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EUR/JPY printed a hammer candlestick yesterday just above a key support level hinting at a potential bullish continuation. The bullish daily candle close also came after three successive days in the red but today has seen price action fail to build on yesterday's momentum.

EUR/JPY has pushed lower testing the lows printed yesterday. What does the pair have in store for market participants in the coming days? Let us take a look.

Japanese Yen: Geopolitical Safety Bid vs. Domestic Instability

The Japanese Yen (JPY) is currently getting stronger, but this strength is based on fear and is likely to be temporary.

The yen's recent gains is likely because market participants are scared by the rising trade tensions between the US and China, which now includes new shipping fees and tariff threats. This global "risk-off" mood, which is also pushing gold prices to records, makes investors put money into the yen because it's traditionally considered a safe-haven.

However, this rise is unstable due to problems in Japan. The currency's gains are limited by political uncertainty following the collapse of the ruling party's coalition. More importantly, the likely new Prime Minister, Sanae Takaichi, has in the past indicated she may interfere with the Bank of Japan's (BOJ) decision to potentially hike interest rates.

Market participants think this political interference will prevent the BOJ from raising rates which is what the yen needs to get stronger. We have already seen rate hike expectations take a significant hit following the election, based on the latest LSEG data.

These developments are weighing on the Yen and may do so over the medium-term, hinting at potential gains for the Euro.

Political Instability Affecting the Euro

The euro’s path right now seems stuck because the Eurozone looks shaky.

France, for example, saw its prime minister step down, and the country is wrestling with the biggest budget deficit any Euro‑area nation has had in years. That kind of political mess may mean higher risk for investors.

Because of that the spread between French OATs and German Bunds has started to widen. In other words, lenders ask for a bigger premium to hold French debt. The market reads this as a sign that the whole bloc could be under pressure. So the euro’s ability to ride out outside shocks looks weaker, which may push the EUR/JPY pair lower.

Looking Ahead - Beyond the Data

Over the next ten days or so we have a host of data releases which could stoke volatility in EURJPY. However, many of these data releases will likely lead to short-term moves.

The political developments in France and Japan may have a bigger impact on the overall direction of the pair, especially regarding BoJ policy. Keep an eye out for any major announcement in that regard in the coming days.

For all market-moving economic releases and events, see the MarketPulse Economic Calendar. (click to enlarge)

Technical Analysis - EUR/JPY

From a technical point of view, EUR/JPY is resting above a key support level which was the recent swing high around the 175.00 handle.

If this level holds there is every chance that EUR/JPY may revisit the YTD high from October 9, resting at 177.92.

A break of that handle could open up a run toward the psychological 180.00 handle and beyond.

A break of support at the 175.00 handle may open up a deeper retracement with a key level resting at 173.89 before the long-term ascending trendline and the 100-day MA which rests at 171.32 comes into focus.

EUR/JPY Daily Chart, October 15, 2025

Source: TradingView.com

GBPCHF: ⬆️ Buy

• GBPCHF reversed from support zone
• Likely to rise to resistance level 1.0750

GBPCHF currency pair recently reversed from the support zone between the strong long-term support level 1.0665 (which has been reversing the price from April) and the lower daily Bollinger Band.

The upward reversal from this support zone stopped the previous short-term ABC correction 2 from the end of September.

Given the bullish divergence on the daily Stochastic indicator, GBPCHF currency pair can be expected to rise to the next resistance level 1.0750.

Dow Jones: ⬆️ Buy

• Dow Jones reversed from support zone
• Likely to rise to resistance level 47000.00

Dow Jones index recently reversed up from the support zone between the key support level 45470.00 (former resistance from August), lower daily Bollinger Band and the 38.2% Fibonacci correction of the upward impulse from August.

The upward reversal from this support zone created the daily reversal pattern Hammer, which stopped earlier correction ii.

Given the strong daily uptrend, Dow Jones index can be expected to rise further to the next resistance level 47000.00 (which stopped earlier impulse wave i).

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USDJPY fell further on Wednesday as dovish remarks from Fed Powell added to expectations for Fed rate cuts in October and December and kept the dollar at the back foot.

Fresh bears hit one week low but faced strong headwinds at initial support at 150.90 (rising 10DMA / former top of Aug 1), guarding more significant supports at 150.76/72 (weekly cloud top / Fibo 38.2% of 146.59/153.27) and 150 zone (psychological / nearby daily Tenkan-sen / Fibo 50% retracement.

