Weekly FX Chart Commentary - 29th September 2025

FX markets are testing key levels across major pairs this week, with GBP/USD, EUR/GBP, EUR/USD, and USD/JPY showing early signs of directional tension. In this update, we highlight the critical support and resistance points, potential breakout scenarios, and the technical cues that could guide the next moves.

GBP/USD

Cable has recoiled from the 1.36/1.3670 area and is back probing the 1.35 pivot after a sharp bearish candle. Price is mid-band on the Bollinger set and below the short red trendline from the July peak, with RSI(14) ~43 - weakening but not oversold. The recent lower-highs sequence keeps near-term risk tilted to the downside unless 1.36+ is reclaimed.

Potential Scenarios

• Bullish: A daily close back above 1.3520, then 1.3600/20, would neutralise the pullback and open 1.3670, with scope to 1.3750/70 if US yields ease.

• Bearish: Failure beneath 1.3510 and a break below 1.3400 would expose 1.3330/1.3300; a daily close under there targets 1.3220/1.3180 with Bollinger lower band extension risk.

Macro Backdrop to Consider

Sterling’s tone is capped by softer UK growth signals and cooler services inflation as markets reassess how long the BoE can keep rates restrictive, while the dollar is supported by resilient US data and a still-hawkish Fed bias - leaving GBP/USD sensitive to any upside surprises from UK prints or a pullback in US yields.

GBP/USD: MAY ‘24 - PRESENT

EUR/GBP

EUR/GBP has extended higher toward 0.8730–0.8750, brushing the upper Bollinger band and testing a well-established ceiling. Momentum is constructive, with RSI(14) ~61, but stretched near-term as price edges into overbought territory.

Potential Scenarios

• Bullish: A sustained close above 0.8750 opens 0.8780/0.8800, with potential for momentum-driven extension if euro strength persists.

• Bearish: Failure at 0.8750 and a move back below 0.8680/0.8660 would trigger corrective pressure toward 0.8620 and potentially 0.8500 if sterling rebounds.

Macro Backdrop to Consider

The euro has found support from a firmer data pulse in the Eurozone and stabilising inflation prints, while sterling is weighed by softer UK data and expectations that the BoE’s next move could tilt toward easing. Markets remain sensitive to relative policy guidance between the ECB and BoE, with risks skewed toward further euro resilience.

EUR/GBP: MAY ‘24 - PRESENT

EUR/USD

EUR/USD has retreated from the 1.1850 resistance zone, slipping back to 1.1700–1.1730 as price breaks below the 20-day SMA and tests the lower edge of its recent range. The Bollinger bands show volatility expanding, while RSI(14) ~48 indicates momentum has shifted neutral after recent euro strength.

Potential Scenarios

• Bullish: Holding 1.1700/1.1680 keeps the broader uptrend alive, with a retest of 1.1850 possible if euro resilience returns.

• Bearish: A daily close below 1.1680/1.1615 would signal deeper corrective pressure, targeting 1.1500.

Macro Backdrop to Consider

The euro has been supported by resilient Eurozone data and a softer US dollar, but renewed Fed hawkishness, coupled with risk-off sentiment, has capped further gains. Diverging central bank stances remain the key driver, with the market watching for signs of additional ECB support versus a still-cautious Fed.

EUR/USD: MAY ‘24 - PRESENT

USD/JPY

USD/JPY has surged to test the psychological 150 resistance, a level that has repeatedly capped rallies over the past year. The pair is trading above its 20 day SMA, with Bollinger bands widening, suggesting momentum is building. RSI(14) ~61 shows bullish bias, though not yet at overbought extremes.

Potential Scenarios

• Bullish: A sustained break above 150 would open the door to 152, with momentum likely accelerating.

• Bearish: Failure to clear 150 may see a pullback toward 147.80/146.20 support.

Macro Backdrop to Consider

The yen remains under pressure amid Japan’s ultra-loose monetary stance, while stronger US yields support the dollar. Traders are cautious around 150, given its history of sparking verbal and potential policy intervention from Japanese officials. This week’s gains highlight continued divergence between the BoJ and Fed outlooks.

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.

info@k2-fx.com

+44 203 355 4603