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Morning briefing: EUR/USD eyes 1.1100 support amid persistent US Dollar rally

Gold bounces off $4,150 amid modest USD pullback but stays in two-week-old range

Silver price (XAG/USD) extends its losses for the second consecutive day, trading around $60.00 per troy ounce during Asian hours on Tuesday. Silver is struggling as rising oil prices fuel inflation concerns, bolstering expectations of further Federal Reserve (Fed) interest rate hikes. Higher interest rates typically weigh on precious metals like Silver, as they increase the opportunity cost of holding non-yielding assets.

Geopolitical tensions also remain at the forefront for investors. Markets are closely monitoring reports that the US is considering joining Saudi Arabia in its campaign against Iran-backed Houthi militants in Yemen. Meanwhile, sentiment remains fragile following news that the recently announced Russia-Ukraine "energy ceasefire" has already been violated.

Adding to the pressure, the US Dollar Index (DXY) trades near 18-month highs ahead of critical economic releases. Investors are awaiting key inflation reports, including Wednesday’s US Consumer Price Index and Thursday’s Producer Price Index, to gauge the Fed's policy path. According to the CME FedWatch Tool, markets are pricing in roughly an 80% chance of the Fed keeping rates unchanged this month, alongside an 88% probability of a rate hike in December.

Fed Bank of Cleveland President Beth Hammack underscored a stronger-than-usual bias toward tighter policy. The emphasis on the need for higher interest rates, a restrictive stance to re-anchor inflation at 2%, and concern that an inflationary mindset is becoming ingrained—amid neutral financial conditions and AI-driven demand pressures—signals a preference for swift, smaller rate tweaks to keep policy tight and responsive. Hammack’s focus on broad-based inflation, firm pricing power, and the duty to clarify the reaction function reinforces a message that the Fed should not assume inflation expectations are safely anchored and that the economy can withstand more tightening.

Fed expectations seen steady as US CPI loomsAnalysts at Societe Generale highlight Wednesday’s US CPI release as the key event for markets, arguing that a move in core inflation to “2.5% (the market consensus)” is unlikely to alter the prevailing policy outlook. In their view, such a print would leave “little chance of any shift in market expectations: no rate hike this month, but a very strong chance of one in December and another in Q1.”

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.

Gold tumbles below $4,200 on higher oil prices, firmer US Dollar

Why Is China stacking Gold?

The big picture for Gold and Silver could not be more positive

Gold prices are showing signs of stabilisation following a 14% decline from their August high, despite the US dollar index reaching an 18-month high. Falling trading volumes and waning bearish momentum suggest selling pressure is easing, while technical support above $4,000 could provide a foundation for a rebound towards $4,300.

The US bond market may be closed to start the week, but the foreign exchange market remains active, and the world's most widely-traded currency pair is falling to 17-month lows.

USD/JPY Talking Points:
USD/JPY continues to catch bids after pullbacks but bulls remain trepidatious at or around prior highs.
This has built an ascending triangle formation and this puts even more emphasis on the CPI report later this week. CPI has been a significant driver in the USD/JPY carry trade over the past five years, delivering some of the largest moves – in both directions.
With hindsight perhaps the comments from US Treasury Secretary Scott Bessent were ill-timed. The day he said that “I am the house, bet against me if you want” marked a higher-low in USD/JPY, and since then the pair has gained more than 500 pips. That was on September 9th, and in the month since the USD/JPY pair has shown respectable bullish price action, and if it weren’t for a series of comments from President Trump, Bessent and the Japanese Finance Minister, USD/JPY may well be back above the 160.00 handle, at this point.

I have long said that if the pair is going to reverse for anything more than a pullback, there’s going to need to be some help from data. And we can see this in the history of USD/JPY, where interventions or threats thereof might be able to stall a trend – but for buyers to actually sell out of positions there needs to be some legitimate fear of a change in the underlying backdrop.

And this really speaks to the nature of the situation, where comments saying that the USD/JPY spot rate do not reflect fundamentals. Because the fact is – they do, and it does, and so far markets have seen through threats and buyers haven’t been compelled to close out of longs.

