Forex News
- WTI drifts lower for the second straight day on Monday amid easing supply concerns.
- Persistent geopolitical uncertainties help the black liquid hold above a four-week low.
- The technical setup warrants caution before positioning for any further depreciation.
West Texas Intermediate (WTI) – the benchmark US Crude Oil price – attracts sellers for the second straight day on Monday and sticks to its intraday losses around the $89.00 mark through the early European session. The commodity remains close to a four-week low, touched last Friday, amid easing supply concerns, though heightened geopolitical tensions help limit losses.
The G7 agreed on Friday to release 100 million barrels of crude and fuel products from emergency reserves. Furthermore, Middle Eastern crude exports rose above pre-war levels on four days during the final week of September, exerting some pressure on the black liquid. That said, flows through the Strait of Hormuz remain amid the US-Iran standoff, which, along with the widening Russia-Ukraine war, might hold back bears from positioning for any further depreciating move in crude oil prices.
From a technical perspective, the commodity needs to find acceptance below the 38.2% Fibonacci retracement of the July-September upswing to back the case for further losses towards testing sub-$88.00 levels. Any further decline, however, is more likely to attract fresh buyers and find decent support near the $85.00-$84.50 confluence – comprising the 50% retracement level and the 100-day Simple Moving Average (SMA). The said area would act as a pivotal point for crude oil prices amid mixed oscillators.
The Moving Average Convergence Divergence (MACD) stays below zero with a negative reading of -0.93 and the Relative Strength Index (RSI) hovers near a neutral 47, hinting at a moderating but still supportive trend rather than a decisive reversal. A convincing break below $84.50, however, should pave the way for a further downfall towards the 61.8% retracement at $80.73 and the 78.6% level at $74.84, ahead of the broader structural anchor down at $67.33.
On the topside, a break higher would first target resistance at the 23.6% Fibo. retracement at $94.13, with a subsequent extension opening the way toward the cycle high region around $102.40.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
WTI daily chart
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
ING’s Warren Patterson notes that ICE Brent has repeatedly dipped below $100/bbl but continues to settle above this level as the market weighs conflicting supply and geopolitical factors. Higher oil flows through the Strait of Hormuz, G7 reserve releases, and recovering Saudi pipeline capacity contrast with persistent Middle East tensions and unchanged OPEC+ production plans.
Brent holds above key threshold
"Reports are that flows are back to more than 80% of capacity, which will allow crude exports from Yanbu to also recover."
"The latest positioning data shows that speculators reduced their net long in ICE Brent by 13,812 lots over the last reporting week to 204,302 lots, which is the smallest position held since early August. Signs of increased oil flows from the Persian Gulf would likely leave speculators reluctant to carry too much risk at the moment."
"Unsurprisingly, OPEC+ over the weekend left production levels unchanged for November. Throughout the US-Iran conflict, the group announced cumulative supply increases of 1.65m b/d. However, these were largely paper increases, as ongoing supply disruptions prevented a corresponding rise in actual production."
"Despite ICE Brent breaking below $100/bbl several times last week, the move was relatively short-lived. The market continues to settle above this key level as it digests a number of diverging developments. On the bearish side, oil flows through the Strait of Hormuz appear to be trending higher."
"Further reinforcing expectations of looser crude oil market conditions, Saudi Arabia reduced the official selling price for November-loading Arab Light crude into Asia by $3/bbl, widening its discount to the benchmark to $5/bbl. The Saudis have been shipping larger volumes through the Strait of Hormuz in recent weeks, given the outage of the East-West pipeline. More recently, oil flows through the pipeline have been recovering."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- USD/JPY holds in range around 158.00 with downside attempts limited amid broad-based Dollar strength.
- Japanese Prime Minister Takaichi vowed fiscal discipline, as borrowing costs hit record levels.
- The Greenback appreciates against its main peers as debt concerns crush investors' appetite for risk.
The Japanese Yen (JPY) nurses marginal losses against the US Dollar (USD) on Monday but remains trading within previous ranges, with downside attempts limited as Japanese Prime Minister Sanae Takaichi pledged to keep public debt under control. The USD/JPY is trading around 158.00 at the European session opening,with the broader bearish trend still intact as the US Dollar rallies across the board.
