– Written by


Ben Hughes

STORY LINK Pound Sterling to Dollar Forecast: GBP’s “Sentiment-driven Gains” see 1% Rally

The Pound to Dollar exchange rate (GBP/USD) surged above 1.3400 after a ceasefire agreement in the US-Iran conflict triggered a sharp drop in oil prices and a rebound in global risk appetite.

While the weaker dollar has boosted Sterling in the short term, analysts warn that uncertainty remains high and gains could face resistance near the 1.35 level.

GBP/USD Forecasts: Jump Above 1.3400

The Pound to Dollar (GBP/USD) exchange rate jumped above the 1.3400 level in Asia on Wednesday following the announcement of a ceasefire in the US-Iran conflict.

Just ahead of President Trump’s deadline, a deal brokered by Pakistan secured a 2-week ceasefire. In return, Iran pledged to allow transit to resume through the Strait of Hormuz.

Oil prices dropped sharply and there was a surge in risk appetite with a 2.0% gain for the FTSE 100 index while the dollar posted sharp losses with the dollar index (DXY) around 98.80 from close to 100 on Tuesday.

A dip in energy prices and a decline in bond yields will alleviate pressure on the UK economy, although both metrics are worse than before the conflict started.

UoB commented; “While the short-term rally appears overdone, there is scope for GBP to rise to 1.3480.” There is also likely to be tough resistance on any approach to the 1.3500 area.

ING noted the importance of energy prices; “Risk assets are rallying as combatants in Iran pull back from the brink. The most impactful news overnight has been Iran’s announcement that it will allow safe passage for traffic through the Strait of Hormuz during this ceasefire.”

MUFG commented; “There are a lot of uncertainties that will persist but having said that, this of course is a step in the right direction and we see this as reducing considerably, over the short-term at least, the risk of a major risk-off and with it a strengthening of the dollar.

It added; “This outcome is a clear bearish outcome for the US dollar.”

According to National Australia Bank head of FX strategy Ray Attrill; “If the strategic waterway is reopened, we could be able to consolidate the risk-on rally that we’re seeing.”

He added; “But a lot has to happen in the next 14 days. Markets still need to proceed with a degree of scepticism.”

ING commented on the dollar; DXY rallied just over 3% through March. It has gapped lower today, and a further sell-off to 98.50 looks possible. However, there remains too much uncertainty to expect a full unwind of the March rally, and it is therefore premature to call for a break under 98.00.”

Rabobank noted the wide range of potential outcomes; “In terms of our macro and market scenarios, the latest news leans towards our base case of fighting being over by mid-April with a slow Hormuz reopening – and on US terms. Obviously, if this pause instead leads to more fighting, we move towards our other, more damaging scenarios.”

ING added; “Don’t expect a complete reversal of March trends, however.”

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TAGS: Pound Dollar Forecasts

The EURJPY pair renewed the positive attempts since yesterday, due to the continuation of providing positive momentum by the main indicators by its rally above the initial resistance at 184.80, to test the barrier at 185.45 to bounce directly to settle near 184.90.

The price might be forced to provide mixed trading by its stability below 184.45, and there is a chance for forming bearish waves to target 184.20 and 183.70 level, while its success to surpass the barrier at 185.45 will open the way for forming strong bullish waves, to expect reaching 186.00 initially, reaching 186.65.

The expected trading range for today is between 184.40 and 185.45

Trend forecast: Fluctuated

The EURJPY pair renewed the positive attempts since yesterday, due to the continuation of providing positive momentum by the main indicators by its rally above the initial resistance at 184.80, to test the barrier at 185.45 to bounce directly to settle near 184.90.

The price might be forced to provide mixed trading by its stability below 184.45, and there is a chance for forming bearish waves to target 184.20 and 183.70 level, while its success to surpass the barrier at 185.45 will open the way for forming strong bullish waves, to expect reaching 186.00 initially, reaching 186.65.

The expected trading range for today is between 184.40 and 185.45

Trend forecast: Fluctuated

– Written by


David Woodsmith

STORY LINK Pound-to-Euro Week Ahead Forecast: Best GBP Levels in Play

The Pound to Euro exchange rate (GBP/EUR) climbed above 1.1550 to one-month highs as shifting Bank of England rate expectations and position adjustments supported Sterling despite heightened geopolitical tensions.

Rising energy prices following escalating conflict in the Middle East have complicated central-bank policy expectations, prompting markets to reconsider the timing of Bank of England rate cuts while the Euro faces pressure from Europe’s dependence on energy imports.

