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The Canadian dollar is calm on Friday. In the European session, USD/CAD is trading at 1.3947, up 0.05% on the day.

Canada's GDP expected to post 0.1% gain

Canada's economy hasn't looked all that sharp, with three straight monthly declines in GDP. The markets are expecting a slight improvement in July, with a consensus of 0.1% y/y.

The economy has been hurt by the trade war with the United States, with trade talks ongoing but no breaktrhough in sight. US tariffs have been particularly detrimental to the manufacturing sector, which slipped 1.5% y/y in June.

The Bank of Canada lowered rates by a quarter-point earlier this month, bringing the benchmark rate to 2.5%, its lowest level since July 2022. The BoC didn't reveal much in terms of forward guidance at the meeting, as policymakers keep their options open.

Weak economic growth and a slowdown in the labor market support further rate cuts, but sticky inflation is a reason for the BOC to stay on the sidelines. There is a strong likelihood of a December rate cut, although October is also a possibility, especially if inflation moves lower.

The US releases the PCE Price Index, which is the Federal Reserve's preferred inflation indicator. The markets are expecting a small increase in inflation in August, to 2.7% y/y from 2.6% y/y in July and 0.3% from 02%.

With inflation largely under control, the Federal Reserve's priority has shifted to the US labor market. The last two nonfarm payrolls reports showed marginal job growth and missed expectations, raising concerns that the labor market is quickly losing steam. If next week's nonfarm payroll report is soft, it could cement an October rate cut.

USDCAD Technical

• 1.3965 is under pressure in resistance. Above, there is resistance at 1.3990.
• 1.3925 and 1.3900 are providing support

USDCAD 1-Day Chart, September 26, 2025

Gold is trading near record highs, while price pullbacks are attracting new buyers. Two key drivers behind the gold rally are a change in the Fed’s outlook and geopolitics. Jerome Powell emphasises that, given the bilateral risks, the central bank cannot take a risk-free path. Choosing between supporting full employment and inflation control, the Fed now turns its attention to the former.

Gold is considered a hedge against inflation. However, the Fed is the main defender against price acceleration and rising rates. In such conditions, gold often falls. However, when the central bank washes its hands of the matter, gold spreads its wings. This was the case in 1979, when it jumped 140% due to lower rates against a background of high inflation. About the same thing is happening now.

Donald Trump has abandoned the idea of quickly ending the armed conflict in Ukraine. This is leading to a bipolar world, intensifying the processes of de-dollarisation and diversification of gold and foreign exchange reserves, which is adding fuel to the fire of the gold rally.

The Euro edged higher on Friday as the second leg of pullback from new 2025 peak (1.1918) found footstep at important Fibo support at 1.1655 (50% retracement of 1.1391/1.1918 rally).

Near-term bears take a breather after strong fall in past two days, with more quiet action seen ahead of release of important US inflation data (PCE), due later today.

Technical picture on daily chart is bearishly aligned (negative momentum / 10/20/55DMA’s in bearish setup) but oversold stochastic partially counters negative factors.

Solid supports lay at 1.1625/10 (thin daily cloud) and double Fibo at 1.1590 zone (61.8% of 1.1391/1.1918, reinforced by 100DMA and 38.2% of larger 1.1065/1.1918 rally), also former higher base late Aug / early Sep) where bears may face increased headwinds.

The pair holds in corrective phase of broader uptrend, which so far remains intact and sees current dips as positioning for fresh push higher.

The notion is supported by positive outlook for the single currency on weaker dollar, driven by growing expectations for more policy easing (markets expect Fed to deliver two more rate cuts by the end of 2025 and to drop the borrowing cost by 1% in total by the end of next year), with signals of potential 500 bln euros stimulus to the German economy, to provide additional support

Res: 1.1717; 1.1738; 1.1765; 1.1820.
Sup: 1.1650; 1.1625; 1.1590; 1.1516.

The USD/JPY pair slowed its ascent on Friday, stabilising near 149.69 – close to its lowest level in nearly two months. The yen remained under pressure from broad US dollar strength, fuelled by robust economic data that tempered expectations for aggressive Federal Reserve easing.

