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Daily Pivots: (S1) 1.3438; (P) 1.3462; (R1) 1.3502; More...

Intraday bias in GBP/USD stays neutral at this point, and further decline remains in favor. On the downside, break of 1.3322 will resume the fall from 1.3725 to 1.3140 support. On the upside, though, firm break of 1.3535 will argue that pullback from 1.3725 has already completed, and bring stronger rise to retest 1.3725/87 key 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 be seen from 1.4248 (2021 high) to limit upside. Sustained break of 55 W EMA (now at 1.3166) will argue that a medium term top has already formed and bring deeper fall back to 1.2099.

Daily Pivots: (S1) 0.7938; (P) 0.7963; (R1) 0.7978; More…

Range trading continues in USD/CHF and intraday bias remains neutral. On the upside, sustained trading above 55 D EMA (now at 0.8006) will suggest that rise from 0.7828 is already correcting whole fall from 0.9200. Further rise should the be seen to 0.8170 resistance and possibly above. However, break of 0.7908 will turn bias back to the downside for retesting 0.7828 low.

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) 147.11; (P) 147.47; (R1) 147.84; More...

USD/JPY's strong rally and break of 149.95 resistance revived the case that corrective pattern from 150.90 has already completed at 145.47. Intraday bias is back on the upside for 150.90 first. Firm break there will resume larger rally from 139.87 to 151.22 fibonacci level. Sustained break there will carry larger bullish implication. On the downside, below 149.01 will turn intraday bias neutral again first.

In the bigger picture, price actions from 161.94 (2024 high) are seen as a corrective pattern to rise from 102.58 (2021 low). Decisive break of 61.8% retracement of 158.86 to 139.87 at 151.22 will argue that it has already completed with three waves at 139.87. Larger up trend might then be ready to resume through 161.94 high. In case the corrective pattern extends with another fall, strong support is expected from 38.2% retracement of 102.58 to 161.94 at 139.26 to bring rebound.

Japan occupies the spotlight in otherwise subdued Asian trading, with much of the region quiet due to Mid-Autumn Festival holidays. Nikkei 225 jumped sharply to another record high, powered by euphoria surrounding Prime Minister-in-waiting Sanae Takaichi, whose pro-growth agenda and fiscal expansion plans have ignited investor optimism.

That optimism came at the expense of the Japanese Yen, which weakened broadly as traders embraced risk and pared back bets on further BoJ tightening in the near term. Renewed skepticism about the central bank’s willingness to hike again, coupled with surging equity sentiment, drove JPY to the bottom of the major currency rankings.

Elsewhere, Aussie and Kiwi outperformed, buoyed by the upbeat risk tone. New Zealand Dollar also found an additional lift after the NZIER’s RBNZ Shadow Board showed a majority calling for a 25 bps cut—not a larger move—at this week’s policy meeting.

Dollar was slightly firmer alongside the Canadian Dollar, with traders keeping one eye on the ongoing U.S. government shutdown and its potential implications. However, the moves were modest, and overall FX conditions remained rangebound amid light holiday liquidity. Among European majors, Sterling lagged, while Euro and Franc were little changed.

With the exception of pronounced Yen weakness, most pairs drifted in narrow ranges, reflecting a market caught between regional optimism and the lack of fresh catalysts ahead of the week’s key central bank updates including Fed and ECB minutes.

In Asia, at the time of writing, Nikkei is up 4.67%. Hong Kong HSI is down -0.61%. China is still on holiday. Singapore Strait Times is up 0.10%. Japan 10-year JGB yield is up 0.005 at 1.670.

Takaichi victory spurs Yen selloff; EUR/JPY targets 180

Yen tumbled sharply in the Asian session as Nikkei 225 soared over 2,000 points, or 4%, to a new record high, after the Liberal Democratic Party elected Sanae Takaichi as its new leader. Markets quickly priced in expectations that Japan’s first female prime minister will pursue aggressive fiscal stimulus and stronger coordination with the private sector to revive growth.

