The price structure on the weekly chart remains bearish and points to a drop towards the $3,900 to $4,000 area. This is considered a key zone in the gold market. If prices break below $3,900, it will confirm the formation of a head and shoulders pattern and offer downside to $3,700. However, any recovery above $4,500 will offer another strong rally towards $5,000.
What to Watch Next in Gold and Silver Gold and silver remain vulnerable as high Treasury yields limit the rebound in metals. The ISM services report on Monday will provide fresh clues about the business activity and price pressures. The Fed minutes on Wednesday, October 7, could clarify the views of policymakers on further rate hikes. The University of Michigan survey on Friday will put consumer sentiment and inflation expectations in focus. The strong activity or rising expectations of inflation could lift yields and pressure both metals.
Traders should also watch developments in the Middle East as further disruption to energy supplies could push oil higher. A break below $4,100 in gold and $60 in silver could open the way towards $4,000 and $55, respectively. However, a break above $4,220 in gold and $62.60 in silver would strengthen the rebound in the short term.
Read more: Strong Dollar and High Yields Put $50 Silver in Focus
EUR/USD declined heavily below 1.1320 and 1.1250. A major bearish trend line is forming with resistance at 1.1275 on the 4-hour chart. GBP/USD started a consolidation phase below 1.3280. USD/JPY could aim for a fresh increase if it closes above 159.00. EUR/USD Technical Analysis The Euro remained in a bearish zone below 1.1320 against the US Dollar. EUR/USD gained bearish momentum after it settled below 1.1300.
Looking at the 4-hour chart, the pair dropped below 1.1250 and 1.1200. It even tested 1.1165 and settled well below the 100 simple moving average (red, 4-hour) and the 200 simple moving average (green, 4-hour).
It is now consolidating losses below the 23.6% Fib retracement level of the downward move from the 1.1380 swing high to the 1.1166 low. Immediate resistance could be 1.1250. There is also a major bearish trend line forming with resistance at 1.1275.
The first major resistance might be 1.1300. The next key resistance could be near 1.1320. A close above 1.1320 could result in a decent increase toward the 100 simple moving average (red, 4-hour) at 1.1420.
If there is another drop, the pair might find support near 1.1165. The first major support might be 1.1150. A close below 1.1150 might accelerate the decline. In the stated case, the pair might drop to 1.1080.
Looking at GBP/USD, the pair also saw a steady decline below 1.3320 and is now consolidating losses above the 1.3200 support.
Upcoming Key Economic Events:
Eurozone Services PMI for Sep 2026 – Forecast 53.0, versus 53.0 previous. US S&P Global Manufacturing PMI for Sep 2026– Forecast 58.7, versus 58.7 previous. US ISM Services Index for Sep 2026 – Forecast 55.7, versus 55.4 previous.
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AUD/USD closed lower for a fourth week as the Australian dollar continued to retreat against the FX majors. Yet softer US payrolls, falling Fed hike expectations and increasingly stretched bearish positioning suggest the decline could lose momentum over the near term. With little top-tier Australian data scheduled, the US dollar and FOMC minutes could provide the main directional cues.
View related analysis:
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Tankan Backs BOJ Tightening, but Yen Rate Expectations Ease
AU Consumer and Business Confidence Feels the Heat of RBA Hike Bets
AUD/USD Bears Face Signs of Near-Term Exhaustion
A softer-than-expected NFP report saw the odds of an October Fed hike fall to 22% from 70% earlier in the week, following a run of more dovish comments from Fed officials. Attention now shifts to the FOMC minutes, which could reveal how strongly policymakers favour further hikes after September’s 25bp increase. ISM services PMI will also provide a read on underlying growth, inflation and employment trends to help fine-tune Fed expectations.
There is no top-tier Australian economic data this week, although Westpac consumer confidence warrants a look. Its August report showed rising concerns over unemployment and interest-rate hikes, while the headline sentiment index and all of its components declined.
AUD/USD economic calendar for 5-10 Oct, highlighting Australian dollar and US dollar events, including ISM Services PMI and FOMC minutes.
Australia This Week: Economic Data and Events for AUD/USD Traders
AUD/USD Technical Analysis: Australian Dollar vs US Dollar
Two themes immediately jump out when I step back for a broader look at the Aussie dollar’s performance against FX majors. AUD is retracing against all FX majors, though the degree to which it is softening varies widely. This is in stark contrast to the year between April 2025 and 2026, when it was top dog and rising smoothly against the pack. This means traders may want to be more selective about what they pair AUD with and refer to lower timeframes.
AUD/USD closed lower for a fourth week, though last week’s downside spike and shake-up in the US dollar mean its decline could slow over the near term – or even produce a small bounce.
AUD/CAD has tested parity and is now amid a minor pullback, though its trend remains firmly bullish – so perhaps a break above parity could be on the cards.
AUD/CHF also remains within a healthy correction against an established uptrend, making it another AUD pair for dip buyers to keep an eye on.
AUD/EUR has met resistance around 0.62, though its series of higher lows suggests an ascending triangle – and therefore a potential bullish breakout – could be lining up.
AUD/GBP seems to be forming a potential head and shoulders top, though for now we can simply focus on its ability to head for the March low.
AUD/JPY has made a minor attempt at breaking the 2024 high, though its lacklustre effort leaves it vulnerable to a deeper pullback.
AUD/NZD has formed a two-week pullback against an otherwise solid trend, making it another pair for dip buyers to keep an eye on.
