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10
01, 2026
Bank Of America Predicts Significant Downside In 2026 As UK-EU Relations Strengthen
10
01, 2026
GBP/USD Weekly Forecast: Extends Weakness Amid Resilient US Data
- The GBP/USD weekly forecast edges lower as the US dollar gains on upbeat economic data.
- US services PMI and employment data revealed sufficient resilience to lift the dollar.
- The coming week’s US CPI, PPI, and UK GDP are the events to watch.
GBP/USD fell last week as a string of better-than-expected US economic data indicated the dollar was strong and pushed back expectations for Federal Reserve rate cuts in the near future. The pair fell after failing to maintain its early-week gains. US services and labor data, not any UK developments, drove the move.
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The first pressure arose when the US ISM Services PMI came in higher than expected, indicating that the services sector is still growing despite high interest rates. The new orders and prices paid for parts stayed the same, which supports the idea that inflation risks in the service economy are still high. This helped the dollar and pushed US Treasury yields higher, which in turn pushed the GBP/USD down.
The ADP Employment Report, released mid-week, showed that hiring in the private sector remained stronger than expected. The data made markets less likely to expect aggressive easing and more likely to want the dollar ahead of Friday’s jobs report, even though it isn’t always a good predictor of official payrolls.
Following Friday’s Nonfarm Payrolls report, which showed that job growth remained strong and unemployment was lower than expected, the GBP/USD pair fell even faster. Wage growth also remained strong, which alleviated concerns about a rapid decline in the job market. The data made it less likely that the Fed would cut rates early, which helped the dollar end the week strong and put sterling on the defensive.
The market’s direction next week will hinge on whether the new data on inflation and activity reinforce the notion of a robust US economy or pave the way for earlier policy easing.
GBP/USD Major Events Next Week:
- The US CPI inflation report will show whether price pressures are easing or staying the same
- US PPI data, which shows how inflation is changing upstream
- US retail sales, to gauge consumer demand
- Weekly unemployment claims for unemployment benefits in the US provide insight into the job market in the near future.
- UK GDP numbers, which could change expectations about the Bank of England’s policy outlook
If US inflation or consumer data worsens, the dollar will likely remain strong, and the GBP/USD will remain under pressure. On the other hand, lower prices or spending, along with weak UK GDP risks, could alter the market’s direction and allow sterling to stabilize or bounce back.
GBP/USD Weekly Technical Forecast: Critical Demand Zone at 1.3400
The daily chart for GBP/USD suggests a strong bearish momentum after falling below the 100-day MA with a bearish crossover of 20- and 50-day MAs. However, the price holds near the demand zone at 1.3400, while a breakout could push the price further lower towards the 200-day MA at 1.3350.
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Alternatively, finding adequate buying around 1.3400 could push the price higher to test the confluence of 20- and 100-day MAs around 1.3450 ahead of 1.3500.
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9
01, 2026
Carry Trade Momentum Builds (Chart)
- The carry trade is still a very strong driver at the moment in a lot of the Japanese yen-related pairs, including the USD/JPY market.
- The US dollar drifted a bit lower against the Japanese yen to kick off the Thursday session, but we have seen a turnaround show us signs of upward momentum.
- The carry trade is still a very strong driver at the moment in a lot of the Japanese yen-related pairs, so despite the fact that the Bank of Japan has recently raised interest rates, the reality is that they are light years away from trying to tighten monetary policy enough to really turn things around.
With this being said, the market will, of course, remain a little bit noisy, but if we can break to the upside and finally clear the 158 yen level, we could really take off. At that point, I think we could go looking to the 160 yen level, which is an area where the Bank of Japan intervened ages ago.
Technical Support and Future Targets
Short-term pullbacks will end up being buying opportunities, I believe, and as a result, the support levels that I’m watching include the 50-day EMA and the 155 yen level. These are areas that I think will remain very important, but I think it is difficult to break down below.
If we were to break down below that area, then you could have a lot of problems for the US dollar, and I think you have a situation where if that does in fact happen, the 152 yen level might be your next target.
Ultimately, though, despite the fact that the Bank of Japan has raised interest rates and the Federal Reserve has cut, you still have a pretty wide gap between the two, and therefore, if you’re looking for the carry trade to play out, you are looking for the US dollar to remain somewhat resilient against the Japanese yen. Beyond that, the US dollar itself is fairly resilient, mainly due to the fact that the economic numbers coming out of America are stubbornly strong, so even if the Federal Reserve does cut it can only do so in a limited way.
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.
