The 1.1850 level is an area that, over time, I think will continue to be of interest. I think if we get anywhere near it, there should be sellers willing to come in. The question is, can we break above there, because if we can, then the 1.1950 level gets targeted, followed by the 1.20 level. Short-term pullbacks could be buying opportunities, but if we break down below the 1.17 level, we’ll see that there is the 50-day EMA.
The US dollar bounced from the crucial 156-yen level during trading on Thursday as we continue to see a lot of noise in the US dollar against the Japanese yen.
Recently we’ve seen the Bank of Japan come out and intervene, although they don’t openly admit it, and as a result there has been some weakness.
Furthermore, we had interest rates drop in the United States and that brought in some weakness as well as the interest rate differential shrank a bit.
That being said, there are rumblings coming out of Iran and out of Washington DC that they are still not necessarily agreeing on the facts or reality. While there were hopes of peace breaking out, and there still could be in theory, the Iranians and the Americans seem to not agree on whether or not uranium is coming out of that country. That is a huge deal and ostensibly is the whole reason the Americans had attacked Iran.
Geopolitical Rumblings and Economic Data
As long as we continue to see these games being played through the media and Twitter and social media, it is going to be a very noisy world to trade in. That being said, you do get paid to hold the US dollar against the Japanese yen and I think that is going to be the main driver here.
Friday has the non-farm payroll announcement coming out and that is a market that really can move this pair. If the number coming out of the United States is hotter than anticipated, that could cause a bit of trouble for the Japanese yen because it will push the idea that the Federal Reserve will have to stay tighter for longer. In other words, the interest rate differential will remain quite large.
The expected number of jobs added in the previous month is 65,000 and if we blow the doors off of that like we did last month, I would anticipate that we probably see a bit of a jump in this pair. Ultimately, this is a market that I think will try to make its way back to the 158 yen level, it’s just going to be a grind more than anything else.
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.
The Euro has been a little bit positive in the early part of the trading session here on Thursday, but we continue to see a little bit of hesitation between the 1.18 level and the 1.1850 level.
There are a lot of things going on, not the least of which will be the war of course in the Middle East, but the market has seen quite a bit of volatility based on positive news flow coming out of the Middle East and then eventually negative.
It’s also worth noting that the non-farm payroll announcement comes out on Friday, so you have to be a little cautious with this, recognizing that we have a situation where there will be a lot of volatility during the session on Thursday going into Friday and as a result, caution is the better part of valor.
The Impact of Non-Farm Payrolls and Fed Policy
I do think that there is going to be a very immense amount of pressure above that could cause quite a few headaches for traders who are trying to get long. 1.1850 being broken to the upside would obviously be a very bullish turn of events; it could show the EUR/USD market as ready to break higher, perhaps the 1.20 level and beyond.
That being said, what you need is a reason for the Federal Reserve to look like they are not going to stay tighter for longer. In this environment, there is a lot of positivity out there based on some comments coming out of Tehran and Washington DC, but the jobs market, if it’s still really hot, that could kill some of that US dollar weakness as it will make the Federal Reserve have to sit on its hands even longer.
If we do fall from here, I expect the 50-day EMA near the 1.1685 level to offer support. I think we’re just stuck in this compression pattern at the moment.
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.
The GBPJPY pair settles in sideways range near 212.80 level, affected by the contradiction of the main indicators, to delay activating the previously suggested negative trend.
The price might recover more of the losses by its rally towards 213.50, reaching the moving average 55 near 213.85, but it will not affect the main bearish scenario, depending on the continuation of forming main barrier at 214.30 level against the current trading, note that breaking 211.80 level will ease the mission of forming strong waves, to expect reaching 211.20, repeating the pressure on 210.45 support.
The expected trading range for today is between 211.80 and 213.50
The Pound US Dollar (GBP/USD) exchange rate edged higher on Thursday, as improving risk appetite helped lift the pairing.
At the time of writing, GBP/USD was trading at $1.3622, up roughly 0.2% on the day.
The US Dollar (USD) weakened on Thursday as a firmer risk tone reduced demand for the safe-haven ‘Greenback’.
Markets were buoyed by hopes of a possible US-Iran peace agreement, after US President Donald Trump suggested a deal to end the conflict was ‘very possible’ following negotiations over the previous 24 hours.
The prospect of easing tensions in the Middle East lifted global equities and encouraged investors away from safer assets.
This left the US Dollar under pressure through Thursday’s trade, with risk-sensitive currencies advancing as the ‘Greenback’ faced broad-based selling.
The Pound (GBP) strengthened against the US Dollar on Thursday, as its increasingly risk-sensitive nature left it well placed to benefit from the brighter market mood.
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However, Sterling’s gains were limited by caution ahead of the UK local election results.
Labour is widely expected to suffer setbacks, with investors watching closely to see the scale of the losses. A sharper-than-forecast defeat could intensify pressure on Prime Minister Keir Starmer, especially after some Labour MPs have already called for him to resign.