GBP/EUR Forecasts: BoE rethink?

After initial vulnerability, UBS expects that the Pound to Euro (GBP/EUR) exchange rate will strengthen to 1.1630 by the first quarter of 2027.

MUFG, in contrast, still forecasts that GBP/EUR will slide to 1.11 by the end of 2026.

Middle East developments dominated during the week with a surge in energy prices as the US and Israel attacked Iran aggressively while Iran retaliated with missile strikes across the region.

GBP/EUR was broadly resilient and a break above 1.1500 triggered a 1-month high above 1.1550. There was clear evidence of position adjustment with a covering of short Pound positions while the Euro was hit by a liquidation of long positions.

A shift in Bank of England expectations also underpinned the Pound with expectations that the Bank of England would decide not to cut rates this month due to elevated uncertainty.

Nomura has been notably bearish on the Pound, but has tempered its short-term view; “The risk now is that the market finds it relatively easy to price out BoE rate cuts, but the hurdle to pricing in meaningful rate hikes in the euro area is higher. Indeed, the two-year swap spread has moved from just under 120bp in GBP’s favour to nearly 130bp in the last few days.”

It noted; “This has overwhelmed any potential relative “safe haven” demand for EUR relative to GBP, which is often seen when global equities are under pressure.”

The bank added; “if energy prices stay elevated. In the short term, EUR may face slightly more pressure than GBP from these forces.”

UBS has a positive medium-term Pound outlook; “We expect the pound to recover in the second half of this year and into 2027—especially given its current undervaluation—as the political landscape becomes clearer after the May elections and the BoE nears the end of its easing cycle.”

Natixis sees the risk of near-term Pound selling; “In the short term, EUR/GBP could move back above 0.88 (GBP/EUR below 1.1360), especially ahead of the local elections on May 7, which risk adding another layer of political uncertainty.”

UBS does have reservations over the near-term Pound outlook; “With local and regional elections scheduled for May and monetary easing likely to continue through to June, we don’t expect sterling to outperform in the near term. Meanwhile, Europe’s recovery is gaining momentum, with increased fiscal spending in defense-related sectors starting to show.”

MUFG expects rate cuts will be delayed rather than cancelled; “We assume the BoE will hold off from a cut this month due to higher energy prices stemming from Middle East risks, before delivering two further cuts in Q2 and Q3.”

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TAGS: Pound Euro Forecasts

2026.04.07 2026.04.07
Yen Reels on Geopolitical Turmoil. Forecast as 07.04.2026

Dmitri Demidenkohttps://www.litefinance.org/blog/authors/dmitri-demidenko/

The conflict in the Middle East is pushing Japan’s economy toward stagflation and prompting foreign investors to sell Japanese stocks and bonds. The government is trying to counter the rise in the USD/JPY pair. Will it work? Let’s discuss this topic and make a trading plan.

Major Takeaways

• Foreign investors are actively selling Japanese stocks.
• Capital outflows are hurting the yen.
• The Bank of Japan warns of the looming stagflation.
• Consider adding to the long trades opened at 158.5.

Weekly Fundamental Forecast for Yen

Japan emerged as a key casualty of the Middle East conflict, with the yen and related assets under heavy pressure, prompting investors to sell. Foreign investors have been accelerating those sales since September 2024. Capital outflows and rising stagflation risks are driving the USD/JPY pair higher, despite government efforts to stem the yen’s slide. The question is whether verbal intervention alone can deter speculators.

Net Foreign Purchases of Japanese Stocks

Source: Bloomberg.

The Bank of Japan stated that higher oil prices are weighing on corporate profits and consumer spending, warning that escalating tensions in the Middle East could further strain the economy. Companies are already raising prices amid higher energy costs, supply chain disruptions, and a weak yen. Meanwhile, households have cut spending for a third straight month, despite a rise in real wages.

Japan’s Household Spending

Source: Bloomberg.

Therefore, the economy is potentially moving toward stagflation, leaving the Bank of Japan with a difficult choice. Should it raise rates to contain inflation or keep policy loose to support demand? Futures markets are pricing in about a 70% chance of monetary policy tightening, which is already curbing USD/JPY bulls.

Another risk is the threat of currency intervention. The government keeps signaling it, and the dollar’s approach to the ¥160 level is making investors increasingly nervous. Japanese Finance Minister Satsuki Katayama said Donald Trump’s remarks are fueling volatility across global markets, adding that authorities are ready to respond at any time with appropriate measures.

