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Societe Generale analysts note that NZD/USD is testing the lower boundary of its multi-month range at 0.5560/0.5550 following the RBNZ's decision to hold the OCR at 2.75%, despite expectations of a 25bp hike. While the central bank signalled that tighter policy is likely, a break below this crucial support zone could expose the pair to further losses towards 0.5480 and 0.5420, with any short-term rebound potentially capped at 0.5710.

Key support zone under pressure

"RBNZ OCR on hold at 2.75%, vote 4-3, consensus was +25bp."

"The committee agreed that tighter monetary policy is likely to be required, depending on the economic outlook."

"NZD/USD is challenging the lower boundary of its multi-month range at 0.5560/0.5550, a crucial support zone."

"A short-term rebound cannot be ruled out; however, the recent pivot high at 0.5710 could act as resistance."

"If the pair fails to defend the support at 0.5560/0.5550, the risk of a deeper downtrend would increase."

"In such a scenario, the next objectives could be located at the April 2025 low near 0.5480 and projections at 0.5420."

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

Chris Turner at ING highlights that EUR/USD is trading at its lows of the year, pressured by broad Dollar strength, high energy prices and uncertainty around the French budget. While Eurozone activity and upcoming 3Q26 GDP data look relatively resilient, tighter lending conditions and weaker corporate loan demand raise downside risks for EUR/USD technical support levels.

Weaker lending clouds Euro outlook

"EUR/USD remains at the lows of the year as broad dollar strength and an unresolved French budget crisis dominate. "

"Energy prices are at their highs and look to go higher on the prospect of the US and Israel attacking Iran after next week's US midterms. On the eurozone side, activity remains resilient and Friday's release of 3Q26 GDP data should be relatively encouraging. "

"However, yesterday's ECB bank lending survey showed tighter lending conditions and an unexpected fall in corporate loan demand."

"It may be too early for the ECB to pour cold water on market tightening expectations at tomorrow's press conference, but the risks look to be building in that direction."

"This 1.1065/1110 area is quite important support for EUR/USD, below which technical analysts will be dusting off targets at 1.0880."

"Even though the market is reasonably long dollars already, the reasons for EUR/USD to bounce from these levels are conspicuous by their absence."

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

• GBP/USD picks up from two-week lows at 1.3275 but remains below 1.3300, on track for a four-day reversal.
• Investors remain wary ahead of the release of UK Chancellor Healey's budget.
• In the US, the Fed is expected to leave interest rates on hold, and investors will be attntive for hints of a December hike.
  

The British Pound (GBP) is heading south against the US Dollar (USD) for the fourth consecutive day on Wednesday, with investors awaiting the release of the UK budget and the US Federal Reserve’s (Fed) monetary policy decision, both due later in the day. The GBP/USD pair has reached a fresh two-week low at 1.3275, before picking up to 1.3295 at the time of writing.

In the UK, the highlight of the week is the release of the first budget of Prime Minister Andy Burnham’s cabinet, with the main focus on the plans to finance the tax exemptions announced by the cabinet to ease British citizens’ cost of living.

Markets remain wary, with the UK’s public finances strained as total public debt surpassed GBP 3 trillion in September, amid a significant increase in net borrowing. The previous chancellor, Rachel Reeves, left a GBP 23.6 billion buffer, but the surge in debt costs is likely to have eaten up approximately half of it. With bond markets jumpy, and the 2022 Liz Truss fiasco still fresh, the details of Chancellor Healey’s budget are likely to trigger some Pound volatility.

Dollar support seen as focus shifts from AI jitters to FOMC risk

In the US, the Fed is widely expected to leave interest rates on hold, but the question is whether Chairman Kevin Warsh will support market expectations of another rate hike in December, considering his distaste for forward guidance.

Strategists at ING note that “a little stability on the AI side has allowed the FX market to re-focus on the clearer and more present danger of higher energy, higher inflation and the central bank response,” which is boosting speculative demand for the Greenback.

