Weekly FX Chart Commentary - 8th September 2025

Global FX markets stay in the spotlight as central bank signals, fresh economic data, and geopolitical headlines shape market sentiment. In this week’s update, we break down the major pairs and the levels that matter most.

GBP/USD

GBP/USD is trading around 1.3510, consolidating just above support at 1.3450. The pair remains capped by a descending trendline, and RSI at ~53 signals neutral momentum with no clear directional bias.

Potential Scenarios

• Bullish: A break above 1.3600 would open scope for a retest of 1.3700, with momentum shifting back to buyers.

• Bearish: A drop below 1.3450 would expose 1.3300, with trendline support at 1.3200 next in view.

Macro Backdrop to Consider

Sterling has been underpinned by resilient UK services activity and a cautious Bank of England stance, while the dollar holds firm on safe-haven demand and solid US yields. With both central banks signalling data dependency, the pair is likely to stay rangebound until a clearer policy divergence emerges.

GBP/USD: APR ‘24 - PRESENT

EUR/GBP

EUR/GBP is trading around 0.8675, holding just above near-term support at 0.8650. The pair remains capped by resistance near 0.8700, while the RSI at ~55 points to steady but modest momentum.

Potential Scenarios

• Bullish: A breakout above 0.8700 would open a path toward 0.8750, with further momentum possible if Eurozone data surprises to the upside.

• Bearish: A close below 0.8650 could expose 0.8500, with further weakness toward 0.8400 if sterling gains strength.

Macro Backdrop to Consider

The euro has found some support from firmer Eurozone inflation prints and hawkish ECB commentary, while sterling continues to hold ground on solid UK activity data. With both currencies relatively firm, EUR/GBP has struggled to find direction, leaving price action largely rangebound in recent weeks.

EUR/GBP: APR ‘24 - PRESENT

EUR/USD

EUR/USD is trading near 1.1725, edging higher within a tight range and once again testing resistance around 1.1750. The RSI sits at ~56, suggesting steady upward momentum without yet reaching overbought levels.

Potential Scenarios

• Bullish: A break above 1.1750 would open the path to 1.1800, with a sustained move confirming a potential retest of the upper channel.

• Bearish: Failure to clear resistance and a drop below 1.1650 could signal renewed downside toward 1.1500.

Macro Backdrop to Consider

The euro has been buoyed by resilient economic data and cautious optimism on growth, while the dollar remains capped by expectations of gradual Fed easing later in the year. With yields broadly steady, the pair has lacked a decisive driver, leaving price action constrained between support and overhead resistance.

EUR/USD: APR ‘24 - PRESENT

USD/JPY

USD/JPY remains just below 148, but the yen recently fell sharply after Japanese Prime Minister Shigeru Ishiba unexpectedly resigned - sparking significant political uncertainty. The yen dropped around 0.6–0.7% and Japanese government bond yields soared, pushing the pair higher.

Potential Scenarios

• Bullish: A breakout above 148.50 could drive a retest of 150.00, with scope to extend toward 152.00 if momentum builds.

• Bearish: A move back below 146.00 would open the way toward 144.00, with 142.00 trendline support the next key level.

Macro Backdrop to Consider

The yen came under renewed pressure after Japanese Prime Minister Shigeru Ishiba resigned, heightening political uncertainty and driving speculation over future fiscal and monetary policy direction. Bond yields spiked on the news, while the Bank of Japan remains committed to its ultra-loose stance - limiting support for the currency. Meanwhile, resilient US economic data and elevated Treasury yields continue to underpin the dollar, reinforcing the upward bias in USD/JPY.

USD/JPY: APR ‘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

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