Chart prepared by Matt Simpson - Source: LSEG
AUD/USD Correlations
US dollar remains the dominant driver: AUD/USD holds a very strong inverse correlation with DXY at -0.95 across both 10- and 20-day windows. Dollar weakness remains the cleanest bullish cue for AUD/USD.
Commodities are strongly supportive: Correlations with the CRB Index are exceptionally high at 0.99 (10-day) and 0.97 (20-day), while gold and iron ore are also strongly positive.
China-sensitive assets matter again: The yuan correlation has strengthened to 0.97 over 10 days, while the CSI 300 sits at 0.83, reinforcing China as an important confirmation signal for AUD/USD.
Equities are giving mixed signals: AUD/USD remains positively linked with the ASX 200, but correlations with the S&P 500 are negative over 10 and 20 days, so broad “risk-on/risk-off” signals are less reliable.
Very short-term commodity signals are distorted: Copper and WTI correlations have flipped sharply negative over five days, suggesting traders should favour the more stable 10- and 20-day relationships for directional confirmation.
Source: LSEG
AUD/USD Futures Positioning | COT Report
Bears have been piling into short AUD/USD futures, with large speculator and asset manager short exposure reaching record highs. However, there is still a healthy level of gross longs, so this is not an outright rout. That makes sense given Australia’s relatively high cash rate compared with other FX majors.
Total open interest has stabilised around 309k after plunging from its own record high the prior week. Again, this points to underlying support, even though record gross shorts may be signalling a near-term sentiment extreme.
Source: CFTC (COT) CME, LSEG
For traders wanting a deeper understanding of futures positioning, I’ve also published a guide on how to read and interpret weekly COT data in forex markets.
AUD/USD Options and Volatility Analysis (Risk Reversals, HVN Levels)
The US dollar remains firm overall, but Friday’s hammer and inside candle warn of near-term trend exhaustion. This could allow AUD/USD to catch its breath and perhaps form a minor bounce. We can see that it rebounded from Thursday’s low on Friday after finding support at the 0.6907 swing low.
With prices stretched below the 20-day SMA, perhaps some bullish mean reversion is due over the near term.
However, the AU-US 2-year yield spread remains relatively low, while risk reversals continue to trend lower, meaning options traders have increased their demand for puts relative to calls. The 1-week implied volatility band has narrowed slightly from last week and now sits at 0.6881–0.7023. The 1-month band sits roughly between 0.68–0.71.
Gold’s September retreat leaves XAU/USD roughly 21% below Crédit Agricole’s $5,000 December target as US Dollar assets compete for demand. Gold ended Friday below $4,200 even after weak US jobs data, leaving Crédit Agricole's bullish year-end forecast dependent on a substantial recovery.
The Gold price in US Dollars (XAU/USD) closed near $4,136 an ounce, down 1.13% on Friday, following September's 6.64% decline.
See full gold price in US dollars history here.
Crédit Agricole's 30 September projections put Gold at $5,000 in December 2026 and $5,500 in December 2027.
The first target requires approximately 21% upside from Friday's close.
The bank acknowledges the setback:
"Despite its recent underperformance, gold remains the pre-eminent safe-haven asset and currency debasement hedge."
Weak payrolls have not secured a recovery Friday's US employment report showed just 29,000 additional jobs in September and annual wage growth slowing to 3.0%.
That gives the Federal Reserve less reason to raise rates, potentially easing competition from interest-bearing assets.
Th price of Gold nevertheless finished the session lower.
Higher real yields increase the opportunity cost of holding bullion, which pays no income, a hurdle we examined in our earlier coverage of Crédit Agricole's $5,000 forecast.
Image: Chart for the gold price over the last three months Central-bank demand has limits in a crisis Crédit Agricole's demand analysis distinguishes official buying from private enthusiasm:
"Private investors (speculators and otherwise) not rushing to buy gold while central bank gold reserves have increased"
It links the longer-term price gains to supply that cannot readily expand:
"Growing central bank gold demand and inelastic gold supply resulted in exponential XAU price moves in recent years"
But its charts also track reserve declines in Turkey and India during the conflict, under the heading:
"Demand for USD in the wake of the Iran war forced central banks to sell gold reserves"
We believe reserve diversification supports the longer-term forecast, but cannot guarantee protection from immediate selling when US Dollars are needed.
With the $5,000 target due in December, the timing of that recovery is now the demanding part of Crédit Agricole's call.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
With the USD to ZAR exchange rate near 16.65, Crédit Agricole’s 15.50 forecast implies a South African Rand recovery against the US Dollar by December 2026. Crédit Agricole forecasts a recovery in the South African Rand by December, even as it argues that markets expect too many further interest-rate increases.
Its 30 September projections put USD/ZAR at 15.50 in December 2026 and at each quarter-end throughout 2027.
That compares with Friday's closing US Dollar to South African Rand exchange rate near 16.65, implying a decline of approximately 6.9% in the pair.
A lower USD/ZAR rate means a stronger Rand, as fewer Rand are needed to buy one Dollar.
Friday's 0.31% fall in USD/ZAR only partly reversed Thursday's 1.70% rise, leaving the currency some distance from the bank's forecast.
Markets expect more tightening than the bank does The SARB's September decision raised the policy rate by 25 basis points to 7.25%, effective from 25 September.
Crédit Agricole calculated in its subsequent report that markets were pricing substantial additional increases.
"According to our calculations, the market currently prices an additional 66bp in the next six months. In our view, this is too much."
That is a reading of market expectations at the report's publication, rather than current pricing.
