Forex News
- XAG/USD ends week down over 6%, approaching $60.00 support.
- Bearish RSI reinforces lower-high, lower-low structure beneath key moving averages.
- Break below $60.00 exposes $56.57 and YTD low $54.77.
Silver price retreats on Friday, dropping about 0.76% as US Treasury yields edged higher, capping US Dollar depreciation, while investors punished the Greenback following a soft US jobs report. The XAG/USD trades at $60.50 at the time of writing.
XAG/USD Price Forecast: Technical Outlook
The white metal finished with weekly losses of over 6%, below the confluence of the 50- and 100-day Simple Moving Averages (SMAs) at $64.06-$64.74 and poised to test the $60.00 milestone in the near term.
Bearish momentum continues to build as the Relative Strength Index (RSI) remains below its 50-neutral level and closer to the oversold level. Also, price action is respecting the series of lower highs and lower lows, further confirmation that sellers are in charge.
The first support for XAG/USD is $60.00. If breached, a potential move to the August 3 low of the day (LOD) at $56.57 is on the cards. A decisive breakout will expose the year-to-date (YTD) low of $54.77.
On the other hand, for a bullish reversal, buyers must push Silver back above the 50- and 100-day SMA, before claiming the $65.00. Even though that is a significant recovery, the bearish structure remains in charge, unless the bull clears the August 28 swing high of $71.12, the latest cycle high.
XAG/USD Price Chart – Daily
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.
- Peso recovers modestly but remains down roughly 3% weekly.
- Narrowing rate differential continues to undermine Mexico’s carry advantage.
- Weak NFP pushes October Fed hike odds sharply lower.
The Mexican Peso (MXN) recovers some ground versus the US Dollar (USD) on Friday, gaining 0.5%, but it remains poised to end the week with a 3% loss as investors exit the 'carry trade' amid a narrowing of the interest rate differential between the US and Mexico to its lowest level since 2015. The USD/MXN pair edges down to 18.21, after peaking at 18.35.
USD/MXN eases as weak US jobs temper Fed expectations
Mexican Peso buyers find some relief, though the USD/MXN uptrend is set to continue amid the narrowing of the interest rate differential. The Bank of Mexico (Banxico) private economists' survey showed that most economists expect interest rates to remain unchanged at 6.5% until the end of 2027.
Conversely, the Federal Reserve (Fed) is seen tightening monetary policy by at least 25 basis points toward the end of the year, which would put the US-Mexico interest rate differential at 2.25%.
Manufacturing data from Mexico showed that activity expanded in September, according to S&P Global, though it warned that the economy remained “quite fragile.”
Across the northern border, US Nonfarm Payrolls in September were below estimates of 90K, coming in at 29K, down from 133K. The Unemployment Rate rose from 4.1% to 4.2%, although negative, due to the increase in the participation rate.
This and dovish comments by the New York Fed President John Williams and Vice Chair Philip Jefferson triggered a reduction in Fed hawkish bets for the October 28 meeting. At the time of writing, odds of a hike stand at 23%, while the chances for a hold are 77%, according to Prime Terminal data.
In Mexico, the economic docket will feature the release of Banxico’s last Meeting Minutes. In the US, the schedule will feature the ISM Services PMI, jobs data, the release of the Federal Open Market Committee (FOMC) Meeting Minutes from its last meeting, a speech by Fed Governor Bowman, and the University of Michigan Consumer Sentiment.
USD/MXN Price Forecast: Technical Outlook
In the daily chart, USD/MXN trades at 18.16. The pair holds above the triple simple moving average cluster around 17.23 and has also pushed through the prior descending resistance trendline area near 18.12, keeping the near-term bias bullish as the spot grinds higher from August lows. The Relative Strength Index (RSI) at 77 shows overbought conditions, hinting that upside momentum is stretched but not yet decisively reversing.
