March 26, 2025 – Written by Frank Davies

STORY LINK Pound to Dollar FX Outlook: GBP/USD Gains on Trump Tariff Uncertainty

The Pound-to-Dollar advanced on Tuesday following reports suggesting US President Donald Trump may take a more gradual approach to introducing new tariffs.

At the time of writing, the Pound US Dollar exchange rate (GBP/USD) was trading at around $1.2948, up approximately 0.2% from Tuesday’s opening levels.

The US Dollar (USD) faced headwinds on Tuesday as investors reacted to a report from the Financial Times suggesting the White House may take a two-step approach to implementing future tariffs.

According to the report, Trump’s administration is considering an initial round of emergency duties while conducting in-depth investigations into key trading partners. This strategy is expected to generate immediate revenue for potential tax cuts while establishing a more structured legal foundation for long-term tariffs.

The market viewed this approach as a potential softening of Trump’s aggressive tariff plans, leading to a dip in USD exchange rates.

Further weighing on the US Dollar was the latest US consumer confidence reading, which revealed a larger-than-expected decline. Given that weak consumer sentiment has been fuelling US recession fears, this drop renewed concerns over the country’s economic trajectory.

The Pound (GBP) remained rangebound on Tuesday as investors exercised caution ahead of Chancellor Rachel Reeves’s Spring Statement on Wednesday.

The statement will include updated economic forecasts from the Office for Budget Responsibility (OBR) and outline the government’s fiscal strategy. Reeves is expected to focus on reassuring financial markets by highlighting the government’s commitment to fiscal responsibility.

However, speculation over new spending cuts is generating uncertainty. If Reeves announces significant reductions in public spending that investors believe could hinder UK economic growth, it could place pressure on Sterling.

Looking ahead, movement in the Pound to US Dollar exchange rate on Wednesday is likely to be driven by the UK’s Spring Statement.

Before Reeves delivers her update, Sterling sentiment may also be influenced by the UK’s latest consumer price index.

Analysts forecast that inflation slowed slightly in February, which it could add to speculation that the Bank of England (BoE) may opt for another interest rate cut in May, potentially weighing on the Pound.

For USD investors, attention will turn to the latest US durable goods orders figures. Will a sharp decline in orders growth last month apply additional pressure to the US Dollar?

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March 26, 2025 – Written by Tim Boyer

STORY LINK Euro to Dollar Forecast: EUR Edges Higher vs USD after Contrasting Sentiment Surveys

EUR/USD is slightly higher and is consolidating the large gains triggered earlier in March by the German fiscal package.

Sentiment surveys in Germany and the US were released on Tuesday. While the Ifo Index in Germany climbed to the highest reading in nearly a year, US consumer sentiment readings fell to the lowest levels since 2021.

Tuesday’s session has been slower than Monday’s when stocks made a strong recovery rally in the US, driven higher by encouraging words from President Trump who changed his tone compared to the recession talk earlier in March. Fears over fresh tariffs on April 2nd have faded as first he said he would be “flexible,” then the tariffs wouldn’t include cars and chips, and on Monday, “I may give a lot of countries breaks on tariffs.”

The news flow has been neutral for the dollar, but EURUSD has managed to snap its 4-session losing streak with a small rally on Tuesday following the release of sentiment surveys on both sides of the Atlantic.

German Ifo Sets a Positive Tone

Tuesday’s release of the Ifo Index in Germany showed some improvements, and following on from Monday’s encouraging manufacturing PMI reading, it seems optimism is rising ahead of the fiscal stimulus package. However, that may be short-lived as the US tariff announcement is due on April 2nd and is very likely to target the EU. As ING note:

“The German economy is in the middle of two seismic activities: the just-agreed fiscal stimulus package and looming US tariffs. For the time being, the positives seem to outweigh the negatives as Germany’s most prominent leading indicator, the Ifo index, increased in March to 86.7, from 85.2 in February, its highest level since July last year.”

Both PMIs and the Ifo Index are “soft” data – surveys – and they usually lead hard data such as GDP growth. Whether this will be the case this year remains to be seen as the German economy has been stagnating around zero growth for several years now and just when the situation is finally starting to look better, tariffs may tip it into a recession, especially if auto imports are targeted. There are also some questions over how stimulative the fiscal package for infrastructure will be. Certainly, it will create jobs and have some effect, but this may not be significant or long lasting. As ING put it, “Modern infrastructure is essential for one of the world’s largest economies, but it doesn’t inherently drive innovation, sector transformation, or new growth opportunities.”

EURUSD is higher on Tuesday but there may be a further drift lower in the coming weeks as the sugar rush of the initial announcement of German fiscal stimulus fades.