9
01, 2026
Euro bears retain control as focus shifts to NFP
EUR/USD stays on the back foot and trades near 1.1650 after closing in negative territory on Thursday. While investors prepare for the release of the key December employment data from the US, the pair’s technical outlook suggests that the bearish bias stays intact.
Euro Price This week
The table below shows the percentage change of Euro (EUR) against listed major currencies this week. Euro was the weakest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.70% | 0.36% | 0.39% | 0.95% | -0.10% | 0.47% | 0.99% | |
| EUR | -0.70% | -0.34% | -0.26% | 0.25% | -0.79% | -0.23% | 0.29% | |
| GBP | -0.36% | 0.34% | -0.02% | 0.60% | -0.45% | 0.11% | 0.63% | |
| JPY | -0.39% | 0.26% | 0.02% | 0.53% | -0.52% | 0.04% | 0.60% | |
| CAD | -0.95% | -0.25% | -0.60% | -0.53% | -0.89% | -0.49% | 0.04% | |
| AUD | 0.10% | 0.79% | 0.45% | 0.52% | 0.89% | 0.57% | 1.10% | |
| NZD | -0.47% | 0.23% | -0.11% | -0.04% | 0.49% | -0.57% | 0.52% | |
| CHF | -0.99% | -0.29% | -0.63% | -0.60% | -0.04% | -1.10% | -0.52% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
The US Dollar (USD) benefited from the cautious market mood and a modest increase in the US Treasury bond yields on Thursday, causing EUR/USD to stretch lower.
Nonfarm Payrolls (NFP) in the US are forecast to rise by 60,000 in December following the 64,000 increase recorded in November. In this period, the Unemployment Rate is expected to edge lower to 4.5% from 4.6%.
According to the CME FedWatch Tool, markets see a less than 15% chance of a Federal Reserve (Fed) rate cut in January and price in about a 40% probability of a 25 basis points rate cut in March.
A significant positive surprise, with an NFP print of 80,000 or higher, could feed into expectations for two consecutive Fed policy holds in January and March. In this scenario, the USD could preserve its strength heading into the weekend and cause EUR/USD to extend its weekly slide. Conversely, investors could lean toward a rate cut in March and open the door for a recovery in the pair, if the employment report highlights worsening conditions in the labor market, with an uptick in the Unemployment Rate and an NFP reading of 30,000 or lower.
EUR/USD Technical Analysis:
In the 4-hour chart, EUR/USD trades at 1.1647. The 20-period Simple Moving Average (SMA) slopes lower beneath the 50- and 100-period measures, while the pair trades below all four key averages. The 100-period SMA softens and the 200-period one edges higher but remains above spot, maintaining overhead pressure. The Relative Strength Index (RSI) prints 32 (near oversold), signaling bearish momentum. A descending trend line from 1.1801 caps rebounds, with resistance marked at 1.1712.
Measured from the 1.1503 low to the 1.1800 high, the 50% retracement stands at 1.1652 and is being tested as support. A clear break would expose the 61.8% retracement at 1.1617 and 1.1600 (static level), while rebounds could stall beneath the descending trend line as long as the short-term SMAs continue to slope lower.
(The technical analysis of this story was written with the help of an AI tool)
Euro FAQs
The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day.
EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy.
The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa.
The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control.
Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency.
A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall.
Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period.
If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
9
01, 2026
The GBPJPY loses the bullish momentum– Forecast today – 8-1-2026
The GBPJPY pair lost the bullish momentum due to stochastic exit from the overbought level, which forces it to delay the bullish attack by reaching below 211.30 level, which keeps forming an important obstacle against the bullish attempts.
We expect providing new mixed trading with a chance of attacking the minor bullish channel’s support at 210.10, breaking this support makes us expect targeting extra corrective stations that might begin at 209.45 and 208.80, while the trading rally above the obstacle will increase the chances of recording new gains by targeting 212.55 and 213.75 level.
The expected trading range for today is between 210.10 and 211.50
Trend forecast: Fluctuated within the bullish trend
9
01, 2026
Rises above 183.00 to test nine-day EMA barrier
EUR/JPY has recovered its recent losses registered in the previous session, trading around 183.20 during the Asian hours on Friday. The technical analysis of the daily chart suggests that the 14-day Relative Strength Index (RSI) at 54 (neutral) signals steady momentum after easing from overbought. RSI edging higher toward the mid-50s supports stabilization without signaling a stretch.
