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USDCHF: ⬇️ Sell

• USDCHF reversed from resistance zone
•  Likely to fall to support level 0.7865

USDCHF currency pair recently reversed from the resistance zone between the pivotal resistance level 0.8055 (which has been reversing the price from August) and the upper daily Bollinger Band.

This resistance zone was further strengthened by the resistance trendline of the daily down channel from June and by the 61.8% Fibonacci correction of the downward impulse from July.

Given the clear daily downtrend, USDCHF currency pair can be expected to fall to the next support level 0.7865 (which reversed the price in June and September).

Markets

The interesting market moves took place in the US money market corner. The SOFR fixing on Wednesday (applicable for today) shot up to 4.29% compared to the 4.19% the day before. This overnight interbank rate in normal conditions fluctuates neatly within the Fed’s policy target range of currently 4-4.25%. The overshoot is suggestive of funding pressures building. It could be a temporary deviation with markets struggling to digest this week’s UST coupons settling and (net) TBill supply but it bears following up to check whether structural issues are playing as well. In a broader perspective, the SOFR rate has been grinding higher since October 8’s low of 4.12%. and may have been one of the reasons why Fed chair Powell earlier this week announced that the central bank plans to end quantitative tightening in the coming months. Commercial bank reserves held with the Fed have recently dropped below the $3tn mark in a sign of liquidity being sucked out of the financial system. In 2019, when the Fed was doing QT on autopilot it caused a sudden liquidity crunch which the central bank is keen to avoid this time around. The SOFR back then surged to above 5% compared to the Fed’s 2-2.25% policy rate. Fed’s Waller said the amount of reserves then dropped below 8% of GDP and has suggested to keep it at around 10-11% instead – which is more or less where we are today.

Other markets are little changed. Both Treasury and Bund yields trade within wafer thin trading ranges of 1 to 3 bps. France’s OAT-swapspread holds steady after narrowing sharply yesterday in anticipation of Lecornu surviving today’s two censure motions. The one tabled by the far-left failed with 271 lawmakers backing it vs 289 needed to pass. For all but seven members of the Socialist Party, Lecornu’s costly concessions such as suspending the pension reform, sufficed. The motion tabled by Le Pen only got 144 votes in favour. A series of central bank policymakers hit the wires. Fed’s Waller called for a cautious removal of monetary restriction in 25 bps steps. Miran begged to differ and favours a 50 bps move, adding that he thinks 25 bps will be the outcome nonetheless. ECB’s Wunsch said the probability for another rate cut has come down and said services inflation still needs monitoring. Mann from the BoE voiced similar concerns, saying that the “domestic component” is the dominant inflation feature. Gilts slightly outperform nonetheless. Industrial output data from the UK this morning beat expectations at the margin but was offset by a minor miss in stalling service sector activity. The pound doesn’t care much though and is even one of the better performers today. EUR/GBP eases to 0.867 & cable (GBP/USD) tops the 1.34(5) barrier. Stock markets grind higher in Europe (EuroStoxx50 +0.5%) and the US (+0.2-0.7%), with decent to strong earnings so far supporting the equity market.

News & Views

Czech producer prices fell by 0.4% M/M in September whereas consensus only expected a 0.1% slowdown. Producer price deflation accelerated on an annual level from -0.8% Y/Y to -1% Y/Y with prices now dropping Y/Y for an 8th consecutive month. Details showed monthly price declines for agricultural producers (-1.9% M/M; +7.1% Y/Y) and industrial producers (-0.4% M/M). The latter are also down Y/Y (-1%). Construction work prices rose by 0.7% M/M and 3% Y/Y. Domestic service producer prices in the business sphere proved most sticky, adding 1.4% M/M to be up 4.5% Y/Y. EUR/CZK is going nowhere at 24.29. Recent political elections didn’t really cause a setback for CZK which remains firmly supported by CNB’s anti-inflationary rhetoric and steady rate path ahead.

German Chancellor Merz addressed national parliament today, previewing next week’s EU Summit. He backed progress on a European Capital Union saying that European firms need a sufficiently broad and deep European capital market so they can finance themselves better and faster. One way of doing so is creating a pan-European stock exchange to help firm deal with competition from the US and Asia. Earlier, Merz already gave up long-standing reluctance to transfer financial supervision to the European Securities and Markets Authority. Apart from the economic and financial strategy, EU leaders will also focus on migration, security & energy and the implementation of an AI act.

Silver prices continue to soar to unprecedented highs with questions being asked about the reason for the rally.