The bank gives greater weight to the central bank's baseline projection for broadly stable rates through year-end and to weakness in domestic activity.
It cites a 0.2% quarterly contraction in second-quarter GDP.
"Despite the increase in inflation YTD, the short-term real rates have remained above 2.5%. The central bank will likely weigh the possibility of further hikes against the need to support growth."
The same policy argument featured in our recent Pound-to-Rand outlook, where a retreat in hike expectations posed a potential obstacle to Rand gains.
The 15.50 forecast extends beyond the next rate decision Crédit Agricole's policy table holds the repo rate at 7.25% in December, then projects 6.75% in March 2027, 6.25% in June and 6% in September and December.
Its unchanged 15.50 currency forecasts are quarterly projections, not a prediction that USD/ZAR will stay fixed between those dates.
Our reading is that the Rand recovery call cannot be explained simply by expectations of higher South African rates: the bank forecasts eventual cuts.
For the immediate policy outlook, energy prices remain the key qualification.
"Based on July and August, and assuming that the oil price may moderate in Q4, it would make sense for the SARB to stick to a wait-and-see stance."
"Bottom line: we keep our forecast for stable rates in Q4 (one meeting on 19 November), while acknowledging some upside risk depending on where oil prices go in the coming weeks."
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
FX strategists at Westpac still expect a November RBA hike, but Goldman Sachs and Rabobank favour patience, leaving AUD/USD sensitive to the next inflation report. Australia's softer-than-expected underlying inflation has weakened market bets on another November interest-rate rise without shifting Westpac's forecast, exposing a disagreement that matters for the Australian Dollar.
Latest — Exchange Rates:
Australian Dollar to Dollar (AUD/USD): 0.695707 (+0.40%)
Pound to Australian Dollar (GBP/AUD): 1.903035 (-0.09%)
Euro to Australian Dollar (EUR/AUD): 1.617382 (-0.37%)
August's trimmed-mean inflation of 0.2% on the month and 3.6% annually matched Westpac's expectations and remains consistent with its forecast for a 0.9% quarterly rise in the third quarter.
Goldman Sachs expects an extended pause, while Rabobank believes any further tightening is more likely to wait until early 2027.
AUD/USD closed Friday, 2 October, near US$0.6957, up 0.40% on the day, after losing 3.15% in September.
The recovery accompanied a broader Dollar decline following the weaker-than-expected US jobs report, which reduced the immediate pressure for another Federal Reserve hike.
Markets cut November odds, but Westpac holds its call Westpac's 1 October Morning Report recorded a clear change in Australian rate expectations after the CPI release.
"Following a slight downside surprise on inflation figures yesterday, near-term pricing for the RBA has recalibrated, with a follow-up rate hike in November now seen as a circa 25% chance versus a circa 40% chance previously."
Those are the report's dated market probabilities, rather than Westpac's own forecast.
Its economists saw little reason to alter their inflation projections.
"In Australia, the August CPI was spot on Westpac's forecast, with headline inflation up 0.4%mth/4.0%yr and trimmed mean inflation up 0.2%mth/3.6%yr, though the latter was slightly below market expectations."
The softer surprise should not be confused with falling annual headline inflation, which rose to 4.0% from July's 3.5%, while the annual trimmed mean was unchanged.
In its analysis of the latest CPI figures, Westpac analysts retained its November hike call, warning that businesses passing on higher energy costs posed upside risks to underlying inflation later this year.
Its 0.9% third-quarter trimmed-mean forecast would represent an acceleration from 0.8% in the second quarter.
How much restraint is already in place? The RBA's September increase took the cash rate to 4.60%, following a cumulative percentage point of tightening during 2026.
The disagreement centres on whether those increases need more time to restrain demand or whether persistent inflation requires another move in November.
Goldman's assessment after the September decision favoured waiting.
"Our base case is that the RBA holds policy for an extended period until a gradual easing cycle commences from 2H2027."
That means cuts starting in the second half of next year, although Goldman still regarded further tightening as a material risk, including in November if inflation surprised higher.
Rabobank's October outlook gives greater weight to the danger of excessive restraint.
"While we do not rule out the possibility of further rate hikes, we think the RBA is going to be feeling its way and will be careful that any further tightening does not tip the economy into recession or cause a disorderly spike in the unemployment rate."
The bank highlighted weaker new-home construction inflation and a 0.4% monthly fall in market services prices excluding volatile items.
"Overall, we believe that the August inflation data supports our view that the RBA will not be in a rush to raise the cash rate in November and that any further lift in the cash rate is likely to be delayed until early next year."
For AUD/USD, fewer expected Australian hikes remove one potential source of yield support, although Friday's rally shows how weaker US data can offset that pressure.
The next Australian CPI release on 28 October will include September-quarter figures, allowing investors to test Westpac's 0.9% forecast before the November decision.
After the Dollar-Rupee rate gained nearly 7% this year, can higher Indian interest rates contain the INR's losses against the USD? Crédit Agricole expects India to raise interest rates on Wednesday, but sees the move helping to stabilise the Rupee rather than deliver a substantial recovery before year-end.
Its 30 September report forecasts a 25-basis-point RBI increase to 5.50% on 7 October, while retaining USD/INR at 96 for the second half of 2026.
The US Dollar to Indian Rupee exchange rate was quoted near 96.16 late on Friday, 2 October, down 0.07% on the day but up 0.86% during September.
That leaves the bank's currency forecast close to the prevailing rate after a 6.87% rise in USD/INR since the start of the year.
