Created on December 08, 2025

• EUR/JPY traded choppily on Friday, with buyers supporting each dip as sentiment toward the yen remains weak.
• Rising JGB yields and BOJ policy uncertainty shape direction, while key levels at 180, 182, and 185 yen define near-term momentum and support.

The euro has been choppy against the Japanese yen during the trading session on Friday, as we continue to see a little bit of support in this market anytime it drops. But you also need to keep in mind that the Japanese yen itself is facing a lot of noise due to the idea that the Bank of Japan will have to keep its interest rate fairly low, but the bond market at the same time is seeing yields rise in Japan; this is literally going to move JGB expectations. So, we’ll have to wait and see how that plays out from a longer-term standpoint. But as things stand right now, the Japanese yen is not a currency that a lot of people want to own. And that, of course, translates into a higher pair here.

Key Psychological Levels and Upside Targets

Ultimately, short-term pullbacks I think offer buying opportunities, and it’s probably worth noting that the 180 yen level is a large round psychologically significant figure that I think continues to offer short-term support. To the upside, the 182 yen level is probably a target.

And at that point in time, I think you have to look at this as a market that if we can break above there, then we will almost certainly go looking to the 185 yen level. If we were to break down, the 50-day EMA is closer to the 178 yen level and rising. So, I think that is an area buyers might look to pick up a little bit of value as well.

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.

Created on December 08, 2025

• USD/JPY initially slipped but firmed after U.S. core PCE met expectations, with technical action hinting at another bullish rebound.
• Support levels remain intact, and the pair may consolidate while awaiting the upcoming FOMC decision and press conference.

The US dollar fell a bit against the Japanese yen in early trading on a Friday, but we have now reacted to the core PC numbers that came out as anticipated in the United States. And that, of course, makes the US dollar firm up a little bit because I think some people were expecting bad news.

At this point, we have to pay close attention to Japanese yields in the bond markets and the JGB market due to the fact that rising interest rates could signal a problem. It can be the death of the carry trade, but I don’t think that gets out of control. At this point, we’re in the process of forming another hammer as we had on Thursday. So I think a bounce here does make a certain amount of sense from a technical analysis standpoint, and it could send this market back to the 158 level.

50 Day EMA

The 50-day EMA sits in the 153.50 region, and the 153 yen level underneath is a significant support level, all things being equal. This is a market that I think will continue to find buying opportunities based on value, and the Wednesday session of next week also features the interest rate decision; people will be watching that very closely. But I think more importantly, what they will pay attention to is the press conference and statement.

If the Federal Reserve looks like it’s going to be very hesitant to cut rapidly, then that should send the US dollar higher. So, the next couple of days might be about hanging around in this area, just simply killing time waiting for that information. But right now, we’re still in an uptrend. That hasn’t changed. It looks like we are trying to push to the upside. So, I like it.

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

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.

Created on December 08, 2025

EUR/USD Analysis Summary Today

• Overall Trend: : Bullish.
• Support Levels for EUR/USD Today: 1.1610 – 1.1560 – 1.1480
• Resistance Levels for EUR/USD Today: : 1.1680 – 1.1760 – 1.1820

EUR/USD Trading Signals:

• Buy EUR/USD from the support level of 1.1570 with a target of 1.1800 and a stop-loss at 1.1500.
• Sell EUR/USD from the resistance level of 1.1730 with a target of 1.1500 and a stop-loss at 1.1800.

Technical Analysis of EUR/USD Today:

We expect the EUR/USD pair to move within a narrow range at the start of this important trading week, within its recent price range. According to reputable trading platforms, the EUR/USD closed around 1.1640 last week after gains that extended to the 1.1681 resistance level, the pair’s highest point since mid-October.

Last week, the EUR/USD’s gains were fueled by investor optimism following positive European economic data. Germany saw improvements, with factory orders rising 1.5% in October, according to the German Federal Statistical Office (Destatis), five times the market forecast of 0.3%. The September reading was also revised upwards from 1.1% to 2.0%. French industrial production also contributed to this improvement, exceeding expectations with a 0.2% increase compared to the anticipated 0.1% decline. Spanish production rose by 0.7%, exceeding expectations of 0.5%.

Further Confirming the strength of the underlying economic conditions, the Eurozone also released its GDP data, which showed the economy grew by 0.3% quarter-on-quarter in the third quarter, surpassing expectations of 0.2%.

