Forex News

• EUR/USD remains under pressure as a firmer US Dollar and France’s fiscal concerns weigh on the Euro.
• The weekly chart retains a bearish bias as the pair trades below key moving averages.
• RSI approaches oversold territory, with the 200-week SMA emerging as key support.

EUR/USD trades on the back foot on Friday as the US Dollar (USD) regains some ground alongside US Treasury yields following Thursday’s decline. France’s fiscal concerns add pressure on the Euro (EUR), while traders look ahead to next week’s Federal Reserve (Fed) and European Central Bank (ECB) interest rate decisions.

At the time of writing, the pair trades around 1.1190, down 0.22% on the day. Meanwhile, the US Dollar Index (DXY), which tracks the Greenback's value against a basket of six major currencies, trades around 101.82 after touching a three-week low of 101.45 on Thursday.

Fed and ECB seen pausing now but primed for December rate hikes

Economists at Commerzbank argue that “the Fed and the ECB thus have good reasons to pause in October, not least to gain more clarity on the economic and geopolitical conditions.” Looking ahead, they expect policy tightening to resume, with the bank judging that “in December, however, both central banks are likely to respond to persistently high inflation and raise interest rates—as priced in by the futures markets—by 25 basis points.” Commerzbank stresses that this guidance is not without caveats, adding that “the forecast for the ECB is contingent on the situation in the French government bond market not escalating.”

Technical analysis: Weekly chart

EUR/USD holds marginally above the 200-week Simple Moving Average (SMA) at 1.1105 but remains below the 50-week SMA at 1.1585 and the 100-week SMA at 1.1379, leaving sellers in control..

The pair also trades below the 38.2% Fibonacci retracement at 1.1355 and the 23.6% retracement at 1.1634, reinforcing a topside cap, while the Relative Strength Index (RSI) at 34 hovers just above oversold territory and the Moving Average Convergence Divergence (MACD) remains negative, both suggesting persistent, though not extreme, selling pressure within a modest trend environment indicated by the Average Directional Index (ADX) around 20.

On the downside, initial support emerges near the 50.0% Fibonacci retracement at 1.1130, closely followed by the 200-week SMA at 1.1105, with deeper bearish extension exposing the 61.8% retracement at 1.0905 and the 78.6% level at 1.0585 before the structural floor around the 100.0% retracement at 1.0177.

On the topside, a first hurdle is seen at the 38.2% Fibonacci retracement at 1.1355, ahead of the 100-week SMA at 1.1379, while a more meaningful recovery would require a weekly close above the 50-week SMA at 1.1585 and the 23.6% retracement at 1.1634, which together define a dense resistance band capping the broader rebound.

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

United Overseas Bank strategists (UOB) Quek Ser Leang and Lee Sue Ann note that USD/SGD was little changed on Thursday, trading in a narrow band as safe-haven flows and Oil gains supported the US Dollar against Asian currencies. Their short-term view sees modest downside within 1.2755–1.2780, while the 1–3 week outlook stays negative toward 1.2750 as long as 1.2795 caps.

Modest downside while capped below resistance

"24-HOUR VIEW: After USD traded within a tight 1.2771/1.2783 range two days ago, we indicated yesterday that “the price action provides no fresh clues.” We also indicated that USD “could trade between 1.2765 and 1.2785.” USD then traded within a slightly wider range of 1.2762/1.2785, closing unchanged at 1.2774. There has been a slight increase in downward momentum, but it is insufficient to indicate a sustained decline. Today, USD could edge lower, but any decline should stay within a 1.2755/1.2780 range."

"1-3 WEEKS VIEW: We turned negative on USD early this week. In our most recent narrative from Wednesday (21 Oct, spot at 1.2780), we highlighted that “downward momentum has increased further, and USD could decline to 1.2750.” Although USD has traded in a quiet manner since then, we will continue to hold the same view as long as USD holds below 1.2795 (‘strong resistance’ level previously at 1.2805)."

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

• WTI rises to a 22-week high and breaks above the band it held since Monday.
• Aramco clears its headquarters, and a tanker is hit as it leaves Hormuz.
• President Trump speaks at a Fort Myers rally Friday after his Iran remarks.

