Forex News
- Indian Rupee extends its upside against the US Dollar as oil prices retreat significantly.
- The US signals that it prefers diplomatic resolution with Iran over resuming military action.
- Investors shift their focus to US midterm elections.
The Indian Rupee (INR) extends previous trading day’s gains against the US Dollar (USD) on Monday on the back of a sharp correction in oil prices. In the opening trade, the USD/INR pair is down 0.23% to near 94.72.
At the start of the week, the MCX Crude Oil contract expiring on November 19 is significantly down, almost 4% to near Rs. 9,545. The oil price has corrected from its multi-month high of Rs. 9,972 posted on Friday.
A corrective move in oil prices bodes well for currencies from economies, such as India, which rely heavily on oil imports to meet its energy needs.
What led to the significant correction in oil prices?
Oil prices open sharply lower on renewed hopes of a diplomatic resolution between the United States (US) and Iran.
Over the weekend, US Secretary of State Marco Rubio said that Washington hasn’t made any decision to renew strikes on Tehran and that President Donald Trump prefers a diplomatic resolution. However, Rubio warned that the US retains the capabilities to achieve whatever military objective Trump decides to pursue.
The indication from the US that it is ready for peace rather than pursuing joint military action with Israel after midterm elections, as previously stated, has eased fears of prolonged energy supply risks.
Meanwhile, the comments from Iran that it can reopen the Strait of Hormuz, a vital passage to almost 20% of global energy supply, has also diminished fears of energy supply risks.
Iran’s Foreign Minister Abbas Araghchi said talks are ongoing with Qatari mediators on a plan to reopen the Strait of Hormuz within two days if the US cooperates, Al Jazeera reported.
US midterm elections – key trigger for US Dollar
This week, the major trigger for the US Dollar and even global markets will be US midterm elections on Tuesday.
Analysts at ING argue that political risk around the upcoming US midterm elections is now the key near-term driver for the Dollar. They highlight that “the main risk for the dollar today is some precautionary unwinding of net-long positions ahead of Tuesday’s US midterm elections,” with positioning vulnerable to a shift in the political landscape.
ING notes that “a Democratic sweep is trading around 68% in prediction markets,” and warns this outcome “could be seen as slightly negative for the US dollar from a few angles, from higher risk of government shutdown and gridlock on debt ceiling negotiations to potential damage to already shaky AI-related sentiment.” Against that backdrop, the bank concludes that investors should avoid becoming overly optimistic on the greenback in the very short term, stating: “We’d be cautious in chasing the USD upside in the next few days.”
USD/INR Technical Analysis
USD/INR declines to near 94.70 on Monday. The pair reflects a bearish near-term tone as spot remains below the 20-day Exponential Moving Average (EMA) at 95.23.
The pair continues to be pressured by this short-term EMA acting as immediate overhead supply, while the Relative Strength Index (14) around 40 suggests subdued momentum without reaching oversold extremes, hinting at further downside risk.
On the topside, initial resistance is located at the 20-day EMA near 95.23, which would need to be decisively overcome to ease the current bearish bias and open the way for a broader recovery. On the downside, the September low at 94.28 would act as a key demand zone for the pair.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Indian Rupee FAQs
The Indian Rupee (INR) is one of the most sensitive currencies to external factors. The price of Crude Oil (the country is highly dependent on imported Oil), the value of the US Dollar – most trade is conducted in USD – and the level of foreign investment, are all influential. Direct intervention by the Reserve Bank of India (RBI) in FX markets to keep the exchange rate stable, as well as the level of interest rates set by the RBI, are further major influencing factors on the Rupee.
The Reserve Bank of India (RBI) actively intervenes in forex markets to maintain a stable exchange rate, to help facilitate trade. In addition, the RBI tries to maintain the inflation rate at its 4% target by adjusting interest rates. Higher interest rates usually strengthen the Rupee. This is due to the role of the ‘carry trade’ in which investors borrow in countries with lower interest rates so as to place their money in countries’ offering relatively higher interest rates and profit from the difference.