On the downside, initial support emerges at the reclaimed trendline area around 18.12, ahead of the triple Simple Moving Average (SMA) group near 17.23, while a deeper pullback would look toward horizontal support at 16.89. With no meaningful resistance levels immediately overhead in the current setup, price action is likely to be driven by momentum exhaustion signals and profit-taking rather than well-defined topside barriers.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Mexican Peso FAQs
The Mexican Peso (MXN) is the most traded currency among its Latin American peers. Its value is broadly determined by the performance of the Mexican economy, the country’s central bank’s policy, the amount of foreign investment in the country and even the levels of remittances sent by Mexicans who live abroad, particularly in the United States. Geopolitical trends can also move MXN: for example, the process of nearshoring – or the decision by some firms to relocate manufacturing capacity and supply chains closer to their home countries – is also seen as a catalyst for the Mexican currency as the country is considered a key manufacturing hub in the American continent. Another catalyst for MXN is Oil prices as Mexico is a key exporter of the commodity.
The main objective of Mexico’s central bank, also known as Banxico, is to maintain inflation at low and stable levels (at or close to its target of 3%, the midpoint in a tolerance band of between 2% and 4%). To this end, the bank sets an appropriate level of interest rates. When inflation is too high, Banxico will attempt to tame it by raising interest rates, making it more expensive for households and businesses to borrow money, thus cooling demand and the overall economy. Higher interest rates are generally positive for the Mexican Peso (MXN) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken MXN.
Macroeconomic data releases are key to assess the state of the economy and can have an impact on the Mexican Peso (MXN) valuation. A strong Mexican economy, based on high economic growth, low unemployment and high confidence is good for MXN. Not only does it attract more foreign investment but it may encourage the Bank of Mexico (Banxico) to increase interest rates, particularly if this strength comes together with elevated inflation. However, if economic data is weak, MXN is likely to depreciate.
As an emerging-market currency, the Mexican Peso (MXN) tends to strive during risk-on periods, or when investors perceive that broader market risks are low and thus are eager to engage with investments that carry a higher risk. Conversely, MXN tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.
- Gold reverses from $4,227 despite sharply weaker US payrolls.
- October Fed hold odds rise as US Unemployment reaches 4.2%.
- The 10-year yield near 5.29% keeps non-yielding Bullion under pressure.
Gold prices dropped on Friday, with the yellow metal struggling to decisively break the $4,200 milestone. The precious metal is down nearly 1% as US Treasury yields edge higher following a less-than-stellar US employment report. The XAU/USD trades at $4,138 after peaking at $4,227 earlier in the session.
XAU/USD retreats as elevated Treasury yields overwhelm softer US jobs data
US Nonfarm Payrolls in September were well below estimates of 90K, coming at just 29K, shy of August’s downwardly revised figure of 133K. This pushed the Unemployment Rate from 4.1% to 4.2%, a tenth up on the Federal Reserve’s (Fed) projections for 2026 and 2027, but it is attributed to an increase in the participation rate.
US jobs data and dovish comments from New York Fed President John Williams and Vice Chair Philip Jefferson, who said they’re not in a rush to raise rates, raised the potential for an October skip, followed by a rate hike in December.
Money markets now expect a hold at the October 28 meeting, according to Prime Terminal. The odds stand at nearly 77% for a hold. However, for the December meeting, the chances are increasing to 88%.
Bullion failed to rally even though the Greenback is losing its safe-haven appeal. The US Dollar Index (DXY), which tracks the performance of the buck against six currencies, is down 0.14% at 101.89.
US Treasury yields remain moderately high with the US 10-year T-note yielding 5.9%, up 4 basis points, making Gold less appealing due to its non-yielding nature.
Meanwhile, light news from the Middle East is keeping energy prices depressed. Reports that Europe may release diesel and Crude from its reserves pushed West Texas Intermediate (WTI), the US Crude benchmark, down 1.6% to $91.42.
Next week, the US economic docket will feature the ISM Services PMI, jobs data, the release of the Federal Open Market Committee (FOMC) Meeting Minutes from its last meeting, a speech by Fed Governor Bowman, and the University of Michigan Consumer Sentiment.
XAU/USD technical analysis: $4,200 is Gold kryptonite, tumbles below $4,150
Struggling to decisively clear the $4,200 mark despite reaching a daily high of $4,227 opens the door for further downside.
