• GBP/USD forecast remains neutral to bearish after another downbeat data.
• Dovish BoE expectations could push for a rate cut sooner than expected.
• Markets await US and UK PMIs to gauge activity momentum.

The GBP/USD saw a dip from its daily highs near 1.3100 after another weak UK retail sales report, which further deepened concerns regarding softening domestic demand. This increased the odds of a more dovish Bank of England. However, the price pared the retail sales-led losses, hovering near 1.3095 at the time of writing. Despite this, the pound appears fragile as traders reassess the UK’s macroeconomic outlook.

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The ONS data showed retail sales declining 1.1% MoM in October, well below the expected flat reading. September’s reading was revised to 0.7%, which gave some life to the pound after a fall. The annual figures came in at 0.2%, missing the forecast of 1.5% and slipping below the previous 1%. A sharp decline of 3.3% in textile, clothing, and footwear sales weighed heavily on the data, reflecting pressure on discretionary spending.

The weakness arises when inflation and labor market data have already softened significantly, increasing pressure on the Bank of England to shift towards easing. Markets are slowly pricing in a more accommodative policy path, and Friday’s data further supports this narrative that rate cuts may come sooner than expected.

On the fiscal front, the UK’s Autumn Budget, scheduled for November 26, is expected to include an increase in income tax to close the £22 billion budgetary gap. With faltering consumer demand, tighter fiscal measures could further weigh on growth prospects, limiting the pound’s ability to post a meaningful recovery.

Across the Atlantic, the US dollar remains broadly supported, as the dollar index stays comfortably above 100.00, approaching a five-month high. Traders have scaled back their bets on December rate cuts, with the CME FedWatch Tool showing a 35% probability, down from 70% last week. Fed officials warned that inflation remains high, dampening expectations for a potential easing. The October meeting minutes also showed officials leaning towards steady policy, supporting the US dollar.

GBP/USD Key Data Ahead

Both the UK and the US will release PMI data later on Friday, which could offer fresh insight into private sector momentum. Activity is expected to slow in both economies. The direction of GBP/USD will likely hinge on which side shows a sharper loss of momentum.

GBP/USD Technical Forecast: Gains Capped by 1.3100

The GBP/USD finds mild support below the mid-1.3000 level, climbing back to the broken demand zone near 1.3100, which acts as resistance. The same level coincides with the 20-period MA, making it a tough nut to crack. Finding acceptance above the level could gain buying traction, leading to the 1.3200 area.

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On the other hand, staying below the 1.3100 mark will maintain selling pressure, aiming to pounce on the 1.3000 level ahead of 1.2950. The RSI is gradually rising, showing support but still below 50.0, indicating that bulls still require more energy for a reversal.

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BoJ and Prime Minister Takaichi’s Policies Add to Yen Weakness

Softer Japanese data and a weaker yen have intensified focus on Prime Minister Sanae Takaichi’s ultra-loose monetary policy stance and BoJ Governor Kazuo Ueda’s forward policy guidance.

October’s data came after the first meeting between Japanese Prime Minister Sanae Takaichi and BoJ Governor Kazuo Ueda on Tuesday, November 18. BoJ Governor Ueda kept a potential rate hike on the table, stating that monetary policy decisions will hinge on incoming data.

Wage growth trends will likely be crucial for the BoJ, given the weaker yen-import price dynamic. Updates from Japanese labor unions pushing for wage hikes ahead of the 2026 spring negotiations could support a more hawkish BoJ rate path.

Later in the morning session, Japan’s S&P Global Services PMI also requires consideration. Economists expect the Services PMI to drop from 53.1 in October to 52.8 in November. Slowing services activity would support a less hawkish BoJ rate path, given that the sector contributes around 70% to Japan’s GDP.

US Services PMI and Fed Speakers in Focus

While Japanese trade data faced market scrutiny, US services sector data will influence bets on a December Fed rate cut.

Economists expect the S&P Global Services PMI to fall from 54.8 in October to 54.6 in November. A modest drop in the headline PMI would signal economic resilience, given that the services sector accounts for around 80% of US GDP.

However, traders should consider service sector price trends, given the Fed’s increased concerns about inflation. As a key contributor to inflation, price trends will likely be the key driver for the US dollar. Elevated prices would support a more hawkish Fed policy stance, sending USD/JPY toward 160.

Beyond the data, FOMC members’ speeches may also move the dial. Growing support to delay further monetary policy easing to tame inflation would send USD/JPY higher. FOMC members John Williams, Michael Barr, Philip Jefferson, and Lorie Logan are on the calendar to speak. Views on inflation, the labor market, and the timeline for rate cuts will be crucial for the USD/JPY pair.

USD/JPY Scenarios: Diverging Monetary Policies

• Bearish USD/JPY Scenario: Hawkish BoJ rhetoric, intervention warnings, softer US Services PMI, and dovish Fed chatter could drag USD/JPY toward 155.
• Bullish USD/JPY Scenario: Dovish BoJ signals, stronger US PMI data, and hawkish Fed rhetoric could send USD/JPY toward 160.