Well in all honesty there have been a host of reasons cited as a driving force, all of them may be true to some degree. The most popular ones which have been discussed at length include rate cut expectations from the Federal Reserve, the ongoing supply/demand deficit in physical silver, and of course the price of silver being cheap in comparison to Gold.

One of the reasons which has really come to the fore recently is the shortage of physical silver which has led to a big premium for physical silver as well. Recent, widely reported incidents have exposed some key factors regarding silver, particularly due to physical shortages that have made the metal difficult to acquire. This is becoming a global problem.

This shortage is especially felt in India, the world's biggest consumer, which has seen its imports drop by a significant 42% this year, even as demand from both investors and industrial users (like those making solar panels and electronics) has surged.

The problem is amplified globally because most silver is produced as a side product of mining other metals, making it hard to quickly increase supply when demand spikes.

As a result, dealers everywhere are struggling to find the metal, and this scarcity is driving up prices in the supply chain. This physical shortage is not limited to India; countries including China, Turkey, and Australia are also currently facing a scarcity of silver.

Source: Crux Investor

As the physical silver shortage continues, the amount of money held in silver Exchange Traded Funds (ETFs) and futures contracts has surged. Large investment funds are now viewing silver as a "higher beta" version of an inflation hedge, meaning it's more volatile than gold, but offers the chance for much larger gains when the market moves up.

This structural shift is driven by the fact that silver offers dual benefits that gold does not.:

1. Monetary Asset: Like gold, it protects against the long-term devaluation of traditional paper money (monetary debasement).
2. Industrial Asset: It acts as a powerful bet on industrial growth and the global "energy transition" theme, as silver is a crucial, irreplaceable material used in fast-growing sectors like solar panels, electric vehicles, and high-tech electronics.

This unique combination makes silver attractive to both traditional commodity investors looking for a hedge and other market participants focused on clean energy trends.

Either way, right now these factors have created the perfect cocktail for Silver prices.

Technical Analysis - Silver (XAG/USD)

From a technical standpoint, Silver has settled into a period of consolidation since the early hours of Wednesday morning.

Price is just shy of the recent high print around the 53.62/oz handle with the period-14 RSI above the 50 level. This is a nod to how strong the bullish momentum behind the Silver move is.

Similar to Gold, picking a top at this stage appears counterproductive. However, for day traders opportunities may yet present itself.

Silver (XAG/USD) H4 Chart, October 16, 2025

Source: TradingView.com (click to enlarge)

Dropping down to a H1 chart and price has been consolidating in the red/pink block since yesterday.

A candle close outside this block could lead to a move in that direction.

Obviously the longer price remains in the block the more aggressive the breakout may be.

A break to the downside may find support at the 100-day MA resting at 51.84 before the October 14 swing low at 50.59 with the 200-day MA resting below that at the 50.28 handle.

A break to the upside may find some resistance at the YTD high at 53.62 before the psychological 55.00 handle comes into focus.

Silver (XAG/USD) H1 Chart, October 16, 2025

Source: TradingView.com (click to enlarge)

Client Sentiment Data - USD/CAD

Looking at OANDA client sentiment data and market participants are Long on XAG/USD with 64% of traders net-long. I prefer to take a contrarian view toward crowd sentiment and thus the fact that so many traders are Long means XAG/USD prices could fall in the near-term.

Daily Pivots: (S1) 1.1617; (P) 1.1632; (R1) 1.1663; More…

Intraday bias in EUR/USD remains neutral and more consolidations could be seen above 1.1540. But further decline is still expected with 1.1778 resistance intact. On the downside, break of 1.1540 will resume the fall from 1.1917 to 1.1390 , or further to 38.2% retracement of 1.0176 to 1.1917 at 1.1252.

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 1.1274) holds, the up trend from 0.9534 (2022 low) is still extended 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.

Daily Pivots: (S1) 0.7944; (P) 0.7980; (R1) 0.8003; More…

Intraday bias in USD/CHF stays mildly on the downside for the moment. Rebound from 0.7828 could have completed with three waves up to 0.8075. Further fall would be seen for retesting 0.7828 low. On the upside, above 0.8010 minor resistance will turn intraday bias neutral again first. Overall, price actions from 0.7828 are seen as a correction to fall from 0.9200 that could still extend for a while.

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) 150.68; (P) 151.28; (R1) 151.66; More...

No change in USD/JPY's outlook as consolidations continue below 153.25. Intraday bias stays neutral. Downside should be contained by 149.95 resistance turned support. Break of 153.26 will target 100% projection of 142.66 to 150.90 from 145.47 at 153.71. Firm break there will pave the way to 161.8% projection at 158.80. However, decisive break of 149.95 will bring deeper pullback to 55 D EMA (now at 148.58) instead.

