The US Dollar to Yen (USD/JPY) exchange rate remains close to multi-decade highs and is trading around 159.90 after repeatedly testing the 160 level over recent weeks.

Rabobank expects the Japanese Yen to regain some ground over the medium term and has adjusted its six-month USD/JPY forecast to 155.00, although it stresses that any recovery depends on further hawkish signals from the Bank of Japan.

The US Dollar strengthened against most major currencies during May as markets increased expectations that the Federal Reserve could keep interest rates higher for longer.

Despite speculation over a June Bank of Japan rate hike and substantial intervention by Japan’s Ministry of Finance, the Yen remained one of the weakest G10 currencies.

Rabobank notes that support for tighter policy within the BoJ is growing. Several policymakers have expressed concern about inflation pressures, while Governor Ueda has suggested that temporary price shocks could become more persistent through their impact on wages and inflation expectations.

The bank also points to stronger-than-expected retail sales, labour market data and industrial production figures as evidence that the economy could withstand higher interest rates.

However, expectations of a June rate increase have done little to push USD/JPY away from 160, suggesting that policymakers may need to deliver a much stronger hawkish message if they want to support the currency.

Rabobank also highlights that Japan spent an estimated JPY11.7 trillion intervening in currency markets during May, underlining the scale of the challenge facing authorities.

While the bank expects USD/JPY to move lower over the next six months, it believes that a sustained Yen recovery will require continued Bank of Japan tightening and a reduction in the appeal of Yen-funded carry trades.

The Euro to Dollar (EUR/USD) exchange rate has struggled to make further headway in recent weeks and is trading near 1.1630 after retreating from May highs close to 1.1800.

Lloyds Bank nevertheless maintains a constructive medium-term outlook for the single currency and expects EUR/USD appreciation to continue, although the pace of gains could be slower than previously anticipated.

The bank acknowledges that the Eurozone economy has lost momentum in recent months as higher oil prices have weighed on confidence and business activity.

According to Lloyds, the rise in energy prices has triggered a stronger behavioural response in Europe than in other major economies. Although the latest oil shock is modest compared with the energy crisis seen in 2022, households and businesses remain sensitive to rising energy costs.

This slowdown in activity has prompted a shift in European Central Bank policy expectations, with the ECB moving back towards a tightening bias in response to renewed inflation concerns.

Lloyds believes there is a risk that policymakers may be overreacting if energy prices stabilise or if anticipated supply disruptions prove less severe than currently feared.

The bank notes, however, that inflation was relatively subdued before the latest oil-price surge and that monetary policy is broadly neutral. In this context, any additional ECB tightening should be limited and manageable for the wider economy.

As a result, Lloyds expects the current slowdown to moderate the recovery rather than derail it completely. The bank still sees underlying support for Eurozone growth once energy market concerns begin to ease.

Lloyds also considers that the Euro continues to benefit from longer-term structural factors. The Eurozone offers investors a high degree of institutional stability and policy predictability at a time when global political and economic uncertainty remains elevated.

Efforts to strengthen the region’s economic resilience through investment and fiscal initiatives should also support investor confidence over time, particularly if external challenges encourage policymakers to accelerate reforms.

While Lloyds accepts that EUR/USD gains may be more gradual in the near term, it believes the broader appreciation trend remains intact. According to the bank, it would take a decline below 1.1392 to seriously undermine the constructive medium-term outlook for the Euro against the US Dollar.

– Written by


David Woodsmith

STORY LINK GBP/USD Forecast: Strong US Manufacturing Data Lifts the US Dollar

The Pound US Dollar (GBP/USD) exchange rate fell on Monday as escalating tensions in the Middle East and stronger-than-expected US data lifted the safe-haven ‘Greenback’.

At the time of writing, GBP/USD was trading at $1.3421, down more than 0.2% on the day.

The safe-haven US Dollar (USD) strengthened on Monday as a deterioration in market sentiment drove investors towards safer assets.

