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Daily Pivots: (S1) 149.97; (P) 150.68; (R1) 151.16; More...

USD/JPY accelerates lower today and the break of 149.95 resistance turned support indicates that a short term top was already formed at 153.26. Intraday bias is now on the downside for 55 D EMA (now at 148.58) instead. Sustained break there will raise the chance of bearish reversal and target 145.47 structural support next. On the upside, above 151.38 minor resistance will turn intraday bias neutral again first.

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.

Daily Pivots: (S1) 1.3399; (P) 1.3427; (R1) 1.3462; More...

Intraday bias in GBP/USD stays neutral and outlook is unchanged. Fall from 1.3725 could still extend lower through 13247. But even in that case, strong support is expected from 1.3140 cluster (38.2% retracement of 1.2099 to 1.3787 at 1.3142) to complete the corrective pattern from 1.3787. On the upside, break of 1.3526 will bring stronger rally back to 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 1.3173) will argue that a medium term top has already formed and bring deeper fall back to 1.2099.

Daily Pivots: (S1) 0.7907; (P) 0.7946; (R1) 0.7968; More…

USD/CHF's fall from 0.8075 accelerates lower today and intraday bias stays on the downside for retesting 0.7828 low. Decisive break there will resume larger down trend. For now, risk will stay on the downside as long as 0.7984 minor resistance holds, in case of recovery.

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).

Daily Pivots: (S1) 0.6465; (P) 0.6491; (R1) 0.6510; More...

Intraday bias in AUD/USD remains neutral for the moment. On the downside, break of 0.6439 will target 0.6413 cluster support (38.2% retracement of 0.5913 to 0.6706 at 0.6403). Sustained break there will pave the way to 61.8% retracement at 0.6216. Nevertheless, break of 0.6628 resistance will retain near term bullishness, and bring retest of 0.6706 high.

In the bigger picture, there is no clear sign that down trend from 0.8006 (2021 high) has completed. Rebound from 0.5913 is seen as a corrective move. Outlook will remain bearish as long as 38.2% retracement of 0.8006 to 0.5913 at 0.6713 holds. Nevertheless, considering bullish convergence condition in W MACD, sustained break of 0.6713 will be a strong sign of bullish trend reversal, and pave the way to 0.6941 structural resistance for confirmation.

Daily Pivots: (S1) 1.4032; (P) 1.4046; (R1) 1.4070; More...

Intraday bias in USD/CAD remains neutral and more consolidations could be seen below 1.4078. Further rally is expected as long as 1.3930 support holds. Sustained trading above 1.4014/7 will suggest that USD/CAD is already reversing the whole fall from 1.4719, and target 61.8% retracement at 1.4312. However, break of 1.3930 support will indicate short term topping, and turn bias back to the downside for 1.3725 instead.

In the bigger picture, price actions from 1.4791 medium term top could either be a correction to rise from 1.2005 (2021 low), or trend reversal. In either case, further decline is expected as long as 1.4014 cluster resistance (38.2% retracement of 1.4791 to 1.3538 at 1.4017) holds. However sustained trading above 1.4014 will suggest that it's more likely just a correction, and the larger up trend would be in favor to resume through 1.4791 at a later stage.

Daily Pivots: (S1) 201.42; (P) 202.43; (R1) 203.14; More...

GBP/JPY is still bounded in range of 201.24/205.30 and intraday bias stays neutral. With 201.24 resistance turned support intact, further rally is still in favor. Break of 205.30 will target 61.8% projection of 184.35 to 199.96 from 197.47 at 207.11. However, firm break of 201.24 will confirm short term topping and bring deeper fall back to 197.47 support instead.

In the bigger picture, price actions from 208.09 (2024 high) are seen as a corrective pattern which might have completed at 184.35. Firm break of 208.09 high will resume the up trend from 123.94 (2020 low). Next target is 61.8% projection of 148.93 to 208.09 from 184.35 at 220.90. However, firm break of 197.47 will dampen this view and could extend the corrective pattern with another fall.

Daily Pivots: (S1) 175.36; (P) 175.91; (R1) 176.37; More...

EUR/JPY is still bounded in range of 175.03/177.91 and intraday bias stays neutral. Further rise is expected as long as 175.03 resistance turned support holds. On the upside, break of 177.91 will target 61.8% projection of 161.06 to 173.87 from 172.24 at 180.15 next. However, firm break of 175.03 will confirm short term topping and bring deeper fall back to 172.24 support.

In the bigger picture, up trend from 114.42 (2020 low) is in progress and should target 61.8% projection of 124.37 to 175.41 from 154.77 at 186.31. Firm break of 172.24 support will suggests that it has turned into consolidations again. But still, outlook will continue to stay bullish as long as 55 W EMA (now at 167.16) holds, even in case of deep pullback.

Daily Pivots: (S1) 0.8674; (P) 0.8689; (R1) 0.8714; More…

Range trading continues in EUR/GBP and intraday bias stays neutral. On the upside, firm break of 0.8750 will resume larger rally towards 0.8867 fibonacci level. On the downside, break of 0.8654 will extend the fall from 0.8750 to 0.8631 support next.

In the bigger picture, rise from 0.8221 medium term bottom is seen as a corrective move. While further rally cannot be ruled out, upside should be limited by 61.8% retracement of 0.9267 to 0.8221 at 0.8867. Considering bearish divergence condition in D MACD, firm break of 0.8631 support will be the first sign that this corrective bounce has completed. Sustained trading below 55 W EMA (now at 0.8550) will confirm, and bring retest of 0.8221 low.

Daily Pivots: (S1) 1.7910; (P) 1.7984; (R1) 1.8092; More...