Recent figures reinforced the resilience of the US economy: weekly jobless claims fell to 218,000, while second-quarter GDP growth was revised up to 3.8% year-on-year, marking the fastest pace in nearly two years.

In Japan, data provided mixed signals. Core inflation in Tokyo held steady at 2.5% in September, matching the August reading but falling short of the 2.8% forecast. The minutes from the Bank of Japan's July policy meeting revealed that some members are inclined toward further rate hikes, contingent on aligned economic and inflation trends. While rates were held unchanged in September, two dissenting votes suggest that monetary tightening may be approaching sooner than anticipated.

Technical Analysis: USD/JPY

H4 Chart:

On the H4 chart, USD/JPY completed an initial advance to 149.90. The pair is now forming a consolidation range below this level. A downward breakout would likely initiate a correction towards 148.78, with a potential extension to 147.77 (testing the level from above). Once this correction concludes, a new upward move targeting 151.05 is expected to develop. This outlook is supported by the MACD indicator: its signal line remains well above zero, although a pullback towards the zero line is anticipated.

H1 Chart:

The H1 chart shows the pair forming a consolidation range around 148.78 before breaking upward and achieving its first target at 149.90. A new range is now forming below this peak. An expected downside breakout should trigger a correction towards 148.78. The Stochastic oscillator aligns with this view, as its signal line is below 50 and falling sharply towards 20.

Conclusion

 USD/JPY is taking a breather after its recent rally, caught between a strong US dollar and growing speculation around a more hawkish BoJ. The near-term technical bias suggests a corrective pullback is likely, which could offer a more solid foundation for the next leg upward. Traders will be watching for clearer signals from both central banks to determine the pair's next sustained move. 

Eurozone households lifted their inflation expectations in August, according to the ECB’s latest survey. Median expectations for the next 12 months rose to 2.8% from 2.6% in July, while five-year expectations climbed from 2.1% to 2.2%, the highest since August 2022. Three-year expectations were steady at 2.5%.

At the same time, the growth outlook remained grim, with respondents predicting output to shrink by -1.2% over the next 12 months. Job worries also inched higher, with unemployment expectations up to 10.7% from 10.6%.

The survey highlights a lingering inflation mindset among households, even as economic prospects stay fragile. For the ECB, the persistence of medium-term price expectations near or above target may limit the scope for further easing if growth continues to stagnate.

Full ECB Consumer Expectations Survey results here.

• GBP/USD sinks below SMAs, reaches September’s support at 1.3332.
• Short-term bias is bearish-to-neutral, price likely near oversold territory.

GBP/USD crashed to a seven-week low of 1.3322 on Thursday as a string of data reflected an expanding US economy, reducing the odds of an aggressive Fed rate cut.

The past two weeks have been heavy enough to push the pair into monthly losses, erasing almost 3.0% from the 1.3725 high. Yet, the price has not closed below September’s floor of 1.3332, creating speculation that the plunge could soon take a breather. The stochastic oscillator supports this narrative, fluctuating below its oversold level of 20, while the close beneath the lower Bollinger band suggests a pivot may be nearby.

If the pair fails to cross above the 23.6% Fibonacci retracement of the January–July 2025 uptrend at 1.3390, bears could retain control, driving the price towards the 1.3255 handle. Additional declines from there could expose the 38.2% Fibonacci level at 1.3145 and the 200-day simple moving average (SMA).

A potential recovery above 1.3390 could face an initial test between the 20- and 50-day SMAs, currently sitting within the 1.3470–1.3500 zone. If bulls break through that wall, they may continue towards the 1.3600 barrier. Yet, with the market structure losing momentum since the drop to 1.3139 at the start of August, the case for bullish continuation remains under scrutiny, particularly as long as the price trades below 1.3675-1.3720.

In a nutshell, GBP/USD may be near a pivotal region, though whether the pair can attract enough buyers to recover from its latest bearish wave off 1.3725 remains to be seen.

