March 2, 2025 – Written by David Woodsmith

STORY LINK Pound to Euro Weekly Forecast: Retreat to 1.19 on Aggressive BoE Cuts

Currency exchange strategists at Standard Chartered have a 12-month Pound Sterling forecast of 1.2265 amid Euro vulnerability.

ING expects the GBP/EUR exchange rate will hold near current levels in the short term before a retreat to 1.19 at the end of the year as the Bank of England cuts interest rates more aggressively.

GBP/EUR strengthened during the week amid expectations that near-term US trade policy on Europe would target the EU rather than the UK.

The breakdown in relations between the US and Ukraine following the major rift between Trump and Zelensky also increased European security fears and triggered further Euro losses with GBP/EUR hitting fresh 2-month highs near 1.2130.

There have been hopes that any Ukraine ceasefire deal would help lower gas prices, support the Euro-Zone economy and boost the Euro.

If, however, security fears escalate, there will be fresh economic fears with the risk of renewed Euro selling. Diplomatic efforts will be watched very closely in the near term.

Trump will speak to a joint session of Congress on March 4th when Trump has promised tariffs on Mexico and Canada will come into force. There is also the potential for an announcement on EU tariffs.

According to ING; “for the time being, the threat of tariffs and their impact on global growth is euro negative. And we expect investors to be adopting more defensive positions into next Tuesday’s event risk.”

Goldman Sachs noted two-sided risks; “Markets continue to price only a small tariff premium in the currency and we think their implementation will ultimately take the cross back lower. At the same time, if tariff policy changes are smaller than markets expect—perhaps in part due to pro-active EU policies—then the currency could rise further.”

Following President Trump’s meeting with Prime Minister Starmer there was increased confidence that the UK would avoid tariffs at this stage.

According to Rabobank; “At the very least, it kicks the can down the road and saves the UK from tariffs. For today, at least.”

The CDU/CSU came first in the German Federal election with the far-right AfD coming second. The main parties have refused to consider any coalition deal with the AfD.

The Euro rallied on hopes that a new coalition could boost government spending, but failed to hold the gains.

Standard Chartered commented; “It is likely the new government boosts infrastructure investments to support growth, but the debt brake is likely to ultimately act as a constraint.”

As far as monetary policy is concerned, there are strong expectations that the ECB will cut the deposit rate by a further 25 basis points this week to 2.50%.

Rabobank is more cautious; “as monetary policy becomes less restrictive, and the economic outlook again becomes more clouded, a growing group of rate setters may call for a pause soon.”

UBS sees evidence of a tentative Euro reversal; “Highly negative sentiment on Europe has started to improve. Once the ECB slows down or stops its easing around the middle of the year, a gradual recovery of the euro and its European peers is expected.”

Credit Agricole considers that the Euro is undervalued

It added; “EU tariff talk from the Trump administration could continue to add to the headwinds for the EUR vs the GBP in the coming days. That being said, a lot of negatives seem to be in the price of EUR/GBP and the FX pair is looking quite undervalued already.”

There was a shift in stance from a Bank of England Deputy Governor during the week. Ramsden stated that he was uneasy over wage developments in the UK and that risks to inflation are no longer to the downside.

He stated that risks are more balanced while the outlook is more uncertain.

Inflation concerns could delay further BoE rate cuts which would reinforce positive Pound yield spreads over the Euro, at least in the short term.

ING commented; “Having cut rates in February, the path of least resistance is for the Bank of England to keep lowering rates once per quarter for the remainder of the year.”

The bank; however, expects a more aggressive policy stance; “Still, the jobs market is under more visible pressure and we expect service sector inflation to fall back in the spring, undershooting the most recent BoE forecasts. That should make the Bank more comfortable with cutting rates much closer to 3% than markets are currently pricing.”

ING expects reduced yield spreads will undermine Pound support later in the year. The bank also remains concerned over fiscal policy with the risk that the government will have to announce further spending cuts later this month.

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• EUR/USD trades below 1.0850 after closing in negative territory on Thursday.
• The near-term technical outlook highlights a lack of buyer interest.
• The cautious market mood could make it difficult for the pair to rebound.

EUR/USD failed to shake off the bearish pressure on Thursday and registered losses for the second consecutive day. The pair stays on the back foot and trades below 1.0850 in the European morning on Friday.