Macroeconomic factors that influence the value of the Rupee include inflation, interest rates, the economic growth rate (GDP), the balance of trade, and inflows from foreign investment. A higher growth rate can lead to more overseas investment, pushing up demand for the Rupee. A less negative balance of trade will eventually lead to a stronger Rupee. Higher interest rates, especially real rates (interest rates less inflation) are also positive for the Rupee. A risk-on environment can lead to greater inflows of Foreign Direct and Indirect Investment (FDI and FII), which also benefit the Rupee.
Higher inflation, particularly, if it is comparatively higher than India’s peers, is generally negative for the currency as it reflects devaluation through oversupply. Inflation also increases the cost of exports, leading to more Rupees being sold to purchase foreign imports, which is Rupee-negative. At the same time, higher inflation usually leads to the Reserve Bank of India (RBI) raising interest rates and this can be positive for the Rupee, due to increased demand from international investors. The opposite effect is true of lower inflation.
- GBP/USD edges higher on Monday as hopes for Iran diplomacy undermine the safe-haven USD.
- BoE rate hike bets further support the GBP and spot prices ahead of the key central bank event.
- The constructive technical setup suggests that the path of least resistance remains to the upside.
The GBP/USD pair attracts some dip-buyers at the start of a new week and climbs back to the 1.3400 mark during the Asian session, stalling its modest pullback from the highest level since September 16 set on Friday.
The latest optimism over a potential diplomatic breakthrough to end the US-Iran war undermines the safe-haven US Dollar (USD). The British Pound (GBP), on the other hand, continues to draw support from expectations of tighter monetary policy from the Bank of England (BoE). This, in turn, acts as a tailwind for the GBP/USD pair, though bulls seem hesitant to place aggressive bets ahead of the key central bank event and important US macro data later this week.
The BoE will announce its policy decision on Wednesday and is widely expected to raise interest rates by 25 basis points (bps). Meanwhile, the US economic docket features the release of the ISM Manufacturing PMI, later today, followed by the ISM Services PMI on Wednesday and the crucial Nonfarm Payrolls (NFP) report on Friday. Apart from this, further developments surrounding the Middle East crisis could influence the USD and provide some impetus to the GBP/USD pair.
From a technical perspective, spot prices hold a mildly bullish bias above the 100-day Simple Moving Average (SMA) at 1.3387 while pressing a dense Fibonacci barrier just overhead. Moreover, momentum indicators stay supportive, with the Relative Strength Index (RSI) hovering near 57 and the Moving Average Convergence Divergence (MACD) indicator showing positive readings and a constructive tone above zero. This backs the case for additional gains for the GBP/USD pair.
Meanwhile, the 50.0% retracement at 1.3407 is the immediate cap, with higher resistances at the 61.8% level at 1.3471 and the 78.6% retracement at 1.3561 defining the next upside objectives if buyers can extend the move. On the downside, initial support is seen at the 100-day SMA at 1.3387, which guards the 38.2% Fibo. retracement at 1.3344 and a deeper pullback would expose the 23.6% level at 1.3265 before the structural Fibonacci anchor near 1.3138.
As long as GBP/USD holds above the 100-day SMA and these underlying retracement floors, it would retain a positive near-term tone, though a clear daily close above 1.3407 is needed to unlock a stronger advance toward 1.3471 and 1.3561.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
GBP/USD daily chart
Economic Indicator
BoE Interest Rate Decision
The Bank of England (BoE) announces its interest rate decision at the end of its eight scheduled meetings per year. If the BoE is hawkish about the inflationary outlook of the economy and raises interest rates it is usually bullish for the Pound Sterling (GBP). Likewise, if the BoE adopts a dovish view on the UK economy and keeps interest rates unchanged, or cuts them, it is seen as bearish for GBP.
