Should investors be wary of further downside potential for the pound, which has plummeted against the U.S. dollar?

Should we be wary of further downside potential for the pound, which has plummeted against the U.S. dollar?

22.10.2025

In the U.S. currency market yesterday, the U.S. dollar rose against the yen. The USD/JPY pair climbed from 150.473 to 152.183. An uptrend has emerged along the 20-period moving average (MA) on the hourly chart. On the 4-hour chart, the price has rebounded from the 200-period exponential moving average (EMA), which is acting as a support level, and similar price action is being observed on the daily chart. Additionally, on the monthly chart, the price is approaching the upper trendline of the RSI.

Among European currencies, the pound fell against the U.S. dollar. The GBP/USD pair dropped from 1.3416 to 1.3361. The decline followed the 10-period moving average (MA) on the hourly chart.On the 4-hour chart, the pair is declining as it faces resistance at the 20-period moving average, and the daily chart shows a similar price movement to the 4-hour chart. Furthermore, as a significant decline toward this month’s low has been observed during today’s Asian session, we should remain vigilant for a sharp drop during the European session.

Today’s economic indicators include remarks by German Bundesbank President Nagel at 7:00, Japan’s customs-based trade balance at 8:50, the UK’s Consumer Price Index, Retail Price Index, and Producer Price Index at 15:00, South Africa’s Consumer Price Index at 17:00, the US MBA Mortgage Applications Index at 20:00, and at 21:25, the Eurozone’sECB President Lagarde’s remarks at 23:30, U.S. weekly crude oil inventories at 25:35, remarks by Fed Governor Barr at 26:00, and a U.S. 20-year Treasury auction at 26:00. We should pay close attention to the downside potential for the pound, which has plummeted against the U.S. dollar.