GBP/USD holds sideways, but upside bias survives above 1.3406.
Break above 1.3558 opens the path toward 1.3600.
Failure below 1.3500 risks a pullback toward key SMA support.
The Pound Sterling (GBP) edges higher by some 0.29% against the US Dollar (USD) on Friday, yet it remains trading sideways, unable to decisively crack 1.3500 after reaching a three-week peak of 1.3509, and has retreated to the 1.3490 area.
GBP/USD Price Forecast: Technical outlook
The technical picture shows that GBP/USD is consolidating, yet it is slightly tilted to the upside after clearing the 200-day Simple Moving Average (SMA) at 1.3406. Market structure suggests the uptrend might resume once buyers reclaim the July 15 swing high at 1.3558, opening the door to a test of 1.3600.
In that scenario, the next area of interest for GBP/USD would be the May 11 swing high at 1.3653, followed by 1.3700.
On the flip side, if GBP/USD remains below 1.3500, look for a pullback towards August’s 3 low of the day at 1.3417. A breach of the latter will expose the convergence of the 100- and 200-day SMAs at 1.3406/05, followed by the 50-day SMA at 1.3365.
The cross plunged near the start of the American session despite broad Euro gains elsewhere.
The Yen jumped after the US payrolls shock, with traders alert to intervention a week on from the joint Tokyo-Washington operation.
German industrial and trade figures offered the Euro little help, and the ECB is in no hurry.
EUR/JPY trades on the back foot on Friday, easing away even as the Euro (EUR) posts solid gains against the US Dollar (USD). The Japanese currency surged suddenly near the start of the American session after a surprisingly weak United States (US) employment report. But the cross recovered much of those losses fairly quickly.
Japan and the United States conducted coordinated Yen-buying intervention last Friday, a rare bilateral action, and that memory is enough to make traders reluctant to sell the Yen into a US Dollar that fell over 1% against the Yen during the early American session on Friday. The Yen now drifts well away from the 40-year low it reached in July.
The European Central Bank (ECB) continues to adopt a cautious stance after leaving interest rates unchanged at its latest meeting. Markets currently expect only one additional rate hike before the end of the year, with a lower chance of a second increase.
Iran’s parliament speaker and top negotiator, Mohammad Bagher Ghalibaf, accused US President Donald Trump of staging “theater diplomacy” on Thursday, and under the draft plan reported by Fars, US and Israeli ships would be barred from the Strait of Hormuz. Flows through the waterway are unlikely to return to pre-war levels any time soon even if Iran and Oman finalize their framework. For an economy that imports almost all of its energy through that route, higher and less certain Crude prices erode Japan’s terms of trade, which is the mechanism that drove the Yen to four-decade lows in the first place.
Short-term technical analysis:
On the 4-hour chart, EUR/JPY trades at 182.00, retaining a mildly bearish near-term bias as it holds below both the 20-period Simple Moving Average (SMA) at 182.17 and the 100-period SMA at 184.70. The pair is caught under a nearby horizontal cap at 182.13, while the Relative Strength Index (RSI) around 41 suggests subdued momentum rather than aggressive selling, hinting at a consolidative tone beneath these overhead levels.
On the topside, immediate resistance is seen at 182.13, followed by the 20-period SMA at 182.17. Asustained break above this cluster would open the way toward the next barrier at 182.69 before the broader 100-period SMA near 184.70.
On the downside, initial support aligns at 181.76, ahead of a lower horizontal floor at 181.30 where the cross found support early in the American session on Friday. A decisive breach there would reinforce the bearish bias and expose deeper retracement levels in the coming sessions.
GBP/JPY recovers 200-day SMA after sliding to 211.47.
Upside remains capped by 100- and 50-day SMA resistance.
Break below 211.91 exposes 211.00 and 209.58 support.
The British Pound retreats against the Japanese Yen, down about 0.24%, as the Yen is poised to end the week on a higher note. However, GBP/JPY is poised to finish the week with minimal gains, trading at 212.64.
GBP/JPY Price Forecast: Technical outlook
The GBP/JPY trades sideways, though slightly tilted to the downside, following an intervention in the FX markets by US and Japanese authorities. Worth noting that after soft US jobs data, Japanese Finance Minister Katayama said she agreed with US Treasury Secretary Scott Bessent that FX markets had been affected by moves rather than fundamentals.