But – if there’s one data item that has consistently been able to create that counter-trend movement, it’s been US CPI, as we can see from some of the larger reversals in the pair over the past four years.

USD/JPY Weekly Chart
Chart prepared by James Stanley; data derived from Tradingview

The Crux of the Problem
Inflation has printed at 1.9% for Japan over the past two months. The Bank of Japan hiked rates anyways in September despite inflation being below their target. This is quite abnormal for a bank that tested some very experimental monetary policy while consistently leaning more and more dovish.

And one look at the demographic scenario in Japan and it makes sense as to why. With an aging and dwindling population, growth is already an uphill battle, and after decades of disinflation and deflation – much of which was pushed along by a strong Yen – the political volatility in the country pushed economics as a priority. It’s just, an uphill battle when you’re dealing with a population expected to decrease by a third over the next 30ish years.

But, when the comment is made that the spot price doesn’t reflect fundamentals, that’s what speaks against it – inflation in the US remains higher, rate expectations are more hawkish in response to that inflation, and frankly, there’s still a carry trade in play with the rate disparity between the two nations.

And if a fund or a bank is borrowing capital in Japan at lower rates, and then investing elsewhere, the primary risk is currency risk as a continually weakening Yen could eviscerate any profits seen from the spread. So, hedging that risk makes sense and this is where a long USD/JPY trade can come into play.

When that hedge looks more likely to lose capital – such as a large change in underlying inflation rates, such as we saw from the US in November of 2022 or 2023, or July of 2024; or perhaps a jump in inflation such as what we saw in April of 2024 – market participants are going to factor that in.

It’s the very essence of responding to and incorporating fundamentals. But with seemingly everyone pushing in one singular direction, these trades can become incredibly crowded, and that perhaps acts as a magnifier of sorts, so that when some form of change does show, the result can seem more outsized than normal.

USD/JPY Weekly Chart
Chart prepared by James Stanley; data derived from Tradingview

Interventions
Interventions in the open market are not ideal, nor should they be. It essentially involves the central bank jumping in to manipulate a free market, using their own cash reserves, to influence a trade in the opposite direction that their own monetary policy is encouraging. Part of the design is to shake out the crowded trades as looked at above, but, in reality, the half life of these moves is often limited in scope. Because, after all, the fundamental backdrop that produced the situation in the first place very much remains in place.

What makes the most recent episode as unique is who is involved, as this time, it was a dual intervention with both the US and Japan taking part. Also unique is the fact that the US Treasury Secretary behind the push has extensive experience in currency markets. Yes, that same Scott Bessent who is currently being called out by markets and social media for his “I am the house” quote. He was a key member of Quantum and the George Soros team that broke the Bank of England in 1992. Bessent’s role at Quantum was executing FX trades and in this most recent example of intervention, it was a unique approach of the US Treasury asking the NY Federal Reserve to do a rate check. These normally happened from the Japanese side, which basically involves a very obvious move from the central bank in orchestrating dialog with banks designed to scare them into action. One of these episodes allegedly took place earlier in the year, in January, but the episode in July was far more forceful as Bessent took the next step of getting the US Treasury to actually go out and buy Japanese Yen in the marketplace.

Why would Bessent be so interested in the matter, aside from his obvious history with Foreign Exchange markets? Well in his current role he’s tasked with managing US Treasury debt and there’s a plethora of long-term US debt coming due in the next year. This is part of the reason why yields have scaled so much higher, the thought of that additional supply has driven longs to sell, and many funds are shorting Treasuries in anticipation. Well Japan is the largest national holder of US debt, and if they are to go into markets to intervene by buying JPY against the Dollar, they would probably be selling Treasuries to fund the trade. This means more supply, and higher yields, at a time when Bessent can ill afford such a thing.

This backdrop helps to explain why USD/JPY continues to see so much bullish price action after these pullbacks. Because, frankly, with still positive carry on the long side of the pair, evidence of support sets up an attractive technical backdrop to go with a bullish fundamental bias in the pair.

The problem is the theoretically capped upside given those intervention comments over the past couple of months.

