Forex News

• NZD/USD bounces to 0.5740 after finding support around 0.5700.
• Lower Oil prices are supporting the pair, although Fed-RBNZ rate hike divergence is likely to weigh on the pair.
• The current recovery seems corrective, with 0.5800 likely to cap rallies.

The New Zealand Dollar (NZD) shows a modest recovery against the US Dollar (USD) on Thursday, favoured by somewhat brighter market sentiment as Brent Oil prices remain below the $100 level, which provides some relief to Oil-importing economies like New Zealand’s. The NZD/USD pair trades at 0.5740 after bouncing from the 0.5700 area earlier on the day, but remains below a key resistance area just above 0.5800. 

Kiwi’s recovery, however, seems corrective. Federal Reserve's (Fed) hawkish turn last week has boosted hopes of higher interest rates in the US. This is likely to widen the interest rate differential with the Reserve Bank of New Zealand, as investors are dialing back hopes of immediate rate hikes, amid signs of weakening economic growth and a loosening labour market.

Technical Analysis: The immediate rebound seems corrective

From a technical perspective, the NZD/USD is correcting higher from the 78.6% Fibonacci retracement ot the July-August rally, with price action contained within previous ranges and upside attempts so far lacking conviction to turn into a trend shift. Momentum indicators remain negative, with the Relative Strength Index (RSI) near 36 just above oversold conditions, and the Moving Average Convergence Divergence (MACD) below zero hinting at persistent downside pressure.

Upside attempts are likely to find significant resistance at the 0.5810-0.5825 area, the August 13 and September 2 lows, but also the neckline of a bearish Head & Shoulders (H&S) pattern. Further up, the key 200-day Simple Moving Average SMA lies at 0.5853.

On the downside, immediate support emerges at the mentioned 78.6% retracement at 0.5705. Below here, the late June low in the 0.5630 area is coincident with the H&S's measured target.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

• The Indian Rupee surrenders its early gains against the US Dollar amid caution ahead of UN General Assembly event.
• Market experts see limited downside for oil prices amid ongoing tensions between Saudi Arabia and Iran-backed Houthis.
• The US Dollar outperformed on strong hawkish Fed expectations.

The Indian Rupee (INR) opens higher again versus the US Dollar (USD) on Tuesday but later gives back its early gains. The USD/INR pair flattens at around 95.82 ahead of meeting between leaders from the United States (US) and Gulf nations regarding the energy supply through the Middle East.

Later in the day, leaders from Gulf nations and the US are likely to have a meeting on the sidelines of the United Nations (UN) General Assembly in New York. Related parties are expected to discuss possible ways to increase the oil supply through the Middle East. US President Donald Trump is also expected to meet Iranian President Masoud Pezeshkian to talk about ongoing conflicts.

A positive outcome of these meetings would be unfavorable for the oil price, which in turn, would ease fears of high inflation expectations globally.

In past few days, the Indian currency gained ground due to the consistent decline in oil prices. As of writing, the MCX Crude Oil contract expiring on October 19 is up 1.5% to near Rs. 8,970, but is still close to its 12-day low of Rs. 8,753 posted on Monday.

Lower oil prices bode well for currencies from economies, such as India, which rely heavily on oil imports to meet their energy needs.

Oil prices have remained under pressure amid optimism that the supply of energy products from Saudi Arabia would improve, as the nation vowed to explore alternatives to increase oil shipments. However, financial market experts warn that the recent decline in oil prices could be limited due to ongoing tensions between Saudi Arabia and Iran-backed Houthis.

Saudi attacks keep oil downside in check

Analysts at OCBC suggest that crude prices may find "some renewed support after fresh attacks on Saudi Arabia over the weekend," with Houthis claiming missile and drone strikes on Riyadh and an Aramco facility at Yanbu. They note that Saudi authorities reported the attacks on Yanbu and several other locations were "thwarted, with no fresh damage to oil infrastructure" so far. Even so, OCBC argues that "weekend attacks on Saudi Arabia keep supply/geopolitical risks alive, potentially limiting near-term downside in oil prices," and that "further downside in oil may be limited unless Saudi flows normalise and attacks on energy infrastructure subside.

Firm hawkish Fed expectations need to be validated by US data

A string of market experts has explicitly said that the recent strength in the US Dollar is backed by Federal Reserve’s (Fed) interest rate hike expectations. Last week, the Fed hiked interest rates by 25 basis points (bps) to 3.75%-4.00% and signaled at least one more this year.

Experts believe that firm hawkish Fed expectations need validation by upcoming US data.

