Forex News
- EUR/USD weakens to around 1.1165 in Tuesday’s early European session.
- The pair keeps a negative outlook below the 100-day SMA, with bearish RSI momentum.
- The initial support level is located at 1.1140; the first upside barrier to watch is 1.1215.
The EUR/USD pair trades in negative territory near 1.1165 during the early European session on Tuesday. The Euro (EUR) extends its downside against the US Dollar (USD) as France’s fiscal concerns renewed financial stress across the Eurozone. Traders will closely monitor the Federal Reserve (Fed) and European Central Bank (ECB) interest rate decisions later this week.
The Fed is anticipated to keep the benchmark interest rate unchanged on Wednesday. Traders are pricing in nearly 89.5% probability that policymakers will hold interest rates steady at the current target range of 3.75% to 4.0%, the CME FedWatch Tool showed.
"The fundamental issue with the euro hasn't changed and spreads have tightened," said Kit Juckes, chief global FX strategist at Societe Generale. "Euro is still vulnerable at this point because the growth outlook isn't good and energy prices are still elevated,” Kit added.
The ECB is likely to leave its deposit rate unchanged at 2.50% at its October policy meeting on Thursday but raise it by 25 basis points (bps) in December as inflation runs nearly double its 2% target, according to a Reuters poll.
USD firms as yield curve flattens and Brent retreats from recent highs
Analysts at Commerzbank highlight a more cautious tone in rates and commodities, noting that "the US Treasury yield curve flattened slightly, with the short-end higher [while] the long-end edged lower." At the same time, they point out that "Brent crude oil prices pulled back from a near six-month high as diplomatic activity around the US-Iran conflict offered some relief to energy markets," while "the USD was slightly firmer."
Warsh flags investment surge and AI risks but avoids pre-committing on policy
Fed Chair Warsh’s speech scores 5.6/10 on the FXS Speechtracker, modestly below the 6.1/10 historical average, signaling a slightly less impactful tone relative to the established baseline despite broadly steady messaging. The admission of being “over-scarred” from the global financial crisis underscores a cautious bias even as Warsh highlights structural growth and an investment surge driven by “good policies,” while firmly refusing to pre-judge upcoming FOMC decisions. Warsh’s focus on AI as a near-term demand-side force and a tool to strengthen data confidence, alongside attention to negative tailside risks, points to a balanced stance between optimism on innovation and vigilance on financial stability.
The FXS Fed Sentiment Index was unchanged, moving 0.00 points to a level of 127.51, leaving the overall policy tone firmly in hawkish territory despite the slightly softer FXS Speechtracker score. The stable, elevated index level suggests markets see Warsh’s caution and emphasis on price stability and investment strength as consistent with a bias toward maintaining or tightening policy rather than shifting toward a more dovish Dollar stance.
Technical Analysis: EUR/USD maintains a bearish outlook in the near term
In the daily chart, EUR/USD maintains a bearish near-term bias as spot holds beneath the 100-day Simple Moving Average (SMA) and below the Bollinger Bands’ middle line. The pair is slipping along the lower half of the volatility envelope, with price only marginally above the lower band, while the Relative Strength Index (14) at 33.6 hovers just above oversold territory, hinting that downside pressure persists but is becoming stretched.
On the downside, the lower limit of Bollinger band at 1.1140 offers immediate support level. Any follow-through selling below the mentioned level would expose the 1.1100 psychological level, followed by the May 12, 2025 low of 1.0951.
On the topside, initial resistance level is located at the Bollinger middle band around 1.1215, followed by the upper boundary of Bollinger band near 1.1295. A decisive break above this level could pave the way to the 100-day SMA at 1.1445, acting as a more distant cap that reinforces the broader bearish structure.
(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.
- AUD/USD struggles to capitalize on modest Asian session gains to the 100- SMA pivotal resistance.
- Fed hike bets and geopolitical risks continue to underpin the USD, capping the upside for the pair.
- Hawkish RBA expectations support the Aussie as traders await the FOMC decision on Wednesday.
