The EURJPY pair benefited from the positive stability above 184.10 support, forming several bullish waves, achieving some gains by reaching 185.55 level, facing %61.8 Fibonacci correction level, which forces it to decline directly towards 184.90.

The current decline will not threaten the attempt of activating the bullish trend, depending on the stability of the mentioned support, therefore, we will keep waiting for gathering extra bullish momentum to ease the mission of reaching 185.85, and surpassing this barrier will extend the trading towards achieving extra gains that begin at 186.20 and 186.60.

The expected trading range for today is between 184.60 and 185.85

Trend forecast: Bullish

– Written by


Frank Davies

STORY LINK GBP/USD Forecast: ISM Services and UK Politics Leave Pound Sterling Flat

The Pound US Dollar (GBP/USD) exchange rate traded in a narrow range on Monday, as easing UK political concerns and renewed dip-buying in the US Dollar (USD) left the pairing without a clear direction.

At the time of writing, GBP/USD was trading at $1.3352, virtually unchanged on the day.

The US Dollar found some support on Monday as US markets reopened after the extended Independence Day break.

The ‘Greenback’ appeared to have drifted into oversold territory following last week’s sharp selloff, which came after the latest non-farm payrolls report revealed a much steeper-than-expected slowdown in job creation.

This encouraged some bargain hunters back into the market, allowing the US Dollar to recoup a portion of its recent losses.

At the same time, the latest ISM services PMI matched forecasts, slipping from 54.5 in May to 54 in June. While the reading pointed to a modest loss of momentum, it remained comfortably in expansion territory, suggesting the US services sector was still performing relatively well.

The Pound (GBP) remained resilient on Monday as investors continued to unwind some of the political risk premium that had recently weighed on Sterling.

Markets appear increasingly convinced that MP Andy Burnham will become the next Prime Minister without a prolonged Labour leadership contest causing further uncertainty.

Since announcing his bid for the Labour leadership, Burnham has attempted to calm market nerves by pledging to stick to the government’s current fiscal rules, while also setting out an ambitious economic agenda.

This has helped reassure GBP investors, allowing Sterling to hold firm as fears over UK political instability continue to fade.

Near-Term GBP/USD Forecast: US Jobs Data to Lift the US Dollar?

Looking ahead, Tuesday’s data calendar is relatively quiet, with the US weekly ADP employment change figure the only notable release.

Although not a top-tier indicator, the report could still lend the US Dollar some support if it points to solid growth in private-sector hiring.

Beyond the data, broader market sentiment may also drive movement in the pairing. A weaker appetite for risk could favour the safe-haven US Dollar, while a brighter mood may help the increasingly risk-sensitive Pound.

As a result, any shifts in risk appetite could leave GBP/USD trading unevenly.

Like this piece? Please share with your friends and colleagues:

International Money Transfer? Ask our resident FX expert a money transfer question or try John’s new, free, no-obligation personal service! ,where he helps every step of the way,
ensuring you get the best exchange rates on your currency requirements.

TAGS: Pound Dollar Forecasts

Goldman Sachs revised its 12-month USD/JPY forecast to 165 from 155 on July 6, 2026, placing it among the most bearish calls in Bloomberg’s surveyed consensus, as strategist Karen Reichgott Fishman cited Japan’s fiscal pressures, persistently elevated US Treasury yields, and only gradual Bank of Japan rate hikes as the structural drivers of continued yen depreciation.

The yen was trading at 161.79 per dollar in early Asian trading that Monday, down 0.3% on the session and near its weakest level since 1986, cementing its position as one of the worst-performing major currencies in 2026.

Goldman’s three-month target moved to 162 from 160, and its six-month target to 163 from 158 – a consistent upward shift across the entire forward curve that signals conviction rather than a single-point revision.

Foreign exchange options markets are aligned: traders assign roughly a 72% probability that USD/JPY reaches 165 by June 2027, per Bloomberg data, while hedge fund net short positioning on the yen hit its most extreme level since 2017 last month.

Goldman Sachs News: How Japan’s Debt Dynamics and Higher-for-Longer US Treasury Yields Drive the 165 Call

Goldman Sachs outlook hinges on the rate differential between US Treasuries and Japanese Government Bonds, suggesting continued depreciation pressure on the yen despite its current undervaluation.