A Takaichi administration is widely expected to overhaul Japan’s economic framework, emphasizing investment expansion and demand creation through public–private partnerships. Her longstanding support for Abenomics-style fiscal expansion has fueled optimism for renewed spending momentum, particularly in infrastructure and industrial policy.

Traders also anticipate that Takaichi will urge the BoJ to maintain its accommodative stance, dampening expectations for further tightening in the near term. Despite recent data supporting a mildly hawkish case, policymakers may tread carefully amid heightened political and fiscal uncertainty during the leadership transition.

Technically, EUR/JPY broke decisively above 175.41 (2024 high), confirming the resumption of its long-term uptrend. The next target lies at 38.2% projection of 161.06 to 173.87 from 172.24 at 177.13. Firm break there will open the path to 61.8% projection at 180.15.

In the medium term, EUR/JPY's rise from 114.42 (2020 low) should now be heading to 61.8% projection of 124.37 to 175.41 from 154.77 at 186.31.

Bitcoin hits record as ‘Uptober’ hype and debasement trade drive demand

Bitcoin surged to a fresh record high over the weekend and held firm in early Asian trading. The move came as risk-on sentiment in U.S. equities spilled over into digital assets. More importantly, the latest rally also reflects a sense of seasonal optimism.

Traders are apparently leaning into Bitcoin’s well-known tendency to outperform in October — a pattern affectionately dubbed “Uptober” by crypto enthusiasts. The self-reinforcing psychology of this historical trend appears to be drawing momentum traders back into the market.

At the same time, speculation is mounting that the U.S. government shutdown could boost demand for hard assets and decentralized stores of value. Some investors see Bitcoin as part of a broader “debasement trade,” alongside Gold, amid concerns about fiscal instability.

Technically, the short-term focus is on 38.2% projection of 74,373 to 124,553 from 108,627 at 125,995. Decisive break above this level would confirm and solidify buying momentum, paving the way toward 61.8% projection at 137,838. For now, the broader outlook remains firmly bullish as long as the 108,627 support holds.

RBNZ to cut, but how deep? Fed and ECB minutes watched too

A center of focus for the week is on New Zealand, where the RBNZ’s October 8 meeting is expected to deliver another rate cut. The question isn’t whether it will ease, but by how much. After a run of dismal data and a deeper-than-expected -0.9% contraction in Q2 GDP, markets have all but concluded that policymakers must act decisively to cushion the economy.

Money markets are fully pricing a 25 bps cut to 2.75%, yet odds for a larger 50 bps move have climbed to 44.5%, up sharply from 25% a week earlier. Views among analysts remain split. Westpac stands out in projecting a half-point cut to 2.50%, arguing that the RBNZ risks falling behind the curve. Others favor a smaller, “insurance-style” move coupled with strong forward guidance signaling further easing ahead.

For traders, this meeting could be one of the most volatile in months. That policy nuance will determine how New Zealand Dollar trades post-decision. A cautious 25 bps cut with dovish tone could support Kiwi temporarily, while a surprise 50 bps move might spark a knee-jerk sell-off before stabilizing on speculations of a floor in the cycle. Either way, volatility is set to surge.

Attention will also pivot to central-bank minutes elsewhere. The Fed’s September FOMC minutes and the ECB’s meeting accounts will reveal how policymakers are parsing the impact of tariffs, inflation, and fiscal uncertainty. Together, they form the week’s macro backbone.

At the Fed, the September meeting delivered a 25 bps cut to 4.00–4.25%, with a 8–1 vote—new Governor Stephen Miran pushing unsuccessfully for a larger 50 bps move. Even dovish voices like Christopher Waller and Michelle Bowman backed the more measured option, highlighting a consensus for steady but cautious easing.

Markets will watch whether the minutes expose any growing urgency within the FOMC. While officials acknowledge that tariff-related price pressures could last longer, most agree the risks are moderate. The greater debate likely centers on labor-market slack and whether deteriorating employment data justify accelerating cuts.

Complicating matters, the U.S. government shutdown continues into its second week, delaying critical data and keeping investors blind to the economy’s near-term health. In this environment, another “insurance cut” in October looks increasingly probable, as policymakers seek to offset potential fiscal drag and uncertainty. But we'd need to hear more comments from Fed officials this week to verify this view.