Key takeaways

• Gold hit a fresh all-time high at US$3,791 on 23 September before consolidating in a short-term uptrend.
• Current price action forms an “Ascending Triangle”, signalling potential for a bullish continuation if resistance at US$3,785 is cleared.
• Key short-term support is at US$3,688; holding above this level keeps the bullish bias intact.
• US 10-year Treasury real yield remains capped below 1.87%, supporting Gold’s appeal as a non-yielding asset.

The precious yellow metal has staged the expected rally and hit the predefined resistance of US$3,776, as highlighted in our report. Gold (XAU/USD) printed an intraday all-time high of US$3,791 on Tuesday, 23 September 2025, and shaped a minor slide of -19% to hit an intraday low of US$3,717 on Wednesday, 24 September, before it traded sideways.

Despite a stronger US dollar seen ex-post FOMC, where the US Dollar Index recorded a week-to-date gain of 0.8% as of the time of writing on Friday, 26 September 2025, Asia session, Gold (XAU/USD) has remained resilient with a week-to-date gain of 1.6%.

Let’s now focus on the latest short-term trajectory (1 to 3 days), relevant key elements, and key levels to watch for Gold (XAU/USD) from a technical analysis perspective ahead of today’s key US PCE data (inflation, personal income, and spending) releases.

Fig. 1: Gold (XAU/USD) minor trend as of 26 Sep 2025 (Source: TradingView)

Fig. 2: 10-year US Treasury real yield with Gold (XAU/USD) major trend as of 26 Sep 2025 (Source: TradingView)

Preferred trend bias (1-3 days)

Since its US$3,791 current intraday all-time high, Gold (XAU/USD) has started to consolidate in a potential minor bullish continuation configuration called “Ascending Triangle” within its short-term uptrend phase in place since 22 August 2025 low.

Maintain bullish bias for Gold (XAU/USD) with a tightened short-term pivotal support at US$3,688, and a clearance above US$3,785 (“Ascending Triangle” range resistance) opens scope for another bullish impulsive up move sequence towards the next intermediate resistances at US$3,820/3,840 and US$3,865 (Fibonacci extension cluster) (see Fig. 1).

Key elements

• The ongoing consolidation for Gold (XAU/USD) is taking place within its minor ascending channel in place since 22 August 2025 low. The upper boundary/resistance of the minor ascending channel stands at around US$3,865/3,890 (see Fig. 1).
• The hourly RSI momentum indicator of Gold (XAU/USD) remains above an ascending support at around the 50 level (see Fig. 1).
• The 10-year US Treasury real yield (excluding 10-year breakeven inflation rate) medium-term downtrend remains intact despite an ongoing bounce seen from a key near-term support at 1.66% from last Wednesday, 17 September 2025, as it remained below its 50-day moving average that is acting as key medium-term resistance at 1.87% (see Fig 2).
• Based on intermarket analysis, a cap on any further rebound in the 10-year US Treasury real yield below 1.87% reduces the opportunity costs of holding Gold (XAU/USD) as it is a non-income-bearing asset, in turn, creating a further positive feedback loop back into the price actions of Gold (XAU/USD) (see Fig. 2).

Alternative trend bias (1 to 3 days)

Failure to hold at the US$3,688 key short-term support on Gold (XAU/USD) invalidates the bullish consolidation scenario for a deeper mean reversion minor corrective decline sequence to expose the next intermediate supports at US$3,660 and US$3,620 (also close to the 20-day moving average).

A week ago, we wrote about significant changes in the dollar index – the DXY chart was signalling bullish trends. This week has confirmed those assumptions, which is also reflected in EUR/USD: this morning, the pair fell below 1.1660, marking a three-week low.

Trader sentiment is being influenced by:

→ News regarding President Trump’s decision to impose tariffs on pharmaceuticals (and other goods) imported into the US.

→ Expectations for the release of the Core PCE (Personal Consumption Expenditures) Price Index, scheduled for 15:30 GMT+3 – the data may provide important guidance on the inflation outlook and potential US interest rate cuts.

