Crude Oil, GBPJPY Forecast: Ceasefire Potential, Trump Tariffs, and Inflation Rates

Key Events

Israel-Lebanon Potential Ceasefire Deal for 60 Days
December 1 OPEC Meeting Anticipations
Japan’s Corporate Services Inflation rising toward 2.9%
Trump Tariff Policies supporting dollar strength against market trends
Japanese Inflation Metrics, including Tokyo Core CPI

GBP Outlook

UK inflation surged from 1.7% to 2.3% in November, but GBPUSD remains under pressure due to the Bank of England’s gradual interest rate cut plan. The dollar’s continued strength weighs heavily on the pound, alongside recent drops in manufacturing and services PMI metrics, which have fallen below the critical 50-expansion mark. This combination creates a strong bearish outlook on broader charts. However, key support levels outlined below may influence near-term moves.

JPY Outlook

For the yen, critical levels against the dollar are once again in focus, with BOJ intervention risks rising if the yen surpasses the 157 and 160 marks. Volatility risks are anticipated with key upcoming events such as the FOMC minutes, US Core PCE, unemployment claims, GDP, and Tokyo Core CPI. As per BOJ Governor Ueda’s remarks, policies will adjust in response to economic developments. Notably, the services producer price index has risen back to 2.9%, near its yearly high of 3%, aligning with nine-year highs. This keeps speculation alive for a potential rate hike drift. Meanwhile, Tokyo CPI dropped below 2% to 1.8% in October, its first dip since May, and further confirmation from Friday’s data will be closely watched.

Oil Outlook

Ceasefire resolutions and escalating war headlines have fluctuated for months, with painful reversals on each deal attempt. The path toward resolving conflicts involving Russia-Ukraine and Israel-Lebanon remains uncertain. This uncertainty sustains upside risk potential for oil within the $72-$76 range until feasible solutions emerge. The upcoming OPEC meeting on Sunday is expected to leave production quotas unchanged, reflecting risk assessments for 2025 demand-supply levels and weak oil price trends.

Technical Analysis: Quantifying Uncertainties

Crude Oil Forecast: Weekly Time Frame – Log Scale

Source: Tradingview

While headlines can spur critical oil price movements, current price action remains bound within the $72-$76 resistance range and $68-$64 support range.

2025 Sentiment

The overall chart leans bearish due to risks from US oversupply, Chinese contracting demand, and OPEC production quota adjustments. However, unless there is a decisive break and close below the $64 support, upside risk remains present.

Scenarios

Bullish: A firm close above $72 and $76 could extend the rally to $80 and $84, possibly establishing a longer-term uptrend

Bearish: A firm close below $64 could drive the bear trend, targeting $58 and $49, continuing the decline since the 2022 highs.

GBPJPY Forecast: Monthly Time Frame – Log Scale

Source: Tradingview

The GBP/JPY pair is currently exhibiting a bearish inclination, influenced by a weakening British pound and potential intervention by the Bank of Japan (BOJ) to support the yen. The 3-month price action is leaning towards bearish dominance, with an overbought RSI retesting levels previously seen in 2007 and 1998.

The overall breakout of the GBPJPY pair from the consolidating pattern across its history leans towards a longer-term bull run, yet a pullback down towards the borders of the consolidation may be possible.

The scenarios are the following

Bearish Scenario: a close below the 183-support zone can ignite a pullback towards support levels 172 and 155

Bullish Scenario: a close above the 208 high can extend the bull run towards potential resistance levels 223 and 251

--- Written by Razan Hilal, CMT – on X: @Rh_waves

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