Wednesday’s action was so far shaped in a Hammer candle which may signal that corrective leg from 153.27 (Oct 10 peak) might be running out of steam.

Overall bullish daily studies (multiple golden crosses / 14-d momentum still holding well above the centreline / RSI at 60) may contribute to such scenario and signal that larger bulls might be returning to play after a rather shallow correction.

Daily close above 150.90/72 would boost the signal, however, more action to the upside will be still required to confirm (lift above Tuesday’s high at 152.61 and broken upper bull-channel boundary at 152.88).

Conversely, sustained break of 150.72 to generate bearish signal, with extension below 150 pivot to open way for deeper correction.

Res: 150.90; 151.86; 152.61; 152.88.
Sup: 150.72; 150.00; 149.61; 149.14.

Fed Governor Stephen Miran said today that two more interest rate cuts this year “sound realistic”, in light of continued disinflation and growing downside risks.

Speaking at a CNBC forum, he said it was now “even more urgent to get to the neutral rate quickly”, arguing that the Fed’s priority should be to adjust policy preemptively as economic risks mount.

Miran added that the balance of risks had worsened compared to just a week ago. Recent developments in U.S.–China relations could play a meaningful role in shaping the economic outlook, warning that policymakers must now “think about the introduction of a new tail risk.”

Traders are obsessed with trends.

Yet history shows that markets only trend about 30% of the time — the remaining 70% is spent consolidating sideways. This is valid for almost every asset class since the dawn of time.

But consolidation don't necessary translates to frustrating, choppy action.

In 2025, the US Dollar has been at the center of global debate.

After months of weakness driven by tariff fears, slower US growth, and fiscal uncertainty, a bottom seems to have formed since July — confirmed by the pre-FOMC retest in mid-September.

But bottom doesn’t always mean reversal.

The much-discussed de-dollarization trend, for now, looks overstated.

Despite with less conviction than before, the world still largely trades in USD.

Instead of a sharp recovery, the greenback appears stuck in a large range as traders await new catalysts — whether from tariff policy, an unexpected change to the Fed's stance, or new global economic trends.

This could have important implications for FX markets in all currencies.

Let's take a close look at the Dollar Index (DXY) to spot what the range looks like and its key levels of interest.

Dollar Index mulit-timeframe analysis and levels

Daily Chart

Dollar Index Daily Chart, October 15, 2025 – Source: TradingView

The Dollar Index recently broke the 99.00 handle, having done so for the first time since end-July.

However, with the ongoing uncertainty in markets, it seems that participants are not rushing to bid the greenback at its highs.

Reacting to a key technical resistance right around 99.50, sellers have appeared to correct the pair slightly which decreases the technical outlook for a sudden breakout.

Looking further out, the range is taking place between 97.00 to 100.00 with some +/- 500 pip precision.

USD/CAD is trading right around 1.40, USD/JPY rejected its higher levels and the Swissie is proving resilient around 0.80.

4H Chart and levels

Dollar Index 4H Chart, October 15, 2025 – Source: TradingView

The DXY is reacting particularly well to overbought and oversold levels in the RSI as of late, and the pattern seems to repeat through different timeframes, a sign confirming the rangebound action further.

The 4H MA 50 (98.81) is still acting as support around the current 98.50 zone pivot restraining the selloff – Any breach below would confirm a re-entry in the range.

Levels of interest for the Dollar Index:

Support Levels:

• 98.50 to 98.80 Pivot Zone (with 4H MA 50)
• 98.00 Mini-Support
• August Range support 97.25 to 97.60
• 2025 Lows Major support 96.50 to 97.00

Resistance Levels:

• Resistance 99.25 to 99.50
• Thursday Oct 9 highs 99.56
• 100.00 Main resistance zone

1H Chart

Dollar Index 1H Chart, October 15, 2025 – Source: TradingView

Looking even closer, small mean-reversion buying is occuring at the 98.60 hourly support but with the RSI approaching neutral, reactions will be essential to monitor.

Spot through the chart the ongoing mini-range between 98.60 and 99.50: Any break and close above/below should see continuation.

If rangebound conditions persist, attempt to spot how this could contain the price action in other FX pairs in the waiting of more fundamental catalysts.

Safe Trades!