The latest bout of risk aversion followed an exchange of strikes between the US and Iran over the weekend. Iran subsequently accused the US and Israel of breaching the ceasefire agreement and stated that it would withdraw from peace talks until Israel halted its attacks on Lebanon.

Meanwhile, the currency also drew support from upbeat US economic data. The latest ISM manufacturing PMI showed that factory activity accelerated more sharply than expected in May, with the index rising from 52.7 to 54, beating forecasts of 53.

Meanwhile, the increasingly risk-sensitive Pound (GBP) weakened against its safer peers as the market mood soured.

Sterling had initially edged higher in the morning after the UK’s latest manufacturing PMI showed activity climbing to a four-year high in May. The survey also reported rising input price inflation, which fuelled expectations for further Bank of England (BoE) interest rate hikes.

While this may have helped to limit the Pound’s losses, domestic political uncertainty may have dented GBP. On Monday, the government published documents relating to the controversial appointment of Peter Mandelson as ambassador to the US, with the UK’s febrile political atmosphere potentially unnerving investors.

Near-Term GBP/USD Forecast: Could BoE Comments Boost Sterling?

Looking ahead, UK economic data is limited on Tuesday. However, BoE policymaker Megan Greene is due to speak in the afternoon. As Greene is considered one of the more hawkish members of the Monetary Policy Committee, Sterling could strengthen if she argues in favour of higher interest rates.

Tuesday will also see the publication of the latest US Job Openings and Labor Turnover Survey (JOLTS). The data is expected to show a marginal decline in job openings in April, which may have only a muted impact on the US Dollar. However, any surprises could spark sharper movement.

Elsewhere, developments in the Middle East could inject volatility into GBP/USD by influencing risk appetite. Hopes of peace may lift market sentiment and potentially support the Pound, while a fresh escalation in tensions would likely sour the mood and bolster the safe-haven US Dollar.

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

The US dollar continues to grind higher against the Japanese yen but be aware that the 160-yen level is an area that the Bank of Japan intervened at previously and it could cause a little bit of the same type of action. We’ll just have to wait and see. So far, the Japanese have been fairly quiet. So only time will tell.

That being said, if we do get some type of pullback, I am willing to buy dips on the right-hand side of the V to make sure that I am following momentum re-entering the market. I have no interest in selling this pair. The interest rate differential, despite the fact that the interest rates fell in America, continue to favor the US dollar by quite a wide margin.

EUR/USD Analysis Summary Today

EUR/USD Trading Signals:

Technical Analysis of EUR/USD Today

The Euro against the US Dollar (EUR/USD) pair is attempting to maintain its positive momentum after rebounding from recent lows. However, the European currency’s gains are still colliding with an important technical barrier that prevents buyers from establishing full control over the trend.

Despite improved risk appetite in global markets and a reduction in selling pressure on the Euro, the pair’s movements in the coming days will likely be determined primarily by the results of US economic data and European inflation figures, placing traders ahead of a week that could be decisive in shaping the next directional move.

Technical Outlook for EUR/USD

Technically, the pair has successfully defended the key support level near 1.1600, a level that has proven significant on several occasions in recent weeks. The stability of trading above the short-term moving averages reflects continued recovery efforts, but it is not yet sufficient to confirm a complete shift to an upward trend.

The price is currently trading within a clear sideways range between 1.1600 and 1.1800, reflecting the prevailing market anticipation ahead of the release of key economic data.

Morever, buyers need a sustained break above 1.1800 to confirm the resumption of the uptrend and target 1.1850 and then 1.1920. Failure to break through this resistance could lead to renewed selling pressure and push the pair back towards 1.1650 and then 1.1600.

Dollar Awaits Crucial Tests

Investors are focusing this week on a batch of US indicators capable of reshaping the Federal Reserve’s monetary policy expectations.

The upcoming data includes manufacturing and services indices, job openings data, and private sector employment reports, before all eyes turn to the US Non-Farm Payrolls (NFP) report, which remains the most influential indicator for interest rate expectations and dollar movements.

Any results that exceed market expectations could strengthen the US currency by reducing bets on an interest rate cut, while weak data could give the euro an additional opportunity to continue its recovery.

