Important DisclaimersThe content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party’s services, and does not assume responsibility for your use of any such third party’s website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.Risk DisclaimersThis website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.

Created on January 07, 2025

• According to recent trades and after its sharp losses, the EUR/USD exchange rate is heading towards parity.
• Before that, investors will be watching closely for the reaction to the release of US jobs data next Friday.
• According to reliable trading platforms, the euro price has fallen to its lowest level in two years against the US dollar amid sharp gains for the US currency.
• As a result, all indicators indicate that the euro dollar exchange rate is on its way to testing 1.0 and below.

Can You Buy the Euro-Dollar Now?

In this regard, European fundamentals are difficult for euro sellers looking to buy the US dollar, and contrast markedly with US fundamentals, as the US economy is still in good shape. The dynamics of the gas market embody the stark difference in economic fortunes. From one side, Europe faces headwinds amid rising natural gas prices. From anther, the US is receiving tailwinds as the US is the one stepping into the void left by Russia in the European gas market.

US Jobs Data Under the Microscope

According to this week’s economic calendar, the US non-farm payrolls report on Friday is the key data release for this week’s trading, and if the US jobs numbers come in stronger than expected, bears could find an opportunity to push the EUR/USD price towards deeper bearish levels. Overall, analysts expect US job gains to remain high in December at 180,000, recording only a modest slowdown from 227,000 in November.

On the other hand, leading survey indicators have improved recently, confirming the strong position of the US economy, which is consistent with the continued strength of the US dollar. However, the market is well-positioned for a strong jobs reading, and there is a chance of a US dollar decline if the data meets expectations or comes in weaker.

Consequently, this could allow the EUR/USD pair some respite over the weekend.

Tomorrow, another development affecting the forex market is that on Wednesday, the minutes of the Federal Reserve’s last meeting for 2024 will be released. During which it cut interest rates but warned that it is unlikely to do so in 2025, which pushed the US dollar higher. In addition, there is a lot of uncertainty in the outlook with Donald Trump poised to return to the White House. Currently, analysts believe that Trump will bring inflationary policies, which will require the Federal Reserve to abandon further US interest rate hikes. All of this will ultimately support the US dollar.

On the Eurozone front, the focus will be on German inflation data for December, which will provide an important hint as to where we can expect the Eurozone data to be. Overall, analysts expect Eurozone CPI inflation to rise to 2.4% year-on-year in December from 2.2% in November. However, analysts do not believe that this will be enough to upset expectations of further interest rate cuts by the European Central Bank, which could limit any rise in the Euro.

Trading Tips:

The EUR/USD will remain bearish until the announcement of important US economic data and events this week

EUR/USD Technical Analysis Today:

According to recent trades, the EUR/USD exchange rate has risen to match the nine-day exponential moving average (EMA), indicating that it has recovered from some of the peak selling levels seen in recent trades. Technically, it is noteworthy that this nine-day EMA has acted as a resistance layer to the strength of the EUR/USD pair since October. Therefore, this technical indicator indicates a decline, suggesting that there may be some retreat from the negative pressure.

Overall, it is difficult to be pessimistic about the EUR/USD pair in the current technical and fundamental macroeconomic situation, and the chances of recovery from here are limited. Meanwhile, the exchange rate may hold around 1.03-1.04 in the near term as markets wait for a catalyst for the next decline. Also, most markets may have been on a break during the Christmas and New Year period, the EUR/USD has not rested, as the selling wave that has been ongoing since October has extended. Ultimately, the recent losses came after a renewed rise in European gas prices to their highest levels in two years.

Ready to trade our EUR/USD daily analysis and predictions? Here are the best European brokers to choose from. 

• GBP/USD continues to push higher following Monday’s upsurge.
• The pair faces the next resistance level at 1.2575. 
• Investors await key macroeconomic data releases from the US.

GBP/USD capitalized on the broad-based US Dollar (USD) weakness and registered impressive gains on Monday. The pair continues to stretch higher in the European session on Tuesday and trades near the key resistance area at 1.2575.

