• The USD/JPY forecast is expected to tilt downside as the BoJ rate hike expectations increase the yen’s demand.
• The US CPI data showed a cooling momentum, while Japan’s inflation remains sticky.
• Fed-BoJ divergence could support the USD/JPY in the near term.

The USD/JPY is trading under pressure in anticipation of the Bank of Japan’s policy announcement. However, the pair has slightly gained despite an upbeat national CPI in Japan.

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The BoJ will announce its rate decision between 03:30 and 05:00 GMT, and the press conference of Governor Kazuo Ueda will take place at 06:30 GMT. Investors are awaiting clarity, which is reducing trading activity.

The BoJ is expected to increase its policy rate to 0.75% from 0.50%. This would be the highest in nearly 30 years, if confirmed. The action would suggest that inflation and wage growth are sufficiently high to warrant stricter policy. Recent inflation statistics support this, as Japan’s national CPI increased by 2.9% in November. Meanwhile, core CPI, which excludes fresh food, stood at 3.0%.

The USD/JPY remains choppy ahead of the meeting. The pair has partially erased the losses, but the selling pressure has appeared in gradual steps, implying a strategic positioning rather than a panic-driven response.

US data has also played a role. The November CPI was reported as 2.7% YoY, which is significantly lower than the expected 3.1% while core CPI slowed to 2.6%. The price gain was only 0.2% per month. The statistics alleviated concerns about inflation, allowing the Fed to maintain its easing policy in 2026. The Treasury yields fell, pushing the greenback lower against most of its peers.

The policy divergence between the US and Japan is evident, influencing the USD/JPY trades. Japan is heading towards a rate hike, while the US is looking to ease further in 2026. The narrowing yield gaps support the yen, devaluing the dollar.

USD/JPY Technical Forecast: Awaiting a Breakout

The USD/JPY price remains technically supported by the confluence of 20- and 200-period MAs, while wobbling around the 50- and 100-period MAs. Meanwhile, the RSI stays above the 50.0 level but is flat. This suggests the pair lies in the consolidation phase, awaiting a catalyst to trigger a breakout.

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A breakout below the 20-period MA could push the prices to test the demand zone near 154.50 ahead of a horizontal level at 153.00. On the upside, the first resistance level emerges at 156.00, ahead of a potential swing high near the December highs at 156.90.

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Created on December 19, 2025

• The US dollar reversed after an initial rally as softer CPI data fueled rate-cut speculation, keeping USD/JPY volatile.
• Despite near-term noise and Bank of Japan risk, pullbacks are viewed as buying opportunities amid a persistent rate differential.

The US dollar initially rallied during the trading session on Thursday, but gave back gains rather quickly, mainly due to the CPI numbers coming out with a lower-than-anticipated number in the United States. Therefore, people are starting to focus on the idea of whether or not the Federal Reserve may have to cut rates more quickly.

With that being the case, the market remains very noisy, and it does make a certain amount of sense that we continue to see a lot of volatility, but that’s nothing new for this pair. Furthermore, you also have to keep in mind that on Friday, we get the interest rate decision coming out of the Bank of Japan, so this is a pair that could get turned around right away.

Key Levels, Policy Risk, and Trade Bias

With that being the case, this is watched very closely, and pullbacks are being viewed at this point in time as buying opportunities. The 50-day EMA is near the 4.12 level and rising, and it should offer a little bit of support. The ¥158 level above is where a potential target is being watched.

Whether or not the market gets there between now and the end of the year is a completely different question, but it is expected eventually. The interest rate differential will continue to favor the Americans for the foreseeable future, and inflation and growth in the United States are expected to remain above the optimal level for the central bank. Therefore, the Federal Reserve will likely have to be a little cautious with its rate-cutting cycle.

This does not appear to be a major inflection point, at least not yet. As a result, there is no real reason to believe that the Japanese yen is going to appreciate significantly. There may be the potential for a pullback in this pair after the Bank of Japan statement or press conference, but that should be looked at as a potential opportunity.

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

Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.