EUR/AUD's rally continues today and intraday bias stays on the upside for 1.8155 resistance. Firm break there will argue that whole corrective pattern from 1.8554 has completed with three waves to 1.7569. Further rise should be seen to retest 1.8554 high next. On the downside, below 1.79743 will turn intraday bias neutral first.

In the bigger picture, price actions from 1.8554 medium term top are seen as a corrective pattern, which might have completed already. Firm break of 1.8554 will resume larger up trend from 1.4281 (2022 low), and target 61.8% projection of 1.5963 to 1.8554 from 1.7569 at 1.9170. This will remain the favored case as long as 1.7569 support holds.

In focus today

In the euro area, we receive the final inflation print for September. We expect the data to confirm the flash release of headline inflation at 2.2% y/y and core at 2.3% y/y so the print should not be a market mover.

In Sweden, unemployment figures will be published this morning. We expect unemployment to remain largely unchanged at 8.8% (SA). Although the momentum in the labour market is improving, stronger employment in PMI, and an increase in new vacancies from SPES, it is unlikely to be enough to already reflect improvements in the LFS unemployment rate.

In the early hours of Monday, China will release its monthly batch of data for retail sales, housing, etc., as well as GDP data for Q3. GDP growth is expected to slow from the 5.3% rate in the first half to 4.7% in Q3. The monthly data will likely indicate that the domestic economy remains weak, with housing and private consumption continuing to struggle.

Economic and market news

What happened yesterday

In France, premier Lecornu survived the two no-confidence votes in parliament. A total of 271 MPs voted in favour of bringing down the government which was as expected and showed that a handful of Socialists went against the party line as they previously stated they would. This gives some temporary stability in French politics, and the parliament can now work on the 2026 budget. While this is positive in the short term, we eventually expect problems to return as the suspension of the pension reform makes the medium-term fiscal sustainability worse.

In the US, shares of regional banks faced sharp declines following disclosures of problem loans at Zions Bancorp and Western Alliance Bancorp, both of which reported losses tied to alleged fraud involving loans to funds investing in distressed commercial mortgages. Zions dropped 13%, while Western Alliance fell 11%, raising fresh concerns over the stability of the sector. These developments have highlighted investor nervousness despite the S&P 500 Index remaining near record highs.

In geopolitics, following a two-hour phone call with Russian President Putin, President Trump announced plans to meet Putin in Budapest within 'the next two weeks or so' to negotiate an end to the war in Ukraine. Meanwhile, Ukrainian President Zelenskyj is set to meet Trump in Washington today to request additional military support, including long-range missiles. While the White House had recently signalled support for Ukraine, Trump's conciliatory remarks after his call with Putin have raised doubts about the US's next steps.

In commodities, gold reached a record high of USD 4,378 per ounce before retreating slightly, while silver also hit a new peak, topping at USD 54.5. The flight to safety amid renewed US regional banking sector concerns has driven strong demand, with gold set for a weekly gain of 7.6%, the largest since early 2020.

In the UK, the monthly August GDP growth came in at 0.1% as expected. Thus, the less than impressive growth picture continues in the UK. Chancellor Rachel Reeves is facing a GBP20-30bn shortfall in the public budget and a strong rationale to build an additional fiscal buffer on top of that, following years of uncertainty surrounding taxation and spending policies. The Labour Party has promised to freeze income tax rates, National Insurance contributions (social security) and VAT, the three biggest sources of revenue. Most alternative measures, such as reforming property taxation, would prove highly challenging or place significant strain on economic growth. Regardless of the approach, there is a compelling case for addressing the fiscal challenge now, while the next election is still years away. Reeves has acknowledged that she is looking at potential tax increases and spending cuts, and it is hard to see how the fiscal gap can be resolved without breaking some promises. There is no way around an unpopular decision, and we think the Labour government will prioritise addressing the budgetary shortfall in the 26 November budget rather than risk larger tax increases later.

In Norway, Q3 manufacturing confidence dropped from +0.4 to -0.3, pointing to negative growth in the manufacturing sector for the first time in almost 2 years. Details to the weak side as new orders dropped from 48.8 to 47.5 and employment from 54.0 to 53.2. Looking at sectors, the producers of capital goods, a proxy for oil-related sectors, have now turned negative which fits well with our view that oil investments are about to turn into a headwind for the economy. Producers of intermediate goods, a proxy for the export industries, are expecting a very moderate upswing.

Equities: Equities were mixed on Thursday, with Europe faring well (Stoxx 600 up 0.7%) while US markets retreated, ending near session lows (S&P 500 -0.6%, small-cap Russell 2000 -2.1%). Financials were the main drag on US markets, weighing particularly on US small caps after renewed concerns over regional bank credit quality. Additionally, underwhelming earnings from insurance companies added to the sector's weakness. The result was a broad risk-off session, with nearly all sectors ending lower. Risk aversion appears to be carrying into Friday, as US futures roughly 0.5% lower pre-market.

Diving deeper, Zions Bancorporation disclosed a 50 million charge-off tied to defaulted commercial loans, reigniting concerns about the health of regional bank balance sheets. This adds to a growing list of developments that have unsettled investors, following two subprime auto lender Tricolor and major auto parts supplier First Brands bankruptcies in September. Shares of Zions and Western Alliance both tumbled more than 10% on the news.

FI and FX: US Treasury bond yields declined on the back of problems with two US regional banks which has been hit by bad loans. France sold some EUR 13bn in nominal bonds and linkers yesterday with a decent bid-to-cover. Hence, there seems to be no problem in selling OATs and linkers at the auctions, which was also seen last year when the political crisis began after European parliament elections.