• The GBP/USD weekly forecast remains elevated despite a pullback from the weekly highs above 1.3400.
• Fed rate cut, dismal jobless claims, and dovish tone lent fair support to the pound.
• Next week’s BoE rate decision and US CPI and NFP remain the key events to watch.

The GBP/USD price traded in a positive zone, briefly challenging the levels around 1.3400 as markets reacted to shifting monetary policy expectations and economic data. The British pound remains bid against the US dollar, despite softer UK economic data, mainly due to renewed expectations of rate cuts by the Fed in 2026.

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Sterling remained resilient as the markets broadly positioned rate differentials, favoring the GBP over a subdued USD. The GBP/USD marked multi-week highs near 1.3430 before correcting lower to 1.3360 by the end of the week. However, the pair stays underpinned amid the Fed-BoE rate differential.

The Fed rate cut and dovish signals to cut rates further into 2026 gave the pound a decisive push above key levels. Meanwhile, Thursday’s US Jobless Claims figures reflected an increase of 44k claims, adding more weight to the “labor market cooling” narrative. However, the UK GDP data on Friday surprisingly showed a contraction of 0.1%. The weak print intensified the odds of a BoE rate cut in the December meeting. However, the pound briefly dipped without sabotaging the uptrend.

Moving ahead to the next week, the GBP/USD will remain sensitive to the Bank of England’s interest rate decision, the MPC vote split, and its accompanying statement. The markets are pricing in a 90% probability of a 25 bps rate cut.

From the US, NFP and US inflation will be key events to watch, as strong US jobs or elevated inflation figures could boost the US dollar, weighing on the GBP/USD. Meanwhile, softer data could offset the BoE’s rate cut pressure on the pound.

Major Releases to Watch Next Week:

• UK PMIs
• BoE Interest Rate Decision & Monetary Policy Summary
• UK Average Earnings / Unemployment data
• US Nonfarm Payrolls and Unemployment Rate
• US Retail Sales and PMI data

GBP/USD Weekly Technical Forecast: Bullish Above 1.3350

The GBP/USD daily chart shows a strong uptrend, supported by the confluence of 100- and 200-day MAs around 1.3350. Meanwhile, the RSI remains near the 60.0 level, suggesting further room for an upside. However, a doji candle presents a mild selling pressure, attributed to profit-taking, which could resist further upside beyond the weekly highs of 1.3438. A clear breakout of this level could gather enough strength to test 1.3470.

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On the flip side, immediate support emerges at 100- and 200-day MAs near 1.3350 ahead of a demand zone near 1.3280, and then the 20- and 50-day MAs confluence near 1.3200.

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The GBPJPY pair didn’t move anything by forming sideways trading due to its stability continuously below the resistance at 208.80, forming an obstacle for resuming the bullish trend.

The price might form temporary corrective trading, but the stability within the bullish channel levels and the continuation of forming extra support at 206.90 level, these factors support the chances of renewing the bullish attack, to expect surpassing the current resistance by recording new gains that might extend 209.30 and 209.75.

The expected trading range for today is between 207.40 and 208.90

Trend forecast: Fluctuated within the bullish trend

– Written by


Tim Boyer

STORY LINK British Pound to Dollar Forecast: GBP/USD Holds 1.34 Despite UK Recession Fears

The British Pound to Dollar exchange rate (GBP/USD) eased to around 1.338 as markets digested a shock 0.1% contraction in UK GDP for October, marking a second straight monthly decline.

The data undercut recent Pound Sterling optimism and reinforced expectations of a BoE rate cut next week.

Sterling’s ability to stabilise now hinges on whether continued US Dollar weakness can offset deepening UK growth concerns.

GBP/USD Forecasts: 7-Week Best

The dollar lost ground following Wednesday’s Federal Reserve policy rate cut with the Pound to Dollar (GBP/USD) exchange rate jumping to 7-week highs just below 1.3400 before settling around 1.3360.

A sustained move above 1.3400 would boost market confidence in the Pound.

