The EUR/USD pair continues to consolidate amid mixed market drivers. Pressure on the greenback stems from US political uncertainty, while investor attention shifts toward upcoming US labor market statistics and Eurozone inflation data.
Possible technical scenarios:
As we can see on the daily chart, EUR/USD remains within a broad descending channel, holding near its support line, the strength of which remains questionable. A consolidation below the October 14 lows (1.1112) will create technical prerequisites for a decline toward 1.0938. Otherwise, the pair may recover toward local dotted levels at 1.1269 and 1.1324.
Fundamental drivers of volatility:
The US currency is trading slightly lower. US midterm elections remain a key risk factor for the dollar. Betting markets estimate the probability of Democrats securing control of both houses of Congress at 70–72%. Such an outcome could escalate political gridlock, complicate debt ceiling negotiations, increase the risk of a prolonged government shutdown next year, and push Donald Trump toward a more assertive foreign policy. These concerns are capable of limiting demand for the dollar.
In the meantime, downside potential for the greenback is capped by the US economy's underlying strengths: steady economic growth, inflation above target, and ongoing Fed monetary policy tightening. Investors are also focusing on September JOLTS job openings data.
A stronger-than-expected print could support the dollar by demonstrating labor market resilience and reinforcing arguments for the Fed's hawkish stance.
For the euro, Wednesday's flash October Eurozone inflation report will serve as a key catalyst. Headline HICP is expected to hold at 3.9% YoY compared to 3.8% in September, while core inflation is projected to remain unchanged at 2.5%. If actual data confirms an acceleration in headline CPI alongside stable core metrics, it could shift ECB rate expectations and lend support to the euro.
In the coming days, the pair's direction will largely depend on JOLTS job openings and Eurozone inflation statistics: a strong US labor market could support the dollar, whereas higher European inflation may strengthen the euro's position.
Intraday technical picture:
Judging by the unfolding scenario on the 4H chart, EUR/USD continues to trade in the middle of the 1.1112–1.1269 sideways range between two dotted lines, from where it could locally move toward either boundary. If support fails to hold, a medium-term decline toward 1.0938 remains possible.
The GBP/USD pair retains potential for a moderate recovery backed by expectations of a Bank of England rate hike. That said, cautious signals from the central bank may limit the British currency's upside.
Possible technical scenarios:
On the daily chart, GBP/USD has pulled back to the middle of the 1.3215–1.3630 sideways range and is attempting to consolidate above the dotted level of 1.3400. If successful, the increase may steadily extend toward the 1.3630 target. Otherwise, a failure to consolidate above 1.3400 could send the pair back down toward 1.3215 support.
Fundamental drivers of volatility:
The Bank of England is expected to raise its key interest rate on Thursday from 3.75% to 4.0%, marking its first rate hike since August 2023. Policy tightening is supported by elevated inflation and resilient economic activity in the UK. Analysts also allow for another rate increase in February, although ING estimates that market expectations for further tightening already look overextended. Consequently, the pound's reaction will hinge not only on the decision itself, but also on the central bank's forward guidance.
Investors will pay close attention to Bank of England Governor Andrew Bailey's press conference and the updated Monetary Policy Report. More hawkish rhetoric confirming the need for further rate hikes could support the pound. However, experts note that the market has already priced in around 100 basis points of tightening over the next 12 months. If the BoE points to persistent economic slack and easing inflationary pressures, expectations for additional rate hikes could be revised downward, capping GBP/USD upside.
Additional support for sterling comes from comments by BoE official Megan Greene. She noted that wage growth deceleration has stalled at levels inconsistent with achieving the 2% inflation target, with expected wage growth hovering near 3.5%. Economic resilience and signs that labor market cooling may have peaked exacerbate concerns over sticky wage pressures and secondary inflation effects. This assessment points to the central bank's reluctance to shift quickly toward monetary easing.
Overall, rate hike expectations and persistent inflationary pressures in the UK provide fundamental backing for the pound. However, with much of the future tightening already priced in, cautious forecasts from the Bank of England or references to economic slack could restrain further GBP/USD strength.
Intraday technical picture:
The 4H chart suggests that GBP/USD is attempting to confirm 1.3400 as support. If consolidation occurs, the next upside targets for a recovery lie at the dotted resistance levels of 1.3474 and 1.3557.