The Relative Strength Index (RSI) shows that sellers are in charge with the index remaining below its 50-neutral level.
The XAU/USD first support is the $4,100 milestone. If sellers clear the latter, a move toward the July 29 low of the day (LOD) is likely at $3,996, with the next area of interest to the downside being the July 17 low of $3,959.
On the upside, buyers must reclaim $4,200 to have a chance of challenging the 100-day Simple Moving Average (SMA) at $4,279.
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.
Chicago Federal Reserve (Fed) President Austan Goolsbee said in an interview with Fox Business that the labor market is steady and that “the inflation side of the Fed’s job is more important.”
Goolsbee said he is open to seeing if there’s evidence that prices are moving toward the Fed’s 2% goal and that he “won’t rule out any decision at the next rate meeting.”
Key highlights:
Labor market is steady, the inflation side of the fed's job is more important
Plenty of room for anything on the table as far as rate hike or pause
Open to seeing if we get evidence we are heading back to 2% inflation
Won't react strongly to one month of data
Won't rule out any decision at the next rate meeting
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.10% | -0.32% | -0.16% | 0.24% | -0.27% | -0.09% | -0.23% | |
| EUR | 0.10% | -0.21% | -0.07% | 0.34% | -0.16% | 0.03% | -0.12% | |
| GBP | 0.32% | 0.21% | 0.17% | 0.55% | 0.06% | 0.24% | 0.09% | |
| JPY | 0.16% | 0.07% | -0.17% | 0.41% | -0.11% | 0.07% | -0.06% | |
| CAD | -0.24% | -0.34% | -0.55% | -0.41% | -0.52% | -0.34% | -0.47% | |
| AUD | 0.27% | 0.16% | -0.06% | 0.11% | 0.52% | 0.18% | 0.05% | |
| NZD | 0.09% | -0.03% | -0.24% | -0.07% | 0.34% | -0.18% | -0.13% | |
| CHF | 0.23% | 0.12% | -0.09% | 0.06% | 0.47% | -0.05% | 0.13% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
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.
- NZD/USD advances on Friday, supported by broad US Dollar weakness after job creation fell well short of expectations.
- Downward revisions to previous months and slower wage growth reinforce signs of weakness in the US labor market.
- A tightening election race in New Zealand ahead of the November 7 vote fuels political uncertainty and limits the Kiwi’s gains.
NZD/USD advances on Friday and trades around 0.5610 at the time of writing, up 0.12% on the day. The New Zealand Dollar (NZD) benefits mainly from the decline in the US Dollar (USD), which comes under pressure following a significantly weaker-than-expected employment report. However, concerns surrounding the New Zealand election limit the Kiwi’s bullish momentum.
The United States (US) Bureau of Labor Statistics (BLS) reported on Friday that Nonfarm Payrolls (NFP) increased by only 29K in September, well below market expectations of 90K. Revisions to previous months further highlight the weakness of the report. August job creation was revised down to 133K from the 162K initially reported, while July now shows a decline of 10K jobs compared with a previously estimated increase of 21K. Overall, employment gains in July and August were revised down by a combined 60K.
Other components of the report also offer little support to the Greenback. The Unemployment Rate edged higher to 4.2%, while the Labor Force Participation Rate rose to 61.8% from 61.6% previously. Meanwhile, Average Hourly Earnings increased 3% YoY, below the 3.2% expected, easing concerns over wage-driven inflationary pressures.
The US Dollar reacts negatively to the release. The US Dollar Index (DXY), which measures the value of the Greenback against a basket of six major currencies, falls by 0.11% on Friday to trade near 101.90 at the time of press.
The employment report also triggered an adjustment in expectations surrounding the Federal Reserve’s (Fed) next monetary policy decision. According to the CME FedWatch tool, markets now assign around a 22% chance to an interest rate hike in October, down from roughly 64% a week earlier.
This shift follows another batch of softer US economic data. Thursday’s weaker-than-expected Personal Consumption Expenditures (PCE) inflation figures had already reduced expectations of further monetary tightening in October. Friday’s labor market weakness adds to signs that the US economy is losing momentum, further reducing the case for an immediate rate hike. Markets nevertheless retain an approximately 67% chance of a rate increase in December, according to the CME FedWatch tool.
