Forex News
- GBP/JPY drifts lower for the second straight day as UK political turmoil continues to weigh on the GBP.
- Economic concerns due to Middle East tensions undermine the JPY and help limit losses for spot prices.
- The technical setup favors bearish traders and backs the case for a further near-term depreciating move.
The GBP/JPY cross attracts some follow-through selling for the second consecutive day and drops to a one-and-a-half-week low during the early European session on Friday. Spot prices, however, rebounded a few pips in the last hour and currently trade near the 211.75 region, down 0.25% for the day.
The British Pound (GBP) continues with its underperformance in the wake of the deepening UK political crisis and turns out to be a key factor weighing on the GBP/JPY cross. The downside, however, remains cushioned amid a broadly weaker Japanese Yen (JPY), led by concerns about economic risks stemming from the Middle East conflict and a firmer US Dollar (USD). This, in turn, holds back bearish traders from placing aggressive bets, though the technical setup suggests that the path of least resistance for spot prices is to the downside.
The GBP/JPY cross holds beneath the 100-period Simple Moving average (SMA) and the nearby 50% Fibonacci retracement level of the February-April upswing. Moreover, clustered overhead resistance aligns at the 38.2% Fibo. at 212.97 and the 23.6% level at 214.32, suggesting rallies are likely to meet supply.
Momentum indicators also reinforce the negative tone, with the Relative Strength Index (RSI) slipping into oversold territory near 30 and the Moving Average Convergence Divergence (MACD) below zero with a negative histogram. This, in turn, hints that downside pressure persists even if short-covering bounces emerge. Meanwhile, recovery attempts need first to reclaim the 50.0% retracement at 211.88 to ease immediate pressure, with further resistance at 212.97 and the 100-period SMA at 213.92, before the 23.6% retracement at 214.32 comes into view as a more distant cap.
On the downside, initial support is seen at the 61.8% Fibo. retracement at 210.79, where buyers could attempt to slow the decline, ahead of a deeper support band at the 78.6% level at 209.23. A break below there would expose the prior swing low anchor at 207.26.
(The technical analysis of this story was written with the help of an AI tool.)
GBP/JPY 4-hour chart
Japanese Yen Price This week
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies this week. Japanese Yen was the strongest against the British Pound.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.93% | 1.41% | 1.14% | 0.50% | 0.75% | 1.30% | 0.92% | |
| EUR | -0.93% | 0.46% | 0.26% | -0.45% | -0.20% | 0.32% | -0.02% | |
| GBP | -1.41% | -0.46% | -0.72% | -0.92% | -0.69% | -0.13% | -0.48% | |
| JPY | -1.14% | -0.26% | 0.72% | -0.68% | -0.40% | 0.16% | -0.18% | |
| CAD | -0.50% | 0.45% | 0.92% | 0.68% | 0.33% | 0.84% | 0.41% | |
| AUD | -0.75% | 0.20% | 0.69% | 0.40% | -0.33% | 0.56% | 0.17% | |
| NZD | -1.30% | -0.32% | 0.13% | -0.16% | -0.84% | -0.56% | -0.38% | |
| CHF | -0.92% | 0.02% | 0.48% | 0.18% | -0.41% | -0.17% | 0.38% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
- Dow Jones futures slip as investors take profits following Thursday’s record-breaking Wall Street rally.
- US stock futures fall due to Middle East tensions and concerns over rising Federal Reserve interest rates.
- Stephen Miran's resignation from the Board of Governors cleared the path for Kevin Warsh to become the new Fed Chair.
Dow Jones futures decline 0.35% below 50,000 during the European hours on Friday, ahead of the United States (US) regular opening. Meanwhile, the S&P 500 fall 0.56% to near 7,480, and the Nasdaq 100 futures slid 0.81% to near 29,450.
US equity futures are declining as traders lock in gains after Thursday's robust Wall Street performance, where the Dow Jones climbed 0.74% to move back above the critical 50,000 mark. The S&P 500 and Nasdaq 100 advanced by 0.77% and 0.88%, respectively, resulting in both indices finishing at new all-time peaks.
US stock markets are encountering headwinds from heightened risk-off sentiment, driven by a combination of factors such as enduring Middle East conflicts, escalating inflationary worries, and intensifying forecasts for a Federal Reserve (Fed) rate increase.
Market sentiment remains cautious due to shifts within the Federal Reserve (Fed) leadership. Stephen Miran announced on Thursday that he will resign from the Board of Governors on or just before Kevin Warsh takes over as Fed Chair, a necessary move because there is currently no vacant seat on the seven-member board for Warsh to fill.
Crude oil prices maintained their upward trajectory due to the instability regarding the Strait of Hormuz, which is aggravating inflation anxieties and bolstering expectations for a Federal Reserve rate hike later this year. Meanwhile, the 10-year US Treasury yield surged past 4.5%, hitting a one-year high as new economic reports indicated that inflationary pressures are gaining speed.