Regarding the Fed, ING states that they “suspect Chair Warsh will not want to tie himself in knots by citing a tightening in financial conditions, having learnt from the unruly market response to his press conference in July.” Instead, they expect that a “focus on restoring monetary stability should remain the dominant message and keep the dollar supported.”

• The Bank of Canada is expected to raise interest rates by 25 basis points to 2.50% on Wednesday.
• Canadian employment fell sharply in September, complicating the case for tighter monetary policy.
• Investors will scrutinize the central bank's guidance for clues about further rate increases.

The Bank of Canada (BoC) is expected to raise its benchmark interest rate by 25 basis points to 2.50% on Wednesday, as persistent inflation concerns put pressure on policymakers to tighten monetary policy despite growing signs of economic weakness.

According to a Reuters poll, 19 of 34 economists anticipate a rate hike, which would mark the central bank's first increase since July 2023. However, the decision remains uncertain as recent economic data highlight the challenges facing the Canadian economy.

Canada's Consumer Price Index (CPI) rose 3.1% YoY in September, compared with 3% in August, mainly driven by higher energy prices. Underlying inflation measures, however, eased, suggesting that broader price pressures remain relatively contained. BoC Governor Tiff Macklem has warned that prolonged increases in Oil prices could eventually spread to other goods and services.

Meanwhile, the Canadian labor market deteriorated sharply in September. Employment declined by 68.3K jobs, far below expectations of a 7K increase, following a loss of 41.7K jobs in August. The Unemployment Rate rose to 6.5% from 6.4%, reinforcing concerns about weakening domestic demand.

These conflicting signals have divided economists. BBH and Scotiabank expect a quarter-point rate hike, while TD Securities anticipates that the BoC will wait until December. Standard Chartered also favors keeping rates unchanged, citing subdued underlying inflation and economic weakness.

Beyond Wednesday's decision, investors will closely examine the BoC's updated economic projections and Governor Macklem's comments to assess whether policymakers are preparing for additional tightening or a more cautious approach.

When will the BoC release its monetary policy decision, and how could it affect USD/CAD?

The BoC will announce its monetary policy decision on Wednesday at 13:45 GMT, alongside its updated Monetary Policy Report. Governor Tiff Macklem's subsequent press conference at 14:30 GMT will offer further insights into the central bank's policy outlook.

A 25-basis-point rate hike accompanied by hawkish guidance could support the Canadian Dollar (CAD) and weigh on USD/CAD. Conversely, a hold rates decision or cautious guidance highlighting labor market weakness could undermine the Canadian Dollar and push USD/CAD higher.

In the four-hour chart, USD/CAD keeps a capped near-term tone as it holds just under the horizontal barrier at 1.4055 while remaining below the 200-period simple moving average (SMA) at 1.4108 and the 100-period SMA at 1.4153. The Relative Strength Index (14) at 54.9 has recovered into mildly positive territory, suggesting improving momentum, but price action is still constrained by these overhead averages, limiting upside follow-through for now.

On the topside, initial resistance is located at 1.4055, ahead of the 200-period SMA at 1.4108, with the 100-period SMA at 1.4153 and the nearby horizontal level at 1.4155 forming a broader supply zone higher up. On the downside, immediate support appears at 1.3969, with a deeper floor seen at 1.3910, and a break below this latter level would likely expose further bearish pressure in the short term.

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

Silver prices (XAG/USD) fell on Wednesday, according to FXStreet data. Silver trades at $54.04 per troy ounce, down 0.71% from the $54.42 it cost on Tuesday.

Silver prices have decreased by 23.98% since the beginning of the year.

The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, stood at 75.02 on Wednesday, up from 74.61 on Tuesday.

(An automation tool was used in creating this post.)

UOB’s Quek Ser Leang highlights that USD/CHF extended gains to 0.8294 despite overbought conditions, with intraday scope for further upside though a move to the major 0.8320 resistance is seen unlikely. On a 1–3 week horizon, he now expects the pair to test 0.8320 after a close at 0.8290, but judges the odds of a sustained break above this level as low while strong support has shifted to 0.8250.