The improving market mood made it difficult for the USD to find demand at the beginning of the week. Risk flows dominated the action in financial markets and triggered a USD selloff after the Washington Post reported that US President-elect Donald Trump’s aides were exploring tariff plans that would be applied to every country but only cover critical imports.

Later in the day, Trump disputed this claim in a social media post and helped the USD find a foothold, calling the story “just another example of fake news.”

The ISM Services PMI report for December and JOLTS Job Openings data for November from the US will be watched closely by market participants in the second half of the day.

The headline ISM Services PMI is expected to rise to 53 from 52.1 in November. A reading below 50, which would point to a contraction in the service sector’s economic activity, could put additional weight on the USD’s shoulders and open the door for another leg higher in GBP/USD. Conversely, a strong print of 55 or higher could support the USD.

GBP/USD Technical Analysis

As of writing, GBP/USD was trading near 1.2575, where the Fibonacci 50% retracement level of the latest downtrend is located. Once the pair stabilizes above this level and starts using it as support, it could target 1.2620-1.2630 (200-period Simple Moving Average (SMA), Fibonacci 61.8% retracement) and 1.2700 (Fibonacci 78.6% retracement) next.

On the downside, first support could be seen at 1.2555 (100-period SMA) before 1.2525 (Fibonacci 38.2% retracement), 1.2500 (round level, 50-period SMA) and 1.2460 (Fibonacci 23.6% retracement).

• EUR/USD trades in positive territory above 1.0400 on Tuesday.
• The pair could extend its uptrend once it flips 1.0410-1.0420 into support.
• Eurozone inflation report and US data will be watched closely by market participants.

EUR/USD started the week on a bullish note and registered strong gains on Monday as the US Dollar (USD) remained under persistent selling pressure throughout the day. The pair holds its ground and trades in positive territory above 1.0400 in the European morning on Tuesday.

The USD weakened against its rivals on Monday in reaction to the Washington Post report that said US President-elect Donald Trump’s aides were considering tariffs that would be applied to every country but only cover critical imports.

Although Trump disputed this claim by calling the story “just another example of fake news,” the USD failed to stage a decisive rebound as risk flows dominated the market action.

Eurostat will publish December inflation data on Tuesday. On a yearly basis, the Harmonized Index of Consumer Prices (HICP) is forecast to rise 2.4% in December, up from the 2.2% increase recorded in November. A stronger increase than expected in the annual HICP could help the Euro preserve its strength.

In the second half of the day, the ISM Services PMI report for December and JOLTS Job Openings data for November will be featured in the US economic docket. The headline ISM Services PMI is seen rising to 53 from 52.1 in November. A reading below 50 could trigger another bout of USD selloff and lift EUR/USD. On the other hand, a print of 55 or higher could help the USD find a foothold and limit the pair’s upside.

EUR/USD Technical Analysis

The Relative Strength Index (RSI) indicator on the 4-hour chart holds above 60, reflecting the bullish bias in the near term. The Fibonacci 50% retracement level of the latest downtrend and the 100-period Simple Moving Average (SMA) form a key resistance area at 1.0410-1.0420. In case EUR/USD rises above this area and starts using it as support, 1.0460 (200-period SMA; Fibonacci 61.8% retracement) could be seen as next resistance before 1.0520 (Fibonacci 78.6% retracement).

Looking south, supports could be spotted at 1.0370 (50-period SMA, Fibonacci 38.2% retracement) and 1.0320 (Fibonacci 23.6% retracement, 20-period SMA).

Created on January 06, 2025

• At the beginning of trading in the new year 2025, the pressure to sell the pound sterling continued and its losses against the US dollar extended to the support level of 1.2352.
• Obviously, this is the lowest for the pound sterling dollar pair in eight months before settling around the level of 1.2417 at the beginning of trading in the US jobs week and the content of the minutes of the last meeting of the US Federal Reserve.

Will the Pound Sterling rise in the coming period?

