Geopolitical Tensions and Fed Outlook Boost Safe-Haven Demand
The EUR/USD declined to 1.0920 as geopolitical tensions in the Middle East and China-Taiwan conflicts weigh on risk sentiment, boosting demand for the US dollar.
Expectations of a 25 basis point rate cut by the Federal Reserve in November increased to 87% after the US PPI data. Meanwhile, the euro faces pressure from a dovish ECB outlook. USD/JPY is approaching August lows due to a stronger dollar, while gold holds steady around $2,655, supported by safe-haven demand. GBP/USD dropped to 1.3060 amid safe-haven flows and dovish BoE signals, and silver rallied to $31.30, benefiting from geopolitical risks and expectations of slower Fed rate cuts.
EUR/USD Declines as US PPI Data and ECB Dovish Outlook Weigh on Euro
The EUR/USD pair continued its decline, nearing 1.0920 during the early Asian session on Monday. Risk aversion stemming from rising geopolitical tensions in the Middle East and conflicts between China and Taiwan has put selling pressure on riskier currencies like the euro. On Monday, a spokesperson for the US Department of State expressed serious concerns over the People’s Liberation Army’s military exercises in the Taiwan Strait and around Taiwan, stating they would closely monitor the situation and collaborate with allies on shared concerns. Any signs of escalating tensions could drive safe-haven flows toward the dollar, putting additional pressure on the EUR/USD pair. Traders are anticipating a 25 basis point rate cut from the Federal Reserve in November, following Friday’s US Producer Price Index (PPI) data. According to the CME FedWatch Tool, the probability of this rate cut has risen to approximately 87%, up from 83% before the PPI report. Meanwhile, the euro is facing challenges as the European Central Bank (ECB) is expected to lower interest rates further in its remaining monetary policy meetings this year. The ECB’s dovish outlook has been reinforced by a quick decline in inflationary pressures within the Eurozone and a ‘fragile’ economic recovery.
In the pair, the first support level is at 1.0900. If this level is breached, the next supports to watch will be 1.0870 and 1.0830. On the upside, the first resistance is at 1.0950; if this level is surpassed, the next targets will be 1.1020 and 1.1060.
Gold Holds Steady at $2,655 as Markets Assess Fed Rate Outlook
On Monday, gold remained steady at around $2,655 per ounce after a 1% increase in the previous session. Markets are still evaluating the Federal Reserve’s interest rate outlook considering recent inflation data. Reports revealed that US producer prices remained unchanged in September, alongside a rise in jobless claims, which raises questions about the resilience of the US labor market to higher interest rates. Although headline inflation decreased less than expected, core inflation rose more than anticipated. Currently, the likelihood of a 25 basis point cut to the fed funds rate in November is at 87%. Investors are also awaiting further economic data, such as retail sales figures and comments from several Fed officials, for more insights. Additionally, ongoing geopolitical tensions in the Middle East are enhancing gold’s appeal as a safe haven.
Technically the first support level is at 2,645. If this level is breached, the next supports to watch will be 2,625 and 2,600. On the upside, the initial resistance is at 2,665; if this level is surpassed, the next targets will be 2,685 and 2,700.
The ECB is expected to announce a third interest rate cut on Thursday due to concerns about sluggish economic growth and falling inflation.
A strong US dollar is contributing to the downward pressure on the EUR/USD pair. A decline in the yuan and dovish comments from the Bank of Japan Governor and new Prime Minister further weakened the yen. Gold prices stabilized on Tuesday, supported by increasing tensions between China and Taiwan and ongoing violence in the Middle East. The British pound strengthened against the US dollar after the UK’s unemployment rate fell to 4.0% in August, beating market expectations. Silver prices have fallen due to concerns about demand, particularly in China.
The EUR/USD pair continued its downward trend on Tuesday, slipping for the second day to around 1.0890, nearing its lowest level since August 8, reached the previous day. The European Central Bank (ECB) is set to announce its policy decision on Thursday, with expectations of a third interest rate cut in this easing cycle due to growing concerns about sluggish economic growth. Additionally, inflation in the Eurozone has fallen below the ECB’s 2% target for the first time since 2021, reinforcing the case for further easing measures. This backdrop and a strong US dollar are significantly pressuring the EUR/USD pair.
In the pair, the first support level is at 1.0875. If this level is breached, the next supports to watch will be 1.0830 and 1.0800. On the upside, the first resistance is at 1.0900; if this level is surpassed, the next targets will be 1.0920 and 1.0950.
