• GBP/USD holds comfortably above 1.3400 in the European session on Monday.
• The renewed US Dollar weakness helps the pair stretch higher.
• Market participant will keep a close eye on political developments in the US.

GBP/USD builds on Friday’s gains and trades in positive territory comfortably above 1.3400 in the European morning on Monday. The pair’s technical outlook is yet to point to a bullish reversal in the short term.

The US Dollar (USD) struggles to find demand at the beginning of the week as the deadline for the US government shutdown looms.

United States (US) President Donald Trump will meet with top congressional leaders from both parties later in the day to finalize a funding deal and avoid a shutdown. Senate Minority Leader Chuck Schumer reportedly demands the funding bill to contain an extension of the enhanced Affordable Care Act premium subsidies to get his party’s support to pass the spending package.

In the absence of high-impact macroeconomic data releases, investors will scrutinize political developments in the US. In case markets grow optimistic about lawmakers funding the government beyond September 30, the USD could stage a rebound and cause GBP/USD to lose its traction. Conversely, the USD could stay under bearish pressure if no deal is reached moving towards the deadline.

On Tuesday, the UK’s Office for National Statistics will publish a revision to the second-quarter Gross Domestic Product (GDP) growth data.

GBP/USD Technical Analysis

The Relative Strength Index (RSI) indicator on the 4-hour chart stays slightly above 50, while GBP/USD continues to trade below the 100-period and the 200-period Simple Moving Averages (SMAs). Additionally, GBP/USD stays below the 20-day, 50-day and 100-day SMAs, reflecting a lack of bullish momentum.

On the downside, the first support area could be spotted at 1.3410-1.3400 (Fibonacci 50% retracement of the latest uptrend, round level) ahead of 1.3330 (static level) and 1.3300 (round level). Looking north, resistance levels could be seen at 1.3470-1.3475 (50-day SMA, Fibonacci 38.2% retracement), 1.3490-1.3500 (100-day SMA, 20-day SMA, 200-period SMA) and 1.3550 (Fibonacci 23.6% retracement).

• EUR/USD clings to small gains, trades above 1.1700 early Monday.
• The US Dollar struggles to find demand on growing fears over a government shutdown.
• The near-term technical outlook points to a loss of bearish momentum.

EUR/USD holds its ground and clings to modest gains above 1.1700 early Monday after closing the previous week in negative territory.

The renewed selling pressure surrounding the US Dollar (USD) helps EUR/USD gain traction in the European morning as investors grow increasingly concerned over a government shutdown in the US.

United States (US) President Donald Trump will meet with top congressional leaders from both parties later in the day to enact the funding legislation to avoid a shutdown ahead of the Tuesday midnight deadline.

Market participants are also worried that the Bureau of Labor Statistics (BLS) might not be able to release the September employment report, which will include key Nonfarm Payrolls (NFP) and Unemployment Rate figures that the Federal Reserve (Fed) looks at while taking policy steps, this Friday if the government shutdowns midweek.

The US economic calendar will feature Pending Home Sales data for August later in the day, which is unlikely to trigger a significant market reaction. Investors will keep a close eye on the political developments in the US. In case Congress strikes a funding deal, the USD could stage a rebound and make it difficult for EUR/USD to extend its recovery.

EUR/USD Technical Analysis

The Relative Strength Index (RSI) indicator on the 4-hour chart moves sideways near 50 in the European session, reflecting a neutral stance.

EUR/USD faces a pivot level at 1.1690-1.1700 (200-period Simple Moving Average (SMA), Fibonacci 38.2% retracement of the latest uptrend). In case the pair continues to use this level as support, technical buyers could remain interested. In this scenario, 1.1750 (100-period SMA), 1.1770 (Fibonacci 23.6% retracement) and 1.1820 (static level) could be seen as next resistance levels.

If EUR/USD fails to stabilize above 1.1690-1.1700, sellers could take action. On the downside, support levels could be spotted at 1.1640 (Fibonacci 50% retracement) and 1.1580 (Fibonacci 61.8% retracement).

Copper price began today’s trading with positive action, attempting to renew the pressure on the barrier at $4.7500, to find an exit for resuming the main bullish attack, to expect targeting $4.9500 level reaching the main target at $5.3100.

