Forex News
Danske Research Team describes Wednesday as a constructive session for global equities, with the S&P 500 and Nasdaq posting gains. However, weaker overnight earnings sentiment, including Meta’s higher spending plans and Tesla’s lower capex guidance, has weighed on futures, with Nasdaq and S&P 500 contracts trading lower alongside a softer Kospi.
Constructive cash session, softer futures
"Wednesday was ultimately a constructive session for equities rising 0.7%, with the S&P 500 up 0.6% and Nasdaq gaining 1.1%."
"The overnight earnings picture, however, has been less convincing to markets."
"Meta raised its spending outlook and announced new AI initiatives, while Tesla moved in the opposite direction, lowering its 2026 capex target to USD20bn from above USD25bn."
"The two stocks also moved in opposite directions in post-market trading."
"So, while Meta shares gained after hours, the broader signal from big tech was not strong enough to keep the AI momentum going."
"Nasdaq futures are down 1.2% this morning and S&P 500 futures are down 0.6%, while the Kospi is also trading lower."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- GBP/USD trades firmly near the monthly high around 1.3410.
- Hawkish BoE expectations have strengthened the British Pound.
- Investors await the UK Retail Sales and the flash UK-US PMI data.
The British Pound (GBP) reflects strength against the US Dollar (USD) on Thursday, trading firmly near the monthly high at around 1.3410 in the European trade. The GBP/USD pair strengthens as hot United Kingdom (UK) Consumer Price Index (CPI) data for September has boosted hawkish Bank of England (BoE) expectations.
UK inflation surprise keeps BoE tightening bias in focus
Analysts at Nomura highlight that the latest UK inflation release showed renewed upside pressure, with “both headline and services inflation” in the September report coming in “above consensus expectations.” They note that the BoE’s core gauge of underlying price pressures remains stubborn, stressing that “the BoE’s core measure service prices momentum has been sticky over the past few months.”
Nomura also points to pipeline pressures, observing that “upstream prices also surprised on the upside.” While they judge that wholesale goods price rises were “dominated by a rise in energy costs,” they add that “core prices rose at a more modest pace.” At the same time, they warn that “upstream service prices are signalling a further increase in consumer prices,” underscoring the risk of renewed pass-through to households.
Against this backdrop, Nomura argues that “a combination of sticky inflation, a resilient labour market, strong economic growth and persistently elevated energy prices has led us to change our view on the BoE.” The bank now expects additional tightening, stating: “We now see rate hikes in November and February, which is still a more dovish outcome than markets are pricing.”
Going forward, investors will focus on the UK Retail Sales data for September and the preliminary Uk-United States (US) S&P Global PMI data for October, which are scheduled for Friday.
GBP/USD Technical Analysis
In the daily chart, GBP/USD trades at 1.3404. The pair has reclaimed a near-term bullish tone as price holds above the 20-day Exponential Moving Average (EMA) at 1.3313 and sits between the 38.2% and 50.0% Fibonacci retracements of the recent downswing, with the latter just overhead at 1.3409. The Relative Strength Index (RSI) at 58.6 is edging into positive territory, which suggests recovering upside momentum while the pair tests this key retracement cap.
On the topside, immediate resistance is located at the 50.0% Fibonacci retracement at 1.3409, followed by the 61.8% level near 1.3472 and the 78.6% retracement around 1.3562, with the recent swing high at 1.3677 acting as a more distant barrier. On the downside, initial support is seen at the 38.2% Fibonacci retracement at 1.3345, ahead of the 23.6% level around 1.3267, while a deeper pullback would expose the structural floor near 1.3140.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Economic Indicator
Consumer Price Index (YoY)
The United Kingdom (UK) Consumer Price Index (CPI), released by the Office for National Statistics on a monthly basis, is a measure of consumer price inflation – the rate at which the prices of goods and services bought by households rise or fall – produced to international standards. It is the inflation measure used in the government’s target. The YoY reading compares prices in the reference month to a year earlier. Generally, a high reading is seen as bullish for the Pound Sterling (GBP), while a low reading is seen as bearish.
