Created on January 30, 2025

Bearish view

• Sell the GBP/USD pair and set a take-profit at 1.2350.
• Add a stop-loss at 1.2600.
• Timeline: 1-2 days.

Bullish view

• Set a buy-stop at 1.2450 and a take-profit at 1.2525.
• Add a stop-loss at 1.2350.

The GBP/USD pair was flat after the Federal Reserve left interest rates unchanged in its first interest rates of the year. It was trading at 1.2440 on Thursday morning ahead of the upcoming US GDP data.

Federal Reserve rates and US GDP data

The GBP/USD pair wavered after the Federal Reserve made its first interest rate decision of the year. In, the Federal Open Market Committee (FOMC) decided to leave interest rates unchanged at 4.50%.

The committee tweaked its statement by removing any mention of progress on inflation. This was likely a reaction to a recent report that showed that the headline Consumer Price Index (CPI) rose from 2.7% to 2.9% in December.

The Fed expects the headline inflation to take a longer period before moving back to the 2.0% target. The top inflation risks are the recent wildfires in Los Angeles that hav made most things, including housing and insurance expensive. There are also concerns that some of Donald Trump’s policies like mass deportations, tariffs, and tax cuts will lead to high inflation.

The Fed maintained the view that the economy was solid and that the labor market was making progress. As such, most analysts anticipate that the Fed will hold interest rates steady and then cut in July.

The next important GBP/USD news will be the upcoming US GDP data, which will shed more color on the state of the economy. Economists expect the data to show that the US capped a good year, growing by 2.7% in the fourth quarter.

The GBP/USD pair may remain under pressure now that analysts expect the Bank of England to be more aggressive in cutting rates this year since the economy is slowing.

GBP/USD technical analysis

The daily chart shows that the GBP/USD pair peaked at 1.3435 in September and has now dropped to 1.2450. Its recent rebound found substantial resistance point at the 50-day Exponential Moving Average (EMA).

The pair has moved slightly above the upper side of the descending channel pattern. It has also dropped below the Ichimoku cloud indicator. The Relative Strength Index and the MACD indicators have pointed upwards.

Therefore, the pair will likely resume the downward trend, and possibly retest the key support at 1.2350. A move above the 50-day moving average will point to more gains and invalidate the bearish view.

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Created on January 30, 2025

• For two consecutive days, the USD/JPY currency pair has been attempting to recover from recent selloffs that pushed it towards the support level of 153.71.
• Meanwhile, its recent gains extended to the resistance level of 155.80 before settling around 155.25 at the time of writing this analysis.
• Obviously, this is after interacting with the US Federal Reserve’s announcement to keep US interest rates unchanged as expected.

The Japanese Yen is still affected by central bank policies

According to Forex market trading, the Japanese Yen had recorded gains against the rest of the other major currencies, the highest for the Japanese currency in five weeks, and its gains came as the stricter policy by the Bank of Japan this year regained the spotlight after the US Federal Reserve fixed the interest rate. The minutes of the Bank of Japan’s December meeting recently revealed that the Japanese central bank is maintaining a cautious stance on monetary policy adjustments, based on inflation trends, wage growth and global economic risks.

However, the Bank of Japan raised the interest rate, and revised inflation forecasts higher at its January meeting, supporting market bets that the Japanese central bank is scheduled to continue tightening policy this year. In return, Asian currencies also received support from easing concerns about tariffs by the new US presidential administration amid conflicting comments on trade restrictions by government officials.

Trading Tips:

We still recommend buying the dollar/Japanese yen from every downward level as Trump’s policies may ultimately benefit the US dollar.

US Stocks Halt Recent Losses

During yesterday’s trading session, according to stock trading companies’ platforms, US stock indices pared their losses after the Federal Reserve left US interest rates unchanged, as expected. Meanwhile, the markets awaited a set of key earnings and continued to assess the impact of potential tariffs on major trading partners. By trade, the S&P 500 closed down 0.5%, the Nasdaq 100 fell 0.5%. Also, the Dow Jones Industrial Average ended down 0.3%, with the S&P 500 and Nasdaq 100 paring their losses by 0.8% in the afternoon.

For its part, the US Federal Reserve indicated that growth remained steady and that the labour market was stable at strong levels, while its statement lacked a previous paragraph that referred to progress in declining inflation. Nvidia shares remained in the spotlight with a 4% decline, extending their volatile momentum after claims of effective AI models from China risked the urgent need for more AI infrastructure. Meanwhile, the performance of Microsoft, Meta, and Tesla shares was mixed before their earnings after the closing bell. On a more positive note, T-Mobile US shares rose 6.3% after reporting stronger-than-expected earnings.