According to reliable trading company platforms, the pressures on the Sterling continue, but some analysts do not believe that this move will continue. According to recent trades, the losses incurred by the Pound Sterling followed news of a decline in the UK manufacturing Purchasing Managers’ Index and another rise in wholesale gas prices to their highest levels in two years.

Developments confirm that the UK’s economic outlook for 2025 will be challenging, but this is not new news, and the move made by the Pound Sterling far exceeded what was expected given the secondary nature of these developments. However, if this is the correct assessment, then the Pound Sterling may find itself targeted by low-priced buyers in the coming days, which may help it recover. According to the forex market trades, the intensive selling was significant, as the GBP/USD pair lost 1.10%, its biggest daily decline since Donald Trump won the US election.

The performance of the Pound Sterling and the pressure of rising gas prices

According to currency analysts, concerns about growth in Europe remain a major focus for investors, and this could weigh on the pound and the euro as 2025 begins. In general, the topic of rising energy prices has come into focus again, and there has been another sharp rise in natural gas prices after gas supplies through Ukraine ended. The cost of wholesale gas prices in the UK rose to a two-year high, indicating higher energy costs for businesses and households. The development is particularly difficult for British companies, which will also face rising wage and tax bills in the coming months.

On the other hand, the performance of the pound is particularly sensitive to interest rate expectations from the Bank of England; markets expect two to three rate cuts in 2025, but most analysts believe the actual outcome will be four times. Therefore, the market should adjust to this view. As this happens, British bond yields and the pound should decline.

Again, it should be stressed that the movement in the pound exchange rate goes beyond the fundamental nature of developments.

Trading Tips:

Keep a close eye on the future of central bank policies and the extent of investors’ risk appetite or lack thereof to predict the future direction of the pound dollar

Sterling forecasts in 2025

Several forex market analysts expect the Pound Sterling to outperform most of its peers in 2025, aided by a relatively strong economy and a slow pace of interest rate cuts at the Bank of England. In its 2025 forecast report, NatWest Markets says the Pound Sterling looks like the “Carry King” of 2025. The term “Carry” refers to a strategy where investors borrow capital where interest rates are low to invest in financial assets where interest rates are higher, which usually provides a profit in a low-volatility environment.

Meanwhile, the subsequent flow of money to places where interest rates are higher creates demand for the recipient currency.

The Pound Sterling was the second best-performing currency in 2024 as interest rates in Britain remain high compared to elsewhere, with the Bank of England saying it will cut interest rates cautiously as inflation is expected to remain high. If this view is correct, the Pound Sterling will look attractively priced after the massive sell-off on January 2nd.

Technical Analysis for the GPB/USD pair today:

The overall trend of the GBP/USD pair remains bearish, and as I mentioned before, the stability below the 1.2500 support level will continue to encourage the stronger dominance of bears on the trend. According to the daily chart performance, approaching the 1.2350 support as it happened last week pushes technical indicators towards oversold levels. Technically, we expect the selling pressure on the Sterling Dollar to continue until investors react to the announcement of US jobs figures and the content of the latest Federal Reserve meeting minutes.

Ready to trade our daily GBP/USD Forex analysis? Check out the best forex trading company in UK  worth using.

With the US non-farm payrolls to come in a busy week for US economic data, the USD/JPY is our featured currency pair this week. Earlier, the USD/JPY was trading sharply lower, along with all the other dollar crosses, with analysts pointing to reports suggesting that Trump’s aides may be contemplating a more lenient approach to tariffs as the reason for the greenback’s drop. In an interview, Trump had said that “I predict China’s Xi and I will get along, have been talking through representatives.” The key question now was whether Trump will issue any denials regarding this reportedly softer stance. Lo and behold, Trump shortly denied that he will pare back his tariff policy, and up went the dollar. Given his tough rhetoric so far, it’s hard to envision him adopting a more conciliatory tone when he takes office later this month. The dollar is now going to be more headline- driven and potentially boost the appeal of safe haven yen. For now, it may be too early to have a bearish USD/JPY forecast, especially ahead of this week’s key data highlights. But we could see the USD/JPY drift back lower in the days ahead anyway, as the focus turns to data and monetary policy.

