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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.

The dollar holds in red for the third consecutive day, weighed by escalation of US-China trade conflict and recent dovish remarks from Fed chair Powell that add to strong expectations for two Fed rate cuts by the end of the year.

Pullback from a multiweek highs (99.22/29) where larger bulls from new 2025 low (95.82) got trapped at Fibo 76.4% of 100.04/95.82 descend, faced headwinds from 98.00 support zone (top of thickening daily Ichimoku cloud/Fibo 38.2% of 95.82/99.29 upleg).

Reaction at these points is likely to define near-term direction, with sustained break lower to sideline bulls and open way for deeper correction and expose targets at 97.56 (50% retracement/daily Kijun-sen) and 97.15 (Fibo 61.8%) in extension.

Conversely, failure at 98.00 would generate initial signal that pullback is running out of steam, though bounce and close above daily Tenkan-sen (98.48) will be a minimum requirement to generate initial reversal signal and point to scenario of healthy correction before broader bulls regain control.

The second scenario is supported by predominantly bullish technical picture on daily chart, however, dollar’s action will also depend on behavior of the largest index components – Euro and Japanese yen.

The single currency holds positive stance and remains mainly intact from deepening political crisis in France, while USDJPY started to gain traction after a two-day drop.

Res: 98.48; 98.82; 99.00; 99.29.
Sup: 98.00; 97.79; 97.56; 97.15.

Market Overview

The crypto market capitalisation lost 2.3% from the previous day’s level to $3.75 trillion. The rebound on Sunday and Monday did not develop, and the 50-day moving average acted as local resistance. The market is again testing the strength of 3-month support near current levels. Such persistence from the bears suggests that the next stage will be a test of the 200-day average, which passes through $3.5 trillion. The market broke above this line in May; touching it at the end of July triggered strong buying.

Bitcoin is trading above $110K, as is the entire market, approaching the support level of the last three months. Several facts reinforce the importance of the current moment: BTC is trading near a crucial milestone, which was also the resistance area in the first half of the year, and the 200-day moving average is approaching this level, currently at $107.4K but heading towards $109K by the end of the month.

News Background

Bitcoin has entered a ‘speculative phase,’ and new major players are taking control of it, according to XWIN Research. This means that long-term investors are taking profits, and less experienced market participants are taking their place.

An opportunity to buy has emerged in the crypto market, said former BitMEX CEO Arthur Hayes, citing Fed Chair Jerome Powell’s comments that the quantitative tightening programme may soon be completed.

K33 also sees current levels attractive for building spot BTC positions, as ‘leverage has been aggressively reduced.’ The options market points to further growth in BTC to the $115K-$130K range, Glassnode notes.

Trading veteran Peter Brandt presented two scenarios. According to the first, Bitcoin could renew its historic high after the current correction ends. Otherwise, a drop to $50K-60K is possible.

According to Bitwise, forty-eight new companies began accumulating Bitcoin reserves in the third quarter. In three months, the number of Bitcoin treasuries grew to 172 with combined reserves of over 1 million BTC (more than $110 billion).

About 40% of the total volume of Ethereum has been removed from active circulation, which is a record high in history, notes analyst Crypto Gucci. BitMine CEO Tom Lee confirmed his forecast for ETH to grow to $10,000 by the end of this year.

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.

Full Eurozone trade balance release here.

This morning, the USD/CHF exchange rate slipped below 0.7944 for the first time since 1 October, as demand for safe-haven assets intensified — a trend also reflected in yesterday’s record gold price above $4,200.

The traditionally stable Swiss franc is strengthening amid rising global uncertainty and risk aversion:

→ In Japan, the upcoming prime ministerial election could significantly impact monetary policy, while France faces ongoing political turmoil.

→ In the United States, the government shutdown continues, and traders are closely watching developments around a potential trade deal with China, possibly to be discussed during an expected meeting between the two countries’ leaders.

Technical Analysis of the USD/CHF Chart

As noted in our 25 September analysis, the Swiss franc has appreciated through 2025 amid elevated geopolitical and macroeconomic risks, forming a downward channel on the USD/CHF chart (shown in red).

We also highlighted:

→ the possibility of a trend reversal around the 0.7900 support area;

→ potential breakout targets (shown in blue).