On the New Zealand side, political uncertainty acts as a headwind for the NZD. Ahead of the November 7 election, opinion polls indicate a tight race and the possibility that New Zealand Prime Minister Christopher Luxon’s coalition could lose power. A change in government could result in several shifts in economic policy, including changes to the central bank’s mandate.
New Zealand’s Labour Party has indicated that it would restore the dual mandate of the Reserve Bank of New Zealand (RBNZ), after Christopher Luxon’s government refocused its mandate on price stability. The prospect of changes to the monetary policy framework therefore adds another source of uncertainty for the New Zealand Dollar ahead of the election.
New Zealand Dollar Price Today
The table below shows the percentage change of New Zealand Dollar (NZD) against listed major currencies today. New Zealand Dollar was the strongest against the Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.11% | -0.27% | -0.21% | 0.23% | -0.31% | -0.12% | -0.26% | |
| EUR | 0.11% | -0.16% | -0.09% | 0.30% | -0.17% | 0.02% | -0.15% | |
| GBP | 0.27% | 0.16% | 0.08% | 0.46% | -0.03% | 0.15% | 0.00% | |
| JPY | 0.21% | 0.09% | -0.08% | 0.43% | -0.11% | 0.07% | -0.06% | |
| CAD | -0.23% | -0.30% | -0.46% | -0.43% | -0.54% | -0.37% | -0.50% | |
| AUD | 0.31% | 0.17% | 0.03% | 0.11% | 0.54% | 0.19% | 0.05% | |
| NZD | 0.12% | -0.02% | -0.15% | -0.07% | 0.37% | -0.19% | -0.13% | |
| CHF | 0.26% | 0.15% | -0.01% | 0.06% | 0.50% | -0.05% | 0.13% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the New Zealand Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent NZD (base)/USD (quote).
- DXY drops through 102.00 to a session low under 101.70 after US payrolls miss.
- US employers add 29K jobs in September, about a third of the 90K forecast.
US employers added 29K jobs in September against a forecast of 90K, and July and August were revised down by a combined 60K. The unemployment rate rose to 4.2%, and hourly pay grew 3.0% over the year against a 3.2% forecast.
Traders now see about a one-in-five chance of another rate hike on October 28, and the two-year Treasury yield, which moves most with Fed expectations, fell. The Dollar fell on a first estimate, and backward revisions have dragged July and August down into net loss territory. A lower US yield means less extra interest for holding Dollars over Euros, which make up 57.6% of the Dollar Index.
On the charts
The Dollar Index had climbed to just above 102.10, near the day's high, in the bars before the release. In the release bar, it fell from 102.00 to the 101.80 area, back to where that climb started. A bounce stalled short of 102.00, the level it broke above on Thursday, and a second leg lower reached the day's low just under 101.70. The index has since recovered to near 101.90, the middle of the day's range.
DXY 5-minute chart
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.
- GBP/USD rebounds above 1.32 as US payrolls badly miss forecasts.
- Unemployment rises to 4.2%, pushing Fed hold odds to 79%.
- BoE tightening expectations keep Sterling supported ahead of officials’ speeches.
The Pound Sterling (GBP) rises by over 0.41% against the US Dollar (USD) on Friday, as the US Unemployment Rate rises amid a worse-than-expected Nonfarm Payrolls report for September. At the time of writing, GBP/USD trades at 1.3250 after bouncing off daily lows beneath 1.3200.
Sterling rallies as weak US hiring pushes markets firmly toward Fed hold
US employment data showed that in September, the Unemployment Rate rose from 4.1% to 4.2% as the economy added just 29K to the workforce, well below estimates of 90K. August’s figures were revised down from 162K to 133K.
After the report, money markets increased their bets that the US central bank will keep rates steady, with odds at 79% and pricing out a rate hike by the Federal Reserve (Fed) in October, according to Prime Terminal.
