– Written by


Frank Davies

STORY LINK GBP/USD Price Forecast: Pound Sterling Firms After Fed Minutes

The Pound US Dollar (GBP/USD) exchange rate was rangebound on Thursday morning after falling to its lowest level in roughly three weeks during the previous session.

At the time of writing, GBP/USD was trading close to $1.3486, showing minimal movement from Thursday’s opening levels.

The US Dollar traded unevenly through Thursday’s European session as investors continued analysing the minutes from the Federal Reserve’s latest policy meeting.

Initially, the publication lent support to the ‘Greenback’, revealing broad agreement among policymakers to keep interest rates unchanged while also indicating that some officials remain open to further tightening should inflationary pressures persist.

However, enthusiasm for the US currency faded as upon further reading the minutes suggested US authorities reviewed exchange rate movements earlier in the year, fuelling speculation that policymakers may be more comfortable with a softer Dollar if required to support economic conditions.

The Pound lacked clear direction as domestic political concerns continued to weigh on market sentiment.

Renewed scrutiny surrounding Prime Minister Keir Starmer followed another policy reversal regarding delays to local elections, adding to doubts about the government’s stability ahead of the upcoming Gorton and Denton by-election.

At the same time, expectations that the Bank of England could soon begin loosening monetary policy continued to cap Sterling demand. Recent UK employment and inflation releases have strengthened market conviction that a rate cut as soon as March remains likely.

GBP/USD Forecast: Growth Data and UK Activity Surveys in Focus

Volatility in the Pound to US Dollar (GBP/USD) exchange rate may increase toward the end of the week with several key economic releases scheduled on both sides of the Atlantic.

Markets will closely watch the latest US GDP estimate for the final quarter of 2025, which is forecast to show growth cooling following the disruption caused by the extended government shutdown. A stronger-than-expected reading, however, could provide renewed support for the US Dollar, given the resilience previously shown by the US economy.

Meanwhile, upcoming UK PMI surveys are expected to indicate slower expansion within the services sector, while retail sales growth is also projected to weaken. Should these forecasts materialise, Sterling may face additional downside pressure heading into the weekend.

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Created on February 19, 2026

The Euro fell during trading on Wednesday, as we continue to ask questions about the overall strength or weakness of the US dollar.

EUR/USD

The Euro fell during trading on Wednesday as it looks like we are threatening the 1.18 level. The 1.18 level of course is a large round psychologically significant figure that a lot of people will be watching. I recognize this as a market that potentially will be testing the 50-day EMA and it’s worth watching what the US dollar is doing in general as it has a major influence here.

After all, this is one of the most heavily traded forex pairs that you have available to you and therefore this has a lot of weight on the US Dollar Index and in general the overall risk appetite around the world. What I am seeing during the session is a flood of money coming into the United States again and that of course drives down the Euro because Europeans are buying US stocks.

Technical Support and Upside Potential

If we break down below the 50-day EMA, that could send the market down to the 1.16 level and possibly even the 200-day EMA. On a break to the upside, if we can break above the 1.19 level it opens up the 1.21 level and perhaps, if we get a little bit of momentum building there, then the potential measured move of the previous consolidation which could send this pair to the 1.23 level.

The 1.23 level has been important multiple times in the past and I think it will be very difficult to break above. Nonetheless, the dollar short positioning is at a 14-year high and generally speaking, when you get that extreme, the dollar fights back. That might be what we’re starting to see here and if we break down below the 50-day EMA, you can even make an argument that we just made a lower high, which of course is a bearish sign.

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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 GBPJPY pair ended the negative movement by reaching 207.60 level, to begin activating with stochastic positivity to rally towards 209.30 directly, to press on the barrier to find an exit to end the negative scenario in the current trading.

Note that providing positive close for the upcoming four hours above 209.15 level is important to confirm its readiness to begin bullish attack, to expect targeting 210.65 level initially, to extend the trading towards 211.70, while the failure to breach it will force the price to form new bearish waves to reach 208.25

The expected trading range for today is between 209.00 and 210.65

Trend forecast: Bullish

The GBPJPY pair ended the negative movement by reaching 207.60 level, to begin activating with stochastic positivity to rally towards 209.30 directly, to press on the barrier to find an exit to end the negative scenario in the current trading.

Note that providing positive close for the upcoming four hours above 209.15 level is important to confirm its readiness to begin bullish attack, to expect targeting 210.65 level initially, to extend the trading towards 211.70, while the failure to breach it will force the price to form new bearish waves to reach 208.25

The expected trading range for today is between 209.00 and 210.65

Trend forecast: Bullish

– Written by


James Fuller

STORY LINK GBP/USD Forecast: Pound Sterling Steady despite Softer UK Inflation

The Pound US Dollar (GBP/USD) exchange rate traded within a tight corridor on Wednesday as investors digested the UK’s latest inflation update.