GBP/USD traded at 1.3050 in response to the latest employment data. The UK’s ILO Unemployment Rate declined to 4.0% for the three months ending in August, down from 4.1% in July, according to data released by the Office for National Statistics (ONS). This figure was better than the market expectation of 4.1%. The positive employment data may take on greater significance following tomorrow’s CPI release, particularly in relation to potential interest rate cuts.
For GBP/USD, the initial support lies at 1.3000, followed by 1.2960 and 1.2925 below. On the upside, the first resistance is at 1.3100, with subsequent levels at 1.3160 and 1.3200 if the pair breaks above this resistance.
Markets Shift Focus to Central Bank Decisions Amid Tensions
The EUR/USD ended its four-day losing streak, stabilizing around 1.0890 as traders await key decisions from the ECB and upcoming Eurozone inflation data.
In USD/JPY, the yen continues to struggle near 149 as the dollar rallies on solid US data, while the BOJ signals caution in future rate hikes. Gold remains steady at $2,665 per ounce, with investors focused on the Fed’s next moves and rising geopolitical tensions, particularly in the Middle East. Meanwhile, GBP/USD has dropped to 1.3010 following disappointing UK CPI data, increasing expectations for a Bank of England rate cut. Silver (XAG/USD) continues to gain, supported by safe-haven demand and rising Middle East tensions.
EUR/USD Ends Losing Streak, Focus Shifts to ECB and HICP Data
EUR/USD stabilized around 1.0890 during the Asian session on Wednesday, ending a four-day losing streak. The euro may face downward pressure as the European Central Bank (ECB) is widely expected to cut both the Main Refinancing Operations and the Deposit Facility Rate by 25 basis points in Thursday’s policy meeting. Traders are closely monitoring the Harmonized Index of Consumer Prices (HICP) data from the Eurozone, set to be released on Thursday, ahead of the ECB’s decision. Additionally, the ECB’s Monetary Policy Statement and President Christine Lagarde’s remarks during the post-meeting press conference will be crucial, as they could offer insights into the bank’s future monetary policy direction.
In the EUR/USD pair, the first support level is at 1.0875. If this level is breached, the next supports to watch will be 1.0830 and 1.0800. On the upside, the first resistance is at 1.0900; if this level is surpassed, the next targets will be 1.0920 and 1.0950.
Gold Holds Steady at $2,665 as Investors Eye Fed’s Next Move
Gold was trading around $2,665 per ounce on Wednesday, maintaining gains from the previous session as investors sought more signals to evaluate the Federal Reserve’s monetary policy direction. The precious metal gained traction on Tuesday after the U.S. dollar and Treasury yields dipped slightly in response to disappointing manufacturing data. The NY Empire State Manufacturing Index unexpectedly fell in October to its lowest level in five months, indicating a contraction in business activity in New York after previously showing growth in September. Investors are now focused on U.S. retail sales data set to be released on Thursday and a speech by Fed Governor Waller on Friday for further insights. Currently, markets are pricing in nearly a 98% probability of a 25 basis point rate cut in the fed funds rate in November. Additionally, heightened tensions in the Middle East may support upward momentum for gold.
Technically, the first support level is at 2,640. If this level is breached, the next supports to watch will be 2,630 and 2,605. On the upside, the initial resistance is at 2,675; if this level is surpassed, the next targets will be 2,685 and 2,700.
CB Decisions and Geopolitical Tensions Drive Market Movements
The EUR/USD continues its decline as the US dollar strengthens ahead of the ECB’s anticipated rate cut, trading near 1.0850.
Meanwhile, USD/JPY hovers around 149.3, reflecting a stronger dollar and cautious remarks from the Bank of Japan on rate normalization. Gold rallies to $2,680 as dovish central bank outlooks and geopolitical tensions in the Middle East support demand for safe-haven assets. GBP/USD remains bearish, trading below 1.3000, as UK inflation data fuels speculation of a BoE rate cut. Silver holds steady at $31.60, supported by declining US Treasury yields and Fed rate cut expectations.
