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ECB President Christine Lagarde reiterated in a speech today that current interest rates are at the level to return inflation to target in a timely manner. She also laid out three criteria for future decisions.

"Based on our current assessment, we consider that the key ECB interest rates have reached levels that, maintained for a sufficiently long duration, will make a substantial contribution to the timely return of inflation to our medium-term target", Lagarde said.

Further shedding light on ECB's decision-making framework, Lagarde stated that their "future decisions will continue to be based on these three criteria." She detailed these criteria as: "the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission."

Full speech of ECB Lagarde here.

UK PMI Services was finalized at 49.3 in September, a marginal drop from the neutral 50.0 recorded in August. S&P Global's analysis points to persistent declines in both business activity and new ventures, and notably, the pace of job shedding is at its quickest since January 2021. However, the silver lining lies in easing inflationary pressures, marking their lowest in over two years.

Tim Moore, Economics Director at S&P Global Market Intelligence, cited reductions in non-essential business and consumer expenditure as significant dampeners on service sector activity. "A combination of elevated borrowing costs and subdued economic conditions had led to lower new business intake," he remarked.

Decline in export sales, particularly influenced by reduced European demand, further contributed to the sector's woes. Service providers' response has been cautionary, with hiring significantly scaled back given the current uncertainties.

On a positive note, Moore highlighted the diminishing inflationary pressures in the sector, observing, "headline rates of inflation will continue to moderate in the coming months, with service sector input costs rising at the slowest pace for nearly two-and-a-half years." This, coupled with the anticipation of consistent decreases in UK consumer price inflation, could potentially revive demand, instilling a sense of optimism for the future.

Full UK PMI Services release here.

• GBPJPY finds support after sudden fall, but risks remain
• Bearish wave could gain new legs below 178

GBPJPY slumped suddenly to 10-week low of 178.00 on Tuesday in what looked to be a currency intervention from the Bank of Japan.The resistance-turned-support trendline from April 2022 halted the bearish action and lifted the price back to the 179.90 constraining area, but downside risks have not evaporated yet.

The RSI remains negatively charged comfortably below its 50 neutral mark, while the stochastic oscillator has resumed its negative momentum. Meanwhile, the decline in the MACD has picked up pace below the red signal line, suggesting downside pressures may dominate in the short-term.

Should sellers drive below 178.00, the pair might seek shelter within the 175.00-175.80 area, where the 38.2% Fibonacci retracement level of the 158.25-186.45 uptrend is found. A step lower could stretch towards the 50% Fibonacci of 172.50 and the 200-day simple moving average (SMA). If buyers don’t show up there, the bearish wave could strengthen towards the 61.8% Fibonacci of 169.00.

On the upside, the 20-day SMA and the short-term resistance trendline drawn from recent highs could cancel any progress around 182.00. The 50-day SMA could cement that ceiling, preventing a quick rally towards the eight-year high of 186.45. Slightly higher, the bulls could face a noisy trading around the resistance line coming from October 2022 at 188.45. If this proves easy to overcome, the door will open for the 190.00 psychological mark and the 191.50 barrier from 2015.

In summary, GBPJPY bears might have some extra fuel in the tank, with traders expected to engage in new selling tendencies below 178.00.

The latest Eurozone PMI Services data brings both a glimmer of optimism and a note of caution to an economic region. The finalized PMI Services for September stood at 48.7, marking an increment from August's 47.9. Composite index also saw a marginal uplift to 47.2 from the previous month's 46.7. While the numbers reflect an uptick, the fragility of the recovery becomes apparent when examining the country-specific data and underlying factors.

A look at the composite PMI output index reveals a contrasting scenario among the countries. Ireland tops the chart with a two-month low of 52.1, while France lags at a 34-month low of 44.1. Germany (46.4) and Italy (49.2), despite being on a multi-month high, are still not out of the woods, pointing towards a segmented recovery pattern.

Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, offers a balanced perspective. "The HCOB Composite PMI for the Eurozone did rebound a bit. However, we can't jump on the hope train yet," he cautioned. The declining new business, especially in powerhouse economies like Germany and France, underscores this sentiment, indicating a continual decline in outstanding business and a drop in business expectations.

In the corridors of ECB, where deliberations over the next interest rate decision are underway, the latest PMI data could act as a double-edged sword. The hawks find solace in the Input Price Index, propelled by wages and energy costs, marking a four-month pinnacle. In contrast, the doves might highlight the moderated pace at which service prices are increasing – the slowest since the summer of 2021.

"Prices are nevertheless still climbing the ladder rather fast, a weird twist when the economy is singing the blues," de la Rubia noted.

Full Eurozone PMI services release here.

EUR/USD remained in a bearish zone and declined below 1.0530. USD/JPY is again rising and might climb toward the 150.00 level.

Important Takeaways for EUR/USD and USD/JPY Analysis Today

• The Euro started a fresh decline below the 1.0530 support zone.
• There is a short-term bearish trend line forming with resistance near 1.0475 on the hourly chart of EUR/USD at FXOpen.
• USD/JPY climbed higher above the 148.00 and 148.75 levels.
• There was a rejection noticed near a bearish trend line at 150.15 on the hourly chart at FXOpen.

EUR/USD Technical Analysis

On the hourly chart of EUR/USD at FXOpen, the pair remained in a bearish zone below the 1.0650 level, as mentioned in the previous analysis. The Euro declined below the 1.0530 support zone against the US Dollar.

The pair even settled below the 1.0500 zone and the 50-hour simple moving average. A low is formed near 1.0448 and the pair is now consolidating losses. On the upside, the pair is now facing resistance near a short-term bearish trend line at 1.0475.