The AUD/USD pair once again fails near the 100-day Simple Moving Average (SMA), trimming a part of Tuesday's modest Asian session gains back closer to a one-month high, which it touched the previous day. Spot prices, however, hold above the 0.7000 psychological mark, warranting caution for bearish traders ahead of the key data and central bank event risks.
Australia's monthly consumer inflation figures are due for release on Wednesday, which will be followed by the highly anticipated FOMC policy decision. The US Federal Reserve (Fed) is expected to keep interest rates unchanged at the end of a two-day policy meeting, suggesting that the focus will be on the accompanying policy statement and Fed Chair Kevin Warsh's comments at the post-meeting press conference. Apart from this, the US macro data – the Advance Q3 GDP report and the Personal Consumption Expenditures (PCE) Price Index, due on Thursday – will be looked at for more cues about the Fed's policy path. The outlook, in turn, will influence the US Dollar (USD) and provide a fresh impetus to the AUD/USD pair.
In the meantime, the growing acceptance that the US central bank will raise borrowing costs in December amid inflationary concerns stemming from elevated energy prices, along with geopolitical uncertainties, acts as a tailwind for the buck. In fact, the USD Index (DXY), which tracks the Greenback against a basket of currencies, scales higher for the third straight day and caps the upside for the AUD/USD pair. However, hawkish Reserve Bank of Australia (RBA) rate expectations act as a tailwind for the Aussie and help limit the downside for the currency. Hence, it will be prudent to wait for a convincing break below the 0.7000 round figure before confirming that the recent recovery from a multi-month low has run out of steam.
From a technical perspective, spot prices maintain a capped tone near the 100-day SMA, currently pressuring the 38.2% Fibonacci retracement at 0.7025, keeping the broader bias fragile despite mildly positive momentum indicators. In fact, the Relative Strength Index (RSI) around 51 and a rising Moving Average Convergence Divergence (MACD) above the zero line hint at tentative recovery rather than a clear bullish turn, while the AUD/USD pair remains under the aforementioned technical barrier. A daily close above this cluster, however, would open the way toward the 50% retracement at 0.7065 and the 61.8% level at 0.7105, with the 78.6% retracement at 0.7162 acting as a stronger medium-term cap.
On the downside, initial support emerges at the 23.6% Fibo. retracement near 0.6976, ahead of the structural low around 0.6895, where a break would revive the broader bearish trend and negate the current momentum uptick.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
AUD/USD daily chart
RBA FAQs
The Reserve Bank of Australia (RBA) sets interest rates and manages monetary policy for Australia. Decisions are made by a board of governors at 11 meetings a year and ad hoc emergency meetings as required. The RBA’s primary mandate is to maintain price stability, which means an inflation rate of 2-3%, but also “..to contribute to the stability of the currency, full employment, and the economic prosperity and welfare of the Australian people.” Its main tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will strengthen the Australian Dollar (AUD) and vice versa. Other RBA tools include quantitative easing and tightening.
While inflation had always traditionally been thought of as a negative factor for currencies since it lowers the value of money in general, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Moderately higher inflation now tends to lead central banks to put up their interest rates, which in turn has the effect of attracting more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in the case of Australia is the Aussie Dollar.
Macroeconomic data gauges the health of an economy and can have an impact on the value of its currency. Investors prefer to invest their capital in economies that are safe and growing rather than precarious and shrinking. Greater capital inflows increase the aggregate demand and value of the domestic currency. Classic indicators, such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can influence AUD. A strong economy may encourage the Reserve Bank of Australia to put up interest rates, also supporting AUD.
Quantitative Easing (QE) is a tool used in extreme situations when lowering interest rates is not enough to restore the flow of credit in the economy. QE is the process by which the Reserve Bank of Australia (RBA) prints Australian Dollars (AUD) for the purpose of buying assets – usually government or corporate bonds – from financial institutions, thereby providing them with much-needed liquidity. QE usually results in a weaker AUD.
Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the Reserve Bank of Australia (RBA) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the RBA stops buying more assets, and stops reinvesting the principal maturing on the bonds it already holds. It would be positive (or bullish) for the Australian Dollar.
- USD/CHF inches higher as a stronger US Dollar holds firm, backed by caution before Wednesday's Fed rate decision.