USD/JPY Daily Chart
Chart prepared by James Stanley; data derived from Tradingview

USD/JPY Ascending Triangle to the Line in the Sand
The month of August was actuall quite similar to what’s played out since early-September. There’s a series of higher-lows as bulls have gotten more and more aggressive, but there’s also a line-in-the-sand where that bullish price action has suddenly ceased. In August, that line was at 160. More recently, it’s 159.

But notably neither price has seen an actual intervention, as it was merely threats of intervention that pushed prices lower. And this is what sets the stage for CPI on Wednesday as a big print, which would probably push rate hike expectations higher, could compel a breakout in the pair.

The actual hard line in the sand that was defended by action before was 164. But that 160 spot, much like we saw in August as bulls started to tip-toe above, may be vulnerable, as might 159.

On the flip side, a big miss in CPI would hit rate hike expectations and, like we saw back in November of 2022 or 2023, or again in July of 2024, there might be a stampede for the exits as longs look to get out ahead of what would feel like an inevitable pullback.

This puts a lot of emphasis on the CPI print on Wednesday because, after all, fundamentals impact the matter. It’s just perhaps not always in the way that we expect, or the way that some want.

USD/JPY Four-Hour Chart
Chart prepared by James Stanley; data derived from Tradingview

--- written by James Stanley, Senior Market Analyst, Global Macro

$4,000: The last relevant support for Gold

The Pound Sterling (GBP) retreats about 0.11% against the Greenback on Monday amid a scarce economic docket on both sides of the Atlantic, but geopolitics continue to drive price action amid developments in the Middle East and the prolongation of the Russia-Ukraine conflict. At the time of writing, GBP/USD trades at 1.3217 after peaking near 1.3261. Read More...

British Pound erases early gains against US Dollar, US CPI in focusThe British Pound (GBP) gives back its early gains against the US Dollar (USD), trading flat at around 1.3235 during the European session on Monday. The GBP/USD pair retreats as the US Dollar recovers morning losses and turns positive, with financial markets turning cautious ahead of the United States (US) Consumer Price Index (CPI) data for September on Wednesday. Read More...

GBP/USD Price Forecast: Edges higher near 1.3250, but technical tone stays bearish below 100-day SMAThe GBP/USD pair trades in positive territory around 1.3240 during the early European trading hours on Monday. The US Dollar (USD) softens against the British Pound (GBP) as markets continue to assess the US Federal Reserve (Fed) rate hike path. An escalating Middle East conflict kept traders wary ahead of key US inflation data later this week that will influence monetary policy. Read More...

After falling for the fifth consecutive week, the EUR/USD has kicked off this week on a downbeat note. As well as macro pressures, strong bearish momentum prevented the pair from staging a meaningful comeback earlier in the day, leading to weakness in the afternoon trade. The popular pair could be heading towards the 1.10 handle barring a surprise reversal in the dollar’s bullish trend, or improvement in euro area fundamentals. But further ahead, perhaps later in the year or in early 2027, the EUR/USD outlook could a lot more stable. For now, only with a sharp drop in oil prices, or if we see the return of the US dollar debasement trade amid concerns over US fiscal policy, could one expect the single currency to end its bearish bias. For now, US inflation remains sticky, Treasury yields are elevated and expectations of tighter Fed policy should keep the greenback supported against major currencies.  A potentially hot US September CPI report this week could reinforce these expectations.

French fiscal risks, oil pressure keep EUR/USD outlook undermined
The US dollar remained in demand in the first half of Monday’s session, weighing on the major FX pairs. News over the weekend, including continued Houthi strikes in Riyadh has had negative impact on foreign currencies so far, especially those where the economy relies on energy imports. The EUR/USD is particularly vulnerable as lingering concerns over French fiscal policy continue to undermine the euro. With French elections in April 2027, fiscal concerns could continue to weigh on the single currency in the weeks ahead. For now, I expect the EUR/USD to remain in a moderately bearish trend and potentially visit the 1.10 level in the coming days or weeks.