Analysts at HSBC note that the USD “strengthened following the decision.” They highlight that “the median 2026 ‘dot’ implies one additional hike before year-end,” with “a significant minority of participants still anticipating a further rate rise in 2027.” HSBC argues that “this path is more hawkish than a ‘one-and-done’ outcome but remains below current market pricing,” meaning they “do not expect a major repricing of rate expectations or the USD.” Instead, the bank expects that “the market’s attention is likely to focus on whether incoming data validate the final projected increase this year,” suggesting any further Dollar gains will hinge on how the data track against the Fed’s projected path.

USD/INR Technical Analysis

In the daily chart, USD/INR trades at 95.82, keeping a constructive bullish bias as it holds above the 20-day exponential moving average (EMA) at 95.54. The pair has reclaimed short-term trend support, and the Relative Strength Index (14) near 60 suggests firm but not overextended upside momentum, hinting that buyers remain in control while avoiding overbought conditions.

On the downside, immediate support is seen at the 20-day EMA at 95.53, followed by 95.00. Looking up, the previous week's high near 96.00 is the key hurdle.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann remain negative on GBP/USD after the pair eased to around 1.3370. They expect a test of last week’s low near 1.3335, though a sustained break below that level and the major 1.3300 support is seen as unlikely. On a 1–3 week horizon, downside risk persists but momentum to reach 1.3300 is questioned.

Pound stays vulnerable but oversold

"24-HOUR VIEW: GBP traded between 1.3366 and 1.3399 yesterday, closing slightly lower by 0.18% at 1.3369. There has been a tentative build-up in downward momentum. Today, GBP could test last week’s low, near 1.3335. A continued decline below this level is unlikely. We also do not expect the major support at 1.3300 to come into view. Resistance is at 1.3385; a breach of 1.3400 would suggest that the mild downward pressure has eased."

"1-3 WEEKS VIEW: We turned negative on GBP last Monday. In our latest update from last Friday (18 Sep, spot at 1.3360), we highlighted the following: “While the risk remains on the downside, conditions remain deeply oversold, and it is unclear whether GBP has sufficient momentum to reach 1.3300. On the upside, a breach of the ‘strong resistance’ at 1.3435 would indicate that the weakness in GBP is stabilising.” There is no change in our view."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

• Gold struggles to capitalize on an intraday uptick as the Fed’s hawkish stance caps the upside.
• US bond yields decline further amid easing inflation fears and keep the USD on the defensive.
• Traders await developments surrounding the Middle East crisis before placing directional bets.

Gold (XAU/USD) turns lower for the second consecutive day following a modest intraday uptick, dropping to the $4,315 region, or a three-day low heading into the European session on Tuesday. The US Federal Reserve's (Fed) hawkish outlook is seen as a key factor driving flows away from the non-yielding yellow metal.

In fact, the Fed’s updated Summary of Economic Projections showed that officials expect at least one more rate hike this year. Furthermore, Boston Fed President Susan Collins and St. Louis Fed President Alberto Musalem explicitly backed the case for further policy tightening as inflation risks remain elevated due to a commodity price shock. Meanwhile, the recent pullback in oil prices helped cool immediate inflation fears and drag US bond yields away from multi-year highs. This keeps the US Dollar (USD) capped below its highest level since late July, touched on Friday, and could act as a tailwind for the Gold price.

Meanwhile, Iran's Islamic Revolutionary Guard Corps (IRGC) warned on Monday that it would change the geography of the war if the US escalates the conflict. The US, on the other hand, is stepping up economic pressure on Iran, warning that Iranian airlines could effectively be shut out of international aviation from September 23. Adding to this, intensifying fighting between the Iran-backed Houthi group in Yemen and Saudi Arabia keeps the geopolitical risk premium in play, which triggers a modest bounce in crude oil prices and favors USD bulls. This, in turn, is seen as another factor holding traders from placing bullish bets on gold.

The downside for the commodity, however, remains limited as traders await further developments surrounding the Middle East crisis and their implications for inflation. This would influence interest rate expectations and drive the bullion. Apart from this, the focus will on a crucial meeting between US President Donald Trump and his Chinese counterpart Xi Jinping on Thursday. Furthermore, speeches from influential FOMC members will drive the USD and provide some impetus to gold. Nevertheless, the fundamental backdrop warrants caution before positioning for an extension of the bounce from an over one-month low.