With the Federal Reserve maintaining high rates and elevated Treasury yields, capital is shifting from yen-denominated to dollar-denominated assets, exerting ongoing selling pressure on the JPY.

Japan’s fiscal challenges worsen the situation, as high debt servicing costs limit policy flexibility and undermine efforts to defend the yen.

Mark Cranfield from Bloomberg highlights that investors remember the significant drop in USD/JPY in the 1980s, indicating that the current 160–165 range isn’t unprecedented.

Gradual Bank of Japan Hikes: Why the Tightening Path Is Too Slow to Close the Rate Gap and Arrest Yen Weakness

The Bank of Japan ended its negative-rate policy and yield-curve control in early 2025 but maintains a near-zero policy rate, emphasizing gradualism to protect growth.

A modest 25-basis-point hike does not close the gap with US rates, keeping the yen a low-yield funding currency. Goldman Sachs believes the BOJ’s tightening will remain too slow to impact its 12-month forecast.

The August 2024 rate surprise showed that such assumptions can lead to rapid yen rallies, compressing USD/JPY and triggering volatility across equities and crypto.

This incident highlighted the risks of crowded yen short positions, making Goldman Sachs 165 target a cautious base case with significant tail risks.

Yen as Funding Currency: Goldman Sachs Carry Trade Endorsement and the Risk-Asset Implications of Extended Yen Weakness

Goldman endorses the yen carry trade, leveraging low JPY borrowing to invest in higher-yielding assets, expecting this strategy to remain viable through mid-2027 due to persistent yen weakness.

This scenario supports broader risk-on behavior in equities, credit, and crypto markets. However, the significant short-yen positioning among hedge funds raises concerns; any sudden yen strength could lead to a disorderly unwinding of carry trades.

This is reminiscent of the sharp crypto volatility seen in August 2024, with the potential unwind now greater due to extended positioning.

Official Intervention: Why Goldman Expects Any Ministry of Finance Defense of the Yen to Be Short-Lived Against Macro Headwinds

🇯🇵 JAPAN MAY BE FORCED TO SPEND $100 BILLION TO SAVE THE YEN.

USD/JPY just hit 162.66, the highest level in 40 years.

Japan already tried to fix this. In late April and early May, it spent roughly $72-$73 billion defending the yen, its biggest intervention in years.

It failed.… pic.twitter.com/bPkPBH4l2d

— Bull Theory (@BullTheoryio) June 30, 2026

Japan’s Ministry of Finance is believed to have intervened in late April and early May when USD/JPY briefly exceeded 160, with BOJ data showing a drop in current account balances consistent with FX support operations totaling about ¥9.8 trillion (around $62 billionBn).

Fishman notes that while such interventions may buy time, they do not change the yen’s structural weakness. Goldman’s view suggests that macro headwinds, yield gaps, and the BOJ’s limited pace of easing will overwhelm policy efforts over the next year.

While interventions can temporarily compress USD/JPY by several hundred pips, without significant shifts in interest-rate differentials, such actions historically reverse. The 165 target reflects potential intervention without suggesting a lasting trend reversal.

The author does not hold any position in the securities discussed in the article.

– Written by


Frank Davies

STORY LINK Euro to Dollar Week Ahead Forecast: Weak US Jobs Data Puts Fed Outlook in Focus

The Euro to Dollar exchange rate (EUR/USD) has stabilised above the 1.14 level after weaker-than-expected US jobs data prompted investors to reassess expectations for further Federal Reserve interest-rate hikes.

While the softer labour market report has eased some of the Dollar’s recent momentum, analysts remain divided over whether the pause is temporary or the start of a broader reversal.

EUR/USD Forecasts: Fed policy crucial

Danske Bank maintains a 12-month Euro to Dollar (EUR/USD forecast of 1.12 as the US raises interest rates.

In contrast, Scotiabank is still backing EUR/USD gains to 1.22 by the end of 2026 as yields don’t back dollar gains.

EUR/USD again found support below 1.14 during the week and secured a limited net recovery to near 1.1450.

