Created on October 28, 2025

• The euro surged against the yen on Monday, hitting fresh highs as yen weakness spread across markets.
• With risk appetite firm and central bank decisions ahead, traders continue to favor buying dips in this strong uptrend.

The euro rose against the Japanese yen during trading on Monday, or perhaps better put, the Japanese yen has fallen against almost everything on Monday. That being said, we are at a fresh new high, and it does look like the overall momentum still favors buying dips in this pair, as the euro clearly is the obvious winner at this juncture.

The 175.50 yen level underneath should continue to be massive support. And it looks to me like the euro may be trying to get to the 180 yen level before it’s all said and done. You should also keep in mind that there is a Bank of Japan as well as a European Central Bank decision for interest rates this week, and that will cause a lot of volatility. Nonetheless, as long as we have more of a “risk on” type of attitude around the world, it does make sense that we continue to see this one open up to the upside, given enough time.

I Can’t Short

And at this point in time, it’s almost impossible to get short. If we were to break down below the 172 yen level, then maybe we start to fall apart, but it’s going to take a lot to even get to that area. I expect to see a lot of noise. I expect to see a lot of questions asked about everything.

I also expect to see a lot of carry traders continuing to take advantage of the Japanese yen getting eviscerated. The situation between the Americans and the Chinese seems to be cooling off a bit. And if that does in fact end up being the case, then I think you have to look at this as a market that continues to rise as the Japanese yen is considered to be a safety currency.

That is being run from as people are looking for a higher rate of return in almost all assets. All things being equal, this is still an uptrend, and I think that continues to be the case going forward. With that, I think you have to look at this as a market that is long only at the moment.

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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 October 28, 2025

• Another day, another choppy session for the euro against the US dollar.
• You can see that we did initially rally a bit during the Monday session to reach the 50-day EMA, but turned around to show signs of hesitation.
• The 50-day EMA is a psychologically important technical signal that a lot of people will be watching, and it is worth noting that market participants will be looking at this through the prism of a potential sideways market.

I don’t really think you have a whole lot of momentum here one way or the other, but I would point out that perhaps we could see short-term rallies get faded near the 1.17 level. I also recognize that markets have been doing more of a pro-dollar move since the FOMC meeting than anything else, which is a bit of a surprise because I was told by everybody in the online community that the US dollar was going to fall apart.

And you can see we’ve done pretty much nothing but strengthen since then.

Now the question is, will we bounce from here? Maybe. But keep in mind that the FOMC meeting this week, which will feature possibly a rate cut, but the real question is going to be, what do we do here as far as the press conference is concerned? Because that’s probably the real story. And the press conference, of course, will be late on Wednesday, and traders will be looking for hints to ask them where we go from here.

Jerome Will Drive the Next Move

If they don’t sound dovish enough, you will see the euro get absolutely hammered. It is worth noting that the central banks around the world have quite a bit of volatility in store for the market. We have, of course, the Bank of Canada, the Federal Reserve, the Bank of Japan, and the European Central Bank all presenting their latest interest rate decisions this week. So, I expect a lot of volatility anyways.

The fact that Monday didn’t really have a lot in the way of news probably means it makes a lot of sense that we’re just drifting. By the end of the week, we should have some answers as to where we are going, especially as the Fed and the ECB will both be out of the way. But as things stand right now, it is worth noting that the dollar has held up remarkably well.

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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 GBP/USD forecast recovered briefly as the dollar weakened.

• The latest UK retail sales and flash S&P Global PMI boosted the pound, reducing the probability of a rate cut by the BoE. 

• Traders look ahead to the US HPI Y/Y and Consumer Confidence for further impetus. 

The GBP/USD price halted its six-day losing streak, trading above 1.3350 as the dollar weakened on Tuesday. The dollar declined after traders speculated about a 25 basis point cut at Wednesday’s Federal Reserve meeting. 

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The US softer-than-expected inflation data released last Friday reinforced the Fed to start easing its cycle. The Fed is expected to lower the funds rates from 3.75% – 4.00% with another cut expected in December. 

The latest stronger-than-expected UK retail sales and flash S&P Global PMI data lifted the pound sterling in the UK. This suggested progressing business activity and steady consumer spending. Earlier, the softer-than-expected UK CPI hinted at a potential rate cut by the Bank of England. However, these key releases have minimized the expectations of further easing by the BoE. 

Traders anticipate the BoE’s 6th November meeting for further confirmation. Meanwhile, policymakers could follow the same interest rates until they achieve further clarity about the fiscal outlook. However,further clarifyeclining growth will likely put the pound under pressure. 

