Weekly FX Chart Commentary - 3rd November 2025

The dollar remains dominant as resilient US data and a cautious Fed keep upward pressure on yields and weigh on major peers. Sterling continues to slide toward 1.31, the euro remains under strain against both the pound and the dollar, and the yen weakens further as policy divergence widens. This week’s update outlines the key technical levels, momentum shifts, and macro drivers shaping near-term direction across GBP/USD, EUR/GBP, EUR/USD, and USD/JPY.

GBP/USD

GBP/USD continues its slide, now around 1.3145, extending the downward trend from early September. The pair has broken below the key 1.3320 support line, with the next target around 1.30. Bollinger Bands are widening, reflecting increased volatility, while the RSI has dipped to 30 - approaching oversold territory.

Potential Scenarios

• Bullish: Recovery above 1.3320 could ease pressure and open a short- term bounce toward 1.35.

• Bearish: Sustained weakness below 1.30 would confirm further downside, targeting 1.2850 initially.

Macro Backdrop to Consider

Sterling remains pressured by persistent dollar strength, driven by robust US data and a cautious tone from the Fed. Domestically, weaker UK retail and manufacturing figures have dampened sentiment, reinforcing the view that the Bank of England may remain on hold for longer. Market focus is turning toward upcoming inflation readings, which could dictate whether sterling finds temporary support or faces a deeper correction toward 1.2850.

GBP/USD: MAY ‘24 - PRESENT

EUR/GBP

EUR/GBP continues to grind higher, trading around 0.8770, testing the upper boundary of its ascending channel. The cross remains supported by its 20-day moving average, and RSI at 62 signals continued bullish momentum, though upside appears limited near resistance at 0.8790.

Potential Scenarios

• Bullish: Break above 0.8790 targets 0.8850 and potentially 0.89.

• Bearish: Rejection from resistance could prompt a retracement to 0.8630.

Macro Backdrop to Consider

The euro has benefited from softer UK data and relative Eurozone stability, though sentiment remains fragile amid weak German output and cautious ECB commentary. Market participants are weighing whether the ECB’s restrictive stance will persist into early next year, while the UK’s mixed economic signals have limited sterling demand. Any break above 0.8790 could trigger a technical push toward 0.8850.

EUR/GBP: JUNE ‘24 - PRESENT

EUR/USD

EUR/USD remains under sustained pressure, currently at 1.1530, having failed to hold above 1.16. The pair continues to trade within a descending channel, with the RSI at 37 reflecting ongoing bearish momentum. The lower Bollinger Band suggests limited near-term relief unless a clear catalyst emerges.

Potential Scenarios

• Bullish: A move back above 1.1610 could trigger recovery toward 1.1690.

• Bearish: A decisive break below 1.1500 risks accelerating toward 1.13.

Macro Backdrop to Consider

The euro remains weighed down by firm US economic performance and ongoing expectations that the Fed will maintain restrictive policy well into 2026. Meanwhile, Eurozone data continues to show mixed signals - modest inflation relief but weak industrial activity. Traders remain cautious ahead of next week’s ECB meeting minutes, with little to suggest a near-term shift in tone.

EUR/USD: MAY ‘24 - PRESENT

USD/JPY

USD/JPY trades firmly near 154.10, maintaining its bullish structure while approaching key resistance around 154.50 - a level not seen since 2022. RSI sits at 65, suggesting the pair is edging into overbought territory. Momentum remains positive, though traders are cautious as the pair nears intervention- sensitive levels.

Potential Scenarios

• Bullish: Break above 154.50 could extend gains toward 156.00.

• Bearish: Failure at resistance may trigger a pullback toward 152.20.

Macro Backdrop to Consider

The yen continues to weaken as policy divergence remains the dominant theme. The Bank of Japan has reiterated its ultra-loose stance, while US yields remain elevated after strong jobless and retail data. Japanese officials have expressed growing discomfort with yen weakness, increasing the probability of verbal or direct intervention should USD/JPY extend past 155. The market remains on alert for any signals from Tokyo.

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.

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