The Pound is likely to remain dependent on dollar weakness to make gains.

From a medium-term view, SocGen forecasts a GBP/USD retreat to 1.27 at the end of 2026 as the dollar rebounds.

The next domestic hurdle for the Pound will be Friday’s GDP data with consensus forecasts of 0.1% growth for October after a 0.1% decline the previous month. Stronger than expected data would help support the Pound.

The Fed met strong market expectations with a further 25 basis-point cut to 3.75%.

There was further evidence of a divided Fed with two members voting against the latest cut while Miran voted for a larger 50 basis-point cut.

As far as 2026 is concerned, the median projection is for one cut, but there were wide divisions with seven members backing no cut.

MUFG commented; “The soft dissents reinforce our view that it will become even harder to cut rates further at the start of next year.

Chair Powell noted that the bank would be data dependent and did not rule out a further move early in 2026.

Danske Bank commented; “Powell made it clear that the Fed is in no hurry to ease its policy further. At the same time, he also refrained from clearly pushing back against the market pricing, which currently sees slightly more than 50bp of additional cuts for the coming year.”

There will be a greater focus on the Bank of England ahead of next week’s policy decision.

There are strong expectations that there will be a 25 basis-point cut to 3.75% and, following the latest Federal Reserve cut, markets are pricing in a slightly more aggressive BoE stance next year.

According to ANZ; “As the inflation rate moderates, the policy rate needs to be cut to prevent the real rate from rising. The dynamics of a sluggish labour market and a disinflationary budget indicate that price pressures will cool over the coming months.”

It added; “However, both household and business inflation expectations remain elevated. It is, therefore, likely that the MPC eases the policy rate gradually to anchor inflation expectations at lower levels. Following the expected 25bp rate at next week’s meeting, we forecast three additional 25bp cuts in 2026.”

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TAGS: Pound Dollar Forecasts

Created on December 12, 2025

• USD/JPY fell sharply on Thursday before rebounding from the 155 level, which continues to act as a strong floor.
• With the Bank of Japan avoiding tightening and the Fed signaling uncertainty, the pair remains a buy-on-dips market amid choppy consolidation.

The US dollar has fallen pretty significantly against the Japanese yen during trading here on Thursday, but the 155 yen level has been like a floor, and we’ve bounced quite nicely. So to me, it looks like we’re at least trying to consolidate after all. There are a lot of questions out there about what’s going to happen next with the Federal Reserve, because we had suggested previously that there were going to be multiple interest rate cuts, but now the data-dependent phrase keeps getting kicked around.

Key Floors and Pullback Strategy

With that being said, and the fact that the Bank of Japan has no real intention of tightening up monetary policy if they can avoid it, that makes sense that we will eventually go higher. And even if we do break down from here, I see the 50-day EMA at the 153.88 level offer in support, followed by the 153 yen level.

All things being equal, you know, I’ve been pretty obvious about it that I’m a buyer here of this pair, and I like these pullbacks for a little bit of value. I look for short-term pullbacks that show signs of bounces like we have had on Thursday as a potential entry. I build on a position, I collect swaps at the end of the day, and my account grows as a result. If we were to break down below the 152.80 yen level, then it’s possible that the market could drop to the 200-day EMA.

That being said, I think we’re going to see a lot of choppy and volatile trading as we more likely than not probably try to stabilize. The question is, what’s the floor? Is it 155 yen or is it 153? We’ll know in a few days.

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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.

• The EUR/USD forecast remains bullish, with a recent pullback triggered due to profit-taking.
• The Fed’s dovish path limits the euro’s losses, supporting a dip-buying trend in the EUR/USD.
• FedSpeak and next week’s US NFP could provide more clarity to the markets.

The EUR/USD marked a 10-week high near 1.1750 on Thursday before retreating mildly in today’s Asian session as the US dollar staged a rebound. The pullback came after two solid sessions for the pair, which followed the Fed rate cut and dismal US jobless claims data, reinforcing dollar weakness.