Interest rate expectations will be a key element with a particular focus on the Federal Reserve. Danske Bank commented; “We forecast two hikes for December and March. We see relative monetary policy as a negative driver for EUR/USD, especially towards 2027.”

The latest US employment report was weaker than expected with the increase in non-farm payrolls held to 57,000 for June compared with consensus forecasts of around 115,000. The main feature was a sharp drop in the labour force.

In response, there were fresh doubts whether the Fed would hike interest rates which curbed dollar support.

MUFG commented; “the tariffs implemented in 2025 are set to fall out of the annual CPI calculations over the coming months that will add downside pressure to annual inflation while a quirk in rental inflation should also reverse in H2. That will help ease Fed concerns over inflation risks that should see yields decline going forward.”

It added; “Apart from the RBNZ, no other G10 central bank has as much tightening priced as the Fed and hence there is scope for US yields to fall relative to elsewhere. This should see this recent dollar buying momentum reverse. We would also expect some renewed focus on US fiscal risks.”

Scotiabank also considers Fed expectations have overshot; “We see the USD’s latest gains as being counter to the longer-term fundamental trend, and see little upside from current levels.

It added; “The Fed’s belated reaction to the inflationary pressures arising from the US/Iran conflict have delivered a material reappraisal of its policy path. However, we believe that the Fed’s repricing is overdone while also suspecting that markets may be underestimating the hawkish appetites of the BoC, ECB, and BoE (as well as the BoJ).”

Danske still sees scope for net Euro losses; “We turned our EUR/USD forecast profile lower in May as we saw a structural shift in relative macro and monetary policy drivers. The moderation in energy prices is EUR-positive in isolation, but the fact that EUR/USD has still declined over the past month supports our view that the cross will be driven lower by more long-term factors.”

Like this piece? Please share with your friends and colleagues:

International Money Transfer? Ask our resident FX expert a money transfer question or try John’s new, free, no-obligation personal service! ,where he helps every step of the way,
ensuring you get the best exchange rates on your currency requirements.

TAGS: Euro Dollar Forecasts

The British Pound has strengthened against both the Euro and the US Dollar following signs that political uncertainty in the UK is easing, with EUR/GBP falling to around 0.8550 and GBP/USD holding above 1.3350.

JPMorgan has turned more constructive on Sterling, upgrading its 2026 forecasts following Andy Burnham’s reassuring commitment to the UK’s fiscal rules.

The bank is now bullish on the Pound against lower-yielding currencies and has trimmed its EUR/GBP forecasts.

JPMorgan now expects EUR/GBP at 0.87 in the third quarter, 0.88 in the fourth quarter, 0.89 in one year and 0.86 over the longer term.

According to the bank, Burnham’s communication around fiscal discipline has reduced political risk and should support Sterling over the coming months.

However, JPMorgan cautions that the current improvement may prove temporary.

As the Labour Party conference approaches in September, investors could begin rebuilding a political risk premium depending on the details of future fiscal policy.

The bank remains broadly constructive on Sterling, although it notes that the outlook for GBP/USD is mixed because it also depends on the direction of the US Dollar.

JPMorgan forecasts GBP/USD at 1.28 over the next quarter and 1.28 on a one-year view.

JPMorgan believes easing political uncertainty has improved the near-term outlook for the Pound, but fiscal policy announcements later this year will determine whether Sterling can extend its recent gains.

The US dollar initially dropped on Friday but has turned around to show signs of life. With this, we continue to see longer-term traders buy into this pair. The interest rate situation continues to favor higher levels.

USD/JPY

The US dollar initially fell during the trading session here on Friday, but then turned around to show signs of life again. The Bank of Japan did intervene over the last couple of days, but quite frankly, there isn’t a whole lot that they can do to change the overall market behavior. This is an area that I think will continue to offer support all the way down to the 160-yen level. Turning around and breaking above the top of the candlestick on Friday would be a good sign, and I do think that the interest rate differential will continue to favor the US dollar.

The Bank of Japan and Japan’s Economic Outlook

The Japanese yen is in serious trouble. I think they have to look at this through the prism of the massive amount of debt in Japan, which just cannot be serviced with high rates. If that’s going to remain the case, then it’s only a matter of time before we go much higher.

