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Chinese yuan rallied in Asian session after weekend reports signaled tangible progress toward a new U.S.–China trade framework. Senior economic officials from both countries agreed on the broad outline of a deal that could be finalized when Presidents Donald Trump and Xi Jinping meet later this week at the APEC summit in Gyeongju, South Korea. The accord aims to extend the existing tariff truce and suspend China’s planned rare-earth export controls, easing one of the key geopolitical risks that has hung over markets for weeks.

U.S. Treasury Secretary Bessent described the outcome of the fifth round of talks as “a very successful framework” for the leaders to discuss on Thursday, noting optimism that the tariff pause beyond its November 10 expiry is all but assured. He added that China is expected to resume substantial purchases of U.S. soybeans, ending a complete halt in September when Chinese buyers turned to Brazil and Argentina.

Bessent also said Beijing plans to delay by a year the rollout of its rare-earth licensing regime while the policy is reviewed. That concession effectively removes a major supply-chain concern for U.S. manufacturers in the short term.

Trump reinforced the upbeat sentiment, telling reporters he believes “we’re going to have a deal with China.”

The positive momentum coincided with stronger domestic data from China. Industrial profits surged 21.6% yoy in September, accelerating from 20.4% in August and marking the fastest pace since late 2023. The data lent further support to Chinese assets and Yuan, reinforcing the perception that policy stimulus and improving export volumes are feeding through to corporate earnings.

Technically, USD/CNH’s gap-down move today confirmed renewed downside momentum. The rejection by 55 D EMA (now at 7.1532) indicates the corrective bounce from 7.0843 has ended, with sellers regaining control. Break below 7.0843 would resume the broader downtrend from the April high of 7.4287 toward 61.8% projection of 7.2239 to 7.0843 from 7.1532 at 7.0669 next.

After last Friday’s sharp sell-off, global markets rebounded strongly this week as risk-on sentiment returned. The USD/JPY resumed its recent uptrend as fears of a renewed U.S.–China trade war eased and Sanae Takaichi was officially sworn in as Japan’s new prime minister. Economists believe her appointment reduces the likelihood of the Bank of Japan raising interest rates anytime soon.

U.S. equities surged to new record highs, led by technology stocks, while Japanese stocks also advanced on optimism that the new administration will pursue policies supportive of economic growth. The latest U.S. Core CPI data showed inflation rose less than expected, further reinforcing hopes that the Federal Reserve will proceed with an interest rate cut at its upcoming FOMC meeting.

Gold, which had been rallying for weeks, finally saw a pullback as profit-taking set in and investors rotated back into risk assets. Meanwhile, Bitcoin rebounded after a brief period of weakness, supported by improved market sentiment ahead of the anticipated Fed rate cut.

Markets This Week

U.S. Stocks

The Dow reached record highs this week as the uptrend continued, helped by lower U.S. inflation, strong tech earnings, and dovish comments from Fed Chair Powell. While some investors worry that the market looks expensive, the trend remains strong, and buying on dips is still the best approach as long as the index stays above its 10-day moving average. Resistance is at 47,500 and 48,000, with support at 46,000, 45,500, 45,000, 44,000, and 43,000.

Japanese Stocks

Following the confirmation of Sanae Takaichi as Japan’s new prime minister, the Nikkei 225 surged to record highs early in the week. The uptrend remains strong, and market sentiment is positive about the outlook under the new leadership. With investors expecting continued policy stability, it’s best to follow the uptrend as the index looks to test the 50,000 level. Resistance is at 50,000円 and 51,000円, while support is at 48,500円, 47,000円, 46,000円, and 45,000円.

USD/JPY

The USD/JPY rose every day last week, returning to this month’s highs as Sanae Takaichi became Japan’s new prime minister, lowering expectations for near-term interest rate hikes. While there are concerns that the yen’s recent weakness may prompt a sudden pullback, the overall uptrend remains intact. Until any signs of intervention appear, it’s best to look for buying opportunities above the 10-day moving average, while staying ready to reassess after the upcoming Bank of Japan meeting, which could hint at a stronger willingness to raise rates. Resistance is at 153, 153.3, and 154, while support is at 151, 150, and 149.