Meanwhile, the ECB’s September accounts are expected to confirm that officials are broadly content with the deposit rate at 2.00%, reinforcing the sense of policy stability in Europe. The release could turn out to be a non-event.

Other key releases—Eurozone Sentix confidence, Japan’s household spending and cash earnings, Canada’s employment, and U.S. Michigan sentiment and inflation expectations—will round out the week.

Here are some highlights for the week:

• Monday: Swiss unemployment rate; Eurozone Sentix investor confidence, retail sales; UK PMI construction.
• Tuesday: Australia Westpac consumer sentiment; Japan household spending; Germany factory orders; Swiss foreign currency reserves; Canada trade balance, Ivey PMI; US trade balance.
• Wednesday: Japan labor cash earnings, current account; RBNZ rate decision; Germany industrial production; FOMC minutes.
• Thursday: Germany trade balance; ECB meeting accounts.
• Friday: New Zealand BNZ manufacturing; Japan PPI; Swiss SECO consumer climate; Canada employment; US U of Michigan consumer sentiment.

USD/JPY Daily Outlook

Daily Pivots: (S1) 147.11; (P) 147.47; (R1) 147.84; More...

USD/JPY's strong rally and break of 149.95 resistance revived the case that corrective pattern from 150.90 has already completed at 145.47. Intraday bias is back on the upside for 150.90 first. Firm break there will resume larger rally from 139.87 to 151.22 fibonacci level. Sustained break there will carry larger bullish implication. On the downside, below 149.01 will turn intraday bias neutral again first.

In the bigger picture, price actions from 161.94 (2024 high) are seen as a corrective pattern to rise from 102.58 (2021 low). Decisive break of 61.8% retracement of 158.86 to 139.87 at 151.22 will argue that it has already completed with three waves at 139.87. Larger up trend might then be ready to resume through 161.94 high. In case the corrective pattern extends with another fall, strong support is expected from 38.2% retracement of 102.58 to 161.94 at 139.26 to bring rebound.

Key Highlights

• EUR/USD is attempting to recover from 1.1650.
• A major bearish trend line is forming with resistance near 1.1750 on the 4-hour chart.
• GBP/USD is also correcting losses but faced hurdles near 1.3525.
• Gold extended gains and rallied above $3,880.

EUR/USD Technical Analysis

The Euro declined below 1.1720 against the US Dollar before the bulls appeared. EUR/USD tested 1.1650 and recently started a recovery wave.

Looking at the 4-hour chart, the pair recovered above 1.1700 and 1.1750 before it faced resistance. A high was formed at 1.1778 and the pair is now consolidating below the 100 simple moving average (red, 4-hour).

Besides, there is a major bearish trend line forming with resistance near 1.1750. A clear move above 1.1750 could send the pair toward the 1.1780 resistance.

The main hurdle could be near 1.1820. A close above 1.1820 could open the doors for a fresh increase. If not, EUR/USD could decline again. On the downside, there is key support at 1.1710 and the 200 simple moving average (green, 4-hour).

The next area of interest might be 1.1665. The main support could be 1.1650. Any more losses might increase selling pressure and send the pair toward 1.1580.

Looking at GBP/USD, the pair attempted to recover, but the bears are still active below the 1.3525 resistance level.

Upcoming Key Economic Events:

• ECB's President Lagarde speech.
• BoE's Governor Bailey speech.

Bitcoin surged to a fresh record high over the weekend and held firm in early Asian trading. The move came as risk-on sentiment in U.S. equities spilled over into digital assets. More importantly, the latest rally also reflects a sense of seasonal optimism.

Traders are apparently leaning into Bitcoin’s well-known tendency to outperform in October — a pattern affectionately dubbed “Uptober” by crypto enthusiasts. The self-reinforcing psychology of this historical trend appears to be drawing momentum traders back into the market.

At the same time, speculation is mounting that the U.S. government shutdown could boost demand for hard assets and decentralized stores of value. Some investors see Bitcoin as part of a broader “debasement trade,” alongside Gold, amid concerns about fiscal instability.