Prime Minister Sanae Takaichi promised that the government will control debt issuance and "scrutinise the economy, prices, tax revenues, interest rates, debt-servicing costs, and market developments”, in an extraordinary speech to the parliament, as Japan’s borrowing costs surged to record highs with the bond markets' turmoil worsening.
Takaichi also pledged a five-year investment plan that will be released by the end of the year, and vowed to “enhance market trust” in their policies by “communicating closely with the public, domestic and overseas players.”
Almost at the same time, the Japanese Cabinet Office revealed that Consumer Confidence ticked down to 35.4 in September from 35.5 in August, a tad better than the 35.3 reading expected by the market.
US Dollar remains bid amid the risk-off mood
In the US, Nonfarm Payrolls data disappointed on Friday and practically discarded any interest rate hike by the US Federal Reserve (Fed) in October. The US Dollar, however, maintains its bid tone, fuelled by its safe-haven status, as borrowing costs surge across the globe, with high oil prices fuelling inflationary pressures.
According to TD Securities, "September payrolls surprised to the downside last week, but the details showed underlying strength," as the moderation in job gains was "largely driven by seasonal factors — especially in leisure & hospitality." All in all, TD experts see the US labor market broadly resilient despite the monthly slowdown.
Later in the day, US "ISM services likely reversed its unexpected August gain, falling to a below-consensus 54.0 in September," and anticipates that "the recently strengthening new orders and activity components" will "lead the reversal," say TD Securities in a note.
Economic Indicator
Consumer Confidence Index
The Consumer Confidence released by the Cabinet Office captures the level of sentiment that individuals have in economic activity. A high level of consumer confidence stimulates economic expansion while a low level drives to economic downturn. Normally, a result above 50 is positive (or bullish) for the JPY, whereas a result below 50 is seen as bearish.
Read more.Last release: Mon Oct 05, 2026 05:00
Frequency: Monthly
Actual: 35.4
Consensus: 35.3
Previous: 35.5
Source: Japanese Cabinet Office
Economic Indicator
ISM Services PMI
The Institute for Supply Management (ISM) Services Purchasing Managers Index (PMI), released on a monthly basis, is a leading indicator gauging business activity in the US services sector, which makes up most of the economy. The indicator is obtained from a survey of supply executives across the US based on information they have collected within their respective organizations. Survey responses reflect the change, if any, in the current month compared to the previous month. A reading above 50 indicates that the services economy is generally expanding, a bullish sign for the US Dollar (USD). A reading below 50 signals that services sector activity is generally declining, which is seen as bearish for USD.
Read more.Next release: Mon Oct 05, 2026 14:00
Frequency: Monthly
Consensus: 55.7
Previous: 55.4
Source: Institute for Supply Management
The Institute for Supply Management’s (ISM) Services Purchasing Managers Index (PMI) reveals the current conditions in the US service sector, which has historically been a large GDP contributor. A print above 50 shows expansion in the service sector’s economic activity. Stronger-than-expected readings usually help the USD gather strength against its rivals. In addition to the headline PMI, the Employment Index and the Prices Paid Index numbers are also watched closely by investors as they provide useful insights regarding the state of the labour market and inflation.
- EUR/GBP weakens to near 0.8475 in Monday’s early European session.
- France's fiscal concerns exert some selling pressure on the Euro.
- BoE officials backed rate hike to tame inflation.
The EUR/GBP cross attracts some sellers to around 0.8475 during the early European trading hours on Monday. The Euro (EUR) softens against the British Pound (GBP) as fiscal concerns in France in the wake of a steep bond market rout stoke contagion fears in the Eurozone.
The turmoil in the bond market and the EUR’s weakness raised fears that France’s financial fiscal crisis could spill over into the wider Eurozone, echoing the sovereign debt crisis of more than a decade ago and potentially prompting the European Central Bank (ECB) to step in to support French government debt.
Brent Donnelly, president of foreign exchange trading at analytics firm Spectra Markets, said the political tensions in France that many had expected to intensify as the April 2027 elections approached have already come to the forefront.
"It's not completely obvious what might fix things here as any budget promises made by the French government now are not super credible with a change of power coming soon," Donnelly said.