Image: USD/INR exchange rate over 2026 chart Inflation is driving the rate call Crédit Agricole's David Forrester identifies three pressures: expensive oil, the inflationary impact of Rupee depreciation and disappointing monsoon rainfall.
At the report's publication, oil exceeded $100 a barrel, compared with the RBI's assumed $80-85 range, while weaker rainfall threatened further food-price increases.
Official August figures already showed annual consumer inflation rising to 4.82% from July's 4.45%, with food inflation at 5.95%.
Forrester distinguishes the purpose of a rate increase from the RBI's intervention in currency markets.
"Importantly, we do not think RBI is raising rates to support the INR, but rather to offset the weak currency's upward pressure on inflation."
A weaker Rupee increases the local-currency cost of imports, compounding the effect of higher oil prices.
The bank also argues that domestic activity gives policymakers room to act.
"Firm service exports and government infrastructure projects are supporting the economy, suggesting the economy can bear higher rates."
A modest adjustment, with a neutral stance The October call gives a specific date to the fourth-quarter increase Crédit Agricole anticipated in September.
"We do not think this will be the start of a tightening cycle and expect the central bank to maintain a neutral bias. We expect the MPC to fine tune its monetary policy rate moving the policy rate towards the upper end of its neutral range, giving it the flexibility to move policy into restrictive territory if needed."
That does not mean the bank expects only one increase: its forecasts put the repo rate at 5.50% in December and 5.75% by March 2027.
The bank sees more restrictive policy as a risk if energy prices stay elevated and El Nino persists into the 2027 monsoon season.
For the Rupee, higher rates, capital inflows and the RBI's capacity to intervene should counter the pressure from oil and weak monsoons, according to the bank.
"We retain our H226 forecast for USD/INR at 96.00."
The size of Wednesday's decision will therefore be only part of the currency story.
"The impact on the INR of a hike will depend on the vote count as well as the bias announced in the statement and RBI's new forecasts."
The Euro's recovery prospects fade as Rabobank lowers EUR/USD forecasts, citing French debt risks and the US Dollar’s enduring appeal. Rabobank has cut its Euro forecasts even after Friday's weak US jobs report, arguing that Europe's growing problems leave investors with few attractive alternatives to the Dollar.
Latest — Exchange Rates:
Euro to Dollar (EUR/USD): 1.125224 (+0.03%)
Pound to Dollar (GBP/USD): 1.323954 (+0.31%)
Dollar to Yen (USD/JPY): 157.85594 (-0.05%)
The bank's 2 October note shifts the focus from interest-rate differences to the risk that French debt concerns could drive money out of Euro-denominated assets.
"We have revised our EUR forecasts lower across the board and now see EUR/USD at 1.13 on a 3-month view, compared with a previous forecast of 1.16. Our 12-month forecast now stands at 1.12 compared with a previous forecast of 1.18."
The Euro to US Dollar exchange rate (EUR/USD) closed Friday near 1.1252, up just 0.03% on the day after falling 2.50% in September.
The revised three-month forecast is therefore slightly above the latest rate, while 1.12 implies only modest further weakness over a year.
The larger change is Rabobank's abandonment of its previous expectation for a recovery towards 1.18.
Image: Three month EUR to USD exchange rate chart When French bond selling becomes a Euro problem Senior FX strategist Jane Foley distinguishes the latest French market stress from earlier budget disputes, when investors appeared to sell French government bonds and buy other Euro-denominated debt.
That kept the money within the currency area, limiting the sustained impact on the Euro.
Rabobank says the recent widening in the gap between French and German 10-year borrowing costs has been sharper, returning the spread to levels last seen during the 2011-12 Eurozone debt crisis.
"This raises the prospect that the EUR could be impacted by outflows."
Official French figures released on 29 September put public debt at 119.0% of GDP in the second quarter, up from 117.5% in the first.
Foley also highlights low European gas storage, expensive energy and competition from China as constraints on the Euro's appeal.
"The Eurozone is an energy importer, and the combination of increased energy prices and higher interest rates will contain demand."
Weak US jobs do not settle the currency outlook The Dollar's initial retreat after Friday's payroll release was already reflected in Rabobank's assessment.
US employers added just 29,000 jobs in September, while revisions removed 60,000 from the previous two months.
Foley acknowledged the profit-taking but remained cautious about its extent.
"However, in the current environment we would expect pullbacks in long USD positions to be shallow."
She argues that the currency retains structural support from its role in trade and payments.
"In our view, safe haven demand for the USD is linked to its importance across the globe as an invoicing currency and its interwoven position within the global payments system. This could take decades to alter significantly."
At Exchange Rates UK Research we believe that Rabobank's downgrade leaves little room for a lasting Euro recovery unless confidence in European assets improves, even if weaker US data reduce support from American interest rates.
Gold Talking Points:
The descending triangle looked at in last week’s forecast led to breakdown shortly after the weekly open, with prices rushing down to the 4100-4135 zone before finding a bounce.
Even with Treasury yields continuing to surge, bold put in a sizable bounce, twice re-testing the $4200 level before sellers came in for rejection on Friday.
At this point there remains the key level below of $4k which held the lows through June and July and that’s what sets up the bigger picture for gold markets as we move deeper into Q4 trade.
Last week started with a bang in gold markets as the descending triangle looked at in last week’s forecast led to a sizable breakdown. In one violent session on Monday, gold prices shed almost 4%, but sellers slowed the push once the 4104-4135 zone came in for a test.
