Forex News

Societe Generale technical analysts highlight that Brent has been consolidating sideways after meeting an interim hurdle near $110 in September. The contract remains above its 50-day moving average around $97, keeping upward momentum intact. Brent is now testing a short-term descending trend line, with potential objectives at $110 and $114/$116, while the recent $102 low acts as first support.

Sideways phase within broader uptrend

"Brent has evolved within a sideways consolidation after encountering an interim hurdle near $110 in September."

"It has remained above the 50-DMA ($97), indicating that the upward momentum remains intact."

"Brent is now attempting to break above a short-term descending trend line, highlighting the possibility of an extension of the up move."

"The next objectives could be located at $110 and the projections of $114/$116."

"The low formed earlier this week at $102 is the first support."

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

Commerzbank’s Thu Lan Nguyen discusses how the US Dollar (USD) reacted to Federal Reserve Chair Kevin Warsh’s move away from traditional forward guidance. She notes that initial unease gave way to a stronger Dollar as rate expectations rose, arguing that central bank credibility and commitment to its inflation mandate matter more than the specific communication toolkit used.

Fed guidance, credibility and Dollar

"Against this backdrop, it is understandable that markets reacted uneasily over the summer when Warsh put his words into practice and deliberately refrained from providing clear guidance on the future path of interest rates. The dollar came under pressure as market participants struggled to interpret the new Fed Chair's intentions. More importantly, this probably fuelled concerns that the US administration might be influencing Warsh in order to keep interest rates artificially low."

"Since then, however, the picture has changed completely. US rate expectations have moved markedly higher, and the dollar has recovered. Yet Warsh has not altered his sceptical stance toward forward guidance."

"In my view, the episode demonstrates one thing above all else: what ultimately matters is not the specific toolkit used by a central bank, but its credibility. If markets are convinced that a central bank is committed to fulfilling its mandate, questions about the precise (communication) strategy become secondary. What matters is the belief that the institution will take whatever action is necessary to achieve its (inflation) objective."

"The Fed reinforced precisely this confidence with last month's rate hike. Notably, Warsh himself supported the decision. As long as markets believe that the Fed will make the right policy choice when it matters most, they appear willing to overlook the fact that the Chair is reluctant to commit to a specific future path for interest rates."

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

• GBP/JPY hesitates between 209.00 and 210.00 halfway through the monthly range.
• The Yen has pulled back following soft Japanese PPI data and BoJ Ueda's comments.
• The pair is forming a triangle pattern with a bearish outcome favoured.

The British Pound (GBP) retraces previous losses against the Japanese Yen (JPY) on Tuesday, and returns to the mid-range of the 209.00s after bouncing from lows at 208.90 earlier in the day. Looking from a wider perspective, the GBP/JPY pair is showing hesitation between 209.00 and 210.00 halfway through the monthly trading range.

In Japan, Producer Price Index (PPI) data released earlier in the day undershot expectations. Inflation at the factory gate contracted unexpectedly, for the second consecutive month in September, and the yearly rate eased to 6.8% from 7.6% in August, against the market consensus that had anticipated a steady reading.

A few hours later, the Bank of Japan (BoJ) Governor Kazuho Ueda affirmed that inflation is approaching the 2% target and that the bank must ensure that it remains anchored at those levels, but conditioned further rate hikes on incoming data. The Yen depreciated after the comments

The UK calendar is thin on Tuesday, and investors will await Thursday’s Gross Domestic Product (GDP) and Industrial Production data to confirm hopes that the Bank of England will hike interest rates before the year-end.

Technical Analysis: Nearing the tip of a triangle pattern

GBP/JPY trades at 209.40, with recent price action forming a triangle pattern. Triangles are considered continuation patterns and, in that sense, a negative outcome is favoured. Momentum indicators on the 4-hour chart show a lack of clear bias, with the Relative Strength Index (14) wavering around 50, and the Moving Average Convergence Divergence (MACD) indicator slipping into slightly negative levels.

On the topside, the area between the triangle top, around 209.95, and the 210.00-210-20 area, which capped bulls several times in October, is closing the way towards the September 27 high, at 219.90, and the September 18 high, at 211.28.

Bearish attempts, on the other hand, remain contained at 208.90, where the triangle bottom lies, ahead of the October 4 and 8 lows at the 208.25 area and the early October lows around 207.60.

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

• Silver consolidates at around $60.30 ahead of the US CPI data on Wednesday.
• The US CPI is expected to have grown at a faster pace in September.
• US Treasury Yields are under pressure after an extended weekend.

Silver price (XAG/USD) trades in a tight range at around $60.30 during the European trading session on Tuesday. The white metal consolidates as investors shift their focus to the United States (US) Consumer Price Index (CPI) data for September, which will be released on Wednesday.

The inflation data is expected to have a significant impact of Federal Reserve (Fed’s) interest rate expectations.