The GBPUSD pair has transformed into a technical battleground as the trading week nears its close. A combination of a divided Bank of England (BoE) and a cooling US inflation report has created a “whipsaw” environment, leaving the price resting precariously on a significant layer of technical support.

• The BoE Catalyst: A narrow 5-4 vote for a “hawkish cut” by the Bank of England initially sparked Sterling strength, signaling that the path to future rate cuts remains steep.

• The CPI Whipsaw: A soft US CPI print (2.7%) sent the pair to a multi-week high of 1.3446 before a massive retracement saw the pair surrender all daily gains.

• The Technical Floor: The price is currently testing a “cluster” of four major moving averages between 1.3348 and 1.3380, a zone that will define the trend for the Friday close.

Breaking Down the Momentum: From Hawkish Cuts to Soft CPI

The initial leg of the GBPUSD rally was fundamentally driven. The Bank of England’s decision to cut rates—but with a clear 5-4 split—indicated to the markets that the BoE is not in a rush to ease aggressively. This “hawkish lean” gave the British Pound a head start against a softening Greenback.

Later, the US Consumer Price Index (CPI) added fuel to the fire. The weaker-than-expected inflation data triggered a sharp sell-off in the US Dollar, propelling the “Cable” above a series of key daily and hourly moving averages. This move saw the pair challenge the highs of the last two weeks, specifically testing the Tuesday peak near 1.3455.

The “Moving Average Cluster” Barometer

Despite the breakout, momentum failed to hold. The pair has retraced back into a dense zone where four critical moving averages are currently overlapping. This “cluster” acts as a massive technical pivot point:

As long as the price remains within or above this zone, the “Up and Down” volatility theme persists. The price action today reached as low as 1.3370 before stabilizing slightly, keeping the market in a state of high suspense.

The Roadmap: What to Watch for the Friday Close

As we transition into the final session of the week, the cluster of moving averages will serve as the primary barometer for directional bias.

The Bullish Scenario

For the buyers to reclaim the driver’s seat, they must keep the price sustained above the 1.33804 (100-hour MA). A push above the 1.3405 swing area is required to confirm that the bears have been flushed out. If successful, the door opens for another run toward the recent highs at 1.34526.

The Bearish Scenario

If the sellers gain enough traction to break below the bottom of the cluster at 1.33488 (200-day MA), the technical picture turns decidedly bearish. A break here would likely trigger a retest of the weekly low at 1.33118, with a secondary target at last week’s low and the key 38.2% Fibonacci retracement level of 1.32833.

Watch the Video Analysis

In the video above, Greg Michalowski, author ofAttacking Currency Trends, provides a deep dive into these GBPUSD technical levels. He breaks down the real-time price action, helps you define the bias, the risk, and the specific targets that will matter most today and going forward.

Be aware. Be prepared.

Created on December 18, 2025

EUR/USD Analysis Summary Today

• Overall Trend: : Upward Technical Correction
• Support Levels for EUR/USD Today: 1.1700 – 1.1650 – 1.1570.
• Resistance Levels for EUR/USD Today: : 1.1800 – 1.1880 – 1.1940.

EUR/USD Trading Signals:

• Buy EUR/USD from the support level of 1.1640 with a target of 1.1820 and a stop-loss at 1.1570.
• Sell EUR/USD from the resistance level of 1.1810 with a target of 1.1500 and a stop-loss at 1.1900.

Technical Analysis of EUR/USD Today:

Amidst an upward technical correction, the EUR/USD pair jumped to its highest level in two months, briefly testing the psychological resistance level of 1.1800. This followed a widely expected US Federal Reserve interest rate cut, which simultaneously revealed deep internal divisions within the bank. Markets interpreted the split vote and Jerome Powell’s data-dependent remarks as bearish for the US Dollar against other major currencies, providing support for the Euro. Focus is now shifting to the Fed’s path for 2026 and the uncertainty surrounding the selection of Powell’s successor.

For his part, US Federal Reserve Chairman Jerome Powell emphasized the difficulty of formulating monetary policy in the face of high inflation and weak job prospects. He insisted that monetary policy would be data-driven. According to the latest updates, the median forecast points to a further rate cut in 2026, although there is considerable variation in expectations.