Employment also grew at a comfortable rate of 0.2%, exceeding expectations of 0.1%. Overall, all of this points to a strong economic pulse that will encourage the European Central Bank to hold interest rates steady for an extended period. In a world where interest rates are so crucial, this presents the euro with a good opportunity to make further gains against the dollar, which is expected to be subject to a series of US interest rate cuts by the Federal Reserve this week.

Daily Chart Technical Indicators Support the Bulls

According to the daily Forex chart, technical indicators continue to support the upward trend of the EUR/USD pair. The 14-day Relative Strength Index (RSI) is around 61 and has more time to achieve stronger gains before reaching overbought territory. This could happen if the bulls manage to push back towards the psychological resistance level of 1.1800. Meanwhile, the MACD indicator continues its steady upward trend.

The scenario for a bearish in the EUR/USD on the daily chart depends on the bears pushing prices back toward the psychological support of 1.1500 once again. The Euro/Dollar is not anticipating major data releases today apart from the announcement of the German Industrial Production reading at 09:00 AM Egypt time, followed by the Sentix Consumer Confidence reading for the Eurozone at 11:30 AM Egypt time.

Accordingly, limited trading for the Euro/Dollar can be expected today, pending the market’s reaction to the most important event: the US Federal Reserve’s policy announcement next Wednesday.

Trading Tips:

Please note that trading currencies within narrow ranges is not a sound investment decision. It is best to wait for the currencies’ reaction to this week’s key releases to determine the most suitable trading opportunities, avoiding unnecessary risk regardless of how strong the trading opportunities may seem.

Ready to trade our EUR/USD daily forecast? Here’s a list of some of the top forex brokers in Europe to check out.

The EURJPY pair remains affected by the dominance of the sideways bias, due to the contradiction between the main indicators, keeping their stability within the sideways track that is represented by 179.40 support, while 181.75 keeps forming strong barrier against bullish attempts.

The main stability within the bullish channel’s levels makes us wait to gather bullish momentum, motivating the bullish attempts by its rally towards 181.35, to attempt to breach the barrier to begin recording new gains by reaching 182.35 and 183.10.

The expected trading range for today is between 180.20 and 181.70

Trend forecast: Fluctuating

– Written by


Tim Boyer

STORY LINK Pound-to-Dollar Forecast: Will GBP/USD Rally on FED This Week?

The Pound to Dollar exchange rate (GBP/USD) stalled above 1.3350 after a strong run, with both the Fed and BoE poised to cut rates this month.

Long-term forecasts diverge sharply, with some banks expecting gains toward 1.45 while others see a slide back to 1.30 by 2026.

Direction now hinges on how aggressively the Fed eases next year and whether a new Chair injects political risk into US policy.

GBP/USD Forecasts: Rate cuts imminent

Credit Agricole forecasts that GBP/USD will retreat to 1.30 by the end of 2026, although it does see gains to 1.40 by the end of the following year.

In contrast, Bank of America forecasts that GBP/USD will strengthen to 1.45 at the end of 2026.

According to Bank of America; In reality, markets have been reluctant to price in good news, preferring to trade bearish GBP news into the budget.

GBP/USD posted net gains to 5-week highs above 1.3350 before stalling.

Federal Reserve policy will be a key element for currency markets. Traders are pricing around 86% odds of Fed cut this week, and potentially 2-3 more reductions next year.

There will also be a new Fed Chair from May which could trigger a notable shift in direction.

There has been increased speculation that President Trump will nominate Director of the National Economic Council Kevin Hassett to be the next Chair.

Such an appointment would increase concerns over increased political influence.

ING also noted potential risks to the US currency; “We are mildly bearish on the dollar into 2026 as the Fed brings the policy rate down to neutral. We see risks skewed to the dollar’s downside should a more politically minded Fed take US real rates a lot lower or even be dragged into a scheme to target longer-dated Treasury yields.”

Danske Bank has adjusted its forecast; “We expect the Fed to cut rates by 25bp in December, March and June (prev. January, April and July), and then maintain the terminal rate of 3.00-3.25% through the rest of 2026 and 2027.”

It noted a high degree of uncertainty; “Sudden slowdown in private consumption could tilt the Fed towards resuming more aggressive rate cuts, but the persistent fiscal easing could also force the Fed to maintain rates at a structurally higher level than we assume.”

Credit Agricole, however, expects no cuts in 2026; “Policy uncertainty to fade and dovish Fed market expectations to be put to the test by a resilient US economy and sticky inflation that would further render any fiscal dominance attempts costlier for the Trump administration ahead of the all-important US mid-term elections.”