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The immediate correction suggests profit-taking and stabilization of the greenback, but the broader perspective remains euro-supportive, as the Fed is expected to continue easing next year.

The Federal Reserve delivered its third 25 bps rate cut of 2025 on Wednesday, lowering the benchmark range to 3.50% – 3.75%. Although the committee remained split, the statement tempered expectations of further easing. However, the market participants viewed Powell’s tone as less hawkish, acknowledging the downside risks in the labor market. This, combined with Thursday’s downbeat US jobless claims data with a rise of 44,000, reinforced the view that labor markets are cooling. The Fed’s dovish tilt seems justified, pushing the Dollar Index (DXY) towards a 7-week low near the 98.00 area.

Political noise is also keeping the dollar on the back foot, as renewed speculation about Fed independence has unsettled investors. The White House officials’ insistence on further rate cuts continues to weigh on the greenback. This has drawn the market’s attention to Kevin Hassett, widely seen as a potential new Fed Chair, who is considered rate-friendly. According to the CME FedWatch Tool, the markets are pricing in a 58% probability of two rate cuts by October 2026, well above the Fed’s dot plot.

From the Eurozone, the ECB is expected to hold in the December meeting, pointing to the potential end of the easing cycle. ECB President Lagarde and other policymakers have reiterated that the current situation seems reasonable and requires no further cuts in the near term. This ECB-Fed divergence continued to favor dip buying in EUR/USD.

EUR/USD Key Events Ahead

The near-term direction of the pair will depend on US data. Traders will keep an eye on comments from Fed Cleveland’s President Beth Hammack and Chicago’s President Goolsbee later today. However, the key catalyst will be the NFP data due next week.

EUR/USD Technical Forecast: Bulls in the Overbought Zone

The EUR/USD 4-hour chart displays two significant spikes, indicating intense buying pressure. Though the RSI is now in the overbought zone, the bias remains tilted to the upside. The key moving averages, stacking one above the other, also support the upside.

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The key resistance for the pair emerges at 1.1800, while the immediate support lies at 1.1700, ahead of 1.1650 and 1.1600. The prices could consolidate here and might correct lower to attract more buying.

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With the markets betting on a December BoJ rate hike, USD/JPY volatility could intensify on US economic data and Fed rhetoric. On the one hand, markets are speculating on how far the BoJ needs to go to reach normalization. On the other hand, incoming US data will fill the US government shutdown-induced data void, which may materially alter the Fed’s rate path.

Fed Speakers to Spotlight the Greenback

Later on Friday, traders should closely monitor FOMC members’ speeches as the dust settles from Wednesday’s monetary policy decision. FOMC members Beth Hammack and Austan Goolsbee are due to speak. Notably, Cleveland Fed President Hammack will become a voting member in 2026, while Chicago Fed President Goolsbee will be an alternative after being a voting member in 2025.

Cleveland Fed President Hammack’s views on inflation, the labor market, and the timeline for a rate cut will influence US dollar demand. The FOMC’s Dot Plot signaled a single rate cut in 2026. Growing calls for a Q1 2026 rate cut would signal a more dovish Fed rate path. A more dovish Fed policy stance would support a bearish short- to medium-term USD/JPY outlook.

For context, the CME FedWatch Tool gives a 24.4% chance of a January 2026 Fed rate cut, while the probability of a March 2026 cut rose from 42.2% to 49.6% on Thursday, December 11. Traders should closely monitor sentiment toward a Q1 2026 Fed rate cut, which are likely to influence USD/JPY trends.

Technical Outlook: USD/JPY on a Downward Trajectory

With markets focused on rate differentials, technical indicators, and fundamentals will give crucial insights into potential USD/JPY price trends.

Looking at the daily chart, USD/JPY remained above the 50-day and 200-day Exponential Moving Averages (EMAs), signaling a bullish bias. While technicals remain bullish, fundamentals are increasingly outweighing the technical structure.