As a result, the Pound’s upside was capped, with improved risk appetite partly offset by fears that the elections could trigger renewed political uncertainty in the UK.
Near-Term GBP/USD Forecast: Pound to Face Election Fallout as US Dollar Awaits NFP Data?
Looking ahead, the UK local election results are likely to take centre stage for Pound investors on Friday.
Sterling may find support if Labour’s losses prove relatively contained, as this could calm concerns over Prime Minister Keir Starmer’s leadership.
However, a heavier defeat could revive speculation over a possible leadership challenge. If the results heighten fears of political instability in the UK, rising bond yields may add further pressure to the Pound.
At the same time, USD investors will be focused on the latest non-farm payrolls report. Economists expect US jobs growth to have slowed in April, which could strengthen bets on a Federal Reserve interest rate cut this year and drag on the ‘Greenback’.
Risk sentiment may also remain a key driver for the US Dollar. Should the market mood stay upbeat, the safe-haven ‘Greenback’ could struggle to regain ground.
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USD/JPY is moving higher as traders shrug off intervention risks and focus on higher yields in the U.S. The yield of 2-year Treasuries climbed back towards the 3.90% level, while the yield of 10-year Treasuries settled above 4.37%.
If USD/JPY settles above the 156.00 level, it will head towards the key resistance level at 158.00 – 158.50. Yesterday, BoJ defended the 158.00 level and briefly pushed USD/JPY towards 155.00.
However, the yen is fundamentally weak, and traders are ready to use pullbacks as an opportunity to buy USD/JPY. The Bank of Japan cannot intervene on a daily basis as the yen would lose the status of a free-floating currency. USD/JPY bulls bet that BoJ will be forced to move away from the forex market after several unsuccessful attempts to defend the yen.
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The US dollar has pulled back slightly against the Canadian dollar, but it still looks like it is in a basing pattern, and it is trying to find a reason to go higher. If we do drop from here, the 1.36 level might be short-term support, and the 1.3550 level most certainly is; it has proven itself multiple times. Pay attention to those US rates. If they turn around, that probably continues the bounce here.
The EURJPY pair reached %23.6 Fibonacci correction level at 182.00, to form strong support to provide chances for recovering some losses by its rally near 183.70 level.
In general, the bearish scenario will remain valid depending on forming main barrier by 185.45 level against the current trading, which makes us wait for gathering negative momentum, which allows it to renew the negative attempts that might target 182.80 level, to attempt to renew the pressure on 182.00 support, while breaching the main barrier and holding above it will confirm its move to a positive station, to begin targeting several positive stations by its rally towards 186.00 and 186.60.
The expected trading range for today is between 182.80 and 184.30
The GBP/USD pair trades 0.18% higher around 1.3620 during the European trading session on Thursday. The Cable reflects strength as the US Dollar (USD) faces selling pressure amid the optimism that the United States (US) and Iran will reach a peace deal soon.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the New Zealand Dollar.
USD
EUR
GBP
JPY
CAD
AUD
NZD
CHF
USD
-0.16%
-0.17%
-0.02%
-0.03%
-0.28%
-0.45%
-0.11%
EUR
0.16%
-0.02%
0.17%
0.14%
-0.12%
-0.29%
0.04%
GBP
0.17%
0.02%
0.17%
0.14%
-0.11%
-0.28%
0.06%
JPY
0.02%
-0.17%
-0.17%
-0.03%
-0.27%
-0.49%
-0.09%
CAD
0.03%
-0.14%
-0.14%
0.03%
-0.24%
-0.42%
-0.08%
AUD
0.28%
0.12%
0.11%
0.27%
0.24%
-0.17%
0.16%
NZD
0.45%
0.29%
0.28%
0.49%
0.42%
0.17%
0.34%
CHF
0.11%
-0.04%
-0.06%
0.09%
0.08%
-0.16%
-0.34%
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
As of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, is down 0.1% to near 97.90.
Market sentiment is risk-on, following reports from Al-Hadath, sister channel to Al Arabiya, that intense communications between the US and Iran are ongoing to gradually reopen the Strait of Hormuz, a vital passage to almost 20% of global energy supply. S&P 500 futures are marginally higher at around 7,370, indicating a higher appetite for riskier assets.
Going forward, the major trigger for Cable will be the US Nonfarm Payrolls (NFP) data for April, which will be released on Friday. The data is expected to influence market expectations for the Federal Reserve’s (Fed) monetary policy outlook. The CME FedWatch tool shows that the central bank will hold interest rates at their current levels by the year-end.
GBP/USD technical analysis
GBP/USD trades higher at around 1.3620 as of writing. The pair retains a constructive bullish bias as spot holds above the 20-period exponential moving average (EMA) at 1.3518. The pair is also trading just over the 61.8% retracement at 1.3600, turning that level into immediate underlying demand, while the Relative Strength Index (14) at 61.4 sits in positive territory, suggesting sustained upward momentum rather than overbought excess.
