Created on December 24, 2025

• British pound rallied during the session on Tuesday to pierce the $1.35$ level.
• At this point, we have to ask questions about whether or not this is a British pound thing or if it’s a US dollar thing.
• Truthfully, it’s the US dollar, I think that’s the bigger mover here, mainly because I am seeing US dollar weakness across the board, and this pair will follow right along with others like the Euro or the Swiss franc, etc.

With that being the case, this is a market that I think will continue to be noisy, but the $1.35$ level is an area that’s been important in the past, and of course, it’s a large round, psychologically significant figure, so I do anticipate that there will be a certain amount of questions asked at this point.

Potential for a Move to 1.37

If we can clear this area, it’s possible that we will end up going to the $1.37$ level. If we turn around and fall from here, it’s really not until we break down below the $1.34$ level that I think we will see a little bit more negative. Keep in mind that at this time of year, we have to worry about liquidity and volume, and that, of course, is a major influence as well.

With that being the case, I think you have to look at this through the prism of what’s going on with the Federal Reserve and, of course, the fact that the British pound has been a fairly strong performer in relation to the dollar over the last couple of years. Even when the US dollar was so strong, the British pound held up better than most of its contemporaries. Because of this, I’m watching the US dollar across the board, and if it does start to shrink, then this is a place I want to get long of. On the other hand, if the US dollar strengthens, I could short the British pound, but I will probably get more traction out of certain currencies like the Australian dollar or the New Zealand dollar.

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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.

Created on December 24, 2025

• Over the next couple of days, I think we will stay well within this 400-pip range because volume will start to dissipate.
• The US dollar fell significantly during the early hours on Tuesday against the Japanese yen.
• The market is looking like it’s trying to turn things around and show signs of life, and with that being the case, the market may be trying to find some type of range to trade in.

The 154 yen level seems to be massive support, while the 158 yen level seems to be a significant resistance barrier. All things being equal, this is a market that I think is trying to determine what is going to happen with central banks, especially with the Federal Reserve, as traders are starting to bet on more interest rate cuts going into the future.

Normalizing Rates

But at the same time, the Bank of Japan is trying to normalize rates. Whether or not that actually ends up being the case and whether or not they can actually do it to any significant amount remains a question to be answered, but I think we have to look through the prism of a market where you are seeing a positive swap at the end of every day if you’re long.

I think that’s part of what we’ve seen during the trading session on Tuesday as we head towards North America. Traders are trying to turn things around and reach back towards the 158 yen level. Over the next couple of days, I think we will stay well within this 400-point range because volume will start to dissipate, and several central banks are not only going to be closing down the banking system on Thursday for Christmas, but you will also see the Friday session being a major holiday in most of the larger countries as well. After that, you have the week of New Year’s, and that really is kind of messy as well. So I think you’re looking at a 400-point range between now and next year when traders start to throw more liquidity in.

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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.

Coffee price surrendered to the negative pressures, forcing it to suffer several losses towards 339.20, facing a strong support base as appears in the above image.

The price stability above this support and stochastic attempt to exit the oversold level might provide a chance to recover several losses by its rally towards 359.80, then wait for facing the moving average 55 near 368.50.

The expected trading range for today is between 338.00 and 359.80

Trend forecast: Bullish

Created on December 24, 2025

• The British pound has pulled back ever so slightly during the trading session here on Tuesday, only to turn around and rally against the Japanese yen.
• What I find interesting about this is I’m seeing the same pattern everywhere, so I think this has more to do with the yen than the pound, although the pound is stronger against the US dollar.

Ultimately, breaking above the recent 209 yen level was a very strong sign as to where we are going next. As the Bank of Japan tightened rates a bit, the bond market is up in arms and suggesting that they can only do so much. With that being said, and the interest rate differential coming into focus here, I do think you continue to see a big move to the upside.

Short-term pullbacks continue to be buying opportunities

Short-term pullbacks continue to be buying opportunities, and it’s really not until we break down below 208 yen that I would consider stepping back and staying away from the pair. I don’t have any interest in shorting this pair anytime soon, and quite frankly, if I were to buy the yen, it would be against lower-yielding currencies if we saw a major trend change, for example, maybe short the Swiss franc against the yen.

