– Written by


Ben Hughes

STORY LINK Pound-to-Dollar Forecast: Bond Market Jitters, Fed Bets Boost USD

The Pound to Dollar exchange rate (GBP/USD) slipped back below the 1.3500 level as renewed UK political tensions and rising bond yields undermined Sterling sentiment.

Markets remain focused on speculation surrounding Prime Minister Keir Starmer’s future, while stronger US inflation expectations and persistent geopolitical risks continue to provide underlying support for the dollar.

GBP/USD Forecasts: Dips Below 1.35

The Pound to Dollar (GBP/USd) exchange rate was unable to break above the 1.3550 level on Wednesday and dipped below 1.35 around the US open.

UoB noted support around 1,3490 and added; “We do not expect the next support at 1.3455 to come into view.”

According to Scotiabank; “We look to support at the 50/200 day MA’s around 1.3430 at levels that correspond to the 38.2% Fibo.”

UK domestic politics, geo-political developments and UK data will all be important for the near-term Pound direction. The latest UK GDP data will be released on Thursday with expectations for a 0.1% March contraction after 0.5% growth in February.

The dollar secured net gains in global markets amid further doubts whether the Federal Reserve would be able to cut interest rates over the next few months. The Pound also failed to sustain a recovery with gains evaporating following reports that health Secretary Streeting will launch a leadership challenge to Prime Minister Starmer.

Immediate speculation surrounding Starmer’s position was dampened to some extent by the state opening of parliament, but there are still severe underlying tensions with the Labour leader remaining under intense pressure.

There are rumours that Streeting will resign on Thursday to mount a challenge and this could draw other candidates into the fray.

The bond market failed to hold initial gains with the 10-year yield just above 5.10% amid unease surrounding fiscal policy.

Scotiabank commented; “The major risk for the UK remains centered on the fiscal outlook and the loss of confidence associated with a change in Chancellor, given the reassurance provided by Rachel Reeves and her adherence to self-imposed rules.”

Energy prices and US developments will also be monitored closely. Following the latest inflation data, markets are not expecting Federal Reserve rate cuts this year and are pricing in close to a 60% chance that there will be a rate hike before year-end.

ING commented; “With reasonably high deposit rates of 3.65% (one week) and seen as a hedge if oil prices spike or equities turn south, the dollar should stay reasonably in demand for the time being.”

Iran developments will be important, especially given the impact on energy prices.

MUFG commented; “Time remains crucial here and further upward pressure on yields is likely to build over the coming days and weeks if there is no resolution to the closure of the Strait of Hormuz.”

It added; “So increased volatility on higher yields in the US is a key risk that would likely propel the dollar stronger. Bond markets will be key over the coming days and weeks for broader markets with inflation risks, as seen in the CPI report, rising.”

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• The US dollar rallied against the Japanese yen during the trading session on Wednesday as we are now threatening the 158-yen level.

• The 158 yen level of course is an area that a lot of people will be watching closely as it’s a round figure and then on top of that it’s an area that has shown support and resistance in the past.

Because of this, I think if we can break out above the 158-yen level we could go looking much higher, perhaps even to the 160-yen level. Ultimately, this is a market that I think continues to see more of a buy on the dip type of situation with the 156-yen level as a major floor.

The USD/JPY pair rallying from here makes quite a bit of sense, but the 158-yen level is an area that will continue to be a significant barrier, but getting above there opens up the possibility of the market really racing to the upside. Keep in mind that the Bank of Japan has shown itself to be very aggressive in shorting this pair when the Japanese yen gets hit too hard.

Potential Resistance and Economic Data

That being said, there is a real problem when it comes to the market and whether or not it can break higher because if we do get that breakout above the 160.50-yen level we could see the Japanese yen get absolutely crushed. In that environment, I think you would see the Japanese yen get crushed not only against the US dollar but almost everything else.

I don’t think that happens anytime soon, but we are more likely than not going to see the market at least try to get there. Keep in mind that Friday is the non-farm payroll announcement and that has a major influence on this.

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.

As seen on: Pairs Of Aces Podcast,The Trader Guy, FXEmpire

• The EUR/USD pair continues to bounce around in a range, and Wednesday was just a simple bounce move from the bottom of it.

• The Euro initially fell during the trading session on Wednesday to test the 50-day EMA near the 1.17 level.

The 1.17 level of course is an area that’s been important a couple of times for the EUR/USD pair in the past and I think markets continue to look at the 50-day EMA as the short-term floor in the market. The 1.18 level the beginning of significant resistance all the way to the 1.1850 level. I think we are essentially stuck in this range, and I think that continues to be the main scenario here.

Friday’s Jobs Report and Market Volatility

The reality is that Friday is the jobs number in the United States, so I think that keeps this market somewhat tight anyway and let’s be honest the Euro is typically very choppy and doesn’t like to make big moves in a short amount of time regardless.

So, with that being said it’s not a huge surprise to see that we are finding ourselves in this sideways market and I think that continues to be the case as we are at the bottom of the overall range. I do favor buying at the moment, but I think that’s a short-term setup and obviously I would want to be out of the market before we get the non-farm payroll announcement on Friday as it will throw a ton of volatility into the situation.