There are also strong expectations that the Bank of England will cut rates in December while 2026 policy decisions will be a key element.

Barclays commented; “The BoE is expected to slow the pace of policy easing in 2026, this is contingent on inflation remaining contained and the labour market staying stable”

The bank did add; “some slack is starting to appear in the labour market. Should the unemployment rate surpass 5%, the central bank may ease more aggressively in a bid to support real disposable income and consumption.”

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While expectations of a BoJ rate hike are strengthening yen demand, key US data will fuel speculation about multiple Fed rate cuts.

US Inflation in Focus as the Fed Decision Looms

Later on Monday, US economic data will influence USD/JPY trends as the FOMC interest rate decision and projections loom. Economists expect Consumer Inflation Expectations to soften from 3.2% in October to 3.1% in November.

A drop in the NY Fed 1-Year Consumer Inflation Expectations would align with last week’s inflation data, supporting bets on a Fed rate cut. A more dovish Fed rate path would weaken demand for the US dollar, sending USD/JPY lower, aligning with my bearish short- to medium-term outlook.

For context, the US Core PCE Price Index rose 2.8% YoY in September, down from 2.9%, while Michigan Inflation Expectations fell from 4.5% in November to 4.1% in December.

The prospect of a December Fed rate cut, further easing in H1 2026, and BoJ rate hikes are key for USD/JPY trends.

According to the CME FedWatch Tool, the probability of a December cut stood at 88.4% on December 8, up from 86.2% on December 5. Meanwhile, the chances of a March rate cut slipped from 46.5% to 46.1%.

With markets already pricing in a December cut, traders should closely monitor the chances of a March cut.

While key US inflation data will influence US dollar demand, there are no FOMC member speeches to overshadow the reports. The Fed’s Blackout Period is in effect until December 11, limiting Fed-driven volatility.

Technical Outlook: USD/JPY on a Downward Trajectory

Looking at the daily chart, USD/JPY remained above the 50-day and 200-day Exponential Moving Averages (EMAs), indicating a bullish bias. However, fundamentals have begun to shift from the technical trend, supporting a bearish outlook.

A drop below the 155 support level would pave the way toward the 50-day EMA. If breached, the 153 support level would be the next key support. Significantly, a break below the 50-day EMA would signal a bearish trend reversal, signaling a near-term drop toward 150.

In today’s Weekly Forex Forecast, I’m breaking down my exact trade plan for the DXY, EURUSD, GBPUSD, and XAUUSD.

Can the euro confirm last week’s bullish change of character on the 4-hour chart?

I explain that and more in today’s video.

US Dollar Index (DXY) Forecast

The DXY did what I was anticipating last week as the market rotated lower from the upper band of its distribution channel. It was a clean reaction using the same combination of channels and SMC structure concepts I always look for.

The key for next week is the 4-hour structure. The only low that matters for market structure is 98.60. That is the level that produced the last confirmed bullish break of structure (BoS).

We also have the September FVG sitting there, still unmitigated. I want to see price tag that level next week.

If buyers defend 98.60, the bullish structure remains intact, but only if the DXY then closes above 99.12. If we close below 98.60, that would shift momentum and give us a confirmed bearish Change of Character (CHoCH).

The focus next week is simple. DXY bulls must hold above 98.60 to keep the bullish narrative alive. A sustained break below on the high time frames would confirm a bearish CHoCH.

EURUSD Forecast

EURUSD is showing early signs of strength after confirming a CHoCH on the 4-hour chart. That happened when price broke above the 1.16668 high.

The level buyers need to defend is 1.1590. That is the low that produced the last valid break of structure.

As long as EURUSD stays above that low, the pair has room to continue higher.

But EURUSD still depends heavily on the DXY. Before I turn bullish on the euro, I need to see the dollar index below 98.60. Until then, I’ll take last week’s EURUSD bullish CHoCH with a grain of salt.

Admittedly, last week was a bit frustrating because the EURUSD came within a few pips of sweeping the equal lows I wanted. Still, we got the EURUSD rally, which was my base case last weekend.

The bigger picture remains bullish as long as 1.1590 holds. A confirmed break below that low would invalidate the CHoCH.

GBPUSD Forecast

GBPUSD hit the September FVG last week that I had my eye on. That level came from a clean three candle pattern on the monthly.

The pound came close to my ideal entry zone but didn’t quite reach it. I wanted a deeper move into the pocket that showed more confluence.

Even without that, the market reacted and pushed higher, so the short-term structure remains bullish.