Two days of Houthi attacks in Saudi Arabia and strikes on ships leaving the Strait of Hormuz have taken WTI above the $95.00-$101.00 band it held from Monday to Thursday. It has risen from near $98.50 to just under $103.00, its highest in 22 weeks, and it's trading in the top fifth of the session's range.

Saudi Aramco (2222.SR) told its remaining staff on Thursday to leave its Dhahran headquarters, after debris from a Houthi drone killed two people at the Shaybah field. A tanker was hit by an unknown projectile as it left Hormuz near Limah in Oman, UK Maritime Trade Operations said on Friday. Both attacks land on supply still getting out of the Gulf, and WTI rose on Thursday and is higher again on Friday.

US Ambassador to the United Nations Waltz told the Financial Times the war could last another year, and President Trump said the US could end it very quickly. Ambassador Waltz said the Navy can keep Iran's ports blockaded for the foreseeable future, and Kpler expects that to cut Iran's Crude Oil revenue to zero by mid-December. On either timeline, Iran's barrels stay off a market already short of Gulf supply.

On the calendar

President Trump holds a midterm rally in Fort Myers, Florida, on Friday, after telling reporters the US is taking all the Crude Oil it wants out of Hormuz. US and Israeli planning for strikes on Iran after the November 3 midterms is going ahead, ABC News, The Atlantic and The New York Times report. Officials say no decision has been made, and those strikes would fall on Gulf supply that's already under attack.

On the charts

The high went past the September 15 peak just above $102.00, and the price is back near that peak. The climb from the August 6 low near $74.00 is now about $28, and the 50-day Exponential Moving Average (EMA) has risen to just above $91.50. Daily momentum has just reached overbought for the first time since mid-September.

WTI spot daily chart

Tatha Ghose at Commerzbank reports that Turkey’s Central Bank of the Republic of Türkiye (CBRT) cut its one-week repo rate by 100bp to 36.0%, alongside similar moves in overnight rates. Despite acknowledging upside inflation risks from higher Oil, the bank now claims indicators “confirm” disinflation and signals meeting-by-meeting flexibility without altering its easing trajectory. Commerzbank expects USD/TRY to reach 52.0 by year-end.

Turkish central bank continues to ease

"Turkey’s central bank (CBRT) cut its one-week repo rate by 100bp as expected yesterday, from 37.0% to 36.0%. CBRT also lowered both overnight rates by 100bp, taking the lending and borrowing rates to 39.0% and 34.5%, respectively."

"The changes from September’s statement were subtle but revealing. CBRT hardened its assessment that inflation indicators “suggest” deceleration, to the stronger claim that they “confirm” deceleration in the underlying trend."

"This confidence rests heavily on September’s softer inflation reading, which we think could prove to be a one-off caused by the temporary decline in imported energy prices in prior months. Oil has since climbed back above USD 110 per barrel. CBRT still acknowledges that elevated energy prices pose an upside inflation risk, but evidently does not consider this sufficient to delay easing."

"CBRT similarly tweaked its assessment of the real economy – that it “indicates” weakness. The most meaningful addition is that the size and timing of policy steps will be decided prudently on a meeting-by-meeting basis."

"This may signal flexibility over individual decisions, but does not challenge the direction of travel. CBRT is now committed to a rate-cutting path, even if it may sometimes skip a meeting. We expect USD-TRY to trade at 52.0 by year-end."

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

• GBP/USD slips 0.16% to 1.3378 as Dollar demand recovers.
• US Manufacturing PMI rises to 56 despite weaker consumer sentiment.
• UK Retail Sales slow sharply ahead of next week's Fed decision.

The Pound Sterling (GBP) retreats by about 0.16% against the US Dollar (USD) on Friday as US business activity expands, while consumer sentiment worsens, with households complaining about high prices. At the time of writing, GBP/USD trades at 1.3366.

GBP/USD retreats as resilient US activity and disappointing UK Retail Sales weigh on sentiment

Tensions in the Middle East remain high. US President Donald Trump said that “we could end the war with Iran very quickly”, adding that “do we want to finish it or let it within is the question.” He reassured that the US controls the Strait of Hormuz.