Overall, Fed policy will remain a core factor in 2026, especially as Powell’s term ends in May, adding to the climate of uncertainty.

EUR/USD levels confirm the upward trend.

According to reliable trading platforms and based on the daily chart, technical indicators support an upward technical correction for the EUR/USD pair. As previously mentioned, breaking the psychological resistance level of 1.1800 will be crucial for strengthening the bulls’ control and preparing for significant upward breakouts, followed by the psychological peak of 1.2000, the most prominent target for the EUR/USD in the new year. Currently, the 14-day Relative Strength Index (RSI) is near the overbought level of 70, and unless it gains new positive momentum, expect profit-taking. Simultaneously, the MACD indicator has crossed into overbought territory.

The Bearish Scenario: For the pair to return to a downward trajectory on the daily timeframe, it would require a retreat back toward the 1.1500 support level. The EUR/USD pair will be influenced today by the European Central Bank’s policy announcement, with expectations that interest rates will remain unchanged. The bank’s announcement will be at 3:15 PM Egypt time, followed by a statement from ECB President Lagarde at 3:45 PM Egypt time. On the US side, the focus will be on the weekly US jobless claims report and the Philadelphia Fed Manufacturing Index, both due at 3:30 PM Egypt time.

Trading Advice:

Be cautious. If the EUR/USD fails to break above the 1.1800 level, profit-taking may begin. Never take unnecessary risks.

EUR/USD Forecast for 2026

According to forex trading experts, Scotiabank predicts that the EUR/USD exchange rate will rise to the 1.22 resistance level by the end of 2026, with a further increase to 1.24 the following year. In the same vein, Société Générale sees the possibility of the euro/dollar exchange rate rising to the psychological resistance level of 1.20 by early 2026, but expects a gradual decline to 1.14 by the end of 2026.

Mizuho also predicted that the EUR/USD exchange rate would reach the resistance level of 1.22 by the end of 2026, noting that “Federal Reserve cuts, German fiscal spending, and increased hedging against US dollar exchange rate risks will lead to a repeat of the 2017 scenario in 2025 and 2026, but it is difficult to predict beyond that.”

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Created on December 18, 2025

• EUR/JPY remains in a strong uptrend, but near-term caution is warranted with ECB and BOJ decisions ahead.
• Central bank commentary is key, while structural Japanese constraints continue to favor carry trades against the yen.

The euro has risen quite nicely against the Japanese yen in what would be a continuation of a very strong trend anyway. But one thing that I am worried about is the fact that we have both of these central banks in the next 36 hours or so coming out with interest rate decisions. While the interest rate decisions themselves probably don’t make the headlines, what will make the headlines will be the comments coming out of central bank governors, especially during the press conference.

So, with that being said, even though this is obviously a very bullish market, and I do want to be a buyer, not a seller, the reality is you have to be very cautious over the next couple of days. With that, I’ve noticed a pattern here of about every 200 pips, there is support and resistance. So, if I get a little bit of a pullback here, perhaps down to the 180 yen level, I’ll become very interested. Once we get through both the European Central Bank and the Bank of Japan, then things will be quite a bit clearer.

Why the Carry Trade Still Favors EUR/JPY

Nonetheless, I know what I’m not going to do here. And what I’m not going to do is buy the Japanese yen. I will be buying the euro against the Japanese yen. And I do think that the carry trade continues because no matter what Japan does, they have massive debt problems, where if they raise the rates too much, that causes a real issue. The last 25 years or so of ultra-loose monetary policy have done a real number on the Japanese situation. A collapsing demographic and a high debt level mean they can’t afford higher interest rates for very long.

I think the market knows this, and that’s exactly what it’s sniffing out here. I don’t even necessarily think that the euro is the best currency to trade against the yen. I just think it’s one of many that you can buy in place of it.

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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.

Created on December 18, 2025

• The British pound traded erratically ahead of the Bank of England decision, with markets focused on forward guidance rather than the expected rate cut.
• Price action suggests dollar flows remain the primary driver, with GBP showing relative resilience.

