February 28, 2025 – Written by Tim Boyer

STORY LINK Pound to Euro Forecast: Two-Month Best Now, 1.2350 in Six Months

The Euro has been hampered by a renewed threat on tariffs on EU goods from President Trump with the Pound to Euro (GBP/EUR) exchange rate strengthening to 2-month highs just above the 1.2100 level, but has not made a convincing break higher at this stage.

Danske Bank expects that GBP/EUR will strengthen to 1.2350 on a 6-month view.

Markets are, however, also having to factor in the Ukraine situation. In essence, US trade policies are likely to be a threat to the single currency, but a Ukraine ceasefire would potentially support the Euro.

ING noted that Ukraine’s hopes have helped underpin the Euro but added, “the threat of tariffs looms large and could easily insert a risk premium back into those currencies in the firing line.”

US President Trump has threatened to impose 25% tariffs on US imports from the EU, and an announcement will be coming soon.

ING commented; “Our baseline view is that tariffs will go into place in April.”

Tobin Marcus, head of US policy and politics at Wolfe Research, commented, “The 25% threat that he threw out today is in line with the high end of the range that he previously indicated.”

He added; “It’s a number that’s concerning – certainly should be concerning – for the trans-Atlantic trade relationship, but not totally out of the blue.”

Danske Bank analyst Mohamad Al-Saraf considers that the pound could be a relative outperformer because the trade deficit between the U.S. and Britain is relatively small.

According to Al-Saraf; “If we actually see tariffs being implemented, we expect the pound to outperform in the G10 space. Looking at the price action in the past few months, the pound is relatively immune to all this tariff talk.”

ING considers the potential implications; “The EU is better prepared to tackle Trump 2.0, but it still faces a complex challenge in countering potential US tariffs.”

It added; “While the bloc has several options at its disposal – including retaliatory tariffs on key US exports and the implementation of a digital services tax – the effectiveness of these measures will depend on its ability to act swiftly and cohesively, with a reliance on widespread member state support.”

There will be potentially important implications for monetary policy.

MUFG commented; “The looming threat of tariff hikes on the EU in the coming months continues to pose downside risks to growth in the euro-zone and may encourage the ECB to keep lowering rate at every meeting at least until rates move closer to President Lagarde’s estimated range for the neutral rate between 1.75% and 2.25%.”

Further aggressive rate cuts would tend to undermine the Euro.

MUFG has, however, noted some hawkish comments from ECB officials and added; “The comments suggest to us that it is far from a done deal that the ECB will cut rates both in March and April as currently priced in. It poses one potential upside risk for euro in the near-term although we still expect the policy rate to fall to 2.00% this year.”

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TAGS: Currency Predictions Pound Euro Forecasts

Created on March 05, 2025

• During the trading session on Tuesday, we have seen the British pound break well above the 1.2750 level, which is a very bullish sign.
• Because of this, I think that we will continue to see British pound strength, which was present for several weeks, although it’s been a very noisy scenario.
• We have seen the British pound absolutely dismantle many other currencies, but I’ve been a bit hesitant to get long against the greenback. It is now obvious that we are going to continue to see momentum here.

Technical Analysis

The technical analysis for this GBP/USD pair is very bullish now that we are well above the 200 Day EMA, and therefore I think you need to watch that indicator very closely. As long as we can stay above there, then technically we are in an uptrend. After all, most people are aware that longer-term traders often will use the 200 Day EMA as a trend defining indicator.

To the upside, the 1.30 level above is a potential target, and if we continue to see the US dollar shrank, I think that will very likely be where we end up. Ultimately, if we turn around a break down below the 200 Day EMA, then you could see a situation where the market is little bit confused, and you probably continue to buy British pounds against other currencies such as the Canadian dollar or possibly even the Swiss franc.

In general, this is a market that can be very volatile, so you need to be very cautious with your position sizing, but I think at this point the direction is fairly obvious. As long as inflation numbers in the United States continue to shrink bed, that will have traders out there getting excited on the prospect of the Federal Reserve possibly cutting interest rates. In fact, the market is now pricing in 3 different rate cuts this year, although I think they will be disappointed by that.

