The EURJPY pair provided a new negative close below 181.70 barrier, to confirm delaying the bullish rally, activating with stochastic negativity by forming corrective waves and its stability near 180.10.

This corrective decline will not threaten the main bullish scenario, depending on the continuation of forming current support at 179.40 level, therefore, we will keep waiting for gathering bullish momentum to help it to form new bullish waves, to renew the pressure on the barrier and find an exit for achieving new gains in the upcoming period.

The expected trading range for today is between 179.65 and 181.70

Trend forecast: Bullish

The Pound Sterling (GBP) recovery gathered steam against the US Dollar (USD), driving GBP/USD to fresh five-week highs above the 1.3350 level.

Pound Sterling cheered renewed USD weakness

GBP/USD witnessed the extension of the UK Budget-inspired relief rally amid a sustained bearish sentiment around the US Dollar, which bolstered its recovery momentum.

Last week, British Chancellor of the Exchequer Rachel Reeves announced a tax hike amounting to an annual £26 billion to fund the fiscal hole. The UK’s Office for Budget Responsibility (OBR) raised the country’s GDP forecast for 2025 to 1.5% from the previous forecast of 1%.

Pound Sterling, however, capitalized on the absence of any major tax burden on households, as the Labour Party stuck to its self-imposed rule of avoiding fresh borrowings for day-to-day spending, as explained by FXStreet’s Analyst Sagar Dua.

Across the Atlantic, the USD faced headwinds from persistent dovish expectations for the US Federal Reserve’s (Fed) December monetary policy meeting and beyond.

A flurry of unimpressive US data releases kept the bets for a 25 basis points (bps) December Fed rate cut elevated around 90%, according to the CME Group’s FedWatch Tool.

Earlier in the week, the Institute for Supply Management (ISM) Services PMI showed little improvement in November at 52.6 versus 52.4 in October, while the Automatic Data Processing (ADP) said that US private payrolls unexpectedly declined by 32K in November, following a revised 47K increase. Analysts estimated a job gain of 5K.

Data on Thursday showed that the Initial Claims for state unemployment benefits fell 27,000 to a seasonally adjusted 191,000 for the week ended November 29, the lowest level since September 2022.

However, data published by Challenger, Gray & Christmas showed that employers reported 71,321 job cuts in November, its highest level for that month since 2022. Mixed US economic data did little to alter markets’ expectations of a Fed rate cut this month.

Further weighing on the USD were US President Trump’s repeated comments that he has “already decided” who will replace Fed Chairman Jerome Powell in May 2026. 

Following his recent references and media reports, markets considered White House Economic Adviser Kevin Hassett as Trump’s top pick for the next Fed Chair.

Hassett has endorsed Trump’s calls for lower rates on several occasions as the head of the National Economic Council (NEC).

Heading toward the weekend, the pair held its bullish streak after the delayed September US annual core Personal Consumption Expenditures (PCE) Price Index rose 2.8%, against the expected increase of 2.9% in the same period. 

Meanwhile,  the University of Michigan (UoM) preliminary Consumer Sentiment climbed to 53.3 in December, compared to November’s 51 and 52 forecast. The one-year Consumer Inflation Expectations declined to 4.1% in December after reporting 4.5% in November.

Focus on Fed policy announcements and UK GDP

It’s a relatively busy week, in terms of economic events, with the Fed policy announcements on Wednesday likely to stand out.

A 25 bps rate cut by the Fed is almost certain, and hence, all eyes will be on the US central bank’s Summary of Economic Projections (SEP), the so-called Dot Plot chart, for fresh insights on the interest rate path for 2026.

Fed Chairman Jerome Powell’s words at the post-policy meeting press conference will also hold weight, having a significant impact on the USD and the GBP/USD pair.

Ahead of the Fed event risk, Tuesday’s US JOLTS Job Openings and the ADP Weekly Employment Change data will be eagerly awaited.

Later in the week, the monthly Gross Domestic Product (GDP) from the United Kingdom (UK), due on Friday, could offer some incentives to Pound Sterling traders.

Apart from the data releases, markets will closely scrutinize speeches from BoE and Fed policymakers and any developments on the US-Russia discussions on the potential Ukraine peace deal.

GBP/USD Technical Analysis

In the daily chart, the 21-day Simple Moving Average (SMA) has turned higher and price holds above it, with the pair also above the 50-day SMA but still beneath the declining 100-day SMA. The rising 200-day SMA sits just below price, hinting at a gradual improvement in the medium-term tone, while the 100-day SMA at 1.3368 caps the topside. The Relative Strength Index (RSI) is at 62, supportive without entering overbought territory.

Short-term posture improves as the 21-day SMA rises beneath price, while the 50-day SMA continues to drift lower, underscoring an ongoing transition. Risk stays skewed higher while above the rising 200-day SMA, with support concentrated between 1.3329–1.3267. A daily close north of moving-average resistance would add traction to the recovery, whereas a break back into that support band would stall momentum.

