Weekly technical outlook – USD/JPY, EUR/USD, GBP/USD [Video]

USD/JPY bulls retreat from 158.00 ahead of BoJ and Fed decisions.
EUR/USD remains fragile below its 20-day SMA as ECB faces policy constraints.
GBP/USD faces rejection near 50-day SMA ahead of UK Autumn Budget announcement.

Christina Parthenidou XM

Fed and BoJ rate decisions – USD/JPY

It will be a critical week of monetary policy meetings, with rate decisions due from the Federal Reserve on Wednesday and the Bank of Japan on Friday setting the tone for USDJPY.

The pair encountered aggressive selling pressure down to 156.00 last Friday, following nearly four weeks of failed attempts to break above the 200-day SMA near 158.50.

Neither central bank is expected to alter benchmark rates. However, with the Fed maintaining a flexible, data-dependent stance in the absence of fresh projections, policymakers could keep the door open for a December move. Meanwhile in Tokyo, markets will closely monitor the BoJ’s updated inflation outlook and Governor Kazuo Ueda's remarks regarding whether conditions warrant an imminent December rate increase.

Technically, with the latest pullback stabilizing below the lower Bollinger Band, a bullish reversal or some stability could be the baseline scenario heading into the events.

In the event of a hawkish BoJ tilt pointing toward further policy tightening in the coming meetings, USDJPY could break lower to test the 155.20 support zone.

Alternatively, a patient BoJ echoing Fed caution would likely trigger a retest of the critical 158.00 resistance barrier, with the 200-day SMA serving as the next major hurdle.

ECB rate decision – EUR/USD

The European Central Bank (ECB) is expected to hold its deposit facility rate steady at 2.50% on Thursday. Amid volatility across EU sovereign bond markets, President Christine Lagarde’s press conference will likely center on containing fiscal spillovers while defending inflation stability.

Persistent energy price pressures may prevent the ECB from abandoning its hawkish bias. Nonetheless, any euro rally may prove short-lived while fiscal concerns overhang the bloc.

Technically, EURUSD remains capped beneath its descending 20-day SMA, keeping the near-term bias tilted to the downside toward key confluence support around 1.1080–1.1100, which aligns with the 200-week SMA. Alternatively, buyers need a confirmed close above 1.1230 to encounter downside momentum and shift focus toward the 1.1320–1.1350 supply zone.

UK Autumn Budget – GBP/USD

Chancellor John Healey presents the Autumn Budget on Wednesday against a backdrop of public debt near 94% of GDP and elevated debt-servicing costs. A loose fiscal package with expanded stimulus could stoke inflation, leading markets to price in a November BoE rate hike. In this scenario, GBP/USD could stage a recovery through the confluence of its 50-day and 200-day SMAs to challenge overhead resistance at 1.3400.

Conversely, if the Chancellor adheres to strict fiscal consolidation, GBP/USD is poised to extend its pullback following the recent bearish rejection at the 50-day SMA. A continuation lower would expose dynamic support at the 20-day SMA before testing the pivotal September–October demand zone between 1.3265 and 1.3285.

Author

Christina Parthenidou

Christina joined Trading Point in May 2017. She holds a master degree in Economics and Business from the Erasmus University Rotterdam with a specialization in International economics.

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