The US Dollar (USD) capitalized on the risk-averse market atmosphere and gathered strength against its rivals on Thursday. Upbeat macroeconomic data releases further supported the currency and made it difficult for EUR/USD to find a foothold.

The US Department of Labor reported that there were 223,000 first-time applications for unemployment benefits in the week ending March 15, slightly below the market expectation of 224,000. Other data from the US showed that Existing Home Sales increased by 4.2% in February, following January’s 4.7% decline. Finally, Philadelphia Fed Manufacturing Index arrived at 12.5 in March, surpassing analysts’ estimate of 8.5.

The economic calendar will not feature any high-impact data releases on Friday. Hence, investors could react to changes in risk perception heading into the weekend. At the time of press, US stock index futures were down about 0.1% on the day. A bearish opening in Wall Street could help the USD hold its ground and cause EUR/USD to stretch lower.

Investors will also pay close attention to comments from Federal Reserve (Fed) officials now that the Fed’s blackout period is over. According to the CME FedWatch Tool, markets are currently pricing in about a 15% probability of a 25 basis points (bps) rate cut in May. In case policymakers hint that another policy-easing step could be taken at the next meeting, the USD could come under renewed selling pressure and allow EUR/USD to reverse its direction.

EUR/USD Technical Analysis

The Relative Strength Index (RSI) indicator on the 4-hour chart stays below 40 and EUR/USD continues to trade below the 20-period and the 50-period Simple Moving Averages (SMA). In case the pair drops below 1.0830 (static level) and starts using this level as resistance, it could meet interim support at 1.0800 (static level, round level) ahead of 1.0730 (200-day SMA).

On the upside, resistances could be spotted at 1.0890-1.0900 (20-period SMA, 50-period SMA, static level), 1.0950 (static level) and 1.1000 (static level, round level).

Created on March 21, 2025

• The British pound initially plunged during the trading session against the Japanese yen but has turned around to show signs of life.
• Again, at this point, the 200 day EMA looks as if it is offering support right along with the 50 day EMA.
• I think we probably get a run toward the 195 yen level at this juncture.

If we can break above there, then I think you really start to see the British pound punish the Japanese yen. The Bank of Japan seemed a little wishy-washy as it were about interest rate hikes. The British pound is offering quite a bit more in the way of swap than the Japanese yen is. In fact, the official bank rate vote tally was a little bit more hawkish than anticipated coming out of London during the day. So that has a lot to do with what we are seeing here.

I Remain Bullish Overall

With this, I would be somewhat bullish. I recognize that there’s a lot of fear out there and the Japanese yen can be enticing during those times, but it certainly looks like somebody is willing to jump into this pair and take advantage of cheap British pounds. I have no interest in trying to get short of this market, at least not at the moment and at this point would be watching the 50 day EMA as a potential signal, which is just below the lows of the session, right around the 191.90 yen level. Expect a lot of noise, expect a lot of choppiness, but I do think at this point in time, it looks like we’re going to try to rally back towards that crucial 195 yen level. A move above there opens up another 300 pips to the upside.

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• GBP/USD trade below 1.2950 in the European session on Friday.
• The Bank of England left the policy rate unchanged at 4.5%, as expected.
• The pair’s near-term technical outlook points to a buildup of bearish momentum.

GBP/USD stays on the back foot and trades below 1.2950 after closing in negative territory on Thursday. The pair’s technical outlook highlights a buildup of bearish pressure in the near term.

The Bank of England announced on Thursday that it left the policy rate unchanged at 4.5%, as widely expected. Only one policymaker, Swati Dhingra voted in favor of a 25 basis points (bps) rate cut. In the policy statement, the BoE reiterated that it will stick to a “gradual and careful” approach to removing policy restrain, adding that the policy will need to remain restrictive for sufficiently long. Although the BoE’s cautious on further easing limited Pound Sterling’s losses, it failed to support the currency in a noticeable way.

Meanwhile, the US Dollar (USD) held its ground on the back of upbeat data releases and didn’t allow GBP/USD to gain traction. 

The Initial Jobless Claims in the US came in at 223,000 in the week ending March 15, the US Department of Labor reported on Thursday. This reading came in below the market expectation of 224,000. Additionally, Existing Home Sales increased by 4.2% in February, following January’s 4.7% drop and Philadelphia Fed Manufacturing Index arrived at 12.5 in March, surpassing analysts’ estimate of 8.5.