Technically, the short-term focus is on 38.2% projection of 74,373 to 124,553 from 108,627 at 125,995. Decisive break above this level would confirm and solidify buying momentum, paving the way toward 61.8% projection at 137,838. For now, the broader outlook remains firmly bullish as long as the 108,627 support holds.

Yen tumbled sharply in the Asian session as Nikkei 225 soared over 2,000 points, or 4%, to a new record high, after the Liberal Democratic Party elected Sanae Takaichi as its new leader. Markets quickly priced in expectations that Japan’s first female prime minister will pursue aggressive fiscal stimulus and stronger coordination with the private sector to revive growth.

A Takaichi administration is widely expected to overhaul Japan’s economic framework, emphasizing investment expansion and demand creation through public–private partnerships. Her longstanding support for Abenomics-style fiscal expansion has fueled optimism for renewed spending momentum, particularly in infrastructure and industrial policy.

Traders also anticipate that Takaichi will urge the BoJ to maintain its accommodative stance, dampening expectations for further tightening in the near term. Despite recent data supporting a mildly hawkish case, policymakers may tread carefully amid heightened political and fiscal uncertainty during the leadership transition.

Technically, EUR/JPY broke decisively above 175.41 (2024 high), confirming the resumption of its long-term uptrend. The next target lies at 38.2% projection of 161.06 to 173.87 from 172.24 at 177.13. Firm break there will open the path to 61.8% projection at 180.15.

In the medium term, EUR/JPY's rise from 114.42 (2020 low) should now be heading to 61.8% projection of 124.37 to 175.41 from 154.77 at 186.31.

A week with political paralysis in Washington ended with record highs on Wall Street — a telling sign of how investors are prioritizing Fed policy over fiscal drama. The U.S. government shutdown, now in effect after Congress failed to pass a funding bill, has frozen major data releases and paralyzed parts of the bureaucracy. Yet for markets, the episode has so far reinforced the belief that the Fed will be compelled to cut rates again this month to cushion a softening economy. Dollar, thus, slipped on the back of falling yields, closing as one of the weakest currencies of the week.

The other laggard was Loonie, dragged lower by tumbling oil prices. WTI crude plunged around 8% as reports surfaced that OPEC+ could drastically raise its planned output increase, potentially flooding the market at a time of weak global demand. That combination — cheaper oil and a dovish BoC — left Canadian Dollar as the week’s worst performer.

In contrast, the Australian Dollar held firm near multi-month highs after the RBA’s hawkish hold. However, by week’s end, the rally began to stall as traders reassessed whether the hawkish tone could still justify more upside.

Meanwhile, Yen led the currency board. The early push came as speculation built over a BoJ rate hike following a hawkish turn from a traditionally dovish board member. But enthusiasm moderated after mixed domestic data and a cautious speech from Governor Kazuo Ueda. Adding a political twist, Sanae Takaichi’s weekend victory in the LDP leadership race made her Japan’s first female prime minister — a milestone that would shape both fiscal and monetary direction.

Taken together, the week captured a global market in transition: U.S. stocks thriving amid fiscal chaos, oil sliding on supply fears, Aussie cooling after a hawkish burst, and Yen strengthening into Japan’s political dawn.

Government Shutdown Boosts Odds of Another Fed Insurance Rate Cut

US equities closed another week on a strong note, showing remarkable resilience even as the US federal government entered its latest shutdown. S&P 500 advanced 1.1% over the week, while DOW and NASDAQ each rose 1.3%, extending the post-summer rally. The optimism reflects investors’ continued faith that lower policy rates and AI-related growth can offset mounting signs of a cooling economy.

Historically, US government shutdowns have had little lasting market impact, and this one has proven no different so far. Political gridlock in Washington has delayed some key data releases, most notably the non-farm payroll report. Yet, traders have quickly filled the gap with alternative indicators that suggest the labor market is turning down faster than expected.

