongest against the Canadian Dollar.
USD
EUR
GBP
JPY
CAD
AUD
NZD
CHF
USD
-0.33%
-0.20%
0.07%
0.79%
0.48%
0.60%
-0.34%
EUR
0.33%
0.04%
0.22%
0.93%
0.80%
0.74%
-0.21%
GBP
0.20%
-0.04%
0.25%
0.89%
0.76%
0.70%
-0.25%
JPY
-0.07%
-0.22%
-0.25%
0.72%
0.49%
0.61%
-0.34%
CAD
-0.79%
-0.93%
-0.89%
-0.72%
-0.36%
-0.19%
-1.13%
AUD
-0.48%
-0.80%
-0.76%
-0.49%
0.36%
-0.06%
-1.00%
NZD
-0.60%
-0.74%
-0.70%
-0.61%
0.19%
0.06%
-0.94%
CHF
0.34%
0.21%
0.25%
0.34%
1.13%
1.00%
0.94%
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
The USD weakened against its major rivals in the American session on Tuesday as the benchmark 10-year US Treasury bond yield dropped to its lowest level in over two months below 4.3%. US Treasury Secretary Scott Bessent reiterated that US President Donald Trump’s administration aims to reduce spending, while easing monetary policy and lowering Treasury yields at the same time.
Meanwhile, Trump’s trade adviser, Peter Navarro, told CNBC on Tuesday that tariff negotiations with Canada and Mexico were ongoing and added that they are planning to set a reciprocal tariff for digital services tax.
In the early American session, Trump is scheduled to hold a press conference. In the absence of high-impact data releases, market participants will pay close attention to the action in the US bond and stock markets. At the time of press, US stock index futures were up between 0.3% and 0.8%, while the 10-year US T-bond yield was holding steady slightly above 4.3%.
In case Wall Street’s main indexes keep the bullish tone after the opening bell, GBP/USD could gain traction. If, however, US yields extend the rebound, the pair’s upside could remain capped.
GBP/USD Technical Analysis
The Relative Strength Index (RSI) indicator on the 4-hour chart holds above 50, suggesting that sellers struggle to take control of the pair’s action.
The 100-day Simple Moving Average (SMA) aligns as a pivot level at 1.2650. Once GBP/USD makes a daily close above this level and starts using it as support, technical buyers could remain interested. In this scenario, 1.2700-1.2710 (round level, static level) and 1.2750 (static level) could be seen as next resistance levels.
On the downside, supports could be spotted at 1.2600 (static level, round level), 1.2540 (100-period SMA on the 4-hour chart, Fibonacci 61.8% retracement of the latest downtrend) and 1.2500 (round level, static level).
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
The US dollar has gone back and forth during the course of the trading session on Tuesday, as the market is hanging around the 150 yen level, the 150 yen level, of course, is an area that has a certain amount of psychology attached to it as it is a large round psychologically significant figure.
But it’s also an area that’s been important more than once.
At this point, it certainly looks as if we are asking questions of the downside, but keep in mind that the interest rate differential continues to favor the US dollars. It’ll be interesting to see how this plays out. I think you’ve got a situation here where perhaps traders are looking through the prism of whether or not things can turn in the right direction as far as the interest rate differential is concerned, and we can break above the inverted hammer from Friday. I don’t know yet. This is a market that certainly looks like it is trying to find its bottom. But right now, we’re just bumping along. And I think the interest rate differential itself isn’t enough to get the market moving because everybody is freaking out about the idea of the carry trade unwinding.
On a Break Above the Highs of Friday
That being said, if we could break above the Friday inverted hammer from last week, it opens up a move to the 152 yen level, which is where the 200 day EMA currently resides. If we break down from here, perhaps below the 148 yen level, then it opens up a move down to the 145 yen level rather quickly. That goes against the interest rate swap and of course, you have to pay at the end of every day to do that. So that’s why I’m always a little bit leery of doing this, because it does add up over time. A short-term trade works out quite nicely, but if you end up in a trend trade, it gets expensive over the longer term. As things stand right now, the Japanese are likely to be at 0.75% by the end of the year, but the Americans are probably still going to be at 4%, or perhaps even 4.25% which is part of why I’m waiting to see if we can break to the upside.
Generac Holdings’ stock price (GNRC) gained ground in the intraday levels, while trying to recoup some recent losses, amid the dominance of the downward correctional trend in the short term, while trading alongside a steel trend line, reflecting the negative pressure, with negative signals from the RSI after reaching overbought levels, and ongoing negative pressure as well due to trading below the 50-day SMA.
Therefore we expect the stock to return lower, targeting the support of $131.66, provided the resistance of $151.60 holds on.
Platinum price didn’t move since yesterday, to keep its fluctuation between 983.00$ barrier, while the MA55 keeps forming intraday obstacle against the negative attempts by consolidating near 959.00$.
The price might provide more sideways trades until gathering the additional negative momentum to ease the mission of reaching the negative stations near 950.00$ followed by reaching the next target at 941.00$.
The expected trading range for today is between 950.00$ and 980.00$
The EURJPY pair lost the negative momentum to provide sideways fluctuation by settling near 156.85.
We remind you that the negative scenario will remain valid due to the consolidation within the bearish channel, in addition to 158.90 level that forms major barrier, which allow us to wait to gather the negative momentum again to ease the mission of targeting the negative stations by moving towards 155.30 level first, while breaking this obstacle might extend losses towards 153.90 to form the next main target for the negative trades.
The expected trading range for today is between 155.30 and 157.60
Dell Technologies’ stock price (DELL) fell in the intraday levels, while hurt by exiting a descending price channel that guided recent short-term trading, as it also leaned on the support of the 50-day SMA, while trying to gather positive momentum to rise anew, as it also tries to vent off overbought saturation in the RSI with negative signals coming out of it.
Therefore we expect the stock to return higher, targeting the first resistance at $127.00, provided the support of $104.66 holds on.
BofA remains structurally bearish on JPY, raising their USD/JPY forecast to 165 (previously 160) and expecting the 10-year JGB yield to reach 1.65%. They see continued JPY weakness driven by accelerating Japanese outward investment, as households shift wealth away from yen deposits into foreign assets amid persistent inflation.
Key Points:
1️⃣ Higher USD/JPY Forecast 📈
New target:165 by year-end (previously 160).
Consensus remains lower at 148 (Bloomberg median).
JGB yields forecasted at 1.65% (up from 1.4%).
2️⃣ BoJ Terminal Rate Revised Upwards 🏦
New BoJ terminal rate forecast: 1.5% (previously 1.0%).
However, still distant from positive real interest rates.
3️⃣ Accelerating Outward Investment 🌏
NISA scheme (2024 upgrade) has accelerated household shifts into foreign assets.
Japanese investors seek protection from rising domestic inflation.
Toshins (Japanese mutual funds) inflows into foreign assets indicate continued rebalancing away from JPY.
Conclusion:
BofA reinforces its structurally bearish JPY stance, forecasting USD/JPY at 165 by year-end. Japanese households’ portfolio rebalancing and lack of positive real rates will likely drive continued JPY weakness.
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