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Daily Pivots: (S1) 1.1680; (P) 1.1720; (R1) 1.1756; More...

Outlook in EUR/USD is unchanged and intraday bias remains neutral for the moment. Considering bearish divergence condition in D MACD, sustained trading below 55 D EMA (now at 1.1675) will argue that 1.1917 was already a medium term top. Deeper fall should then be seen to 1.1390 support next. Nevertheless, break of 1.1819 will 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).

Daily Pivots: (S1) 1.3391; (P) 1.3451; (R1) 1.3501; More...

Outlook in GBP/USD remains unchanged and intraday bias stays neutral for the moment. On the upside, firm break of 1.3535 resistance will suggest that pullback from 1.3725 has completed, and bring stronger rally to 1.3725/87 key resistance zone. On the downside, though, break of 1.3322 will resume the fall from 1.3725, as the third leg of the corrective pattern from 1.3787, and target 1.3140 support.

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 1.3155) will argue that a medium term top has already formed and bring deeper fall back to 1.2099.

Daily Pivots: (S1) 0.7953; (P) 0.7977; (R1) 0.8002; More…

Intraday bias in USD/CHF remains neutral as sideway trading continues. On the upside, sustained trading above 55 D EMA (now at 0.8011) 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) 146.73; (P) 147.13; (R1) 147.65; More...

Intraday bias in USD/JPY stays neutral at this point. For now, price actions from 150.90 are still seen as a corrective pattern. On the upside, above 148.12 minor resistance will bring stronger rally to 149.95 first. Firm break there should resume larger rally from 139.87 through 150.90. On the downside, though, below 146.58 will bring deeper fall to 145.47 support. Decisive break of 145.47 will indicate near term reversal, and bring deeper fall to 142.66 support next.

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.

Daily Pivots: (S1) 1.3938; (P) 1.3962; (R1) 1.3991; More...

Intraday bias in USD/CAD remains on the upside and further rise could be seen. But strong resistance is expected from 1.4014 cluster to complete the corrective rebound from 1.3538. On the downside, break of 1.3895 support will turn bias back to the downside for 1.3725. However, sustained break of 1.4014 will carry larger bullish implications.

In the bigger picture, price actions from 1.4791 medium term top could either be a correction to rise from 1.2005 (2021 low), or trend reversal. In either case, further decline is expected as long as 1.4014 cluster resistance (38.2% retracement of 1.4791 to 1.3538 at 1.4017) holds. Next target is 61.8% retracement of 1.2005 (2021 low) to 1.4791 (2025 high) at 1.3069. However, sustained break of 1.4014 will argue that fall from 1.4791 has completed, and bring stronger rally to 61.8% retracement at 1.4312.

Canadian Dollar remains the weakest major currency this week, pressured by a combination of falling oil prices and dovish stance of the BoC. Canada’s key export driver slumped to a four-month low with WTI crude threatening to break below 60 handle. That decline comes just as the BoC’s own communications reinforced expectations of more easing ahead.

The oil market itself is under heavy pressure from expectations of a large OPEC+ output hike. Reports suggest the group could raise production by as much as 500,000 barrels per day in November—triple the October increase—in a bid to reclaim lost market share. Such a move would come at a time when analysts already warn the market may be tipping into sizeable surplus through Q4 and into 2026.

For the BoC, September summary of deliberations confirmed concerns that the economy is losing momentum. Policymakers noted further softening in the labor market and more convincing signs that core inflation pressures are easing. In addition, the removal of most retaliatory tariffs has reduced the risk of renewed cost-push inflation. Against that backdrop, the decision to cut rates to 2.50% was straightforward, and officials left the door open to additional easing.

Still, not all forecasts are bearish for the Canadian Dollar. A recent Reuters poll of 38 FX analysts showed a median projection for the Loonie to strengthen around 2.8% to 1.36 per U.S. Dollar by the end of 2025. That view rests on the assumption that the Fed will embark on a more aggressive easing path in 2026, while the BoC, having moved earlier, may conclude the cycle sooner.

Canada’s growth backdrop remains fragile but not disastrous. GDP contracted at an annualized pace of -1.6% in Q2, but subsequent monthly data suggest the economy may have avoided slipping into a technical recession.

So far this week, Loonie is at the bottom of the FX performance table, followed by Dollar and Swiss Franc. Yen continues to lead despite today’s mild retreat, with Kiwi and Aussie also among the outperformers. Euro and Sterling remain stuck in the middle of the pack.