A sharper deterioration in French bonds could accelerate the euro selling pressure, especially if the contagion spreads to other European countries. That outcome could force the ECB to abandon further rate hikes and potentially even halt quantitative tightening. In that scenario, it will have to absorb higher inflation in order to avoid further chocking the economy.  

For now, high US yields, elevated energy prices and rising cross-market volatility create a tougher environment for the euro and emerging-market currencies. The dollar remains the safer bet until the macro backdrop starts to turn.

Technical analysis: EUR/USD on the brink
The EUR/USD remains under heavy pressure, having closed lower for the fifth consecutive week last week. From a technical analysis perspective, therefore, momentum is clearly bearish, with price consolidating near the recent range lows in recent days.

Source: TradingView.com
The 1.1215/20 level, marking the 127.2% Fibonacci extension level of the last upswing that began back in June, has now turned into resistance. So, this is an important level to watch on the EUR/USD chart in the week ahead. A break back above it could see the level turn back into support and potentially signal some stabilisation.

If that doesn’t happen and we continue to see weakness in the currency pair, the immediate downside target is the liquidity sitting below last week’s low, around 1.1160.

If that level breaks, 1.1000 would become the next major downside target, with 1.1100 likely to attract some attention on the way down.

Meanwhile, the 161.8% Fibonacci extension of the last upswing that began back in June comes in at around 1.1085, making this another important downside level to watch.

On the upside, 1.1215/20 is the first key resistance. Above that, there isn’t much in the way of obvious resistance until the 1.1325–1.1355 area.

EUR/USD outlook: Remains under increased pressure from higher Dollar/Oil prices

Technical outlook on EUR/USD, Gold, US500 [Video]

Silver continues to see noisy back-and-forth trading. The Monday session continues to be a session that is watching interest rates closely.

Silver Technical Analysis

Daily chart of Silver Futures (SI1!) on TradingView with price hovering around 60.895 just above the key demand zone. The silver market initially tried to rally during the trading session here on Monday but has rolled over. Keep in mind, it’s going to be very thin trading. It’s a bank holiday in the United States and Canada, as well as, I believe, Japan. With all that being said, I wouldn’t read too much into the daily candlestick.

Interest Rates Continue to Drive Moves Interest rates in America did rise a little bit in the futures market, but not enough to really get things moving too rapidly. We just seem to be bumping along, with the $60 level offering a bit of support, extending down to the $55 level. This area remains the most important area of the chart.

Ultimately, a short-term pullback at this point in time probably attracts a certain amount of buying pressure. But if we were to break down below there, then the market will challenge $55. Anything underneath that level would be very negative, as it would be a breach of massive support.

To the upside, we have the 50-day EMA as well as the 200-day EMA. Basically, right around the $64 level would be the average of the two, and that’s an area that previously had been support. So, would it be resistance on the way back up? That will be the question.

Follow the interest rates and see how they’re behaving. If interest rates start rolling over, that will generally speaking help silver. We’ll just have to see if we get a little bit of external pressure to the upside in order to help buyers out here.

Silver Price Forecast

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Chris is a proprietary trader with more than 20 years of experience across various markets, including currencies, indices and commodities. As a senior analyst at FXEmpire since the website’s early days, he offers readers advanced market perspectives to navigate today’s financial landscape with confidence.

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0.8447 under pressure: EUR/GBP tests 16-month lows with France in the spotlight

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Orbex Group Limited is the holding company of Orbex Global Limited, Orbex Limited is an affiliate with Orbex Global Limited. Orbex Global Limited is authorized and regulated by Mauritius Financial Services Commission “FSC” (View License). Orbex.com is owned by Orbex Group Limited and is operated by Orbex Global Limited with registered address: Ground Floor, The Catalyst, Silicon Avenue, 40 Cybercity, 72201 Ebène, Republic of Mauritius

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Gold interrupts its downward motion

British Pound erases early gains against US Dollar, US CPI in focus

The Euro to Dollar (EUR/USD) exchange rate slipped to 1.1182 on Monday as French fiscal worries and renewed Middle East tensions kept the US Dollar supported.

US inflation figures and Eurozone price data could decide whether the sell-off extends.