Bank of England (BoE) policymakers Catherine Mann, one of the most hawkish officials, said that a rate hike is needed to manage inflationary risks as financial conditions are still not tight enough.
Markets are currently discounting roughly 30 basis points (bps) of rate hikes by the UK central bank through the end of the year, alongside approximately 90 bps of cumulative tightening through 2027.
France fiscal risks build as deficit path drifts from Eurozone commitments
Analysts at Brown Brothers Harriman highlight mounting fiscal risks in France, noting that the country’s minority government has “presented details of a plan to reduce the country’s budget deficit to 5.0% of GDP next year,” but they “doubt the proposal will clear parliament without significant concessions.” Even if a compromise is reached, BBH points out that France’s fiscal watchdog has already warned that the economic assumptions in the “2027 draft budget are ‘optimistic’,” underscoring concerns over the credibility of the consolidation path.
Against a backdrop of limited political appetite for compromise ahead of the presidential election on April 18, 2027, BBH argues that “a rollover of the 2026 budget is the most likely outcome.” They caution that such an outcome “could push the deficit from 5.4% of GDP in 2026 to roughly 6.0% in 2027,” taking France further away from its European Commission commitment to bring the shortfall “below 3% by 2029.”
BoE’s Mann flags need for higher rates despite tighter conditions
BoE’s Mann delivers a notably more hawkish message than usual, with the 9.4/10 FXS Speechtracker score well above the historic 8.1/10 baseline. The insistence that policy cannot rely on risk premia and instead “needs to raise Bank Rate” points to a clear preference for further tightening, even as financial conditions have already firmed.
By stressing that tighter conditions driven by higher inflation and policy uncertainty premia are “no comfort,” the speech underscores concern that markets are pricing in persistent inflation risks, reinforcing a hawkish tilt. The admission that BoE communication around the Middle East shock and the lack of an April baseline forecast may have clouded the reaction function suggests a desire to reassert control via clearer guidance and potentially higher rates, a backdrop that is typically supportive for the Pound.
Technical Analysis: EUR/GBP remains capped under the key SMA amid oversold conditions
In the daily chart, EUR/GBP extends its slide beneath all key moving average and Bollinger band references, which keeps the near-term bias firmly bearish. The 100-day simple moving average (SMA), together with the Bollinger band midline, sits well above spot and suggests the broader trend remains capped despite the Relative Strength Index (14) slipping into oversold territory around 26, hinting that downside momentum is stretched but not yet reversed.
On the topside, initial resistance emerges at the Bollinger lower band around 0.8500, with further barriers at the Bollinger midline near 0.8565 and the 100-day SMA at 0.8580, before the Bollinger upper band at 0.8635 comes into view as a stronger cap. As long as EUR/GBP holds below this stacked resistance cluster, rallies would likely be corrective, with sellers expected to reassert control on approaches to the 0.8500–0.8580 area.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling 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, its currency will benefit 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.
Japanese Prime Minister Takaichi Sanae said on Monday that the government will control the annual debt issuance amount appropriately while scrutinising the economy, prices, tax revenues, interest rates, debt-servicing costs, and market developments.
Key quotes
We will control the annual debt issuance amount appropriately while scrutinising the economy, prices, tax revenues, interest rates, debt-servicing costs, and market developments.
We will seek to enhance market trust in our policies by communicating closely with the public, domestic and overseas market players.
If economy, markets make unexpected movements, we will analyse their impact, respond nimbly as needed.
We will draw up a 5-year investment plan by year-end.
Market reaction
As of writing, the USD/JPY pair is down 0.02% on the day at 157.80.
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.
- Gold maintains a capped tone at the start of a new week amid a strong pickup in USD demand.
- Geopolitical risks counter receding October Fed hike bets and lift the USD to a fresh YTD high.
- Sliding US bond yields offer support to the bullion as traders look to the US ISM Services PMI.
Gold (XAU/USD) extends its consolidative price move, trading below $4,150 heading into the European session on Monday and within a range held over the past week or so. As investors look past Friday's disappointing US jobs data, the US Dollar (USD) regains strong positive traction and rallies to a fresh high since April 2025. This, in turn, is seen as a key factor capping the commodity, though receding bets for an October rate hike by the Federal Reserve (Fed) help limit the downside.