Gold

Gold finally saw a down week after its strong two-month rally, as investors took profits following recent large gains. Although the decline was sharp, it remains relatively small compared to the overall rise. Prices steadied toward the end of the week, and with U.S. interest rates falling and the 10-day moving average still trending higher, the broader uptrend may not be over yet. In the short term, range trading appears the best approach to take advantage of current volatility. Resistance is at $4,200, $4,300, and $4,400, while support stands at $4,050, $4,000, and $3,950.

Crude Oil

New sanctions on Russian oil exports lifted WTI sharply this week, breaking the recent downtrend as hopes for lower U.S. interest rates supported the market. However, the rise may be short-lived since worries about U.S. economic growth remain. With strong resistance around $65, prices could move lower again this week. Resistance is at $65, $66.50, $70, and $75, with support at $60 and $55.

Bitcoin

Bitcoin held support last week as improved risk sentiment helped stop further speculative selling. After the sharp drop from record highs earlier this month, the market remains uncertain and is waiting for fresh news to drive new buying interest. Volatility is still high, making range trading the most practical way to find short-term opportunities. Resistance is at $115,000, $120,000, and $125,000, while support stands at $105,000, $100,000, and $95,000.

This Week’s Focus

• Monday: U.S. Durable Goods Orders and New Home Sales
• Tuesday: Japan BoJ Core CPI, U.S. CB Consumer Confidence
• Wednesday: Australia CPI, U.S. Fed Interest Rate Decision
• Thursday: Japan BoJ Interest Rate Decision, E.U. GDP, Unemployment Rate and ECB Interest Rate Decision, U.S. GDP
• Friday: Japan Tokyo Core CPI and Industrial Production, U.S. Core PCE Price Index and Chicago PMI

It’s a big week for global markets, with three major central banks set to announce monetary policy decisions. The Federal Reserve is widely expected to cut the fed funds rate by 0.25% as signs of a weakening U.S. labor market grow, while the Bank of Japan is expected to keep rates unchanged. The European Central Bank is also likely to hold steady, though markets will be watching closely for comments following each announcement. Key U.S. data releases include Durable Goods Orders early in the week and GDP figures on Thursday, both likely to guide expectations for future policy. Investors will also be watching whether the recent sell-off in gold continues and if U.S. equities face profit-taking after their record highs.

In the last week of October, investors will be focused on US-China trade negotiations and news surrounding Donald Trump’s visit to Asia. The main event on the economic calendar will be the Fed meeting.

The futures market gives a 97% probability of a cut in the federal funds rate. The chances of another cut in December are estimated at 93%. The Fed is ready to continue despite a lack of data due to the shutdown. However, accelerating inflation could increase the number of hawks. In addition, monetary conditions are very relaxed, and the leading indicator from the Atlanta Fed signals an acceleration of the economy to 3.9% in the third quarter. Is it worth lowering the rate in such conditions?

If Jerome Powell signals a slowdown in the rate-cutting cycle, the dollar may strengthen, and stock indices may fall. This will undoubtedly anger Donald Trump, but the Fed must not allow a repeat of the 1970s. Back then, rampant inflation forced a return to aggressive monetary tightening, which led to a double-dip recession.

On Tuesday, gold experienced its most significant sell-off in 12 years. In dollar terms, Monday’s intraday drop of $230 per ounce was the worst in history. Gold has never risen for more than nine consecutive weeks in history. This time was no exception. However, the price remained above $4,000, fuelling optimism among those who saw the collapse at the start of the week as an opportunity to join the further rally.

Bespoke Investment Group notes that in the 21st century, there have been only six cases when the precious metal fell by 3% or more in a single day. And in the following month, it lost an average of 18%.

We believe that the situation is more similar to what we saw in August 2020, when a 30-week decline followed an outstanding rally and new historical highs, and the latest highs became the upper limit of the range for the next three years. A more pessimistic scenario takes us back to the peak in 2011, after which the bear market lasted for four years.

Global markets resumed their risk-on momentum last week, buoyed by softer U.S. inflation data, easing political uncertainty, and renewed optimism over global trade. In the U.S., both DOW and S&P 500 climbed to fresh record highs after September CPI figures came in below expectations, cementing confidence that the Fed remains on track to deliver two more rate cuts by year-end. Sentiment was also underpinned by progress on the U.S.–China trade front, as high-level officials met in Malaysia to lay the groundwork for a Trump–Xi summit. Markets welcomed the prospect of de-escalation that could avert the next wave of tariffs in November.