The initial bounce from support was smooth, taking on the form of a bullish channel. But as I had highlighted over Twitter, that bullish channel when coupled with a bearish backdrop set up for a potential bear flag formation, and that led to breakdown after the test of resistance at 4200.
That wasn’t the last test of 4200, however, as another test showed on Friday after Non-farm Payrolls. And, like the first, sellers responded in a big way to push price back down to support at 4135.
Gold Four-Hour Price Chart
Chart prepared by James Stanley; data derived from Tradingview
Gold – Daily Divergence
The daily chart highlights well the tango taking place in gold, where recent lower-lows and lower-highs point back to that 4k support zone that put up such a rigid fight back in June and July.
There’s even been a hold of higher-lows so far, with sellers unwilling to push through the 4100 level that was previously resistance back in July, just before gold broke out of the falling wedge formation.
Also of interest from the daily chart is the Friday bar, which currently shows as a bearish engulfing pattern. These formations are often followed for continuation in that direction, which in this case would point to a test of $4100 along with breakdown potential into next week.
Gold Daily Chart
Chart prepared by James Stanley; data derived from Tradingview
Gold Big Picture
The weekly chart sets the stage as it illustrates the importance of that $4k level. This speaks to the prospect of institutional accumulation, which is one of the oft cited reasons for the support hold back in June and July. You’ll notice that not a single weekly candle closed below that $4k level, and that highlights how intra-week tests below $4k can be looked to for short-term bullish reversal potential, even if only for a rally up to a possible lower high.
If and when that zone gives, which could be signified by a weekly close below that price, then the prior support thesis would no longer hold as much attraction, and that would point to bearish continuation potential down to a 3500 re-test, which was last in-play as resistance in 2025, before Jerome Powell signaled his willingness to vote for rate cuts later that year.
Gold Weekly Chart
Chart prepared by James Stanley; data derived from Tradingview
--- written by James Stanley, Senior Market Analyst, Global Macro
USD/JPY front-end rates correlation collapsed last week
Quarter-turn Japanese portfolio flows may explain the disconnection
Speculative yen longs have more than halved since mid-September
Fed speak, ISM services and Ueda headline event risk
The dominant rates relationship with USD/JPY deteriorated abruptly last week, coinciding with the calendar turn and the start of the second half of Japan’s fiscal year.
However, the reaction following Friday’s non-farm payrolls report suggests the disconnection may prove only temporary, with a strong rebound in US 2-year yields mirrored by a similar move in USD/JPY.
If the rates regime is to reassert itself, Fed speak and Monday’s ISM services PMI loom as the most likely catalysts for volatility given the dearth of top-tier US economic data. In Japan, a speech from BOJ Governor Kazuo Ueda on Tuesday is another key event, particularly given he has been used in the past to help steer market pricing ahead of looming policy decisions.
USD/JPY rates relationship breaks down
There was something of a changing of the guard when it came to the key drivers for USD/JPY last week, with the strong positive relationship between front-end US Treasury yields and front-end US-Japan rate spreads disintegrating rapidly, as seen in the correlation matrix below.
You can see how quickly that relationship deteriorated in the five-day window at the top. The correlation with the US 2-year yield fell to -0.95, while the relationship with the US-Japan 2-year spread dropped to -0.90, despite both remaining strongly positive over the 20-day window at +0.87 and +0.84 respectively.
Source: LSEG
The breakdown coincided with the calendar turn, the start of the December quarter and, of course, the second half of Japan’s fiscal year, putting something of an asterisk next to the abrupt deterioration.
The question now is whether temporary factors were responsible for the breakdown in this longstanding relationship, or whether something more meaningful is now asserting itself as the key driver for USD/JPY moving forward.
This content was created by an affiliate of FOREX.com and represents the views and opinions of the author/speakers, not the views and opinions of FOREX.com, StoneX Group Inc., or its subsidiaries. The content has not been independently reviewed by FOREX.com.
NISA seasonality adds another piece to the puzzle
Hinting the disconnection between front-end rates and USD/JPY may be temporary, there is some seasonal evidence that capital outflows following the quarter turn may have played a role, resulting in yen weakness and buoyancy in USD/JPY.
One possible explanation is NISA. Introduced in 2014, Japan’s Nippon Individual Savings Account scheme gives households tax advantages when investing in eligible financial assets. Investment gains and dividends within the accounts can be received tax-free, encouraging households to allocate savings into equities and funds, including products with overseas exposure.
Source: LSEG
Of course, that may not explain what happened last week. But given the similarities in the seasonal pattern during the first week of October in recent years, it fits with the idea that Japanese portfolio outflows may have temporarily disrupted the usual relationship between USD/JPY and rates.
Yen longs are being rapidly unwound
Another factor that may have contributed to the disconnection is a recalibration in market positioning, at least among futures traders. As seen in the graphic below, speculative yen longs had surged to 120,359 contracts in mid-September, according to the CFTC COT report. However, over the past fortnight, that position has more than halved, falling to a net long of 55,440 contracts as of the close of business last Tuesday.
Source: LSEG
Of course, this only captures one part of the market, and speculative accounts remain net long yen. But the unwind in bullish yen positioning, combined with possible seasonal portfolio outflows, provides a plausible explanation as to why USD/JPY held up last week even as the rally in front-end US rates broadly stalled.
Friday hints the rates link is still alive
While the relationship between front-end US yields and USD/JPY deteriorated over the past week, the reaction to Friday’s September non-farm payrolls report over a much shorter timeframe adds to the view that the disconnection may only be temporary.