In the absence of high-tier data releases, the risk sentiment could drive the pair’s action heading into the weekend. After posting marginal gains in the Asian session, US stock index futures turned south and were last seen losing between 0.2% and 0.3% on the day. A risk-averse market atmosphere in the second half of the day could support the USD and weigh on GBP/USD.

GBP/USD Technical Analysis

GBP/USD trades in the lower half of the ascending regression channel, and the pair closed the last 4-hour candle below the 20-period and the 50-period Simple Moving Averages (SMA). Additionally, the Relative Strength Index (RSI) dropped to its lowest level since late February near 40, reflecting a buildup of bearish momentum.

Looking south, first support could be spotted at 1.2900 (static level, round level) ahead of 1.2870 (100-period SMA) and 1.2850 (lower limit of the ascending channel). On the upside, 1.2950 (50-period SMA, static level) aligns as first resistance before 1.2990-1.3000 (static level, round level, mid-point of the ascending channel) and 1.3040 (static level).

The EUR/USD pair edged higher in intraday trading after the pivotal support of $1.0820 held on, which represents the neckline of a negative technical pattern that formed in the short term, the Double Top pattern, lending the price some positive momentum which helped it pare some earlier losses, while the price also tries to vent off oversold saturation in the Stochastic as it starts to send out positive signals. 

It comes after the price pierced a secondary upward trend line, trespassing with this negative move the 50-candle SMA and exposing the price to mounting pressure, with an increasing potential for the downward correctional trend to dominate upcoming trading. 

The EUR/USD pair edged higher in intraday trading after the pivotal support of $1.0820 held on, which represents the neckline of a negative technical pattern that formed in the short term, the Double Top pattern, lending the price some positive momentum which helped it pare some earlier losses, while the price also tries to vent off oversold saturation in the Stochastic as it starts to send out positive signals. 

It comes after the price pierced a secondary upward trend line, trespassing with this negative move the 50-candle SMA and exposing the price to mounting pressure, with an increasing potential for the downward correctional trend to dominate upcoming trading. 

March 20, 2025 – Written by Frank Davies

STORY LINK Pound to Dollar Forecast: GBP Drifts Lower vs USD on BoE Rate Hold

The Pound was on the defensive against the US Dollar on Thursday following the release of the Bank of England’s (BoE) latest interest rate decision.

At the time of writing, the Pound to Dollar exchange rate was trading at approximately $1.2965, down roughly 0.3% from the start of Thursday’s session.

Despite facing a downturn against the US Dollar (USD) due to the negative trading environment on Thursday, the Pound (GBP) managed to gain ground against most of its major trading partners.

This positive movement came in the wake of the Bank of England’s recent interest rate decision.

As widely anticipated, the central bank maintained the interest rates at 4.5%, a decision that provided a boost to the Pound.

The bank’s hawkish stance further reinforced confidence in Sterling, as it clearly communicated its commitment to a gradual and cautious approach in removing policy restraint.

On Thursday, the US Dollar climbed against most of its peers, even in the absence of any significant domestic data releases.

The ‘Greenback’s’ rise was mainly driven by the day’s market mood, which turned more risk-averse.

This shift in sentiment bolstered the safe-haven USD, particularly against riskier currencies, enabling the US Dollar to attract buyers despite the lack of economic catalysts.

Looking ahead, the main driver of movement for the Pound US Dollar exchange rate on Friday will likely be an economic data release from the UK.

The UK is set to publish its latest GfK consumer confidence index for March. If the data aligns with the expected decline, the Pound could face pressure and weaken by the end of the week.

On the US Dollar side, there are no domestic data releases scheduled for Friday, so the ‘Greenback’ is likely to trade primarily based on market sentiment as the week concludes.

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• EUR/USD added to Wednesday’s decline and approached 1.0800.
• The US Dollar gathered extra steam and rose to weekly peaks.
• The ECB’s Lagarde warned against a US-EU trade war.

EUR/USD extended its retreat from recent yearly highs on Thursday, dipping into the 1.0820-1.0810 range as the US Dollar (USD) regained ground. The Greenback’s rebound propelled the US Dollar Index (DXY) above the 104.00 mark, buoyed by Fed Chair Jerome Powell’s remarks suggesting no rush to continue cutting rates.