European Inflation in the Spotlight

Meanwhile, investors are awaiting Eurozone inflation figures for new clues about the future direction of European monetary policy. In recent weeks, expectations have grown that the European Central Bank (ECB) will maintain its relatively hawkish stance to combat inflationary pressures, particularly given the continued impact of rising energy costs on prices.

Any higher-than-expected inflation reading would support bets on continued European monetary policy tightening, which could provide an extra boost to the Euro against major currencies, led by the Dollar.

Conclusion

As long as the Euro/Dollar pair maintains its stability above the 1.1600 level, the potential for a continued recovery will remain intact, with the 1.1800 level remaining the most critical technical obstacle for buyers. However, breaking below the 1.1600 support level and closing under it could alter the short-term technical picture and open the door for a deeper corrective wave targeting new support levels.

Overall, the short-term trend leans toward a cautious positivity, but the confirmation of any bullish or bearish breakout will remain dependent on the upcoming economic data results and their impact on interest rate expectations in both the United States and the Eurozone.

Trading Tips

Dear TradersUp trader, some traders prefer to follow a strategy of selling the Euro against the Dollar, emphasizing the absolute necessity of strict adherence to capital management and setting stop-loss levels to mitigate risk.

Ready to trade our free daily Forex trading signals? We’ve shortlisted the best Forex trading brokers in the industry for you.

The GBPJPY pair ended yesterday’s trading by providing positive close above 214.50 barrier, announcing its readiness to readiness to renew the bullish attempts by reaching 215.00 level, providing positive momentum by stochastic will keep our bullish scenario, which might target 215.30 level, surpassing it will make the next target at 215.75 in he current trading.

While the attempt of activating the bearish corrective trend requires forming several negative waves, to settle below the extra support at 213.30.

The expected trading range for today is between 214.40 and 215.75

Trend forecast: Bullish

The GBPJPY pair ended yesterday’s trading by providing positive close above 214.50 barrier, announcing its readiness to readiness to renew the bullish attempts by reaching 215.00 level, providing positive momentum by stochastic will keep our bullish scenario, which might target 215.30 level, surpassing it will make the next target at 215.75 in he current trading.

While the attempt of activating the bearish corrective trend requires forming several negative waves, to settle below the extra support at 213.30.

The expected trading range for today is between 214.40 and 215.75

Trend forecast: Bullish

– Written by


Frank Davies

STORY LINK GBP/USD Forecast: BoE Comments and JOLTS Data in Focus

The Pound US Dollar (GBP/USD) exchange rate fell on Monday as escalating tensions in the Middle East and stronger-than-expected US data lifted the safe-haven ‘Greenback’.

At the time of writing, GBP/USD was trading at $1.3421, down more than 0.2% on the day.

The safe-haven US Dollar (USD) strengthened on Monday as a deterioration in market sentiment drove investors towards safer assets.

The latest bout of risk aversion followed an exchange of strikes between the US and Iran over the weekend. Iran subsequently accused the US and Israel of breaching the ceasefire agreement and stated that it would withdraw from peace talks until Israel halted its attacks on Lebanon.

Meanwhile, the currency also drew support from upbeat US economic data. The latest ISM manufacturing PMI showed that factory activity accelerated more sharply than expected in May, with the index rising from 52.7 to 54, beating forecasts of 53.

Meanwhile, the increasingly risk-sensitive Pound (GBP) weakened against its safer peers as the market mood soured.

Sterling had initially edged higher in the morning after the UK’s latest manufacturing PMI showed activity climbing to a four-year high in May. The survey also reported rising input price inflation, which fuelled expectations for further Bank of England (BoE) interest rate hikes.

While this may have helped to limit the Pound’s losses, domestic political uncertainty may have dented GBP. On Monday, the government published documents relating to the controversial appointment of Peter Mandelson as ambassador to the US, with the UK’s febrile political atmosphere potentially unnerving investors.

Near-Term GBP/USD Forecast: Could BoE Comments Boost Sterling?