UBS analysts doubt Japanese authorities can stop the USD/JPY pair from rising further. The bank argues that if Brent crude climbs to $150 a barrel, pressure on the yen will intensify, making FX intervention less effective. Any intervention-driven pullbacks are likely to attract fresh buyers. UBS also warns that if the government shifts toward fiscal measures to offset the impact of inflation, investors may see it as a reluctance to support the currency. In that scenario, the dollar may advance toward ¥175.

A more bearish scenario would involve a further escalation of the conflict in the Middle East. This could happen if Donald Trump does not extend the ultimatum deadline and the US moves to target Iran’s energy infrastructure. In that case, Brent could push above its March highs, putting additional pressure on the yen.

Weekly USDJPY Trading Plan

Further gains in USD/JPY may prompt currency interventions, raising the risk of a sharp pullback. This decline can be used to open new long trades or add to those initiated at 158.5.

This forecast is based on the analysis of fundamental factors, including official statements from financial institutions and regulators, various geopolitical and economic developments, and statistical data. Historical market data are also considered.

Price chart of USDJPY in real time mode

Created on April 07, 2026

EUR/USD Analysis Summary Today

• Overall Trend: Remains Bearish.

• Support Levels for EUR/USD Today: 1.1510 – 1.1460 – 1.1390.

• Resistance Levels for EUR/USD Today: : 1.1590 – 1.1630 – 1.1680.

EUR/USD Trading Signals:

Buy Scenario:

Sell Scenario:

Technical Analysis of EUR/USD Today

Following yesterday’s holiday, liquidity has returned to the markets. At the same time, risk sentiment remains fragile amid escalating tensions in the Middle East. Investors are closely monitoring developments after Donald Trump threatened to target Iranian bridges and oil facilities if the Strait of Hormuz is not reopened by Tuesday evening. This geopolitical ambiguity is keeping traders cautious and benefiting safe-haven currencies.

This situation is negative for the EUR/USD pair. It attempted a rebound, but gains were limited to the 1.1571 level, before quickly resuming its broader downward trend to the 1.1525 support level at the time of writing.

According to the technical analysis on the daily chart, breaking the 1.1500 support level reinforces the bearish bias. Technical indicators confirm this, with the 14-day Relative Strength Index (RSI) below the 50 neutral line, supporting the bears’ push for the currency pair to lower levels until the indicator reaches oversold territory. This could happen quickly if the pair falls to the 1.1400 support level, as occurred in the middle of last month’s trading. The MACD indicator and moving averages still support the strength of the downtrend in the coming days.

To break the overall bearish trend and initiate a technical upward reversal, bulls must stabilize above the 1.1640 resistance.

Fundamental Analysis EUR/USD:

The economic focus for today, Tuesday, remains on the Eurozone Investor Confidence Index (Sentix), which is expected to reflect the impact of regional conflict and energy price shocks on investor sentiment. It will be released at 10:30 AM Egypt time. Prior to that, the Eurozone Services Purchasing Managers’ Index (PMI) readings will be released. However, given the weak liquidity and general geopolitical concerns, this indicator is unlikely to generate a significant market reaction.

On the US side, the durable goods orders reading will be released at 2:30 PM Egypt time.

From a monetary policy perspective, this pair reflects the ongoing divergence between the European Central Bank (ECB) and the US Federal Reserve. Inflationary pressures in the Eurozone have prompted ECB officials to hint at a possible interest rate hike, which strengthens the euro. Meanwhile, the US Federal Reserve Chairman has indicated that the bank is continuously monitoring the impact of rising oil prices on inflation and will either tighten or wait at the appropriate time. Overall, this divergence in monetary policy expectations continues to influence the exchange rate of this currency pair.

Trading Advice:

Dear TradersUp trader, the Euro will remain under constant pressure as long as the conflict in the Middle East persists and oil prices continue to rise, which negatively impacts the Eurozone

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No news for EURJPY pair until this moment, affected by the positivity of the main indicators, which forces it to delay the bearish attack and keep forming bullish corrective waves, to settle near 184.30.

Reminding you that the negative scenario will remain valid, depending on the stability of the initial resistance at 184.80, which makes us wait for gathering negative momentum to motivate it to target the negative stations by reaching 183.10 followed by 182.20.

The expected trading range for today is between 183.30 and 184.55

Trend forecast: Fluctuating within the bearish track