The initial knee-jerk move lower in US 2-year yields was mirrored by USD/JPY. However, both reversed almost immediately, with 2-year yields pushing back above their pre-payrolls level and USD/JPY staging a similar V-shaped recovery during the session.
So while quarter-turn flows and positioning may have temporarily disrupted the relationship, Friday’s price action suggests it could soon reassert itself in the week ahead.
A placeholder week for US macro
Looking to event risk in the week ahead, there is a dearth of top-tier economic data in the United States, suggesting Fed speak and Monday’s ISM services PMI loom as the most likely catalysts for USD/JPY volatility.
Source: TradingView
Within the ISM report, the prices paid component will be very closely watched after the equivalent gauge in Thursday’s ISM manufacturing PMI surged to 77.9. If that strength is replicated in the far larger services sector, it would reinforce the idea that even with some softness emerging in the labour market, the Fed can’t take its eyes off inflation, with survey-based price pressures still running very hot.
In reality, this week comes across as more of a placeholder as markets await key September inflation data due midway through October, which may provide a much stronger steer on whether the Fed follows September’s rate hike with another move later this month.
Source: TradingView
While there was a noticeable unwind in hawkish pricing for the Fed’s October meeting last week, moving from more than 50% priced to less than 25% by Friday, most of that repricing had already occurred before the payrolls report. There was very little change in the implied October probability following the data itself, which may help explain why US 2-year yields rebounded so sharply after the initial knee-jerk move lower.
Looking further out, there is still more than 85 basis points of cumulative tightening priced through to the final quarter of next year, suggesting at least three additional rate hikes, with the risk of a fourth move still priced in.
Ueda could reshape October rate expectations
Source: TradingView
While Japanese-specific data and events have rarely moved USD/JPY recently, as demonstrated by the scorching hot September Tokyo CPI report released on Friday that barely saw yen traders bat an eyelid, the Japanese calendar at face value actually looks a little more interesting than the US.
Key wages data and household spending are due Tuesday, while a speech from BOJ Governor Ueda also lands ahead of the Bank’s October policy decision later this month. In the past, Ueda has been rolled out to shift market pricing when deemed necessary, meaning his remarks could provide clues as to whether the pace of BOJ tightening may accelerate to back-to-back increases rather than the more gradual path markets currently assess.
Price action takes precedence as momentum stays neutral
USD/JPY has been range-bound over the past couple of weeks, attracting bids towards and beneath 156.68, the swing low set on August 7. Moves above 158, which also coincides with the 50% retracement of the 2026 low-high, have often brought out not only jawboning from Japanese officials but also offers.
That makes 158 the immediate level to watch overhead, coinciding with where the 50-day moving average is also located. Above that, the 200-day moving average and 159 are the next levels to note, before a more pronounced resistance zone kicks in around 159.50, coinciding with the 38.2% retracement of the 2026 low-high and the 100-day moving average.
Source: TradingView
Underneath where the pair now trades, bids kicked in around 157 on dips last week, making that the initial area of focus on the downside. An emerging uptrend also runs through the area, strengthening it as a support zone.
If we were to see a clean break beneath the uptrend and 156.68, particularly on a closing basis, that may see bears become more emboldened, putting a potential retest of the significant support zone between 155.50 and 155 on the radar. That area absorbed plenty of offers during intervention episodes earlier this year.
The message from the oscillators is entirely neutral, meaning more emphasis should be put on price action around the above-mentioned levels when assessing near-term directional risks.
As the trading week comes to an end, weakness around gold price action remains evident in the short term. This can be seen in the performance of the past two sessions, where the metal has declined by approximately 0.3%.
Gold remains under bearish pressure after failing at key resistance, but support near $4,103 could determine whether the correction extends toward lower levels.
Resistance Test Fails to Shift Momentum Gold remained caught between competing forces on Friday, trading outside of the range from the prior two days. A close below Thursday’s low of $4,139 would reinforce the bearish implications from price action and suggest that the bearish correction in gold is not complete. The high of the day at $4,225 was a four-day high and marked a second recent test of resistance near the confluence of the uptrend line and the lower swing high of $4,203 from July. The failure to break above that resistance is bearish behavior, further supported by Friday’s weak close in the lower third of the week’s range.
Spot gold daily chart shows bearish price action Sellers Strengthen Their Grip Below Resistance This week’s bearish price action and weak weekly close show sellers dominating price action, leaving the trend vulnerable to further downside. Whether that happens before or after a bounce remains to be seen. With the bearish implications from Monday’s breakdown and trend extension now reinforced, further evidence of sellers regaining control is emerging. A break below Thursday’s low would provide another short-term bearish signal and increase the likelihood of a test of lower support.
Spot gold daily chart shows larger bearish trend structure So far, support near the 78.6% Fibonacci retracement of the prior advance has held with the week’s low of $4,111. If that zone breaks with a decisive decline below the Fibonacci level at $4,103, the June low of $3,942 may eventually be challenged, along with support from the higher swing low of $3,886 from October 2025. A decline below the June low would signal a continuation of the bearish trend structure as support at the prior low would be broken. Until then, the $4,103-$4,111 zone remains an important test for sellers.
$4,103 Becomes Next Bearish Trigger Despite the bearish implications of this week’s price action, support has held at $4,111, leaving open the possibility that a decisive rally above Friday’s high could lead to a test of resistance near the falling 20-day moving average near $4,285, which is also close to the week’s high of $4,285, or a minor lower swing high at $4,316. The downtrend prevails unless there is a recovery of the lower swing high and the 50-day moving average, currently near $4,326. Therefore, Friday’s failed push above resistance keeps the bearish structure intact, while a break below $4,103 would provide the next confirmation that the correction is extending lower.