The popularly known US Nonfarm Payrolls (NFP) report showed that the economy added 29K new jobs in September, compared to the previous month's downwardly revised reading of 133K and 90K consensus estimates. Moreover, the Unemployment Rate unexpectedly edged higher to 4.2% from 4.1% in August, while annual wage growth slowed to 3.0% in September, matching the lowest pace recorded since May 2021. This comes on top of the soft US inflation data, released last week, and significantly eased pressure on the Fed to raise interest rates. The outlook, in turn, drags US bond yields further away from multi-year highs and acts as a tailwind for the non-yielding Gold.
Fed hike pressure eases after softer US data but ABN Amro still sees December move
Analysts at ABN Amro judge the latest US labour market report as “consistent with our base case,” arguing that “the apparent resurgence in the labour market over the previous two reports was somewhat of a mirage.” They highlight that “the three-month average of 51k is solid given labour supply, but it does not indicate a hot or tight market,” and contend that the softer tone in employment, “especially alongside the downside surprise in the PCE report earlier this week, removes the pressure on the Fed to hike in October.”
Despite this, ABN Amro maintains that “persistent inflationary pressure from the energy shock” is likely to “prompt one more Fed hike in December, for reasons similar to those in September: to prevent pass-through to consumer prices and wages.”
However, the CME Group's FedWatch Tool indicates that traders are still pricing in around an 85% chance that the US central bank will raise borrowing costs by the end of this year. Apart from this, uncertainties stemming from the ongoing conflicts in the Middle East and the widening Russia-Ukraine war provide a strong boost to the safe-haven Greenback. In the latest developments, Iran’s Foreign Minister, Abbas Araghchi, said that there is no military solution to the conflict with the US, but Tehran remains ready to return to war. Adding to this, Iranian parliament speaker Mohammad Bagher Ghalibaf said that the Strait of Hormuz will not be opened until our conditions are met.
Furthermore, the head of Yemen’s governing body, Rashad al-Alimi, announced the start of military operations to retake the remaining territory held by the Houthis in the country. Separately, Ukraine reported deadly Russian air strikes on the Kyiv region, Kharkiv, and Dnipro on Sunday. In response, Ukrainian President Volodymyr Zelenskyy said in a post on X that Russia will definitely face a response to this. This keeps the geopolitical risk premium in play and favors USD bulls, warranting caution for XAU/USD bulls. Traders now look to the release of the US ISM Services PMI, which, along with speeches by influential FOMC members, should provide some impetus to the Gold price.
XAU/USD 4-hour chart
Technical Analysis
The XAU/USD pair keeps a bearish near-term tone below the 100-period Simple Moving Average (SMA) on the 4-hour chart and the 61.8% Fibonacci retracement level at $4,225.30. Moreover, the Relative Strength Index (RSI) at 40.92 hovers below the midline, while the Moving Average Convergence Divergence (MACD) indicator slips marginally into negative territory with a flat histogram. This together suggests waning upside momentum and reinforces the idea of gold being capped by overhead resistance.
Meanwhile, initial resistance is located at the 61.8% retracement at $4,225, followed by the 100-period SMA at $4,269, with higher barriers at the 50% retracement at $4,314 and the 38.2% level at $4,403. On the downside, immediate support emerges at the 78.6% Fibo. retracement at $4,098, ahead of a more important structural floor near the prior swing low at $3,936, where sellers could hesitate on a deeper pullback.
(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.
- GBP/USD falls sharply to near 1.3200 as the US Dollar outperforms its peers.
- The US Dollar gains even as traders have scaled back hawkish Fed bets for the October policy meeting.
- Heightened French fiscal concerns have prompted US Dollar’s safe-haven appeal.
The British pound (GBP) is down 0.26% to near 1.3200 against the US Dollar (USD) during the early European trading session on Monday. The GBP/USD pair faces selling pressure as the US Dollar (USD) outperforms due to an improvement in its safe-haven demand in the wake of heightened French fiscal concerns.
As of writing, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.42% higher to near 102.53. The DXY posted a fresh yearly high at 102.53 during the day.
