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Weekly FX Chart Commentary - 20th October 2025
- jusdenhalabi
- Oct 20
- 3 min read
FX markets are steady but finely balanced as dollar strength reasserts itself against mixed global data and cautious central bank tones. In this week’s update, we analyse the technical setups for GBP/USD, EUR/GBP, EUR/USD, and USD/JPY - highlighting key levels, near-term scenarios, and the macro themes driving sentiment across major pairs.
GBP/USD
GBP/USD remains in a consolidation phase, hovering near 1.3415 after finding support around 1.33. The pair continues to trade below its 20-day moving average, with Bollinger Bands tightening to reflect reduced volatility. RSI at 48 signals a neutral bias, although momentum favours the dollar in the near term.
Potential Scenarios
Bullish: A daily close above 1.3530 could signal renewed upside momentum toward 1.3630.
Bearish: A slip below 1.3290 would expose 1.3150, with broader downside potential if dollar strength persists.
Macro Backdrop to Consider
Sterling is holding steady despite a firmer US dollar, supported by better-than expected UK retail data and stabilising gilt yields. However, the broader backdrop still favours the dollar following upbeat US macro releases and a hawkish tone from several Fed speakers. The BoE remains cautious, reiterating that inflation progress is slow, and that cuts will only be gradual - limiting sterling’s ability to rally.
GBP/USD: MAY ‘24 - PRESENT
EUR/GBP
EUR/GBP trades around 0.8690, maintaining its short-term uptrend but showing signs of losing momentum after repeated failures near 0.8750. Price remains above the 20-day moving average, yet RSI has drifted toward 49, highlighting range-bound conditions.
Potential Scenarios
Bullish: A clean break above 0.8750 would target 0.8800 and potentially the May highs near 0.8850.
Bearish: A move below 0.8660 could reopen 0.8550, bringing the lower trendline support into view.
Macro Backdrop to Consider
The euro has been broadly stable as markets digest mixed European data — with modest growth in Germany offset by weaker French output. Traders remain cautious ahead of this week’s ECB commentary, while UK data continues to show stagnation rather than contraction. Both currencies are in a holding pattern, with volatility likely to rise if Eurozone inflation or UK labour numbers surprise.
EUR/GBP: MAY ‘24 - PRESENT
EUR/USD
EUR/USD continues to drift lower, currently around 1.1660, with price capped beneath a descending trendline from the July highs. The pair remains within the lower half of its Bollinger Band range, and RSI near 48 reflects subdued momentum.
Potential Scenarios
Bullish: Reclaiming 1.1710 could lift the pair back to 1.1800.
Bearish: A break below 1.1550 would confirm downside continuation toward 1.13.
Macro Backdrop to Consider
Dollar strength remains the dominant theme as US data continues to outperform Europe. Softer European industrial production numbers and a cautious ECB tone contrast with the Fed’s recent confidence in maintaining higher rates for longer. Political uncertainty in parts of the Eurozone has also weighed slightly on sentiment, reinforcing the near-term bearish tone for the euro.
EUR/USD: MAY ‘24 - PRESENT
USD/JPY
USD/JPY trades just above 150.70, recovering after a brief pullback from 153.70. The pair continues to trade within an established ascending channel, supported by strong bullish momentum, though RSI around 55 suggests the rally is cooling.
Potential Scenarios
Bullish: Sustained trading above 150.00 could keep the uptrend intact, targeting 153.70 again.
Bearish: A move below 150.00 might trigger a correction toward 148.00 or 146.00.
Macro Backdrop to Consider
The yen has steadied slightly following last week’s political volatility in Japan, when markets reacted to leadership changes within the ruling party. The frontrunner for the prime ministership signalled continued fiscal stimulus and coordination with the BoJ - keeping monetary policy accommodative. Meanwhile, rising US Treasury yields and strong US economic data continue to underpin dollar demand.
USD/JPY: MAY ‘24 - PRESENT
As always, if you’d like to discuss these moves in more detail, or how they could impact your business or personal FX requirements, please don’t hesitate to get in touch.
+44 203 355 4603
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