Earlier in the week, traders scrambled to shift expectations that the Fed would hold rates at the October meeting, following the release of the Core Personal Consumption Expenditures (PCE) Price Index.
US Treasury yields are holding steady after the report, with the long end of the curve unchanged, while the US 10-year Treasury note yields 5.256%, up nearly one and a half basis points.
Across the pond, the UK economic docket remained absent, but Andy Burnham’s hinting that the UK could rejoin the European Union (EU) gained traction as he campaigned to stay in the EU in a 2016 referendum.
Traders anticipate roughly 30 basis points of monetary tightening from the BoE by year-end and about 90 bps by 2027.
Next week, the UK economic docket will feature speeches by Bank of England’s Mann and Lombardelli. In the US, the schedule will feature the ISM Services PMI, the FOMC's last meeting minutes, jobless claims and the University of Michigan Consumer Sentiment.
GBP/USD Price Forecast: Technical Outlook
In the daily chart, GBP/USD trades at 1.3225, keeping a bearish near-term bias as spot holds beneath the cluster of simple moving averages around 1.3453 and multiple trend-line levels overhead. Price is capped first by a descending resistance trend line around 1.3313, while the latest reading of the Relative Strength Index (14) at 33.9 stays just above oversold territory, hinting that downside momentum remains dominant but could be slowing rather than collapsing.
On the topside, initial resistance is seen at the downward-sloping trend line break near 1.3313, followed by another descending barrier around 1.3434 that converges with the 50/100/200-period simple moving average cluster near 1.3453. Above there, an upward-sloping trend line that now stands around 1.3544 and the higher structural level near 1.3745 form successive caps, and GBP/USD would need to reclaim these areas to ease the current bearish pressure.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Pound Sterling Price This week
The table below shows the percentage change of British Pound (GBP) against listed major currencies this week. British Pound was the strongest against the Euro.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 1.09% | 0.08% | 0.28% | 0.81% | 0.86% | 0.91% | 0.15% | |
| EUR | -1.09% | -1.07% | -0.76% | -0.29% | -0.24% | -0.19% | -0.95% | |
| GBP | -0.08% | 1.07% | 0.10% | 0.75% | 0.79% | 0.85% | 0.06% | |
| JPY | -0.28% | 0.76% | -0.10% | 0.43% | 0.50% | 0.55% | -0.26% | |
| CAD | -0.81% | 0.29% | -0.75% | -0.43% | 0.08% | 0.08% | -0.67% | |
| AUD | -0.86% | 0.24% | -0.79% | -0.50% | -0.08% | 0.05% | -0.74% | |
| NZD | -0.91% | 0.19% | -0.85% | -0.55% | -0.08% | -0.05% | -0.78% | |
| CHF | -0.15% | 0.95% | -0.06% | 0.26% | 0.67% | 0.74% | 0.78% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
TD Securities' Macro Research’s FX team notes the softer US payrolls data is only marginally negative for the Dollar, with the labor market still described as buoyant and neither overheating nor deteriorating. They argue market pricing for Fed hawkishness has likely peaked and see near-term rate hike expectations easing in both the US and Europe.
TD sees limited upside for USD
"FX: We have a greater conviction to fade the USD rallies than to chase the USD to a new high."
"The softer payrolls report (headline, AHE, revisions) is marginally weighing on the USD."
"It is hard for us to see persistent bullish USD signals from the US data/ Fed channel alone."
"However, we do not yet see the macro fundamentals justifying a move into a new higher orbit for the USD or a reversion back to peak safe haven era."
"On balance, we have greater conviction in fading USD rallies than chasing for any return to 2025 highs."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
TD Securities analysts characterize the upcoming September FOMC minutes as largely outdated given subsequent employment and PCE data. The minutes are expected to show disagreement over how much further tightening is needed, but broad consensus that policy should remain more restrictive.
Stale minutes with cautious policy tone
"The September FOMC minutes will be largely stale given the employment report and PCE data releases since the meeting."
"The minutes will likely note there was disagreement on the extent of tightening this year despite broad agreement that rates should be more restrictive."