Note that the continuation of forming extra support by the moving average 55 stability near $4.3700, besides stochastic attempt to provide bullish momentum, these factors support the bullish suggestion, to keep waiting for achieving the suggested targets.

The expected trading range for today is $4.5500 and $4.9500

Trend forecast: Bullish

The EURJPY pair didn’t succeed in reaching the extra positive stations, affected by its neediness to the positive momentum, which forces it to settle below the barrier at 175.20, forming correctional waves by its stability near 174.65.

We expect providing mixed trading due to stochastic attempt to exit the overbought level, but it didn’t affect the main bullish trend, due to the stability of the trading within the bullish channel levels, by forming 173.45 level as an important extra support, therefore, we recommend waiting for breaching the barrier, to open the way for reaching extra positive stations, that are located near 176.00 reaching 176.95.

The expected trading range for today is between 174.20 and 175.20

Trend forecast: Sideways 

– Written by


Ben Hughes

STORY LINK Euro to Dollar Forecast: Oversold EUR/USD Tests Crucial Support

The Euro-to-Dollar exchange rate slipped to three-week lows on Thursday, with EUR/USD testing support near 1.1650 after stronger-than-expected US data boosted the greenback.

Markets scaled back Fed cut bets, while analysts warned that a break of the 50-day moving average at 1.1660 could open the door to deeper losses.

ING, however, still sees scope for EUR/USD to rebound above 1.170 in the short term.

EUR/USD Forecasts: Slides to 3-Week Lows

The Euro to Dollar (EUR/USD) exchange rate was unable to make headway on Thursday and dipped to 3-week lows just below 1.1650 before a tentative recovery to 1.1680 on Friday.

The US data releases on Thursday were stronger than expected with no sign of an increase in layoffs which helped underpin the dollar.

There was a shift in market pricing with traders considering that the chances of two further Fed rate cuts by the end of 2025 had dipped towards 60%.

According to UoB; “While the decline is deeply oversold, there is no sign of stabilisation just yet. Today, as long as EUR holds below 1.1715, there is a chance for EUR to continue to decline. That said, the major support at 1.1610 is likely out of reach for now.”

SocGen considers that the dollar is around key support; “The pair is currently testing an ascending trend line established since August; the 50-day moving average near 1.1660 is a crucial support.”

It added; “Should it fail to defend the moving average near 1.1660, the down move may extend. In such a scenario, the next objectives could be located at the late August lows of 1.1600/1.1570 and 1.1500.”

ING is doubtful that the dollar can hold recent gains; “our baseline view is for the dollar to give back some gains, and we think a return above 1.170 can happen as early as today.”

It did note potential further Euro setbacks; “One risk, aside from any more US data strength, is that markets take rising geopolitical tension in Europe more seriously. NATO said yesterday that it is ready to shoot down any Russian planes violating its airspace.”

MUFG noted that the US data was stronger than expected; “It’s been some time since US data has surprised to the upside and driven both yields and the US dollar higher but the data yesterday and on Wednesday certainly did surprise to the upside and given positioning has been so skewed of late toward weakening economic data in the US we have seen a notable rebound for the dollar just when volatility is hitting new lows in FX and bonds.”

The bank expects that the labour market will be crucial for developments.

MUFG added; “If the labour market data was to prove better than expected next week, it would certainly undermine the primary argument put forward by Fed Chair Powell to cut rates further and force the Fed to give more weight to the upside inflation risks.”

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USD/JPY Correlation with Fed Policy Tightens as Pair Holds 149.00–150.00

Technical Levels Signal Bulls in Control but Risks of Pullback Persist

Technically, USD/JPY’s reclaim of the 200DMA has reset the bullish outlook, but caution lingers given past failures above this level. RSI (14) remains in overbought territory, while MACD momentum continues to slope upward. Immediate support is reinforced at 149.00, followed by a cluster near 148.80. On the upside, a daily close beyond 150.90 would open 151.22 before setting the stage for 152.40. If buyers fail to sustain momentum, pullbacks could target 148.00 or deeper retracements toward 145.50, the September low.