Private-sector payrolls contracted by 32,000 in September, the third decline in four months according to ADP data. Both ISM employment sub-indexes remained mired in contraction territory, with manufacturing employment rising modestly to 45.3 and services improving slightly to 47.2. These readings point to a job market that is clearly deteriorating.

If the shutdown prevents official data from being published before the October 28-29 Fed meeting, these proxy measures may carry unusual weight. Fed will rather err on the side of supporting jobs, and deliver another quarter-point reduction as an “insurance cut".

Futures markets now assign 96.2% probability to a quarter-point rate cut, taking the target range down to 3.75%–4.00% on October 29. Expectations for another reduction in December have risen back to 86.3%. Nevertheless, it's still premature to draw a conclusion beyond October.

Equity markets, meanwhile, continue to look through the economic softness. Investors are betting that a dovish Fed will help extend the bull market.

Technically, near term outlook will stay bullish in S&P 500 as long as 6569.22 support holds. Current up trend should target 78.6% projection of 3491.58 to 6147.43 from 4835.04 at 6922.53. Strong resistance would likely be seen around 7000 psychological level to bring pullback, at least on first attempt.

The greenback has softened in tandem with falling yields, as risk appetite improved and traders repositioned for faster Fed easing. Dollar Index's rebound from 96.21 short term bottom lost momentum and closed back below 55 D EMA (now at 98.01).

Still, further rise would remain mildly in favor as long as 97.22 support holds. Price actions from 96.21 are seen as correcting the whole decline from 110.17. Thus, further rally should be seen to 100.25 resistance. Nevertheless, strong resistance could be seen from the zone between 38.2% retracement of 110.17 to 96.21 at 101.54 and 55 W EMA (now at 100.98) to limit upside. Meanwhile, break of 97.22 will dampen this bullish view, and bring retest of 96.21 low.

Oil Slumps as OPEC+ Eyes Output Hike; Loonie Feels the Heat

Oil prices fell sharply last week, posting their steepest weekly loss in more than three months as supply expectations shifted dramatically. WTI crude tumbled around 8%, breaking key technical levels after reports emerged that OPEC+ members were preparing another round of output increases in November.

According to sources familiar with internal talks, eight OPEC+ producers are likely to back a fresh supply hike at Sunday’s meeting. Saudi Arabia is reportedly leading calls for a sizeable increase to regain market share, while Russia prefers a smaller rise.

The proposed output hike, possibly as large as 500,000 barrels per day, follows a string of production increases this year that have already added more than 2.5 million barrels per day to global supply. Traders fear this could tip the market into surplus in the fourth quarter, particularly as demand indicators in China and Europe remain lackluster.

Geopolitical developments have added further pressure. Hamas has reportedly entered discussions with the Trump administration over a potential peace plan, with Washington giving the group until Sunday night to agree to terms aimed at ending the Gaza conflict. Any progress could remove a geopolitical premium that has lingered over Middle Eastern crude, reinforcing the recent downward momentum.

Technically, the damage is clear. WTI’s decline from June high at 78.87 re-accelerated after breaking 61.90 support. As long as 55 Day EMA (now at 64.33) caps the upside, risk stays skewed to the downside with next target at 100% projection of 71.34 to 61.90 from 66.70 at 57.26. Nevertheless, Strong support should emerge near 55.20 to contain the fall and allow for a rebound.

The slide in crude has amplified pressure on Canadian Dollar, which was already undermined by dovish expectations for the BoC. Loonie ended the week as one of the weakest majors, with CAD/JPY leading the losses with a -1.38% drop.

Technically, CAD/JPY’s fall from 108.94 resumed last week. The cross is now targeting 100% projection of 108.94 to 105.93 from 107.61 at 104.60. Decisive break there could prompt downside acceleration to 161.8% projection at 102.73.

More importantly, any near term downside acceleration will raise the chance that whole medium term corrective pattern from 101.63 has already completed. And the decline from 118.85 (2024 high) is ready to resume. This is worth some attention in the next few weeks.

Aussie Rally Fades as RBA Hawkish Tilt Meets Market Fatigue

Australian Dollar started last week on a strong footing, rallying after the RBA kept its cash rate unchanged at 3.60% and leaned slightly hawkish in tone. However, by the end of the week, the momentum faded as Aussie looks exhausted after recent strong rise.