EUR/USD Pressured by US Dollar Strength, ECB Rate Cut in Focus
The EUR/USD pair continued its decline, approaching 1.0850 during the early Asian session on Thursday. The strengthening of the US dollar is applying selling pressure on this major currency pair. Investors are particularly focused on the European Central Bank (ECB) monetary policy meeting, where another interest rate cut is anticipated. At its September meeting, the Federal Open Market Committee (FOMC) took the rare step of reducing its benchmark interest rate by half a percentage point, setting it in the range of 4.75% to 5.00%. However, investors now expect the Federal Reserve (Fed) to implement modest rate cuts over the next year, which supports the dollar’s strength. Fed Governor Christopher Waller stated on Monday that future rate cuts are likely to be less aggressive than the significant reduction seen in September, expressing concern that the economy might still be operating at a higher level. Later on Thursday, market participants will look for insights from US Retail Sales data, which is projected to increase from 0.1% in August to 0.3% in September. Meanwhile, the ECB is expected to announce its third interest rate cut of the year during its October meeting, with money markets nearly fully pricing in three additional rate reductions through March 2025. ECB President Christine Lagarde mentioned last month that recent developments have bolstered the ECB’s confidence in achieving its inflation target in a timely manner, which will be considered during the October meeting. The dovish remarks from ECB policymakers, along with lower inflation data from the Eurozone, could put additional pressure on the euro against the US dollar.
In the pair, the first support level is at 1.0830. If this level is breached, the next supports to watch will be 1.0795 and 1.0755. On the upside, the first resistance is at 1.0875; if this level is surpassed, the next targets will be 1.0920 and 1.0950.
GBP/USD Remains Bearish as UK CPI Decline Fuels BoE Rate Cut Concerns
The GBP/USD pair remains below the 1.3000 psychological level during the Asian session on Thursday, sitting close to its lowest point since August 20, which was reached the previous day. The current fundamental landscape appears to favor bearish traders, indicating that the most likely movement for spot prices is downward. On Wednesday, data revealed that the annual UK Consumer Price Index (CPI) slowed from 2.2% in August to 1.7% last month, marking the lowest rate since April 2021. This has fueled speculation about a possible interest rate cut by the Bank of England (BoE) in November, further weighing on the British Pound (GBP). Additionally, the recent rally of the US Dollar (USD) to its highest level since early August supports the short-term negative outlook for the GBP/USD pair.
For GBP/USD, the initial support lies at 1.2965, followed by 1.2900 and 1.2830 below. On the upside, the first resistance is at 1.3000, with subsequent levels at 1.3040 and 1.3100 if the pair breaks above this resistance.
The US economy showed mixed signals in the latest data.
Retail sales beat expectations, while initial jobless claims fell but didn’t meet the target. The ECB cut interest rates for the third time this year, and the euro faced downward pressure. The Japanese yen traded lower as inflation rates declined. Gold prices surged to a new record high amid rising geopolitical tensions and market uncertainties. Silver prices also increased, reflecting the broader rally in precious metals. The GBP/USD pair gained ground after the UK’s inflation data surprised to the downside, suggesting potential interest rate cuts.
US Jobless Claims Fall, but Retail Sales Beat Expectations
The EUR/USD ended its 4-day losing streak, trading around 1.0840. The USD gained strength, reaching a 2-month high of 103.87 on a strong US Retail Sales report. The CME FedWatch Tool suggests a 90.8% chance of a 25 basis point rate cut in November and a 74.0% chance of another in December. US Retail Sales increased by 0.4% MoM in September, exceeding market expectations of a 0.3% rise. US Initial Jobless Claims fell by 19,000 for the week ending October 11, dropping to 241,000, failing to meet the expected 260,000 target.
The euro faced downward pressure following the ECB’s policy decision on Thursday. The ECB cut its Main Refinancing Operations Rate and the Deposit Facility Rate by 25 basis points to 3.40% and 3.25%, respectively. This marks the first consecutive rate cut by the ECB in 13 years. This decision follows a notable decline in inflation, which peaked at 10.6% in October 2022 and fell to 1.7% in September. During the post-meeting press conference, ECB President Christine Lagarde left the markets uncertain about the timing of future rate cuts but indicated that the Eurozone economy is on course for a soft landing.
In the pair, the first support level is at 1.0810. If this level is breached, the next supports to watch will be 1.0760 and 1.0740. On the upside, the first resistance is at 1.0875; if this level is surpassed, the next targets will be 1.0920 and 1.0950.
Gold Prices Top $2,700 as Investors Seek Safe Haven
Gold prices surged past $2,700 per ounce on Friday, reaching a new record high. This increase was fueled by global demand for safe-haven assets and expectations for further interest rate cuts from major central banks. The European Central Bank cut rates for the third time this year, lowering the deposit rate to 3.25% as anticipated, while noting that the disinflationary process is “well on track.”
Gold also benefited from rising tensions in the Middle East, particularly following the Israeli military’s confirmation that Yahya Sinwar, a prominent Hamas leader, was killed in combat, raising concerns about regional escalation. Additionally, bullion prices rose as investors moved away from riskier assets due to disappointing fiscal measures in China related to its ongoing property crisis and uncertainties surrounding the US presidential election. Strong economic data from the US limited gold’s upward momentum by supporting a less dovish outlook from the Federal Reserve.