Latest — Exchange Rates:

Euro to Dollar (EUR/USD): 1.118203 (-0.17%)

Pound to Dollar (GBP/USD): 1.32329 (0.00%)

Dollar to Yen (USD/JPY): 158.62013 (+0.18%)

WEEKLY RECAP:

EUR/USD ended Friday at 1.1201 and fell again on Monday, moving towards October's 1.1163 low.

The pair dropped 2.5% in September and has already lost more than 1% during October.

French fiscal pressures remain a major drag.

The French-German 10-year yield spread has hovered near 140 basis points as investors question Paris's proposed €43 billion in budget savings.

ING's Chris Turner favours further declines, writing that "a further dip towards 1.1100/1120 looks more likely."

German industrial production rose 2% in August, but that resilience has failed to lift the Euro.

MUFG's Lee Hardman sees "no obvious positive catalyst" to reverse bearish positioning as leveraged funds rebuild short Euro positions.

The US Dollar, meanwhile, has benefited from renewed Middle East tensions and Brent crude trading above $100 a barrel, maintaining demand for the currency.

Federal Reserve tightening expectations have eased following softer US employment figures, but Wednesday's inflation report could change that calculation.

Scotiabank described the Euro as "soft but failing to hit fresh lows" amid elevated European bond-market stress.

Near-Term EUR/USD Forecast: US CPI and French Debt Risks in Focus For the Euro, Tuesday brings Germany's final September inflation figures.

Eurozone industrial production follows on Thursday, with Friday's final CPI expected to confirm headline inflation at 3.8% and core inflation at 2.5%.

For the Dollar, Wednesday's US CPI report is the main test, with annual inflation forecast at 3.6% and monthly core inflation at 0.2%.

US producer prices, retail sales and jobless claims follow on Thursday, while Fed Chair Kevin Warsh speaks on Friday.

A stronger-than-expected US inflation reading or renewed French bond selling could push EUR/USD towards 1.1100.

Softer US data and calmer European bond markets could instead encourage a rebound towards 1.1300.

Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.

GBP/JPY Price Forecast: Pound extends gains, nearing 210.00 amid Yen weakness

The Pound-Australian Dollar rate could remain supported if risk appetite stays weak, with the Aussie vulnerable to further geopolitical and bond-market pressure. The Pound Australian Dollar (GBP/AUD) exchange rate firmed on Thursday as a souring mood weighed on the risk-sensitive 'Aussie'.

At the time of writing, GBP/AUD was trading at AU$1.9006, up around 0.2% from its earlier low point.

Latest — Exchange Rates:

Pound to Dollar (GBP/USD): 1.323299 (+0.03%)

Australian Dollar to Dollar (AUD/USD): 0.698362 (+0.35%)

DAILY RECAP:

The risk-sensitive Australian Dollar (AUD) weakened on Thursday as a souring market mood weighed on the currency.

Sentiment deteriorated amid a fresh rise in oil prices following recent attacks on oil tankers in the Strait of Hormuz. In addition, energy companies in the US have shut down some offshore oil and gas platforms in the Gulf of Mexico due to risks posed by an approaching hurricane.

Furthermore, the prospect of higher interest rates globally and reports that some large tech companies are trying to raise billions of Dollars in debt spooked investors.

As a result, the risk-sensitive 'Aussie' struggled to attract support.

Meanwhile, the Pound (GBP) lacked a clear direction on Thursday as British economic data remained thin on the ground.

Sterling also fluctuated as UK gilt yields hit multi-year highs before retreating from their peaks. The initial rise unnerved GBP investors, with rising government borrowing costs creating a challenge for the Treasury ahead of the Autumn Budget.

However, the pullback eased these concerns a little and helped the Pound recoup early losses.

Near-Term GBP/AUD Forecast: Risk Appetite and RBA Outlook in Focus Looking ahead, movement in the Pound to Australian Dollar exchange rate may continue to be driven primarily by wider market sentiment and expectations surrounding Reserve Bank of Australia policy.

The Australian Dollar remains particularly sensitive to shifts in risk appetite, with global bond markets, oil prices and developments in the Middle East all capable of driving volatility.