Looking ahead, UK economic data is limited on Tuesday. However, BoE policymaker Megan Greene is due to speak in the afternoon. As Greene is considered one of the more hawkish members of the Monetary Policy Committee, Sterling could strengthen if she argues in favour of higher interest rates.

Tuesday will also see the publication of the latest US Job Openings and Labor Turnover Survey (JOLTS). The data is expected to show a marginal decline in job openings in April, which may have only a muted impact on the US Dollar. However, any surprises could spark sharper movement.

Elsewhere, developments in the Middle East could inject volatility into GBP/USD by influencing risk appetite. Hopes of peace may lift market sentiment and potentially support the Pound, while a fresh escalation in tensions would likely sour the mood and bolster the safe-haven US Dollar.

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

2026.06.01 2026.06.01
Yen Under Pressure Near Key Intervention Threshold. Forecast as of 01.06.2026

Dmitri Demidenkohttps://www.litefinance.org/blog/authors/dmitri-demidenko/

The Bank of Japan’s policy meeting, combined with the government’s currency interventions, has tempered USD/JPY bulls twice. Will history repeat itself in June? Perhaps, if the BoJ refrains from raising rates. Let’s analyze the situation and make a trading plan.

Major Takeaways

• Disappointment with the BoJ will trigger a surge in USD/JPY quotes.
• The risk of currency interventions may increase.
• The yen’s position is better than it was a month ago.
• A break above 160 followed by a pullback below that level is a reason to sell the USD/JPY pair.

Weekly Fundamental Forecast for Yen

If something happens once, it may never happen again. However, if it happens twice, it is bound to happen a third time. Just as in 2024, Japan intervened in the Forex market at the end of April and beginning of May, immediately following the BoJ meeting and the resulting decline in the yen. The central bank disappointed, and the government was forced to intervene to stop USD/JPY bulls. As the June Board of Governors meeting approaches, there is a sense of déjà vu.

The futures market indicates a 75% probability of an overnight rate hike at the Bank of Japan’s first summer meeting. However, the latest data on slowing inflation could allow doves to convince the rest of the BoJ officials of the need to continue the pause in the monetary tightening cycle. If that happens, the USD/JPY pair will likely surge above the psychologically important 160 level.

Speculative Positions on Japanese Yen

Source: Bloomberg.

Speculators are counting on this scenario. Hedge funds and asset managers have increased their net short positions in the yen to their highest levels in nearly two years, despite all the government’s warnings. As a result, Satsuki Katayama has resumed verbal interventions. The finance minister stated that the authorities were ready to take decisive action if they observed increased volatility or signs of speculative activity in the Forex market.

At the turn of April and May, Japan spent ¥11.7 trillion on currency interventions. The amount exceeded the market estimate of ¥10 trillion and sparked rumors that there may have been more than two interventions within a short period. If so, they could resume before the USD/JPY pair reaches the 160 level.

USD/JPY Rate and Interventions on Forex

Source: Bloomberg.

In reality, currency interventions are merely a way to buy time, not a turning point. Although the yen is currently trading at the same levels as in early May, the fundamental outlook is far more favorable for it now than it was then. The conflict in the Middle East is about to end, and oil prices will likely fall, benefiting Japan—a net importer of crude oil—more than the US. At the same time, the Fed will have less reason to raise the federal funds rate, and demand for the dollar as a safe-haven asset may decline.

All of this, combined with excessively inflated speculative positions on the yen, allows Eurizon SLJ Capital to forecast that the upward trend in USD/JPY quotes will reverse. It is quite possible that the authorities will not need to buy more time, especially if the Bank of Japan meets expectations and raises the overnight rate to 1% in June.

Weekly USDJPY Trading Plan

While in April and May I suggested buying the USD/JPY pair following currency interventions, such interventions could now reverse the uptrend. If the price pierces the 160 level, and a sharp downward move follows, short positions can be considered.

This forecast is based on the analysis of fundamental factors, including official statements from financial institutions and regulators, various geopolitical and economic developments, and statistical data. Historical market data are also considered.