Longer-term, I think we go as high as 244 yen. Right now, 224 yen is a measured move of the rounding bottom. Ultimately, I think this is a market that will remain choppy, and it will get intervened in occasionally, but I look at these drops in price as value. The interest rate differential remains huge.

Yes, I understand that the Bank of Japan intervened early on Friday, and then the non-farm payroll number came out weaker than anticipated, but we are light years away from the differential closing, and I still like this as a longer-term buy and hold, and I do add every time it drops.

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

Christopher Lewis is a technical analyst and market commentator at DailyForex with more than two decades of trading experience in Forex and other leveraged markets. Based in Columbus, Ohio, he specializes in chart-based analysis of major currency pairs, stock indices, commodities, and energy markets, focusing on clear support and resistance levels, trend structure, and risk management. Christopher produces daily written and video analysis for traders who rely on technical setups to navigate volatile market conditions

As seen on: Pairs Of Aces Podcast,The Trader Guy, FXEmpire

– Written by


James Fuller

STORY LINK Pound to Dollar Weekly Forecast: Chancellor Appointment in Focus as GBP Recovers

The Pound to Dollar exchange rate (GBP/USD) has recovered to two-week highs near 1.3380 as investors continued to unwind bearish Sterling positions following signs of a smoother UK political transition.

Attention is now shifting towards Andy Burnham’s expected appointment of a new Chancellor, a decision widely seen as the next major test of market confidence in UK fiscal policy.

GBP/USD Forecasts: Waiting for the new Chancellor

Danske Bank forecasts that the Pound to Dollar (GBP/USD) exchange rate will slide to 1.26 on a 12-month view amid a vulnerable Pound and firm dollar.

Bank of America (BoA), however, expects a net gain to 1.37 by the end of this year as the Pound secures net support on capital inflows.

According to BoA; “Strong cross-border M&A inflows likely to support sentiment as political uncertainty recedes and focus turns to enhanced UK-EU relations and lower trade frictions.”

GBP/USD posted a net gain to a 2-week high around 1.3380 during the week with evidence that Pound benefitted from a covering of short positions.

Credit Agricole commented; “The GBP is still looking oversold, according to our FX positioning data and could continue to benefit from any potential short squeeze as well.”

Fiscal policy will be a key element, especially with strong expectations that Burnham will become the next Labour Party leader and be installed as Prime Minister.

ING commented; “ Andy Burnham will probably take over as Labour’s leader and UK PM on 20 July. The focus will then be on whether he appoints Ed Miliband as Chancellor (probably a little sterling negative) and then what policies are planned to be enacted in Burnham’s first budget – probably in early November.”

Scotiabank commented; “the “revolving door” at Number 10 over the past few years is a poor look for a large, developed economy and any tilt to the left in the ruling Labour party will register on GBP sentiment.”

Bank of England (BoE) policy will also be important with further doubts whether the central bank will hike rates.

According to ING; “the UK economy typically performs poorer in the second half of the year, and we suspect that Andrew Bailey’s dovish half of the MPC would be looking to restart the BoE easing cycle at the first opportunity.”

Danske Bank expects no BoE rate hikes. In contrast, the bank forecasts that the Federal Reserve will hike rates in December and March.

Scotiabank maintains a cautious stance on the dollar; “ the prospect of lower energy prices is already weighing on inflation expectations and tighter policy in the early days of a reformist Fed chair look unlikely.

It added; “Broader dollar gains look stretched and markets are already quite long the USD but strength will persist while markets anticipate a tightening being the Fed’s next move. We think structural challenges (debt/deficits) remain medium-term constraints on dollar gains as well.”

Like this piece? Please share with your friends and colleagues:

International Money Transfer? Ask our resident FX expert a money transfer question or try John’s new, free, no-obligation personal service! ,where he helps every step of the way,
ensuring you get the best exchange rates on your currency requirements.