Trade tensions keep the Greenback in check 

Lingering anxiety over US trade policy continues to influence market sentiment, driven by President Trump’s unpredictable approach to tariffs. Although Canada and Mexico secured a temporary reprieve until April 2, fears of a global trade war remain, overshadowing growth prospects and clouding the Fed’s policy outlook.

Tariffs can fuel inflation, potentially pushing the Fed to keep a tight grip on its monetary policy. At the same time, they threaten to erode economic momentum—creating a tug-of-war that leaves the near-term direction of the US Dollar uncertain.

Peace talks on the Russia-Ukraine front should help the Euro 

The Euro (EUR) has found additional support on signs of progress in the Russia-Ukraine peace process. The Kremlin recently announced that Russian President V. Putin accepted US President D. Trump’s proposal for a 30-day pause on attacks against energy infrastructure, following a nearly two-hour phone call between the two leaders.

Central banks in the spotlight 

On Wednesday, the Federal Reserve kept interest rates unchanged, as widely forecast, but signalled plans to cut rates by a total of 50 basis points before year-end, citing slowing economic activity and an eventual dip in inflation. While officials raised their 2025 inflation outlook to 2.7% (up from 2.5% in December), they lowered this year’s growth forecast to 1.7% from 2.1% and projected a slight uptick in unemployment by year-end. Policymakers also cautioned that economic risks remain “unusually elevated.”

Fed Chair Jerome Powell warned that inflation’s retreat might be delayed in part by rising price pressures tied to US tariffs. While he acknowledged the possibility that tariffs are already pushing prices higher, he emphasized that the ultimate impact on consumer behaviour and inflation expectations remains uncertain. Powell reiterated there is no rush to reduce rates further unless conditions deteriorate.

Across the Atlantic, the European Central Bank (ECB) recently lowered key rates by 25 basis points and hinted at additional easing if uncertainty persists. Policymakers trimmed Eurozone growth forecasts and nudged near-term inflation estimates higher, although they still expect price pressures to moderate by 2026. At the same time, speculation that the ECB might pause its easing cycle has added another layer of complexity for the Euro’s trajectory.

ECB President Christine Lagarde cautioned on Wednesday that a potential US-EU trade war could shave as much as 0.5 percentage points off eurozone growth if both tariffs and retaliatory measures escalate, though she added that deeper trade integration could more than compensate for those losses. Acknowledging the inherent uncertainty of such projections, Lagarde stressed the ECB’s readiness to protect price stability. She also praised Germany’s newly announced spending initiatives, despite the upward pressure on bond yields.

EUR/USD technical outlook 

Immediate resistance lies at the YTD high of 1.0954 (March 18). A firm break above that level would target 1.0969 (the 23.6% Fibonacci retracement) and could pave the way for a test of the psychological 1.1000 barrier.

On the downside, the 200-day Simple Moving Average (SMA) at 1.0728 acts as initial support, followed by the provisional 100-day SMA at 1.0522 and the 55-day SMA at 1.0498. Below these levels are 1.0359 (the February 28 low), 1.0282 (the February 10 low), 1.0209 (the February 3 low), and the 2025 bottom of1.0176 (January 13).

Momentum signals remain somewhat bullish, with the Relative Strength Index (RSI) sitting around 62, and the Average Directional Index (ADX) near 32 indicating a strengthening uptrend.

EUR/USD daily chart

What to Watch Next 

EUR/USD is likely to remain sensitive to trade-related headlines, central bank developments, and the broader Eurozone growth narrative—particularly as Germany ramps up fiscal spending. Progress in Russia-Ukraine peace efforts could also shift market sentiment rapidly. Traders should stay alert to both geopolitical news and major economic releases, which could redefine near-term direction for the pair.

February 28, 2025 – Written by Frank Davies

STORY LINK Pound to Euro Rate Today: GBP/EUR Subdued Ahead of German Economic Data

The Pound Euro (GBP/EUR) exchange rate was trapped in a narrow range on Thursday despite the release of some forecast-beating data from the Eurozone.

At the time of writing, the GBP/EUR was trading at around €1.2096, virtually unchanged from Thursday’s opening levels.

On Thursday, the Euro (EUR) was mostly rangebound against most of its major trading partners following the release of the Eurozone’s latest economic sentiment indicator.

The index for February exceeded market expectations, climbing from 95.3 to 96.3, surpassing the anticipated modest rise to 96.