(The technical analysis of this story was written with the help of an AI tool)

Created on December 04, 2025

• EUR/GBP continues to face selling pressure as it tests the 0.8750 support area, with the recent strong candlestick hinting at potential downside.
• A bounce could target 0.88–0.8850, but a break below 0.87 may signal a deeper decline.

The Euro has fallen pretty significantly during the trading session here on Wednesday to test the 0.8750 level. This is an area where I expect to see a significant amount of support, and therefore, it’ll be interesting to see how this plays out.

We are hanging around the 50-day EMA and previous resistance. So, it all lines up for a potential setup, but we’ll have to wait and see. The size of the candlestick is pretty impressive, and it does suggest that perhaps the market is going to continue to see a little bit of downward pressure, but ultimately, I look at this as a market, so that if we can get a little bit of a bounce, then I think we will probably return back to the 0.88 level. Longer term, one would suspect that perhaps we could go to the 0.89 level based on the previous consolidation range and the measured move.

Longer-Term Perspective and Key Levels

However, when you look at this from a longer-term perspective, and I mean multi-year, the 0.89 level is an area that’s been important a multitude of times. So even if we do turn around and rally from here, I’m not going to get married to the position. In fact, I probably would take profit somewhere near the 0.8850 level and see if we pull back.

That could be an excellent selling opportunity. We have already done that. So, the question is, did we put in a top? If we break down below 0.87, then I suspect we did, and we probably go much lower.

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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.

While market bets on a BoJ rate hike are boosting demand for the yen, key US data will fuel speculation about multiple Fed rate cuts.

US Personal Income and Outlays Report Takes Center Stage

Later on Friday, the highly anticipated Personal Income and Outlays report will be under the spotlight. Economists expect the Core PCE Price Index to rise by 2.9% year-on-year and by 0.2% MoM in September, matching August’s trends.

Despite the delayed report reflecting September numbers, any shift from August levels would likely influence bets on December and March Fed rate cuts. A more dovish Fed rate path would pull 10-year Treasury yields sharply lower, narrowing US-Japan rate differentials further.

Rising 10-year JGB and falling 10-year Treasury yields further support the short- to medium-term USD/JPY outlook, with 140 a medium-term price target.

Other stats include preliminary Michigan Consumer Sentiment numbers. The inflation components will require attention, given the market focus on the Fed’s dual mandate. Economists forecast Michigan Inflation Expectations to drop from 4.5% in November to 4.4% in December.

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

According to the CME FedWatch Tool, the probability of a December cut stood at 87.0% on December 4, down from 90.0% on December 3. Meanwhile, the chances of a March rate cut slipped from 53.4% to 48.8%. However, traders should closely monitor the December and March trends. The absence of US inflation data left softer labor market data to drive expectations. Incoming inflation data will recalibrate market expectations, with sticky inflation likely to curb dovish calls.

Technical Outlook: USD/JPY on a Downward Trajectory

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

A break below the 155 support level would bring the 50-day EMA into play. If breached, the 153 support level would be the next key support. Crucially, a drop below the 50-day EMA would signal a bearish trend reversal, suggesting a near-term fall toward 150.

– Written by


Frank Davies

STORY LINK GBP to USD Forecast: Pound Sterling Extends Gains Ahead of Key US Sentiment Data

The Pound to US Dollar exchange rate (GBP/USD) touched a fresh one-month high on Thursday, supported by a mildly risk-on market tone and rising expectations of imminent Federal Reserve interest rate cuts.

At the time of writing, GBP/USD was trading at $1.3363 – its strongest level since late October.

The Pound (GBP) spent Thursday trading within a narrow range, with the absence of new UK data leaving Sterling without a strong directional catalyst.

Lingering reactions to the UK’s autumn budget continued to influence sentiment. Reports suggesting that uncertainty ahead of the fiscal statement had cooled investment, dampened business confidence, and contributed to a slowdown in construction activity added to the mixed response to Labour’s late-November plans.

Even so, the increasingly risk-sensitive Pound managed to hold onto its recent momentum against the US Dollar (USD), briefly pushing to a new one-month high as broader market appetite shifted toward risk.

The US Dollar remained under pressure on Thursday, with upbeat market sentiment limiting demand for the safe-haven currency.

Speculation that the Federal Reserve may accelerate monetary easing over the coming months weighed heavily on USD sentiment. With a rate cut widely expected at next week’s meeting, and recent signs of a cooling US labour market reinforcing expectations of further easing, investors saw little reason to move back into the ‘Greenback’.

Adding to the downward pressure were reports that Kevin Hassett, a close ally of President Donald Trump, is likely to replace Jerome Powell as Federal Reserve Chair when Powell’s term ends in May 2026, a move that markets view as supportive of a more dovish policy path.

GBP/USD Exchange Rate Forecast: US Dollar Poised for Additional Weakness?

