Created on January 15, 2026

The euro weakened temporarily against the yen due to yen-driven risk flows, but the broader uptrend remains intact. Structural policy differences favor buying dips, with expectations for a rebound and continued positive momentum.

The euro has struggled a bit against the Japanese yen during the trading session on Wednesday, but this has been a Japanese yen-related move and not really anything to do with the euro. There are a lot of geopolitical concerns out there, and the handful of traders who believe in doomsday are buying the yen for the session. The reality is that the trend is very strong and is light years away from changing.

At this point in time, to assume that sooner or later the buyers come back is the camp being taken. Somewhere near the 183 level, there should be traders willing to get involved, assuming the market gets anywhere near there. The 50-day EMA is at the 181.67 yen level, and there are also a couple of trend lines in the same mix.

Monetary Policy and Carry Trade Support

The Japanese yen is backed by a Bank of Japan that simply cannot do anything to tighten monetary policy significantly, and that is the part that most traders need to be paying attention to. The focus is on a drop and a bounce. So far, the drop has occurred, but the bounce has not. Once the market starts to take off to the upside, there is a willingness to buy the right-hand side of the V pattern.

This could send the market towards the 186 level, possibly even higher than that. Ultimately, traders get paid at the end of every day to collect the carry trade. With that being said, this is a market with no interest in shorting. The overall momentum and bulk of the market’s attitude remain positive, and this dip should offer a buying opportunity for those patient enough.

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.

GBP/USD Technical Analysis

The British Pound is breaking below the 50-day EMA, and I think it is finally starting to roll over. I did previously suggest that maybe this was a topping pattern. I think on Thursday, we’re starting to get that answer.

With that being the case, the 200-day EMA is the next target, and then after that, we could be looking at the 1.30 level. I have no interest in buying anymore, at least not until we break above 1.36, something that I just don’t see happening in the short term.

EUR/GBP Technical Analysis

The Euro has bounced slightly against the British Pound during trading on Thursday as the 200-day EMA continues to offer support. That being said, I still think this is a pair that probably falls, but short-term rallies are likely in the meantime.

I’m willing to fade those short-term rallies at the first signs of exhaustion. The 0.86 level underneath, I think, is your initial target. Anything below there really opens up the downside here, and we could go looking to the 0.85 level, followed by the 0.84 level. Above, the 50-day EMA offers a bit of a ceiling.

For a look at all of today’s economic events, check out our economic calendar.

– Written by


Tim Boyer

STORY LINK GBP/USD Forecast: Pound Sterling Loses Momentum as BoE Outlook Unchanged

The Pound to US Dollar exchange rate (GBP/USD) slipped back on Thursday after an initial lift from stronger-than-expected UK growth data faded, leaving investors unconvinced that the rebound marked a turning point for the British economy.

At the time of writing, GBP/USD was trading around $1.3415, drifting lower after an early uptick following the UK’s GDP release.

The Pound briefly found support after data from the Office for National Statistics showed the UK economy expanded by 0.3% month-on-month in November, reversing October’s 0.1% contraction and beating expectations for a modest 0.1% rise.

However, the upbeat headline failed to generate lasting momentum. November’s expansion marked the first month of growth since June and was widely viewed by markets as a technical rebound rather than evidence of renewed economic strength.

Confidence was further tempered by concerns over the composition of the growth. A sizeable portion of the increase was driven by a sharp 25.5% surge in car manufacturing, as Jaguar Land Rover ramped up output following disruption caused by a cyber-attack earlier in the year.

As these caveats sank in, Sterling gave back its initial gains and slipped back into a softer trading range.

The US Dollar, meanwhile, traded without strong direction as improving global risk appetite reduced demand for traditional safe havens. A brighter market mood followed signs of easing tensions in the Middle East after Iran paused planned executions linked to recent protests, prompting the US to dial back the prospect of military action.

Despite the shift towards a more positive risk backdrop, the Dollar managed to hold its ground. A mild uptick in US Treasury yields helped underpin the currency, limiting losses even as investors tentatively rotated into higher-risk assets.

GBP/USD Forecast: Fed Speakers and US Output in Focus

Looking ahead to Friday, the Pound to Dollar exchange rate may be influenced by the release of US industrial production data. Output is forecast to have risen by just 0.1% in December, a slowdown that could place modest pressure on the Dollar if confirmed.

Later in the session, comments from Federal Reserve policymakers Michelle Bowman and Philip Jefferson will be closely watched. Both are viewed as leaning dovish, and any remarks reinforcing expectations of looser monetary policy could weigh on the US currency.

With no major UK economic releases scheduled, Sterling may continue to take its cues from broader market sentiment. A sustained improvement in risk appetite could support the increasingly risk-sensitive Pound, while renewed caution would be more likely to favour the US Dollar.