Read more.Next release: Thu Nov 05, 2026 12:00
Frequency: Irregular
Consensus: -
Previous: 3.75%
Source: Bank of England
- EUR/USD strengthens to around 1.1175 in Monday’s early European session.
- Fitch's revision of France's outlook to "negative" from "stable" might cap the Euro’s upside.
- Americans head to the polls on Tuesday.
The EUR/USD pair gathers strength to near 1.1175 during the early European trading hours on Monday. The Euro (EUR) edges higher against the US Dollar (USD) as the Eurozone and German Gross Domestic Product (GDP) data beat forecasts in the third quarter (Q3). Traders await Germany’s Retail Sales and US ISM Manufacturing Purchasing Managers Index (PMI) reports later on Monday.
Data on Friday showed that the Eurozone economy grew more than expected in Q3, indicating resilience despite the impact of the Middle East war and surging energy costs. The Eurozone GDP expanded by 0.4% QoQ in Q3, versus a 0.6% growth seen in Q2, stronger than the 0.2% expected.
Meanwhile, the German economy grew by 0.2% QoQ in Q3, compared to a rise of 0.3% in Q2. This figure came in above the market consensus of 0.1%.
However, credit ratings agency Fitch on Friday revised France's outlook to "negative" from "stable", warning that worsening fiscal conditions and political risks are undermining debt stabilization prospects. This, in turn, could undermine the shared currency in the near term.
Americans will vote on Tuesday to decide whether the Democratic Party can take control of Congress from US President Donald Trump’s Republican Party. While Democrats are expected to secure a majority in the House of Representatives, the outcome of the Senate election remains uncertain.
Euro supported by limited ECB-Fed divergence but France risks cap EUR/USD upside
Brown Brothers Harriman’s Elias Haddad highlights that “resilient Eurozone economic activity and inflation projected to remain above target for an extended period keep a December rate hike to 2.75% firmly in play (86% priced in).” He notes that “real GDP rose 0.4% q/q in Q3 vs. 0.6% in Q2, double the consensus forecast, as growth in Spain and Germany offset France’s contraction,” underscoring the region’s underlying strength despite pockets of weakness.
Against this backdrop, Haddad argues that the “bottom line: limited policy divergence between the ECB and Fed offers EUR/USD support,” with the current rate outlook helping to underpin the Euro. At the same time, he cautions that “France’s ongoing fiscal troubles can drive EUR/USD down to 1.1000,” suggesting that country-specific risks could yet weigh on the currency.
On the institutional front, BBH stresses that “the ECB leadership change is unlikely to alter the near-term policy outlook and has no material implication on EUR. The ECB Governing Council is not a one-person show; 21 members have voting rights, including six Executive Board members and 15 governors of the national central banks.” EU leaders are scheduled to meet on November 26-27 “to discuss who will take over the ECB’s top job,” with “Spain’s Pablo Hernandez de Cos and the Netherlands’ Klaas Knot” reported as the frontrunners to succeed the current president.
Nagel flags renewed inflation risks and keeps Euro bulls alert
ECB’s Nagel delivers a stronger-than-usual warning on inflation, with an FXS Speechtracker score of 8.2 versus a historic average of 6.9, signaling a clear hawkish shift. The pledge that the ECB will take “decisive action if needed” to bring inflation back to target reinforces expectations that policy tightening remains firmly on the table if price pressures re-accelerate.
Nagel’s emphasis that consumer-price growth has picked up again and that further price increases “can’t be ruled out,” driven by higher energy costs, underpins a more vigilant stance on inflation risks. This combination of renewed inflation concern and readiness to act is supportive for the Euro, as markets may price in a higher probability of additional restrictive measures if data continue to surprise on the upside.
Technical Analysis: EUR/USD maintains a bearish bias under the 100-day SMA
In the daily chart, EUR/USD retains a bearish near-term bias as spot holds beneath the 100-day simple moving average (SMA). Price also trades below the Bollinger Bands 20-period middle SMA, keeping the pair anchored in the lower half of the recent volatility envelope, while the Relative Strength Index (14) around 40 suggests weak but stabilizing downside momentum rather than outright oversold conditions.