Big Picture: USD/JPY Holds Medium-Term Uptrend Above 139.00

From a structural perspective, USD/JPY’s multi-year trend from the 2021 low at 102.58 remains intact. The correction from last year’s 161.94 high may have already bottomed at 139.87, with the breakout through 149.12 reinforcing that interpretation. As long as 139.00–139.20 holds, the bullish bias for a retest of 161.94 is preserved. A failure back below 139.00 would suggest the corrective wave is not yet complete, but that scenario looks less likely given current U.S. economic resilience.

That’s TradingNEWS 

• The GBP/USD weekly forecast turns bearish after dipping to 7-week lows.
• Upbeat US GDP and Jobless Claims, along with a cautious Fed, triggered a dollar recovery.
• Markets now focus on labor market data due next week for a fresh impetus.

The GBP/USD weekly forecast has turned bearish after the price significantly declined last week, reaching 7-week lows near 1.3320. The move was attributed to a stronger dollar after a cautious Fed and upbeat data.

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A broad US dollar resurgence followed stronger-than-expected US GDP growth, a recovery in durable goods orders, and a decline in jobless claims. This reinforced the view that the Federal Reserve may not deliver aggressive rate cuts this year. The Fed’s cautious tone was echoed by Fed Chair Powell and other policymakers, which further pushed the greenback up.

On the other hand, softer UK PMI data revealed slower growth momentum, further weighing on the demand for the pound. The Composite PMI fell to 51.0 in September from 53.5 in August, underscoring the fragility of the UK economy. Weaker gilt demand and political uncertainty also kept the sterling subdued.

The Friday’s Core PCE Inflation data came as expected at 2.9% y/y; the lack of upside surprise and a mildly better risk mode helped the GBP/USD stabilize into the weekend. However, the broader sentiment remains favorable for the US dollar as markets scale back bets for quicker Fed easing, while the Bank of England retains its cautious stance.

GBP/USD Key Events Next Week

Moving to the last week of the month, the focus now shifts to the US labor market and the UK growth data, with the following significant events:

• UK GDP (Tuesday)
• JOLTs Job Opening (Tuesday)
• ADP Employment Change (Wednesday)
• US Non-Farm Payroll (Friday)

Another round of strong US data could further undermine the GBP/USD, while cooling labor market signs could dampen the dollar’s recovery. Traders will also monitor speeches by the Fed and BOE for fresh policy cues, along with tariff-related developments from the US.

GBP/USD Weekly Technical Forecast: Demand Zone Resisting Bears

The daily chart for the GBP/USD reveals a neutral to bearish bias, as the downside meets solid support at 1.3340, with the price jumping to the 1.3400 mark while closing the week. However, the prices are lying well below the key moving averages, which could gather selling traction, pushing towards the 200-day MA at 1.3125. This needs a clear breakout of the demand zone.

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On the other hand, if the prices remain supported by the demand zone, the pound could further gain and test the MA confluence zone at 1.3480–1.3500. The markets are likely to consolidate, awaiting fresh impetus.

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USD/JPY Pushes Toward 150.00 as Fed Easing Bets Unwind

USD/JPY surged into Friday’s European session, trading as high as ¥149.96 before easing to ¥149.52 by 17:00 GMT, marking a weekly gain of 1.3%. The move was powered by a sharp reduction in expectations for aggressive Federal Reserve rate cuts after a combination of stronger-than-expected U.S. macroeconomic releases. Second-quarter GDP was revised up to 3.8% from 3.2%, while weekly jobless claims fell to 218,000, the lowest since July, countering fears of a softening labor market. The dollar index simultaneously climbed to 97.85 before easing back to 97.50, underlining broad greenback strength that lifted USD/JPY from its early-September lows of 146.90.

Tokyo CPI Miss Adds Pressure on the Yen

The Japanese yen’s weakness was exacerbated by softer-than-expected inflation data in Tokyo, where September headline CPI slowed to 2.5% year-on-year from 2.6% in August. The core measure held at 2.5% rather than accelerating to 2.6% as economists had forecast. Markets immediately trimmed the probability of an October Bank of Japan rate hike from 50% to just 35%. The moderation in Japan’s inflation gives policymakers at the BoJ further cover to maintain ultra-accommodative policy, reinforcing the divergence between U.S. and Japanese yields. The move has pushed the yen to its weakest level in eight weeks, with USD/JPY now retesting levels last seen on August 1, when the pair briefly reached 150.00.