"In line with the SEP and recent Fedspeak, "most" participants likely saw no urgency in their next move."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- USD/JPY rebounds toward 157.65 after briefly falling below 157.00 following the US employment data.
- The Japanese Yen weakens despite hotter-than-expected Tokyo inflation and hawkish signals from the Bank of Japan.
- Weak US job creation weighs on the US Dollar and reduces expectations of an interest rate hike.
USD/JPY trades around 157.65 on Friday at the time of writing, down 0.28% on the day. The pair briefly dropped to 156.95 following the release of the United States (US) employment report before erasing the entire move and returning to pre-release levels. The rebound is mainly driven by renewed weakness in the Japanese Yen (JPY), while the US Dollar Index (DXY) remains close to its daily lows.
The recovery extends the dip-buying pattern seen around the 157.00-156.50 area since mid-September. USD/JPY's resilience is particularly notable as Friday's US economic data provides little support to the Greenback.
The US Bureau of Labor Statistics (BLS) reported that Nonfarm Payrolls (NFP) increased by only 29K in September, well below market expectations of 90K. Figures for previous months are also revised lower. August's increase is downgraded to 133K from the initially reported 162K, while July now shows a decline of 10K jobs compared with a previously estimated gain of 21K.
Other components of the report reinforce signs of a cooling US labor market. The Unemployment Rate rose to 4.2%, while the Labor Force Participation Rate increased to 61.8% from 61.6%. Average Hourly Earnings rose 3% YoY, below expectations of 3.2%, also easing concerns about wage-driven inflationary pressures.
The US Dollar Index, which measures the Greenback against a basket of six major currencies, fell 0.23% after the data and remains close to its daily lows. The fact that USD/JPY simultaneously manages to erase its post-NFP decline suggests that the pair's rebound is driven more by Japanese Yen selling than by renewed demand for the US Dollar.
The employment figures also trigger an adjustment in expectations surrounding the Federal Reserve's (Fed) next monetary policy decision. According to the CME FedWatch tool, markets now assign around a 18% chance to an interest rate hike in October, down from roughly 24% before the NFP release and 64% a week earlier.
The shift comes after several weaker US economic releases. Thursday's softer-than-expected Personal Consumption Expenditures (PCE) inflation data had already reduced expectations that the Fed would tighten monetary policy again in October. Friday's employment report adds to signs that the US economy may be losing momentum, although markets continue to assign around a 69% chance to a rate hike in December.
On the Japanese side, Friday's fundamentals nevertheless provide several arguments in favor of the Yen. The Statistics Bureau of Japan reported that the Tokyo Consumer Price Index (CPI) excluding Fresh Food accelerated to 2.7% YoY in September from 1.8% in August, above the 2.4% expected. Inflation excluding Food and Energy also accelerated to 3% from 2% previously.
The figures strengthen the case for further monetary tightening by the Bank of Japan (BoJ). The Summary of Opinions (SoP) from the September meeting, released on Thursday, also showed that several policymakers support additional interest rate hikes. One member notably argued that it is appropriate to continue raising rates in line with developments in the economy, prices and financial conditions.
The report also showed, however, that Cabinet Office representatives are urging the central bank to carefully assess the cumulative impact of previous interest rate increases. Despite accelerating Tokyo inflation and hawkish signals from some BoJ policymakers, the Japanese Yen therefore fails to hold onto its gains against the US Dollar on Friday.
USD/JPY technical analysis
In the one-hour chart, USD/JPY trades at 157.49, pressing lower beneath the 100-period simple moving average (SMA) at 157.53 and the 200-period SMA at 157.71, which together cap the topside and reinforce a bearish near-term bias. The pair has slipped back from recent highs, and the Relative Strength Index (14) near 42 suggests waning bullish momentum, keeping the risk tilted toward further downside while price stays under these moving averages.
On the downside, immediate support emerges at 157.00, ahead of a lower floor at 156.50, while a deeper slide could target the 155.50 area. On the topside, initial resistance is seen at the 100-period SMA at 157.53, followed by the 200-period SMA at 157.71 and a nearby horizontal barrier at 157.85; above there, the next resistance levels stand at 158.45 and 159.00.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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