On the topside, initial resistance is aligned with the Bollinger middle band at 1.1195, ahead of the upper Bollinger band near 1.1260, while a more substantial cap emerges at the 100-day SMA at 1.1425. On the downside, the lower Bollinger band at 1.1130 offers the next meaningful support, and a decisive break beneath this floor would reopen the path toward fresh lows within the prevailing bearish setup.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Euro FAQs
The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
- EUR/JPY may test the immediate support at the nine-day EMA of 176.33.
- The 14-day Relative Strength Index is at 42.64, indicating weak upside momentum.
- The primary barrier lies at the descending channel's upper boundary near 178.00.
EUR/JPY gains ground after recovering recent losses from the previous trading day, hovering around 176.40 during Asian hours on Monday. Based on the technical analysis of the daily chart's descending channel pattern, the currency cross maintains a clear bearish bias.
The EUR/JPY cross is maintaining a bearish near-term bias as it holds below the 50-day Exponential Moving Average (EMA). The cross is showing only modest stabilization, with price trading just above the nine-day EMA, while the 14-day Relative Strength Index (RSI) at 42.64 remains below the neutral 50 line and hints at subdued upside momentum rather than a decisive recovery.
The EUR/JPY cross may test the immediate support at the nine-day EMA of 176.33, followed by the 12-month low of 175.07, reached on October 30. Further support lies at the lower boundary of its descending channel around 174.40. A break below the channel would open the door for the currency cross to navigate the region around the 15-month low at 169.72.
On the upside, the EUR/JPY cross may rise toward the upper boundary of the descending channel near 178.00, followed by the 50-day EMA of 178.79. A successful break above the medium-term price average would cause a bullish reversal, supporting the EUR/JPY cross to explore the area around the all-time high of 187.95, reached on April 17.
Dollar stays on the back foot as tech rout collides with Fed hawkishness
Brown Brothers Harriman’s Elias Haddad argues that the ongoing tech sell-off is likely to keep the Dollar under pressure in the near term, with “the USD index (DXY) likely to test support at 101.00.” However, he stresses that “strong US economic activity and rising price pressures reinforce the Fed’s hawkish bias, keeping rate differentials supportive of USD,” suggesting that any downside in the Dollar may be tempered by underlying macro and policy support.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Euro FAQs
The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
- Gold attracts some buyers on Monday as hopes for Iran diplomacy undermine the safe-haven USD.
- Ukrainian attacks on Russia and US threats of further military action keep a lid on the latest optimism.
- Fed rate hike bets further limit USD losses and cap the commodity ahead of this week’s US macro releases.
Gold (XAU/USD) kicks off the new week on a positive note, snapping a two-day losing streak and reversing part of Friday's heavy losses to sub-$3,900 levels, or its lowest since October 2025. The optimism over a potential diplomatic breakthrough to end the US-Iran war caps the safe-haven US Dollar (USD) and offers some support to the commodity. Meanwhile, US Federal Reserve (Fed) rate hike bets remain firmly on the table amid oil-driven inflation concerns and might act as a headwind for the non-yielding yellow metal.
Iranian negotiators reportedly held talks for a third consecutive day with Qatari mediators on Sunday to advance a deal to end the US-Israeli war on Iran. In further developments, Iran has proposed a two-day (48-hour) plan to reopen the Strait of Hormuz, provided that the US fulfills a set of conditions that include lifting the sanctions imposed following the Islamabad memorandum and reducing US forces in the region. Adding to this, US President Donald Trump said that negotiations with Iran were going fine and that Iran wanted a deal.