At the time of writing, GBP/USD was hovering near $1.3547, showing little deviation from the day’s opening levels.

The Pound struggled for direction following the release of January’s consumer price index figures.

Data from the Office for National Statistics showed headline inflation easing to 3%, its lowest level since March last year.

The slowdown was largely attributed to falling energy costs and cheaper airfares, which helped offset price increases in areas such as hospitality and accommodation.

The latest figures reinforced expectations that the Bank of England will opt for a 25-basis-point interest rate cut at its March meeting, particularly in the wake of weaker employment data earlier in the week.

However, as markets had already largely priced in a near-term move from the Bank of England, Sterling avoided a sharp selloff and instead traded in subdued fashion.

The US Dollar also remained confined to narrow ranges after the publication of the latest durable goods orders data.

Figures from the US Census Bureau revealed order growth tumbled from 5.4% to -1.4% in December, a slightly smaller decline than the 2% fall markets had anticipated.

Despite the contraction, USD losses were limited during the European session as investors refrained from taking strong positions ahead of the release of minutes from the Federal Reserve’s January policy meeting, which may offer clues on the central bank’s outlook.

GBP/USD Forecast: US Growth and UK PMI Data in Focus

As the week progresses, attention will shift to the latest US GDP figures, which could inject fresh volatility into GBP/USD.

Current forecasts indicate US economic growth slowed from an annualised 4.4% to 3% in the fourth quarter, partly reflecting the impact of the extended government shutdown. A sharper-than-expected slowdown may weigh on the US Dollar.

For Sterling, focus will turn to upcoming UK retail sales data and the latest services PMI reading. Evidence of resilient consumer spending and sustained strength in the services sector could help the Pound regain ground heading into the weekend.

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The GBPJPY pair approached the previously waited main target by reaching 207.30 level which forces it to form some bullish corrective waves, affected by stochastic rally above 50 level, which allows it to recover some losses to settle near 208.15.

Note that the negative stability below 209.15 level represents main factor to confirm the previously suggested negativity, therefore, we will keep waiting for gathering extra negative momentum to reinforce the chances of reaching 207.05, while surpassing the barrier and holding above it will ease the mission of achieving several gains by its rally towards 209.85 reaching 207.05. 

The expected trading range for today is between 207.05 and 208.75

Trend forecast: Bearish

BitcoinWorld

GBP/JPY Forecast Plummets: Bank of Japan’s Hawkish Pivot Crushes Sterling

LONDON, March 2025 – The GBP/JPY currency pair has entered a pronounced downward trajectory this week, marking one of the most significant weekly declines in 2025. Consequently, market analysts now attribute this sharp movement primarily to shifting monetary policy expectations from the Bank of Japan (BoJ). The central bank’s increasingly hawkish communication has fundamentally altered the interest rate differential outlook, thereby providing substantial underlying support for the Japanese Yen against the British Pound.

GBP/JPY Technical Breakdown and Immediate Price Action

Forex charts currently display a clear bearish pattern for the GBP/JPY cross. The pair recently broke below the critical 50-day and 200-day moving averages, which now act as dynamic resistance levels. Furthermore, trading volume has surged during the sell-off, confirming the strength of the downward momentum. Key support levels from early 2024 are now being tested, and a breach could open the path for further significant losses. Market sentiment, as measured by the Commitment of Traders (COT) report, shows a rapid buildup of short positions on the pair by institutional investors. This technical deterioration coincides perfectly with the fundamental shift emanating from Tokyo.

The Bank of Japan’s Historic Policy Evolution

The Bank of Japan has embarked on a gradual but unmistakable exit from its decades-long ultra-accommodative monetary framework. This policy shift represents a watershed moment for global forex markets. Initially, the BoJ ended its negative interest rate policy (NIRP) in 2024. Subsequently, it has begun signaling a willingness to normalize policy further as domestic inflation shows signs of becoming entrenched. Governor Kazuo Ueda’s recent parliamentary testimony emphasized a data-dependent approach, but his acknowledgment of rising wage pressures and service-sector inflation was interpreted as decidedly hawkish. This communication marks a stark contrast to the Bank of England’s (BoE) current stance, which appears more cautious despite persistent UK inflation concerns.