Read more.Last release: Wed Oct 21, 2026 06:00
Frequency: Monthly
Actual: 3.5%
Consensus: 3.4%
Previous: 3.1%
Source: Office for National Statistics
The Bank of England is tasked with keeping inflation, as measured by the headline Consumer Price Index (CPI) at around 2%, giving the monthly release its importance. An increase in inflation implies a quicker and sooner increase of interest rates or the reduction of bond-buying by the BOE, which means squeezing the supply of pounds. Conversely, a drop in the pace of price rises indicates looser monetary policy. A higher-than-expected result tends to be GBP bullish.
- EUR/GBP has bounced up from 17-month lows near 0.8370 but remains capped below 0.8400 so far.
- High Oil prices and concerns about France's fiscal health are likely to keep Euro rallies limited.
- The Pound remains strong as recent UK data endorses the idea of a BoE rate hike in November.
The Euro (EUR) shows a mild bullish correction against the British Pound (GBP) on Thursday, following a more than 2.7% selloff from late September highs that had pushed the Relative Strength Index to heavily oversold levels in most timeframes. The EUR/GBP pair trades around 0.8390, after hitting fresh 17-month lows near 0.8370 on Wednesday, with 0.8400 capping rallies for now.
Slightly brighter market sentiment is supporting the Euro on Thursday, although high Oil prices and ongoing concerns about France’s fiscal issues, and the government’s difficulty resolving them, are likely to cap the pair’s recovery.
The Pound, on the other hand, is likely to remain strong, as the hot UK inflation figures released on Wednesday and the positive Gross Domestic Product (GDP) figures seen last week have paved the path for the Bank of England (BoE) to hike interest rates at its November meeting.
Later in the day, BoE’s Governor Andrew Bailey will meet the press and might provide further guidance about next month's meeting. In Europe, European Central Bank (ECB) official and Bank of Italy Governor, Fabio Panetta, will take the stage ahead of the release of the European Commission’s preliminary Consumer Confidence report.
Technical Analysis: Dead cat bounce
EUR/GBP trades at 0.8393, keeping the broader bearish trend intact after having depreciated continuously over the last four weeks. The pair shows a mild corrective reaction as the 4-hour Relative Strength Index (RSI) picks up from heavily oversold levels, although it remains below 40. The Moving Average Convergence Divergence (MACD) is marginally positive, but the whole picture suggests that rallies are likely to find sellers.
Immediate resistance is seen at Wednesday's top at the 0.8400 area, followed by the October 19 and 20 highs, near 0.8430. On the downside, below Wednesday's low near 0.8373, the next bearish targets are the May 2025 low, near 0.8355, and the April 2025 bottom, around 0.8320.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
(This story was corrected on October 22 at 07:00 to say that EUR/GBP has bounced up from 17-month lows, in the first bullet point, and not EUR/USD as previously reported)
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.13% | -0.10% | -0.61% | -0.15% | 0.20% | 0.13% | -0.38% | |
| EUR | 0.13% | 0.01% | -0.51% | -0.06% | 0.33% | 0.26% | -0.28% | |
| GBP | 0.10% | -0.01% | -0.53% | -0.09% | 0.30% | 0.22% | -0.29% | |
| JPY | 0.61% | 0.51% | 0.53% | 0.45% | 0.82% | 0.72% | 0.23% | |
| CAD | 0.15% | 0.06% | 0.09% | -0.45% | 0.37% | 0.30% | -0.22% | |
| AUD | -0.20% | -0.33% | -0.30% | -0.82% | -0.37% | -0.09% | -0.59% | |
| NZD | -0.13% | -0.26% | -0.22% | -0.72% | -0.30% | 0.09% | -0.48% | |
| CHF | 0.38% | 0.28% | 0.29% | -0.23% | 0.22% | 0.59% | 0.48% |
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).