This pushed GBP/JPY to the day’s low of 211.47, slightly below the 200-day SMA of 211.91, but buyers reclaimed the latter and surpassed 212.00. After the rebound, the cross is about to end Friday’s session near the highs, but it will face key resistance at the 100-day SMA at 214.48, followed by the 50-day SMA at 215.42.
In the event of further losses, the first GBP/JPY support is 212.00. Below the next support is the 200-day SMA at 211.91, followed by 211.00. Beneath emerges the August 3 low of 209.58.
Negotiations between Iran, the US, and GCC states on access to the Strait of Hormuz will continue to set energy prices and interest rate outlooks for the global economy. In the meantime, updates on the AI trade, which is undergoing heightened volatility, will feature earnings from Applied Materials, Cisco, and CoreWeave. The US will publish consumer inflation data as both the FOMC and financial markets are split on the Fed’s rate decision next month. The US will also post the PPI, retail sales, and the Michigan Consumer Confidence Index. In Europe, the UK and Switzerland will post Q2 GDP figures, while the Eurozone will publish industrial production data. In Asia, Chinese monetary aggregates will be in focus, while Taiwan’s GDP will unveil concrete figures on global chip production. Also, China and India will post inflation rates. For G10 monetary policy, rate decisions are due in Australia and Norway, while the BoJ will post July’s Summary of Opinions.
The Indian Rupee trades slightly lower at around 95.27 against the US Dollar as the US NFP takes center stage.
Weak US ADP Employment Change data has set a negative tone for the US NFP.
Oil prices bounce back amid fears of escalation in internal Middle East war.
The Indian Rupee (INR) falls slightly against the US Dollar (USD) on Friday in the countdown to the United States (US) Nonfarm Payrolls (NFP) data for July at 06:00 PM IST or 12:30 GMT. The USD/INR pair rises to near 95.27, with investors awaiting the US NFP to get cues regarding the current status of the labor market.
Ahead of the US NFP, weak ADP Employment Change data for July has established a cautious backdrop for the official employment data.
ADP slowdown reinforces expectations for softer US payrolls
According to TD Securities, July ADP employment data “surprised to the downside, moderating to 44k (TD: 50k, cons: 65k).” While the bank stresses that it does “not put much weight on ADP when it comes to m/m moves in NFP,” it notes that “the trend in the data is in line with what we are expecting.” TD highlights that “both the monthly and weekly ADP data have moderated this summer after a strong start to the year,” and suggests that “a similar trend is likely to occur with NFP job gains.”
According to NFP estimates, the US economy created 80K fresh jobs, higher than 57K in June. The Unemployment Rate is seen as steady at 4.2%. Average Hourly Earnings, a key measure of wage growth, is expected to have grown at a steady pace of 0.3% and 3.5% on a monthly and yearly basis, respectively.
The wage growth measure, which provides cues about the inflation outlook, could prove to be a major driver for the US Dollar’s next move, compared to the job data, as policymakers signaled in July’s Fed monetary policy statement that they are increasingly concerned about inflation remaining well above the 2% target. Also, Chairman Kevin Warsh said that the central bank “won’t hesitate to act” if needed to tame elevated price pressures.
Currently, the CME FedWatch tool shows a 54.5% chance that the Fed will raise interest rates in the September policy meeting.
Oil prices recover on internal Middle East conflicts risk
Oil prices have regained ground after a significant plunge in the last two weeks. Rising friction between Iran-aligned Houthis and Saudi Arabia has increased risks of internal war in the Middle East at a time when Iran and the US have just reached a temporary ceasefire, and has promoted fears of a prolonged energy supply disruption.
According to a report from The Guardian, Saudi Arabia is stepping up its attacks on Houthis in retaliation for striking Yemeni government troops and Najran province.
At press time, the MCX Crude Oil contract expiring on August 19 trades 1.13% higher at around Rs. 7,460.
Currencies from economies, such as India, which rely heavily on oil imports to meet their energy needs, tend to underperform in a high-oil-price environment.
