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Canadian Dollar is holding its ground as one of the month’s best-performing currencies so far, supported by surprisingly strong domestic data despite a slump in oil prices. WTI crude’s drop through 60 last week would normally pressure the Loonie, but September’s upbeat employment figures more than offset that drag.

The standout feature of the report was rebound in manufacturing jobs — the sector’s first monthly gain since January — signaling renewed momentum in an area hard-hit by global trade tensions. The improvement was particularly welcome after a weak summer stretch that had driven the BoC’s 25bps rate cut in September.

Markets are now looking to the October 21 CPI report for confirmation. Inflation would probably need to print well below expectations to confirm the case for another cut on October 29. For now, the data flow leans toward a pause.

Technically, EUR/CAD shows early signs of exhaustion after meeting upside target of 61.8% projection 1.4682 to 1.5959 from 1.5598 at 1.6387. Visible bearish divergence on D MACD reinforces the case that upward momentum is fading.

Sustained break below the 55 D EMA (now at 1.6160) should indicate medium term topping at 1.6402. Deeper decline could then be seen to correct whole five-wave rally from 1.4483 (Nov 2024 low), and target 38.2% retracement of 1.4483 to 1.6402 at 1.5669. Nevertheless, strong bounce from 55 D EMA will retain near term bullishness and set up another rally through 1.6402 instead.

Also, it should be noted that cross-currency dynamics point to growing downside risk for EUR/CAD. EUR/USD has failed to break through the key 1.2000 cluster resistance and has since retreated from 1.1917. Deeper pullback or even a shift toward bearish reversal could be underway.

At the same time, USD/CAD is testing strong cluster resistance near 1.4000, where a corrective dip appears likely after months of steady advance.

Should both patterns materialize—Euro weakening against Dollar while Loonie strengthens versus the Greenback—EUR/CAD would accelerate its decline, reinforcing the view that a medium-term top is in place. However, sustained strength in USD/CAD or stabilization in EUR/USD would shift the odds away from this bearish case in EUR/CAD.

New Zealand’s services sector remained mired in contraction in September, with BNZ Performance of Services Index edging up modestly from 47.6 to 48.3. While the improvement marks a slight lift in momentum, the index has now stayed below the 50-point expansion threshold for 19 consecutive months.

Activity and sales rose to 47.8, and new orders improved to 49.6, but both remained in negative territory. Employment slipped to 47.8, reflecting ongoing caution among firms facing soft sales and squeezed margins.

BNZ reported that 58% of survey comments were negative, only marginally below August’s 59.6%. Respondents cited weak consumer confidence, rising living costs, and reduced discretionary spending as key drags. Many businesses also noted clients delaying projects and contracts amid broader economic uncertainty.

Full NZ BNZ PSI release here.

It was a busy week in global markets. The Japanese yen weakened sharply after Sanae Takaichi won the ruling party leadership vote. In the U.S., the Federal Reserve’s meeting minutes showed that most officials support more interest rate cuts in 2025 because of a weaker job market. Fed Chair Jerome Powell said inflation is still too high to move faster, and the U.S. government shutdown continued with little market impact.

Gold surged above $4,000, hitting new record highs as investors rushed to safe assets. Central bank buying and expectations of easier global monetary policy helped keep the bull run going. The shutdown continues to delay major U.S. economic reports, including employment data, leaving traders with limited fresh information.

Markets were shocked on Friday when Donald Trump reignited the trade war with China. He announced a 100% tariff on all Chinese imports, on top of the existing 30%, starting November 1, 2025—or sooner if China escalates. The move was a response to China’s tighter export restrictions on rare earth materials, key components in electronics and technology manufacturing. All risk assets fell sharply after the announcement as traders rushed to exit positions and reduce exposure.

Markets This Week

U.S. Stocks

The Dow reversed all of its gains from the past two months last Friday after Donald Trump announced new tariffs on China, sparking heavy selling. Markets now hope Trump will strike a quick deal as he has in the past, but with U.S. equities still up strongly this year, more downside remains possible. Predicting Trump’s next move is difficult, but a short-term rebound could occur if the market holds above Friday’s lows. For medium-term traders, buying remains an option since prices are still above July’s record highs, though caution is advised—any new negative headlines could trigger fresh selling. Resistance is now at 46,000, 46,500, 47,000, and 48,000, with support at 45,000, 44,000, and 43,000.