XAU/USD daily chart

Technical Analysis

The XAU/USD pair holds a mildly bearish near-term bias below the 100-day Exponential Moving Average (EMA) at $4,377. The 38.2% Fibonacci retracement level of the June-August upswing, at $4,410, caps the upside, while the 50.0% retracement at $4,321 lends some support to the precious metal. Momentum indicators are mixed, with the Relative Strength Index (14) hovering near a neutral 48.81 and the Moving Average Convergence Divergence (MACD) below zero and showing a contracting negative profile. This, in turn, hints at fading downside pressure but not yet signaling a sustained recovery.

Meanwhile, a break below the 50.0% retracement level would expose the 61.8% Fibo. level at $4,232 and deeper structural levels at $4,105 and $3,943 if selling extends. On the topside, initial resistance emerges at the 100-day EMA at $4,377 ahead of the 38.2% Fibo. retracement at $4,410, with further barriers seen at $4,521 and the cycle high anchor near $4,699. Only a clear daily close above this EMA-Fibonacci cluster would ease the current bearish tone.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

• US Dollar Index strengthens to around 100.45 in Tuesday’s early European session. 
• Fed policymakers signaled another potential rate increase before the end of the year, supporting the DXY. 
• Traders await developments on potential US-Iran talks. 

The US Dollar Index (DXY), an index of the value of the US Dollar (USD) measured against a basket of six world currencies, currently trades near 100.45 in the early European trading hours on Tuesday. The DXY gains momentum as the US Federal Reserve (Fed) delivers a rate hike and signals more rate hikes this year.

Last week, the US central bank unanimously raised its benchmark interest rate by 25 basis points (bps), bringing the target range to 3.75% to 4.00%. This marked the Fed's first rate hike in three years. Fed Chair Kevin Warsh said during the press conference that “the plain fact is that inflation is too high and has been for too long.” “We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed,” he added. 

Traders are now pricing in roughly 56.5% odds for a rate hike of at least 25 bps at the Fed's October meeting, according to the CME FedWatch tool, up from 43.5% a week earlier.

On Monday, St. Louis Fed President Alberto Musalem said that additional rate increases may be necessary to achieve the Fed’s inflation target. Chicago Fed President Austan Goolsbee stated that the central bank cannot overlook repeated and persistent supply shocks.

Traders will closely monitor the developments on potential US-Iran talks at the United Nations General Assembly on Tuesday. President Masoud Pezeshkian will lead an Iranian delegation at the UN session in New York amid renewed hopes for a diplomatic solution to the Middle East conflict. 

US President Donald Trump signalled that he is “probably open to meeting Pezeshkian during the assembly. Any signs of progress between the US and Iran talks could improve risk sentiment and weigh on the DXY. 

Fed and ECB speakers in focus as markets track policy tone

Deutsche Bank flags a busy day for monetary policy commentary, noting that, beyond scheduled data releases, attention will turn to a slate of central bank speakers. The bank highlights that “we’ll hear from Fed’s Vice Chair Jefferson, the Fed’s Williams and Barkin, ECB President Lagarde, and the ECB’s Kaasik, Nagel, Kocher, Seijpen and Simkus,” suggesting that markets will be closely watching any guidance on the policy outlook from both sides of the Atlantic.

Musalem leans more hawkish as inflation risks call for earlier, incremental hikes

Musalem’s speech scores 8/10 on the FXS Speechtracker, modestly above the 7.4/10 historical average and signaling a firmer hawkish tilt relative to the established baseline. The warning that without further policy restraint inflation is likely to remain substantially above the 2% target over the next 18 months, even with core pressures still “too high” around 3% and businesses planning price increases closer to 3%, underscores a clear preference for additional rate hikes that are “earlier and incremental” to counter both demand- and supply-driven inflation, including broader commodity shocks beyond oil. The characterization of a labor market around full employment but not the main source of inflation pressure suggests policy is aimed squarely at persistent price dynamics rather than overheating employment.

The FXS Fed Sentiment Index rose by 0.42 points to 149.96, reinforcing that the broader Fed tone remains deeply in hawkish territory well above the neutral 100 threshold. This incremental uptick, aligned with the stronger-than-average FXS Speechtracker score, confirms that Musalem’s remarks contribute to a sustained bias toward tighter policy, a backdrop typically supportive of the Dollar against lower-yielding peers.

Technical Analysis: US Dollar Index keeps a bullish vibe above the 100-day SMA

In the daily chart, the near-term bias of Dollar Index Spot is bullish as price holds above the 100-day simple moving average (SMA) and the Bollinger middle band, keeping the recent recovery well supported. The upper Bollinger band acts as immediate overhead resistance, while a Relative Strength Index (14) reading near 65 suggests firm positive momentum without yet reaching overbought conditions.