Strategists at OCBC note that markets “currently expect the Fed to remain on hold in October before delivering a fully priced 25bp rate hike in December.” They argue that the “key question is whether upcoming CPI data can alter that sequencing by bringing forward expectations for further tightening.”

OCBC added that while consensus forecasts point to “firmer headline inflation due to higher energy costs, core inflation is expected to remain relatively contained.”

In their view, “if core inflation moderates as expected, markets could further trim expectations for additional Fed tightening.” OCBC adds that “it would likely take a core CPI print of 0.4% m/m or higher to materially shift market pricing and strengthen the case for earlier Fed action.”

According to FXs Economic Calendar, the US headline inflation rose to 3.7% Year-on-Year (YoY) from 3.4% in August. The core CPI – which excludes volatile food and energy items – is seen arriving at 2.5% YoY, higher than the previous reading of 2.4%.

During the European trade, the 10-year US Treasury Yields are down almost 1% to near 5.19%. Technically, lower US bond yields improve the appeal of non-yielding assets, such as Silver.

Silver Technical Analysis

In the daily chart, XAG/USD has been in a limited range of $58.50-$62.09 for over weeks, keeping a bearish near-term tone as price holds beneath the 20-period Exponential Moving Average (EMA) at $61.85. The metal has retreated from recent highs and now trades under this short-term trend gauge, suggesting upside attempts remain capped, while the Relative Strength Index (RSI) at 41.94 stays below the neutral 50 line, hinting at persistent but not extreme selling pressure.

On the topside, initial resistance aligns with the 20-period EMA at $61.85, and a sustained break above this barrier would be needed to ease immediate downside risks and allow a recovery toward higher levels. On the downside, momentum support is implied by the RSI hovering near 42, as a deeper slide in price would likely push the oscillator closer to oversold territory and could pave the way for a corrective bounce if bears overextend the move.

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

MUFG’s Lee Hardman notes that the Japanese Yen has firmed modestly, pulling USD/JPY back toward 158.00 and keeping it below the 200-day moving average near 158.50. He highlights ongoing intervention risk and closer US-Japan FX coordination, alongside rising expectations for faster Bank of Japan tightening. MUFG expects the Yen to outperform non-Dollar crosses and recently recommended a short EUR/JPY trade.

Yen supported by BoJ tightening hopes

"The yen has strengthened modestly overnight resulting in USD/JPY moving back closer towards the 158.00-level. The pair has been trading just below the 200-day moving at around 158.50 so far this month. The heightened risk of further intervention from Japan to support the yen is still helping to curtail upside for USD/JPY even as the US dollar continues to strengthen against other major currencies."

"At the same time, the yen has been deriving more support from building expectations for a faster pace of BoJ tightening. The Japanese rate market expects the BoJ to deliver another rate hike by year end in December and a cumulative total of around 75bps of additional tightening by the middle of next year. It follows the BoJ’s decision to deliver a hike last month, and signal that monetary policy has moved into a new phase indicating that a faster pace of hikes is likely to continue."

"BoJ Governor Ueda also spoke overnight in parliament where he stated that underlying inflation is very close to their goal and that it is very important to the price trend around 2.0%. In the current environment of broad-based US dollar strength, we expect the yen to continue to perform better against non-US dollar crosses. We recently recommended a short EUR/JPY trade idea (click here) to reflect building downside risks for the euro from heightened fiscal and political risks in the euro area."

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

United Overseas Bank (UOB) strategists Quek Ser Leang and Lee Sue Ann note that USD/CHF has rebounded but still lacks strong upside momentum. In the near term, they see the Dollar trading in a slightly higher 0.8320/0.8355 band, while over the next 1–3 weeks they expect a narrower 0.8295/0.8365 range. On a 1–3 month horizon, they see continued rebound but not a retest of the July peak.

Dollar seen holding in tight range

"24-HOUR VIEW: We expected USD to “range-trade between 0.8290 and 0.8320” yesterday. The subsequent price movements did not unfold as expected. USD dipped to 0.8285 and then rose sharply, reaching a high of 0.8350. The sharp rise appears to be excessive, and USD is unlikely to rise much further. Today, we expect USD to trade in a higher range of 0.8320/0.8355."

"1-3 WEEKS VIEW: Our most recent narrative was from early this month (02 Oct, spot at 0.8310), when we highlighted that USD “has likely entered a range-trading phase between 0.8245 and 0.8365.” Yesterday, USD rose to a high of 0.8350. There has been a tentative buildup in upward momentum, but it is insufficient to indicate a sustained rise. We continue to expect range-trading but now expect a narrower range of 0.8295/0.8365. Looking ahead, should USD close above 0.8365, it would increase the risk of a break above 0.8385"

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

OCBC strategists Sim Moh Siong and Christopher Wong note the Indian Rupee (INR) rebounded sharply after the Reserve Bank of India (RBI) tightened FX derivative rules and imposed additional restrictions, alongside higher-than-expected inflation. They caution against extrapolating Monday’s gains, arguing sustainability depends on moderating portfolio outflows and easing external pressures from Oil and US yields. Policy moves may firm INR near term but not decisively reverse its broader depreciation trend.