Since then, the bulls have indeed made progress, driving the price up towards point A and:

→ breaking above the red channel’s upper boundary;

→ overcoming the psychological 0.8000 level.

However, that progress has not been sustained. Among the bearish signals:

→ the median line of the blue channel acted as resistance;

→ the brief move above local highs around 0.8072 resembles a bearish liquidity grab.

From the bullish perspective, USD/CHF has now retreated into a zone that could act as support:

→ the upper boundary of the red channel;

→ the lower boundary of the blue channel.

The arrow highlights signs of a bullish engulfing pattern, suggesting that buyers may be using these support zones to stage a rebound within the blue channel. The 0.8000 psychological mark could serve as the first key test of their resolve.

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Employment: +14.9k (from –11.9k). Unemployment Rate: 4.5% (from 4.3%). Participation Rate: 67.0% (from 66.9%).

• Unemployment rate jumps to a new cycle high of 4.5%, driven by stronger-than-expected labour force participation.
• Employment growth slips to a below-average pace of 1.5%yr amid an underlying slowdown in ‘care economy’ jobs growth.
• Today’s data lends weight to our view that there is still a good chance the RBA will cut rates in November; Q3 CPI data (due October 29) will be the decider.

Employment rose by +14.9k (+0.1%) in September, virtually spot on Westpac’s forecast (+15k) but below the market consensus (+20k). On a three-month average basis, employment growth has now slowed to 1.5%yr, down from 2.2%yr six months ago and now well below the long-run average pace of 1.9%yr. This is currently weaker than population growth, seeing the employment-to-population continue to track a downtrend, currently at 64.0% in September.

Underlying this slowdown in employment growth is a rebalancing across industries, with the contribution from the job-intensive ‘care economy’ falling while the market sector stages a gradual and ‘patchy’ recovery. We will not have the complete detail on how the industry mix fared for the September quarter until the next instalment of the Labour Account (due 5 December), but we suspect a continuation of these broad trends.

What really caught the market’s attention, though, was the jump up in the unemployment rate from an upwardly revised 4.3% in August to 4.5% in September, the highest recorded so far in this cycle (though at 4.46%, it was close to the rounding barrier). It is also worth noting that youth unemployment also rose +0.8ppts to 10.5%, a new cycle high as well. This echoes the large increase back in June, when we flagged that sharp jumps in cyclically sensitive youth unemployment often precede a grind higher in total unemployment. We are now starting to see this unfold, with ‘adult’ unemployment also moving to a cycle high of 3.3%.

Higher participation, combined with softer hiring, opened up a bit more labour market slack in September. The participation rate lifted to 67.0% from 66.9% (revised up from 66.8%), in line with the year-average to date. There are competing forces underlying the trend for participation – easing cost-of-living pressures and cooling labour demand is driving a cyclical unwind, while demographic factors still look to be driving a structural increase in labour supply. The mix may continue to see ‘bumpy’ moves month-to-month – there is a risk that October could see a partial unwind, which may see the unemployment rate round back down, but we are still confident in our base case that unemployment will continue to trend higher for the rest of the year.

Another part of the data we are closely watching is underemployment, which largely captures part-time individuals who desire more hours in this part of the survey (although there are broader ‘analytical’ measures which expand the scope). The underemployment rate ticked up from 5.7% to 5.9% in September, though it has tracked a gradual downtrend over the past year. We suspect that this can largely be explained by the pull-back in part-time employment growth from its peak of around 6%yr to 2%yr currently, meaning there are relatively fewer part-time workers entering the workforce and seeking extra hours of work. The easing in part-time employment growth has slowed somewhat but there are no clear-cut signs that the downtrend is over just yet.

Conclusion

Today’s data is yet another instalment in a series of readings that clearly indicate the labour market is softening again. Employment growth is already tracking a slightly weaker pace than the RBA had pencilled in for Dec-25 (1.5%yr vs 1.6%yr), and the unemployment rate looks likely to overshoot the RBA’s flat-as-a-pancake projection of 4.3% through to Dec-27. This is a clear challenge to the RBA’s most recent assessments, the Monetary Policy Board describing the labour market as “broadly steady” and “a little tight” at its October meeting.