On the downside, initial support is located at the 100-day SMA at 99.90, followed by the Bollinger middle band at 99.50, with deeper support at the lower Bollinger band around 98.45. On the topside, a clear break above the upper Bollinger band near 100.60 would open the door for further gains, reinforcing the bullish bias as long as price continues to trade above the clustered moving-average support.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Deutsche Bank strategists note that Brent briefly fell below $100/bbl as hopes for a diplomatic solution in the Middle East weighed on oil prices. They link the pullback to positive headlines around potential US-Iran talks, while renewed sanctions risks on Iran helped limit the decline and supported a rebound toward $101/bbl.

Crude retreats on diplomacy hopes

"Markets have put in a strong performance over the last 24 hours, with Brent crude oil (-3.40%) briefly falling beneath $100/bbl again as hopes grew for a diplomatic solution in the Middle East."

"Brent is a little above $101/bbl this morning but net net the week has started more optimistically."

"Although oil is back up a little overnight, Brent fell back beneath $100/bbl yesterday for the first time in nine trading sessions before closing at $100.34/bbl."

"In part, that followed more positive headlines over the weekend, including comments from President Trump to Fox News that he would be open to meeting Iran’s President at the UN this week. So that raised hopes about some kind of deal between the two sides, and it helped drive a big reduction in energy prices across the board."

"Even though there are hopes of diplomatic progress, the rise back in oil overnight seems to be in part due to Bessent suggesting that all Iranian airlines will be shut down from tomorrow with anyone providing fuel, landing services etc., shut out of the dollar system."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

• USD/JPY consolidates gains near 157.50, with bulls looking at key resistance above 158.00.
• The Fed's hawkish hike and a somewhat more dovish BoJ have reversed the Yen's bullish trend.
• Bank analysts anticipate a Tokyo intervention if the JPY keeps trending lower.

The Japanese Yen (JPY) maintains its near-term bearish trend against the US Dollar (USD) on Tuesday. The USD/JPY pair is trading in the mid-157.00s at the time of writing, with bulls aiming for a previous support area just above 158.00 and the key 200-day Simple Moving Average (SMA) at 157.45. 

The Federal Reserve’s (Fed) hawkish turn has offset the impulse of the Bank of Japan’s (BoJ) monetary tightening plans. Beyond that, the two dovish dissenters at the BoJ meeting have cast some doubt about the scope of the bank's tightening cycle. All in all, the Yen has lost the shine of previous weeks, which is prompting Japanese authorities to set the stage for an intervention if the JPY weakens further

Yen rebound highlights Japan’s two-pronged defence of USD/JPY

Analysts at MUFG note that "the BoJ had conducted a rate check during the New York trading session,” sending “a clear signal that they are prepared to intervene again if the yen continues to weaken.” MUFG warns that this move came “ahead of the 3-day holiday period where liquidity for USD/JPY is likely to be lower.”

According to Societe Generale, the spot rate checks by the MoF late on Friday "underlined the two-pronged policy approach in Japan where intervention is obfuscating the price action and wrong-footing tactical investors.”

Regarding the intervention trigger, strategists at ING observe that the reported Bank of Japan rate check on Friday "may suggest that Japanese authorities are focused more on the pace of moves over a rolling x-day period than on defending a specific level.”

"The hope is that this approach avoids creating a clear line in the sand for markets to target and helps keep positioning cautious,” says Ing in a note, also observing that “the Fed has sounded distinctly more hawkish than the Bank of Japan this month, leaving room for further USD/JPY gains.”

Looking ahead, Commerzbank’s Thu Lan Nguyen warns that “over the longer run, however, merely threatening intervention is unlikely to be enough.” “Sooner or later, the BoJ will have to back up its words with action” if it wants to restore confidence in its commitment to tighter policy and more durable Yen stability, says Nguyen.

Danske Research Team describes a strong, broad-based risk-on session in equities, catalyzed by declining Oil price. They emphasize how retreating energy costs ease inflation expectations, push central bank pricing more dovish and improve confidence, while noting cyclicals led by technology outperformed, with the Nasdaq at record highs and MSCI World close to its peak, supported by robust growth and earnings.

Risk-on session led by technology

"Yesterday delivered a strong, broad-based risk-on session, with the decline in oil price acting as the catalyst for another move higher in equities. We have written extensively about this transmission mechanism recently, and the correlations and intraday moves across equities and asset classes yesterday are likely to remain defining features for much of the rest of the year."