- Markets expect a Fed rate pause at the October policy decision due on Wednesday.
- Swiss 10-year government bond yield fell to near 0.47% amid safe-haven flows.
USD/CHF inches higher after two days of gains, hovering around 0.8280 during Asian hours on Tuesday. The pair moves little as the US Dollar (USD) remains stronger, driven by market caution ahead of looming interest rate decisions by the US Federal Reserve (Fed) due on Wednesday.
Financial markets expect the Federal Reserve to keep interest rates unchanged at its upcoming October meeting before potentially hiking rates again in December. According to the CME FedWatch Tool, market pricing currently reflects an 89.5% probability of a rate pause at the October policy meeting, alongside an 82.3% chance of a rate increase in December.
Heather Long, chief economist at Navy Federal Credit Union, said that “Inflation is still the No. 1 problem in the US economy, and there are a lot of signs it is getting more broad-based.” “For consumers, it means really high borrowing costs for the foreseeable future.” However, “given that it’s right before an election,” Heather added, “they won’t hike in October.”
The upside of the USD/CHF pair is restrained as the Swiss Franc (CHF) gains strength as the yield on the Swiss 10-year government bond fell to near 0.47%, driven by safe-haven demand amid growing concerns over Europe's fiscal outlook.
Swiss National Bank (SNB) Meeting Minutes revealed that policymakers observed inflationary pressures with no signs of spillover effects into the broader economy, attributing the recent rise in inflation primarily to higher oil prices and the depreciation of the CHF.
USD/CHF rally seen stretching toward nearby resistance
Strategists at UOB Group note that USD/CHF has extended its recent surge, with the Dollar “rising sharply to a high of 0.8255” on Friday and pushing on to “0.8278 before settling at 0.8271 (+0.27%)” yesterday. They acknowledge that “conditions are overbought after the sharp rise over the past two days,” yet still see room for the move to continue, highlighting “scope for USD to test 0.8290,” while cautioning that “a sustained advance above this level is unlikely.” On the downside, UOB flags “support is at 0.8250,” marking the first line of defense for the pair after its rapid ascent.
Swiss Franc FAQs
The Swiss Franc (CHF) is Switzerland’s official currency. It is among the top ten most traded currencies globally, reaching volumes that well exceed the size of the Swiss economy. Its value is determined by the broad market sentiment, the country’s economic health or action taken by the Swiss National Bank (SNB), among other factors. Between 2011 and 2015, the Swiss Franc was pegged to the Euro (EUR). The peg was abruptly removed, resulting in a more than 20% increase in the Franc’s value, causing a turmoil in markets. Even though the peg isn’t in force anymore, CHF fortunes tend to be highly correlated with the Euro ones due to the high dependency of the Swiss economy on the neighboring Eurozone.
The Swiss Franc (CHF) is considered a safe-haven asset, or a currency that investors tend to buy in times of market stress. This is due to the perceived status of Switzerland in the world: a stable economy, a strong export sector, big central bank reserves or a longstanding political stance towards neutrality in global conflicts make the country’s currency a good choice for investors fleeing from risks. Turbulent times are likely to strengthen CHF value against other currencies that are seen as more risky to invest in.
The Swiss National Bank (SNB) meets four times a year – once every quarter, less than other major central banks – to decide on monetary policy. The bank aims for an annual inflation rate of less than 2%. When inflation is above target or forecasted to be above target in the foreseeable future, the bank will attempt to tame price growth by raising its policy rate. Higher interest rates are generally positive for the Swiss Franc (CHF) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken CHF.
Macroeconomic data releases in Switzerland are key to assessing the state of the economy and can impact the Swiss Franc’s (CHF) valuation. The Swiss economy is broadly stable, but any sudden change in economic growth, inflation, current account or the central bank’s currency reserves have the potential to trigger moves in CHF. Generally, high economic growth, low unemployment and high confidence are good for CHF. Conversely, if economic data points to weakening momentum, CHF is likely to depreciate.