With all of this being said, I do think that the upward target is probably somewhere closer to the 214 yen level over the next several weeks. I do recognize that the lack of liquidity coming in the next few days will continue to be a bit of an issue, but it can also provide an opportunity. For example, you may have traders looking to take some profit out of the market, and that could send this market down for a day or two, and it could give you an opportunity based on that alone.

Another thing that can happen this time of year is maybe the lack of volume makes for erratic moves, so if you are already long of this market, you may have traders who are short trying to cover, and it can cause a spike. Either way, no matter what, at this point, there’s only one direction I’m looking to trade in this market, and that is with the positive currency swap to the upside.

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.

Copper price activated with the main indicators again, surpassing the barrier at $5.5000, announcing its readiness to achieve extra gains on a near-term basis, therefore, we will keep our bullish expectations, reminding you that the extra target near $5.6300 and $5.7400 level.

Note that the price stability below the current barrier might force it to form mixed trading, and there is a chance of testing the support at $5.1500.

The expected trading range for today is between $5.3900 and $5.6300

Trend forecast: Bullish

However, the weaker yen has pushed import prices higher, dampening households’ purchasing power and curbing private consumption. The effects of higher import prices on private consumption have been a key concern for the BoJ and the Japanese government, leading to yen intervention warnings.

An upward revision to the October LEI would align with improving sentiment toward the Japanese economy and strengthen the yen.  However, USD/JPY losses will likely be limited, considering the ongoing fiscal concerns and the BoJ’s cautious policy outlook and fading bets on a March Fed rate cut.

US Jobless Claims and Fed Rate Expectations

An unexpected surge in US GDP growth and a hotter-than-expected US price deflator tempered expectations of a March rate cut on Tuesday. A sharp increase in PCE prices signaled a sticky inflation outlook, while concerns mount about a decoupling of the labor market from GDP growth.

Later on Wednesday, initial jobless claims will come under scrutiny after last week’s weak US jobs report. Economists forecast initial jobless claims to slip from 224k (week ending December 13) to 223k (week ending December 20).

A lower claims reading would ease immediate concerns about the labor market, while supporting a more hawkish Fed policy stance. However, an unexpected spike in claims could revive Fed rate cut bets, supporting a bearish USD/JPY price outlook.

According to the CME FedWatch Tool, the chances of a March Fed rate cut dropped from 52.9% on December 22 to 45.1% on December 23. The sharp drop reflected the impact of the Q3 US GDP report on sentiment toward the Fed policy stance.

Yen Carry Trade Risks and Key Price Levels

While US data will influence US dollar demand and USD/JPY trends, risks of a yen carry trade unwind linger ahead of the holidays.

Elevated JGB and rising US Treasury yields will likely shift focus back to USD/JPY trends for early warning signs of an unwind. However, economists have mixed views on the USD/JPY’s breaking point. 10-year JGB yields could boost demand from domestic investors. The prospect of a stronger yen on repatriations and higher yields reinforces the constructive short- to medium-term bias.

A drop below 155 could be crucial for the negative short- to medium-term bias, given Tuesday’s low of 155.649.

Technical Outlook: USD/JPY on a Downward Trajectory

With markets monitoring technical indicators and fundamentals, they will offer crucial signals into potential USD/JPY price trends.

Looking at the daily chart, USD/JPY remained above the 50-day and 200-day Exponential Moving Averages (EMAs), indicating a bullish bias. While technicals remained bullish, fundamentals are increasingly outweighing the technical structure, indicating a bearish outlook.

A drop below the 155 support level would bring the 50-day EMA into play. If breached, 150 would be the next key support level. Importantly, a sustained break below the 50-day EMA would signal a bearish near-term trend reversal, paving the way to the 200-day EMA and 150. A break below the 200-day EMA would reinforce the bearish medium- to longer-term USD/JPY price outlook.

– Written by


Tim Boyer

STORY LINK Pound Sterling to Dollar Forecast: Festive Mood Lifts GBP/USD Toward 2026

The Pound to US Dollar exchange rate (GBP/USD) pushed past the $1.35 mark on Tuesday, rising to its strongest level since the end of September.

At the time of writing, GBP/USD was trading near $1.3501, up around 0.3% from Tuesday’s opening levels.

The US Dollar (USD) softened broadly on Tuesday, even after US GDP data surprised sharply to the upside.

Markets had expected growth to cool in the third quarter, with forecasts pointing to a slowdown from 3.8% to 3.3% amid concerns that President Donald Trump’s tariff policies were beginning to weigh on activity.

