EUR/USD shows limited upward movement with low volatility expected amid minimal U.S. economic data, while the euro remains pressured by anticipation of ECB rate cuts. GBP/USD has dipped below key levels due to lower-than-expected UK inflation, with rate cuts anticipated from the BoE. USD/JPY reflects a bullish trend, though restrained by low market volatility and potential impact from upcoming Japanese inflation data. Gold, supported by safe-haven demand amid geopolitical risks and falling Treasury yields, faces resistance at higher levels, yet continues to attract buyers during market uncertainty.
EUR/USD
Current Market Sentiment: Bearish. The EUR/USD pair remains under pressure due to the stronger-than-expected U.S. employment and inflation data, reducing the likelihood of significant rate cuts by the Federal Reserve. At the same time, the European Central Bank (ECB) is widely expected to cut rates by 25 basis points at its upcoming October 17th meeting, further weighing on the euro.
Key Technical Levels:
- Support: 1.0884, 1.0847, 1.0790
- Resistance: 1.0902, 1.0930, 1.0997, 1.1036, 1.1136
Analysis:
The bearish trend continues as EUR/USD sellers successfully pushed below the 1.0908 support, with prices now flirting with the liquidity zone around 1.0884. The pair is likely to remain under pressure, especially in light of the ECB’s dovish stance. However, some buyers might step in at 1.0884, which could trigger a short-term rebound.
- Support Zone: A dip towards 1.0847 could act as the next support level, but if it breaks, 1.0790 becomes the next significant target for bears.
- Resistance: If bulls regain momentum and push prices above 1.0902, further upward movements might aim for 1.0930 and eventually 1.0997, but the upside is capped by concerns over ECB dovishness and strong U.S. dollar sentiment.
Forecast:
Short-term, expect low volatility as the market digests limited U.S. data and prepares for the ECB meeting. However, with growing chances of ECB rate cuts, the overall sentiment remains bearish for EUR/USD. A break below 1.0884 would open the way to 1.0847, and possibly 1.0790. Upside moves are unlikely unless there’s a reversal in U.S. dollar strength or surprising ECB rhetoric.
GBP/USD
Current Market Sentiment: Bearish. The British pound has seen considerable weakness, with GBP/USD dropping below the critical 1.3000 level due to soft UK inflation data. CPI fell below market expectations, marking its lowest level since April 2021, suggesting that the Bank of England (BoE) could soon cut rates, putting additional pressure on the pound.
Key Technical Levels:
- Support: 1.2972, 1.2932, 1.2900
- Resistance: 1.3015, 1.3101, 1.3171, 1.3290
Analysis:
GBP/USD is currently trading in a bearish trend as inflation declines and expectations of BoE rate cuts rise. The pair has broken through several support levels, including 1.3071 and 1.3004, indicating strong selling momentum.
- Support Zone: The next significant support lies at 1.2972. If this level is breached, GBP/USD could quickly fall towards 1.2932 and potentially 1.2900.
- Resistance Levels: On the upside, a recovery above 1.3015 could bring a temporary relief rally toward 1.3101. However, sustained gains are unlikely unless there’s a shift in BoE expectations or a weakening of the U.S. dollar.
Forecast:
In the short term, GBP/USD will likely remain under pressure as the market continues to digest weaker UK inflation data and anticipates a BoE rate cut. A break below 1.2972 would signal a continuation of the downtrend, with 1.2900 as the next target. Any bullish recovery will be limited unless new data changes the market’s perception of BoE policy.
USD/JPY
Current Market Sentiment: Bullish. The USD/JPY pair is experiencing limited volatility due to a lack of significant U.S. economic data releases. However, stronger expectations that the Federal Reserve will maintain its current rates have strengthened the U.S. dollar, keeping USD/JPY elevated.
Key Technical Levels:
- Support: 148.91, 148.32, 147.50
- Resistance: 149.49, 149.90, 151.03
Analysis:
The medium-term trend for USD/JPY remains bullish, although the pair failed to consolidate above the 149.37 resistance level. This indicates some vulnerability to a potential pullback.
- Support Zone: A break below 148.91 could lead to further declines toward 148.32 and 147.50, which are critical support levels. A more extended correction could signal a shift in the medium-term trend.
- Resistance Levels: If buyers manage to push prices back above 149.49, the next target would be 149.90, and a breakout above 151.03 would confirm a strong bullish continuation.
Forecast:
Given the upward bias, USD/JPY is expected to remain strong unless there is a significant decline in U.S. Treasury yields or unexpected dovish rhetoric from the Fed. Support at 148.91 will be crucial; a break below this level could signal a deeper correction. However, if USD/JPY rises above 149.90, it would target 151.03, keeping the bullish trend intact.
Gold (XAU/USD)
Current Market Sentiment: Bullish. Gold has been trading with a bullish bias due to heightened geopolitical risks and declining U.S. Treasury yields, which have boosted its appeal as a safe-haven asset. However, the stronger U.S. dollar is limiting gold’s gains, especially with expectations of cautious Fed rate cuts.
Key Technical Levels:
- Support: 2661, 2640, 2605
- Resistance: 2685, 2700, 2735
Analysis:
The bullish trend for gold is likely to continue as long as geopolitical tensions and U.S. economic uncertainty persist. The metal has rebounded from support around 2640 and is now approaching the key psychological level of 2700.
- Support Zone: Immediate support is found at 2661, followed by a more substantial level at 2640. If gold falls below 2640, it could drop towards 2605, where buyers may re-enter the market.
- Resistance Levels: On the upside, resistance near 2685 and the psychological barrier of 2700 remain critical. A decisive break above 2700 could trigger further gains towards 2735, continuing the uptrend.
Forecast:
Gold is expected to remain bullish in the short term, with ongoing geopolitical tensions supporting its safe-haven status. A rise above 2700 would confirm continued upward momentum, while a break below 2640 would signal a potential pullback towards 2605. The medium-term outlook is also positive as long as Fed rate cuts remain modest and geopolitical risks persist.
Summary:
- EUR/USD: Bearish outlook, next support at 1.0847. Resistance at 1.0930.
- GBP/USD: Bearish trend likely to continue with support at 1.2972.
- USD/JPY: Bullish, targeting 149.90, with support at 148.91.
- Gold (XAU/USD): Bullish, approaching resistance at 2700.