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) 1.3344; (P) 1.3376; (R1) 1.3435; More...

Intraday bias in GBP/USD remains neutral first. Fall from 1.3725 could still extend lower. 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.

Sterling traded slightly firmer as one of the day’s top performers. The modest 0.1% mom GDP growth in August confirmed that the UK economy continues to grind forward. While small, the uptick carries symbolic weight, reinforcing the notion that Britain’s slowdown is stabilizing heading into the final quarter of the year.

Markets are still divided over whether another rate cut is on the table for BoE's November 6 decision. Inflation data in the coming weeks will be pivotal in shaping expectations. Another key variable is the outcome of the Chancellor’s upcoming budget on November 26, which could alter the BoE’s policy calculus. Given the uncertainty, a “wait-and-see” approach at the November meeting is plausible, allowing policymakers to assess the fiscal backdrop before committing to the next step.

Meanwhile, Swiss Franc weakened after Bern lowered the country's 2026 growth forecast to 0.9%, citing U.S. tariffs as a “heavy burden” on its manufacturing and export sectors. The downgrade comes after Switzerland failed to secure a tariff exemption from Washington, leaving its goods subject to 39% duties—the steepest country-specific rate imposed under the Trump administration.

Trade headwinds have magnified downside risks for Switzerland’s export-reliant economy, where pharmaceuticals, machinery, and precision instruments dominate shipments abroad. sustained tariff exposure could dampen business confidence and delay investment decisions well into next year.

For the week so far, Sterling leads the major currencies, followed by the Aussie, which recovered despite soft labor data that boosted odds of a November RBA cut. Euro ranks third, supported by calmer political conditions in France. At the weaker end, Loonie, Dollar, and Yen lag, while Kiwi and Swiss Franc are trading in the middle of the pack.

In Europe, at the time of writing, FTSE is down -0.22%. DAX is up 0.15%. CAC is up 0.98%. UK 10-year yield is down -0.025 at 4.525. Germany 10-year yield is up 0.003 at 2.578. Earlier in Asia, Nikkei rose 1.27%. Hong Kong HSI fell -0.09%. China Shanghai SSE rose 0.10%. Singapore Strait Times fell -0.28%. Japan 10-year JGB yield rose 0.001 to 1.657.

Fed’s Waller favors cautious 25bp cuts amid weak hiring, uncertain outlook

Fed Governor Christopher Waller told Bloomberg that even without the official employment data, the available evidence points to a clear slowdown in hiring across the U.S. economy. He noted that private and survey-based indicators have been consistent in signaling weaker labor demand, reinforcing the view that the job market is losing momentum.

Waller argued that this backdrop supports the case for the Fed to continue with measured 25bps rate cuts, emphasizing caution amid high uncertainty.

“We don’t know which way this is going to break,” he said. “If the labor market rebounds, there is less pressure to cut rates—you don’t want to make a mistake.”

Fed’s Miran backs 50bp cut, warns trade war add to downside growth risks

Fed Governor Stephen Miran said today that he would support a 50bps rate cut at the upcoming policy meeting, arguing that monetary policy remains too restrictive given the heightened risks surrounding U.S.–China trade tensions.

Speaking to Fox Business, Miran said that the escalation in trade uncertainty adds downside risks to growth and that the Fed must act preemptively to cushion the economy.

“If monetary policy stays as restrictive as it is, and you have a shock like this hit the economy, it does materially increase the negative consequences of that shock,” he warned.

Miran added that the outlook for next year’s growth will depend heavily on whether trade risks are “realized or defused” in the weeks ahead.

Eurozone trade surplus narrows, as exports to the US down -22.2% yoy

The Eurozone recorded a EUR 1.0B surplus in trade in goods with the rest of the world, down from EUR 3.0B a year earlier. Exports fell -4.7% yoy to EUR 205.9B, while imports declined -3.8% yoy to EUR 204.9B.

At the broader EU level, the picture was even weaker. The EU recorded a EUR- 5.8B deficit in August, widening from EUR -2.4B in the same month last year, as exports dropped -6.7% yoy and imports fell -4.9% yoy.

Looking at bilateral flows, EU's exports to the US plunged -22.2% yoy, while imports from the U.S. dipped just -1.9% yoy, reducing the EU’s trade surplus to EUR 6.5B from EUR 15.3B a year earlier.

Trade with China also weakened, with exports down -11.3% yoy and imports falling -7.1% yoy, though the EUR -28.8B deficit narrowed slightly.