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Created on March 05, 2025

• The British pound has dipped against the Japanese yen during trading, as there was a little bit of a risk-off vibe to the day, but we have turned around to show signs of life again.
• It looks like the market is going to continue to favor the Japanese yen against multiple currencies, whether or not that’s the case against the British pound is a completely different story.
• The 190 yen level is an area that I think a lot of people will be paying close attention to.

If we can break above there, then the market could go looking at the 50 day EMA near the 192 yen level. I do think that happens given enough time. If we see the overall risk appetite pick up a bit, and more importantly, the yen overall lose strength.

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On a Move Lower

If we break down from here, the 188 yen level is support, and I think that it extends down to the 185 yen level, which is a massive bottom in this pair. On the chart, the market has 500-point increments, and you can see that it has paid close attention to these levels, and as we are close to one, it’s not a huge surprise to see that we’ve gone back and forth.

The question now is, which way do we break? Ultimately, I think we go higher, but I also recognize that a lot of people are still excited by the Japanese fighting inflation, but they’d be hard pressed to get to 1% interest rates, and right now they’re only projected to go to 0.75%. So, while that’s better than it once was. It doesn’t compete against the United Kingdom or multiple other currencies around the world. So long term, I’m still bullish, but I recognize it is going to be a noisy affair indeed.

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• The EUR/USD forecast shows renewed optimism about the Eurozone economy.

• Germany announced plans to create a 500 billion euro fund.

• The dollar pulled back on Tuesday after Trump’s tariffs ignited trade wars.

The EUR/USD forecast shows renewed optimism about the Eurozone economy after Germany announced plans to revive growth. As a result, the euro gained sharply against the dollar. At the same time, the greenback suffered as the outlook for the US economy dimmed amid Trump’s trade policies. 

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On Tuesday, Germany announced plans to create a 500 billion euro fund for infrastructure and security. At the same time, the country plans to change its borrowing rules completely. These plans have brightened the outlook for growth in the Eurozone economy, boosting the euro. 

At the same time, the euro found support from a minerals deal between the US and Ukraine. Trump and Zelenskiy have had a difficult time agreeing on anything. This had dimmed hopes of a peace deal with Russia to end the war. However, the deal on Tuesday revived hopes that the two leaders could work together with Putin to end the Ukraine war with a peace deal. 

Meanwhile, market participants looked forward to the European Central Bank policy meeting. Economists expect policymakers to cut rates by 25-bps. 

On the other hand, the dollar pulled back on Tuesday after Trump’s tariffs ignited trade wars. These wars will negatively impact global and US growth.

EUR/USD key events today

• ADP Non-Farm Employment Change
• ISM Services PMI

EUR/USD technical forecast: Sharp rally meets the 1.0701 key level

On the technical side, the EUR/USD price has made a sharp, bullish move, breaking above the 1.0500 key resistance level. The price trades far above the 30-SMA while the RSI is overbought, indicating solid bullish momentum.

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Previously, EUR/USD had paused its rally after failing to break above the 1.0500 resistance level. Bulls made several attempts at the level but could not break above. However, after a deep pullback, the price finally broke above the resistance, rallying to the 1.0701 key level. The bullish move was so steep, leaving the SMA well below. 

The bulls might need to pause after such a strong move and let the SMA catch up. In this case, the 1.0701 level acts as a strong resistance, prompting a pause or pullback. However, if bulls are still strong, EUR/USD might break past the current resistance to reach 1.0800.

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The GBPJPY pair formed new bullish rally yesterday to breach the bearish channel’s resistance line at 190.55, to start forming bullish waves and achieve clear gains by touching 192.00.

The frequent stability above the breached resistance and stochastic approach to 80 level will increase the chances of resuming the bullish attack, to expect moving towards 192.55 level first, while surpassing it will extend trades towards 50% Fibonacci correction level at 193.25.

The expected trading range for today is between 190.75 and 192.55

Trend forecast: Bullish

The EURJPY pair activated the bullish scenario yesterday by surpassing 157.30 barrier, to notice forming strong bullish rally and achieve the previously suggested targets by reaching 159.20.