In Europe, at the time of writing, FTSE is up 0.54%. DAX is down -0.17%. CAC is down -0.10%. UK 10-year yield is down -0.026 at 4.688. Germany 10-year yield is down -0.008 at 2.696. Earlier in Asia, Nikkei rose 1.85%. Hong Kong HSI fell -0.54%. China was on holiday. Singapore Strait Times rose 0.38%. Japan 10-year JGB yield fell -0.002 to 1.665.

Eurozone PPI down -0.3% mom, -0.6% yoy, energy drag while regional divergence widens

Eurozone producer prices fell by -0.3% mom and -0.6% yoy in August, weaker than expectations of flat monthly growth and a smaller -0.4% yoy decline. The drop underscores the continued disinflationary forces in the pipeline, particularly as energy prices remain soft.

Breaking down the Eurozone data, prices fell -1.3% mom for energy and -0.1% for both intermediate and durable consumer goods. In contrast, modest increases were seen in capital goods (+0.1%) and non-durable consumer goods (+0.1%).

Across the EU as a whole, PPI slipped -0.4% mom and -0.4% yoy. At the country level, the steepest monthly declines were recorded in Denmark (-1.3%), the Netherlands and Romania (both -1.0%), and Austria (-0.8%). Meanwhile, Estonia (+5.4%), Finland (+1.9%) and Slovakia (+1.3%) bucked the trend with notable gains.

Eurozone PMI signals 0.4% Q3 GDP growth, backs ECB hold

Eurozone services activity strengthened in September, with PMI Services finalized at 51.3, up from 50.5 in August and marking an eight-month high. Composite PMI also edged higher to 51.2, the best in 16 months.

Country breakdowns in Composite highlighted broad-based improvement. Spain led with a 53.8 reading, while Germany and Ireland both came in at 52.0, representing multi-month highs. Italy held at 51.7, while France lagged with a decline to 48.1, its weakest in five months.

Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, noted that business activity “picked up more strongly” in September, and that the rebound was “broad-based geographically.” The uptick in new business suggests expansion could continue into October, though backlogs have yet to recover.

Crucially, price pressures eased but remained slightly above average. De la Rubia said the data support policymakers who resist further cuts, as inflation in services is still sticky. With the composite PMI holding in expansionary territory throughout Q3, HCOB’s nowcast points to quarterly GDP growth of around 0.4%.

UK PMI suggests summer bounce a flash in the pan, supports BoE dovish shift

UK business activity slowed sharply in September, with the final Services PMI dropping to 50.8 from August’s 16-month high of 54.2, marking a five-month low. The Composite PMI mirrored the downturn, slipping to 50.1 from 53.5, also a five-month trough.

Tim Moore, Economics Director at S&P Global Market Intelligence, said service providers saw a “disappointing end” to Q3 as weak consumer confidence, postponed investment decisions, and falling exports weighed on demand. He warned that the summer’s output surge now looks like a “flash in the pan,” with political and economic uncertainty again restraining the sector. Export orders were particularly weak, as European demand remained subdued.

The report also flagged another month of job losses, extending a year-long trend, alongside weaker business confidence and softer cost pressures. These signs of slackening labor conditions and easing inflation are likely to reinforce the “more dovish shift” in the BoE’s policy debate, with calls growing for further rate cuts into 2025.

BoJ's Ueda reiterates further hikes if baseline holds, flags three uncertainties

BoJ Governor Kazuo Ueda said in a speech today that Japan’s real interest rates remain “significantly low,” and if the Bank’s baseline scenario holds, policy rates will continue to rise. He highlighted that rising labor shortages and firmer medium- to long-term inflation expectations should eventually push underlying CPI toward 2% in the second half of the Bank’s forecast horizon.

Ueda acknowledged, however, that uncertainties remain significant. Chief among them are US economic developments, tariff impact on Japan, and food price inflation.

He warned that tariffs could hurt US firms’ profits and in turn slow employment and income growth — risks that may already be showing in weaker US job data. If firms pass on costs instead, higher consumer prices could sap private demand.

At home, the Tankan survey suggested resilience in services, where the tariff impact is limited, but profit projections for export-heavy industries such as autos showed steep declines.

Food prices are another area of concern. While much of the recent rise has been driven by temporary factors, Ueda cautioned that wage and distribution cost pass-through is increasingly evident. That raises the possibility of more persistent inflation in food.

Japan unemployment rate rises to 2.6%, highest in over a year

Japan’s unemployment rate rose more than expected in August, climbing to 2.6% from 2.3% a month earlier. That marked the highest reading since July 2024 and exceeded expectations of 2.4%.