As a small and open economy, Switzerland is heavily dependent on the health of the neighboring Eurozone economies. The broader European Union is Switzerland’s main economic partner and a key political ally, so macroeconomic and monetary policy stability in the Eurozone is essential for Switzerland and, thus, for the Swiss Franc (CHF). With such dependency, some models suggest that the correlation between the fortunes of the Euro (EUR) and the CHF is more than 90%, or close to perfect.
- WTI drifts lower for the second straight day as Middle East diplomacy hopes ease supply concerns.
- Attacks on Saudi Arabia keep the geopolitical risk premium in play and help limit losses for oil prices.
- The bullish technical setup further warrants caution before positioning for any meaningful decline.
West Texas Intermediate (WTI) – the benchmark US Crude Oil price – attracts some sellers for the second straight day, trading below the $100.00 psychological mark during the Asian session on Tuesday. Meanwhile, the commodity remains within striking distance of a five-month high set last Friday as traders await further developments surrounding the Middle East crisis.
The optimism over a potential resolution in the US-Israeli war on Iran eases some fears of supply disruption and exerts pressure on crude oil prices. However, the geopolitical risk premium remains in play amid stalled US-Iran talks and renewed attacks by Iran-backed Houthis on Saudi Arabia. Adding to this, Lebanese armed group Hezbollah is reportedly preparing for a possible resumption of hostilities with Israel. This dampens hopes of immediate stability in the region and should help limit the downside for the black liquid.
From a technical perspective, crude oil prices maintain a bullish near-term bias above the 100-period Simple Moving Average (SMA) on the 4-hour chart, and all key Fibonacci retracement supports between $86.58 and $99.42. That said, the Relative Strength Index (RSI) at 50.69 has eased back toward neutral from prior overbought readings. Adding to this, the Moving Average Convergence Divergence (MACD) has slipped into negative territory, hinting at a consolidative phase rather than a clear reversal within an otherwise supported uptrend.
Meanwhile, immediate support is seen at the 23.6% Fibo. retracement at $99.42, followed by the 38.2% retracement at $96.97 and the 50% level at $94.98, which cluster around the 100-period SMA at $94.74 and reinforce a broader demand zone. Deeper pullbacks would eye the 61.8% retracement at $93.00 and lower Fibonacci levels at $90.18 and $86.58. On the topside, the recent cycle high anchor near $103.39 stands as the next significant resistance level that bulls would need to clear to extend the rally witnessed since the start of this month.
(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.
Gold prices remained broadly unchanged in India on Tuesday, according to data compiled by FXStreet.
The price for Gold stood at 12,310.14 Indian Rupees (INR) per gram, broadly stable compared with the INR 12,299.84 it cost on Monday.
The price for Gold was broadly steady at INR 143,584.20 per tola from INR 143,462.90 per tola a day earlier.
Unit measure | Gold Price in INR |
|---|---|
1 Gram | 12,310.14 |
10 Grams | 123,103.30 |
Tola | 143,584.20 |
Troy Ounce | 382,901.40 |
FXStreet calculates Gold prices in India by adapting international prices (USD/INR) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
(An automation tool was used in creating this post.)
- AUD/JPY attracts some buyers to near 110.75 in Tuesday’s early European session.
- The cross keeps a bearish vibe below the 100-day SMA; a temporary rebound cannot be ruled out amid improving RSI momentum.
- The first support level is seen at 110.20; the immediate resistance level to watch is 111.20.
The AUD/JPY cross trades in positive territory around 110.75 during the early European trading hours on Tuesday. Hawkish tone from the Reserve Bank of Australia (RBA) provides some support to the Australian Dollar (AUD) against the Japanese Yen (JPY). Australia’s September inflation data will be the highlight later on Wednesday. On Friday, the Bank of Japan (BoJ) interest rate decision will take center stage.
RBA Assistant Governor Sarah Hunter said that the central bank “not quite yet" is done fighting inflation, signaling further rate hikes are likely when policymakers meet early next month. Markets are now pricing in nearly a 62% chance of an interest rate increase to 4.85% at the next RBA Board meeting, according to the ASX RBA Rate Tracker.