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 Euro.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.61% | 0.27% | 0.09% | 0.21% | 0.12% | 0.55% | 0.17% | |
| EUR | -0.61% | -0.30% | -0.49% | -0.37% | -0.31% | -0.12% | -0.39% | |
| GBP | -0.27% | 0.30% | -0.17% | -0.07% | -0.02% | 0.17% | -0.10% | |
| JPY | -0.09% | 0.49% | 0.17% | 0.11% | 0.12% | 0.35% | 0.09% | |
| CAD | -0.21% | 0.37% | 0.07% | -0.11% | 0.02% | 0.21% | -0.05% | |
| AUD | -0.12% | 0.31% | 0.02% | -0.12% | -0.02% | 0.18% | -0.08% | |
| NZD | -0.55% | 0.12% | -0.17% | -0.35% | -0.21% | -0.18% | -0.27% | |
| CHF | -0.17% | 0.39% | 0.10% | -0.09% | 0.05% | 0.08% | 0.27% |
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).
Meanwhile, traders have scaled down hawkish Federal Reserve (Fed) expectations for the October policy meeting after the release of the United States (US) Nonfarm Payrolls (NFP) data on Friday, which showed a moderate job growth.
The CME FedWatch tool shows an 82.3% that the Fed will keep interest rates steady in the policy meeting this month. This is a sharp turnaround from the probability of 35.8% seen last week.
Later in the day, investors will focus on the US ISM Services Purchasing managers Index (PMI) data for September, which will be published at 14:00 GMT. The ISM Services PMI is seen higher at 55.7 from 55.4 in August.
GBP/USD Technical Analysis
In the daily chart, GBP/USD trades at 1.3207, retaining a bearish near-term bias as spot holds beneath the 20-day exponential moving average (EMA) at 1.3324. Price action remains capped by this overhead EMA, suggesting sellers stay in control while buyers struggle to regain the broken trend reference.
The Relative Strength Index (14) at 33 is hovering just above oversold territory, hinting that while downside pressure persists, the sell-off is losing some momentum rather than accelerating.
On the topside, initial resistance is defined by the 20-day EMA at 1.3324, which acts as the first barrier that bulls would need to reclaim to ease immediate bearish pressure and open the way for a corrective bounce. Below the 20-day EMA, the 1.3300 round level would be a key hurdle.
Looking down, the Year-Till Date (YTD) low at 1.3140 is the key support zone, a decisive move below the same could expose the pair to 1.3100, followed by the psychological level of 1.3000.
(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.
- The Indian Rupee edges up against the US Dollar as traders reassess hawkish Fed bets.
- The US Dollar and US Treasury Yields remain firm despite hawkish Fed prospects cool down.
- Investors keenly await the RBI’s monetary policy.
The Indian Rupee (INR) opens marginally higher against the US Dollar (USD) at the start of the Reserve Bank of India’s (RBI) monetary policy week. The USD/INR pair ticks down to near 96.25 as traders have trimmed Federal Reserve (Fed) interest rate expectations for the policy meeting this month, a scenario that improves the appeal of riskier assets, such as the Indian Rupee.
According to the CME FedWatch tool, the odds of the Fed leaving interest rates unchanged in the October policy meeting have increased to 82.3% from 35.8% seen last week.
Financial markets scale back hawkish Fed expectations after the release of the United States (US) Nonfarm Payrolls (NFP) data for September, which showed a moderate job growth.
What US NFP report showed
On Friday, the US Bureau of Labor Statistics (BLS) showed that the economy created 29K fresh jobs in September, fewer than 90K estimates and the previous reading of 133K, revised lower from 162K. The Unemployment Rate increased to 4.2%, while it was expected to remain steady at 4.1%.
Average Hourly Earnings, a key measure of wage growth, grew by 3% Year-on-Year (YoY), unexpectedly slower than the August reading of 3.1%. The data was expected to rise at a faster pace of 3.2%.
Moderate job wage growth forced financial markets to reassess their hawkish Fed expectations.
However, US Treasury Yields and the US Dollar remain firm due to elevated inflation projections and French fiscal risks.
As of writing, 10-year US Treasury Yields are marginally down at around 5.27% but not so far from its two-decade high of 5.34% posted last week. In the Asian trade, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, posts a fresh yearly high near 102.53.