EUR/USD Technical Analysis

EUR/USD fluctuations over the past few months have formed an ascending channel (shown in blue), providing an important context for interpreting price dynamics.

From a bullish perspective:

→ The price is near a key support line – the lower boundary of the channel;

→ The recent dip below the 11 September low (1.1660) can be viewed as a bullish Liquidity Grab pattern;

→ The RSI indicator has fallen into oversold territory.

From a bearish perspective, mid-September saw important reversal signals:

→ The median of the ascending channel acted as resistance;

→ The break above July’s high was short-lived (potentially trapping buyers) – a sign of a false breakout;

→ A long upper wick on candle A of the EUR/USD chart indicated seller aggression.

A logical continuation of these signals has been the formation of a series of lower highs and lows A→B→C→D, with:

→ Each recovery reaching roughly 50% of the preceding downward impulse;

→ Note (as shown by the arrow) that the bounce from 1.7250 was extremely weak (resembling a Dead Cat Bounce pattern), confirming rising selling pressure.

Given the above, it is reasonable to suggest that the lower boundary of the multi-month channel may act as strong support for EUR/USD. However, clear seller initiative increases the likelihood of a bearish breakout. Whether this occurs today will depend on the market’s reaction to the PCE index release.

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US dollar

The US dollar has recovered thanks to the Fed chair’s reluctance to signal a rate cut in October, a correction in stock indices, and rising geopolitical risks. Each of the USD’s main competitors has its own Achilles heel. The euro is disappointed by Friedrich Merz’s fiscal stimulus measures. The leadership battle in the Liberal Democratic Party weighs down the yen. The pound is concerned about the Treasury’s ability to plug a £35 billion hole in the budget.

Scott Bessent expressed surprise that Jerome Powell did not signal further rate cuts in October. According to the Treasury Secretary, the federal funds rate should fall by 100-150 basis points before the end of 2025. However, many FOMC members are concerned about the possibility of accelerating inflation. The split within the Fed is playing into the hands of the US currency.

The greenback continues to act as a safe-haven asset, and the United States is a net exporter of energy commodities. Therefore, rising oil prices amid increasing geopolitical risks have provided support for the USD index.

Stock indices

The fall in US stock indices resembles a sell-the-fact after a large-scale buy rumour after the Fed has lowered its rate. After the S&P 500 rose on news of Oracle and NVIDIA’s deals with OpenAI, asset managers bought $58 billion worth of US stocks. This is the largest inflow since the beginning of the year. This seems logical against the backdrop of numerous record highs for the broad stock index.

As soon as the S&P 500 took a step back, the bulls became nervous. Jerome Powell contributed to the pullback. The Fed chairman said that US stocks are overvalued. Until then, the markets had not attached any significance to the Price-to-Earnings Ratio rising to 22.9. The broad stock index has only traded above this level twice this century — during the dot-com crisis and the pandemic.

Bank of America notes that 19 out of 20 fundamental valuation metrics for the S&P 500 indicate that the market is overheated. However, corporations’ current positions look much better than in the past, so the current valuations may be justified. This gives investors the opportunity to use the good old strategy of buying on dips.

Daily Pivots: (S1) 199.51; (P) 199.97; (R1) 200.34; More...

Intraday bias in GBP/JPY remains neutral as sideway trading continues. Further rise is expected as long as 197.93 support holds. Firm break of 201.24 will target 100% projection of 180.00 to 199.79 from 184.35 at 204.14. However, considering bearish divergence condition in both D and 4H MACD, firm break of 197.93 will indicate bearish reversal and bring deeper fall back to 195.01 support first.

In the bigger picture, price actions from 208.09 (2024 high) are seen as a correction to rally from 123.94 (2020 low). The pattern might still extend with another falling leg. But in that case, strong support should be seen from 38.2% retracement of 123.94 to 208.09 at 175.94 to contain downside. Meanwhile, decisive break of 208.09 will confirm long term up trend resumption.