The USD/JPY pair continues a modest recovery, though its fundamental backdrop remains mixed. Threats of currency intervention from Japan support the yen, but uncertainty surrounding the timing of the Bank of Japan's next rate hike and sustained dollar strength are capping yen gains.
Possible technical scenarios:
USD/JPY continues a steady recovery within the 156.41–158.93 range. If the consolidation attempt above 157.90 succeeds, gains could extend toward the 158.93 target.
Fundamental drivers of volatility:
Japanese Finance Minister Satsuki Katayama reiterated warnings on Monday regarding authorities' readiness to intervene in the event of excessive or disorderly yen weakness. She emphasized that the joint currency statement with the US remains in effect. These signals heighten intervention risks and could cap USD/JPY upside as market participants are forced to price in potential action by Japanese authorities. At the same time, a lack of clarity regarding the timing of the Bank of Japan's next rate hike weakens monetary policy support for the yen.
The US dollar gains support from the resilience of the US economy and expectations of further Fed tightening. The ISM Manufacturing PMI rose to 55.5 in October from 54.5 in the previous month, signaling sector expansion for the tenth consecutive month. Furthermore, according to the CME FedWatch tool, the probability of a Fed rate hike in December exceeds 70%. These factors support the greenback and sustain demand for USD/JPY.
However, dollar upside remains constrained by geopolitical and political uncertainty. Hopes for a diplomatic resolution to the US-Iran conflict strengthened following statements from Donald Trump regarding Tehran's readiness to reach an agreement, as well as reports from the Iranian Foreign Minister about active consultations through intermediaries. A potential easing of tensions could weigh on safe-haven demand for the dollar. Additional investor caution stems from the upcoming US midterm elections, which could amplify FX market volatility.
Meanwhile, the geopolitical risk premium persists: several days of talks between Iranian representatives and Qatari intermediaries yielded no significant progress despite revised proposals. This supports safe-haven demand for the dollar and limits scope for yen appreciation. In the coming days, market participants will focus on US JOLTS job openings, Wednesday's ISM Services PMI, and particularly Friday's Nonfarm Payrolls (NFP) report. Strong statistics could reinforce Fed rate hike expectations and lift USD/JPY, whereas weak metrics could weigh on the pair.
Intraday technical picture:
As evidenced by the 4H chart, USD/JPY shows an attempt to consolidate above 157.90. If successful, it will open the way toward 158.93. Otherwise, a pullback to dotted support at 156.41 remains possible.
The USD/CAD pair remains under pressure due to a more hawkish stance from the Bank of Canada and anticipation of upcoming US and Canadian labor market reports, the publication of which on Friday could set the pair's next directional trend.
Possible technical scenarios:
The daily chart shows that the USD/CAD decline was halted by dotted support at 1.3958. If this level fails to hold, the downside could steadily extend toward 1.3908 and 1.3861. Immediate resistance currently sits at 1.4013.
Fundamental drivers of volatility:
The Bank of Canada raised its benchmark interest rate by 25 basis points to 2.5% at its October 28 meeting. The decision signals the central bank's readiness to act preemptively to curb inflation risks, despite modest core inflation and sluggish economic growth. The Canadian dollar received additional support from subsequent comments by BoC Governor Tiff Macklem, whose tone was perceived by the market as more hawkish than the initial statement and press conference.
As a result, expectations regarding future Bank of Canada policy could remain a supportive factor for the Loonie. If the central bank continues to demonstrate a willingness to respond to inflation threats, it will limit prospects for monetary easing and bolster the Canadian dollar. Nevertheless, weak economic growth and subdued core inflation remain factors that could cap further policy tightening.
On Friday, main investor focus will center on US and Canadian employment reports. US statistics will allow markets to assess labor market resilience and prospects for future Fed decisions, while Canadian data will provide insight into the domestic labor market and potential next steps from the BoC. Relatively stronger US employment figures could support the dollar and push USD/CAD higher. Conversely, a resilient Canadian job market combined with weaker US data could strengthen the Loonie's position.
Thus, hawkish BoE rhetoric provides fundamental backing for CAD and creates prerequisites for a USD/CAD decline; however, final pair dynamics will depend on the comparison of Friday's labor releases.