USD/JPY Technical Analysis and Expectations Today:

According to trading on the daily chart, the USD/JPY currency pair is trying to stop the downward correction path. Meanwhile, the strong control for the bulls will not return without returning to the vicinity of the resistance levels of 156.80 and 158.00, respectively. The last level will stimulate the move towards the psychological resistance of 160.00, with which the talk about the imminent Japanese intervention in the forex markets increases, in addition to the movement of technical indicators towards strong overbought levels. In return, and in the same time frame, the support level of 153.20 will remain the most important for strong control of the bears over the direction. The USD/JPY price today will be affected by the announcement of the US economic growth reading and the number of weekly jobless claims, in addition to the extent of investors’ appetite for risk or not.

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• EUR/USD extends its sideways grind above 1.0420 in the European session on Thursday.
• The Fed left monetary policy settings unchanged as expected.
• The ECB is widely anticipated to lower key rates by 25 bps.

EUR/USD continues to move sideways in a narrow channel above 1.0400 in the European session on Thursday after closing marginally lower on Wednesday. Investors await the European Central Bank’s (ECB) policy announcements and the Gross Domestic Product (GDP) data from the US.

The Federal Reserve (Fed) announced late Wednesday that it maintained the policy rate unchanged at 4.25%-4.5%. In its policy statement, the Fed removed the language suggesting inflation had “made progress” toward its 2% target and said the pace of price increases “remains elevated” instead. In the post-meeting press conference, Fed Chairman Jerome Powell said that there was elevated uncertainty because of significant policy shifts. “We don’t need to be in a hurry to make any adjustments,” he noted.

The US Dollar managed to stay resilient against its rivals after the Fed event but failed to gather bullish momentum. Later in the day, the US Bureau of Economic Analysis (BEA) will publish its first estimate of the fourth-quarter Gross Domestic Product (GDP) data. Markets expect the US economy to expand at an annualized rate of 2.6% following the 3.1% growth recorded in the third quarter. A weaker-than-forecast print could hurt the USD with the immediate reaction. 

The ECB is widely anticipated to cut key rates by 25 basis points. In case ECB President Christine Lagarde adopts a cautious tone regarding further policy easing, citing doubts over the continuation of the disinflation, the Euro could gather strength. If Lagarde acknowledges the worsening growth outlook and reiterates the confidence in inflation stabilizing at around their target level, the Euro could come under renewed bearish pressure.

EUR/USD Technical Analysis

The near-term technical outlook fails to provide a directional clue, with the Relative Strength Index (RSI) indicator on the 4-hour chart moving sideways slightly below 50.

On the downside, first support could be seen at 1.0380-1.0390 (200-period Simple Moving Average, Fibonacci 50% retracement of the latest downtrend) before 1.0340-1.0350 (Fibonacci 38.2% retracement, 100-period SMA) and 1.0300 (static level, round level). If EUR/USD stabilizes above 1.0440 (Fibonacci 61.8% retracement), next resistance could be spotted at 1.0500-1.0510 (round level, Fibonacci 78.6% retracement) ahead of 1.0540 (static level) and 1.0600 (beginning point of the downtrend).

The EURJPY pair surrendered to stochastic negativity yesterday, forming new negative waves to crawl below the sideways track’s support line at 161.60, to notice resuming the negative attempts this morning and settling near 160.80.

Now, the major indicators provide the negative momentum to increase the sharpness of the bearish track, to expect suffering additional losses by crawling below 160.90 level again and targeting the additional support at 160.20.

The expected trading range for today is between 160.20 and 162.10

Trend forecast: Bearish

January 30, 2025 – Written by Frank Davies

STORY LINK Pound to Dollar Forecast Today: GBP Rangebound vs USD ahead of FED Rate Decision

The Pound Sterling (GBP) mainly traded flat against the U.S. Dollar on Wednesday as investors awaited the Federal Reserve’s latest interest rate meeting.

At the time of writing, Pound US Dollar exchange rate (GBP/USD) was trading at approximately $1.2422, virtually unchanged from the start of Wednesday’s session.

On Wednesday, the US Dollar (USD) remained largely stable against most of its major counterparts, following a USD rally on Tuesday.

This surge came after US President Donald Trump hinted at the possibility of imposing universal tariffs on imported goods, potentially much higher than 2.5%.

On Wednesday, the ‘Greenback’ fluctuated within a tight range as investors held their breath in anticipation of the Federal Reserve’s upcoming interest rate decision.

While the central bank is expected to maintain current interest rates, any hawkish signals in the forward guidance could provide a boost to USD exchange rates heading into Thursday’s European trading session.

The Pound (GBP) faced difficulty in gaining traction against most of its major peers on Wednesday, largely due to the continued lack of UK data releases which weighed on GBP exchange rates.