Key US data to watch this week

Here’s a list of key US data to watch this week, which could impact the short-term USD/JPY forecast:

If this week’s data, especially the NFP report, fails to meet or exceed expectations then that could cause a bearish shift in the US dollar.

Longer-term USD/JPY Forecast point to a possible correction

The trend may often be your friend, but when it comes to the slightly longer-term USD/JPY forecast, I’m leaning against the prevailing momentum. While the currency pair has enjoyed a bullish streak, I believe the conditions are ripe for a reversal. However, timing is critical—a clear bearish confirmation and pattern are needed before taking action.

In 2024, analysts widely anticipated a stronger performance from the Japanese yen, driven by expectations of the Bank of Japan (BoJ) normalizing its ultra-loose monetary policy. Instead, the BoJ maintained its dovish stance, and the yen continued to weaken, pushing USD/JPY higher for a fourth consecutive year. By late 2024, the pair approached intervention-prone levels between 157.00 and 160.00. The pair was showing signs of struggle around this area again today.

Looking ahead, several factors suggest that the yen could stage a sharp rally in 2025, making a short USD/JPY an appealing trade idea. One factor behind this idea is the potential for the Bank of Japan to tighten its belt. In December 2024, the BoJ held its benchmark rate at 0.25%, disappointing those hoping for a hawkish pivot. Despite this, persistent above-target inflation could compel the central bank to tighten policy in 2025. Japan’s annual inflation climbed to 2.9% in November, driven by rising food and import costs. With inflation likely to remain elevated due to yen depreciation, the BoJ may act to align its policy more closely with global peers. Even a modest rate hike could strengthen the yen and weigh heavily on USD/JPY.

Unwinding of Trump trades

Today’s earlier reports that Trump will scale down tariff plans (which he later denied) means there is always the possibility we could see the unwinding of Trump trades in the coming weeks. After all, much of the dollar’s strength in 2024 stemmed from resilient US data and anticipation of pro-growth policies under Donald Trump. Should these policies falter in 2025, and Trump decides against imposing tough trade tariffs on imports from Eurozone and China, we could see the likes of the euro and yuan recover sharply. This resulting unwinding of “Trump trades” could further pressure USD/JPY lower.

Key Technical Levels to Watch on USD/JPY

Source: TradingView.com

From a technical perspective, the trend is still bullish on the USD/JPY, as evidenced by a rising trend line and key moving averages being below price.

While the pair remains in a bullish trend, a decisive break below the bullish trend line that has been in place since September could signal the start of a deeper correction.

In terms of levels to watch, the 156.75 to 160.00 range serves as a significant resistance zone. Ahead of the abovementioned trend line, there are a few levels to watch, including 156.00 and 155.00, now the most important short-term support levels.

In as far as the longer-term view is concerned, we will need to see a break below December’s low of 148.65 to provide a clearer bearish signal.

Meanwhile, if the USD/JPY refuses to buckle, and instead rises through the 160.00 region then I would imagine it might go on to take out the July high of 161.95 before the bears will have another attempt at driving the pair lower.

— Written by Fawad Razaqzada, Market Analyst

Follow Fawad on Twitter @Trader_F_R

January 6, 2025 – Written by David Woodsmith

STORY LINK Pound to Dollar Rate Week Ahead Forecast: GBP/USD Firm in Turbulent Week

Monday AM Brief: The Pound to Dollar exchange rate edged higher on Monday ahead of a number of US data releases expected this week.

On Monday, the Pound (GBP) experienced a slight rise against most of its major counterparts, even as the UK’s final services PMI for December was released.

The services PMI, a key indicator for the UK economy, registered at 51.1, falling just short of the expected 51.4.

Nonetheless, the GBP maintained its stability after the data was made public, showing resilience despite the minor discrepancy.