GBP/USD Daily Key Events

The major events in the day include

• US S&P/CS Composite-20 HPIsignificantUS HPI M/M
• US Richmond Manufacturing Index
• US CB Consumer Confidence

On Tuesday, traders look forward to the US HPI Y/Y and US HPI M/M, Richmond Manufacturing Index, and CB Consumer Confidence to gain insights into inflation, growth, and consumer sentiment. 

GBP/USD Technical Forecast: Rebound Eying 1.3400

The GBP/USD 4-hour chart indicates the pair shows signs of recovery, trading above the 1.3350 level. However, the price stays below the key 200-period MA near 1.3460, signaling a broader bearish bias. 

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The pair’s rebound from the 1.3330 support zone signals short upside momentum. However, the resistance zones near the 50- and 100-period MA around the 1.3360 and 1.3380 levels limits further uptrend. 

The RSI at 54 shows a growing buy limit interest as the pair remains below the overbought region. This signals modest upside potential, which could improve if the pair gains some bullish strength. 

A decisive break above the 1.3380 a3400 levels could trigger an upside towards the next resistance zone. In contrast, a failure to sustain above the short-term MAs could lead to a renewed downtrend.

Support Levels

Resistance Levels

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The EURJPY pair faced difficulty resuming the bullish attack, to form extra barrier at 178.00 level, forcing it to activate the bearish corrective track by reaching 177.25.

Note that suffering extra bearish pressure might force it to break 177.05 level, to confirm its readiness to provide extra corrective trading, to target 176.35 and 175.65 level, while the price success by breaching 178.00 level and holding above it will reinforce the chances of recording extra gains, to expect targeting 178.65 and 179.30 level initially.

The expected trading range for today is between 176.65 and 178.00

Trend forecast: Bearish 

The Pound to Australian Dollar (GBP/AUD) exchange rate slipped at the start of the week as renewed US-China trade optimism drove risk-on sentiment and boosted the risk-sensitive Australian Dollar.

DAILY RECAP:

The Australian Dollar (AUD) started the week on the offensive, climbing against most major peers as traders welcomed renewed signs of progress in US-China trade negotiations.

Reports that Washington and Beijing had agreed on a preliminary ‘framework’ deal ahead of the upcoming meeting between Presidents Donald Trump and Xi Jinping lifted market confidence, sending risk assets higher.

Given the Aussie’s close trade ties with China and its reputation as a proxy for global risk appetite, the news fuelled strong demand for the currency — seeing the AUD rally sharply through Monday’s European session.

The Pound (GBP), meanwhile, held largely steady ahead of upcoming UK data releases.

Traders looked to the afternoon’s CBI distributive trades survey for direction, which was expected to show another decline in retail sales activity for October, reflecting softer domestic demand.

However, with no major developments in sight, Sterling’s moves were modest and largely reactive to broader shifts in risk sentiment.

Near-Term GBP/AUD Forecast: All Eyes on Australian Inflation Data

Looking ahead, the next key driver for the Pound to Australian Dollar exchange rate will be Wednesday’s Australian CPI report.

Economists expect inflation to edge higher across key measures, which could bolster AUD if the data reduces the likelihood of further Reserve Bank of Australia (RBA) rate cuts.

Until then, GBP/AUD movement on Tuesday is likely to be shaped by global market tone.

If optimism surrounding trade relations persists, the Aussie may extend gains. Conversely, any cooling in sentiment could see Sterling claw back some ground.

The Pound to US Dollar (GBP/USD) exchange rate firmed at the start of the week as softer US inflation data fuelled expectations for aggressive Federal Reserve rate cuts and lifted risk sentiment.

DAILY RECAP:

The US Dollar (USD) lost traction on Monday as markets digested the implications of last Friday’s softer US CPI report.

Headline inflation eased more than expected, reinforcing the view that price pressures are cooling and boosting market confidence that the Federal Reserve could cut rates by up to 50 basis points before year-end.

This dovish shift in expectations weighed on USD across the board, with the currency also pressured by a broad risk-on tone after reports of progress in US-China trade talks.

Meanwhile, the Pound (GBP) traded in tight ranges, with little domestic data to provide direction.

Traders focused on the afternoon’s CBI distributive trades survey, expected to show another dip in retail sales activity — potentially signalling softer consumer demand.

Overall, Sterling’s performance on Monday reflected its rising sensitivity to shifts in global risk appetite rather than homegrown fundamentals.

Near-Term GBP/USD Forecast: Fed Decision Looms Large

All eyes now turn to Wednesday’s Federal Reserve policy meeting.

Markets widely expect a 25bps rate cut, though speculation has grown over a larger 50bps move following last week’s inflation data.

If the Fed delivers a bigger cut or signals further easing ahead, the Dollar could slide sharply.

Conversely, a cautious tone or smaller-than-expected move might prompt a USD rebound.