Intraday technical picture:
Given the current developments on the 4H chart, USD/CAD is testing the dotted support at 1.3958. From here, price will either proceed to consolidate within the 1.3958–1.4013 range or resume its decline toward 1.3908 and 1.3861.
Gold continues to decline. A recovery in crude oil prices is fueling inflation concerns and expectations of higher-for-longer interest rates, putting pressure on the precious metal.
Possible technical scenarios:
Gold prices have fallen to the support level of the 3886.25–4002.27 trading range. If 3886.25 fails to hold, the next downside targets will be 3796.34 and 3708.77.
Fundamental drivers of volatility:
Primary pressure on gold today comes from rising oil prices following reports of a US strike on Iran's Qeshm Island. This has heightened fears of further escalation in the eight-month conflict and prolonged crude supply disruptions from the Middle East. The return of a geopolitical risk premium to oil prices elevates inflation risks and complicates prospects for a gold recovery.
High energy prices reinforce expectations that the Federal Reserve will maintain interest rates at elevated levels for longer. According to the CME FedWatch tool, the market prices in a 75% probability of a December rate hike. Prospects of tighter monetary policy increase the opportunity cost of holding non-yielding bullion, dampening demand for the precious metal.
US midterm elections serve as an additional source of uncertainty. According to KCM Trade analyst Tim Waterer, a Democratic victory could create headwinds for artificial intelligence data center infrastructure development and the tech sector as a whole. Increased regulatory pressure on tech companies could ripple into the gold market if investors liquidate precious metals positions to cover losses across other asset classes.
Another negative signal came as the World Gold Council lowered its forecast for annual investment demand growth from 400 to 200 tons, citing waning interest in physical bullion and coins. However, the organization raised its estimate for central bank gold purchases, partially offsetting the decline in private investment demand. Overall, gold's recovery remains constrained by expensive oil, Fed rate hike expectations, and weakening retail investor interest in physical gold.
Intraday technical picture:
The 4H chart of the XAU/USD pair evidences that the price is returning to support at 3886.25. If it holds again, a recovery toward 4002.27 is plausible. A breakout of 3886.25 will allow price to slide further toward 3796.34.
Brent crude oil prices recovered some of the ground lost on Monday. Following a sharp decline of more than 7%, quotes found support amid escalating US-Iran conflict dynamics and heightened supply risks.
Possible technical scenarios:
On the daily chart, Brent crude dropped below the dotted level of 106.40. If it holds as resistance, a further pullback toward the $100 per barrel area remains possible. Should the price break below this boundary as well, the next target to the downside is 95.18.
Fundamental drivers of volatility:
On Monday, oil prices dropped by more than 7% as expectations improved regarding a potential end to the war with Iran following talks between Iranian and Qatari officials. Statements from the Iranian President expressing readiness to resolve the conflict diplomatically, alongside comments from Donald Trump indicating that a deal "could happen," raised hopes for restored Middle East supply stability. This led to a unwinding of the geopolitical risk premium previously priced into crude.
On Tuesday, the market turned upward following reports of a US strike on Iran's Qeshm Island. Further pressure on diplomatic hopes came from statements by a senior Iranian official stating that a ceasefire agreement remains far off and that Tehran has no intention of accepting excessive demands from Washington. These developments intensified fears of further conflict escalation and potential energy supply disruptions.
An additional supportive factor for oil quotes came from a Ukrainian drone attack on an oil refinery in Yaroslavl, Russia. Damage to energy infrastructure amplifies concerns over potential disruptions to refining capacity and petroleum product supplies.
At the same time, upside potential for crude remains capped. Experts note that supply disruption risks continue to underpin prices; however, uncertainty over Washington's next steps, the political climate, and traders' reluctance to open large positions are restraining upward momentum. The US midterm elections are also drawing attention: high gasoline prices increase pressure on the Trump administration to wrap up the conflict.
Thus, the local fundamental balance favors crude oil gains due to military risks and supply threats, but expectations of a potential diplomatic resolution continue to cap price upside.
Intraday technical picture:
The unfolding situation on the 4H chart shows that Brent has formed a local sideways range between 101.95 and 106.40. An exit from it will allow price to initiate a recovery toward 113.99. However, if there is a consolidation below 101.95 and the uptrend gets broke, this could lead to a decline toward 95.18.
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