Higher US Treasury Yields and the US Dollar could weigh on the Indian currency in the near term.
RBI’s monetary policy awaited
This week, the major trigger for the Indian Rupee will be the RBI’s monetary policy announcement on Wednesday.
Analysts at MUFG/BTMU reiterate that they are “officially forecasting RBI to keep rates on hold,” but emphasise that “more importantly we have already been calling for the central bank to start its hiking cycle from December so ultimately we think it’s just a matter of time before policy rates move higher.” They “see a good chance RBI will also move its stance away from neutral to signal a tightening bias,” underscoring a shift in the policy signal even if the near-term decision is unchanged.
In terms of the projected magnitude, MUFG/BTMU note that “we have 50bps of rate hikes in our forecast profile, and have mentioned that there could be a risk of 75bps in total this cycle,” pointing to a backdrop where “growth is strong, liquidity is abundant, credit growth is picking up, fiscal policy is supportive, while higher commodity prices and adverse weather conditions lend inflation risk to the upside in India.” They add that “we are forecasting RBI to hike rates by 50bps this cycle with some risk of 75bps, although we note pricing in the rates market is quite rich already,” suggesting that markets may already be pricing in a relatively aggressive tightening path.
USD/INR Technical Analysis
In the daily chart, USD/INR trades at 96.25, maintaining a bullish near-term bias as spot holds above the 50-period exponential moving average (EMA) at 95.59. The pair is consolidating near recent highs, and the Relative Strength Index (14) at 63.26 is approaching overbought territory, suggesting that upside momentum is strong but could be nearing a stretched zone.
On the downside, initial support is located at the 50-day EMA at 95.59, where any pullback would likely be tested before deeper losses emerge. On the upside, the pair aims to revisit the all-time high near 97.00
(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.
- AUD/JPY trades on a softer note near 109.70 in Monday’s early session.
- The negative outlook of the cross remains intact, with a bearish RSI condition.
- The first upside barrier emerges at 100.00; the initial support level is seen at 109.20.
The AUD/JPY cross trades in negative territory around 109.70 during the early European session on Monday. The Australian Dolllar (AUD) softens against the Japanese Yen (JPY) as bets of the Reserve Bank of Australia (RBA) raising interest rates in November have fallen sharply after the latest Consumer Price Index (CPI) came in line with expectations.
Money markets are now betting the RBA will likely raise rates unchanged at its November policy meeting. The probability of a rate hike fell to around 20%, data from LSEG showed.
On Japan’s front, Chief Cabinet Secretary Minoru Kihara said on Monday that there are no plans for a fresh release of crude oil from national reserves as the country had already released crude supplies, despite a G7 agreement to release 100 million barrels of diesel and crude from emergency reserves.
"Underlying inflation is near the BOJ's 2% target, and wages are becoming embedded at levels consistent with 2% inflation. If so, it would be too risky to implement policies that boost demand," said former BoJ board member Asahi Noguchi
Japan focus turns to BoJ communication and wage momentum
Analysts at MUFG/BTMU highlight that, in Japan, "BOJ Governor Ueda’s speech and wage data will be important for assessing the timing of the BOJ’s next move." They expect "headline labour cash earnings growth is expected to slow to 3.7% from 4.3% as summer bonuses normalise," but emphasise that "underlying base-pay momentum is likely to remain firm, keeping the prospect of further monetary tightening alive." MUFG/BTMU add that "Governor Kazuo Ueda’s speech on 6 October will provide an additional policy signal, while household spending and current-account data are also due," underscoring the significance of the upcoming data and communication in shaping expectations for the BoJ’s policy path.
Technical Analysis: AUD/JPY retains a negative tone below the 100-day SMA
In the daily chart, AUD/JPY maintains a bearish near-term tone as price holds beneath the 20-day simple moving average (SMA) Bollinger middle band and the 100-day SMA. The pair also trades below the Bollinger upper band, underscoring a capped structure after the recent slide, while the Relative Strength Index (RSI) at 34.97 hovers just above oversold territory, hinting that downside momentum is still in control but somewhat stretched.