Fed Cut Repricing Tightens Link Between Rates and USD/JPY

Correlation studies show USD/JPY tracking short-end U.S. yields and Fed funds futures with a coefficient near -0.94 over the past two weeks, a near-lockstep relationship. Futures markets now discount fewer than 50 basis points of additional easing in 2025, compared to nearly 100 basis points just a month earlier. This repricing, tied closely to resilient consumer spending and income growth in the U.S., has made USD/JPY extremely sensitive to U.S. data surprises. Traders note that while the Fed’s preferred inflation measure—the PCE deflator—rarely shocks, today’s release of spending and income details could prove more consequential for expectations and price action in USD/JPY.

Technical Levels: Resistance at 151.00, Support Near 149.00

USD/JPY’s technical picture has turned decisively bullish. The pair has broken above its 200-day moving average for the first time since June, now holding support near the ¥149.00 level. Momentum gauges confirm the strength of the move: the 14-day RSI is trending higher, and MACD remains firmly in positive territory. Bulls are eyeing resistance at ¥151.00, the October 2022 swing high, and further at ¥152.40, a level tested in late 2023. On the downside, any slip below ¥149.00 could expose the 20-day moving average near ¥148.25, while deeper pullbacks might target ¥147.50 where demand has previously emerged. Still, with Japan’s inflation losing steam and U.S. data consistently surprising to the upside, the bias remains skewed to the upside for now.

Market Sentiment and Trading Flows

Institutional accounts in Tokyo and New York have been adding to long USD/JPY positions on the break above 149.00, according to traders familiar with the flows. Options markets have shown heavy demand for 150.00 strike calls expiring next week, indicating positioning for a breakout. Meanwhile, volatility remains subdued, with one-month implied vol hovering at 9.2%, well below levels seen during past interventions by Japanese authorities. This signals that while risk of official action exists if USD/JPY sustains above 150.00, the market is not yet pricing imminent intervention.

Verdict: Bullish Bias with Near-Term Caution

Given the dovish backdrop in Tokyo, the resilience of U.S. growth, and the repricing of Fed cuts, USD/JPY remains tilted toward further upside. Support at ¥149.00 is critical, and as long as the pair holds above it, the path toward ¥151.00 appears open. Short-term traders should remain alert around today’s U.S. PCE data and subsequent Fed speakers, but the balance of risks suggests dips are likely to be bought. The current structure supports a Buy rating on USD/JPY with targets at ¥151.00 and ¥152.40, while acknowledging the risk of verbal or direct intervention should yen weakness accelerate beyond policymakers’ comfort zone.

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GBP/USD Slides to Seven-Week Low as U.S. Data Outpaces U.K. Recovery

The GBP/USD pair has come under sustained selling pressure, dropping to 1.3322 this week, its weakest point in nearly two months, before stabilizing just above 1.3350. The move reflects a sharp 3% decline from the September high at 1.3725 as U.S. economic strength has undercut the case for aggressive Federal Reserve rate cuts, while the Bank of England remains caught between sticky inflation and weakening domestic growth.

Impact of U.S. Growth and Inflation Data on GBP/USD

The second-quarter U.S. GDP revision to 3.8% year-on-year, coupled with weekly jobless claims falling to 218,000 and durable goods orders surging 2.9%, has provided the dollar with renewed momentum. These numbers highlight U.S. economic resilience and have reduced expectations for back-to-back Fed cuts in 2025. Meanwhile, markets await the Core PCE inflation print at 2.9% year-on-year, a figure that could cement the Fed’s cautious stance and extend downside pressure on GBP/USD if it overshoots consensus.