On the downside, initial support is seen at the recent pivot area around 1.3600, with the 20-period EMA and the 50% Fibonacci retracement clustered near 1.3520, reinforcing a deeper floor ahead of 1.3434 and 1.3331. On the topside, further gains face first resistance at the 78.6% Fibonacci retracement near 1.3719, with a break there exposing the cycle high region at 1.3870 as the next resistance hurdle.
(The technical analysis of this story was written with the help of an AI tool.)
(This story was corrected at 11:47 GMT to say in the third paragraph that S&P 500 futures are marginally higher at around 7,370, and not 7,7370.)
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data.
Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates.
When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money.
When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP.
A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period.
If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
We have seen some big moves across financial markets today with oil prices sliding more than 10% amid optimism about a deal between the US and Iran to end the blockade in the Strait of Hormuz, before prices bounced back as fresh doubts emerged. With oil plunging earlier, stagflation worries receded sharply, and investors piled back into European stocks, metals and foreign currencies, while selling the US dollar. The USD/JPY was apparently hit again by further dollar selling from Japan overnight, causing it to drop to near the 155.00 handle. The near-term USD/JPY forecast remains tilted to downside amid ongoing FX intervention and the dollar selling, but a lot now depends on what oil prices do from here. Will the two sides agree to any deal?
Risk appetite improves as crude oil takes a plunge
Risk appetite has picked up sharply today, with equities pushing higher as oil prices slide. The move follows a string of encouraging headlines on the US-Iran front. Late yesterday, US Secretary of State Marco Rubio confirmed that “Operation Epic Fury” had concluded, with its objectives met. Shortly after, Donald Trump announced a pause to “Project Freedom”, signalling room for negotiations with Iran. This was a step markets quickly interpreted as progress towards a deal, and so oil sold off after futures re-opened. Since then, prices haven’t looked back much, with Brent sliding now to below $100.
Source: TradingView.com
Momentum built further on reports from Axios suggesting both sides are close to agreeing a one-page framework to end hostilities, with a response from Tehran expected within 48 hours. Unsurprisingly, that combination has fuelled optimism across risk assets. Market’s reaction suggests that the situation could soon be resolved. Let’s hope that is the case and we don’t see any fresh escalations. But for now, Brent oil was still holding above its mid-April lows, where the latest rally began when talks broke down.
Trump’s fresh ultimatum halts oil-slide
After the big drop in oil prices, Trump has just posted the following:
“Assuming Iran agrees to give what has been agreed to, which is, perhaps, a big assumption, the already legendary Epic Fury will be at an end, and the highly effective Blockade will allow the Hormuz Strait to be OPEN TO ALL, including Iran. If they don’t agree, the bombing starts, and it will be, sadly, at a much higher level and intensity than it was before. Thank you for your attention to this matter!”
Markets have reacted slightly negatively to this latest post, but essentially it doesn’t change anything. The key sticking point is whether Iran would agree to remove its highly enriched uranium from the country. That’s what the US president is presumably referring to. This is something Iran has rejected until now.
USD/JPY forecast: Attention to turn to US data
In recent days, the US dollar was regaining momentum as talks between the two sides had stalled and oil prices went high. On top of this, the Federal Reserve appeared to be gradually stepping back from its easing bias, and this was also supported by resilient US data and company earnings.
However, today, that trend has changed. While oil still remains elevated compared to pre-war levels, if the Strait of Hormuz fully reopens prices could fall even more. If so, that could further weigh on the dollar in the near term as rate cut expectations creep back higher. That should also allow attention to shift back to fundamentals.
It is worth pointing out that any sustained rebound in economic activity following any resolution could just as easily keep inflation sticky, preventing the dollar from sliding too much in the longer run. For now, though, markets are leaning into the positive narrative, which is benefiting the EM currencies the most. The likes of the euro and yen, currencies that had come under pressure because of the oil shock, were also benefitting largely from this slide in oil prices.
Meanwhile, today’s US ADP employment report (expected at +120k) could also prove influential. A downside surprise would likely reinforce the softer dollar narrative.
For now, the tone remains tilted towards risk-on and a softer greenback, keeping the short-term USD/JPY forecast tiled to the downside.
Technical USD/JPY forecast and key levels to watch
Additional pressure on the dollar may have come from renewed Japanese activity in FX markets, as we saw renewed sudden drops in the USD/JPY overnight.
Source: TradingView.com
Technically, the pair has now reached and reacted from the key short-term support around 155.00-155.50 area. This is where recent lows meet the support trend of the bullish channel. A break below here could pave the way for fresh selling in the days and weeks to come, data and oil permitting. Key resistance is now at 157.50 to 158.00 area. Lots of other short-term levels in between.