Trump, however, added that he has not ruled out further military action after the November 3 midterm elections. Furthermore, Iran’s Supreme Leader, Mojtaba Khamenei, ordered his top military commanders to prepare for renewed confrontation with the US and Israel, and to expand Tehran’s options for retaliation. This, along with fresh Ukrainian attacks on Russian oil refineries, keeps the geopolitical risk premium in play and keeps USD bears on the back foot, warranting caution before positioning for any further gains for the Gold price.
Meanwhile, US macro data, released last Thursday, pointed to resilient economic growth and persistent price pressures, solidifying bets for additional Fed tightening. According to the CME Group's FedWatch Tool, traders are currently pricing in around a 75% chance that the US central bank will raise borrowing costs again in December. Hence, strong follow-through buying is needed to confirm a near-term bottom for the XAU/USD pair as the focus now shifts to important US macro releases, scheduled at the start of a new month.
The US ISM Manufacturing PMI will be published later today, followed by the ISM Services PMI on Wednesday ahead of the closely watched US monthly employment details – popularly known as the Nonfarm Payrolls (NFP) report on Friday. In the meantime, the aforementioned fundamental backdrop suggests that any subsequent recovery is more likely to be sold into and remain capped.
XAG/USD 4-hour chart
Technical Analysis
Friday's breakdown and acceptance below the $4,000 psychological mark was seen as a key trigger for bearish traders. Moreover, the precious metal holds well below the 100-period Exponential Moving Average (EMA) on the 4-hour chart, validating the near-term negative outlook. The Moving Average Convergence Divergence (MACD) remains in negative territory with the MACD line below its signal and a weak histogram. That said, the Relative Strength Index (RSI) at 28.94 hovers in oversold territory, hinting that while downside pressure dominates, the latest slide could be stretched in the short term.
Nevertheless, any subsequent upward move is more likely to attract fresh sellers and remain capped near the 100-period EMA at $4,068.55, which acts as the key level bulls would need to reclaim to ease the current bearish bias. On the downside, traders would now look to Friday's swing low, around the $3,870 region for potential demand zones, which, if broken, should pave the way for an extension of the well-established downward trajectory.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
Gold prices rose in India on Monday, according to data compiled by FXStreet.
The price for Gold stood at 11,909.58 Indian Rupees (INR) per gram, up compared with the INR 11,825.19 it cost on Friday.
The price for Gold increased to INR 138,910.20 per tola from INR 137,926.70 per tola on friday.
Unit measure | Gold Price in INR |
|---|---|
1 Gram | 11,909.58 |
10 Grams | 119,096.70 |
Tola | 138,910.20 |
Troy Ounce | 370,428.30 |
FXStreet calculates Gold prices in India by adapting international prices (USD/INR) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
(An automation tool was used in creating this post.)
- AUD/JPY holds positive ground near 110.90 in Monday’s early Asian session.
- The cross keeps the bearish vibe, with the price holding below the 100-day SMA.
- The first upside barrier emerges at 111.45; the initial support level to watch is 110.50.
The AUD/JPY cross trades in positive territory around 110.90 during the early European trading hours on Monday. Growing expectations for an imminent interest rate hike from the RBA provide some support to the Australian Dollar (AUD) against the Japanese Yen (JPY). Traders await the Reserve Bank of Australia (RBA) policy meeting later on Tuesday.
The RBA is expected to raise the Official Cash Rate (OCR) for a fifth time this year. Almost all economists surveyed by Bloomberg reckon the nine-member board will make a 25 basis points (bps) hike tomorrow, bringing the OCR to 4.85%, the highest level in 18 years.
Traders remain on high alert for currency intervention from Japanese authorities. This, in turn, might lift the JPY and cap the upside for the cross. Japan’s Finance Minister Satsuki Katayama said on Monday that the joint FX statement with the US persists and the government will act against disorderly moves. Katayama added that it’s crucial to maintain stable foreign exchange markets and the government needs to avoid chaotic fluctuations.