Traders await the Australian Consumer Price Index (CPI) report for fresh impetus. Economists expect the annual CPI to show a rise of 4.2% in September, while the monthly CPI is projected to show an increase of 0.7% in September. Any signs of hotter inflation in Australia could boost the Aussie in the near term.
The BoJ is expected to keep the interest rate steady at 1.25% at the October policy meeting on Friday. Analysts said the Japanese central bank is likely to avoid dropping explicit hints on the timing and pace of future rate rises as it balances the need to forestall risks of an inflation overshoot without disrupting jittery markets with a premature hike.
BoJ rate path in focus as swaps price in December move and support for Yen
Analysts at Brown Brothers Harriman note that the BoJ is “widely expected to keep rates on hold at 1.25% and assess September’s 25bps hike before tightening again.” They highlight Governor Kazuo Ueda’s cautious tone in September, when he warned that “rapid rate hikes could unsettle asset prices,” and stressed that “it could take some time to confirm that 2% inflation is entrenched.”
Even so, BBH argues that “firmer underlying inflation leaves scope for a more hawkish Outlook Report, lifting BoJ rate expectations in favor of JPY.” Reflecting this shift in market pricing, they point out that “the swaps curve price in 75% odds of a 25bps BoJ rate hike to 1.50% at the December 18 meeting and nearly 75bps of tightening in the next twelve months.”
BoJ’s Himino flags AI-driven inflation risks, keeping Yen underpinned
BoJ’s Himino scores 8.2/10 on FXS Speechtracker, exactly in line with the historic average, but the emphasis on rising underlying inflation and expectations marks a hawkish tilt. Strong AI-related demand lifting capex and exports, alongside accommodative financial conditions, low real rates and rapid bank lending, reinforces the case that inflation is converging toward the 2% target, supporting a firmer Yen bias.
Warnings that postponing policy changes could heighten upside price risks and damage the economy signal growing readiness to adjust policy, even if timing remains data-dependent. The focus on achieving stable prices through “suitable monetary policy” to secure sustainable growth suggests BoJ is edging away from ultra-easy settings, a backdrop that should limit Yen downside and keep markets alert for future normalization steps.
Technical Analysis: Negative outlook of AUD/JPY remains intact below the 100-day SMA
In the daily chart, AUD/JPY maintains a capped tone as it holds below the 100-day simple moving average (SMA). Price has recovered back above the Bollinger Bands’ 20-period middle band, suggesting some near-term stabilization, while the Relative Strength Index (14) at 52.25 hints at mildly improving momentum that has yet to challenge the overarching bearish structure defined by the dominant SMA overhead.
On the downside, initial support level is seen at the Bollinger middle band around 110.20, followed by the 110.00 psychological level. A deeper cushion is located at the lower limit of Bollinger band near 109.20, where sellers could hesitate if the pair resumes its decline.
On the topside, immediate resistance level appears at the uppber boundary of Bollinger band near 111.20, en route to the 100-day SMA at 112.00. Sustained trading above this level could see a rally to the August 18 high of 113.61.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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.
- EUR/JPY may fall toward the 12-month low of 175.10.
- The 14-day Relative Strength Index near 35.98 signals subdued upside momentum rather than an oversold state.
- The primary barrier lies at the nine-day EMA of 176.60.
EUR/JPY remains stronger for the second successive day, trading around 176.20 during Asian hours on Tuesday. Based on the technical analysis of the daily chart's descending channel pattern, the currency cross maintains a clear bearish bias.
The EUR/JPY cross is maintaining a bearish bias as it holds beneath both the nine- and 50-day Exponential Moving Averages (EMAs). The short- and medium-term averages above price suggest rallies remain capped, while the 14-day Relative Strength Index (RSI) at 35.98 stays in weak territory, hinting at subdued upside momentum rather than an outright oversold condition.
The EUR/JPY cross may test the 12-month low of 175.10, reached on October 23, followed by the lower boundary of its descending channel around 174.80. Further declines below this confluence support zone would open the door for the currency cross to navigate the region around the 15-month low at 169.72.