On Monday, the US Dollar (USD) failed to capture much investor interest and weakened against most of its major counterparts.

US investors appeared cautious about making significant bets on the ‘Greenback’ ahead of a busy economic calendar this week.

Key economic data releases are scheduled for the coming days: the latest labor data and PMIs will be out on Tuesday, the Federal Reserve’s FOMC meeting minutes will be released on Wednesday, and the crucial non-farm payrolls report along with the latest unemployment rate will be published on Friday.

Anticipation of these important economic indicators left USD exchange rates struggling to attract strong buying interest at the beginning of the week.

Looking ahead, the main driver of movement for the Pound US Dollar exchange rate on Tuesday will likely be the release of several high-impact economic data points from the US.

First up, the US will publish its latest ISM services PMI for December.

If the data shows another rise in this crucial sector, it could provide a lift to the ‘Greenback.’

Later in the day, the US will release its JOLT job openings survey for November.

Should the data remain around the positive levels seen in October, it could further support USD exchange rates.

On the Pound side, the UK will release its latest BRC retail sales monitor for December.

The data is expected to show a recovery, with a forecasted improvement from -3.4% to -0.2%.

If the figures meet these expectations and confirm an uptick in the UK’s retail sales, it could give a boost to GBP exchange rates.

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: Currency Predictions Pound Dollar Forecasts

With the US non-farm payrolls to come in a busy week for US economic data, the USD/JPY is our featured currency pair this week. Earlier, the USD/JPY was trading sharply lower, along with all the other dollar crosses, with analysts pointing to reports suggesting that Trump’s aides may be contemplating a more lenient approach to tariffs as the reason for the greenback’s drop. In an interview, Trump had said that “I predict China’s Xi and I will get along, have been talking through representatives.” The key question now was whether Trump will issue any denials regarding this reportedly softer stance. Lo and behold, Trump shortly denied that he will pare back his tariff policy, and up went the dollar. Given his tough rhetoric so far, it’s hard to envision him adopting a more conciliatory tone when he takes office later this month. The dollar is now going to be more headline- driven and potentially boost the appeal of safe haven yen. For now, it may be too early to have a bearish USD/JPY forecast, especially ahead of this week’s key data highlights. But we could see the USD/JPY drift back lower in the days ahead anyway, as the focus turns to data and monetary policy.

Key US data to watch this week

Here’s a list of key US data to watch this week, which could impact the short-term USD/JPY forecast:

If this week’s data, especially the NFP report, fails to meet or exceed expectations then that could cause a bearish shift in the US dollar.

Longer-term USD/JPY Forecast point to a possible correction

The trend may often be your friend, but when it comes to the slightly longer-term USD/JPY forecast, I’m leaning against the prevailing momentum. While the currency pair has enjoyed a bullish streak, I believe the conditions are ripe for a reversal. However, timing is critical—a clear bearish confirmation and pattern are needed before taking action.

In 2024, analysts widely anticipated a stronger performance from the Japanese yen, driven by expectations of the Bank of Japan (BoJ) normalizing its ultra-loose monetary policy. Instead, the BoJ maintained its dovish stance, and the yen continued to weaken, pushing USD/JPY higher for a fourth consecutive year. By late 2024, the pair approached intervention-prone levels between 157.00 and 160.00. The pair was showing signs of struggle around this area again today.

Looking ahead, several factors suggest that the yen could stage a sharp rally in 2025, making a short USD/JPY an appealing trade idea. One factor behind this idea is the potential for the Bank of Japan to tighten its belt. In December 2024, the BoJ held its benchmark rate at 0.25%, disappointing those hoping for a hawkish pivot. Despite this, persistent above-target inflation could compel the central bank to tighten policy in 2025. Japan’s annual inflation climbed to 2.9% in November, driven by rising food and import costs. With inflation likely to remain elevated due to yen depreciation, the BoJ may act to align its policy more closely with global peers. Even a modest rate hike could strengthen the yen and weigh heavily on USD/JPY.