Meanwhile, Houthis continued to attack Saudi Arabia interests, while Iran’s Islamic Revolutionary Guard Corps (IRGC) continued to strike ships transiting the Strait, through an “illegal route.”

Data in the US showed that business activity expanded but at a slower pace. The flash S&P Global Manufacturing PMI came at 56 in October, above 55.9 in September. The Services PMI dipped from 58.8 to 57.9, as economists expected. Meanwhile, the University of Michigan Consumer Sentiment Index fell to a five-month low in October, attributed to higher prices and expectations of higher rates, easing to 48 from 48.1 the previous month.

Meanwhile, inflation expectations for one year steadied at 4.7%, and for five years stood at 3.5%.

GBP/USD trimmed some of its gains, as the Greenback trimmed some of its earlier losses. The US Dollar Index (DXY), which measures the performance of the buck’s value against six currencies, is up 0.17% to 101.79.

Next week, traders eye the Federal Reserve's monetary policy decision and the Core Personal Consumption Expenditures (PCE) Price Index release.

Across the pond, UK data were mixed: the S&P Global Composite PMI rose to 53.1 from 52 in September, while Retail Sales deteriorated from 2.7% to 0.8% YoY, below forecasts.

British Prime Minister Andy Burnham said on Friday that next week’s first annual budget statement will give businesses "breathing space to grow.”

GBP/USD Price Forecast: Technical outlook 

In the daily chart, GBP/USD trades at 1.3367, holding a bearish near-term bias as it remains capped beneath the clustered simple moving averages around 1.3404 and the descending trend-line resistance coming from 1.3653 at 1.3402. The pair is also trading below the higher rising trend supports at 1.3628 and 1.3811, which now act as overhead barriers, while the Relative Strength Index (14) at 54.5 only hints at modest, corrective upside momentum rather than a sustained bullish shift.

On the topside, initial resistance is aligned at the descending trend line around 1.3402, closely followed by the triple simple moving average cluster at 1.3404; a daily close above this area would be needed to ease immediate downside pressure. Further up, the former rising trend supports at 1.3628 and 1.3811 form progressively stronger resistance zones. On the downside, the main nearby structural support is defined by the broken resistance trend line around 1.3266, where buyers could attempt to slow the decline if the pair extends its slide.

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

• Gold slips back below $4,000 after failing to sustain an earlier rebound.
• Traders await next week’s Fed interest rate decision.
• XAU/USD remains bearish below key moving averages, with RSI nearing oversold territory.

Gold (XAU/USD) loses momentum after attempting a rebound from a three-month low of $3,986 touched during Asian trading hours. Buyers remain on the sidelines as market sentiment stays fragile. At the time of writing, XAU/USD trades around $4002, below an intraday high of $4,034, on track for a weekly decline of more than 3%.

Analysts at Rabobank describe “a brutal day for markets on Thursday,” noting that the S&P 500 fell “1.2% to $7663, dragged lower by the Philadelphia Stock Exchange Semiconductor index, which marched its way to the lowest level since July of this year.” The sharp equity sell-off was mirrored by a strong rally in government bonds, with Rabobank highlighting that “bad things for equities meant good things for US Treasuries, as the US 10-year yield moved back below 5% for the first time since September, despite higher energy prices, and the 2-year made its way back below 4.75%.”

Gold failed to benefit from Thursday’s equity slump and falling US Treasury yields as several factors weighed on the metal. Middle East tensions keep upward pressure on energy prices, with West Texas Intermediate Oil trading around $100 per barrel, near five-week highs. The resulting inflationary pressures reinforce expectations that interest rates will remain higher for longer. This increases the opportunity cost of holding non-yielding metal.

Some traders may also have sold precious metals to cover losses in equities. Technical selling likely added to the pressure after Gold broke below the $4,100-$4,200 range that largely held since the start of October.

Against this backdrop, Gold remains vulnerable to renewed selling on rebounds while the US Dollar and Treasury yields also show signs of stabilisation after Thursday’s declines. The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades around 101.70, up 0.11%. The benchmark 10-year US Treasury yield stands at around 5%, up from 4.95% on Thursday.