Number of unemployed increased by 150k to 1.79 million, a 13-month high, while employment fell by -210k to 68.10 million. The labor force edged down by -40k to 69.89 million, though the participation rate improved to 64.0% from 63.9%. Still, the data underscored growing strain in the labor market as job creation weakens and unemployment rises.

Complementary data from the labor ministry showed the job-to-applicant ratio slipping to 1.20 from 1.22, its lowest since January 2022. The decline points to waning demand for labor.

USD/CAD Mid-Day Outlook

Daily Pivots: (S1) 1.3938; (P) 1.3962; (R1) 1.3991; More...

Intraday bias in USD/CAD remains on the upside and further rise could be seen. But strong resistance is expected from 1.4014 cluster to complete the corrective rebound from 1.3538. On the downside, break of 1.3895 support will turn bias back to the downside for 1.3725. However, sustained break of 1.4014 will carry larger bullish implications.

In the bigger picture, price actions from 1.4791 medium term top could either be a correction to rise from 1.2005 (2021 low), or trend reversal. In either case, further decline is expected as long as 1.4014 cluster resistance (38.2% retracement of 1.4791 to 1.3538 at 1.4017) holds. Next target is 61.8% retracement of 1.2005 (2021 low) to 1.4791 (2025 high) at 1.3069. However, sustained break of 1.4014 will argue that fall from 1.4791 has completed, and bring stronger rally to 61.8% retracement at 1.4312.

Key takeaways

• SPX 500 maintains bullish momentum, rallying to a fresh all-time high of 6,745 despite the ongoing US government shutdown.
• Fed rate cut expectations remain elevated, with markets pricing a 98% chance for October and 87% for December.
• Technical outlook stays positive, with key support at 6,690 and upside targets at 6,800–6,850 within the medium-term uptrend channel.
• Sector rotation favours risk assets, with Consumer Discretionary outperforming Consumer Staples, reinforcing bullish sentiment.

The price actions of the US SPX 500 CFD Index (a proxy of the S&P 500 E-mini futures) have staged the expected bullish reversal, rallied by 2% and hit the 6,730/6,745 resistance zone. It notched another fresh all-time high of 6,745 on Friday, 3 October 2025, during the start of the European session at the time of writing.

The US government entered its second day of shutdown with US President Trump ratcheting up pressure on the Democrats to end the shutdown by threatening to slash “thousands” of federal jobs.

Increased odds of Fed rate cuts fuelled the bullish optimism for US stocks

Fig. 1: FOMC outcome probabilities as of 3 Oct 2025 (Source: CME FedWatch tool)

The US stock market brushed aside potential economic headwinds, instead focusing on growing expectations of a more dovish Federal Reserve, which propelled the S&P 500 and Nasdaq 100 to fresh record highs on Thursday, 2 October 2025.

Based on the latest data from the CME FedWatch tool, the Fed funds futures market is pricing a 98% probability of a 25-basis-point Fed rate cut at the upcoming 29 October 2025 FOMC meeting. Expectations for a third 25-basis-point cut in 2025 have also strengthened, with odds rising to 87% for the 10 December meeting, which would lower the Fed funds rate to a range of 3.50%–3.75% (see Fig. 1).

All in all, a more dovish Fed is likely to increase liquidity, in turn, fuelling a positive feedback loop into risk assets such as US stocks.

Also, do take note that the Bureau of Labour Statistics’ non-farm payroll data for September is likely not to be released today due to the ongoing US government shutdown. The key focus later in today’s US session will be the private surveyor ISM Services PMI for September, with its employment sub-component.

Let’s now focus on the latest short-term trajectory (1 to 3 days), relevant key elements, and new key levels to watch on the US SPX 500 CFD Index.

Fig. 2: US SPX 500 CFD Index minor trend as of 3 Oct 2025 (Source: TradingView)

Preferred trend bias (1-3 days)

Maintain bullish bias for the US SPX 500 CFD Index with an adjusted key short-term pivotal support at 6,690 as it continues to oscillate within its minor and medium-term uptrend phases.

It's minor bullish impulsive up move sequence remains intact, with next intermediate resistances coming in at 6,800 and 6,850 (Fibonacci extension) (see Fig. 2).