In contrast, trade with the UK remained relatively resilient—exports edged only -1.2% yoy lower, while imports dropped -8.5% yoy, leaving the EU’s surplus with the UK relatively steady at EUR 13.4B.

UK GDP expands 0.1% mom in August, growth patchy across sectors

The UK economy expanded modestly by 0.1% mom in August, in line with expectations, suggesting that activity remains subdued but stable. Industrial production rose 0.4% mom, helping to offset flat performance in the dominant services sector and a -0.3% mom contraction in construction.

On a three-month basis, GDP grew 0.3% in the period to August compared with the previous three months. The details were uneven: services output rose 0.4%, maintaining its role as the primary driver of growth, while production slipped -0.3% and construction gained -0.3%.

Australia jobless rate rises to 4.5%, highest since 2021

Australia’s labor market showed further signs of cooling in September as hiring momentum eased and the jobless rate climbed from 4.2% to 4.5%, the highest since November 2021. The unemployment rate figure exceeded expectations for 4.3%, driven by a 5.2% jump in the number of unemployed persons, equivalent to an increase of 33.9k people.

Total employment rose by 14.9k, undershooting forecasts of 20.0k. The breakdown showed full-time positions up 8.7k and part-time jobs rising 6.3k. Despite slower hiring, the participation rate edged up by 0.1% to 67.0%, indicating that more Australians are re-entering the labor force even as job creation moderates.

At the same time, monthly hours worked increased 0.5% mom, showing that those employed are still working longer hours on average, cushioning some of the weakness in headline employment figures.

RBA’s Bullock warns markets too optimistic, says trade war effects to linger for years

RBA Governor Michele Bullock cautioned today that financial markets may be underestimating global economic risks, warning that investors have taken a “Goldilocks view” of the outlook. Speaking at a forum, Bullock said markets appear to be “discounting the bad macroeconomic risks,” even as trade and geopolitical tensions threaten to slow global growth. She emphasized that the effects of the trade war will “play out over the next few years,” as tariffs are maintained or expanded by multiple countries, dampening trade and investment.

Bullock said the unpredictability of government responses to tariffs—rather than the general uncertainty surrounding them—was the biggest risk to investors’ confidence. “You just don’t know what might come out tomorrow morning,” she said, noting that sudden policy shifts could easily destabilize the currently “rosy” market outlook.

Addressing China’s economic struggles directly, Bullock pointed to the country’s ongoing deflationary pressures and excess industrial capacity, saying that “competing provinces” are cutting prices to maintain output, effectively exporting deflation to the rest of the world. She suggested that Beijing could do more to stimulate domestic consumption to rebalance its economy, adding that China’s “massive population” provides untapped potential demand if policies shift toward supporting households.

BoJ’s Tamura urges faster move toward neutral rate, warns against falling behind the curve

BoJ board member Naoki Tamura, one of the central bank’s most hawkish policymakers, who voted for a 25bps hike at the September meeting, reiterated his call for a faster shift toward a neutral policy stance. In a speech today, he said the current stance remains “far away from the neutral interest rate” the impact of prior rate hikes on the domestic economy has been “extremely limited.” He warned that keeping policy too loose for too long could invite future instability.

Tamura explained that his dissent was based on “risks to prices being skewed to the upside”. He now sees it as “more likely that the price stability target will be achieved earlier than expected,” helped by the recent Japan–U.S. tariff policy agreement, which he believes will support growth while keeping price momentum intact.

He acknowledged that U.S. tariff measures could weigh on the American economy, with spillover effects on Japan. But he emphasized “It is important from a risk management perspective for the Bank to move closer to a neutral monetary policy stance”.

Delaying further moves, he warned, could lead to Japan “falling behind the curve,” forcing abrupt rate hikes later that might “inflict significant damage” on the economy.

GBP/USD Mid-Day Outlook

Daily Pivots: (S1) 1.3344; (P) 1.3376; (R1) 1.3435; More...

Intraday bias in GBP/USD remains neutral first. Fall from 1.3725 could still extend lower. 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.

Fed Governor Christopher Waller told Bloomberg that even without the official employment data, the available evidence points to a clear slowdown in hiring across the U.S. economy. He noted that private and survey-based indicators have been consistent in signaling weaker labor demand, reinforcing the view that the job market is losing momentum.

Waller argued that this backdrop supports the case for the Fed to continue with measured 25bps rate cuts, emphasizing caution amid high uncertainty.

“We don’t know which way this is going to break,” he said. “If the labor market rebounds, there is less pressure to cut rates—you don’t want to make a mistake.”