The EUR/USD pair keeps sliding for the third day in a row, pressured by a stronger dollar and disappointing European data, even as US-China trade sentiment shows short-term improvement.
Possible technical scenarios:
As we can observe on the daily chart, EUR/USD remains in a steady downtrend between 1.1494 and 1.1788. After the completion of upward correction, the pair still has room to drop further toward the 1.1494 level.
Fundamental drivers of volatility:
A mix of temporary dollar strength amid fading global risks, weak German inflation data, and ongoing political uncertainty across the eurozone sets a negative fundamental tone for the pair.
The greenback is gaining ground across the board as the USA softens its stance toward China, fueling optimism that the Trump–Xi upcoming meeting in South Korea could extend the trade truce and avert the 100% tariffs planned for November 1. The dollar is also supported by hopes that the US government shutdown will soon be resolved, allowing the Fed to review fresh data ahead of its meeting, where a 0.25% rate cut is anticipated.
Meanwhile, domestic troubles weigh on the euro. Even though France saw some political stabilization after Prime Minister Sébastien Lecornu survived a no-confidence vote, concerns persist about potential budget tightening amid a fragmented political landscape. In Germany, the producer price index slipped another 0.1% in September, signaling weaker manufacturing activity and reinforcing expectations of a looser ECB policy in the coming months.
Intraday technical picture:
Judging by the unfolding scenario on the 4H chart, EUR/USD remains vulnerable within the broader downtrend, with bears likely to push the price toward support at 1.1494.
The GBP/USD pair continues to move lower amid a stronger dollar and improving sentiment surrounding US-China trade relations.
Possible technical scenarios:
On the daily chart, the GBP/USD pair has completed its upward correction, retreating from the 1.3436 level. From here, it maintains technical downside potential within the 1.3147–1.3436 range.
Fundamental drivers of volatility:
The pound remains under pressure ahead of the release of key inflation data from both the UK and the US, which could shape monetary expectations on both sides of the Atlantic.
The easing tone in Washington–Beijing relations has supported demand for the dollar, as investors reduce reliance on safe-haven assets. Donald Trump’s confidence in reaching a trade agreement with China has eased fears of an escalating tariff conflict, strengthening the dollar’s position across markets.
For the pound, focus stays on the September UK inflation report, expected to show a 4% annual increase, which is consistent with the Bank of England’s outlook. Persistent price pressures, along with a slight labor market slowdown, pose a challenge for policymakers to balance between curbing inflation and sustaining growth. Comments from MPC members, particularly Catherine Mann, highlight ongoing concerns over inflation risks, suggesting that the rate-cut cycle may be delayed.
Meanwhile, in the United States, traders await CPI data, also expected to show accelerating inflation, though the market continues to price in two Fed rate cuts before year-end.
Therefore, short-term support for the dollar persists amid an improving external backdrop and expectations of a looser Fed stance, while the pound remains weighed down by limited domestic catalysts and ongoing uncertainty surrounding Bank of England policy.
Intraday technical picture:
The 4H chart shows that the GBP/USD pair continues to decline steadily within the sideways range of 1.3147–1.3436, with potential to test the lower boundary after breaking below the intermediate line at 1.3332.
The Japanese yen remains under pressure, trading near recent lows after reacting to political changes in Japan and mixed expectations for monetary policy in both countries.
Possible technical scenarios:
As evidenced by the daily chart, the USD/JPY pair has climbed back above 151.53 following a deeper correction. If this level holds, the next upside target is the resistance at 153.19.
Fundamental drivers of volatility:
The yen is weakening amid uncertainty over the direction of Japan’s new government and the persistent policy divergence between the Bank of Japan and the US Federal Reserve.
The appointment of Sanae Takaichi as Japan’s new Prime Minister has fueled expectations of a more dovish economic course, including potential fiscal stimulus expansion, putting additional pressure on the yen. Market sentiment suggests that this could allow the Bank of Japan to maintain its accommodative stance despite inflation staying above target and signs of economic growth.
At the same time, signals from BoJ officials indicate a cautious move toward policy normalization. Bank representatives noted that inflation goals have been broadly met and that a rate hike remains possible under current conditions, which somewhat limits the yen’s downside.
In the United States, however, expectations for two Fed rate cuts before year-end are growing, capping the dollar’s upward potential. The ongoing government shutdown and uncertainty ahead of the Donald Trump–Xi Jinping meeting add to the pressure. Still, the yield gap between the US and Japan continues to support dollar demand, keeping USD/JPY near the upper end of its range despite increased volatility and domestic risks in both economies.
Intraday technical picture:
Based on the developments we see on the 4H chart, USD/JPY consolidation above the 151.53 support level confirms the potential for a price move toward resistance at 153.19.
The USD/CAD pair is gaining momentum as the Canadian dollar weakens ahead of the upcoming inflation report.
Possible technical scenarios:
On the daily chart, USD/CAD continues to consolidate above 1.4013, maintaining upside potential toward the resistance level at 1.4108. A breakout of this level would open the way to the next target at 1.4179.
Fundamental drivers of volatility:
Pressure on the Canadian dollar is intensifying amid expectations of an imminent Bank of Canada rate cut and falling oil prices, while the US dollar remains supported by safe-haven demand.
The Bank of Canada’s latest business outlook survey indicated a slight improvement in economic sentiment, yet companies remain cautious about investment and hiring due to the negative effects of US tariffs. Inflation expectations also remain moderate, strengthening the case for another 25-basis-point rate cut at the next meeting. According to market estimates, the probability of such a move is around 77%. The central bank’s dovish tone continues to weigh on the Canadian currency.
Adding to the pressure, oil prices have slid to five-month lows amid concerns over oversupply and weakening global demand.
However, short-term risks for USD/CAD are tied to the release of Canada’s CPI data. September inflation is projected to accelerate to 2.3% year-on-year, up from 1.9% in the previous month. Stronger-than-expected figures could temporarily support the loonie.
Intraday technical picture:
Judging by the look of things on the 4H chart, USD/CAD shows potential for further strengthening within the 1.4013–1.4108 range. For this move to materialize, the pair needs to break above local resistance at 1.4059; otherwise, consolidation is likely to continue.
Gold prices are pulling back after reaching a new all-time high, as investors take profits and await fresh signals from upcoming US inflation data.
Possible technical scenarios:
On the daily chart, gold is consolidating within the 4262.71–4375.25 range. An upward exit from this area would pave the way for a move toward the next target at 4635.63.
Fundamental drivers of volatility:
From a fundamental standpoint, gold remains supported by ongoing geopolitical tensions, strong central bank demand, and expectations of a Federal Reserve rate cut. The market has already priced in a 0.25% Fed rate reduction at the upcoming meeting, which continues to support gold’s appeal as a safe-haven asset amid lower bond yields.
ВInvestor attention is now shifting to Friday’s release of the US Consumer Price Index (CPI) for September, expected to show a 3.1% year-on-year increase. Such data could reinforce expectations for further monetary easing.
Despite short-term profit-taking, demand from latecomer investors and persistent geopolitical risks continue to limit gold’s downside potential. As a result, the metal is likely to remain firm near record highs ahead of key US macro data.
Intraday technical picture:
The 4H chart shows that XAU/USD is forming a double-top reversal pattern with a neckline at 4190.85, which could indicate a deeper correction toward the $4,000 per ounce area.
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