If we were to break down below the 1.1680 level, then it opens up a move down to the 200-day EMA followed by the 1.15 level. Ultimately this is a market that is trying to sort out whether or not the Federal Reserve is going to keep its interest rates extraordinarily high and of course whether or not the European Union is going to be able to get any type of energy coming out of the Middle East.

That is a conflict that I think is nowhere near ending although we aren’t necessarily in the hottest part of the war but with all of the random tweets or random statements expect choppy volatility coming out of the bond market influencing these currencies.

Ready to trade our daily Forex analysis? We’ve made this forex brokers list for you 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.

As seen on: Pairs Of Aces Podcast,The Trader Guy, FXEmpire

Platinum price reached $2191.00 level by its last bullish rally, approaching the previously waited main target, to form temporary corrective rebound towards $2135.00, affected by stochastic attempt to exit the overbought level as appears in the above image.

The price might be forced to provide some mixed trading, however it settles above $2060.00 makes us keep the bullish scenario, to keep waiting for surpassing $2195.00 level, extending the trading towards %161.8 Fibonacci extension level at $2245.00.

The expected trading range for today is between $2110.00 and $2215.00

Trend forecast: Bullish

• The US dollar initially fell against the Japanese yen on Tuesday but has turned around to show signs of strength yet again.

• This is a market that quite frankly is still in the midst of trying to figure out whether or not they can actually continue to push above the 158-yen level.

This is a market that should continue to be positive in the sense that the interest rate differential certainly continues to favor the US dollar and the fact that the 50-day EMA sits right there suggests that there is a potential barrier, but if we were to break above there, then it’s possible that traders could really start to push this thing toward the 160 yen level. Short-term pullbacks I do believe are buying opportunities and that of course is something that you need to pay close attention to.

Interest Rate Differentials and Historical Resistance

The interest rate differential continues to be a major driver, but it also allows the market to test those swing highs again as it could open up a bigger move towards the 160.50-yen level which was essentially a swing high from 1990. Because of this, we will have to keep in mind that the Bank of Japan may continue to look at the USD/JPY currency pair very closely as the central bank did intervene recently.

But all things being equal, this is a market that I think continues to be one that you have to be very cautious and what I mean by that is the occasional headline will come across and spook traders, but we’ll ultimately see this as a market that looks as if it has a hard floor in the form of the 200-day EMA, which is right around the 155 yen level.

We have been bouncing every time we pull back, and I think it’s probably only a matter of time before we truly get moving to the upside and in that environment, I do anticipate that eventually the FOMO traders will join. This has been a long-term uptrend that’s been going on for several years now and ultimately the Bank of Japan is in a situation where it cannot tighten monetary policy very much. I favor the US dollar.

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.

As seen on: Pairs Of Aces Podcast,The Trader Guy, FXEmpire

– Written by


David Woodsmith

STORY LINK GBP/USD Forecast: Pound Sterling Falls as US Inflation Comes in Hot

The Pound US Dollar (GBP/USD) exchange rate weakened on Wednesday as cautious trading conditions boosted demand for safer currencies.

At the time of writing, GBP/USD was trading at around $1.3498, down roughly 0.3% from Wednesday’s opening levels.

The US dollar (USD) traded with firm support in midweek trade as investors adopted a more defensive stance.

Persistent tensions in the Middle East continued to unsettle markets, while uncertainty ahead of talks between US President Donald Trump and Chinese President Xi Jinping also weighed on investor confidence.

Although trade is expected to dominate discussions, markets are increasingly alert to the possibility of disagreements over Iran, particularly as the US naval blockade threatens a major source of oil exports to China.

The latest US producer price index also lent support to the ‘Greenback’. Factory gate inflation accelerated more than forecast in April, reinforcing expectations that the Federal Reserve could keep interest rates elevated for longer.

While the Pound (GBP) lost ground against the US Dollar, it managed to steady against several other currencies as fears surrounding Prime Minister Keir Starmer’s future eased slightly.

Sterling sentiment improved after UK gilt yields retreated from recent highs, suggesting markets had become less concerned about an imminent leadership crisis within Labour.

Earlier in the week, long-dated gilt yields surged amid speculation that Starmer could face a challenge from a more fiscally expansionary successor, sparking concern over the UK’s borrowing outlook.

However, confidence remained fragile after reports emerged suggesting Health Secretary Wes Streeting may consider resigning in a move that could pave the way for a leadership bid.

Near-Term GBP/USD Forecast: UK Politics to Drive Sterling Volatility?

Looking to the latter half of the week, political developments in the UK are likely to remain a key driver of movement in the Pound to US Dollar (GBP/USD) exchange rate.

Any signs that support is building behind a potential challenge to Starmer’s leadership could inject fresh volatility into Sterling.

The uncertainty may also overshadow the UK’s latest GDP release, despite expectations that first-quarter growth will show a solid improvement.

Meanwhile, the US Dollar could face some headwinds on Thursday if the latest retail sales figures indicate that consumer spending slowed last month as forecast.

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TAGS: Pound Dollar Forecasts