Dow Jones FAQs
The Dow Jones Industrial Average, one of the oldest stock market indices in the world, is compiled of the 30 most traded stocks in the US. The index is price-weighted rather than weighted by capitalization. It is calculated by summing the prices of the constituent stocks and dividing them by a factor, currently 0.152. The index was founded by Charles Dow, who also founded the Wall Street Journal. In later years it has been criticized for not being broadly representative enough because it only tracks 30 conglomerates, unlike broader indices such as the S&P 500.
Many different factors drive the Dow Jones Industrial Average (DJIA). The aggregate performance of the component companies revealed in quarterly company earnings reports is the main one. US and global macroeconomic data also contributes as it impacts on investor sentiment. The level of interest rates, set by the Federal Reserve (Fed), also influences the DJIA as it affects the cost of credit, on which many corporations are heavily reliant. Therefore, inflation can be a major driver as well as other metrics which impact the Fed decisions.
Dow Theory is a method for identifying the primary trend of the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) and only follow trends where both are moving in the same direction. Volume is a confirmatory criteria. The theory uses elements of peak and trough analysis. Dow’s theory posits three trend phases: accumulation, when smart money starts buying or selling; public participation, when the wider public joins in; and distribution, when the smart money exits.
There are a number of ways to trade the DJIA. One is to use ETFs which allow investors to trade the DJIA as a single security, rather than having to buy shares in all 30 constituent companies. A leading example is the SPDR Dow Jones Industrial Average ETF (DIA). DJIA futures contracts enable traders to speculate on the future value of the index and Options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Mutual funds enable investors to buy a share of a diversified portfolio of DJIA stocks thus providing exposure to the overall index.
MUFG’s Derek Halpenny argues that rising crude Oil prices, higher global yields and Middle East tensions are undermining Japanese Yen stability and working against recent Ministry of Finance (MoF) intervention. With the Bank of Japan (BoJ) having held rates, Japanese Government Bonds are underperforming and real yields remain too low, leaving further FX intervention as the likely tool to prevent another sharp move higher in USD/JPY.
Higher yields and Oil pressure Yen
"Crude oil prices are moving higher again and that is going to further unsettle sovereign bond markets with inflation concerns more elevated this week following higher than expected inflation in the US."
"As we have written here before, the success or failure of MoF intervention to strengthen the yen was always going to come down to factors outside Japan’s control and those factors are clearly working against a strengthening of the yen."
"Global yields are heading higher once again, and crude oil is drifting higher with the Strait of Hormuz closed."
"USD/JPY is clear through the 158-level that marked the point when the MoF last intervened on 6th May and is quickly retracing back to the highs on 30th April when intervention first took place (both interventions to be confirmed)."
"Real yields are too low to stabilise super-long yields and real yields are declining further as inflation rises which likely makes further FX intervention by the MoF / BoJ necessary."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- Silver price slides vertically to near $77.57 during the day amid soaring US Treasury yields.
- The Fed is unlikely to cut interest rates this year.
- Improving US-China trade relations and squeezed dovish Fed bets have strengthened the US Dollar.
Silver price (XAG/USD) is down over 5% to near $79.00 during the European trading session on Friday, and touched an intraday low of $77.57 earlier in the day. The white metal faces intense selling pressure due to surging United States (US) bond yields amid firm expectations that the Federal Reserve (Fed) will either hold interest rates steady or raise them this year.
During the press time, 10-year US Treasury yields are up 1.66% at 4.53%, the highest level seen in almost a year. Higher yields on interest-bearing assets diminish the appeal of non-yielding assets, such as Silver.
According to the CME FedWatch tool, the odds of the Fed keeping interest rates in the current range of 3.50%-375% and delivering at least one interest rate hike are 52.3% and 47.4%, respectively.
Traders have priced out dovish Fed bets due to a significant increase in the US inflationary pressures amid elevated energy prices in the wake of the US-Iran conflicts. Before the US Consumer Price Index (CPI) data release for April on Tuesday, the possibility of the Fed raising borrowing rates at least once this year was 23.5%.
Meanwhile, a higher US Dollar (USD) due to a significant jump in US bond yields and improving trade relations between the US and China is also hurting the Silver price. During the day, the US Dollar Index (DXY) posted a fresh over two-week high at 99.20. Technically, a higher US Dollar makes the Silver price an unfavorable risk-reward bet for investors.
Silver technical analysis
XAG/USD trades sharply lower at around $79.00 at the press time. The white metal extends correction to near the 20-day exponential moving average (EMA) at $79.26, leaving the near-term tone broadly neutral after the pullback from recent highs.
The Relative Strength Index (RSI) at 50.54 hovers around the midline, hinting at a loss of directional conviction rather than a clear bearish or bullish impulse.
On the downside, the first notable support is the rising trend-line zone around $75.83, where a break lower would expose a deeper corrective phase towards $70.00. On the topside, the May 13 high at around $89.38 will remain a key barrier.
(The technical analysis of this story was written with the help of an AI tool.)
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
- GBP/USD extends losses to 1.3330 area, and is more than 2% down this week.