The first support level is at 2,685 for gold, and if this level is breached, the next supports to watch will be 2,640 and 2,605. On the upside, the initial resistance is at 2,730; if this level is surpassed, the next targets will be 2,760 and 2,800.
Fed Policy and Global Tensions Drive Market Sentiment Across Key Pairs
The EUR/USD stabilizes near 1.0860 as traders await key Fed and ECB policy decisions, with a focus on potential rate cuts.
USD/JPY strengthens toward 149 following warnings of possible intervention by Japan’s government amid the yen’s slide. Gold surges to record highs at $2,730, driven by escalating Middle East conflicts and expectations of looser global monetary policies. GBP/USD fluctuates around 1.3050, pressured by UK inflation data that fuels expectations of BoE rate cuts. Silver surges to $34.10, supported by China’s positive news and a PBoC rate cut.
Yen Strengthens Toward 149 as Japan Warns of Potential Intervention
The Japanese yen strengthened towards 149 per dollar on Monday, marking a second consecutive day of gains. This followed a drop to the 150 level last week, which elicited new verbal warnings from the government and raised concerns about potential currency intervention. Last week, the yen fell to an 11-week low of 150.32 as the dollar strengthened due to strong US economic data and increasing speculation about another Trump presidency. Additionally, data released on Friday indicated that Japan’s headline and core inflation rates slowed to five-month lows of 2.5% and 2.4%, respectively, in September. In response to the yen’s decline, Japan’s chief currency diplomat, Atsushi Mimura, reiterated that the government is closely monitoring currency fluctuations and considers excessive volatility undesirable. Earlier this year, authorities intervened when the yen fell below 160 per dollar, and the 150 level is now seen as a critical threshold.
From a technical perspective, the first resistance level is at 150.00. If this level is surpassed, the next targets will be 151.00 and 151.30. On the downside, the initial support is at 148.65; if this level is breached, the next supports to watch will be 148.00 and 147.20.
Gold Climbs Higher as Middle East Conflicts Escalade
Gold climbed around $2,730 per ounce on Monday, setting new record highs due to rising demand for safe-haven assets. The focus is now on the escalating tensions in the Middle East, particularly after Hezbollah announced a more intense phase in its conflict with Israel and reports emerged of Israeli strikes in Beirut’s southern suburbs and other regional locations over the weekend. The uncertainty surrounding the upcoming US presidential elections is also making safe-haven investments a strong investment choice. Furthermore, expectations of looser monetary policies from major central banks are supporting gold prices. The People’s Bank of China recently cut key rates as part of its stimulus efforts, while the European Central Bank lowered rates for the third time this year. However, strong US economic data has raised expectations for a less dovish approach from the Federal Reserve.
Technically the first support level is at 2,685. If this level is breached, the next supports to watch will be 2,640 and 2,605. On the upside, the initial resistance is at 2,750; if this level is surpassed, the next targets will be 2,770 and 2,800.
Euro Falls on German Deflation, Yen Nears Intervention Trigger
The Euro, Yen, and silver all experienced significant movements on Tuesday.
The Euro weakened against the US dollar due to German deflation and expectations of further monetary easing by the ECB. The Japanese Yen fell to a three-month low against the dollar, raising concerns about intervention by Japanese authorities. Silver prices surged to a 12-year high on the back of safe-haven demand and rising industrial demand.
The EUR/USD pair entered a bearish consolidation phase during the Asian session on Tuesday, fluctuating around the 1.0820 level, just above its lowest point since early August reached the previous day. The near-term sentiment appears firmly bearish, indicating that the path of least resistance for spot prices is likely downward. Data released on Monday revealed that producer prices in Germany, the Eurozone’s largest economy, declined for the first time in seven months in September, with the annual rate of deflation accelerating. This development has increased expectations for further monetary easing by the European Central Bank (ECB). Additionally, ECB policymaker Gediminas Simkus suggested that the ECB may need to lower its key interest rate further below the “natural” level if inflation continues to decline. This outlook could further weaken the euro, particularly in the context of a strong U.S. dollar, reinforcing the negative sentiment for the EUR/USD pair.
In the pair, the first support level is at 1.0810. If this level is breached, the next supports to watch will be 1.0770 and 1.0740. On the upside, the first resistance is at 1.0830; if this level is surpassed, the next targets will be 1.0875 and 1.0920.