RBA seen hiking then holding as TD Securities flags upside inflation risks
According to TD Securities, “the risks to inflation are tilted to the upside in Q4,” a backdrop they believe is “likely to encourage markets to price in some chance of a follow-up hike in Q1 of 2027.” After next week’s anticipated move, the bank expects the RBA to pause, noting that “after next week's anticipated hike, we forecast the Bank moving to the sidelines to assess the impact of the series of rate hikes to date.” TD Securities argues that “the lags in policy and signs of slowing economic activity should keep the Bank on hold in 2027 with cuts to commence in 2028.” Strategists add that “the Monetary policy bias table below is not too different from what we presented ahead of the September RBA meeting,” and that “this time we expect” the RBA’s hawkish rhetoric to be reinforced by persistent upside inflation risks even as the policy stance shifts to a prolonged hold.
Technical Analysis: AUD/JPY retains a negative outlook below the 100-day SMA
In the daily chart, AUD/JPY holds below the 100-day simple moving average (SMA), which maintains a capped, mildly bearish tone despite the recent bounce. Price is consolidating between the Bollinger Bands, trading above the middle band but still facing overhead supply near the upper band; the Relative Strength Index (RSI) around 52 suggests neutral-to-slightly improving momentum that has yet to overcome the prevailing structural resistance.
On the topside, initial resistance level is aligned at the uppber boundary of Bollinger band near 111.45, en route to the 100-day SMA at 111.95. A daily close above this level would be needed to shift the short-term bias back toward the upside, with the next hurdle emerging at the August 18 high of 113.61.
On the downside, immediate support level is located at the Bollinger middle band around 110.50, followed by the 110.00 psychological level. The next contention level is seen at the lower limit of Bollinger band at 109.50. A drop through this lower boundary would reopen the path toward a more pronounced bearish continuation.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
- US Dollar Index moves little as safe-haven demand eases amid ongoing diplomatic efforts to end the Middle East conflict.
- US Dollar could receive support from robust US economic data and high Fed rate hike expectations.
- CME FedWatch Tool indicates that markets are pricing in roughly a 75% chance of a December rate increase.
The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, is remaining steady after posting modest gains in the previous day and trading near 102.00 during Asian hours on Monday.
The Greenback moves little amid easing safe-haven demand, driven by ongoing diplomatic efforts to end the Middle East conflict despite lingering fears of renewed US military action against Iran. Qatari and Iranian officials continued discussions for a third consecutive day, working toward an agreement to end the war ahead of the US midterm elections.
However, the US Dollar could regain ground on rising expectations for a Federal Reserve rate hike. According to the CME FedWatch Tool, traders are pricing in roughly a 75% chance of a December rate increase, boosted by recent US macroeconomic data pointing to economic resilience and persistent inflation.
Traders await key upcoming events, including the US Nonfarm Payrolls (NFP) report and ISM manufacturing and services data. Remarks from several Federal Reserve officials scheduled throughout the week are also expected to offer further guidance on the central bank's monetary policy path.
Dollar narrative shifts as US PCE data show inflation progress stalling
Brown Brothers Harriman highlights that the latest US September PCE report “confirms that progress on inflation has stalled.” The bank notes that, in line with consensus, “headline PCE rose 0.5% m/m vs. +0.3% in August to be up 3.6% y/y vs. 3.4% in August,” while “core PCE was up 0.3% m/m vs. 0.3% in August to be up 3.1% y/y vs. 3.0% in August.” This stickiness in both headline and core measures reinforces their view that the Dollar remains underpinned by stalled disinflation, even as market focus shifts toward wage dynamics and broader growth expectations.
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
- AUD/USD attracts fresh sellers in reaction to China’s disappointing official PMIs over the weekend.
- Geopolitical uncertainties act as a tailwind for the USD, further exerting pressure on spot prices.
- The technical setup warrants caution for bearish traders ahead of the RBA decision on Tuesday.