Bank of England Uncertainty Weighs on Sterling

Governor Andrew Bailey has acknowledged that U.K. inflation is on a downward path but linked future easing directly to progress in consumer prices. This hesitancy is complicated by other MPC members, such as Megan Greene, warning against premature cuts amid lingering upside risks. Political noise in London—calls for re-nationalization of utilities and large-scale borrowing schemes—has rattled gilt markets already strained by fragile demand. With households sitting on unusually high savings and labor conditions softening, the pound has struggled to find a solid base against the dollar.

Technical Breakdown of GBP/USD Levels

Technically, GBP/USD’s inability to reclaim 1.3390, the 23.6% Fibonacci retracement of the January–July rally, leaves bears in control. A sustained break under 1.3330 risks a slide toward 1.3255, followed by deeper targets at 1.3145 and the 200-day SMA near 1.3130. On the flip side, only a decisive recovery above 1.3470–1.3500, where the 20- and 50-day SMAs converge, would ease bearish momentum and allow a rebound toward 1.3600. Until then, the bias remains skewed to the downside with 1.3300–1.3260 acting as the next key pivot zone.

Short-Term Pound Sterling Outlook Against the Dollar

The stochastic oscillator sitting below 20 suggests the pair is oversold, and price action beneath the lower Bollinger band signals the potential for a short-lived bounce. However, with market structure deteriorating since August’s 1.3139 low and with GBP/USD still capped under the broader 1.3675–1.3720 resistance band, upside moves should be treated as corrective rallies rather than a trend reversal. A failure to sustain above 1.3400 in the coming sessions would quickly put 1.3260 back on the radar.

Final Assessment: Bearish Bias Maintained on GBP/USD

Considering the stronger U.S. macro backdrop, upcoming PCE inflation data, and the Bank of England’s indecisive tone, GBP/USD remains in a bearish setup with high probability of retesting 1.3255–1.3150 in the short term. The pair is oversold enough for tactical rebounds, but with momentum firmly on the dollar’s side, rallies are likely to be capped. Based on current dynamics, the stance remains Sell on GBP/USD, with downside risks dominating until there is evidence of U.S. data softening or the BoE signaling a firmer stance against inflation.

The forex market is more attractive after the September 17th FOMC, but the devil is in the details.

In Today’s forex forecast, I’m sharing trade setups on the DXY, EURUSD, GBPUSD, USDJPY, NZDUSD, and XAUUSD.

Remember to scroll down after watching the video for additional comments and annotated charts.

US Dollar Index (DXY) Forecast

The DXY followed through on last week’s aggressive bounce from 96.60. That’s the bottom of a 2011 ascending channel I’ve discussed for months.

The September 17th FOMC meeting gave dollar bulls what they needed to defend the 96.60 level. It was a critical moment for the DXY, given the significance of this channel since 2011.

As long as the USD is above that mark on the high time frames, I’ll remain bullish.

Last week, the price managed to push above 97.70, a key benchmark for the price action in October. The level shifts to new support, especially with last week’s close above it.

However, dollar bulls face a critical test next week between 98.60 and 99.00. The 98.60 level has been crucial for the DXY since June, and 99.00 is channel resistance from May.

Some ranging for the DXY between 98.60 and 97.70 seems likely for early next week. Buyers may need to digest last week’s aggressive rally.

If bulls can clear the 99.00 resistance area, resistance levels like 99.35 and the 99.88 imbalance come into play.

Alternatively, a sustained break back below 97.70 would flip the DXY bearish.

I’ll remain bullish on the dollar, given the combination of last week’s close above 97.70 and the 2011 support that held strong in September.

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EURUSD Forecast

EURUSD played out nicely for us last week following Wednesday’s breakdown.

I discussed this in Wednesday’s video, noting that a sustained break below the February trend line would be bearish. It also had the potential to open up lower levels.

Sure enough, Wednesday’s session closed below, and the EURUSD hit resistance on Thursday right at the February trend line.

I also discussed in the VIP Discord group how 1.1645 could serve as support for the euro. That’s a 5-week composite point of control for EURUSD.

In other words, it’s where the EURUSD spent the most time in August and early September. Markets have memories, so areas like these often serve as support or resistance.

So far, euro bulls are defending 1.1645 to the pip. However, I’m not convinced that this bounce will be anything more than a relief rally.