On the upside, the primary barrier lies at the nine-day EMA of 176.60, followed by the upper boundary of the descending channel near 178.50. Further resistance lies at the 50-day EMA of 179.26. A move above the medium-term price average would cause a bullish reversal, supporting the EUR/JPY cross to explore the area around the all-time high of 187.95, reached on April 17.
BoJ seen on hold at 1.25% as market waits on next tightening step
Brown Brothers Harriman’s Elias Haddad notes that the Bank of Japan is “widely expected to keep rates on hold at 1.25% and assess September’s 25bps hike before tightening again,” underscoring market expectations that policymakers will pause to evaluate the impact of the recent move before considering any further adjustment to the policy rate.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Bank of Japan FAQs
The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%.
The Bank of Japan embarked in an ultra-loose monetary policy in 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds. In March 2024, the BoJ lifted interest rates, effectively retreating from the ultra-loose monetary policy stance.
The Bank’s massive stimulus caused the Yen to depreciate against its main currency peers. This process exacerbated in 2022 and 2023 due to an increasing policy divergence between the Bank of Japan and other main central banks, which opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy led to a widening differential with other currencies, dragging down the value of the Yen. This trend partly reversed in 2024, when the BoJ decided to abandon its ultra-loose policy stance.
A weaker Yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeded the BoJ’s 2% target. The prospect of rising salaries in the country – a key element fuelling inflation – also contributed to the move.
- Silver may stabilize amid bargain-hunting and declining crude oil prices.
- Security talks between Iran, Saudi Arabia, Pakistan, and Turkey temporarily soften near-term inflation concerns.
- Markets expect a Fed rate pause in October, alongside upcoming decisions from the ECB, BoJ, and BoC.
Silver price (XAG/USD) depreciates after posting minor gains in the previous day, trading around $53.80 per troy ounce during Asian hours on Tuesday. Non-yielding Silver is trading near an 11-month low of $53.01, recorded on Monday, as elevated energy prices keep inflation risks in focus, sustaining expectations for further monetary tightening. However, the downside pressure on the white metal could ease as falling oil prices and bargain-hunting ahead of the Federal Reserve’s (Fed) upcoming policy decision offer some support.
Crude oil prices have declined amid renewed diplomatic efforts to defuse US-Iran tensions, which has helped ease near-term inflation concerns. Following high-level talks in Tehran, Iran, Saudi Arabia, Pakistan, and Turkey agreed on Monday to continue security discussions and enhance regional cooperation, according to Islamic Republic of Iran Broadcasting (IRIB). A joint statement released after the initial meeting between Iran and senior officials representing the Mecca Joint Defence Agreement noted that all four countries agreed to maintain dialogue and consultations focused on regional peace, security, and stability.
In central banking, financial markets anticipate that the Federal Reserve will keep interest rates unchanged at its upcoming October meeting before potentially pursuing another rate hike in December. According to the CME FedWatch Tool, market pricing currently reflects an 89.5% probability of a rate pause in October, alongside an 82.3% chance of a rate increase in December. Meanwhile, the European Central Bank (ECB) and Bank of Japan (BoJ) are also set to leave their key interest rates unchanged, while the Bank of Canada (BoC) is expected to deliver a 25-basis-point rate hike this week.
Technical Analysis: Silver falls to near oversold territory
In the daily chart, XAG/USD trades at $53.80, maintaining a bearish near-term bias as price holds below both the nine- and 50-day Exponential Moving Averages (EMAs). The Moving Average Exponential structure suggests rallies are likely to be capped by these overhead levels, while the 14-day Relative Strength Index (RSI) at 31.06 hovers near oversold territory, hinting that downside momentum is stretched but not yet reversed. The FXS Fed Sentiment Index consolidating around 127.51 reinforces a cautious backdrop for silver amid tight monetary expectations.
On the topside, initial resistance is located at the nine-day EMA at $55.74, with a stronger barrier emerging at the 50-day EMA near $60.74, where a break would be needed to ease the prevailing bearish tone. With no clear technical support levels immediately beneath the current price in this dataset, the metal remains vulnerable to further declines until buyers can reclaim the short-term EMA cluster, which would be the first sign of stabilization on the daily chart.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
- DXY prolongs its recovery from a three-week low and gains positive traction for the third straight day.