Swiss Franc under pressure as Dollar stays firm

"24-HOUR VIEW: On Monday, USD rose to a high of 0.8278. When it was at 0.8270 yesterday, we highlighted that “conditions are overbought after the sharp rise over the past two days, but there is scope for USD to test 0.8290.” We pointed out that “a sustained advance above this level is unlikely.” USD then rose to a high of 0.8294 before closing at 0.8290 (+0.23%). While downward momentum is starting to slow, and conditions remain overbought, the advance is not showing signs of pausing just yet. Today, USD could edge higher, but any advance is unlikely to reach the major resistance at 0.8320. On the downside, support is at 0.8270."

"1-3 WEEKS VIEW: Two days ago (26 Oct, spot at 0.8250), we indicated that USD “has likely entered a range-trading phase between 0.8200 and 0.8290.” After USD rose to a high of 0.8278, we highlighted yesterday (27 Oct, spot at 0.8270) that “upward momentum is starting to build, and if USD closes above 0.8290, it could rise to 0.8320.” We added that “to sustain the momentum buildup, USD must not break below 0.8230 (‘strong support’ level).” USD then rose and closed at 0.8290. While we would have preferred a more decisive close above 0.8290, the price action suggests USD could test 0.8320. At this stage, the odds of a continued rise above this level are not high for now. The ‘strong support’ level is now at 0.8250 instead of 0.8230."

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

• USD/CAD may fall toward the lower boundary of the falling wedge around 1.3950.
• The 14-day Relative Strength Index hovers around 45, reflecting bearish momentum.
• The pair is testing the immediate resistance confluence at the 50- and nine-day EMAs of 1.4066 and 1.4067, respectively.

USD/CAD gains ground for the third consecutive day, trading around 1.4060 during European hours on Wednesday. The Bank of Canada (BoC) is expected to deliver a 25-basis-point interest rate hike later in the day.

The technical analysis of the daily chart shows that the pair price is remaining within the falling wedge pattern, indicating a potential bullish breakout as selling momentum weakens.

The USD/CAD pair is holding a bearish near-term bias as spot languishes just under a tight cluster of Exponential Moving Averages (EMAs), with the 50-day EMA near 1.4066 and the nine-day EMA around 1.4068 acting as immediate overhead caps.

The USD/CAD pair has slipped beneath these trend gauges after failing to sustain recent highs, while the 14-day Relative Strength Index (RSI) around 45 suggests an ongoing bearish momentum rather than outright oversold conditions.

On the downside, the USD/CAD pair may fall toward the lower boundary of the falling wedge around 1.3950. A break below the wedge could put downward pressure on the pair to navigate the region around the five-month low of 1.3732, recorded on May 21. Further support lies at 1.3481, the lowest since October 2024.

The USD/CAD pair is testing the immediate resistance confluence at the 50- and nine-day EMAs of 1.4066 and 1.4067, respectively, aligned with the upper boundary of the falling wedge. Further upside above this confluence would open the door for the pair to explore the region around nearly an 18-month high of 1.4299, recorded on October 14.

Fed seen on hold now but December hike still in play

Strategists at ABN Amro expect the Fed to stay sidelined at this week’s meeting, flagging “some risk of hawkish dissents” even as policymakers refrain from moving rates. They acknowledge that “inflation remains too hot,” but argue that “declining breadth and a cooler labour market give the Fed room to wait.” Reflecting that shift in tone, they note that markets have “sharply reduced the probability of an October hike, and December is no longer fully priced.” Nonetheless, ABN Amro still look for “one final 25bp hike in December, followed by an extended hold.”

BoC meeting seen as live event with scope for surprise

Analysts at MUFG/BTMU highlight that market pricing for today’s BoC decision currently implies “an 80% probability of a rate hike,” a level they argue “is not quite in done-deal territory and there is scope for a surprise.” They suggest that, while investors lean toward another move from the BoC, the outcome remains sufficiently uncertain to keep the meeting a live event for markets.