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About the Author
With over 20 years of experience in financial markets, Bruce is a seasoned finance MBA and CMT® charter holder. Having worked as head of trading strategy at hedge funds and a corporate advisor for trading firms, Bruce shares his expertise in futures to retail investors, providing actionable insights through both technical and fundamental analyses.
A move above the June highs around 1.4250 could accelerate the USD/CAD rally, with the pair's resilience after weaker US jobs data suggesting the bulls remain in control. With the Fed focused on inflation and elevated oil prices keeping pressure on bond markets, I still think the near-term USD/CAD forecast is tilted to the upside.
Key takeaways
June highs remain the hurdle for renewed momentum.
Inflation matters more than employment for the Fed's current focus.
The bullish lean remains conditional, not a confirmed breakout.
Watch the full video
Weak jobs data has not changed the dollar argument
The US dollar initially fell a little after the weaker-than-expected jobs report. However, this followed other disappointing numbers during the week, and I have my doubts about whether the greenback will fall much further. The key question is whether weaker activity changes the monetary policy backdrop.
The report has modestly lowered expectations that the Fed will hike again next month. But its focus remains firmly on the inflation mandate rather than employment. That leaves a softer jobs number offering some relief without necessarily removing the reasons for the dollar's recent strength.
Elevated oil prices keep yields in focus
Oil prices have surged in recent months and remain elevated. Inflation should therefore remain sticky for a while yet, keeping pressure on bond markets and yields higher. This is the mechanism that makes a sustained dollar decline harder to argue for, despite the weaker economic numbers.
Attention will now gradually shift towards the US CPI release on 14 October 2026. Meanwhile, risk appetite has been all over the place, providing additional support for the dollar. The inflation outlook and uncertain appetite for risk remain important parts of the backdrop against which USD/CAD is holding up.
Technical USD/CAD forecast and key levels to watch
From a technical analysis point of view, the strength of the rally stands out, with minimal pullbacks along the way. USD/CAD dipped only slightly after the jobs report before bouncing back and turning higher on the session. Yesterday's inverted hammer against the June highs may therefore have trapped the bears. A move through that resistance would bring yesterday's high, also this week's high, at 1.4263 into focus, where stops could help accelerate the move. If the bullish trend continues, the round handles at 1.4300 and 1.4400 could come into view. The 127.2% Fibonacci extension at 1.4388 offers another longer-term reference, not a promise that price will reach it. On the downside, key support comes in around 1.4130, which was previously resistance.
Source: TradingView.comFrequently asked questions
Why has USD/CAD been resilient after weak jobs data?
The small dip and subsequent recovery suggest the disappointing report has not displaced the bullish trend. The dollar's wider backdrop still matters more than that initial reaction.
Could the inverted hammer be a bear trap?
It looks that way for now, but the June highs still need to be overcome. I would distinguish that possibility from a breakout that has already happened.
Why does former resistance matter as support?
It gives the downside a clear reference while attention is on the highs. The bullish case should not obscure the importance of the level below.
-- Written by Fawad Razaqzada, Market Analyst | Follow Fawad on Twitter @Trader_F_R
USD strength ran rampant again this week as the Dollar burst through a number of resistance levels, including the key Fibonacci level of 101.80 which had previously held the highs in June of this year. And, interestingly, while it was the carry trade in USD/JPY that was a large source of USD strength leading into Q3, last week saw the USD/JPY pair in somewhat of a calm manner.
Key Points:Rising Treasury yields are extending the pullback in precious metals, but we foresee a turning point in October.Overall, 2026 has been a consolidation year following the record gains of 2025. We expect the uptrends in metals and miners to resume after the midterm elections.Our Gold Cycle Indicator finished Thursday at 50. We could see a reading between ZERO and 25 later this month, which often supports a major buying setup.
Gold 2022 vs. Now If you didn’t get a chance, check out Thursday’s Morning Brief. I explain how the current setup mirrors the rising-yield environment we saw in 2022, which led to additional weakness in precious metals into the October timeframe.
In a nutshell, we could see a little more downside and a reading between 0 and 25 in the Gold Cycle Indicator before precious metals resume their uptrends. Note how a multi-year gain followed the final low in 2022, which was also a mid-term election year.
10-Year Yields The breakout above 5.00% in 10-year Treasury yields is extending the pullback in precious metals. Simply put, gold should resume its uptrend once yields top out. Historically, peaks frequently occur in October, suggesting the correction in precious metals is likely nearing its end.
US Dollar The dollar hit fresh highs and could extend into the 103 – 105 area before peaking in October. I expect prices to top out when yields peak, likely within the next 30-days.
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Gold The breakout in Treasury yields is putting downward pressure on gold, similar to what we saw in 2022. Once yields peak, I expect gold to stabilize and its uptrend to resume. In the near term, prices could retest the trendline near $4,000, depending on how high Treasury yields spike.
This year has been nothing more than a consolidation phase following the record gains in 2025. Our work continues to support new all-time highs in 2027, with gold expected to reach $10,000+ by 2030.
Silver Silver will likely remain under pressure until Treasury yields peak. In the near term, another test of support around $55.00 is possible.
Platinum Platinum could slip back toward support between $1,500 and $1,550 if the 10-year Treasury yield continues to rise toward 5.50% in October.
GDX Last week, I noted the potential for bullish flag patterns in the miners, which could support a rally back toward the Q1 highs before year-end. That remains a possibility as long as prices hold above Thursday’s $86.48 low.