The next key resistance is near the 50-hour simple moving average and the 23.6% Fib retracement level of the recent decline from the 1.0617 swing high to the 1.0448 low at 1.0485.

A clear move above the 1.0485 level could send the pair toward the 1.0530 resistance. It is close to the 50% Fib retracement level of the recent decline from the 1.0617 swing high to the 1.0448 low. An upside break above 1.0530 could set the pace for another increase. In the stated case, the pair might rise toward 1.0615.

If not, the pair might resume its decline. The first major support on the EUR/USD chart is near 1.0450. The next key support is at 1.0420. If there is a downside break below 1.0420, the pair could drop toward 1.0380. The next support is near 1.0335, below which the pair could start a major decline.

USD/JPY Technical Analysis

On the hourly chart of USD/JPY at FXOpen, the pair started a decent increase from the 145.00 zone. The US Dollar gained bullish momentum above 148.00 against the Japanese Yen.

It settled above the 50-hour simple moving average and 148.75. However, the pair faced a rejection noticed near a bearish trend line at 150.15. There was a sharp decline below the 148.00 level. However, it turned out to be a false move and the price trimmed most losses.

It is back above the 148.75 level and the 61.8% Fib retracement level of the downward move from the 150.15 swing high to the 147.32 low.

Immediate resistance on the USD/JPY chart is near the 50-hour simple moving average at 149.50. It is close to the 76.4% Fib retracement level of the downward move from the 150.15 swing high to the 147.32 low.

The first major resistance is near 150.15. If there is a close above the 150.15 level and the RSI moves above 50, the pair could rise toward 151.20. The next major resistance is near 152.00, above which the pair could test 153.50 in the coming days.

On the downside, the first major support is near 148.75. The next major support is 148.00. If there is a close below 148.00, the pair could decline steadily.

In the stated case, the pair might drop toward the 147.30 support zone. The next stop for the bears may perhaps be near the 145.50 region.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Daily Pivots: (S1) 179.01; (P) 180.20; (R1) 181.19; More...

GBP/JPY's fall from 186.75 resumed by breaking through 180.78. Intraday bias is back on the downside for 176.29 support next. For now, risk will stay on the downside as long as 183.00 resistance holds, in case of recovery.

In the bigger picture, fall from 186.75 is currently seen as a corrective move only. As long as 176.29 support holds, larger up trend from 123.94 (202 low) should still be in progress. Break of 186.75 will target 195.86 (2015 high). Nevertheless, firm break of 176.29 will confirm medium term topping, and bring lengthier and deeper consolidations.

Daily Pivots: (S1) 155.09; (P) 156.16; (R1) 157.05; More....

EUR/JPY's fall from 159.75 resumed by breaking through 156.57 and intraday bias is back on the downside. This decline is seen as a larger scale correction. Deeper fall would be seen to 151.39 support. For now, risk will stay on the downside as long as 158.46 resistance holds, in case of recovery.

In the bigger picture, as long as 151.39 support holds, rise from 114.42 (2020 low) is still expected to continue. Next target is 100% projection of 124.37 to 148.38 from 139.05 at 163.06. Sustained break there will pave the way to retest long term resistance at 169.96.

Daily Pivots: (S1) 0.8654; (P) 0.8672; (R1) 0.8686; More....

Range trading continues in EUR/GBP and intraday bias remains neutral. On the upside, decisive break of 0.8700 resistance will carry larger bullish implication and bring stronger rally to 0.8874 resistance next. Nevertheless, rejection by this resistance will maintain bearish outlook that larger down trend is not over. Firm break of 0.8629 resistance turned support will turn bias back to the downside for 0.8568 support first.

In the bigger picture, the down trend from 0.9267 (2022 high) is seen as part of the long term range pattern from 0.9499 (2020 high). Decisive break of 0.8700 resistance will argue that this decline has completed with three waves down to 0.8491. Rise from 0.8491 could then be another leg inside the pattern and targets 0.8977 and above. However, rejection by 0.8700 will keep the down trend alive for another fall through 0.8491 at a later stage.

Daily Pivots: (S1) 1.6483; (P) 1.6564; (R1) 1.6688; More...

Intraday bias in EUR/AUD remains neutral first. On the upside, firm break of 1.6650 resistance will argue that pull back from 1.7062 has completed, after drawing support from medium term rising trend line. Further rally would be seen back to retest 1.7062. Nevertheless, break of 1.6319 will resume the fall to 1.6000 fibonacci level.

In the bigger picture, fall from 1.7062 is probably correcting whole up trend from 1.4281 (2022 low). Deeper decline would be seen to 38.2% retracement of 1.4281 to 1.7062 at 1.6000. Strong support could be seen there to bring rebound, at least on first attempt. This will remain the favored case as long as 1.6650 resistance holds.

Daily Pivots: (S1) 0.9611; (P) 0.9644; (R1) 0.9672; More...

Intraday bias in EUR/CHF remains neutral and outlook is unchanged. Further rally is expected as long as 0.9617 support holds. Above 0.9691 will resume the rebound from 0.9513 to 38.2% retracement of 1.0095 to 0.9513 at 0.9735. However, firm break of 0.9617 will turn bias back to the downside for retesting 0.9513 low.

In the bigger picture, medium term outlook will stay bearish as long as the cross is capped well below falling 55 W EMA (now at 0.9804). That is, down trend from 1.2004 (2018 high) could still resume through 0.9407 (2022 low). However, sustained trading above the 55 W EMA will raise the chance that 0.9470 is already a long term bottom. Further rise would then be seen to 1.0095 resistance to indicate bullish trend reversal.