Unwinding of Trump trades

Today’s earlier reports that Trump will scale down tariff plans (which he later denied) means there is always the possibility we could see the unwinding of Trump trades in the coming weeks. After all, much of the dollar’s strength in 2024 stemmed from resilient US data and anticipation of pro-growth policies under Donald Trump. Should these policies falter in 2025, and Trump decides against imposing tough trade tariffs on imports from Eurozone and China, we could see the likes of the euro and yuan recover sharply. This resulting unwinding of “Trump trades” could further pressure USD/JPY lower.

Key Technical Levels to Watch on USD/JPY

Source: TradingView.com

From a technical perspective, the trend is still bullish on the USD/JPY, as evidenced by a rising trend line and key moving averages being below price.

While the pair remains in a bullish trend, a decisive break below the bullish trend line that has been in place since September could signal the start of a deeper correction.

In terms of levels to watch, the 156.75 to 160.00 range serves as a significant resistance zone. Ahead of the abovementioned trend line, there are a few levels to watch, including 156.00 and 155.00, now the most important short-term support levels.

In as far as the longer-term view is concerned, we will need to see a break below December’s low of 148.65 to provide a clearer bearish signal.

Meanwhile, if the USD/JPY refuses to buckle, and instead rises through the 160.00 region then I would imagine it might go on to take out the July high of 161.95 before the bears will have another attempt at driving the pair lower.

— Written by Fawad Razaqzada, Market Analyst

Follow Fawad on Twitter @Trader_F_R

Created on January 06, 2025

• For ten consecutive trading sessions, the USD/JPY pair has been moving within narrow ranges with a strong bullish bias, with gains reaching the resistance level of 158.00.
• This is the highest for the pair in five months, paving the way for bulls to move towards the psychological resistance of 160.00.

From now on, you may notice an increase in Japanese statements about the possibility of intervening in the exchange markets to prevent further collapse of the Japanese yen, which historically contradicts the policies of the upcoming US administration, as Trump refuses to intervene in the exchange markets. Keep in mind that the movement of the dollar against the Japanese yen price for long periods in narrow ranges portends a strong move in one of the two directions.

Trading Tips:

We still recommend buying the dollar against the Japanese yen from every downward level, but without risk and placing stop loss profit orders

US Dollar Performance Awaits the Future of Interest Rate Policies

The US dollar is trading near its two-year high, supported by a shift in US Federal Reserve policies and the continuation of Trump’s trade. The Federal Reserve has cut US interest rates by a full percentage point in three steps since September 2024. Federal Reserve Chairman Jerome Powell described the latest move as “closer to a call,” adding that the federal funds rate is now “much less restrictive.” It currently falls within the range of 4.25% to 4.5%.

Fed officials’ expectations for US interest rates this year indicate a median estimate of only two more cuts this year. Also, four officials preferred not to cut US interest rates at all in December 2024. Moreover, Cleveland Federal Reserve President Beth Hammack opposed the decision in favour of keeping interest rates steady.

USD/JPY Technical Analysis and Expectations Today:

The USD/JPY pair recently retreated to trade at the 100-hour moving average line. However, the pair continues to move towards the overbought levels of the 14-hour Relative Strength Index (RSI). In the near term, bulls will look to extend the current rally towards the 157.75 resistance levels and then the 158.90 resistance levels respectively. On the other hand, bears will look to take advantage of the selling to move towards the 156.80 support levels or lower at the 155.95 support.

In the long term, according to the performance on the daily chart, the USD/JPY pair is trading within an ascending channel formation. Also, the 14-day RSI supports a long-term bullish bias as it is about to enter overbought levels. Therefore, bulls will look to move towards stronger highs beyond the usual Japanese intervention levels reaching the 161.20 and 164.00 resistance levels respectively. In contrast, and over the same period of time, bears will look to move with renewed profit-taking selling operations, reaching the support levels of 155.30 and then the support of 152.00, respectively.

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