Looking ahead, Friday’s release of the University of Michigan’s consumer sentiment index will be the key focus for USD traders. Sentiment is expected to show a slight improvement in December, which may offer the Dollar some modest support — though confidence remains historically fragile.

Even so, firm expectations that the Federal Reserve will cut interest rates next week, and may increase the pace of easing through 2026, are likely to keep the ‘Greenback’ under pressure in the short term.

For the Pound, the absence of major UK economic releases going into the weekend means GBP will continue to take its cues from broader market sentiment. A risk-on mood could help Sterling extend gains against the Dollar, while any deterioration in confidence may pull the currency lower.

Continued scrutiny of the autumn budget fallout — including concerns about leaks and mixed briefings surrounding the announcement — could also exert a subtle influence on GBP trading.

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TAGS: Pound Dollar Forecasts

Created on December 04, 2025

EUR/USD Analysis Summary Today

• Overall Trend: : Bullish bias.
• Support Levels for EUR/USD Today: 1.1620 – 1.1550 – 1.1480.
• Resistance Levels for EUR/USD Today: : 1.1720 – 1.1800 – 1.1880

EUR/USD Trading Signals:

• Buy EUR/USD from the support level of 1.1590 with a target of 1.1800 and a stop loss at 1.1500.
• Sell EUR/USD from the resistance level of 1.1800 with a target of 1.1500 and a stop loss at 1.1890

Technical Analysis of EUR/USD Today:

Amid renewed positive momentum, the Euro has maintained a strong performance this week, thanks to supportive yield differentials. Across reliable trading platforms, the EUR/USD exchange rate rose to the 1.1675 resistance yesterday, Wednesday, supported by favorable developments in bond markets. In recent days, bond yields (the interest rate paid on government debt) have risen at a faster pace in the Eurozone than in the United States, which is supportive of Euro trading.

Technically, the EUR/USD’s test of the 1.1675 level grants US Dollar buyers their strongest exchange rate since November 14. After hitting its low of 1.1491 on November 21, the pair has closed higher for seven consecutive days. This rally moves beyond the narrow descending wedge pattern that was evident on the charts since mid-September, when the EUR/USD fell from its 2025 peak of 1.19. We also note a break above the 50-day Exponential Moving Average (EMA) at 1.1605, which aligns with the emerging positive momentum and suggests that the multi-week lows have been reached, making a test of the 1.19 level in early 2026 possible.

Bond Yields and Euro Momentum

Recenlty, we observed a rise in Eurozone bond yields mid-week following a better-than-expected inflation reading, indicating that financial markets are betting on the European Central Bank (ECB) keeping interest rates at their current levels for an extended period. According to economists, if Eurozone inflation does not fall below the ECB’s target in the coming months, as the markets anticipate, then a 10-year swap rate exceeding 3% is not an unrealistic scenario.

As is well known, the 10-year swap rate is a key money market benchmark, reflecting investors’ and traders’ expectations for future interest rates. It also underpins a wide range of products, such as mortgages and corporate lending. Meanwhile, the EUR/USD pair’s gains reflect lowering expectations for US interest rates, as the past seven trading days have been characterized by a cautious repricing of expectations for a US rate cut by the Federal Reserve.

In this regard, the US interest rate market has almost fully priced in a third consecutive 25 basis point rate cut by the Fed this month. This will naturally have a negative impact on the overall performance of the US dollar. Therefore, we expect the Federal Reserve to be more aggressive in cutting interest rates going forward, compared to the European Central Bank’s support for our expectation that the EUR/USD pair will break through the psychological resistance level of 1.2000 in 2026.

Trading Advice:

We still recommend buying EUR/USD from the support area of ​​1.15 and below, but without risk, with a target of 1.18, the most important level for moving towards the psychological resistance of 1.20.

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GBP/USD Technical Analysis

The British pound has gone back and forth there in the course of the trading session on Thursday so far, with a 1.3350 level offering a barrier.

We can continue to go higher; that obviously would be a very bullish sign, and it is worth noting that the Wednesday candlestick was extraordinarily bullish, but I find it interesting that on Thursday, we’re just standing still. This tells me that maybe there isn’t as much conviction as Wednesday seemed to provide, but again, we’ll have to wait and see. I think a lot of this comes down to next week’s interest rate decision, and it wouldn’t surprise me at all if we just drift sideways.

EUR/GBP Technical Analysis

The euro initially tried to rally against the British pound but continues to suffer at the hands of selling pressure. That being said, we are sitting right at a support level that was previously resistance, and we are hanging around the 50-day EMA as well, all things being equal. This is a market that I think continues to see a lot of questions asked of it. The 0.89 level is a massive resistance barrier, but it is also a target based on the previous consolidation.

So, I think we get more chop. I still, at least so far, favor the upside, but we’ll have to wait and see. If we break it down to the 0.87 level, then for me, I think it’s a longer-term short. We’ll just have to wait and see. Pay attention to how the Euro and the British pound are behaving against the US dollar. It’ll tell you which one wins here.

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