There are two buy-side single prints (imbalances) at 1.1722 and 1.1780. Market makers may target these areas next week, but any retest is likely to be a selling opportunity.

Anticipate more ranging from EURUSD next week. Trading what’s on the chart (trading the range) will always be more profitable than trading what you want to happen.

Lastly, remember we have a poor low (unfinished auction) at 1.15643 and a single print at 1.1440. These could also be targeted, but only if the EURUSD drops below 1.1645 on the high time frames.

GBPUSD Forecast

GBPUSD is another pair that worked out nicely last week. In the previous Weekly Forex Forecast, I mentioned how the break below 1.3580 looked bearish for the pound.

I also discussed how the 1.3529 single print could offer a short opportunity.

Last Tuesday’s session offered the ideal short entry with a high of 1.3537. That retest triggered a fresh wave of sellers, pushing GBPUSD into the 1.3330 support area.

For now, GBPUSD bulls are defending the September low at 1.3330. But like EURUSD, I’m not convinced that this bounce will be anything more than some relief.

Looking at the market profile for the pound, we have two buy-side single prints that could become a factor next week. The first is 1.3410, and the second is 1.3425.

These levels could serve as “magnets” early next week. Unless, of course, we see the pair tag these levels on Friday, since I’m writing this with several hours left in Friday’s session.

Either way, I expect sellers to defend the 1.3425 region if tested early next week.

Looking lower, we have a couple of poor lows. The first is 1.3282 and the second is 1.3254. Whether these become targets depends on whether GBPUSD sellers can break 1.3330 support next week.

If bulls reclaim 1.3380 on Friday, watch for some relief early next week.

USDJPY Forecast

USDJPY broke out last week after nearly two months of sideways chop. I discussed the breakout and a potential trade plan in Thursday’s USDJPY video.

In that video, I mentioned the single prints that could become a factor. USDJPY tagged the 149.51 single print on Friday, but the 148.94 print remains open for business next week.

These levels could serve as key support for USDJPY if we get a pullback next week.

The challenge for bulls is where the DXY is trading. Last week’s retest of 98.60 was a significant moment for the dollar, which is also attracting sellers.

If USDJPY can hold above 148.70, a push higher into 150.23 and potentially 151.20 could be in the cards.

On the other hand, a break below 148.70 would cast a bearish shadow over USDJPY and expose the 147.00 level.

NZDUSD Forecast

A few weeks ago, I included NZDUSD in the forecast, noting that the failure at 0.5890 looked bearish. It confirmed the failed breakout, exposing support at 0.5817 and lower.

Fast forward to today, and NZDUSD has accomplished both of those things.

The pair sold off from the 0.5890 region following the September 18th bearish close, and also broke below 0.5817 support last week.

That keeps sellers in control for next week.

However, like many of the major currency pairs, the New Zealand dollar left several imbalances for next week.

The first single print (imbalance) is 0.5785, and the second is 0.5805. I expect market makers to target 0.5785 early next week; however, targeting 0.5805 will be more challenging.

Either way, I like the idea of looking for shorts next week as long as NZDUSD is below 0.5820. Those two imbalances at 0.5785 and 0.5805 could provide another opportunity to go short.

As for downside targets, we have the bottom of the July descending channel. It’s difficult to say where the level comes in, but my bet is on 0.5660.

There’s a 3-month composite point of control from early 2025 sitting at 0.5660. That’s a fancy way of saying NZDUSD spent a lot of time at 0.5660 in Q1, and markets don’t forget.

XAUUSD (Gold) Forecast

Gold continued its rally last week following the break above $3,700. Pullbacks continue to be shallow with upside seemingly unlimited.

However, XAUUSD is nearing the top of a weekly channel from 2024. I’ve discussed this pattern several times, and the upper boundary currently sits just above $3,800.

It’s not a reason to be bearish by any means. But it is reason enough to approach fresh longs with caution.

Gold has also left several sell-side imbalances in its way. The closest sits at $3,703.

If we get a deeper pullback from XAUUSD in the coming days, $3,703 could become a target.

However, shorting gold remains a losing battle. Even a pullback from $3,800 (if we get it) would likely offer a buying opportunity rather than justification to get short.

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