Consumer Sentiment in US Takes Another Hit

Another sentiment survey is helping EURUSD and weighing on the US dollar as the Consumer Conference Board survey on consumer sentiment for March showed some concerning readings. The 92.9 print was below the 94.2 estimate and registered the fourth straight monthly decline. 92.9 is the lowest level since January 2021. Even worse, the consumer expectations index, which measures short-term outlooks on income, business, and labour market conditions, fell to its lowest level in 12 years, dipping just below July 2022 levels.

The overall picture shows more gloom for the all-important American consumer, following on from weak figures in February. Tariffs and high inflation expectations are clearly weighing on sentiment and spending, and the trade war is still in the very early stages. This doesn’t bode well for the rest of the year, although stocks were able to shrug off the bad news on Tuesday with marginal gains adding to Monday’s strong showing.

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Natural gas prices fell and hit $3.810, thus approaching the support of $3.750, which is the key for deciding the overall trend in the near and medium term.

The price is now approaching the 55-day SMA support, which would reinforce its stability, while the Stochastic sends out positive signals, which boost the price further towards the resistance of $4.050, then $4.180.

Expected trading range today is between $3.750 and $4.050.

Today’s price forecast: Bullish as the support holds 

• GBP/USD trades near 1.2900 in the European session on Wednesday.
• Annual CPI inflation in the UK softened to 2.8% in February.
• Technical sellers could take action in case 1.2880 support fails.

GBP/USD stays under bearish pressure in the European session on Wednesday and trades at around 1.2900. The pair could stretch lower in case 1.2880 support area fails.

Pound Sterling weakens against its major rivals following the soft inflation readings from the UK.

The Office for National Statistics announced early Wednesday that the Consumer Price Index (CPI) rose 2.8% on a yearly basis in February. This reading followed the 3% increase recorded in January and came in below the market expectation of 2.9%. The core CPI, which excludes volatile food and energy prices, rose 3.5% in the same period, below analysts’ estimate of 3.6%.

The UK’s Office for Budget Responsibility (OBR) will publish its forecasts for the UK economy and Chancellor of the Exchequer Rachel Reeves will present the Spring budget on Wednesday.

Later in the day, February Durable Goods Orders data will be featured in the US economic docket. A significant negative surprise could weigh on the USD and help GBP/USD stage a rebound.

During the American trading hours, several Federal Reserve (Fed) policymakers will be delivering speeches as well.

GBP/USD Technical Analysis

The lower limit of the ascending regression channel and the 20-day Simple Moving Average (SMA) form a key support at 1.2880. In case GBP/USD falls below this level and fails to reclaim it, 1.2800 (200-day SMA) could be seen as the next bearish target.

On the upside, 1.2960 (50-period SMA) aligns as first resistance level before 1.3000 (static level, round level) and 1.3020 (mid-point of the ascending channel).

The AUD/USD price inched higher in latest intraday trading amid the dominance of the main upward trend in the short term as the price trades alongside the trend line, while buoyed by piercing a downward correctional trend line, thus tackling the resistance of $0.6305, which represents the neckline of the positive Head and Shoulders pattern that’s contradictory to the downward correctional trend.

However, the price continues to suffer pressure due to trading below the 50-candle SMA, with negative signals from the Stochastic after reaching overbought levels, representing a strong obstacle to recovery.

The USD/JPY price settled slightly higher in latest intraday trading, while moving within an upward correctional price channel in the short term, as the price also benefits from positive support due to trading above the 50-candle SMA.

We also see positive signals emerging from the Stochastic after reaching oversold levels compared to the price’s movements, hinting at positive divergence, which boosts the upward scenario.

The AUD/USD price inched higher in latest intraday trading amid the dominance of the main upward trend in the short term as the price trades alongside the trend line, while buoyed by piercing a downward correctional trend line, thus tackling the resistance of $0.6305, which represents the neckline of the positive Head and Shoulders pattern that’s contradictory to the downward correctional trend.

However, the price continues to suffer pressure due to trading below the 50-candle SMA, with negative signals from the Stochastic after reaching overbought levels, representing a strong obstacle to recovery.

USD/JPY news today: discussions around whether USD/JPY will break the 150 mark are intensifying, driven by various economic indicators and geopolitical factors.

Current Market Sentiment for USD/JPY

USD/JPY forecast: the sentiment surrounding the USD/JPY pair is influenced by a combination of economic data releases, central bank policies, and geopolitical developments. Recently, the pair has shown volatility, with fluctuations often reflecting broader market trends. Traders are closely monitoring the interplay between the U.S. dollar and the Japanese yen, particularly as the Federal Reserve and the Bank of Japan (BoJ) navigate their respective monetary policies.