Key elements

• The US SPX 500 CFD Index has continued to evolve within a medium-term ascending channel in place since 23 May 2025. The upper boundary/resistance of the ascending channel is projected at 6,850.
• The hourly RSI momentum indicator of the US SPX 500 CFD Index remains in a bullish momentum condition as it is being supported by an ascending trendline, holding above the 50 level.
• The relative chart of the cyclical-oriented equal-weighted S&P 500 Consumer Discretionary sector ETF versus the defensive-oriented equal-weighted S&P 500 Consumer Staples sector ETF has just rebounded after a retest on its 20-day moving average on Thursday, 2 October 2025. This development signals continued outperformance in Consumer Discretionary over Consumer Staples, reinforcing the case for an ongoing bullish impulsive movement in the US SPX 500 CFD Index.

Alternative trend bias (1 to 3 days)

A break below the tightened 6,690 key short-term support negates the bullish tone for a minor corrective pull-back to expose the next intermediate supports at 6,650 and 6,615 (also the 20-day moving average).

The shutdown came as a bolt from the blue for the US dollar. The greenback was confident that Democrats and Republicans would reach a last-minute agreement. That did not happen. During previous government shutdowns, the dollar index typically fell on expectations of slowing GDP and mass layoffs. In 2025, the situation will worsen because the labour market is already cooling down.

Due to the shutdown, the publication of important data will be postponed. Therefore, the importance of the ADP report increases. Over the last two months, there has been a decline in private sector employment. This increased the chances of a federal funds rate cut in October to 99% and in December to 87%. Treasury bond yields and the US dollar fell.

There is increased demand for safe-haven assets in the markets. Gold continues to break records, Treasury yields are falling, and the yen has moved away from the political crisis in Japan and is growing steadily. In contrast, European currencies are not yet able to take full advantage of the weakness of the US dollar. The euro is hampered by geopolitics and events in France.

The EUR/USD pair held its ground around 1.1726 on Friday. While volatility in the currency market has picked up significantly, the immediate economic impact of the US government shutdown remains limited. Nonetheless, the political deadlock is fuelling broader concerns over policy uncertainty, persistent inflation risks, and a weakening US labour market.

Adding to the tense atmosphere, Finance Minister Scott Bessent warned on Thursday that the funding suspension could negatively impact GDP growth. Simultaneously, President Donald Trump threatened deep cuts to federal agencies in a bid to pressure Democratic opponents.

On the monetary policy front, Dallas Fed President Lorie Logan characterised the September rate cut as a justified step to shield the labour market from a sharper slowdown. However, she noted that the economic deceleration is gradual and does not yet warrant urgent further action.

Despite this cautious tone, market pricing indicates a near-certain probability of a 25 bps rate cut this month, with a second cut fully priced in by December.

Technical Analysis: EUR/USD

H4 Chart:

On the H4 chart, EUR/USD formed a consolidation range around 1.1740, which has since expanded downward to 1.1685. We now anticipate a move higher towards 1.1740, followed by a decline to 1.1707. A decisive upside breakout could propel the pair towards 1.1786, while a break below the current range would open the path for a continued downtrend towards 1.1625 and potentially lower. This bearish-leaning scenario is technically supported by the MACD indicator, with its signal line positioned below zero and pointing firmly downward.

H1 Chart:

The H1 chart shows the pair completed a downward wave to 1.1683 and a subsequent correction to 1.1728. We now expect a further decline to 1.1670. A break below this level would activate the potential for a downward wave targeting 1.1625. A breach of this latter level could then initiate a third wave of selling towards 1.1470. The Stochastic oscillator aligns with this view, as its signal line is above 80 and turning sharply downward towards 20.

Conclusion

EUR/USD is currently stabilising, but remains highly sensitive to the twin forces of US political instability and shifting Fed policy expectations. The overall technical structure retains a bearish bias, suggesting that any near-term stability is fragile and likely to give way to further declines unless fundamental drivers shift significantly.

Eurozone producer prices fell by -0.3% mom and -0.6% yoy in August, weaker than expectations of flat monthly growth and a smaller -0.4% yoy decline. The drop underscores the continued disinflationary forces in the pipeline, particularly as energy prices remain soft.

Breaking down the Eurozone data, prices fell -1.3% mom for energy and -0.1% for both intermediate and durable consumer goods. In contrast, modest increases were seen in capital goods (+0.1%) and non-durable consumer goods (+0.1%).

Across the EU as a whole, PPI slipped -0.4% mom and -0.4% yoy. At the country level, the steepest monthly declines were recorded in Denmark (-1.3%), the Netherlands and Romania (both -1.0%), and Austria (-0.8%). Meanwhile, Estonia (+5.4%), Finland (+1.9%) and Slovakia (+1.3%) bucked the trend with notable gains.

Full Eurozone PPI release here.