Japanese Stocks

The Nikkei 225 is likely to come under pressure this week following Monday’s public holiday, as markets react to the U.S.–China trade war and growing political uncertainty after the Komeito Party’s exit from the LDP coalition. Given how far the index has risen recently, there is potential for further weakness if investors panic. In the short term, traders can look for intra-day opportunities in either direction, but with a bias toward selling on large moves. For medium-term traders, it’s best to avoid new buying positions for now and wait until there is progress on U.S.–China trade talks or the LDP forms a new coalition partner. Resistance is at 47,000円 and 48,000円, while support lies at 45,000円, 44,000円, and 43,500円.

USD/JPY

The USD/JPY jumped higher last week after Sanae Takaichi won the LDP leadership, as she is seen as dovish and supportive of more stimulus, reducing the chance of rate hikes in Japan. The yen weakened quickly, causing some concern among officials. Later in the week, renewed U.S.–China trade tensions led to a short sell-off, but the pair still finished with strong gains. With uncertainty over whether Takaichi will become prime minister, the market could stay volatile, and some further weakness is possible. Traders may look to buy around 150 with a small stop and sell above 152. Resistance is at 152 and 153, while support is at 150, 149, 148, and 146.

Gold

Gold extended its winning streak, surging above $4,000 as investors continued to buy it as an alternative to holding U.S. dollars. Just when it seemed the market had reached a temporary peak, Trump’s announcement of new tariffs on China pushed prices back above $4,000 again. Looking for higher levels remains the best strategy as long as prices stay above the 10-day moving average. However, there could be short-term selling opportunities if Trump reaches a deal with China and prices drop below the moving average. Resistance is now at $4,100 and $4,200, while support stands at $4,000, $3,900, and $3,800.

Crude Oil

WTI crude fell below $60 support as renewed U.S.–China trade tensions raised concerns about global growth and future oil demand. With the dispute unlikely to be resolved quickly, WTI is expected to stay under pressure, with the next target near $55. For now, selling into strength below the downward-sloping moving average looks like the best strategy. Key resistance is at $60, $66.5, $70, and $75, while support lies at $55 and $50.

Bitcoin

After reaching record highs early in the week on expectations of lower U.S. interest rates, Bitcoin reversed sharply lower as U.S.–China trade tensions flared up again. The sell-off was quick and heavy, bringing prices back to the lows from August 2025. In the short term, Bitcoin may see a rebound as long as the market holds above key support at $107,000. Resistance is at $117,000, $120,000, and $125,000, while support stands at $107,000, $105,000, and $100,000.

This Weeks Focus Image

This Week’s Focus

• Monday: China Trade Balance, U.S. Construction Spending
• Tuesday: Australia RBA Meeting Minutes, U.K. Unemployment Rate, E.U. ZEW Economic Sentiment, U.S. Fed Chair Powell Speaks
• Wednesday: China CPI and PPI, Japan Industrial Production, E.U. Industrial Production, U.S. CPI, NY Empire State Manufacturing Index and Beige Book
• Thursday: Australia Unemployment Rate, U.K. GDP, Industrial Production and Trade Balance, E.U. Trade Balance, U.S. PPI, Retail Sales and Business Inventories
• Friday: E.U. CPI, U.S. Building Permits, Housing Starts and Industrial Production

This week could be very volatile as markets watch how China reacts and whether Donald Trump can reach a deal or if this is the start of the trade war investors have feared all year. Japanese politics will also draw attention as the ruling party looks for partners to stay in power. In the U.S., important data such as inflation and retail sales will be released, giving clues about the next Fed rate cut and likely causing big moves in currencies, stocks, and commodities.

AUDUSD: ⬇️ Sell

• AUDUSD broke support level 0.6525
• Likely to fall to support level 0.6410

AUDUSD currency pair recently broke the support zone between the support level 0.6525 (low of wave (1) from September), 61.8% Fibonacci correction of the upward impulse (C) from August and the support trendline from April.

The breakout of this support zone accelerated the active intermediate impulse wave (3).

Given the strongly bullish US dollar sentiment seen today, AUDUSD currency pair can be expected to fall to the next support level 0.6410 (former low of wave (B) from August).

NZDUSD: ⬇️ Sell

• NZDUSD broke support zone
• Likely to fall to support level 0.5660

NZDUSD currency pair recently broke the support zone between the support level 0.5750 (which reversed the price in September) and the support trendline of the daily down channel from June.

The breakout of this support zone should accelerate the active impulse waves 3 and (C).

NZDUSD currency pair can be expected to fall to the next support level 0.5660 (target price for the completion of the active impulse wave (C)).

Dow Jones index: ⬇️ Sell

• Dow Jones index broke daily up channel from
• Likely to fall to support level 45470.00

Dow Jones index recently broke the daily up channel from end of July – which was preceded by the downward reversal from the key resistance level 46775.00 (former monthly high from last month).