We expect to form additional support at 158.20, in addition to stochastic positive momentum, which will increase the chances of renewing the bullish attempts, to expect targeting 160.00 level soon, while surpassing it will push the price towards the MA55 as a next target near 160.80.

The expected trading range for today is between 158.25 and 160.00

Trend forecast: Bullish

dogwifhat’s currency price (WIFUSD) fell in the intraday levels, amid the dominance of the main downward trend in the short term, with negative pressure due to trading below the 50-day SMA, coupled with negative signals from the RSI after reaching overbought levels. 

Therefore we expect more losses for the price, targeting the support of $0.06597, provided it settles below the resistance of $1.07640.

Trend forecast for today: Bearish

March 4, 2025 – Written by Frank Davies

STORY LINK GBP/USD Forecast: Pound Sterling Ticks Up vs Dollar despite Downbeat Trade

Pound Sterling (GBP) firmed against the US Dollar (USD) on Tuesday despite the days negative trading conditions.

At the time of writing, the Pound US Dollar exchange rate was trading at approximately $1.2735, up roughly 0.3% from the start of Tuesday’s session.

On Tuesday, the US Dollar (USD) had difficulty attracting buyers and weakened against several of its major counterparts.

While the ‘Greenback’ did recover somewhat from Monday’s losses following a Europe-led initiative to bring peace to Ukraine, USD exchange rates remained largely under pressure during Tuesday’s European trading session.

Moreover, despite a risk-averse market environment, the US Dollar failed to leverage its safe-haven status as geopolitical concerns and worries about the US economy diminished USD’s appeal.

On Tuesday, the Pound (GBP) traded within a broad range, maintaining its position against many currencies while showing some weakness in others.

This volatility was primarily due to the lack of UK economic data and a generally cautious market sentiment.

After Monday’s positive trading, the market’s negative mood on Tuesday dampened the risk-sensitive nature of Sterling.

Investors were also hesitant to make significant moves on the Pound, ahead of important data releases later in the week.

On Wednesday, the key driver for the Pound US Dollar exchange rate will likely be the release of the latest services PMIs
from both the UK and the US.

The UK’s services PMI for February are expected to show a slight improvement. If the data meets these expectations, it could provide a boost to the Pound.

Additionally, Bank of England (BoE) Governor Andrew Bailey is set to deliver a speech. If his comments lean towards a
more hawkish stance, it could further strengthen the Pound.

For the US Dollar, the latest ISM services PMI for February is also forecast to rise, which could support the ‘Greenback’ in mid-week trading.

Moreover, the US will release its January factory orders, which are expected to show a rebound. This positive data could
further strengthen the USD exchange rates.

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TAGS: Pound Dollar Forecasts

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Created on March 04, 2025

• During the trading session on Monday, we’ve seen the euro gap higher to kick off the trading session, pull back a bit, and then rally again before giving up a little bit of momentum right around the 158 yen level.
• The 158 yen level is a minor area of support resistance.
• The most important, I believe at least at this juncture is the 155 yen area of the chart has been a hard floor for some time and I think it probably continues to be so going forward.

Now the question of course is going to be whether or not we can continue this momentum And I think we probably can maybe not so much Because of the euro, but I think because of the yen.

Yen Overdone

The yen is overdone, has been for a while against most currencies, and therefore it’s a little bit of a knock on effect. Let’s be honest here, the yen moves in the same general direction against almost every currency at the same time. So therefore, I think it’s probably only a matter of time before the euro goes looking to the 160 yen level. The 160 yen level also has the 50 day EMA hanging around as well.

So I do think we’ve got a situation where we might be in a bit of a range, but if we can break above the 160 yen level, that would obviously be very bullish. That would allow the Euro to really take off after forming a massive W pattern. I think given enough time though, we’ve got a situation where you’re probably going to see more of a “buy on the dips” type of market and it’s probably going to be very choppy and noisy. I don’t necessarily think we get a clean move here despite the fact that Monday was so strong.

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