A drop below the 155 support level would open the door to testing the 50-day EMA. If breached, 153 would be the next key support. A sustained break below the 50-day EMA would signal a bearish near-term trend reversal. A near-term bearish trend reversal would expose the 200-day EMA and 150.

– Written by


Tim Boyer

STORY LINK GBP to USD Forecast: Pound Sterling Softens on UK Economic Concerns

The Pound to US Dollar exchange rate (GBP/USD) pulled back from a one-month peak on Thursday as volatility picked up following the Federal Reserve’s final policy decision of 2025.

At the time of writing, GBP/USD was hovering around $1.3358, roughly 0.2% below the day’s opening levels.

The US Dollar (USD) saw sharp, uneven swings on Thursday as markets attempted to digest the Fed’s December rate cut.

As widely expected, the central bank lowered its benchmark rate to 3.5–3.75%.

However, traders were taken aback by the voting distribution. Ahead of the decision, markets had anticipated as many as four dissents, reflecting deep division within the Federal Open Market Committee. Instead, just two members opposed the move, while another unexpectedly argued for a larger cut.

This dovish surprise sent the Dollar sharply lower in the immediate aftermath, amplifying speculation that the Fed may deliver additional easing through 2026.

The ‘Greenback’ later reclaimed some ground, though its recovery was uneven as investors continued to debate the likely pace of next year’s policy trajectory.

The Pound (GBP) struggled for support on Thursday as concerns around the UK’s economic resilience resurfaced.

Investors remain uneasy about signs of a weakening labour market and mounting pressure on household spending. A new Barclays report underscored these concerns, revealing the sharpest decline in consumer expenditure in five years.

Such developments have strengthened expectations that the Bank of England (BoE) will need to adopt a more accommodative stance, with further rate cuts anticipated over the coming months.

GBP/USD Exchange Rate Forecast: Underwhelming GDP to Weigh on Sterling?

Looking ahead, Friday’s UK GDP release will take centre stage for Pound traders.

Economists expect October’s monthly GDP to show a modest 0.1% rise — the first growth since June — but such a muted improvement is unlikely to shift the broader narrative of a sluggish UK economy.

A soft reading may reinforce expectations that the BoE will cut rates at its upcoming meeting, potentially placing renewed pressure on Sterling.

Meanwhile, with the US schedule light on major data, Dollar movement may be guided largely by broader risk appetite. A risk-on environment could leave the ‘Greenback’ on the defensive, while any deterioration in sentiment may help USD find renewed support.

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TAGS: Pound Dollar Forecasts

Created on December 11, 2025

EUR/USD Analysis Summary Today

• Overall Trend: : Neutral with an upward bias.
• Support Levels for EUR/USD Today: 1.1620 – 1.1570 – 1.1490
• Resistance Levels for EUR/USD Today: : 1.1720 – 1.1800 – 1.1880.

EUR/USD Trading Signals:

• Buy EUR/USD from the support level of 1.1570 with a target of 1.1800 and a stop-loss at 1.1490.
• Sell EUR/USD from the resistance level of 1.1800 with a target of 1.1500 and a stop-loss at 1.1900.

Technical Analysis of EUR/USD Today:

Currency prices moved positively against the US Dollar after the Federal Reserve cut the key US interest rate for the third consecutive time on Wednesday, though it signaled the possibility of keeping it unchanged in the coming months—a move that could anger President Donald Trump, who has demanded sharp reductions in borrowing costs. According to reliable trading platforms, the EUR/USD pair rebounded to the 1.1680 resistance level at the time of writing this analysis. These gains may push the EUR/USD trend out of the neutral zone that dominated trading recently while awaiting the Fed announcement.

The bullish scenario for EUR/USD requires more work to confirm the strength of the bulls’ control. On the daily chart, the psychological resistance of 1.1800 remains the key to a confirmed bullish shift. The pair’s recent gains pushed the Relative Strength Index (RSI) to the 61 level, which supports a technical correction upward, but it still has more room for stronger gains before reaching the overbought zone. The MACD indicator is also moving positively. The echoes of the Fed’s decisions, its policy statement, and updated projections will continue to influence EUR/USD trading in the coming days.

