The euro has shown minor gains against the dollar, with German economic sentiment expected to improve slightly despite inflation and employment concerns. The British pound remains volatile as traders await the upcoming UK budget, although a stable range holds below key resistance levels. The yen hit a three-month low, weighed down by political instability following Japan’s snap election and anticipation of the Bank of Japan’s monetary stance. The Australian dollar is under pressure, with the Reserve Bank of Australia set to maintain its rate, deferring cuts amid persistent inflation. Gold remains bullish, testing resistance levels with further rises possible in a volatile environment.
EUR/USD Analysis
- Recent Trend: The euro has been on a bearish streak, losing 2.6% over the past four weeks.
- Economic Factors: German consumer confidence, the GfK consumer climate index (expected at -20.2), and CPI data will be key drivers. Inflation below the 2% target yet persistent high core and services inflation continues to concern ECB policymakers.
- ECB Rate Outlook: The ECB may cut rates in December, with swaps pricing a 25-basis-point cut at 100%, and a 50-basis-point cut at 41%.
- Technical Levels:
- Support: 1.0780, 1.0766
- Resistance: 1.0805, 1.0836, 1.0862, 1.0894
- Forecast: EUR/USD may experience further downside pressure, especially if it breaks below 1.0780. Upside will likely be limited unless there is a break above 1.0871, which could initiate an uptrend. Low volatility and range-bound trading are expected, with buying opportunities from oversold conditions.
GBP/USD Analysis
- Recent Trend: GBP/USD is trading below the 1.3 mark, with limited movement expected given the low volatility and lack of U.S. economic data early in the week.
- Economic Factors: The UK budget release on Wednesday could potentially impact GBP. A conservative fiscal stance may provide mild support to the pound, but major impacts are unlikely.
- Technical Levels:
- Support: 1.2932, 1.2917
- Resistance: 1.2970, 1.2992, 1.3032
- Forecast: GBP/USD may maintain a bearish tone. A break below 1.2932 could lead to further downside to 1.2917, while a sustained move above 1.3032 would shift the trend upward. Short-term traders may focus on intraday moves within this range, targeting sell positions near resistance levels.
USD/JPY Analysis
- Recent Trend: USD/JPY has pushed to a 3-month low following political upheaval in Japan. The Bank of Japan’s Oct. 31 meeting will be closely watched, especially with speculation over potential intervention if the yen drops further.
- Economic Factors: The yen’s weakness is influenced by political uncertainty in Japan. The BoJ is unlikely to adjust its policy this week but may intervene if levels near 155–160 are breached.
- Technical Levels:
- Support: 152.03, 151.68
- Resistance: 153.94, 154.43
- Forecast: The USD/JPY pair is likely to test resistance near 154.43, and a sustained move above this level would continue the bullish trend. If the yen gains strength and breaks below 152.03, a bearish phase may emerge, targeting 151.68.
AUD/USD Analysis
- Recent Trend: The AUD/USD is at a 10-week low. October has been a challenging month, with a 4.4% decline largely attributed to the RBA’s hawkish stance on inflation and rate cuts.
- Economic Factors: Australia’s Q3 inflation data (Thursday) will be critical, with core CPI expected to remain near 4%, possibly delaying rate cuts until 2025.
- Technical Levels:
- Support: 0.6571, 0.6560
- Resistance: 0.6617, 0.6680
- Forecast: AUD/USD may stay in a consolidation phase near the current support zone. A move above 0.6617 could signal a recovery to 0.6680, while a break below 0.6560 would likely extend the downtrend.
Gold (XAU/USD) Analysis
- Recent Trend: Gold has been on an upward trend, recently reaching an all-time high at 2757.96, driven by a combination of inflation concerns and risk sentiment.
- Economic Factors: With persistent inflation and uncertain economic conditions, demand for safe-haven assets remains high.
- Technical Levels:
- Support: 2708.10, 2680.45
- Resistance: 2750.00, 2800.00
- Forecast: Gold is likely to test the resistance levels at 2750–2770. If resistance holds, a sideways-to-downward correction could ensue, with bearish attention shifting to support at 2680. However, if the bullish momentum persists, gold could reach new highs toward 2800.
Summary Forecast
- EUR/USD: Bearish; look for sell opportunities near resistance levels with potential breaks below 1.0780.
- GBP/USD: Range-bound with a slight bearish bias; monitor support at 1.2932 for intraday trades.
- USD/JPY: Bullish with resistance near 154.43; downside risks emerge on breaks below 152.03.
- AUD/USD: Consolidation near current levels; recovery possible above 0.6617.
- Gold: Bullish trend persists; resistance at 2750–2770. Buy opportunities on dips near support.
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