The breakout of this up channel from accelerated the active short-term downward correction ii from the start of October from resistance level 46775.00.

Given the strength of the resistance level 46775.00 and the bearish divergence on the daily Stochastic indicator, Dow Jones index can be expected to fall to the next support level 45470.00 (target price for the completion of the active correction (ii)).

It was a week dominated by politics — both domestic and international — as shifting power dynamics and fresh policy risks rippled through global markets. In Japan, optimism surged after Sanae Takaichi’s victory in the ruling LDP leadership race, clearing the way for her to become the country’s first female prime minister. Investors welcomed her Abenomics-style agenda of fiscal stimulus and pro-growth policies, propelling the Nikkei to record highs. At same time, Yen plunged sharply, prompting verbal intervention from officials worried about “one-sided” market moves.

Takaichi’s early momentum was tested as the LDP’s long-time coalition partner, Komeito, abruptly withdrew support after failed negotiations, citing unresolved issues over a political funding scandal. Still, Komeito's move should be seen as a tactical standoff rather than a lasting rupture. Given the backing for Takaichi from senior LDP figures such as former Prime Minister Taro Aso, the expectation remains that she will secure parliamentary approval later this month.

Across Europe, France’s political crisis deepened. President Emmanuel Macron reappointed Sébastien Lecornu as prime minister—just days after his resignation—hoping the loyalist can rally enough support to pass a 2026 budget through a fractured legislature. Markets remain skeptical, however: another failure could trigger snap elections, heightening fiscal uncertainty and weighing on the Euro.

Meanwhile in the Middle East, the long-awaited ceasefire in Gaza was finally implemented after Israel approved the first phase of a peace deal involving the withdrawal of troops and a hostage-prisoner exchange. The agreement sent WTI crude below 60, its lowest since May, as geopolitical risk premiums unwound.

Yet all of these developments were ultimately overshadowed by a late-week shock from Washington. US President Donald Trump reignited the U.S.–China trade war, announcing plans for 100% tariffs on all Chinese imports starting Nov 1 and threatening to impose sweeping export controls. The escalation triggered a sharp sell-off in U.S. equities and a flight into Treasuries, erasing weeks of calm.

By week’s end, Dollar reigned as the strongest major currency, followed by the Loonie—lifted by robust Canadian jobs data, and Swiss Franc. At the bottom, Yen’s collapse left it the weakest performer, though the worst may be over after recent intervention talk, and risk-off bounce. Aussie and Kiwi lagged amid risk aversion, while Euro and Sterling held mid-table.

Trump’s 100% Tariff Threat Reignites Full-Scale US–China Trade War Fears

The week’s closing hours were dominated by sharp escalation in U.S.–China tensions. In a surprise announcement late Friday, Trump said the U.S. will impose 100% tariffs on all Chinese imports starting November 1, “over and above any tariff that they are currently paying.” Trump further declared that export controls will be applied on “any and all critical software” from the same date, signaling a widening scope of decoupling beyond physical goods.

The move marks a return to hardline trade policy, undoing months of tentative diplomatic progress and rattling financial markets already uneasy over the ongoing U.S. government shutdown.

The escalation came after Beijing introduced new controls on rare earth exports earlier in the week, requiring foreign entities to obtain licenses to export goods containing even trace amounts of strategic minerals. Trump accused China of holding the world “captive” through its dominance in these materials and said the U.S. would no longer tolerate this economic blackmail.

The shift was abrupt. Earlier in the week, Trump had been expected to meet Chinese President Xi Jinping at the upcoming APEC summit in South Korea, but he later suggested the meeting would be canceled. The announcement effectively swept away expectations for a trade deal, sparking heavy risk aversion across global markets.

Wall Street responded violently. The DOW dropped nearly 2%, the S&P 500 lost 2.7%, and the NASDAQ plunged 3.6%—its steepest decline since early summer. Treasury yields tumbled as investors rushed into safe-haven assets, with the 10-year yield breaking below 4.1%.

The renewed confrontation came against a backdrop of growing domestic dysfunction. The U.S. government shutdown, now stretching into its 10th day, showed no signs of resolution after repeated failed Senate votes. Reports that federal worker layoffs had begun added to investor unease about near-term economic disruption.

By the week’s end, markets were again on full alert: the risk of a full-blown trade and fiscal crisis is now back on the table, and its impact will likely dictate global market direction in the days ahead

NASDAQ Hit Hard by Tariff Shock, 55-Day EMA Crucial to Keeping Uptrend Intact

NASDAQ’s record-setting rally came to an abrupt pause on Friday as the index tumbled -3.56% from its all-time high of 23,119.90, hit earlier in the session. While the magnitude of the drop was striking, the broader structure remains bullish—no decisive break of key trend levels has occurred yet.