On the topside, initial resistance emerges at the Bollinger middle band at 110.65, with the upper band at 112.20 and the 100-day SMA at 112.56 forming a broader supply zone overhead. On the downside, the immediate cushion is the Bollinger lower band around 109.08, and a sustained break below this support would likely open the door to further weakness in the cross in the coming sessions.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
- EUR/JPY could slip below the lower boundary of the channel around 176.50.
- The 14-day Relative Strength Index of 27.00 signals oversold conditions.
- The initial barrier lies at the nine-day EMA at 178.27.
EUR/JPY continues its losing streak for the seventh consecutive day, trading around 176.70 during Asian hours on Monday. Technical analysis of the daily chart shows that the currency cross is testing the lower boundary of the descending channel, suggesting the price could either hold support and trigger a temporary bounce toward the channel's upper limits, or break below it to signal accelerating downward momentum in a steeper downtrend.
The 14-day Relative Strength Index (RSI) at 27.00 signals oversold conditions that could slow the decline but do not yet challenge the prevailing negative bias. The EUR/JPY cross is maintaining a bearish near-term tone as it sits beneath both the nine- and 50-day Exponential Moving Average (EMAs). The pair’s slide below these key averages suggests downside pressure dominates.
A successful break below the lower boundary of the channel around 176.50, followed by an 11-month low of 175.70, recorded in November 2025. Further support lies at the 14-month low of 169.72.
On the upside, the EUR/JPY cross may rebound toward the nine-day EMA at 178.27, followed by the 50-day EMA at 181.34. Further resistance lies at the upper boundary of the descending channel around 184.40, followed by the all-time high of 187.95 set on April 17.
BoJ flags AI as a new positive demand shock for the Yen
BoJ's Uchida speech scores 7.2 on FXS Speechtracker, exactly in line with Uchida's historic average, signaling a stable tone rather than an escalation in policy urgency. The emphasis on AI as a major positive demand shock, pushing up economic activity, prices, and long-term rates via equity gains and bond issuance, tilts the message modestly hawkish for the Yen as it highlights upside risks to inflation and financial conditions.
By stressing that AI affects output gaps, financial conditions, and key "star" variables, Uchida effectively frames AI as a structural force that could justify tighter policy over time if demand-side effects dominate. The caution about correction risks if profits disappoint tempers the hawkish bias, but the commitment to closely monitor AI-driven indicators keeps the balance of risks skewed toward gradual normalization rather than renewed easing, mildly supportive of the Yen.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the weakest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.71% | 0.28% | 0.16% | 0.25% | 0.13% | 0.58% | 0.21% | |
| EUR | -0.71% | -0.39% | -0.53% | -0.43% | -0.41% | -0.20% | -0.46% | |
| GBP | -0.28% | 0.39% | -0.13% | -0.02% | 0.00% | 0.17% | -0.07% | |
| JPY | -0.16% | 0.53% | 0.13% | 0.07% | 0.05% | 0.31% | 0.05% | |
| CAD | -0.25% | 0.43% | 0.02% | -0.07% | -0.01% | 0.21% | -0.06% | |
| AUD | -0.13% | 0.41% | 0.00% | -0.05% | 0.01% | 0.20% | -0.06% | |
| NZD | -0.58% | 0.20% | -0.17% | -0.31% | -0.21% | -0.20% | -0.27% | |
| CHF | -0.21% | 0.46% | 0.07% | -0.05% | 0.06% | 0.06% | 0.27% |
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 Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
Forex Market News
Our dedicated focus on forex news and insights empowers you to capitalise on investment opportunities in the dynamic FX market. The forex landscape is ever-evolving, characterised by continuous exchange rate fluctuations shaped by vast influential factors. From economic data releases to geopolitical developments, these events can sway market sentiment and drive substantial movements in currency valuations.
At Rakuten Securities Hong Kong, we prioritise delivering timely and accurate forex news updates sourced from reputable platforms like FXStreet. This ensures you stay informed about crucial market developments, enabling informed decision-making and proactive strategy adjustments. Whether you’re monitoring forex forecasts, analysing trading perspectives, or seeking to capitalise on emerging trends, our comprehensive approach equips you with the insights needed to navigate the FX market effectively.
Stay ahead with our comprehensive forex news coverage, designed to keep you informed and prepared to seize profitable opportunities in the dynamic world of forex trading.