ING analysts Warren Patterson and Ewa Manthey note that Oil prices remain well supported as ICE Brent trades back above $110/bbl following new attacks on Saudi Arabia. They highlight that Kuwait is exporting as much crude as before the war while producing more than 2m b/d, but refined product shipping issues and elevated US inventory draws keep a sizeable risk premium in place.
Brent holds firm on supply risks
"Despite the volatile environment, oil flows from the Persian Gulf are holding up. According to the CEO of Kuwait Petroleum Corp, Kuwait is exporting as much crude oil as before the war and producing more than 2m b/d. However, he admitted that the shipping of refined products is more of an issue."
"While oil flows have remained elevated, President Trump has expressed concern that oil prices remain elevated due to supply risks. This leaves plenty of uncertainty over the sustainability of flows. The sizeable risk premium currently embedded in prices is unlikely to fade until clear signs of de-escalation emerge and reassure investors that regional supply will remain uninterrupted."
"EIA inventory data shows US crude oil inventories fell by 3.06m barrels over the last week. There was anadditional 300k-barrel fall in Strategic Petroleum Reserves. The data still reflects the impact of hurricane activity in the US Gulf of Mexico, with US oil production estimated to have fallen 410k b/d week-on-week."
"Oil prices remain well bid, with ICE Brent back above $110/bbl this morning following additional deadly attacks on Saudi Arabia. Drones struck the Shaybah oilfield and Dammam's international airport. An oil processing plant was the target of the attack."
(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 report EUR/USD remains stuck in a tight consolidation, with intraday trade expected between 1.1210 and 1.1250 as momentum indicators stay flat. Over the next one to three weeks they see a narrower 1.1170–1.1270 band containing price action. Their medium-term view is that the early-September decline may have bottomed near 1.1112, allowing a corrective recovery above the 21-day EMA at 1.1280.
Euro confined to narrowing ranges
"24-HOUR VIEW: EUR rose briefly to a high of 1.1260 on Tuesday and then pulled back. Yesterday, we pointed out that “the brief advance did not lead to any increase in upward momentum,” and we expected EUR “to trade in a range between 1.1205 and 1.1255.” EUR subsequently traded within a narrower range than expected (1.1211/1.1240), closing largely unchanged at 1.1232 (-0.04%). Momentum indicators are mostly flat and today, we expect EUR to range-trade between 1.1210 and 1.1250."
"1-3 WEEKS VIEW: In our most recent narrative from last Friday (16 Oct, spot at 1.1215), we indicated that EUR “has likely entered a range-trading phase, and for the time being, it is likely to trade between 1.1160 and 1.1280.” The price movements since then still appear to be part of a rangetrading phase, but a narrower 1.1170/1.1270 range is likely sufficient to contain EUR for now."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- WTI regains positive traction following good two-way price swings over the past two days.
- Persistent geopolitical uncertainties act as a tailwind for the commodity and favor bulls.
- The constructive technical setup also backs the case for additional gains towards $100.00.
West Texas Intermediate (WTI) – the benchmark US Crude Oil price – attracts fresh buyers on Thursday, climbing to the $98.70 zone during the Asian session. The commodity remains within striking distance of its highest level since September 15, touched earlier this week, amid
Concerns about a further escalation of tensions in the Middle East continue to fuel worries over potential energy supply disruptions and turn out to be a key factor acting as a tailwind for the black liquid. In the latest developments, two expatriates were killed and two others injured in a drone attack on Saudi Aramco’s Shaybah oil field in the Eastern Province.
Meanwhile, The New York Times reported that the US and Israel have drawn up plans for a short but intense military campaign against Iran after the US midterm elections. Separately, Iranian Foreign Minister Abbas Araghchi emphasised the country's readiness to defend itself, while stating that Tehran is ready to give diplomacy with the US another chance.
From a technical perspective, crude oil prices hold well above the 100-day Simple Moving Average (SMA) on the 4-hour chart. Adding to this, Tuesday's bounce from a resistance breakpoint, now turned support near the $95.00 mark, suggests that the short-term uptrend remains intact despite the recent volatility led by mixed signals over US-Iran peace talks.