TAGS: Pound Dollar Forecasts

Goldman’s shift to one of the most bearish USD/JPY calls on the Street, alongside a market-implied probability of around 72% for 165 by next June, suggests positioning and forecaster consensus are increasingly aligned around further yen weakness rather than a reversal, even with the currency already trading well below what most models suggest is fair value. The bank’s view that any official intervention would likely prove short-lived implies traders may treat verbal or actual yen-buying operations as tactical rather than structural, limiting how much such moves can durably reverse the trend while US-Japan rate differentials and Japanese fiscal pressures persist. With hedge fund short positioning already at its highest since 2017 and Goldman explicitly favouring the yen as a carry trade funding currency, the setup points to continued one-way pressure unless there’s a meaningful shift in either Fed or BOJ policy expectations.

Goldman Sachs cut its one-year USD/JPY forecast to 165 from 155, also raising its 3-month call to 162 and 6-month to 163, citing widening rate differentials, fiscal pressure and slow BOJ tightening despite the yen’s undervaluation.

Summary:

• Goldman Sachs cut its one-year USD/JPY forecast to 165 from a prior 155, making it one of the most bearish institutions on the yen
• The bank raised its three-month forecast to 162 from 160 and its six-month forecast to 163 from 158
• Goldman cited widening US-Japan rate differentials, Japanese fiscal pressure, elevated US Treasury yields and slow Bank of Japan tightening as drivers of further yen weakness
• The bank said the yen appears deeply undervalued but that any official intervention would likely be short-lived, with underlying depreciation drivers remaining in place
• Hedge funds’ short positions on the yen hit their highest level since 2017 last month
• Market-implied probability of USD/JPY reaching 165 by June next year stands at about 72%, and Goldman favors using the yen as a funding currency for carry trades

Goldman Sachs has sharply cut its yen forecast, now projecting USD/JPY will reach 165 within a year, up from a prior forecast of 155 and placing the bank among the most bearish institutions on the currency.

Goldman also raised its nearer-term forecasts, lifting its three-month call to 162 from 160 and its six-month projection to 163 from 158. The bank’s strategists pointed to widening US-Japan rate differentials, Japanese fiscal pressure, elevated US Treasury yields and a slow pace of Bank of Japan tightening as the key drivers behind the revised outlook, even as they described the yen as appearing deeply undervalued on a fundamental basis.

Goldman said any official intervention aimed at supporting the currency would likely prove short-lived, since the underlying causes of the yen’s depreciation remain firmly in place regardless of near-term buying operations. The bank’s more bearish stance comes as hedge funds’ short positions on the yen hit their highest level since 2017 last month, while market pricing currently implies about a 72% probability that USD/JPY reaches 165 by June of next year, broadly consistent with Goldman’s own view. The bank also said it favors using the yen as a funding currency for carry trades, a stance that reflects continued conviction that the currency’s weakness has further to run.

Fundamental Analysis & Market Sentiment

I wrote on 28th June that the best trades for the week would be:

1. Long of the USD/JPY currency pair. This produced a loss of 0.23% over the week.

2. Short of the EUR/USD currency pair. This produced a loss of 0.44% over the week.

The total loss of 0.67% averages to 0.34% per asset.

A summary of last week’s most important data in the market:

1. US Average Hourly Earnings – exactly as expected.

2. US Non-Farm Employment Change – significantly lower than expected, which gave a dovish tilt to the market in terms of Fed expectations.

3. US Unemployment Rate – a tick lower than expected, which helped amplify the dovish tilt.

4. US ISM Manufacturing PMI – a little lower than expected, also more fuel for doves.

5. Canadian GDP – the month-on-month increase ticked a fraction higher and strengthened the Canadian Dollar a little.

The big story last week was the weaker than expected key US jobs data which suggests a cooling economy. This has led to slightly more dovish expectations of the Federal Reserve, which has helped the US Dollar to decline as its anticipated future yield decline. It also gave a small boost to risky assets such as stocks. However, the CME FedWatch tool still shows at least one rate hike of 0.25% is expected this year, in September.

This gave a boost to stock markets, but equities remain generally mixed, with most key indices off their highs, although in many cases, not by very much. Globally, the stock market had its best week in two months.

Another big story is the intervention by the Japanese Government last week to prop up the Yen, after a few rounds of making threats. The presumed intervention sent the Yen sharply higher towards the end of the week after the USD/JPY currency pair made a new 39-year high price. However, the Yen gave up some of its gains, and many players will see these temporarily successful interventions as nothing more than selling opportunities.