Markets

The October Empire Manufacturing Business Survey is one of those sole data points we get from the US with the government shutdown interfering with most of the data releases since the start of the month. The NY manufacturing index from the NY Fed unexpectedly reversed last month steep drop, rising back from -8.7 in September to 10.4 (11.9 in August). Details showed improvements across the board, both for the actual subindex and the one projecting sentiment 6 months ahead and both on the activity (eg new orders, shipments, but also employment) and the price front (paid & received). The outlook for prices paid approached the highest levels since 2022. The notoriously volatile Empire Manufacturing Survey didn’t impact trading though. At the margin, it helped US yields away from key support areas (eg US 2-yr 3.46% and 10-yr 4%). In this respect, it’s striking that yesterday’s Fed Powell speech didn’t have any more impact. He sealed the deal for October (25 bps rate cut) as downside employment risks rise faster than upside inflation risks and simultaneously called an end to the quantitative tightening cycle in coming months. Tonight, the Fed still releases its Beige Book, a summary of regional economic conditions which serves as a preparatory document for the FOMC meeting and is often overlooked. This time around, it could obviously grab some more attention though its hard to impact market pricing. The euro tried to build on yesterday’s intraday comeback but the move didn’t reach far. EMU bond markets fall back on the dovish reflex which dominated the period between US Liberation Day and the EU/US trade deal. They start erring more significantly in the direction of another ECB rate cut over the next 12 months. Daily changes on the German yield curve range between 2.2 bps (2-yr) and 4.4 bps (30-yr). France meanwhile remains stuck between a rock (budgetary crisis) and a hard place (legislative elections) as PM Lecornu tries to win confidence votes tomorrow. Despite support from leadership of French Socialists and Republicans, it remains to be seen whether they can rally all of their MP’s behind the party line. The margin for error is thin. Markets take the optimistic approach today with French assets outperforming. The CAC40 rebounds 2.1% with strong company earnings helping out as well. The EuroStoxx 50 currently recovers 1.15% with key US indices opening with 0.6%-0.9% gains. The 10-yr OAT-swapspread narrowed from 84 bps yesterday morning to currently 77 bps.

News & Views

The Norwegian (minority) government today published a draft budget for next year. The budget from the Labour government needs approval from smaller parties, which currently hold some non-addressed demands. The draft foresees NOK 579bn of the spending to be covered by funds of the Government Pension Fund Global (GPFG). This represents 2.8% of the value of the fund (capped at 3%) and represents about 27% of the budget expenditure. The government believes that 2026 fiscal policy will have an approximately neutral effect on the economy. Amongst others, the draft proposes NOK 4bn in income tax cuts and a NOK 11.5bn allocation to electricity support. The budget is estimated to raise defense spending to 3.4% of GDP. Government projections expect the mainland economy to grow by 2.1% next year from 2% this year. CPI-ATE inflation is expected to ease to 2.5% next year from 2.9% this year. At the its September 17 meeting the Norges bank cut the policy rate to 4% from 4.25%, but indicated that further easing might develop slower as the economy is holding relatively resilient. With respect to fiscal policy, the NB in September also assessed the structural non-oil public deficit at 2.7% this year and 2.8% next year. The krone today rebounds from EUR/NOK 11.79 to 11.715 today, but this is mainly due to a better risk overall sentiment.

In an interview with Bloomberg TV, the chief economist of the Reserve Bank of New Zealand, Paul Conway, indicated that after reducing the official cash interest rate by 50 bps to 2.5% the policy rate now is at the lower end of the neutral range. The RBNZ is still prepared to further cuts if data warrant so. According to Conway, the 0.9% Q/Q contraction in Q2 raised the possibility of a more prolonged period of excess capacity in the NZ economy and might cause less medium term inflation pressures. The RBNZ wanted to reacted to that, even as inflation currently still holds near the top of the RBNZ’s 1-3% target range. It is confident that this relatively high inflation will dissipate. NZD gains about 2.3% YTD against USD, but this places it as the laggard compared to G10 peers.

Daily Pivots: (S1) 151.41; (P) 152.01; (R1) 152.42; More...

Intraday bias in USD/JPY remains as consolidation continues below 153.26. Downside should be contained above 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) 0.7993; (P) 0.8021; (R1) 0.8040; More…

Intraday bias in USD/CHF remains neutral for consolidations below 0.8075. Price actions from 0.7828 are currently seen as correcting whole fall from 0.9200. Above 0.8075 will target 0.8170 resistance next. On the downside, though, break of 0.7944 support will bring retest of 0.7828 low instead.

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).