Meanwhile, the Relative Strength Index (RSI) around 57 keeps a neutral-to-positive tone, while the Moving Average Convergence Divergence (MACD) indicator remains in negative territory, hinting that upside momentum is moderate rather than impulsive. Nevertheless, the broader constructive setup suggests that any corrective slide could find support at $95.00.
The structural floor is located at the 100-period SMA, around $92.76, where buyers would be expected to reassert control on a deeper pullback within the prevailing bullish context. That said, a break below this pivotal support would weaken the bullish structure, whereas holding above it keeps the path open for another attempt toward the recent psychological $100 region and beyond.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
WTI 4-hour 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.
- The Indonesian Rupiah weakens due to high oil prices, El Niño-driven food inflation, and MSCI policy concerns.
- BI liquidity interventions help cushion further steep declines for the Indonesian Rupiah.
- US Dollar gains may be limited by weak US housing data and Fed rate uncertainties.
USD/IDR extends its gains for the second successive day, trading around 18,070 during Asian hours on Thursday. The currency pair has seen upward momentum as the Indonesian Rupiah (IDR) faces pressure from rising global oil prices, which have heightened fiscal concerns for the nation.
Meanwhile, elevated food costs driven by El Niño weather conditions continue to keep domestic inflationary pressures high. Market sentiment was dampened further after President Prabowo criticized MSCI’s proposed changes to Indonesia’s market classification, adding to fears of potential foreign capital outflows. Nevertheless, liquidity measures introduced by Bank Indonesia (BI) have helped cushion the Rupiah's overall decline.
IDR under pressure as BI flags wider current account gap and MSCI risks
Strategists at Brown Brothers Harriman highlight that Bank Indonesia now expects a meaningful deterioration in Indonesia’s external balances, noting that BI “projects Indonesia’s current account deficit (1% of GDP in Q2) to widen to be between 1.6% and 2.4% of GDP in 2026.” They argue that this projected widening “raises external funding needs just as MSCI downgrade risks threaten capital outflows,” a combination that is seen as “keeping IDR under downside pressure.”
On the other hand, the upside for the USD/IDR pair may remain capped due to recent weakness in the US Dollar (USD). Recent economic indicators have pointed to a slowing US economy, highlighted by a downturn in September housing starts and pending home sales dropping to a record low.
Additionally, expectations surrounding US monetary policy are shaping the outlook. According to the CME FedWatch Tool, traders are currently pricing in an 84% chance that the Federal Reserve will hold interest rates steady at its upcoming meeting, alongside a 90% probability of a rate hike in December. However, market uncertainty remains high following recent comments from Fed Chair Kevin Warsh, who declined to provide clear guidance on the timing or necessity of future rate adjustments.
Technical Analysis:
In the daily chart, USD/IDR trades at 18,070. The pair holds a near-term bullish bias as spot remains above both the short- and medium-term, suggesting buyers are defending higher ground. The 14-day Relative Strength Index (RSI) at roughly 61 leans into positive territory, hinting that upside momentum is firm but not yet overstretched.
On the downside, immediate support is seen at the nine-day Exponential Moving Average (EMA) near 18,020.85, with the 50-day EMA at 17,906.01 providing a deeper dynamic floor if a pullback extends. As long as USD/IDR holds above these moving averages, the technical backdrop favors dips being bought, with the absence of nearby overhead levels implying scope for further gains before fresh resistance zones are established.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Indonesian Rupiah FAQs
The Indonesian Rupiah (IDR) is sensitive to a dynamic mix of global market conditions, domestic economic fundamentals, commodity price shifts, and proactive central bank interventions. As an emerging market currency, the Rupiah’s trajectory depends heavily on both domestic resilience and international economic momentum.
Bank Indonesia (BI) plays a central role in stabilizing the Rupiah through strategic monetary policy and direct market operations. By adjusting benchmark interest rates, the central bank manages yield differentials against major global central banks like the US Federal Reserve to attract and retain foreign portfolio investments. BI also utilizes a "triple-intervention" framework—operating across spot, derivative (DNDF), and government bond markets- to smooth out currency volatility, complemented by monetary instruments like Sekuritas Rupiah Bank Indonesia (SRBI) to bolster capital inflows.