For now, 55 D EMA at 21,875.90 serves as the immediate line of defense. Strong bounce from that region would preserve the index’s near term bullishness, suggesting that Friday’s selloff was a temporary reaction to geopolitical shocks rather than the start of a prolonged downturn.

However, considering bearish divergence condition in D MACD, sustained break of 55 D EMA will indicate that a medium term top has already formed. Fall from 23,119.90 would then be seen as correcting whole rise from 14,784.03. Deeper decline would be seen back to 20k psychological level, which is close to both 20,204.58 resistance turned support and 38.2% retracement of 14,784.03 to 23,119.90 at 19,935.60.

U.S. 10-Year Yield Slides as Safe-Haven Demand Surges

The recovery in U.S. 10-year yields proved short-lived, with the benchmark ending the week sharply lower at 4.051, as investors rushed back into bonds amid renewed trade tensions and equity market turbulence. The move erased nearly all of last week’s recovery and reaffirmed that the downtrend remains firmly intact.

Technically, the yield continues to trade well below falling 55 D EMA (now at 4.186%) and comfortably within the descending channel that has guided the decline since May. Further fall should be seen to retest 3.992 low first, and break there will target 61.8% projection of 4.493 to 3.992 from 4.200 at 3.891 next.

Dollar Index Extends Rebound as EUR/USD Struggles Below 1.20 Barrier

Dollar Index extended the rebound from 96.21 last week, climbing to 98.97. Technically, current rise is still viewed as correcting the five wave decline from 110.17 (2025 high). As long as support holds at 97.47, further upside is expected toward 100.25 resistance and possibly above.

Though, significant hurdles remain higher up at 38.2% retracement of 110.17 to 96.21 at 101.54. Strong resistance could emerge there to limit upside to complete the corrective bounce.

However, it should be emphasized that Dollar Index continues to draw background support from its long-term rising trend channel that defines the multi-decade rise from 2008 low at 70.69. Hence, it cannot be ruled out that Dollar Index is at the onset of medium-term bullish reversal.

The strength of the current rally in Dollar Index would ultimately depending on whether EUR/USD's current rejection by 1.2000 psychological level will turn into a medium term bearish trend reversal, or just a corrective pullback.

Bitcoin Hit Hard, 100K Level Becomes Crucial Battle Line

The late development also sparked violent moves in the cryptocurrencies markets. Bitcoin was no exception. Bitcoin extended the plunge from its recent record high of 126,289 to as low as 101,896, before stabilizing into the weekend.

So far, the selloff is seen as a correction within to the broader five-wave uptrend that started from 74,373 (March low). There should be some support around 100k psychological level to contain downside to set the range for consolidations.

However, it should be emphasized that sustained break of 55 W EMA (now at 96831) will argue that Bitcoin is indeed correcting the whole up trend from 15452 (2022 low). In this bearish case, Bitcoin could dive further to 74373 support before finding a bottom.

Gold Pauses at 4000 in Calm Despite Heightened Market Turmoil

Gold’s record-breaking surge above 4,000 has given way to a quieter tone, with the precious metal showing little reaction to Friday’s sharp risk-off wave. The lack of follow-through suggests that bids may have run its course, at least temporarily, as traders lock in profits.

Technically, Gold has met a major target zone, reaching 261.8% projection of 1160.17 to 2074.84 from 1614.60 at 4009.20. The rally’s parabolic nature leaves it vulnerable to profit-taking, and the immediate focus now turns to 3819.03, where a break would confirm that a short-term top is in place. Deeper pullback could then follow toward 55 D EMA (now at 3625.49).

Another brief extension higher cannot be totally ruled out. But stiff resistance is expected below 100% projection of 2584.24 to 3499.79 from 3267.90 at 4183.45 to limit upside and bring the overdue correction.

Focus will remain emergence of topping signals ahead.

EUR/USD Weekly Outlook

EUR/USD's fall from 1.1917 resumed last week, but recovered after hitting 1.1540. Initial bias is turned neutral this week for consolidations. Deeper decline is expected as long as 1.1778 resistance holds. Below 1.1540 will target 1.1390 support 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 1.1247) 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.

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.

EUR/USD's fall from 1.1917 resumed last week, but recovered after hitting 1.1540. Initial bias is turned neutral this week for consolidations. Deeper decline is expected as long as 1.1778 resistance holds. Below 1.1540 will target 1.1390 support 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 1.1247) 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.

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 surged sharply to as high as 153.26 last week but retreated from there. Initial bias stays neutral for consolidations, and 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 148.22) 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.

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.