This figure represented a five-month high and indicated a significant improvement in the bloc’s economic sentiment.

Nevertheless, despite the positive economic data, the Euro failed to gain momentum and stayed largely unchanged against its main counterparts.

On Thursday, the Pound (GBP) once again faced difficulty attracting buyers as a continued lack of domestic data releases this week left the Sterling without a clear direction.

Adding to the Pound’s woes was a cautious market sentiment on Thursday.

Given the currency’s heightened sensitivity to risk, the anxious trading environment and the absence of economic catalysts pressured GBP exchange rates.

Looking ahead to Friday, the primary factor influencing the Pound Euro exchange rate will likely be the release of further economic data from the Eurozone.

Germany is set to publish its January retail sales index and its February unemployment rate.

Retail sales are anticipated to rebound, rising from -1.6% to 0%, while the unemployment rate is expected to remain steady at 6.2%.

If the data aligns with expectations and shows mixed results in the Eurozone’s largest economy, the Euro could close the week on a weaker note.

For the Pound, the UK will not be releasing any economic data on Friday, which is likely to leave GBP exchange rates without a clear direction again.

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Created on March 20, 2025

• For three consecutive trading sessions, the GBP/USD exchange rate has stabilized around and above the 1.3000 psychological resistance.
• It is confirming the strength of the upward reversal with gains reaching the 1.3011 resistance level, the highest for the currency pair in four months.
• Its gains are stable at the time of writing this analysis, after the reaction of markets and investors to the US Federal Reserve’s announcement to keep US interest rates unchanged as expected.

Will GBP/USD Stabilize Above 1.30 in the Coming Days?

According to Forex market trading and through licensed currency trading companies’ platforms, the GBP/USD pair has failed to hold above this key level of 1.30, indicating a drain in the upward trend, as many technical indicators point to an “overbought” state. Furthermore, a significant decline in the coming weeks cannot be ruled out if the Pound Sterling continues to fluctuate around these levels.

In general, those wishing to buy the US dollar should consider placing automatic buy orders at various levels before 1.30 to cover at least half of their exposure. Holding onto a portion of this cash also makes sense, as 1.30 appears likely to eventually decline given current trends. According to currency market experts, “The $1.30 level is a crucial psychological level, and crossing it could lead to a significant upward movement, as happened in August of last year. Currency experts then see the possibility of a move to the highs of 1.3045 and 1.3130, respectively.”

Trading Tips:

Sterling’s gains will react strongly to the Bank of England’s announcement today, so be cautious. Its gains may increase, or it may be subject to profit-taking selloffs.

The British pound is cautiously awaiting the Bank of England announcement.

According to Forex market trading, the Pound Sterling (GBP) is trading cautiously as its investors refrain from making any bold bets ahead of the Bank of England’s interest rate decision today, Thursday. Like the US Federal Reserve, the Bank of England is also expected to keep its monetary policy unchanged this month, after cutting interest rates following the Monetary Policy Committee meeting in February.

Previously, the Pound investors expected the next rate cut by the Bank to come in May. However, since then, we have seen There are signs of rising inflationary pressures in the UK. If this prompts the Bank to downplay the likelihood of an interest rate cut in May, the pound could rise.

Going into the second half of the week, it seems reasonable to assume that the Bank of England’s interest rate decision will be the main catalyst for the pound’s exchange rate against the US dollar. However, before the Bank of England announces its policy, the UK will also release its latest jobs data on Thursday morning. Economists expect the UK jobs figures for January to show a stable unemployment rate, with slower wage growth.

Ultimately, a decline in wage growth may weaken the Pound Sterling if it is considered additional pressure on the Bank of England to ease its monetary policy.

Technical Analysis for the GBP/USD pair today:

According to the daily chart performance, the 1.30 psychological resistance will remain an important symbol of bulls’ control over the GBP/USD currency pair trend. At the same time, technical indicators will begin to give strong overbought signals if bulls succeed in moving towards the 1.3055 and 1.3140 peaks, respectively. Conversely, and on the same time frame, the 1.2785 support will remain the most important to exit the current upward channel.

The GBP/USD pair will be affected today by the Bank of England’s announcement, then the announcement of the US weekly jobless claims reading and the Philadelphia Fed Manufacturing Index reading, in addition to the extent of investors’ risk appetite and the performance of global financial markets.

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