Economic Indicators for USD/JPY Pair

Economic indicators play a crucial role in shaping the expectations of traders. Recent data from both the U.S. and Japan has been mixed, leading to uncertainty in the market. For instance, the U.S. economy has shown signs of resilience, with strong employment figures and consumer spending, which typically supports the dollar. Conversely, Japan’s economic indicators, such as inflation rates and wage growth, have been less robust, impacting the yen’s strength.

The upcoming release of key economic data, including Purchasing Managers’ Index (PMI) figures and inflation reports, will be critical in determining the direction of the USD/JPY pair. A stronger-than-expected performance from the U.S. economy could bolster the dollar, while any signs of weakness in Japan’s economic recovery could further weaken the yen.

Central Bank Policies on USD/JPY Pair

Central bank policies are pivotal in influencing currency values. The Federal Reserve’s stance on interest rates has been particularly impactful for the USD/JPY pair. Recently, Fed officials have indicated a cautious approach to rate cuts, emphasizing the need for sustained economic growth before making any significant policy shifts. This hawkish tone generally supports the U.S. dollar, making it more attractive to investors.

On the other hand, the Bank of Japan has maintained a more dovish stance, focusing on stimulating economic growth through low-interest rates and quantitative easing. This divergence in monetary policy between the Fed and the BoJ creates a favorable environment for the dollar against the yen, potentially pushing USD/JPY toward the 150 mark.

Speculative Trading on USD/JPY movements

Speculative trading also plays a significant role in the movements of the USD/JPY pair. Traders often react to news and market sentiment, leading to rapid price changes. The current market environment is characterized by heightened speculation, with many traders positioning themselves for potential breakouts or reversals.

As USD/JPY approaches the 150 level, traders are likely to increase their positions based on technical analysis and market sentiment. A break above this psychological level could trigger further buying, while a failure to maintain momentum could lead to profit-taking and a subsequent pullback.

Geopolitical Factors on USD/JPY

Geopolitical developments can significantly impact currency markets, and the USD/JPY pair is no exception. Tensions in Asia, particularly related to trade policies and regional security, can influence investor sentiment and currency flows. For instance, any escalation in U.S.-China trade tensions could lead to a flight to safety, benefiting the yen as a traditional safe-haven currency.

Additionally, Japan’s economic ties with other Asian nations mean that regional developments can also affect the yen’s strength. Traders should remain vigilant regarding geopolitical news, as unexpected developments can lead to sudden shifts in market sentiment.

Conclusion

The question of whether USD/JPY will break the 150 mark remains open as traders analyze a complex interplay of economic indicators, central bank policies, speculative trading, and geopolitical factors. While the U.S. dollar currently enjoys a favorable position due to strong economic data and a hawkish Fed, the Japanese yen’s status as a safe-haven currency cannot be overlooked.

As we move forward, traders should stay informed about upcoming economic releases and central bank announcements, as these will be critical in shaping the future direction of the USD/JPY pair. The potential for volatility remains high, and both bullish and bearish scenarios are plausible as market dynamics continue to evolve.

In summary, while the USD/JPY pair is approaching a significant psychological level, the outcome will depend on a multitude of factors that traders must carefully monitor.

When considering shares, indices, forex (foreign exchange) and commodities for trading and price predictions, remember that trading CFDs involves a significant degree of risk and could result in capital loss.

Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice.

• EUR/JPY may encounter key resistance around the psychological level of 165.00, identified as “pullback resistance.”
• The 14-day Relative Strength Index remains above 50, reinforcing the bullish outlook.
• On the downside, initial support is seen at the nine-day EMA of 161.93.

EUR/JPY holds little losses near 162.80 during Tuesday’s Asian session after two consecutive days of gains. Technical analysis of the daily chart shows the currency cross trending within an ascending channel, reinforcing a bullish outlook.

Additionally, the 14-day Relative Strength Index (RSI) stays above 50, strengthening the bullish outlook for the EUR/JPY cross. The cross also holds above the nine- and 50-day Exponential Moving Averages (EMAs), highlighting strong short- and medium-term momentum and supporting the potential for further gains.

On the upside, the EUR/JPY cross may face its first key resistance around the psychological level of 165.00, marked as “pullback resistance”, followed by the upper boundary of the ascending channel near 166.00. A decisive break above this critical zone could reinforce the bullish bias, potentially leading to a retest of the eight-month high at 166.69, last seen in October 2024.

The EUR/JPY cross may find initial support at the nine-day EMA of 161.93. A break below this level could weaken short-term momentum, pushing the currency cross toward the ascending channel’s lower boundary at 161.00, followed by the 50-day EMA at 160.43.

A deeper decline below this support zone could erode medium-term momentum, increasing downward pressure. This may drive the EUR/JPY cross toward its monthly low of 155.59, recorded on March 4, and potentially to 154.41, the lowest level seen since December 2023.

EUR/JPY: Daily Chart