In Europe, downside surprise in UK inflation further boosted risk appetite by reinforcing expectations that the BoE will continue its easing cycle. Combined with firmer oil prices and robust corporate earnings, FTSE 100 surged to a new record high. Meanwhile in Asia, Japan’s political clarity provided another lift to sentiment. The election of Sanae Takaichi as Japan’s first female prime minister removed a major source of uncertainty and drove the Nikkei to new all-time highs.

In currency markets, commodity-linked currencies led the way — with Kiwi, Aussie and Loonie as the top performers — reflecting a renewed global appetite for risk. Yen, by contrast, weakened sharply, while Sterling and Swiss Franc also softened. Dollar and Euro finished the week in middle positions.

CPI Miss Locks in Fed Cuts, DOW Extends Record-Breaking Rally

The U.S. inflation report for September was the most consequential data point of the week. Headline CPI ticked up from 2.9% to 3.0%, slightly below market expectations of 3.1%. Core CPI eased from 3.1% to 3.0%, its first slowdown since spring. For the Fed, some officials had long argued that while tariffs may keep inflation sticky in the short term, they would not cause an uncontrolled spike. The data supported that narrative

Also, the softer core reading offered a degree of reassurance to both policymakers and investors that underlying price pressures are no longer reaccelerating. The uptrend in core inflation that began in May has possibly peaked. Fed’s policy focus can shift more comfortably toward supporting growth and managing downside risks.

Fed fund futures now price in nearly a 100% probability of a 25bps rate cut at Wednesday’s FOMC meeting, which would bring the policy rate down to the 3.75–4.00% range. Expectations of another 25bps move in December have also solidified, with traders assigning more than 90% likelihood. The market now envisions the easing cycle extending into 2026, with three more cuts anticipated to lower rates toward 2.75–3.00% by late 2026 or early 2027.

Technically, DOW remains comfortably within its near term ascending channel, and well supported by the rising 55 D EMA (now at 45,799). Friday’s decisive advance confirmed that the rally from 36,611 has resumed, targeting 61.8% projection of 36,611 to 44,885 from 43,340 at 48,454. The index could encounter some initial resistance near that level, which is close to the channel top. Even if short-term retreat occurs, outlook will stay as long as 55 D EMA holds firm.

10-Yields Trying to Stabilize Near 4%, Dollar Index Lacks momentum

U.S. 10-year yield briefly dipped to 3.947 but stabilized from there. Technically, the yield’s downward momentum has started to flatten, as indicated by D MACD, suggesting that the selling pressure seen through late September is losing force.

Further decline remains possible in the near term, but firm support zone near 61.8% projection of 4.493 to 3.992 from 4.200 at 3.891 should contain the downside on the first test. If yields hold above that level and break back above 4.05, that would signal short-term bottoming, paving the way for rebound toward 55 D EMA (now at 4.129).

From a macro perspective, the next move in yields will serve as a litmus test for broader market confidence. With the absence of renewed stress in regional banks or credit markets like the prior week, 3.9% could emerge as a durable floor for the benchmark yield.

Meanwhile, Dollar Index rebounded after drawing support from 55 D EMA (now at 98.35), but upside momentum proved unconvincing. Dollar's rally attempts were capped by by falling yields and broad risk-on sentiments.

Overall outlook is unchanged that rebound from 96.21 is tentatively viewed as a corrective move. Break above 99.56 would extend the recovery toward 100.25 resistance. But upside should be capped near the 38.2% retracement of 110.17 to 96.21 at 101.54.

Failure to hold 97.46 support, however, would signal that the corrective phase has ended prematurely, setting up a retest of 96.21 low.

FTSE Hits Record High, EUR/GBP Bounces from 55 D EMA

The latest UK inflation report revived hope that the BoE will continue easing later this year. Headline inflation held steady at 3.8%, defying expectations for an uptick to 4.0%, while core CPI slipped to 3.5% from 3.6%. The expectations sent FTSE to new record high and kept Sterling pressured.