Data released on Friday showed the preliminary S&P Global Composite PMI eased to 57.6 in October from 58.4 in September. The Manufacturing PMI rose to 56.0 from 55.9, beating expectations of 55.6. Meanwhile, the Services PMI fell to 57.9 from 58.8, matching forecasts. Meanwhile, the University of Michigan’s final Consumer Sentiment Index was revised up to 48.0 from 46.3, while one-year and five-year inflation expectations held at 4.7% and 3.5%, respectively.

All eyes on the Fed next week

The US central bank is widely expected to leave interest rates unchanged after raising them by 25 basis points (bps) in September. Traders will watch how policymakers balance persistent inflation risks against concerns that a slowdown in AI-related investment could weigh on economic growth. Any signal that another rate hike remains possible in December could keep Gold on the back foot.

Technical analysis: $4,000 at risk as technical indicators favor sellers

On the daily chart, XAU/USD extends its correction below all major moving averages and retains a bearish near-term bias. Momentum conditions are weak, with the Relative Strength Index (RSI) hovering near 35 and edging toward oversold territory, and the Moving Average Convergence Divergence (MACD) indicator holding below zero with a negative reading, hinting that downside forces still prevail despite a modestly rising Average Directional Index (ADX) around 24 that points to a gradually strengthening trend.

On the topside, immediate resistance emerges at the psychological $4,100 level, followed by another horizontal barrier at $4,200, which reinforces the nearby 100-day Simple Moving Average (SMA) at $4,224 as a key hurdle for any recovery attempts. Above that, the 50-day SMA at $4,302 guards the path toward the $4,400 zone, while the 200-day SMA at $4,509 caps the broader bearish structure.

On the downside, failure to hold above the psychological $4,000 mark could trigger deeper losses, exposing the $3,950 level as initial support, followed by the $3,900 zone. A sustained break below the latter could open the door for a further decline toward $3,800.

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

• USD/CHF rebounds from a one-month low as the US Dollar and Treasury yields regain some ground.
• The Fed-SNB interest rate gap continues to weigh on the Swiss Franc.
• Traders await next week's Fed decision for fresh clues on the interest rate outlook.

USD/CHF rebounds on Friday, reversing the previous day’s losses as the US Dollar (USD) regains some ground alongside US Treasury yields. At the time of writing, the pair trades around 0.8250, up 0.56% on the day, after falling to a one-month low of 0.8191 on Thursday.

The Swiss Franc (CHF) benefited from defensive flows on Thursday as concerns over the sustainability of AI-related investments weighed on equities. Investors also sought government bonds, pushing US Treasury yields sharply lower and adding pressure on the Greenback.

However, that move loses momentum on Friday. The benchmark 10-year US Treasury yield recovers toward 5% after falling 16.6 basis points to 4.95% the previous day. Meanwhile, the US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades around 101.75 after touching a three-week low of 101.45 on Thursday.

US economic data offer a mixed picture. The preliminary S&P Global Composite Purchasing Managers’ Index (PMI) eased to 57.6 in October from 58.4 in September. Manufacturing improved to 56 from 55.9, beating expectations of 55.6, while Services slowed to 57.9 from 58.8, matching forecasts. Meanwhile, the University of Michigan’s final Consumer Sentiment Index was revised up to 48 from 46.3. 1-year and 5-year inflation expectations held at 4.7% and 3.5%, respectively.

Attention now turns to next week’s Federal Reserve (Fed) interest rate decision. The central bank is widely expected to hold rates steady after raising them by 25 bps in September. However, the door remains open to another hike before year-end as higher energy prices linked to Middle East tensions threaten to keep inflation above central banks' 2% target for longer.

Against this backdrop, the Swiss Franc remains vulnerable as the SNB maintains its policy rate at 0%, leaving a wide interest rate gap with the Fed. The SNB’s September meeting minutes, released on Thursday, showed little urgency to tighten policy, stating that “the Governing Board deemed current monetary conditions appropriate to ensure price stability over the medium term.”