Expert Analysis: The Yield Differential Driver

Financial institutions like Nomura and Mitsubishi UFJ Morgan Stanley Securities have published detailed analyses on the narrowing yield gap. “The core driver for GBP/JPY is the convergence of government bond yields,” explains a senior currency strategist at a major Tokyo-based bank. “As markets price in potential BoJ rate hikes in late 2025 or early 2026, the yield advantage that supported the carry trade into GBP is evaporating. We are witnessing a classic unwinding of long GBP/JPY positions that were predicated on a static policy divergence.” Historical data supports this view; periods of BoJ policy normalization have consistently correlated with Yen strength across the board.

Comparative Central Bank Outlook: BoJ vs. Bank of England

The monetary policy divergence story is now reversing. The following table summarizes the key factors influencing each central bank:

This juxtaposition creates a powerful two-way pressure on GBP/JPY. The Pound faces headwinds from a cautious BoE, while the Yen receives direct tailwinds from a newly assertive BoJ.

Global Macroeconomic Impacts and Risk Sentiment

Beyond direct policy, broader market conditions amplify the move. Notably, a strengthening Yen often correlates with a downturn in global risk appetite. As a traditional safe-haven currency, the Yen attracts flows during periods of uncertainty. Recent geopolitical tensions and volatility in equity markets have contributed to this dynamic. Simultaneously, the British Pound remains sensitive to UK-specific economic data, which has been mixed. Weak retail sales figures and declining manufacturing PMI have undermined arguments for BoE hawkishness. Therefore, the pair is caught in a perfect storm of shifting fundamentals.

Historical Context and Forward-Looking Scenarios

Analysts are reviewing previous BoJ policy transitions, such as the 2006-2007 rate hikes, for clues. Historically, the initial signaling phase produces the most volatile currency moves. Looking ahead, the path for GBP/JPY will hinge on several verifiable data points:

• BoJ’s Quarterly Tankan Survey: Business sentiment and capital expenditure plans.
• UK CPI and Wage Data: Evidence of inflationary persistence.
• BoJ Bond Purchase Schedules: Any reduction in JGB buying would be a hawkish signal.
• Global Commodity Prices: Affects Japan’s import costs and the UK’s terms of trade.

The consensus forecast among major banks has been revised downward, with many technical analysts identifying the next major support zone for GBP/JPY significantly below current levels.

Conclusion

The GBP/JPY forecast has turned decisively bearish due to a fundamental repricing of Bank of Japan policy. The BoJ’s hawkish stance, aimed at normalizing policy after years of extraordinary stimulus, provides a firm foundation for Yen strength. Concurrently, the Bank of England’s more restrained outlook removes a key pillar of support for the Pound. This dual dynamic suggests the recent slide in the currency pair may extend further. Traders and investors must now monitor BoJ communications and Japanese wage data as closely as UK inflation reports, as the era of predictable policy divergence has clearly ended.

FAQs

Q1: What does a “hawkish stance” from the Bank of Japan mean?
A hawkish stance indicates the central bank is focused on controlling inflation and is inclined to raise interest rates or tighten monetary policy. For the BoJ, this marks a major shift away from its long-standing ultra-loose policy.

Q2: Why does a stronger Yen cause GBP/JPY to fall?
GBP/JPY quotes how many Japanese Yen (JPY) are needed to buy one British Pound (GBP). If the Yen strengthens (gains value), it takes fewer Yen to buy a Pound, so the GBP/JPY exchange rate declines.

Q3: Is this just a short-term technical move, or a long-term trend?
While short-term volatility is always present, the move is driven by a fundamental reassessment of long-term interest rate differentials. This suggests the potential for a sustained trend, not merely a temporary correction.

Q4: How does UK economic data affect this pair now?
Weak UK data reinforces the view that the Bank of England may cut rates before the BoJ hikes, widening the policy divergence in favor of the Yen. Strong UK data could temporarily stall the decline, but the dominant driver has shifted to BoJ policy.

Q5: What are the risks to this bearish GBP/JPY forecast?
The primary risk is a sudden reversal in BoJ communication, signaling a delay in policy normalization. Alternatively, a surge in UK inflation forcing the BoE to hike rates aggressively could also undermine the current trend.

This post GBP/JPY Forecast Plummets: Bank of Japan’s Hawkish Pivot Crushes Sterling first appeared on BitcoinWorld.

The GBPJPY pair approached the previously waited main target by reaching 207.30 level which forces it to form some bullish corrective waves, affected by stochastic rally above 50 level, which allows it to recover some losses to settle near 208.15.

Note that the negative stability below 209.15 level represents main factor to confirm the previously suggested negativity, therefore, we will keep waiting for gathering extra negative momentum to reinforce the chances of reaching 207.05, while surpassing the barrier and holding above it will ease the mission of achieving several gains by its rally towards 209.85 reaching 207.05. 

The expected trading range for today is between 207.05 and 208.75

Trend forecast: Bearish