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Weekly FX Chart Commentary - 28th October 2025

  • jusdenhalabi
  • 11 minutes ago
  • 3 min read
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FX markets remain under pressure as the dollar holds firm against a softer macro backdrop in Europe and the UK. Sterling continues to trade near key support levels, while the euro struggles to gain traction and the yen remains weighed by persistent yield differentials. This week’s update examines the latest technical setups and momentum signals across GBP/USD, EUR/GBP, EUR/USD, and USD/JPY, outlining the key levels that could define near-term direction.


GBP/USD


GBP/USD continues to trade under pressure, holding just above the key 1.33 level after another failed attempt to regain 1.35. The pair remains confined within a descending channel, with Bollinger Bands showing moderate volatility and the RSI sitting at 39, indicating mild oversold conditions.


Potential Scenarios


  • Bullish: A close above 1.3390 could trigger a short-term recovery toward 1.3510.

  • Bearish: A decisive break below 1.3240 opens the path to 1.2850.


Macro Backdrop to Consider


Sterling remains weighed down by soft UK inflation and weaker-than- expected manufacturing data, while the US dollar continues to find broad support amid resilient growth and a still-hawkish Fed narrative. Political noise surrounding the UK’s fiscal outlook has also added to short-term uncertainty. With rate expectations now stabilising, sterling looks vulnerable unless upcoming GDP or wage data surprises positively.


GBP/USD: JUNE ‘24 - PRESENT


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EUR/GBP


EUR/GBP has pushed higher to trade around 0.8735, testing resistance at the upper end of its recent range. The cross remains supported above the 20-day moving average, and RSI at 59 shows moderate bullish momentum, though a breakout above 0.8750 remains elusive.


Potential Scenarios


  • Bullish: A break above 0.8750 would target 0.8800 and potentially the year’s highs.

  • Bearish: Rejection at resistance could see a pullback toward 0.8660.


Macro Backdrop to Consider


The euro has found renewed support from stabilising Eurozone PMI data and softer UK figures, helping the pair rebound from its mid-month lows. ECB officials continue to strike a cautious tone but have largely reaffirmed that rates will stay restrictive for some time. Traders are watching upcoming UK inflation and labour market data closely for any signs that could shift the BoE’s path and pressure sterling further.


EUR/GBP: JUNE ‘24 - PRESENT


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EUR/USD


EUR/USD is trading near 1.1620 after briefly dipping below 1.16 earlier in the week. The pair continues to respect its broader descending channel, with RSI at 46 and price hovering close to the lower Bollinger Band, suggesting a mild downside bias within a consolidating structure.


Potential Scenarios


  • Bullish: Sustained strength above 1.1710 could spark a move to 1.1780.

  • Bearish: A drop below 1.1550 exposes deeper support at 1.13.


Macro Backdrop to Consider


The euro has shown some resilience despite ongoing dollar strength. Recent data highlighted modest improvement in German business sentiment, while in the US, stronger retail sales and steady labour markets have reinforced the “higher-for-longer” stance from the Fed. With few major catalysts this week, the pair remains range-bound, but sentiment favours the dollar until Eurozone growth data improves more convincingly.


EUR/USD: JUNE ‘24 - PRESENT


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USD/JPY


USD/JPY continues to trade firmly, currently around 152.80 after bouncing from 150.70 support. The pair remains within a clear uptrend, with momentum still bullish though RSI at 63 suggests it is nearing overbought territory.


Potential Scenarios


  • Bullish: A push above 153.70 would extend the rally toward 156.00.

  • Bearish: Failure to hold above 150.70 could prompt a corrective pullback toward 148.00.


Macro Backdrop to Consider


The yen remains under pressure as yield differentials persist between Japan and the US. Recent commentary from the BoJ reiterated its commitment to accommodative policy, while Japan’s government continues to signal potential measures to address yen weakness. US data remains robust, keeping Treasury yields elevated and underpinning dollar demand. Intervention talk has resurfaced, but markets appear sceptical of any immediate policy action.


USD/JPY: JUNE ‘24 - PRESENT


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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.


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