The AUD/USD pair shows minor downward movement at the start of a new week, trading near the 0.7020 region, down around 0.15% for the day during the Asian session. Traders, however, might refrain from placing fresh directional bets ahead of the Reserve Bank of Australia (RBA) decision on Tuesday.
The Australian central bank is widely expected to deliver a 25 basis point (bps) rate hike at the end of the November meeting amid persistent inflationary pressures. However, China's disappointing official PMIs, released over the weekend, exert some downward pressure on the Aussie. Furthermore, geopolitical uncertainties act as a tailwind for the safe-haven US Dollar (USD) and contribute to the offered tone surrounding the AUD/USD pair.
From a technical perspective, the AUD/USD pair remains capped beneath the 100-day Exponential Moving Average (EMA) at 0.7046 and is now lodged under the 38.2% Fibonacci retracement level at 0.7026, suggesting that recent recovery is losing momentum. That said, momentum oscillators look constructive, hinting at a consolidative tone rather than a decisive breakdown and warranting some caution for aggressive bearish traders.
In fact, the Moving Average Convergence Divergence (MACD) holds above its signal line and is marginally positive, while the Relative Strength Index (RSI) hovers around the neutral 50 mark. Hence, any subsequent slide below the 0.7000 psychological mark could find immediate support at the 23.6% retracement at 0.6976, while a deeper slide would expose the structural low near 0.6894, where buyers may attempt to reassert a medium-term floor.
On the topside, initial resistance is located at the 38.2% Fibo. at 0.7026, followed by the 50.0% level at 0.7067 and the 61.8% retracement at 0.7107, with the 78.6% barrier at 0.7165 and the cycle high at 0.7239 reinforcing a broader supply zone.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
AUD/USD daily chart
Economic Indicator
RBA Interest Rate Decision
The Reserve Bank of Australia (RBA) announces its interest rate decision at the end of its eight scheduled meetings per year. If the RBA is hawkish about the inflationary outlook of the economy and raises interest rates it is usually bullish for the Australian Dollar (AUD). Likewise, if the RBA has a dovish view on the Australian economy and keeps interest rates unchanged, or cuts them, it is seen as bearish for AUD.
Read more.Next release: Tue Nov 03, 2026 03:30
Frequency: Irregular
Consensus: 4.85%
Previous: 4.6%
Source: Reserve Bank of Australia
- Silver kicks off the new week on a slightly positive note, though it lacks bullish conviction.
- A move beyond the 23.6% Fibo. is needed to back the case for any further recovery move.
- Bearish traders might await acceptance below the $49.00 mark before placing fresh bets.
Silver (XAG/USD) edges higher at the start of a new week, recovering a part of Friday's heavy losses to sub-$49.00 levels, or a fresh low since November 2025. The white metal, however, struggles to capitalize on a modest Asian session uptick and currently trades around the $50.00 psychological mark, up 1.70% for the day.
From a technical perspective, the XAG/USD remains capped near the 23.6% Fibonacci retracement at $50.22 and retains a bearish tone below the 100-hour Exponential Moving Average (EMA). Despite this overhead structure, a slight improvement in momentum indicators warrants caution for bearish traders. In fact, the Moving Average Convergence Divergence (MACD) stands above zero with the line rising and the histogram expanding, while the Relative Strength Index (RSI) at 43.31 has moved out of oversold territory, hinting at a rebound attempt rather than a clear bullish reversal.
Hence, any further strength beyond the 23.6% Fibo. might confront initial resistance at a broader congestion zone defined by the 38.2% level at $51.06 and the 50.0% retracement at $51.74. Higher up, the 100-period EMA at $52.29 aligns with the 61.8% Fibo. level at $52.42 to reinforce a dense supply band, ahead of the 78.6% retracement at $53.39 and the swing high region near $54.62. On the downside, the only meaningful structural support nearby is the recent cycle low around $48.86, where a break would reopen the path for deeper losses despite an improvement in intraday momentum.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
XAG/USD 1-hour chart
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
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