Technical Analysis: USD/INR aims to return to 20-day EMA
USD/INR trades at around 95.27, retaining a mildly bearish near-term bias as spot holds below the 20-day exponential moving average (EMA) at 95.57.
The pair’s failure to reclaim this dynamic resistance hints at continued downside risk, while the Relative Strength Index (RSI) at 44.6 sits in neutral territory, suggesting selling pressure is present but not yet stretched into oversold conditions.
On the topside, the 20-day EMA at 95.57 is the first barrier that bulls would need to clear to ease the current downward tone and open the way for a more sustained recovery. Looking down, the Wednesday low at 94.83 is the key support level, followed by the June low at 94.15.
EUR/JPY could find initial support at the eight-month low of 179.37.
The 14-day Relative Strength Index near 39 indicates weak momentum.
The initial barrier lies at the nine-day EMA of 183.09.
EUR/JPY halts its three-day winning streak, trading around 182.50 during the early European hours on Friday. The currency cross is retaining a bearish near-term bias as spot holds below both the nine-period and 50-period Exponential Moving Averages (EMAs).
The short- and medium-term moving averages now act as layered overhead resistance, hinting at a capped tone while the 14-day Relative Strength Index (RSI) Indicator around 39 suggests weak momentum rather than outright oversold conditions.
Yen under scrutiny as Japan and US officials push back on weakness
Analysts at Scotiabank highlight that “officials (both Japanese and US) remain concerned about the level and path of the Yen, and have been determined to push back on recent weakness.” This ongoing vigilance underscores the degree of discomfort with the current USD/JPY trajectory and reinforces the sense that policymakers are closely monitoring the currency’s performance as it drifts back toward post-intervention lows.
Further intervention to support the Japanese Yen (JPY) would put downward pressure on the EUR/JPY cross to navigate the region around the eight-month low of 179.37, reached on August 3, followed by the nine-month low of 175.70.
On the upside, the EUR/JPY cross could find initial resistance at the nine-day EMA of 183.09, followed by the 50-day EMA at 184.63. Further advances above these moving averages would cause a bullish emergence and support the currency cross to explore the region around the all-time high of 187.95, which was recorded on April 17.
The USD/CAD pair ticks higher to near 1.4023 ahead of US-Canada employment data.
The Fed is expected to hike interest rates at the September meeting.
A bullish flag pattern is in the making, suggesting that the overall trend is still bullish.
The Canadian Dollar (CAD) trades marginally lower against the US Dollar (USD) on Friday, with the USD/CAD pair edging up to near 1.4023 in the European trading session. The Loonie pair is expected to trade sideways as investors await the labor market data for July from both the United States (US) and Canada.
Investors will pay close attention to both datasets to get fresh cues regarding the Federal Reserve (Fed) and the Bank of Canada’s (BoC) monetary policy outlook.
US jobs report in focus as Danske Bank sees solid labor backdrop
Analysts at Danske Bank highlight that “the most important data release will be the US July Jobs Report,” where they “forecast nonfarm payrolls at +70k, the unemployment rate unchanged at 4.2%, and average hourly earnings at +0.3% m/m s.a.” The bank notes that “most leading data still point towards solid labour market conditions, although weak labour supply growth also weighs on the employment growth outlook,” adding that “the unemployment rate remains the Fed’s primary focus.”
The CME FedWatch tool shows a 54.5% chance that the Fed will raise interest rates in the September policy meeting.
Meanwhile, the Canadian labor market report is expected to show that the economy created 15K fresh jobs, slightly lower than 18.2K in June. The Unemployment Rate is seen as steady at 6.5%.
USD/CAD Technical Analysis
USD/CAD trades at 1.4023, retaining a bearish near-term bias as price holds below the 20-period Exponential Moving Average (EMA) at 1.4062. However, the formation of a Bullish Flag chart pattern suggests that the overall trend is still bullish.
The Relative Strength Index (RSI) at 43.1 sits just under neutral, hinting at subdued downside momentum rather than outright oversold conditions.
On the topside, immediate resistance is clustered between the 20-period EMA at 1.4062 and the channel top at 1.4076; a decisive break above that zone would open the way for an upside move towards 1.4200. On the downside, the lower boundary of the Bullish Flag channel at around 1.3902 will be the key support level.
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