The 50-day Exponential Moving Average (EMA) rises to 181.43, underpinning the medium-term uptrend. The nine-day EMA has slipped and now caps intraday advances, pointing to consolidation above the 50-day line. The backdrop favors dip-buying while the rising medium-term average holds.
A close back above the nine-day EMA at 183.34 would improve near-term traction toward overhead barriers around the all-time high of 184.95, which was recorded on December 22, aligned with the psychological level of 185.00.
Failure to reclaim the short-term average would leave the cross vulnerable to a deeper mean-reversion phase. The EUR/JPY cross may navigate the region around the initial support at the four-week low of 181.57, recorded on December 17, followed by the 50-day EMA at 181.43. Holding above the medium-term average preserves the broader bullish bias.
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.05% | 0.02% | 0.16% | 0.10% | 0.07% | 0.14% | 0.00% | |
| EUR | 0.05% | 0.06% | 0.20% | 0.14% | 0.12% | 0.18% | 0.05% | |
| GBP | -0.02% | -0.06% | 0.15% | 0.08% | 0.05% | 0.12% | -0.02% | |
| JPY | -0.16% | -0.20% | -0.15% | -0.05% | -0.09% | -0.03% | -0.16% | |
| CAD | -0.10% | -0.14% | -0.08% | 0.05% | -0.04% | 0.03% | -0.10% | |
| AUD | -0.07% | -0.12% | -0.05% | 0.09% | 0.04% | 0.07% | -0.07% | |
| NZD | -0.14% | -0.18% | -0.12% | 0.03% | -0.03% | -0.07% | -0.13% | |
| CHF | -0.00% | -0.05% | 0.02% | 0.16% | 0.10% | 0.07% | 0.13% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
(The technical analysis of this story was written with the help of an AI tool.)
9
01, 2026
EUR/USD, GBP/USD and EUR/GBP Forecasts – Dollar Stubborn Early Thursday
GBP/USD Technical Analysis
The British pound, of course, has drifted a little bit lower. We are in an area of consolidation. I don’t think that changes today. You could, in theory, see a little bit of a bounce when we get closer to 1.34, but really, I think this is the domain of short-term traders more than anything else, with 1.35 being a bit of a magnet for price.
The Bank of England is expected to cut rates as well, but it is expected to do so in a much slower and gradual manner than the market once thought, hence the British pound’s strength over the last couple of months. I think this is a currency that, relatively speaking, at least will fare better than many others against the greenback.
EUR/GBP Technical Analysis
The euro has climbed slightly against the British pound as we continue our bounce from the 200-day EMA, but I will direct you to my analysis from a couple of days ago. I think we’re going to start drifting towards the 0.8720 area and then maybe see some exhaustion that we can start shorting again.
While the Bank of England is expected to cut rates, it’s doing so at a much slower pace, and this, of course, is in comparison to the ECB, which is basically on hold, so we already know that the interest rate differential will continue to favor the pound for some time. That doesn’t necessarily mean that we fall apart. I just think that you’re going to continue to see more of a rally and then a fade type of situation going forward.
For a look at all of today’s economic events, check out our economic calendar.
9
01, 2026
GBP/USD Forecast 09/01: Testing Bottom Area (Video)
The British pound continues to consolidate on Thursday, as we are waiting for the all-important Non-Farm Payroll numbers in the United States.
- I am looking at the British pound against the US dollar. The British pound continues to consolidate, although it was somewhat negative during the trading session on Thursday, but I think you’ve got a situation where we’re basically bouncing around between 1.34 and 1.3550.
- With that, we’re waiting on something. I think the most obvious candidate will be the non-farm payroll announcements coming out on Friday in the United States.
The non-farm payroll announcement, while in and of itself isn’t particularly interesting and not even particularly accurate, will have a major influence on what people think the Federal Reserve will do. The unemployment rate in America is expected to be 4.5%. The non-farm employment change is supposed to be an addition of 66,000 jobs.
With that being the case, I think it comes down to the number. The higher the number, the better off the US dollar does because we have a situation here where the Bank of England is cutting but is doing so slowly, and if the Federal Reserve has a reason to pause, then that means the dollar is mispriced.
Monitoring Support and Resistance
That being said, in the short term, it looks like we’re still range-bound. It will be interesting to see if we can break out of this little rectangle. A move above 1.36 would be bullish, especially if the US dollar is falling against everything else. In that case, then yes, the GBP rises here.
On the other hand, if we break down below the 50-day EMA currently right at the 1.3367 level, then I think you start to see the dollar strengthen against the pound quite a bit, maybe even a couple of handles.
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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.