The scenario for a EUR/USD pullback over the same timeframe is linked to the bears bringing the currency prices back toward the vicinity of the psychological support of 1.1500 once again.

Trading Advice

Be cautious. The EUR/USD’s upward trend is still in its early stages. We await confirmation of this and recommend buying from the 1.1500 support level again, but never take unnecessary risks.

The Future of US Interest Rates in the New Year

Following the widely anticipated announcement of a US interest rate cut, the Federal Reserve’s interest rate-setting committee indicated in a statement released after a two-day meeting that it is likely to keep US interest rates unchanged in the coming months. In a series of quarterly economic projections, Federal Reserve officials indicated they expect to cut US interest rates only once next year. Overall, yesterday’s rate cut brought the federal funds rate down by a quarter of a percentage point to around 3.6%, its lowest level in nearly three years. Lower interest rates by the Federal Reserve can reduce borrowing costs for mortgages, auto loans, and credit cards over time, although market forces may also influence these rates.

At the final meeting of 2025, three Fed officials opposed the move, the most dissenting votes in six years, indicating deep divisions within a committee that traditionally operates by consensus. Two officials voted to keep the U.S. interest rate unchanged, while Stephen Miran, appointed by Trump in September, voted for a half-point cut.

The December meeting may well signal a more tense period for the Fed. Officials are divided between those who favor lowering U.S. interest rates to stimulate employment and those who favor keeping them unchanged because inflation remains above the central bank’s 2% target. Unless there are clear signs of full control over inflation, or unemployment worsens, these divisions are likely to persist.

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Created on December 11, 2025

• USD/JPY is holding firm ahead of the FOMC, with traders focused on the press conference for clues on the pace of future cuts.
• The broader uptrend remains intact, with potential pullback zones between 155 and 153 offering possible long entries.

We do have the FOMC interest rate here in a couple of hours, and perhaps more importantly, we have the press conference. So, I suspect that about three hours from now, this chart will look quite a bit different. That being said, it doesn’t really matter because there are a couple of things that we can look at to determine whether or not there is going to be a continuation of the trend, or do we get some type of significant pullback. Notice how I didn’t say change in trend. And that’s because it would take a massive change in tone by the Federal Reserve to turn this thing around.

Pay attention to the press conference; he may say something along the lines of “data-dependent in our future decisions”, and that throws a bit of doubt into the market about the likelihood of continuous interest rate cuts. If that’s the case, then the US dollar should do quite well over the longer term. As a trader, I have closed my long position, and I’m waiting for an entry again. I look at this through the prism of maybe 154 yen being an excellent opportunity. But if we take off straight away and that would be a result of either Powell sounding very hesitant to cut going forward, the statement sounding very hesitant, or maybe they don’t cut at all.

Watching Key Pullback Zones

Right now, the Fed watch tool at the CME suggests, I want to say it’s around 90%, I haven’t checked it in a few days, that the Federal Reserve will cut. So, I think that would catch the market so far offside that the US dollar would just slam through the 158 yen level and go to the 160 yen level very quickly. That being said, though, I do think we have an opportunity for a little bit of a pullback to take advantage of, and that’s exactly what I’m going to do. I’m watching this area right around 155, down to 154, and then again at 153.

What I am looking for on a shorter timeframe, not the daily chart necessarily, is some type of move like this. The V pattern on the hourly chart. Once we start to bounce and pick up a little bit of momentum, I’m willing to go long, and that’s because I am okay with owning this pair longer term. That being said, if we break down below 153 in the next several days, then the game’s up at least for a while. I don’t think that happens. Truthfully, I’d be a bit concerned if we broke down below 154, at least in the short term.

Longer term, I do think we’d go higher because the Bank of Japan has a whole litany of problems it has to deal with as well. And really, at this point in time, I think this ends up being a continuation of the carry trade, but I recognize that you may get an opportunity to pick up cheap US dollars.

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