We are unlikely to see the MPB suddenly embrace a more downbeat view on the labour market – especially given the RBA’s ‘sticky’ NAIRU assumption that is higher than that of most market economists. Today’s data could see the language start to pivot, however. The market reaction has lent weight to our view that a 25bp cut in November is a good chance. Swaps markets now pricing in roughly a 75% chance of a cut versus 40% prior to the data. Still, the Q3 CPI (due 29 October) will be the ultimate deciding factor.

Westpac Chart Pack – September Labour Force (PDF 2MB)

The gold market continues to attract strong inflows, underscoring its appeal as a premier defensive asset. Growing anxieties over a potential US government shutdown are fuelling investor nervousness, with Congress once again at a budget impasse. This political deadlock is prompting a flight to safety, benefiting traditional havens like gold and the Swiss franc.

Further pressure on the US dollar stems from the escalation of the trade war, as Donald Trump's rhetoric grows increasingly assertive. Proposals for higher tariffs, a overhaul of import flows, and fresh threats against China are being factored into market expectations for future inflation and Federal Reserve policy.

Amid this backdrop, the yield on 10-year US Treasuries has dipped below 4.2%, while the DXY dollar index struggles for direction. Markets are progressively pricing in a more dovish Fed stance by year-end, creating a solid fundamental base for gold.

Investors are increasingly turning to XAU/USD as a hedge against mounting political and economic uncertainty, viewing the metal as a reliable insurance policy.

Technical Analysis: XAU/USD

H4 Chart:

On the H4 chart, gold found strong support at 4,190 USD and is advancing towards an initial target of 4,266 USD. Upon reaching this level, a corrective pullback towards 4,100 USD is anticipated. Provided the broader bullish structure holds, this could establish a foundation for a subsequent upward wave, with potential targets at 4,300 – 4,400 USD. The MACD indicator corroborates this constructive outlook. Its signal line is firmly above zero and trending higher, confirming the current dominance of buyers.

H1 Chart:

On the H1 chart, the instrument decisively broke above the 4,190 USD resistance, consolidating around this level before extending its gains towards 4,266 USD. A period of profit-taking is expected here, likely triggering a retracement to retest 4,190 USD as support. A successful hold above this level could signal a resumption of the uptrend, targeting 4,300 – 4,400 USD. The Stochastic oscillator aligns with this view, with its signal line positioned above 50 and advancing towards 80, reflecting sustained bullish momentum.

Conclusion

Gold's rally is being driven by a powerful confluence of political uncertainty, trade war escalation, and shifting monetary policy expectations. While a short-term technical correction is likely as profits are taken, the fundamental and technical backdrop remains decidedly bullish.

The short-term Elliott Wave outlook for Dow Futures (YM) indicates that the cycle from the April 2025 low continues as a five-wave impulse. As shown in the 1-hour chart, wave (3) of this impulse peaked at 47,323. The subsequent wave (4) pullback unfolded as a zigzag Elliott Wave structure. From wave (3), wave ((i)) declined to 47,014, followed by a wave ((ii)) rally to 47,162. Wave ((iii)) dropped to 46,693, wave ((iv)) rose to 46,938, and wave ((v)) concluded at 46,507, completing wave A. Wave B bounced to 46,883, and wave C extended lower to 45,391, finalizing wave (4) in the higher degree.

The Index has now turned higher in wave (5), but it must break above wave (3) at 47,323 to rule out a double correction. From wave (4), wave ((i)) reached 46,467, with wave ((ii)) pulling back to 45,663. Wave ((iii)) advanced to 46,743, wave ((iv)) dipped to 46,395, and wave ((v)) completed at 46,915, concluding wave 1. A wave 2 pullback is currently underway, correcting the cycle from the October 11 low before resuming higher. As long as the pivot low at 45,391 holds, expect the pullback to find support in a 3, 7, or 11-swing sequence, setting the stage for further upside.

Dow Futures (YM) – 60 Minute Elliott Wave Technical Chart:

YM – Elliott Wave Technical Video:

https://www.youtube.com/watch?v=83OWpBpM48g

Key takeaways

• Euro weakness stabilizes: EUR/USD’s recent 3.25% drop from its September high has stalled at the key 1.1530 medium-term support level.
• French political uncertainty eases: The reappointment of Prime Minister Lecornu and reduced sovereign risk premiums have helped calm Eurozone markets.
• Technical setup remains bullish: Price action forms an “Ascending Triangle” pattern, signaling a potential continuation of the medium-term uptrend.
• Short-term breakout confirmed: A minor “Double Bottom” bullish breakout above 1.1625 suggests upward momentum toward 1.1690 and 1.1760.