"As oil price retreats, fears of an energy crisis heading into winter fade, inflation expectations ease, central banks are priced more dovishly and confidence improves. This cascade is currently unusually sensitive to energy, oil and developments around the Strait of Hormuz. With the underlying growth and earnings backdrop exceptionally strong, the energy situation remains the principal constraint on further market upside."

"Unsurprisingly, cyclicals outperformed decisively, led by technology. The Nasdaq reached another record high, while MSCI World moved to within 1% of its record. Technology has clearly outperformed year to date, but 2026 earnings estimates for the sector have also been revised almost 45% higher."

"By comparison, health care estimates have been cut by around 5%. Technology has therefore become cheaper this year, while health care has become more expensive, despite technology outperforming health care by almost 30%. The relative earnings impulse between the two sectors remains exceptionally powerful."

"This morning, Asia is catching up following the strong US session, European markets are also pointing higher, while the US picture is more mixed as oil edges higher again."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

• AUD/USD flattens at around 0.7117 and is broadly stable above the 38.2% Fibo retracement cushion near 0.7100.
• RBA Governor Bullock says that both higher oil prices and strong demand are fuelling inflationary pressures.
• The Fed is expected to deliver more interest rate hikes this year.

The Australian Dollar (AUD) trades flat at around 0.7117 against the US Dollar (USD) during the European trading session on Tuesday. The antipodean is broadly firm against its peers amid firm expectations that the Reserve Bank of Australia (RBA) will continue tightening its monetary conditions even after delivering three interest rate hikes so far this year.

Analysts at Commerzbank note that expectations for near-term RBA tightening have intensified, with the bank highlighting that the “RBA’s OIS market is now pricing in 85% chance of a 25bp hike during next week’s monetary policy board meeting.” This elevated probability underscores the increasingly hawkish policy outlook that has been lending support to the Aussie in recent sessions.

Earlier in the day, RBA Governor Michele Bullock didn’t explicitly comment on how the monetary policy will shape in the future, but signaled that the benchmark for neutral rates is rising globally and is supporting bond yields. “Believe neutral rates are rising around the world, pushing up real bond yields,” Bullock said. She warned that high inflation in Australia is coming from energy supply shocks and strong demand environment.

On the US Dollar front, the currency is also broadly firm as the Federal Reserve (Fed) is almost certain to deliver more interest rate hikes this year. According to the CME FedWatch tool, the odds of the Fed delivering at least one more interest rate hike this year are almost 90%.

AUD/USD Technical Analysis

In the daily chart, AUD/USD trades at 0.7120, retaining a mildly bearish bias as it holds beneath the 20-period Exponential Moving Average (EMA) at 0.7138 and the 23.6% Fibonacci retracement at 0.7150.

The pair has slipped back from recent highs, while the Relative Strength Index (14) near 47 suggests consolidating momentum rather than directional conviction, hinting that sellers still have a slight edge while these overhead levels cap the topside.

On the downside, initial support is seen at the 38.2% Fibonacci retracement at 0.7096, followed by the 50.0% level at 0.7052 and the 61.8% retracement at 0.7008, which together outline a broader demand band on pullbacks. On the topside, a daily close above the 20-period EMA at 0.7138 would open the way toward the 23.6% retracement at 0.7150, with stronger resistance emerging at the Fibonacci anchor near 0.7237 where the latest bullish cycle high is located.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Commerzbank’s Antje Praefcke notes that while the Federal Reserve’s (Fed) unanimous rate hike and hawkish tone have supported the Dollar, markets already discount further tightening of about 75 basis points by mid-2027. She argues that sustained hawkish communication is needed to defend current US Dollar (USD) levels, but sees downside risks if rate expectations are revised lower or political conflict over monetary policy emerges.

Fed rhetoric key for Dollar resilience

"Yes, the Fed unanimously raised interest rates. And yes, it sounded hawkish last week, so further moves could follow. But for the dollar to defend its gains, I think more needs to come."

"Since the market has already priced in significant interest rate hikes (+75 basis points till July 2027), these expectations must be kept running in order to avoid losses in the USD. Giving the greenback another boost upward is even much more difficult."

"Our experts also expect that while the Fed will take one more step in December, that will be the end of it, as the conflict in the Middle East is likely to slowly subside and energy prices are expected to fall along with it."

"However, if the market has to revise its interest rate expectations downward, that would suggest a downward correction in the dollar. And then there’s the US president, who could increasingly criticize the Fed’s monetary policy."

"Therefore, it would be worth a thought using the current dollar levels as favorable opportunities for hedging, as I think the risks that the dollar could lose ground again outweigh the upside potential."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)