- The Pound dives across the board as UK Prime Minister Keir Starmer struggles for survival.
- Solid US macroeconomic data and high inflationary pressures are buoying the US Dollar.
The British Pound (GBP) extends losses against the US Dollar (USD) for the fourth consecutive day on Thursday, trading at 1.3337 at the time of writing, as the crisis in the UK cabinet deepens, fuelling concerns about a power vacuum that might trigger another fiscal crisis.
The resignation of the Health Secretary, Wes Streeting, on Thursday, has increased pressure on an increasingly isolated Prime Minister Keir Starmer. Calls to step down within its own Labour Party have been mounting this week, with several Labour lawmakers moving to replace him, after the disastrous results in last week’s local elections.
The fight for power within the Labour Party has heightened concerns about a disorderly replacement of Starmer and the emergence of a candidate seeking looser fiscal discipline, which might renew concerns of a fiscal crisis.
The US Dollar, on the other hand, remains bid, as a resilient economy, confirmed on Thursday by Retail Sales and weekly Initial Jobless Claims figures, combined with surging inflationary pressures, have boosted expectations that the Federal Reserve will be forced to hike interest rates by the end of the year or at the beginning of 2027.
The UK economic calendar is thin on Friday, and investors’ focus will remain on the summit between US President Donald Trump and his Chinese counterpart Xi Jinping. Comments regarding the talks have been positive so far, although the market is waiting for concrete details about trade agreements or specific measures to reopen the Strait of Hormuz.
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
- EUR/JPY may retest the immediate barrier at the nine-day EMA of 184.78.
- The 14-day Relative Strength Index at 44.70 is still suggesting fading bullish momentum.
- The currency cross may fall toward the 12-week low of 181.87.
EUR/JPY continues its losing streak for the fourth successive day, trading around 184.40 during the European hours on Friday. The technical analysis of the daily chart indicates the currency cross is positioned slightly below the upper boundary of an emerging descending wedge pattern. The pattern shows lower highs and lower lows; the narrowing price range indicates that selling momentum is losing steam.
The EUR/JPY cross keeps a bearish near-term tone as it holds below both the nine-period and 50-period Exponential Moving Averages (EMAs), respectively. The currency cross has retreated from recent highs, and the 14-day Relative Strength Index (RSI) at 44.70 leans slightly to the downside, suggesting fading bullish momentum rather than an oversold condition.
The EUR/JPY cross may test the immediate barrier at the nine-day EMA of 184.78, followed by the 50-day EMA at 184.87 and the upper boundary of the descending wedge. A successful break above the confluence resistance zone around the wedge would support the EUR/JPY cross to explore the region around the all-time high of 187.95, which was recorded on April 17.
On the downside, the EUR/JPY cross may navigate the region around the 12-week low of 181.87, recorded on March 16, followed by a five-month low of 180.81, which was reached on February 12.
(The technical analysis of this story was written with the help of an AI tool.)
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the weakest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.23% | 0.27% | -0.02% | 0.18% | 0.72% | 0.77% | 0.13% | |
| EUR | -0.23% | 0.03% | -0.24% | -0.07% | 0.49% | 0.57% | -0.09% | |
| GBP | -0.27% | -0.03% | -0.25% | -0.09% | 0.46% | 0.52% | -0.13% | |
| JPY | 0.02% | 0.24% | 0.25% | 0.19% | 0.71% | 0.78% | 0.13% | |
| CAD | -0.18% | 0.07% | 0.09% | -0.19% | 0.52% | 0.56% | -0.05% | |
| AUD | -0.72% | -0.49% | -0.46% | -0.71% | -0.52% | 0.07% | -0.58% | |
| NZD | -0.77% | -0.57% | -0.52% | -0.78% | -0.56% | -0.07% | -0.64% | |
| CHF | -0.13% | 0.09% | 0.13% | -0.13% | 0.05% | 0.58% | 0.64% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
DBS Group Research economist Radhika Rao highlights that India’s authorities are rolling out measures to address macro volatility and support the Indian Rupee (INR). The government has raised fuel prices and increased import duties on Gold and Silver, while also considering tax changes for foreign bond investors. Near-term INR performance is seen as sensitive to headlines and equity flow dynamics.
Authorities move to stabilise Rupee
"India raised fuel prices on Friday morning, with petrol and diesel prices up around INR 3/litre, which takes petrol prices higher by INR3.14/l up to INR 97.77/l across several cities, while diesel prices climbed by INR 3.11/litre to as high as INR 90.67/l, according to the press release."
"More measures to support the INR are underway. The government announced an increase in import duty on gold and silver and tightened a few administrative requirements yesterday, in a bid to contain inward purchases and dampen incremental demand for dollars."
"Press reports suggest that a cut in the withholding tax (WHT) on foreigners’ bond holding is being considered."
"Debt category has witnessed FPI outflows worth $613mn in FY27 ytd, after $2.8bn inflows in FY26, under the general limit, VRR and FAR windows."
"In the near-term, currency movements will be subject to headlines and prone to weakness till equity outflows reverse."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
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