– Written by


Tim Boyer

STORY LINK GBP to USD Forecast: Pound Sterling Upside to be Limited Ahead of UK Budget

The Pound to US Dollar exchange rate (GBP/USD) pushed higher on Thursday as traders assessed the implications of the latest US non-farm payroll release.

At the time of writing, GBP/USD hovered around $1.3097, up roughly 0.3% from the day’s opening level.

The US Dollar (USD) edged lower on Thursday after September’s long-awaited payroll figures finally landed.

Fresh data from the Bureau of Labor Statistics revealed the US economy created 119,000 jobs in September, comfortably beating expectations for a modest 50,000 increase.

However, the upbeat headline was tempered by a significant downward revision to July’s figures, with payrolls now estimated to have fallen by 4,000 instead of rising by 22,000 as initially reported.

The mixed nature of the release prompted markets to reassess Federal Reserve rate expectations, triggering a modest dovish tilt, although not enough to revive the prospect of a December rate cut.

The Pound (GBP) managed to gain ground on Thursday, though upside momentum was limited as investors remained cautious ahead of the UK’s upcoming autumn budget.

Chancellor Rachel Reeves is set to deliver the budget on 26 November, and uncertainty surrounding the scale and structure of potential tax increases or spending restraints is keeping investors on edge.

Concerns are growing that the measures required to stabilise the UK’s public finances could place further pressure on an already fragile economic backdrop.

Meanwhile, expectations that the Bank of England (BoE) will lower interest rates in December — reinforced by this week’s inflation data — continue to act as a cap on Sterling’s performance.

GBP/USD Forecast: Softer UK PMIs to Drag on Sterling?

Looking to Friday, the Pound to US Dollar exchange rate may soften as fresh UK PMI and retail sales figures are released.

Initial estimates for November suggest slower activity across the UK’s private sector, while retail sales for October are expected to stagnate — a combination that could deepen concerns around the UK’s economic outlook.

Later in the afternoon, the US will publish its own S&P PMI figures. While these are typically less market-moving than ISM surveys, any notable weakening may still inject volatility into USD trade.

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– Written by


Frank Davies

STORY LINK British Pound to Dollar Forecast: GBP Holds 1.30 as Tech Jitters, CPI Shape Outlook

The Pound to Dollar exchange rate (GBP/USD) struggled for momentum on Wednesday, edging lower to around 1.3120 following the release of the UK’s latest inflation figures.

According to UoB, “a breach of 1.3105 would indicate that GBP is more likely to range-trade rather than head higher to test 1.3240.” Scotiabank also warns that a break below 1.3100 could pave the way for deeper losses. Danske Bank maintains a one-month GBP/USD target of 1.31, rising to 1.33 over six months as the dollar gradually softens.

Domestic developments were influential, although global risk sentiment remained a major driver. Fragile risk appetite, driven by weaker equities, continued to weigh on Sterling, while the US Dollar saw a mixed reaction.

UK inflation slowed in October, with headline CPI easing from 3.8% to 3.6% and core inflation slipping from 3.5% to 3.4% — both in line with expectations. Softer energy base effects helped pull the annual rate lower.

The figures did little to shift market pricing for the Bank of England, with traders maintaining around an 80% probability of a December rate cut. Paul Dales, chief UK economist at Capital Economics, noted: “The fall in CPI inflation… could well prompt the Governor of the Bank of England to put on a red suit and white beard and cut interest rates from 4pc to 3.75pc on December 18.”

US equity markets weakened again on Tuesday, with the Nasdaq falling 1.2%. Investors are now awaiting Nvidia’s latest earnings, due overnight, which could have a significant influence on broader risk sentiment. ING warned of vulnerabilities in tech-heavy markets, commenting: “The understandable fear is that this is a very crowded trade and that a casual walk to the exit could turn into something less orderly should cause be found.”

MUFG added that given the current positive correlation between equities and the dollar, “a bad earnings report this evening could drive the dollar weaker.”

Attention will also turn to Thursday’s delayed US non-farm payrolls report for September. Consensus forecasts point to a 55,000 increase in jobs and an unemployment rate steady at 4.3%.

MUFG emphasised: “The focus will then quickly shift back to the economy and it is the jobs market that will ultimately determine dollar direction into year-end.”

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TAGS: Pound Dollar Forecasts

Created on November 20, 2025

• The US dollar rallied higher against the Japanese yen yet again during the trading session on Wednesday, as upward pressure continues.
• All things being equal, this is a market that is likely to see a lot of upward momentum, although it might be getting just a little bit stretched at the moment.

With this being said, the market still remains a buy-on-the-dip type of scenario, with the ¥153 level being a massive floor in the market. If the pair continues to the upside, the target at this point is somewhere closer to ¥159, although there is recognition that as the market approaches the ¥156.50 level, it is facing a little bit of resistance.

Longer-term, This Resistance Isn’t a Huge Deal

Over the longer term, this is unlikely to be a big deal. Short-term pullbacks should be thought of as buying opportunities, and this should be viewed through the prism of staying long in this market as the interest rate differential pays at the end of every day.