- Fed hike bets, recovering US bond yields, and geopolitical risks act as a tailwind for the safe-haven USD.
- Traders seem hesitant to place aggressive bullish bets ahead of the crucial two-day FOMC meeting.
The US Dollar Index (DXY), which tracks the Greenback against a basket of currencies, attracts buyers for the third straight day, building on its recovery from a three-week low, touched last Thursday. The index touches a nearly two-week high during the Asian session, though it lacks follow-through and currently trades around 102.00 as traders opt to move to the sidelines ahead of the highly anticipated FOMC policy meeting.
The US Federal Reserve (Fed) is scheduled to announce its decision on Wednesday and is widely expected to keep interest rates steady. Hence, the focus will be on the accompanying policy statement and Fed Chair Kevin Warsh's comments during the post-meeting press conference in the absence of updated economic projections. Apart from this, important US macro releases – the Advance Q3 GDP and the Personal Consumption Expenditures (PCE) Price Index on Thursday – will be looked upon for more cues about the Fed's future policy path. The outlook, in turn, will play a key role in determining the next leg of a directional move for the DXY.
Heading into the key central bank event and data risks, Fed officials recently signaled that there is no urgency to raise interest rates. That said, traders are still pricing in around an 80% chance that the US central bank will raise borrowing costs again in December. Moreover, inflation fears stemming from elevated energy prices underpin prospects for further Fed tightening. Adding to this, US bond yields rebound slightly after the recent decline to a three-week low, which, along with persistent geopolitical uncertainties, acts as a tailwind for the safe-haven Greenback. This, in turn, suggests that the path of least resistance for the DXY is to the upside.
DXY 4-hour chart
Technical Analysis
The DXY maintains a constructive bullish bias above the 200-period Simple Moving Average (SMA) on the 4-hour chart. Moreover, a move beyond the 23.6% Fibonacci retracement at 101.92 reinforces a short-term upward tone, although the broader advance remains capped by the cycle anchor level near 102.95, where initial resistance is located.
On the downside, slide below the reclaimed 23.6% Fibo. retracement at 101.92 could find support near a dense structural floor formed by the 38.2% retracement at 101.28 and the 200-period SMA at 101.26. Deeper pullbacks would expose the 50.0% retracement at 100.77 and the 61.8% level at 100.26, while the 78.6% retracement at 99.52 and the 98.59 area represent more distant bearish objectives if the current bullish structure fails.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
US Dollar Price This week
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.38% | 0.20% | 0.36% | -0.24% | 0.14% | -0.07% | 0.42% | |
| EUR | -0.38% | -0.21% | -0.07% | -0.67% | -0.31% | -0.48% | -0.01% | |
| GBP | -0.20% | 0.21% | 0.08% | -0.48% | -0.10% | -0.25% | 0.16% | |
| JPY | -0.36% | 0.07% | -0.08% | -0.55% | -0.28% | -0.40% | -0.03% | |
| CAD | 0.24% | 0.67% | 0.48% | 0.55% | 0.31% | 0.10% | 0.63% | |
| AUD | -0.14% | 0.31% | 0.10% | 0.28% | -0.31% | -0.20% | 0.09% | |
| NZD | 0.07% | 0.48% | 0.25% | 0.40% | -0.10% | 0.20% | 0.47% | |
| CHF | -0.42% | 0.01% | -0.16% | 0.03% | -0.63% | -0.09% | -0.47% |
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).
The Saudi-led coalition said on Tuesday that air defences intercepted and destroyed four drones launched by the Houthis towards the southern region of Saudi Arabia, Reuters reported.
Saudi Civil Defense issued early warning alerts for a potential hostile threat in the Eastern Region and in Kharj governorate, before later saying the danger had passed in both areas.
On Monday, the Saudi-led coalition fighting Yemen’s Houthis stated that it carried out a military operation “aimed at neutralising sources of threat”, as the armed group claimed attacks on infrastructure in Saudi Arabia and Yemen.
Market reaction
At the time of writing, the West Texas Intermediate (WTI) is down 0.58% on the day at $100.00.
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.
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