The Week Ahead: 6th – 10th July

Next week is relatively light. The coming week’s most important data points, in order of likely importance, are:

1. US ISM Services PMI

2. Reserve Bank of New Zealand policy meeting

3. Canadian Unemployment Rate & Employment Change

It is a public holiday in New Zealand on Thursday.

Monthly Forecast July 2026

Currency Price Changes and Interest Rates

For the month of July, I forecasted that the EUR/USD currency pair will decline in value, and the USD/JPY currency pair will rise in value. The performance so far is:

Weekly Forecast 28th June 2026

Last week, I made no weekly forecast.

This week, I again make no forecast, as there were no exceptional price movements last week.

Volatility decreased last week, with only 11% of the notable currency pairs and crosses moving by more than 1% in value. Next week’s volatility is likely to remain at a similar level, although it might be higher in New Zealand Dollar pairs and crosses.

You can trade these forecasts in a real or demo Forex brokerage account.

Technical Analysis

Key Support/Resistance Levels for Popular Pairs

Key Support and Resistance Levels

US Dollar Index

The US Dollar printed a bearish candlestick last week, which engulfed the real body of the previous week’s candlestick which both made a new 13-month high and failed to break above the key long-term resistance level at 101.39.

A valid long-term bullish trend has clearly been established, but its failure to break above resistance calls it into doubt. Fundamental data released last week also was not supportive of the US Dollar.

The long-term bullish trend might well survive, but there are signs that the Dollar is not going to be breaking to new highs soon and may have further to fall. However, it is also possible that last week’s low will start to act as support it if is touched again.

I am neutral on the US Dollar over the coming week.

US Dollar Index Weekly Price Chart

USD/JPY

The USD/JPY currency pair rose firmly to reach a new 39-year high price, drawing several warnings of intervention to prop up the Yen from the Japanese financial establishment, and that threat was finally delivered upon at the end of the week, with central bank buying of Yen sending the price down below ¥161. However, the price clawed back some of its gains, and the retracement was not deep enough to shake out most institutional trend followers.

I think these interventions are just trying to hold back the incoming tide, so if anything, I see these dips as buying opportunities.

Technically, the weekly candlestick was a spinning top doji, which can often signify indecision.

There are fundamental reasons why the US Dollar is quite likely to remain strong, but the currency that many analysts see as having a long way to weaken further over the coming years is the Japanese Yen, due to the massive levels of national debt there.

I am very comfortable being long of this currency pair – as a longer-term trend trade, this pair still looks good. Look at that supportive ascending trend line shown in the price chart below which stretches all the way back to April 2025.

USD/JPY Weekly Price Chart

EUR/USD

The EUR/USD currency pair was looking likely to make a serious bearish breakdown and did briefly reach new long-term low prices, drawing in many trend traders like me on the short side. However, it made quite a natural recovery last week, generating a relatively fat bullish candlestick. The Euro is certainly naturally less bearish than the Japanese Yen is.

I remain short here, but I am not very hopeful about this trade. However, there is a valid long-term bearish trend and this pair does like to pullback so I will stick with it. It is easy to be put off by the usual deep retracements in this currency pair. The Euro is not a particularly strong currency, so I still see it as likely to be weaker than the US Dollar over the next few weeks.

EUR/USD Weekly Price Chart

NASDAQ 100 Index

The NASDAQ 100 Index made a bearish pin bar (hammer) last week, although I’m showing the daily chart below so you cannot see that. What you can see, is that since making a record high over one month ago, the price has entered a narrowing triangle consolidation. The price will have to break out of this in a few days.

We have a strong bull market, but there is an increasing feeling that it is overbought, especially in tech indices such as this one.

Looking at this chart pattern, I feel like a strong fall is going to happen, perhaps to 26,400 as a natural floor.

If the price instead rises to close one day above 30,571 then I will take a bullish bias instead.

NASDAQ 100 Index Daily Price Chart

Gold

Gold had a fairly strong bullish candlestick last which, which almost fully engulfed the previous week’s candlestick, which was a bullish sign. The descending trend line is suppressing the price, but there are initial signs that things might be about to change.