From a broader macroeconomic perspective, domestic inflation rates, trade performance, and overall fiscal health dictate the IDR's underlying strength. Indonesia's trade and current account balances are closely tied to these fundamentals, while broader global factors, such as risk-on or risk-off sentiment among international investors and global liquidity trends, directly affect exchange rate movements.
As a major exporter of commodities such as palm oil, coal, nickel, and natural gas, Indonesia benefits from higher global commodity prices, which generate trade surpluses, increase foreign currency inflows, and strengthen the Rupiah. However, because Indonesia is also a net importer of crude oil, elevated global oil prices increase the foreign exchange burden, widening the current account deficit and weighing on the currency's value.
- EUR/USD gathers strength to around 1.1245 in Thursday’s early European session.
- Negative outlook for the pair remains intact below the 100-day SMA; further consolidation cannot be ruled out with neutral RSI.
- The immediate resistance level emerges at 1.1276; the support level is seen at 1.1185.
The EUR/USD pair trades in positive territory near 1.1245 during the early European trading hours on Thursday. Nonetheless, the potential upside might be limited amid fiscal concerns in France. European Central Bank (ECB) policymaker Fabio Panetta is scheduled to speak later on Thursday.
French 10-year borrowing costs climbed above 5% for the first time in 24 years on Wednesday as weekend unrest across France, fuelled in part by cuts to public services, has highlighted how politically difficult it will be to bring budget deficits under control.
"The euro cannot sell off—and it cannot rally," said Spectra Markets' president Brent Donnelly. "We are in a stalemate where the overhang of bad news just about perfectly offsets the market positioning,” Donnelly added.
The ECB is likely to leave its benchmark rate unchanged at 2.5% next week, though a hike is all but priced in before the year's end, according to Reuters.
Across the pond, traders see only a small chance of a Federal Reserve (Fed) rate hike next week, with the next interest rate increase expected in December, according to the CME FedWatch tool.
Euro range holds as EUR/USD shrugs off gas spike and bond jitters
Analysts at Societe Generale highlight that, for EUR/USD, it is “curious that cycle highs in nat gas prices and bond jitters have not triggered another leg down in a way that would have occurred prior to October.” They note that “the correlations have broken down over the past two weeks or so,” with the pair no longer reacting in its usual fashion to swings in energy prices and bond markets. According to the bank, this “would suggest that most of the bad news is priced in or investors are not committed to putting on new directional trades, playing the ranges instead.”
Warsh cautious on policy path even as investment surge and AI optimism support Dollar
Fed Chair Warsh delivered a moderately constructive but less forceful message, with the FXS Speechtracker score at 5.6 versus a 6.1 historical average, signaling a slightly softer tone relative to the established baseline. The admission of being “over-scarred from the Global Financial Crisis” underscores a risk-averse bias, even as Warsh highlights a structural growth and investment surge and refuses to pre-commit on October and December decisions, keeping policy optionality high. Emphasis on AI’s demand-side impact and the need to “crystalize” data on output, employment, and inflation points to a cautious, data-dependent stance that tempers immediate hawkish expectations for the Dollar.
The FXS Fed Sentiment Index was unchanged, moving 0.00 points to a still-elevated 127.51, confirming that the overall policy tone remains firmly in hawkish territory despite the slightly softer FXS Speechtracker score. The combination of a high FXS Fed Sentiment Index level and Warsh’s reluctance to pre-judge meetings suggests that markets should continue to price a restrictive bias, but without fresh hawkish escalation for the Dollar in the near term.
Technical Analysis: EUR/USD retains a negative tone in the near term
In the daily chart, EUR/USD holds below the 100-day Moving Average and also marginally under the 20-day Bollinger simple moving average, keeping the near-term bias bearish despite a mild stabilization. The Relative Strength Index (14) around 42 stays below the neutral 50 line, which suggests that downside momentum is easing rather than reversing, leaving the pair capped by overhead moving-average resistance.