The key takeaway from the RBA’s October meeting was its warning that third-quarter inflation may surprise to the upside. The Bank’s statement noted that recent data—though volatile—suggested price pressures had not cooled as quickly as anticipated. Governor Michele Bullock refrained from committing to a specific policy path, telling reporters she would not “predict what the interest rate is going to be in the next three to six months.” That cautious phrasing was interpreted as a signal that the central bank is more comfortable holding rates steady for longer.

Major banks quickly updated their forecasts. Commonwealth Bank of Australia scrapped expectations of another rate cut this year. It now sees the next easing move pushed back to February 2026, citing a “shift in tone” from the RBA and stronger inflation dynamics. CBA expects Q3 trimmed mean inflation to rise 0.8% quarter-on-quarter, keeping the annual pace steady at 2.7%.

National Australia Bank also turned less dovish. Chief Economist Sally Auld said she now expects the RBA to stay on hold through May 2026, with only one more 25-basis-point cut thereafter. NAB removed its earlier projections for two rate reductions in November and February, aligning with the view that inflation persistence will delay further easing.

Westpac and ANZ are still penciling in a November cut, but both have softened their conviction. Analysts at Westpac noted that while disinflation remains broadly on track, recent strength in household spending and services inflation could force the RBA to wait for more evidence before pulling the trigger.

Nevertheless, traders appear reluctant to chase the currency higher, suggesting that the hawkish tilt might have already been well priced in. The fading momentum in AUD/NZD captures this fatigue most clearly, with the cross retreating after peaking at 1.1416.

Technically, the immediate focus is now on 1.1310 support. Decisive break there would confirm short-term top at 1.1416 and set the stage for a correction of the entire rally from 1.0744. In that case, the next target would be 38.2% retracement of 1.0744 to 1.1416 at 1.1159.

EUR/JPY Weekly Outlook

EUR/JPY's steep pullback last week confirmed short term topping at 175.03, just ahead of 175.41 high. But the cross then recovered after hitting 55 D EMA (now at 172.25). Initial bias remains neutral this week, with risk staying on the downside as long as 175.03 resistance holds. Considering bearish divergence condition in D MACD, sustained trading below 55 D EMA will indicate that whole five-wave rise from 154.77 has completed. Deeper decline should then be seen to 169.69 support next, and possibly to 38.2% retracement from 154.77 to 175.03 at 167.29.

In the bigger picture, rise from 154.77 is seen as resuming the larger up trend from 114.42 (2020 low). While initial set back could be seen as it tests 175.41 (2024 high), outlook will stay bullish as long as 55 W EMA (now at 166.48) holds. However, sustained break of the 55 W EMA will dampen this bullish case, and bring deeper fall back to 154.77 to extend the pattern from 175.41.

In the long term picture, up trend from 94.11 (2021 low) is still in progress. On resumption, next target is 138.2% projection of 94.11 to 149.76 (2014 high) from 114.42 (2020 low) at 191.32. This will remain the favored case as long as 154.77 support holds.

EUR/USD's stayed in range above 1.1644 last week and outlook is unchanged. Further fall is in favor as long as 1.1819 resistance holds. Break of 1.1644 and sustained trading below 55 D EMA (now at 1.1675) will indicate medium term topping at 1.1917, on bearish divergence condition in D MACD. Further fall should then be seen to 1.1390 support. Nevertheless, break of 1.1819 will retain near term bullishness and bring retest of 1.1917 high instead.

In the bigger picture, rise from 1.0176 (2025 low) is seen as the third leg of the pattern from 0.9534 (2022 low). 100% projection of 0.9534 to 1.1274 from 1.0176 at 1.1916 was already met. For now, further rally will remain in favor as long as 1.1390 support holds, and firm break of 1.2000 psychological level will carry larger bullish implications. However, firm break of 1.1390 will suggest that rise from 1.0176 has already completed and bring deeper fall to 55 W EMA (now at 1.1231).

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.