If you are thinking of buying, it will likely be wiser once the trend line I mentioned is decisively broken. Next week, this trend line will be sitting at about $4,260.

It could be that Gold and Silver have finally found bottoms that are going to hold, at least for a few weeks. However, it will be best to wait for a decisive break of that trend line before entering a new long position in Gold.

Gold Weekly Price Chart

Brent Crude Oil Futures

Brent Crude Oil again made its lowest close at the end of last week since the war between the USA and Iran broke out last February. This is not surprising as the belligerents have recently signed an MoU and practically the only thing the Americans get out of it is the reopening of the Strait of Hormuz. Progress towards this, and the news of the MoU signing, have driven down the price of crude oil and removed a recessionary and inflationary input into the global economy. The path lower has been helped by the Iranians stopping violent activities in the Strait of Hormuz, and the are busy this week with the funeral of former “Supreme Leader” Khamenei.

Looking to the downside, the price has arrived within its pre-war area of comfort, albeit maybe at the higher edge of that. So, it might fall by a few more Dollars, but I think it does not have a lot more room to descend technically. I also said this at the end of last week, and I think I was shown to be correct as last week’s candlestick, while bearish, was small.

Brent Crude Oil Futures Weekly Price Chart

Bottom Line

I see the best trades this week as:

1. Long of the USD/JPY currency pair.

2. Short of the EUR/USD currency pair.

Ready to trade our Forex weekly forecast? Check out our list of the top 10 Forex brokers.

– Written by


Frank Davies

STORY LINK Pound Sterling to Dollar Forecast: Fed Rate Hike Bets Fade After Payrolls Shock

The Pound to Dollar exchange rate (GBP/USD) surged to two-week highs above 1.3380 after a much weaker-than-expected US jobs report prompted investors to sharply scale back expectations of a near-term Federal Reserve rate hike.

The disappointing payrolls data triggered broad Dollar selling, while speculation over possible Japanese intervention in the yen added further pressure to the US currency.

GBP/USD Forecasts: 2-Week Highs

After surging to above 1.3350 in early Europe on Thursday, the Pound to Dollar (GBP/USD) exchange rate dipped to near 1.3300 before a fresh surge to 2-week highs above 1.3380 after a weaker than expected US jobs report.

The dollar was also hampered by speculation surrounding Japanese intervention to strengthen the yen, especially with US markets closed for the Independence Day holiday on Friday.

ING commented; “One wild card to consider is that should the data come in soft, Japanese authorities might use the opportunity to sell a lot of USD/JPY – thus, traders will have to stay agile.”

Bank of America is not convinced over the GBP/USD outlook, but notes that any break above the 1.3510-1.3600 area could trigger a strong advance to 1.40.

US non-farm payrolls increased 57,000 for June compared with consensus forecasts of around 115,000 while the May increase was revised down to 129,000 from the 172,000 reported initially.

According to the household survey, the unemployment rate edged lower to 4.2% from 4.3%, but there was a sharp decline in the participation rate and the number of people employed posted a sharp 500,000 decline on the month with over 800,000 people not in the labour force.

There was a shift in Federal Reserve expectations following the data with traders pricing in less than a 50% chance of a rate hike by September.

Annex Wealth Management Chief Economist Brian Jacobsen commented; “(Fed Chairman) Warsh can wipe his brow. The labor market isn’t overheating. Inflation expectations are moderating. It means the Fed can take the whole summer off it wants as it won’t have to hike or cut.”

There were no major UK developments during the day with long-term fiscal concerns not on the agenda at this stage.

ING commented; “There is probably also the view that UK politics may not come back to weigh on sterling until the end of this month or in August.”

It noted the medium-term risk profile; “New policy ideas could start to emerge in August. As Keir Starmer found, the UK fiscal straitjacket very much limits room for manoeuvre, and it is hard to see any major spending plans coming through without tax rises.”

Like this piece? Please share with your friends and colleagues:

International Money Transfer? Ask our resident FX expert a money transfer question or try John’s new, free, no-obligation personal service! ,where he helps every step of the way,
ensuring you get the best exchange rates on your currency requirements.

TAGS: Pound Dollar Forecasts