However, a move at the November meeting still appears premature. BoE officials are expected to hold fire until after the government’s November 26 Budget, which could significantly influence the inflation and growth outlook. Chancellor Rachel Reeves reaffirmed last week that there would be “targeted action in the Budget around prices” to lower the cost of living, adding that she wants to see interest rates — already reduced five times in the past year — “come down further.” Against that backdrop, December remains the most likely timing for the next cut, with markets now pricing an 80% chance of a 25bps reduction to 3.75%.

Technically, FTSE’s up trend remains on track to 61.8% projection of 8,707.65 to 9,577.08 from 9,354.54 at 9,814.22. That level could act as interim resistance for the near term. There would be scope to challenge 100% projection at 10,146.34, if the Budget confirms a supportive fiscal tone. In any case, outlook will stay bullish as long as 55 D EMA (now at 9,305.33) holds.

In the currency markets, EUR/GBP is showing renewed strength. Fundamentally, the cross is structurally supported by the policy divergence between the ECB and BoE — with the former firmly maintaining a hold stance and the latter leaning toward further easing.

Technically, EUR/GBP was repeatedly supported by 55 D EMA (now at 0.8676). Pullback from 0.8750 may have already run its course. Firm break above 0.8750 would signal resumption of the rise from 0.8221, with the next target 61.8% retracement of 0.9267 to 0.8221 at 0.8867.

This 0.8867 level will be a key hurdle to test the underlying momentum of EUR/GBP. For now, considering bearish divergence condition in D MACD, it will more likely cap upside than not.

Nikkei Eyes 50k as Takaichi Era Begins; NZD/JPY Jumps on Yen Weakness

Japanese markets extended their strong run last week, with Nikkei 225 hitting a new record high before easing slightly below the psychological 50,000 mark. The rally came as political uncertainty faded after Sanae Takaichi formally secured her premiership, becoming Japan’s first female prime minister. Backed by a newly formed coalition between the Liberal Democratic Party and the Japan Innovation Party, Takaichi’s leadership has been broadly welcomed by investors anticipating continuity in pro-growth and pro-stimulus policies.

Despite minor profit-taking into the weekend, the overall tone in Tokyo remains upbeat. The shallow pullback from the 50,000 level did not trigger the kind of “sell-the-news” response some had feared. Also, the global risk-on environment would be a powerful tailwind for Japanese equities.

Another take on 50,000 market is likely in the near term. Though, whether Nikkei could sustain above 50,000 would very much depend on how Takaichi performs during her first 100 days in office.

Technically, near term outlook will stay bullish as long as 46,544.05 support holds. Sustained trading above 50,000 will extend the up trend to 138.2% projection of 25,661.89 to 42,426.77 from 30,792.74 at 43,961.80 in the medium term.

Meanwhile, Yen continues to underperform, with NZD/JPY ended as the top mover, registering 1.89% gain. Technically, for NZD/JPY, repeated support from 38.2% retracement of 79.79 to 89.05 at 85.51 keeps the rise from 79.79 intact. Indeed, it's possible that the corrective pattern from 89.05 has already completed with three waves to 85.33.

Near term focus will now be on 88.55 resistance. Firm break there will bolster the bullish case that rise from 79.79 is resuming. Further break of 89.05 will confirm and target 61.8% projection of 79.79 to 89.05 from 85.33 at 91.05 next.

EUR/CHF Weekly Outlook

EUR/CHF edged lower last week but recovered ahead of 0.9204 support. Initial bias remains neutral this week first, and some more consolidations could be seen. But upside should be limited below 0.9311 support turned resistance. On the downside, break of 0.9204 will confirm larger down trend resumption. Next target is 61.8% projection of 0.9660 to 0.9218 from 0.9452 at 0.9179. Firm break there will target 100% projection at 0.9010.

In the bigger picture, outlook remains bearish with EUR/CHF staying well inside long term falling channel after multiple rejection by 55 W EMA (now at 0.9395). Firm break of 0.9204 will resume the whole down trend from 1.2004 (2018 high). Next target is 61.8% projection of 1.1149 to 0.9407 from 0.9928 at 0.8851. Break of 0.9452 resistance is needed to be the first sign of medium term bottoming.

In the long term picture, overall long term down trend is still in progress in EUR/CHF. Outlook will continue to stay bearish as long as 55 M EMA (now at 0.9820) holds.