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

DBS Group Research’s Philip Wee highlights the challenges facing GBP/USD as the UK Autumn Budget and FOMC decision put fiscal credibility and monetary policy divergence in focus. He notes that expectations for a hawkish Fed and ECB, alongside prospects of a Bank of England rate hike, have helped the Pound outperform the Euro over the past week. GBP has also emerged as a relatively resilient alternative amid political risks in the US and France.

Pound holds as policy risks build

"GBP/USD faces a difficult balancing act today as the UK Autumn Budget and FOMC decision put fiscal credibility and monetary policy divergence under scrutiny."

"The FOMC is widely expected to leave rates unchanged while keeping the door open to another hike in December."

"However, the European Central Bank is also likely to deliver a hawkish hold tomorrow, while markets are positioning for a Bank of England hike at its November 5 meeting."

"These expectations have helped GBP to hold up better than the EUR over the past week."

"Beyond these policy events, GBP has emerged as a relatively less vulnerable alternative to the political risks in both the US and France."

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

• The Indian Rupee trades lower against the US Dollar ahead of the Fed’s policy announcement.
• The Fed is seen leaving interest rates steady.
• Higher oil prices have weakened the Indian Rupee.

The Indian Rupee (INR) gives back its opening gains and turns slightly negative against the US Dollar (USD) on Wednesday. The USD/INR pair ticks up to near 95.16 as the Indian currency underperforms due to multiple headwinds, such as the oil price recovery and caution ahead of the Federal Reserve’s (Fed) monetary policy announcement.

In the opening trade, the MCX Crude Oil contract expiring on November 19 is up 1.82% to near Rs. 9,671, closer to its recent highs of Rs. 9,828.

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

Oil prices gain as Houthis attack Saudi’s biggest refinery

On Tuesday, a military spokesperson from Yemen's Iran-aligned Houthis said that they launched a ballistic missile toward the Ras Tanura oil refinery in eastern Saudi Arabia, the kingdom’s largest refinery, Reuters reported.

The incident has reinforced fears of further acceleration in energy supply risks, prompting oil prices to rise.

Higher oil prices have also lent support to United States (US) Treasury Yields. Such a case diminishes the appeal of riskier currencies, like the Indian Rupee. As of writing, 10-year US bond yields are up 0.46% to near 5.02%.

Fed’s policy decision awaited

Later in the day, the Fed’s monetary policy announcement will be the key trigger for global markets. According to the CME FedWatch tool, the Fed is expected to leave interest rates unchanged in the 3.75%-4.00%.

In the September policy meeting, the Fed hiked interest rates by quarter-to-a-percent and signaled at least one more this year through the dot plot.

Financial markets were confident after the September policy announcement that the Fed will hike again in October; however, they pared hawkish bets as several policymakers signaled no urgency for another interest rate hike.

Waller flags more hikes but slower pace, keeping Dollar bulls on alert

Fed’s Waller delivered a distinctly hawkish message, with an 8/10 FXS Speechtracker score that is firmer relative to the historical average of 7.2/10, underscoring a bias toward further tightening. The insistence that “more hikes [are] needed” while allowing that they “do not need to come at consecutive meetings” signals a higher terminal rate but a more flexible path, a mix that supports the Dollar via expectations of prolonged restrictive policy rather than an aggressive near-term hiking cadence. Emphasis on persistent inflation drivers such as AI-related investment, ongoing energy shocks, and a still “solid and stable” labor market reinforces the risk that inflation expectations could de-anchor after nearly 5½ years above-target inflation, keeping the policy skew clearly on the hawkish side.

The FXS Fed Sentiment Index rose by 0.42 points to 138.34, confirming that the speech pushed the policy tone deeper into hawkish territory well above the neutral 100 mark. This elevated index level, aligned with the above-baseline FXS Speechtracker score, should underpin Dollar support as markets price in a longer period of restrictive rates even if individual meetings do not always deliver consecutive hikes.