Forceful RBI action with limited durability

"USD/INR gapped 1% lower in the open on Monday, following the RBI’s measures to contain spot USD demand and tighten FX derivative rules."

"The RBI followed up with further restrictions on Monday, limiting access to certain INR non-deliverable derivatives to hedging purposes and extending the 20% cash reserve requirement to banks’ own qualifying FX hedges."

"The RBI’s increasingly forceful response may help contain near-term INR depreciation pressures, but we are cautious about extrapolating Monday’s rebound into a sustained recovery."

"Higher hedging costs may temper forward USD demand, but could also discourage genuine corporate hedging, while the special USD window for oil companies shifts demand away from the spot market rather than reducing India’s underlying US dollar requirements."

"We may still see room for some near-term INR gains, but the sustainability of the move will depend on whether portfolio outflows moderate and external pressures from oil prices and US yields ease. For now, the policy measures may help establish a firmer near-term footing for INR, rather than mark a decisive reversal in its broader depreciation trend.

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

• USD/CHF holds above 0.8325, after a mild reversal from the 0.8350 area.
• A moderate pullback on US Treasury yields and the reversal in Oil prices is undermining support for the safe-haven US Dollar.
• Fed-SNB monetary policy divergence remains a significant hindrance to a strong CHF recovery.

The Swiss Franc (CHF) has trimmed some losses in a quiet market session on Tuesday, as a pullback on US Treasury yields and a mild reversal in Oil prices has undermined support for the safe-haven US Dollar (USD). The USD/CHF pair, however, stands above 0.8325 so far, which leaves the broader bullish structure intact.

US Treasury yields are pulling back from multi-decade highs, amid a moderate decline in Crude Oil prices. Brent Oil has retreated to $103.00 per barrel during the European trading session, about $2.5 below Monday’s highs, but still above $100, a level considered critical for global economic growth, which is keeping risk appetite subdued so far.

Earlier in the day, Cleveland Federal Reserve President Beth Hammack reiterated her hawkish message, calling for further monetary tightening in the coming months as, in her opinion, “inflation remains too high with the Fed having missed its 2% target for five and a half years.” 

Fed's Hammack reiterates her call for higher interest rates

Hammack's words failed to support the US Dollar, with the market awaiting US Consumer Price Index (CPI) and Producer Price Index (PPI) releases later in the week for a better assessment of the Fed’s tightening calendar. Investors are pricing in an 80% chance that the US central bank will stand pat on rates at its October 28 and 29 meeting, but remain confident on a rate hike in December, according to the FedWatch Tool. Markets await September’s inflation data to confirm those hopes.

In Switzerland, the calendar is thin this week, and the monetary policy divergence between the Fed and the Swiss National Bank (SNB) is likely to keep the CHF on the defensive. The SNB’s benchmark interest rate is at 0% and is not expected to move in the near term as inflation in Switzerland remains at moderate levels.

Looking ahead, Strategists at UOB Group maintain a steady medium-term stance on USD/CHF, reiterating that the Dollar “has likely entered a range-trading phase between 0.8245 and 0.8365.”

Deutsche Bank strategists, highlight the start of the United States (US) Q3 earnings season with major banks reporting. They expect S&P 500 earnings growth to stay at a record 34% year-on-year in Q3, well above the 27% consensus, arguing consensus embeds too much slowdown and leaves room for above-average earnings beats.

Strategists see strong Q3 earnings

"Financials are actually expected to be one of the sectors with the weakest YoY growth so be aware of that as you digest today's results. Overall, our US equity strategists expect S&P 500 earnings growth to remain at a record 34% YoY in Q3, versus consensus at 27%. Their view is that consensus is again embedding too much of a slowdown, leaving scope for another quarter of above-average beats."

"So it should be a very strong earnings season on both sides of the Atlantic and indeed across the globe."

"US equity gains were ultimately reversed by the continued selloff in chip stocks, with the Philly semiconductor index down -2.67%. That said, two-thirds of the index were higher with the Mag-7 closing up +0.47%."

"To the day ahead now, and as discussed near the top, earnings releases include JPMorgan, Wells Fargo, Goldman Sachs and Citigroup. Data releases from the US include the NFIB’s small business optimism index for September, along with existing home sales. Finally, the Fed’s Waller, Barkin and Collins will speak today."

"Before the late US equity dip and the overnight Asia sell-off, all the major European indices ended higher on the day even with gas prices notably higher. That included the Stoxx 600 (+0.65%) and the DAX (+0.76%), whilst France’s CAC 40 (+0.38%) still saw a rise, even though it underperformed."

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