On the topside, immediate resistance level is located at the October 6 high of 1.1276, en route to the upper boundary of Bollinger band at 1.1372. A more significant barrier is located at the 100-day Moving Average around 1.1455, which would need to be reclaimed to ease the broader bearish pressure.
On the downside, initial support level is seen near at the October 19 low of 1.1185, followed by the lower limit of Bollinger band at 1.1120. The key contention level to watch is the 1.1000 psychological level.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Euro FAQs
The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
- USD/JPY attracts heavy selling on Thursday as declining US bond yields keep the USD depressed.
- BoJ rate hike bets and intervention risks underpin the JPY, further exerting pressure on the pair.
- Geopolitical risks and hawkish Fed expectations could limit USD losses and support spot prices.
The USD/JPY pair declines to a one-week low during the Asian session on Thursday, currently trading around the 157.70 region, closer to the lower boundary of a range held since the beginning of this month amid a broadly weaker US Dollar (USD).
The USD Index (DXY), which tracks the Greenback against a basket of currencies, languishes near a three-week low, touched on Tuesday, as US bond yields extend the recent retracement slide from multi-year highs. The Japanese Yen (JPY), on the other hand, draws support from Bank of Japan Governor Kazuo Ueda's hawkish remarks earlier this week, signaling scope for another rate increase as soon as December. This, in turn, is seen exerting downward pressure on the USD/JPY pair.
Meanwhile, traders are still pricing in around a 90% chance that the US Federal Reserve (Fed) will raise borrowing costs again by the end of this year amid inflation fears stemming from volatile energy prices. Adding to this, a further escalation of tensions in the Middle East keeps the geopolitical risk premium firmly in favor, which could offer some support to the safe-haven Greenback and help limit losses for the USD/JPY pair as traders now look to key central bank events next week.
Spot prices keep a bearish near-term bias below the 50.0% Fibonacci retracement at 158.47. Moreover, an intraday breakdown through the 100-period Simple Moving Average (SMA) on the 4-hour chart backs the case for further losses amid negative momentum indicators. The 38.24 reading on the Relative Strength Index (RSI) hints at weakening momentum, while the negative Moving Average Convergence Divergence (MACD) line below zero suggests that rallies are likely to be capped.
However, a convincing break below the trading range support near mid-157.00s is needed to reaffirm the negative outlook. The USD/JPY pair might then slide to the 38.2% Fibo. level at 157.15 en route to the 23.6% retracement near 155.52 and the swing low anchor around 152.88. On the topside, initial resistance is seen at the 100-period SMA at 158.07, followed closely by the 50.0% retracement at 158.47, forming a tight supply zone ahead of the 61.8% retracement at 159.79 and the 78.6% level at 161.66.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
USD/JPY 4-hour chart
US Dollar Price Last 7 Days
The table below shows the percentage change of US Dollar (USD) against listed major currencies last 7 days. US Dollar was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.81% | -1.53% | -0.35% | -1.43% | -0.63% | -1.68% | -1.50% | |
| EUR | 0.81% | -0.75% | 0.44% | -0.70% | 0.19% | -0.88% | -0.74% | |
| GBP | 1.53% | 0.75% | 1.18% | 0.11% | 0.93% | -0.21% | 0.06% | |
| JPY | 0.35% | -0.44% | -1.18% | -1.02% | -0.25% | -1.33% | -1.11% | |
| CAD | 1.43% | 0.70% | -0.11% | 1.02% | 0.76% | -0.32% | -0.01% | |
| AUD | 0.63% | -0.19% | -0.93% | 0.25% | -0.76% | -1.06% | -0.84% | |
| NZD | 1.68% | 0.88% | 0.21% | 1.33% | 0.32% | 1.06% | 0.17% | |
| CHF | 1.50% | 0.74% | -0.06% | 1.11% | 0.01% | 0.84% | -0.17% |
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).
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