Technical Analysis: USD/INR recovers to near 20-day EMA

In the daily chart, USD/INR trades at 95.1355, keeping a bearish near-term tone as spot remains below the 20-period exponential moving average (EMA) at 95.3253. The pair’s inability to reclaim this short-term EMA suggests rallies are being sold into, while the Relative Strength Index (RSI) at around 44 stays in neutral-to-soft territory, hinting at a lack of upside momentum rather than outright oversold conditions.

On the topside, initial resistance is aligned with the 20-day EMA at 95.3253, and a sustained break above this barrier would be needed to ease immediate downside pressure and open the way for a more meaningful recovery. In the absence of clearly defined nearby support levels from the available indicators, the focus stays on price action relative to this EMA pivot, with continued trading beneath it likely to preserve the bearish bias in the short term.

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

• The Euro trades vulnerably near its yearly low of 1.1113 against the US Dollar ahead of Fed’s policy decision.
• Higher oil prices and French fiscal risks continue to keep the Euro under pressure.
• Both the Fed and the ECB are expected to hold interest rates steady.

The Euro (EUR) trades close to its yearly low of 1.1113 against the US Dollar (USD) during the European trading session on Wednesday. The major currency pair is under pressure as heightened concerns in French bond markets and rising oil prices continue to weigh on the Euro.

Euro pressured as French spreads widen and confidence hits 2022 lows

Strategists at Scotiabank point out that domestic political strains are increasingly visible in French markets, with “French bonds … underperforming, nudging the spread over 10Y bunds back up to 161bps.” They add that sentiment has deteriorated sharply, as “French Consumer Confidence plunged to 80 in October, equaling the low seen in 2022, reflecting recent pollical tensions and social unrest.”

Meanwhile, oil prices have accelerated as Iran-backed Houthis’ drone attack on Saudi Arabia’s biggest oil facility has fanned fears of further energy supply risks.

On Tuesday, a military spokesperson from Iran-aligned Houthis said that they had hit Saudi Arabia’s biggest oil refinery with a missile, intensifying their strikes against the world’s second-largest crude producer. Saudi authorities did not immediately confirm the strike on the 550,000 barrel per day facility, Reuters report.

Going forward, major triggers for the Euro will be the European Central Bank’s monetary policy announcement on Thursday and the preliminary German Harmonized Index of Consumer Prices (HICP) data for October on Friday. The ECB is expected to hold interest rates steady.

On the US Dollar front, investors await the Federal Reserve’s (Fed) monetary policy announcement at 18:00 GMT.

Fed in focus as Danske Bank looks for December and March hikes

Analysts at Danske Bank highlight that, in the US, “the main event of the week is this evening's FOMC rate decision and the following press conference,” where they “expect the Fed to keep policy rates unchanged, in line with consensus, while markets price in a 10% probability of a hike.”

The bank notes that “most central FOMC members have signalled that they can wait until December before hiking again, although a few see more urgency,” and therefore they “expect 2-3 dissenting votes in favour of a hike.”

Overall, Danske Bank reiterates that it “still see[s] a need for further tightening” and that “all eyes are on Fed, which are expected to leave rates unchanged.” In their base case, Chair Powell is expected “to reiterate his firm commitment to bringing inflation back to target,” with the bank maintaining its call for “two more hikes, in December and March.”

EUR/USD Technical Analysis

In the daily chart, EUR/USD trades at 1.1126, extending a bearish stance as spot holds below the 20-day exponential moving average (EMA) at 1.1228. The pair remains pressured while capped by this dynamic resistance, and the Relative Strength Index (RSI) near 30 hints that downside momentum is still dominant, though approaching oversold territory could slow the immediate selling pace rather than reverse the trend.

On the topside, initial resistance is located at the 20-day EMA around 1.1228, and a daily close above this level would be needed to ease the current bearish pressure and signal a more sustained corrective bounce. Until that barrier is reclaimed, rallies are likely to be viewed as corrective within the broader decline, with the lack of nearby structural supports on the chart leaving the pair vulnerable to fresh lows if sellers regain traction.

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