The British pound has been all over the place during the session on Wednesday, which is not a surprise considering that we have the Bank of England interest rate decision coming out on Thursday. With that being the case, I think it’s very difficult to get overly aggressive here. But I also recognize that market participants will continue to perhaps extract a little bit of momentum from the idea that although there’s probably going to be a rate cut coming out of London, it will be the statement and the press conference that will drive everything.

After all, people will want to know the forward guidance. It was interesting because the British pound sold pretty early during the day, but as soon as the Americans came on board, they started buying it back up, shorting the US dollar. This has been the pattern for a while, where the US dollar loses strength once the Americans start trading it. Europeans seem to want it, and at this point, I think there isn’t too much to read from this chart.

Key Technical Levels and Market Behavior

Going into the central bank decision, other than people are nervous. The 1.34 level has been like a significant magnet for price. And if we can break above the 1.35 level, then I think we clear resistance and start going much higher. If we turn around and fall from here, then we go looking at the 200-day EMA.

All things being equal, I do think that the British pound probably performs better than many other currencies against the dollar, be it up or down. While England does have an interest rate cut in its short-term future, the reality is that inflation has been a little sticky, so we’ll have to wait and see how that plays out. But this may be very much like about a year and a half ago, when, while the US dollar strengthened and the British pound fell, it didn’t fall as much as other currencies.

And then when the US dollar started weakening, the British pound was a huge winner. With all that being said, I think we see more of that. I think the US dollar will determine where we go next, not necessarily the British pound, but the British pound will outperform others. And therefore, I watch this chart quite closely.

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Created on December 18, 2025

• USD/JPY remains firmly bullish, supported by the 50-day EMA and interest rate differentials favoring the United States.
• Volatility may arise around the Bank of Japan decision, but dips continue to look like buying opportunities.

The US dollar has risen quite nicely against the Japanese yen during trading here on Wednesday as we continue to see the area just below the 155 yen level offer a bit of a floor. Furthermore, the 50-day EMA sits underneath there as well, offering support. So, really, at this point in time, I think you have a buy on the dip situation. If the market can rally from here, the 157 yen level is an area that I’ll be watching, but let’s also keep in the back of our mind that we have the Bank of Japan interest rate decision on Friday.

Now, while I fully anticipate that the interest rate differential will continue to favor the United States, the reality is that there could be a little bit of volatility around that interest rate decision. So be aware of that. I don’t necessarily think that is a good or bad thing. I think it’s just a thing. So, with this, I remain fairly confident in the overall trend of this market. I think it is probably only a matter of time before it goes higher.

Watching the 50-Day EMA for Trend Continuation

But the question now is, will the 50-day EMA hold? We will probably know midday on Friday whether or not the market has the momentum to continue racing towards 158 yen or if we need to pull back a little further in order to start buying. I have no interest in shorting this pair. Quite frankly, there’s really nothing on this chart that even remotely suggests that you should be doing it. Although you can make an argument, maybe we can consolidate between 154 and 158 over the next several weeks, especially as we go into the holiday season. But beyond that, I don’t really see anything negative here.

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

Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.

Platinum price succeeded in forming a new bullish rally this morning, achieving the previously suggested main target by reaching $1973.00, facing a %161.8 Fibonacci extension level which forms strong barrier against bullish trading.

The stability of the trading below this barrier might activate the attempts of gathering some gains, to reach $1900.00 then attempts to test the extra support at $1860.00, while breaching the barrier and holding above it will ease the mission of recording new historical gains that might extend towards 2000.00 psychological barrier.

The expected trading range for today is between $1890.00 and $1970.00

Trend forecast: Fluctuated within the bullish track

Platinum price succeeded in forming a new bullish rally this morning, achieving the previously suggested main target by reaching $1973.00, facing a %161.8 Fibonacci extension level which forms strong barrier against bullish trading.

The stability of the trading below this barrier might activate the attempts of gathering some gains, to reach $1900.00 then attempts to test the extra support at $1860.00, while breaching the barrier and holding above it will ease the mission of recording new historical gains that might extend towards 2000.00 psychological barrier.

The expected trading range for today is between $1890.00 and $1970.00

Trend forecast: Fluctuated within the bullish track