8
01, 2026
Pound Sterling to Dollar Forecast: Can GBP Break Higher as USD Backing Fades?
– Written by
Ben Hughes
STORY LINK Pound Sterling to Dollar Forecast: Can GBP Break Higher as USD Backing Fades?
The Pound to US Dollar exchange rate (GBP/USD) remained capped below 1.35 as signs of fragility in the US labour market offset lingering caution over global risk conditions.
With momentum slowing, traders are watching whether support can hold above the mid-1.34s.
GBP/USD Forecasts: Hold Near 1.35
The Pound to Dollar (GBP/USD) exchange rate has been held in tight ranges and traded just below 1.35 after the New York open. Tough resistance remains above 1.3550.
According to Scotiabank, the trend is bullish, but momentum has faded; “We note the importance of the 200 day MA at 1.3388, and we look to a near-term range roughly bound between 1.3450 and 1.3550.
UoB added; “Upward momentum has slowed with the pullback, and today, we expect GBP to range-trade, most likely between 1.3470 and 1.3535.”
Equity markets were less confident on Wednesday with limited pullbacks and the tone surrounding risk appetite was slightly less confident.
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There is scope for increased volatility given geo-political tensions and important US data releases.
According to Scotiabank; “Calm, low volatility trading risks getting a shake up over the coming days.”
US ADP jobs data recorded an increase in private payrolls of 41,000 for December, slightly below consensus forecasts of around 50,000 and followed a revised 29,000 decline for November.
ADP chief economist Dr. Nela Richardson commented; “Small establishments recovered from November job losses with positive end-of-year hiring, even as large employers pulled back.”
Elsewhere, the JOLTS data recorded a decline in job openings to 7.15mn for November from 7.45mn previously and below consensus forecasts of 7.60mn.
There was, however, a stronger than expected reading for the ISM services-sector index.
Overall, markets are still not expecting the Federal Reserve to cut rates again in January, although traders are still on alert for an announcement on the next Fed Chair.
ING commented; “Beyond today, our short-term view remains neutral to slightly bullish on the greenback.”
Geo-political developments will be watched closely with Venezuela and Greenland both important areas.
Macquarie Group global forex and rates strategist Thierry Wizman commented; “Traders seem to be okay with the rhetoric coming from the U.S. when it does not imply that ‘boots on the ground’ will be needed to run Venezuela.”
He added; “A military invasion and a prolonged on-the-ground conflict would have risked a major dollar depreciation, as did the Iraq and Afghanistan wars in 2002-2008,
There has also been speculation that the Supreme Court could announce a decision on US reciprocal tariffs on Friday when it will hold an opinion day.
If there is a decision, MUFG commented; “We lean toward the Supreme Court striking down the use of IEEPA which will trigger a bout of uncertainty for US companies once again.
The bank expects there are plans to expand other tariffs if necessary.
According to the bank; “It’s unlikely that Plan B will be as all-encompassing and hence tariff revenue expectations would likely be downgraded, potentially steepening the US Treasury yield curve and potentially weakening the dollar. In any case, it adds renewed uncertainties for US companies that would be unhelpful for corporate sentiment.”
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TAGS: Pound Dollar Forecasts
8
01, 2026
Sits in Tug of War with Yen (Chart)
The US dollar continues to drift a bit against the yen, as we are in the middle of a major consolidation area. Traders will likely be focused on Non-Farm Payroll this Friday for the next move.
The US dollar drifted a little bit lower against the Japanese yen during early trading on Wednesday, as we continue to stay stuck between two major levels in consolidation. With that, I’m watching the 158 yen level above very carefully as it is a major resistance barrier, and the 154.50 yen level below as it is a major support level. It’s worth noting that the 50-day EMA has just crossed the 155 yen level, so it is potential support there as well.
As we go through the week, we’ll start to focus on the non-farm payroll announcement, and that tends to have a major influence on this pair and, by extension, causes it to react to the bond markets, which obviously will move as well. The interest rate differential still favors the US dollar, so I still favor the upside overall.
Market Reaction to Bank of Japan
I also recognize that this is more or less a consolidation than anything else. The market is likely to remain somewhat tight and rangebound for the short term, but eventually, we will have to make a decision, perhaps in the next Bank of Japan meeting, as there are a lot of questions as to whether or not they will actually attempt to tighten monetary policy.
With the massive amount of debt in Japan, it’s difficult to imagine that being a long-term play, but in the short term, it does cause some noise here. Anything above the 158 yen level really has this market taking off. I suspect running to the 160 yen level.
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.