EUR/USD stayed in sideway trading above 1.1540 last week and outlook is unchanged. Initial bias remains neutral this week and further decline is expected with 1.1727 resistance intact. Break of 1.1540 will resume the decline from 1.1917 and target 1.1390 support, or even further to 38.2% retracement of 1.0176 to 1.1917 at 1.1252. On the upside, though, break of 1.1727 resistance will turn bias back to the upside for 1.1778, and then retest of 1.1917 high instead.

In the bigger picture, considering bearish divergence condition in D MACD, a medium term top is likely in place at 1.1917, just ahead of 1.2 key psychological level. As long as 55 W EMA (now at 1.1290) holds, the up trend from 0.9534 (2022 low) is still expected to continue. Decisive break of 1.2000 will carry larger bullish implications. However, sustained trading below 55 W EMA will argue that rise from 0.9534 has completed as a three wave corrective bounce, and keep outlook bearish.

In the long term picture, 38.2% retracement of 1.6039 to 0.9534 at 1.2019, which is close to 1.2000 psychological level is the key for the outlook. Rejection by this level will keep the multi decade down trend from 1.6039 (2008 high) intact, and keep outlook neutral at best. However, decisive break of 1.2000/19, will suggest long term bullish trend reversal, and target 61.8% retracement at 1.3554.

USD/JPY staged a strong rebound last week but lost momentum ahead of 153.26 resistance. Initial bias remains neutral this week and some consolidations could be seen. Further rise is expected as long as 55 4H EMA (now at 151.64) holds. Firm break of 153.26 will resume larger rise from 139.87 and target 100% projection of 142.66 to 150.90 from 145.47 at 153.71. Firm break there would prompt upside acceleration to 161.8% projection at 158.80.

In the bigger picture, current development suggests that corrective pattern from 161.94 (2024 high) has completed with three waves at 139.87. Larger up trend from 102.58 (2021 low) could be ready to resume through 161.94 high. On the downside, break of 145.47 support will dampen this bullish view and extend the corrective pattern with another falling leg.

In the long term picture, there is no sign that up trend from 75.56 (2011 low) has completed. But then, firm break of 161.94 is needed to confirm resumption. Otherwise, more medium term range trading could still be seen.

GBP/USD stayed in consolidations above 1.3247 last week and outlook is unchanged. Initial bias remains neutral this week first, and further fall is in favor. Break of 1.3247 will target 1.3140 cluster (38.2% retracement of 1.2099 to 1.3787 at 1.3142). Strong support is expected there to contain downside to complete the corrective pattern from 1.3787. On the upside, break of 1.3526 will target 1.3725/87 resistance zone.

In the bigger picture, rise from 1.0351 (2022 low) is still seen as a corrective move. Further rally could be seen to 61.8% projection of 1.0351 to 1.3433 (2024 high) from 1.2099 (2025 low) at 1.4004. But strong resistance could emerge from 1.4248 (2021 high) to limit upside. Sustained break of 55 W EMA (now at 1.3191) will argue that a medium term top has already formed and bring deeper fall back to 1.2099.

In the long term picture, as long as 1.4248/4480 resistance holds (38.2% retracement of 2.1161 to 1.0351 at 1.4480), the long term outlook will remain bearish. That is, price actions from 1.3051 are seen as a corrective pattern to down trend from 2.1161 (2007 high) only. Nevertheless, decisive break of 1.4248/4480 will be a strong sign of long term bullish reversal.

USD/CHF's recovery from 0.7872 extended last week but retreated after hitting 0.7984 minor resistance. Initial bias remains neutral this week first and deeper decline is still in favor. On the downside, below 0.7913 will turn bias to the downside for 0.7872 support, and then 0.7828 low. However, firm break of 0.7984 will suggest that corrective pattern from 0.7828 is extending with another rising leg, and target 0.8075 again.

In the bigger picture, long term down trend from 1.0342 (2017 high) is still in progress. Next target is 100% projection of 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.7382. In any case, outlook will stay bearish as long as 0.8332 support turned resistance holds (2023 low).

In the long term picture, price action from 0.7065 (2011 low) are seen as a corrective pattern to the multi-decade down trend from 1.8305 (2000 high). It's uncertain if the fall from 1.0342 is the second leg of the pattern, or resumption of the downtrend. But in either case, outlook will stay bearish as long as 0.8756 support turned resistance holds (2021 low). Retest of 0.7065 should be seen next.