The Bank of Japan is very unlikely to be able to tighten monetary policy, and with that, plenty of participants appear willing to grind to the upside in this pair and continue to hang on to the interest rate differential and the swap payment at the end of every day.

There is absolutely no interest in shorting the US dollar against most currencies, and most specifically not against the Japanese yen. Across the forex world, most yen-denominated pairs look the same. Because of this, the markets all look as if they are selling off the Japanese yen, and this pair will be the biggest barometer of yen strength or weakness.

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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 November 20, 2025

• The Euro initially tried to rally during the trading session on Wednesday, but it has seen a lot of selling pressure and has turned around quite drastically against the US dollar.
• This is part of the longer-term downtrend that we have been in for a while, so that’s not a huge surprise, as the last couple of months have been negative.
• In fact, the very peak of the euro was during the FOMC press conference in September, and although we have bounced a couple of times, it’s been negative.

I am looking for 1.14

All things being equal, this is a market that I think does go looking to the 1.14 level, where the 200-day EMA is also hanging about. The FOMC is expected to cut rates sooner or later, but there has been some doubt thrown on that. And now that the jobs number is supposed to come out after the announcement, it’s likely that you will see a lot of traders freaking out because the idea that the Fed is going to start cutting rapidly may have taken a little bit of a hit.

That doesn’t really matter, though, because, quite frankly, I think this is something that goes on with the idea of the US dollar shortage really coming into play here as well. If we can break below the 1.14 level, the 1.11 level is my next target, and I don’t really see much, at least from a technical analysis standpoint, that gets in the way of reaching that level.

The EUR/USD market bouncing from here really isn’t that interesting to me, at least not until we get above the 1.17 level at the very least, and possibly even the 1.18 level, which at that point in time, you’d be chasing the highs. You might kick off the next leg to the upside. But quite frankly, if the euro doesn’t save itself relatively soon, we’re going to see the US dollar steamroll it.

Ready to trade our EUR/USD daily forecast? Here’s a list of some of the top forex brokers in Europe 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 GBPJPY pair formed more bullish waves, reaching 2.00%Fibonacci extension level at 205.25, achieving the suggested initial target, to form sideways trading due to its neediness to the positive momentum.

We recommend waiting to achieve the current obstacle and providing positive close above it, to reinforce the chances of recording new gains by its rally towards 205.70 reaching the next main target in the medium period near 206.90, while the breach failure will force it to provide mixed trading, and there is a chance to decline towards 203.70.

The expected trading range for today is between 204.45 and 205.70

Trend forecast: Bullish

– Written by


Frank Davies

STORY LINK GBP/USD Forecast: Pound Sterling Risks $1.30 as Markets Turn Cautious

The Pound to US Dollar exchange rate (GBP/USD) drifted lower on Wednesday as investors erred on the side of caution, boosting appetite for the safe-haven US Dollar.

At the time of writing, GBP/USD was trading near $1.3116, roughly 0.2% down from the day’s opening levels.

The US Dollar (USD) firmed on Wednesday as worries over a possible stock market pullback encouraged investors to rotate into safer assets.

Nerves were particularly heightened ahead of Nvidia’s third-quarter earnings release — a report widely viewed as a barometer for broader tech-sector momentum. A disappointing result could revive fears of overstretched valuations.

Additional support for the US Dollar came as markets waited for the publication of the Federal Reserve’s October meeting minutes.

USD traders broadly expect the minutes to reinforce the hawkish message delivered recently by Fed Chair Jerome Powell, further reducing the likelihood of a rate cut in December.

The Pound (GBP) lost ground on Wednesday after fresh inflation data strengthened expectations that the Bank of England will cut interest rates next month.

Figures from the Office for National Statistics showed headline inflation slipping from 3.8% to 3.6% in October, while core inflation eased from 3.5% to 3.4%.

The cooling in price pressures, driven largely by a steep year-on-year decline in energy costs, aligned with market forecasts and marked the first drop in inflation since May.

In response, investors ramped up bets on another 25bps BoE rate cut in December, with markets expecting the dovish bloc on the Monetary Policy Committee to win out as economic momentum continues to sag.

However, the data wasn’t entirely negative for Sterling. The easing of inflation pushed gilt yields lower, potentially giving Chancellor Rachel Reeves some additional fiscal flexibility when she delivers next week’s autumn budget.

GBP/USD Exchange Rate Forecast: Soft US Payrolls to Sink the US Dollar?

Looking ahead to Thursday, all eyes will be on the delayed release of September’s US non-farm payrolls.

Economists expect the data, postponed for nearly two months by the US government shutdown, to show 50,000 new jobs were created, up from August’s subdued 22,000 print.

Even with this improvement, the figures would still point toward a cooling labour market. Any signs of softening could weigh on the US Dollar if they encourage traders to reassess the prospect of a Fed rate cut later in the year.

Meanwhile, lingering uncertainty surrounding the UK’s autumn budget is likely to keep the Pound under pressure through the session.

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TAGS: Pound Dollar Forecasts