Policymakers noted that “inflation is likely to increase again somewhat in the short term due to higher energy prices,” while adding that “an increased willingness to intervene in foreign exchange markets is no longer necessary in the current environment.”

• The Australian Dollar gains 0.20% against the US Dollar on Friday, supported by expectations of higher interest rates in Australia.
• US manufacturing activity reached its highest level in 53 months in October, exceeding market expectations.
• Investors anticipate the Fed will keep interest rates unchanged on Wednesday, while monitoring inflationary risks.

AUD/USD extends its gains on Friday, trading around 0.7035 at the time of writing, up 0.20% on the day. The Australian Dollar (AUD) maintains a slight advantage against the US Dollar (USD), supported by expectations of further monetary tightening by the Reserve Bank of Australia (RBA), despite the release of strong economic data in the United States (US).

The Australian Dollar benefits from expectations that the RBA could raise interest rates again this year, amid persistent inflationary pressures. This outlook supports the appeal of the Australian currency as investors assess the diverging monetary policy trajectories of the two countries.

On the US side, preliminary data released by S&P Global on Friday confirms the resilience of private-sector activity. The Manufacturing Purchasing Managers Index (PMI) rose to 56 in October from 55.9 in September, exceeding market expectations of 55.6 and reaching its highest level in 53 months.

In the services sector, the PMI eased to 57.9, in line with forecasts, following September's reading of 58.8. Meanwhile, the Composite PMI, which combines manufacturing and services activity, slowed to 57.6 from 58.4 previously. However, it remains well above the 50 threshold separating expansion from contraction.

Investors now turn their attention to the Fed's upcoming monetary policy decision, scheduled for Wednesday. The US central bank is widely expected to leave interest rates unchanged in the 3.75%-4.00% range.

However, the outlook for December remains more uncertain. Markets are pricing in an approximately 80% chance of another interest rate hike, according to the CME FedWatch Tool, amid inflationary risks linked in particular to Oil prices.

Attention will therefore focus on the monetary policy statement and comments from Fed Chair Kevin Warsh during the subsequent press conference. In the absence of updated economic projections, his remarks could provide important clues about the future path of US interest rates and influence the US Dollar's performance against the Australian Dollar.

AUD/USD technical analysis

In the one-hour chart, AUD/USD trades at 0.7034, keeping a modest bullish bias as it holds above the 100-period simple moving average (SMA) at 0.7009 and the 200-period SMA at 0.6985. The pair is grinding higher toward nearby overhead supply, while the Relative Strength Index (14) around 63 suggests strengthening bullish momentum without yet reaching overbought territory.

On the topside, initial resistance emerges at 0.7037, ahead of a higher horizontal cap at 0.7045, where buying pressure could start to fade. On the downside, immediate support is located at the 100-period SMA at 0.7009, followed by a horizontal floor at 0.6994, with deeper structural support coming in near the 200-period SMA at 0.6985.

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

TD Securities’ macro team, led by Andrew Kelvin and Robert Both, does not share market conviction for an October Bank of Canada rate hike. They expect the BoC to hold at 2.25% now, then deliver 25bp increases in December and January, taking policy to the midpoint of its neutral range while monitoring inflation breadth, growth data and the impact of new tariffs.

October hold then December and January hikes

"We do not share the market's conviction for an October rate hike given limited inflation breadth and uncertainty over the near-term outlook."

"Functionally, there is a trade-off between certainty and inflation. The Bank can wait for more data to confirm their forecast, at the cost of allowing incremental increases in underlying inflation."

"We would simply contend that near-term inflation pressures are contained enough for the Bank to wait and see another six weeks of data."

"We therefore look for the Bank of Canada to deliver a hold with a clear indication that rates will be moving higher in future meetings, contingent on a benign growth path."

"We do not see the urgency to hike in October, but we don't expect rates to remain at 2.25% for much longer. We are pulling forward the hikes in our forecast from Jan/Mar to Dec/Jan, which would allow the Bank to lean against the risk of broader inflation pressures while giving it some more clarity around the near-term growth outlook and impact of new 338 tariffs."

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