A further deterioration in risk conditions could weigh on the risk-sensitive 'Aussie' and push GBP/AUD higher.

However, the Australian Dollar may find some support if investors become more confident that the RBA will need to raise interest rates again before the end of the year.

The RBA has already lifted rates to 4.6%, and persistent inflation pressures mean another increase remains possible.

China will also remain an important influence given Australia's close trade links, with upcoming Chinese economic data likely to affect sentiment towards the Australian Dollar.

For the Pound, the UK calendar is relatively light in the immediate term, potentially leaving Sterling particularly sensitive to movements in global markets and expectations surrounding the Bank of England.

Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.

Gold – Potential for the bigger drop [Video]

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Summary:

The USD/JPY pair is currently confined between 157.35 and 158.50. A wide yield gap between the US and Japan supports the dollar, though the threat of intervention near 160 caps any significant upward moves. Conflicting policy from the Federal Reserve and the Bank of Japan, combined with a neutral technical outlook, means the pair keeps consolidating sideways because it lacks clear momentum. Traders will be watching for upcoming US inflation figures, Japanese economic indicators, and central bank meetings scheduled for late October. These could provide the push to break out of the current trading range. The USD/JPY pair’s been trading in a tight range lately, hovering between 157.35 and 158.50. This quiet period comes after quarters of much bigger price swings.

For traders used to the sharp, multi-figure swings the pair often saw in previous quarters, this long stretch of sideways movement brings up some questions.

Why the Pair Is Stuck A few things are keeping the pair trading sideways. The strong US dollar, for one, is partly thanks to high US Treasury yields, which have kept the Dollar Index near its recent highs. Meanwhile, Japanese officials have signaled that levels at or above 160 aren’t desirable, keeping intervention a risk.

The ongoing difference in yields between US Treasuries and Japanese Government Bonds still makes long USD/JPY positions appealing for carry traders. This yield gap helps stop the pair from falling too much.

Technical indicators back this up, too. The pair’s trading above its 20-day and 50-day moving averages, though it’s below the 100-day. The Relative Strength Index (RSI) sits around 56, suggesting a neutral stance. This technical picture points to a clear trading range, with higher lows but firm resistance capping the highs.

Forces Defining Momentum and Trajectory The monetary policy differences between the Federal Reserve and the Bank of Japan (BoJ) really shape market momentum. While markets first expected the Fed to be more aggressive with rates, recent US employment data has lowered the chances of an immediate hike.

Meanwhile, the BoJ is gradually normalizing its policy. Even though the yield gap has narrowed some, it remains wide enough to keep the dollar appealing for carry trades.

Near-Term Fundamentals to Watch Investors should keep a close eye on upcoming economic data and central bank announcements. The Consumer Price Index (CPI) report this week is expected to show headline inflation climbing to 3.7%, with core inflation at 2.5%.

If inflation comes in hotter than expected, yields could climb, giving the dollar a boost. That might push the pair toward 158.73, possibly even a retracement level at 159.82. A weaker inflation report, naturally, would likely have the opposite effect.

Central bank meetings later this month should also offer some direction. We’re waiting on decisions from the Federal Open Market Committee and the Bank of Japan for clearer signals on future interest rates.

Until then, the pair will probably stay in its current range. A big move out of this band would need a strong catalyst. This consolidation should hold until new economic data or policy signals shift the balance between the appeal of yield differences and the risk of intervention.

Why has USD/JPY failed to break above 158.50 recently?

The USD/JPY pair keeps trying to push past 158.50, but each attempt runs into selling pressure. This probably comes from fears of intervention as the pair nears 160.

What is the main force keeping the pair in range?

The main reason the pair stays range-bound is the interest-rate gap between the US and Japan, which boosts the dollar through carry trades. But warnings from Japanese officials around 160 create a kind of soft cap, stopping any sustained upward push.

Which US data matters this week?

This week, all eyes are on the September CPI report. Analysts predict headline inflation will climb to 3.7%, up from 3.4%. Core inflation, they figure, will hit 2.5%. These numbers could definitely shift expectations for the Fed and influence Treasury yields.