Instead, figures from the Bureau of Economic Analysis showed the US economy expanded by a robust 4.3% between July and September, driven by stronger consumer spending as well as renewed momentum in exports and government outlays.

Rather than lifting the Dollar, the data reinforced a risk-on market backdrop, prompting investors to rotate away from safe-haven assets.

The release also failed to shift expectations for US monetary policy, with markets continuing to price in multiple Federal Reserve interest rate cuts over the course of 2026.

The Pound (GBP) also advanced on Tuesday, benefiting from the typically upbeat sentiment associated with the year-end ‘Santa rally’.

Thin liquidity conditions during the holiday period appeared to amplify Sterling’s gains, as an optimistic market mood favoured risk-sensitive currencies.

Beyond seasonal effects, the Pound drew modest support from tentative optimism around the UK’s medium-term outlook. While recent inflation and growth data point to near-term challenges, some investors are increasingly hopeful that conditions could improve into 2026 as global growth steadies and policy uncertainty eases.

GBP/USD Exchange Rate Forecast: Can Festive Risk Appetite Keep Sterling Supported?

Looking ahead, with no major UK or US economic releases scheduled, movement in GBP/USD is likely to remain closely tied to broader market sentiment.

If festive optimism continues to underpin risk appetite, the Pound to US Dollar exchange rate may be able to extend its upward momentum into the Christmas period.

However, any sudden shift in mood or external geopolitical headlines could quickly reintroduce volatility.

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– Written by


Tim Boyer

STORY LINK Pound-to-Dollar Forecast: GBP/USD Higher as Rate Outlooks Diverge

The Pound to Dollar exchange rate (GBP/USD) edged higher as a softer US currency offset lingering concerns over the UK growth outlook.

Markets are increasingly focused on Fed policy and political pressure for looser monetary conditions in the US.

Any further gains in GBP/USD are likely to depend on continued dollar losses rather than renewed confidence in the UK economy.

GBP/USD Forecasts: Close to 2-Month Highs

The Pound to Dollar (GBP/USD) exchange rate has secured net gains to around 1.3440 on Monday with pair within touching distance of 2-month highs just above 1.3450.

The Pound has secured a limited net gain in global markets while there was a generally soft dollar.

The main focus was a fresh surge in precious metals prices with gold and silver both surging to fresh record highs.

US equity markets held firm, although the FTSE 100 index posted a decline of just over 0.5%.

There is the risk of choppy trading in the very short term as trading volumes dip ahead of the Christmas holiday period.

Federal Reserve policy and personnel will remain a key element over the next few months.

At this stage, markets are pricing in close to a 20% chance of a further cut in January with a round a 50% chance of a cut by March.

Danske Bank commented; “We expect the Fed to pause in January and deliver two additional 25bp cuts in 2026, in March and June.”

The policy outlook is complicated by the fact that a new Fed Chair will be nominated while the Administration is continuing to lobby for faster and further rate cuts.

According to MUFG; “Whether Hassett, Waller, or Warsh is chosen, the likelihood is that the new Chair will be more aligned with Trump’s views and will push more forcefully for fundamental change at the Fed that will inevitably shape investor expectations that the Fed will align more toward policies to fuel growth over price stability rather than the current symmetric policy approach.

It added; “This would give momentum to the US yield curve steepening which tends to coincide with a weaker dollar.”

Markets will also be monitoring any developments surrounding the Supreme Court with two crucial cases surrounding the dismissal of Fed Governor Cook and Trump’s reciprocal tariffs.

Domestically, the final GDP data for the third quarter confirmed GDP growth of 0.1%, although there was a slight downward revision to 0.1% for the second quarter from the previous estimate of 0.2%.

The year-on-year growth rate was unchanged at 1.3% due to a small upward revision to 2024 data.

AJ Bell head of financial analysis Danni Hewson remains uneasy over the outlook; “With the Bank of England expecting growth to come to a standstill in the last few months of the year, thanks in part to the impact of the Budget on overall confidence, it’s clear there are huge challenges to overcome if the UK’s growth story is going to become more compelling.”

Elsewhere, the current account deficit was estimated at £12.1bn for the third quarter of 2025 from a revised £21.2bn the previous quarter.

Danske Bank is still concerned over balance of payments risks; “The UK runs a large current-account deficit, which makes GBP vulnerable when capital inflows fade.”

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