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TAGS: Pound Dollar Forecasts

Created on January 15, 2026

The US dollar initially rallied against the Japanese Yen on Wednesday, but continues to see a lot of noise. Nonetheless, this is a longer-term uptrend.

The US dollar initially rallied against the Japanese Yen during trading on Wednesday, but then gave back gains as we pulled back toward the 158 yen level. The 158 yen level is an area that has been significant resistance in the past, so it will be interesting to see whether or not it holds up as support.

There is a lot of concern out there about the United States possibly attacking Iran, but we have been down this road numerous times, so I don’t really know what changes longer-term structurally. As a result, if we do bounce from here, I am very interested in buying the US dollar.

I have no interest in shorting this market. I don’t care what it did during the trading session on Wednesday; it doesn’t change reality. The reality is that we have broken above a major resistance area and now we are testing it.

Support Levels and Long-Term Targets

Whether or not it holds remains to be seen, but I think the 50-day EMA underneath is going to be a significant support level as well. With all of that, I believe you have a situation where buyers are going to be looking to take advantage of value when they can get it and possibly try to push this market to the 160 yen level.

160 is an area that the Bank of Japan intervened in a couple of years ago. Ultimately, as long as the destruction of the Japanese Yen is somewhat subtle and slow-moving, I think we probably have a situation where the Bank of Japan stays out of it.

Structural technical analysis dictates that we could be looking at a 400 pip move from the breakout point at 158 yen, which leads me to believe we could go to 162 yen. I think, given enough time, that is exactly what happens, but we may get a little bit of noise here with some geopolitical issues.

Want to trade our USD/JPY forex analysis and predictions? Here’s a list of forex brokers in Japan to check out.

Copper price failed to settle for long time above $5.9700 barrier, affected by stochastic exit from the overbought level, to reach $5.8800 again, which increases the chances of activating temporary negative corrective trading, facing new bearish pressures that will force it to decline towards $5.6000 reaching extra support at $5.5100.

While the price success in surpassing the barrier and holding above it will reinforce it to record new historical gains by its rally towards $6.1200 and $6.2050.

The expected trading range for today is between $5.7500 and $6.000

Trend forecast: Fluctuated within the bullish trend

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STORY LINK Pound Sterling to Dollar Forecast: GBP Stalls Below 1.35 as USD Holds Firm

The Pound to Dollar exchange rate has been unable to regain ground above 1.35, as geopolitical developments and global risk considerations continue to dominate trading.

With UK fundamentals taking a back seat, GBP/USD remains range-bound while markets await clarity on US policy risks.

GBP/USD Forecasts: Held Below 1.3500

The Pound to Dollar (GBP/USD) exchange rate has been unable to move back above the 1.3500 level and settled around 1.3470 after the New York open.

Ranges have been relatively contained despite major underlying concerns and uncertainties.

Geo-political stresses remain substantial, especially with markets waiting for President Trump’s response on the Iran situation.

Overnight Trump threatened to impose 25% tariffs on countries which trade with Iran which is liable to trigger fresh tensions with China.

The overall dollar performance has been mixed while there has been further demand for precious metals with gold and silver posting fresh record highs. There have not been any major UK developments ahead of the latest UK GDP data on Thursday.

Monex Europe head of macro analysis Nick Rees commented; “It’s less to do with UK fundamentals – which we still think are weak – it’s rather that events elsewhere are providing a distraction from Britain’s problems.”

UoB commented; “The price action suggests that GBP is likely in a range-trading phase, probably between 1.3390 and 1.3520.”

MUFG expects limited GBP/USD gains to 1.38 at the end of 2026.

The headline US inflation rate was unchanged at 2.7% for December and in line with consensus forecasts. Core prices increased 0.2% on the month with the annual rate holding at 2.6% compared with market expectations of a slight uptick to 2.7%.

Markets are pricing in less than a 30% chance of a March Fed rate cut after no change in January, limiting scope for dollar selling.

There is still a high degree of concern surrounding Fed independence, although the market impact has been limited.

Traders are waiting for further news on the legal action against Chair Powell and the choice of next Fed Chair.

Scotiabank commented; “As President Trump continues to mull his pick to replace Powell, investors appear surprisingly calm in the face of the apparent risks facing the Fed’s policy independence.”

Domestically, markets will be on alert for comments from Bank of England (BoE) officials.

Deputy Governor Ramsden and external member Taylor are due to speak on Wednesday.

Both members have been relatively dovish members on the committee and the Pound will be vulnerable if Ramsden backs another immediate rate cut.

According to Scotiabank, there is scope for the disappointment surrounding central bank policy; “BoE rate expectations are steady following their recent pullback with markets still pricing at least one 25bpt cut by June and nearly 50bpts by December. We see risks titled to less easing than what is currently priced and look to GBP support as markets pare back their expectations for cuts.”

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TAGS: Pound Dollar Forecasts