With the UK data calendar quiet, GBP/USD direction will hinge primarily on the Fed’s decision and the accompanying guidance.

Continued risk-on sentiment would also favour the Pound, while any souring in global mood could see Sterling retrace gains.

The US Dollar to Japanese Yen (USD/JPY) exchange rate is trading near ¥152.86, down 0.14% on the day after touching resistance around 153.27 last week.

Rabobank says the week ahead could be pivotal for the yen, with markets watching both the Bank of Japan’s October 30 policy meeting and Prime Minister Takaichi’s first in-person meeting with US President Trump.

“The market’s implied path for policy now suggests only 20 bps of tightening over three months,” Rabobank noted, “reflecting a loss of confidence in the BoJ’s ability to deliver another 25-bps hike before year-end.”

The bank highlighted that the yen has been the worst-performing G10 currency so far this month, losing over 3% against the US dollar.

“We see scope for the JPY to recover some ground versus the USD on the assumption that BoJ rates can be raised again by the turn of the year,” the bank said.

“This in turn assumes that Governor Ueda underscores the BoJ’s hawkish bias at this week’s policy meeting.”

Rabobank forecasts USD/JPY at 147 on a three-month view, adding that “recent highs around 153.27 are likely to provide resistance,” and that it would favour selling rallies ahead of the BoJ decision.

On the political front, the bank said Takaichi’s meeting with Trump “will be an early test of her ability to maintain Japan’s alliance with Washington” and that she is unlikely to advocate a weaker yen policy given the sensitivity of imported inflation.

Current USD/JPY rate: ¥152.86. More Dollar-Yen forecasts.

GBP/USD Technical Analysis

The British pound rallied a little bit during the trading session here on Monday as well, as it looks like the 1.34 level is coming into the picture for potential support and resistance as it is in the middle of the larger consolidation area. Rallies that appear here and show signs of exhaustion are more likely than not going to be sold into, with the 1.35 level being significant resistance as it is the same place that not only do we see a large, round, psychologically significant figure, but also where we start to run into the uptrend line that’s now been broken. If we drop from the 1.35 level, then we could head back to the 1.3250 level, possibly the 1.32 level.

EUR/GBP Technical Analysis

The Euro has pulled back slightly against the British pound during the trading session on Monday, with the 0.8750 level offering resistance yet again. At the end of the day, this is a market that I think continues to see the 0.8750 level as a major barrier. So, if we were to break above there, then we could go much higher. A short-term pullback to the 50-day EMA is possible, with the 0.8684 level offering a little bit of support. Anything below there, then we could go looking at the 0.86 level, where the 200-day EMA is trying to get to.

This is a positive market overall, but we have such a major amount of resistance above that it is going to be difficult to ultimately have to make some type of bigger decision. Keep in mind that this pair is typically very choppy. So, at the end of the day, this is a market that I think you use as an indicator of how to trade the euro or the pound against the US dollar based on relative strength.

For a look at all of today’s economic events, check out our economic calendar.

The Pound to Canadian Dollar exchange rate (GBP/CAD) softened last week as weaker UK inflation data and renewed fiscal concerns weighed on Sterling sentiment.

WEEKLY RECAP:

The Pound (GBP) was subdued early in the week amid light data and directionless trading.

Tuesday’s UK public finance figures revealed government borrowing had climbed to its highest level since 2020, fuelling fiscal unease ahead of the Autumn Budget.

Mid-week, Sterling came under renewed pressure as September’s CPI data undershot expectations — headline inflation held at 3.8% and core slipped to 3.5%.

The weaker figures amplified Bank of England (BoE) rate cut speculation, dragging GBP lower through Wednesday and Thursday.

By Friday, Sterling stabilised after upbeat retail sales and services PMI results signalled resilience in consumer and business activity, helping the Pound trim its losses into the weekend.

The Canadian Dollar (CAD) endured a choppy week, initially pressured by softer oil prices before recovering on Tuesday as domestic inflation surprised to the upside — tempering Bank of Canada (BoC) rate cut expectations.

Mid-week, rising oil prices provided further support, though Thursday’s weaker retail sales print and renewed trade tensions with the US capped gains, leaving CAD volatile into the week’s end.

Near-Term GBP/CAD Forecast: BoC Decision to Steer the Loonie

The key event this week will be Wednesday’s Bank of Canada (BoC) rate decision.

Markets expect a 25bps cut; if confirmed, and paired with dovish forward guidance, CAD could come under pressure mid-week.

However, if the BoC surprises with a hold or downplays further easing, the Canadian Dollar may rally.

The UK side remains light, with Monday’s CBI distributive trades survey expected to show another decline — a result that could see Sterling start the week on a softer footing.

Overall, GBP/CAD direction looks set to hinge on the BoC’s tone and subsequent market risk appetite.