The bigger question is whether this is the bottom for GBPUSD or simply a relief rally within the downtrend. Some recent highs only produced wicks and not closes.

That makes it difficult to confirm a true CHoCH on higher timeframes. The DXY holding above 98.60 adds to the uncertainty.

Several inefficiencies beneath GBPUSD still need to be filled, specifically near 1.3270. If the dollar bounces from 98.60, the pound could struggle.

For now, GBPUSD is bullish in the short term. The reaction from any pullback next week will tell us whether buyers remain in control.

XAUUSD (Gold) Forecast

Gold moved sideways last week, but the structure is unchanged. The 4-hour trend remains bullish, with a recent break of structure, confirming higher highs and lows.

I am watching a key pocket below current levels next week. It includes a weekly bullish FVG, a daily FVG, and a sell-side single print.

That entire area remains unmitigated. It would be a clean place for a pullback.

Last week I wanted to see gold trade into that pocket and print a lower timeframe bullish CHoCH. Instead, the market stalled and traded sideways.

The same setup is valid going into next week. As long as gold stays above the key lows just above $4,000, buyers remain in control.

The trend line below also supports the idea of continuation. I would never use a trend line on its own, but it does intersect with the $4,130 support area.

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– GBP/EUR seen closer to 1.19 in 2026
– JPY faces notable structural headwinds
– USD to see a gradual decline

Image © Bank of England

Bank of America Global Research swims against the consensus and backs the pound.

The consensus prediction amongst investment bank analysts is that 2026 will be characterised by further underperformance of pound sterling.

“We’re happy to take the other side of that,” says Adarsh Sinha, FX and Rates Strategist at Bank of America, in a media briefing Thursday, in which he introduced his team’s key themes and forecasts for the coming year.

He opined that consensus year-ahead views tend to get burned out pretty early in any given year. Given this, ideas previously seen as contrarian can be adopted quickly as traders look for a new anchor.

The pound is down 5% against the euro this year, and the consensus is extrapolating that trend into another year.

To be sure, BofA is also bullish on the euro’s prospects, but the single currency won’t outperform a pound that can shake off recent worries over the UK’s budget.

A sizeable premium was demanded of sterling heading into the November budget, with investors concerned the government would announce policies that would upset the bond markets.

Image is courtesy of Bank of America Global Research.

GBP/EUR Year-End 2025

Built from leading bank forecasts.

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Now, with the budget having passed without drama, the pound is at a fork in the road: does that risk premium dissipate or does it become entrenched?

Bank of America thinks the former is the most likely: that premium can continue to lift, and the pound will recover as a result.

“This Budget has the buy-in from the OBR (who prepare macro forecasts for the Government) and the Chancellor has reinforced the commitment to keep the Fiscal Rule and raise the Fiscal Headroom. These are important anchors which should lead to a relief rally in GBP as the release valve of event risk has passed,” reads Bank of America’s year-ahead outlook.

BofA forecasts EUR/GBP at 0.84 by year-end, which gives a pound to euro conversion of 1.19.

Following on from the dollar’s largest annual decline since 2017, more weakness is in store next year, which makes for a GBP/USD year-end forecast of 1.45.

Of the Dollar, BofA says:

“We expect this trend to continue into 2026, albeit at a more moderate pace. Heading into next year, many of the same themes/conflicts in markets remain unresolved.”

Speaking to the media alongside Sinha was FX strategist Alex Cohen, who said a potential risk for the greenback is a building risk premium surrounding the role of the Federal Reserve and its independence.

“The administration is clearly discussing affordability,” Cohen said, adding that it’s looking at addressing the issue “through the lens of lower rates.”

Above: File image of Kevin Hassett. He’s a Trump ally, heavily favoured to replace Jerome Powell as Fed Chair. Copyright: U.S. Government Work.

Lower real rates, thanks to Fed rate reductions, and potential concerns over Fed functionality under a new Chair tied to White House policy, would pose headwinds to the dollar.

Another anti-consensus view adopted by BofA concerns the yen.

Yen upside is a strong consensus view for next year, largely on account of the Bank of Japan raising interest rates. However, BofA thinks the structural headwinds are too significant and they’re also happy to swim against the flow here.

“Japan is seeing structural outflows… Japan has been a cash-rich society for many years,” Sinha told journalists. “Inflation is no longer zero, and when inflation is no longer zero that’s a problem.”

Households and corporates are diversifying as cash is put to work, and most of that diversification is ex-Japan.

“As long as that continues, the yen will remain structurally weak,” says Sinha.

USD/JPY is forecast to end the year at 155.