Despite the absence of economic indicators, Sterling managed to maintain a relatively stable position, buoyed by optimism around the UK government’s pro-growth plans.

UK Chancellor Rachel Reeves alluded to several measures aimed at stimulating the British economy, helping to keep GBP exchange rates afloat during mid-week trading.

GBP/USD Exchange Rate Forecast: US Data to Drive Movement

Looking ahead, the main driver of movement for the Pound US Dollar exchange rate on Thursday will likely be the release of the latest US GDP figures.

With US GDP projected to decline from 3.1% to 2.8% in the fourth quarter of last year, a result in line with expectations could weaken the ‘Greenback.’

Meanwhile, across the Atlantic, the UK is set to have another relatively quiet day in terms of economic data, which may keep GBP exchange rates directionless.

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TAGS: Pound Dollar Forecasts

Pepe’s currency price (PEPEUSD) rose in the intraday levels, amid the dominance of the downward correctional trend in the short term, with negative pressure due to trading below the 50-day SMA, as the price tries to recoup some recent losses, as it also tries to vent off oversold saturation in the RSI. 

Therefore we expect the price to return lower, targeting the support of $0.000007718 holds on, provided the resistance of $0.000017223 holds on.

Trend forecast for today: Bearish 

The USDJPY price opens today’s trading with clear negativity to break 154.96 level and settle below it, to activate the bearish correction scenario and head towards achieving negative targets that start at 153.75, noting that breaking this level will push the price to visit 61.8% Fibonacci correction level at 152.55.

Therefore, the bearish bias will be suggested for today, taking into consideration that breaching 154.96 and holding above it will stop the expected decline and lead the price to start recovery attempts on the intraday and short-term basis.

The expected trading range for today is between 153.60 support and 155.00 resistance

Trend forecast: Bearish

January 28, 2025 – Written by Frank Davies

STORY LINK Pound to Euro (GBP/EUR) Exchange Rate Muted despite Upbeat German Data

The Pound Sterling was trapped in a narrow range against the Euro on Monday despite the release of some better-than-expected German data.

At the time of writing, the GBP/EUR exchange rate was trading at around €1.1889, virtually unchanged from Monday’s opening levels.

Although flat against the Pound (GBP), the Euro (EUR) gained ground against several of its counterparts on Monday following the release of Germany’s latest IFO business climate index.

The index ticked up in January, rising from 84.7, the lowest level since May 2020, to 85.1, surpassing expectations that it would remain unchanged.

This positive data from the Eurozone’s largest economy bolstered the Euro at the beginning of the week, especially amid a generally cautious market sentiment.

As a safe-haven currency, the Euro also benefited from the risk-averse trading environment on Monday.

On Monday, the Pound stayed largely muted against most of its peers, owing to a lack of fresh economic data releases.

This absence of new information left Sterling without a clear direction at the start of the week, however, saw the Pound remain relatively steady.

Given the anticipated scarcity of UK economic data throughout the week, it’s likely that the Pound will continue to oscillate without any major economic drivers influencing its movement.

Looking ahead to Tuesday, the main factor influencing the Pound Euro exchange rate will likely be several speeches from European Central Bank (ECB) officials.

Both ECB official Piero Cipollone and ECB President Christine Lagarde are set to speak on Tuesday.

If either policymaker hints at a potential ECB interest rate cut, EUR exchange rates could weaken as a result.

For the Pound, with UK data remaining sparse, GBP exchange rates are likely to continue struggling to find a clear direction this week.

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Created on January 29, 2025

• The British Pound has rallied a bit during the early hours on Tuesday against the Japanese Yen as we continue to see a lot of noise.
• Ultimately, this is a pair that is currently struggling with the 200 day EMA and the 50 day EMA both being flat.
• So that does suggest there’s a little bit of lackluster trading.

However, it is also worth noting that the 195 yen level above gives us a nice area from which to judge this market. If we can break above that level, then I think it opens up a possible trade to the 200 yen level. Short-term pullbacks are more likely than not going to end up being buying opportunities with the 190 yen level underneath offering a bit of a floor.

Interest Rates Still Matter

All things being equal, the interest rate differential still favors the United Kingdom, and that’s not going to change anytime soon. So, if we see British Pound strength in general, that will almost certainly be felt here in spades. I don’t like the idea of shorting this pair, and I do believe that longer term traders are just simply collecting swap at the end of the day and are waiting for a continuation of the overall upward momentum that will eventually have this market testing the 200 yen level again. Anything above there probably opens up the possible move to the 208 yen level again, but right now I think we’re just killing time. I still favor the upside, but I’m not looking for anything major. I think if you are somewhat tactical with your entries, it’s probably a good market to take advantage of as it has been somewhat stable, and the market is likely to see a bit of back and forth trading set ups.

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