The Euro and Pound are under pressure as slower growth and potential rate cuts by the ECB and BoE weigh on their respective currencies. The Euro faces headwinds amid sluggish volatility and is unlikely to see significant movement. Similarly, the British Pound sees little change, though UK employment and inflation data could sway its trajectory. Meanwhile, the Yen remains weak against the dollar, with expectations for further tightening by the Fed supporting the USD/JPY pair. Gold continues to rise, driven by geopolitical tensions and the anticipation of softer U.S. monetary policy.
EUR/USD
Current Situation:
The EUR/USD pair is in a bearish trend, driven by signs of economic slowdown in the Eurozone. The pair has been struggling with low volatility and the lack of significant U.S. data on October 14th. Traders are awaiting further direction from the ECB, which is expected to cut interest rates by 25 basis points. Meanwhile, the U.S. Federal Reserve is cutting rates more slowly, adding pressure to the euro.
Key Support Levels:
- 1.0908: Initial support where buyers showed strength last week.
- 1.0884: Further support, where more buying activity could emerge.
Key Resistance Levels:
- 1.0952: First resistance, which halted recent price growth.
- 1.0979: A critical resistance level where selling pressure could reemerge if tested.
Forecast:
The EUR/USD pair is expected to continue its bearish momentum unless it can break above the resistance at 1.1038. A breach above this level could resume an uptrend. However, the overall economic sentiment favors a medium-term bearish outlook as the ECB is expected to maintain dovish policies.
- Short-term Bias: Bearish
- Medium-term Bias: Bearish
GBP/USD
Current Situation:
The British pound has been under pressure, driven by anticipation of key U.K. economic data releases this week. Employment, inflation, and retail sales reports will provide critical signals for the Bank of England’s upcoming rate decisions. The BoE is expected to cut rates by 25 basis points in both November and December, leading to further downside pressure on GBP/USD.
Key Support Levels:
- 1.3035: The first significant support level where buyers showed interest last week.
- 1.3013: Additional support, providing a potential buying zone if tested.
Key Resistance Levels:
- 1.3105: Immediate resistance, which could cap any short-term rallies.
- 1.3175: A break above this level could trigger an uptrend, but it seems unlikely in the near term.
Forecast:
The overall outlook for GBP/USD remains bearish, especially if U.K. economic data weakens further. However, traders should monitor the U.K.’s upcoming employment and inflation reports, which could provide short-term volatility.
- Short-term Bias: Neutral to Bearish
- Medium-term Bias: Bearish
USD/JPY
Current Situation:
The USD/JPY pair continues to trade within a bullish trend, supported by diverging monetary policies between the Bank of Japan and the U.S. Federal Reserve. The Fed’s tightening bias contrasts with the BoJ’s reluctance to raise rates further, keeping the yen under pressure.
Key Support Levels:
- 148.91: The most recent support where buying interest has been noted.
- 148.28: A deeper support level that may trigger stronger buying activity if tested.
Key Resistance Levels:
- 149.37: Immediate resistance that the pair is currently testing.
- 151.03: Next major resistance level where selling pressure could increase.
Forecast:
The USD/JPY pair is likely to continue higher unless the BoJ signals a shift in policy. With low volatility expected due to bank holidays, traders should watch for a consolidation around the 149.37 level. A break above 149.37 could trigger a move toward the 151.00 handle.
- Short-term Bias: Bullish
- Medium-term Bias: Bullish
Gold (XAU/USD)
Current Situation:
Gold has maintained a positive momentum due to expectations of lower interest rates from the Federal Reserve and geopolitical tensions in the Middle East. However, gains may be capped by higher U.S. Treasury yields and risk sentiment linked to China’s economic stimulus.
Key Support Levels:
- 2646: Immediate support, where buyers have shown strength.
- 2623: A further support level that could attract buyers if tested.
Key Resistance Levels:
- 2658: First resistance level, which was tested on Friday.
- 2669: The next resistance level, where sellers may attempt to regain control.
Forecast:
Gold is expected to remain in a bullish trend as long as the price stays above the key support levels. A break above 2669 could push the price toward the psychological $2,700 level. However, traders should be cautious of potential retracements if U.S. yields rise or risk sentiment shifts.
- Short-term Bias: Bullish
- Medium-term Bias: Bullish
Summary Table of Support and Resistance Levels
| Asset | Support Levels | Resistance Levels |
|---|---|---|
| EUR/USD | 1.0908, 1.0884 | 1.0952, 1.0979, 1.1038 |
| GBP/USD | 1.3035, 1.3013 | 1.3105, 1.3175 |
| USD/JPY | 148.91, 148.28 | 149.37, 151.03 |
| Gold (XAU/USD) | 2646, 2623, 2605 | 2658, 2669, 2700 |
This analysis highlights the current market conditions and provides a forecast based on technical and fundamental factors. Be mindful of potential market-moving events such as central bank meetings and key economic data releases.