The euro has suddenly lost its sparkle ex-post September’s FOMC, after it hit a four-year high of 1.1919 against the US dollar on 17 September 2025. The EUR/USD dropped by 3.25% (high to low) to print an intraday low of 1.1542 on 9 October 2025.

This article will look at several key technical/momentum factors to argue that the recent weakness of the EUR/USD is likely a bullish consolidation phase within a medium-term uptrend phase that is still intact since 13 January 2025.

Before we jump straight into the technical analysis portion, let’s briefly highlight the main macro drivers that reinforced the recent softness seen in the EUR/USD.

Recent rise in Eurozone sovereign risk premium capped the euro's strength

Fig. 1: 10-year yield spread of France sovereign bond/Germany Bund with EUR/USD as of 16 Oct 2025 (Source: TradingView)

Political uncertainties in France, the second-largest economy in the Eurozone, triggered higher sovereign risk premia in the Eurozone.

The newly appointed French Prime Minister, Sebastien Lecornu, resigned within hours of forming a cabinet, making it the shortest-lived government in modern French history. Also, the French government faces ongoing no-confidence threats and an inability to pass a credible budget.

An increase in sovereign risk premia in the Eurozone can be gauged by using the yield spread of the 10-year French sovereign bond over the 10-year Germany Bund. The yield spread has spiked from 0.80% to 0.86% during the period of 16 September 2025 to 7 October 2025, in turn, triggering a slide in the EUR/USD over the same period (see Fig. 1).

Interestingly, the 10-year yield spread between the French sovereign bond and the Germany Bund has started to compress to 0.77% as of 16 October 2025 at this time of writing, which suggests that sovereign risk premia in the Eurozone have been reduced as compared to two weeks ago, reinforced by the reappointment of the French Prime Minister Sebastien Lecornu proposed suspending a law to raise the retirement age in a bid to bring political stability to the country.

Let’s now focus on the medium-term technical outlook of the EUR/USD

Evolving within an “Ascending Triangle” range configuration since 1 July 2025

Fig. 2: EUR/USD medium-term & major trends as of 16 Oct 2025 (Source: TradingView)

Since hitting its 1 July 2025 high of 1.1830, the price actions of the EUR/USD have traced out “similar swing highs” and “higher swing lows” (depicted by the four grey shaded boxes on the chart).

These observations represent a potential bullish consolidation configuration called “Ascending Triangle” that represents a pause in EUR/USD’s impulsive up move sequences within its ongoing medium-term uptrend phase in place since 13 January 2025 low of 1.0178 (see Fig. 2).

Also, the daily RSI momentum indicator of the EUR/USD has managed to stage a rebound after a retest of its key ascending support on 9 October 2025, which supports the ongoing medium-term uptrend phase of the EUR/USD.

We will now examine its latest short-term (1 to 3 days) trajectory and key technical levels to watch on the EUR/USD.

Preferred trend bias (1-3 days) – Minor “Double Bottom” bullish breakout

Fig. 3: EUR/USD minor trend as of 16 Oct 2025 (Source: TradingView)

Bullish bias with key short-term pivotal support at 1.1590 for the EUR/USD. A clearance above 1.1690 sees the next intermediate resistance coming in at 1.1760 (see Fig. 3).

Key elements

• The price actions of the EUR/USD have staged a bullish breakout on Wednesday, 15 October 2025, from the neckline resistance of a minor “Double Bottom” (depicted in the two green boxes shown in Fig. 3), now turns into an intermediate pull-back support at 1.1625
• The 1.1690 intermediate resistance confluences closely with the intersection point of the 20-day and 50-day moving averages.
• The hourly RSI momentum indicator of the EUR/USD has reached its overbought region, but no bearish divergence condition has been flashed out. These observations suggest a minor pull-back in the EUR/USD rather than a bearish reversal scenario.

Alternative trend bias (1 to 3 days)

A break below the 1.1590 key short-term support invalidates the minor bullish breakout scenario on the EUR/USD for a retest on the 1.1530 key medium-term pivotal support.

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%.

Full UK GDP release here.