GDXJ Juniors must hold the $112.07 low to maintain the potential for a bullish flag. Momentum is slipping, implying near-term weakness unless it reverses quickly next week.
SILJ The momentum breakdown in silver juniors has persisted for more than a few days, increasing the potential for further downside if prices close below $26.93.
NEM Newmont is leading to the upside and is the first major gold miner to exceed its Q1 high. In the near term, the stock must hold this week’s $114.18 low to prevent further downside. I expect miners to outperform gold into 2030, and Newmont is a prime example of that potential.
In Summary This year has been a consolidation period in precious metals following the massive gains of 2025. I expect the uptrends to resume within the next 30 days, with gold making fresh highs next year and miners leading the way.
Some additional downside is possible in October, and gold could slip briefly below $4,000. I view any additional weakness as a buying opportunity and will alert members if/when our Gold Cycle Indicator nears ZERO.
For more price predictions and daily market commentary, consider subscribing at www.GoldPredict.com.
AG Thorson is a registered CMT and expert in technical analysis. He believes we are in the final stages of a global debt super-cycle that will begin to unravel in 2020.
Weak US payrolls lift GBP/USD towards 1.3260 as ING questions further Fed tightening, while still expecting a December hike. The US Dollar fell against Pound Sterling, the Euro and the Australian Dollar on Friday after September's jobs report weakened the case for another Federal Reserve rate increase this month.
Latest-Exchange Rates:
Euro to Dollar (EUR/USD): 1.127837 (+0.27%)
Pound to Dollar (GBP/USD): 1.325093 (+0.40%)
Dollar to Yen (USD/JPY): 157.66629 (-0.17%)
US employers added just 29,000 jobs, against the 90,000 consensus cited by ING, while revisions removed 60,000 jobs from the previous two months.
Unemployment rose to 4.2% from 4.1% and annual wage growth slowed to 3%, leaving ING arguing that investors still expect too much monetary tightening.
At the time of writing, the Pound to Dollar exchange rate (GBP/USD) was around 1.3256, up approximately 0.43% on the day, while EUR/USD traded near 1.1282, up 0.30%.
The Australian Dollar gained roughly 0.64% to US$0.6973 and the New Zealand Dollar rose 0.46% to US$0.5627.
Canada was an exception to the broader daily move, with USD/CAD still marginally higher at 1.4227 despite retreating after the release.
Image: US Dollar fx reaction vs major currencies after US NFP report ING sees less urgency to raise rates ING's chief international economist James Knightley says the report reinforces recent signals from the Fed leadership that policymakers can take more time before acting again.
"As such, the Fed leadership is clearly leaning in the direction of an October hold, meaning it will require a hot September CPI print (due 14 October) to make the meeting interesting. December remains our call on the next Fed hike."
The immediate market response was consistent with that assessment, with two-year Treasury yields falling to around 4.72% from 4.77% before the release.
Lower US yields reduce one source of support for the Dollar, although ING's December forecast leaves scope for borrowing costs to rise again before year-end.
The official employment figures also showed monthly wage growth of just 0.1%.
Knightley sees little evidence that competition for staff is generating additional inflation pressure.
"There are now similar numbers of unemployed people and job vacancies. In early 2022, there were two job vacancies for every unemployed American."
He adds: "Unsurprisingly, this demand-supply swing lower is depressing wage growth, with the low quits rate suggesting further downside risks to wage growth relative to the current, already low, 3% rate."
A weaker outcome than banks had anticipated The release undershot the expectations discussed in our four-bank US payrolls preview.
Crédit Agricole had forecast 90,000 jobs and 0.2% monthly wage growth, although its unemployment forecast of 4.2% proved correct.
JPMorgan's market intelligence team had highlighted upside hiring risks after ADP, a possibility the headline payroll figure did not bear out.
Those were pre-release assessments, while ING's new analysis questions how much further the Fed needs to go.
"This suggests there is no inflation threat coming from the jobs market and reinforces our view that the market pricing of 3-4 Fed rate hikes looks too aggressive."
The report still contained pockets of strength, including a fourth consecutive monthly rise in manufacturing employment.
The increase in unemployment also reflected more people looking for work.
"It can be a little choppy, and we saw a 485,000 increase in the labour force last month, lifting the participation rate to 61.8% from 61.6%."
Our reading is that Friday's figures weaken the argument for rapid successive hikes without settling the inflation debate.
The 14 October CPI release will test whether price pressures elsewhere in the economy are strong enough to override the cooler hiring and wage figures.
Daily US Dollar Index (DXY) The U.S. Dollar Index eased after the report, falling from a session high at 102.132 to near 101.74. It remains above the 50-day moving average at 99.94 after a sharp run higher. The dollar gave gold some room Friday. Control of the currency trade is another matter.
That’s why gold couldn’t hold the first spike. The metal got a weaker jobs report, lower October hike odds, a lower 10-Year yield and a softer dollar. It still couldn’t take out the 61.8% level.
What to Watch The payrolls report pushed the October rate trade out of the way. Friday’s bounce is running on short-end relief. Gold still needs the long end of the bond market to follow it lower. The 10-Year and the dollar backed off Friday without breaking anything on their charts.
The bias is to the downside with the main trend down on the swing chart. The jobs report gave gold a chance to repair the break and it stalled before the 61.8% level at $4,230.51. Spot Gold is still trading under the 50% level at $4,319.61 and the 50-day moving average at $4,327.50. This week’s low at $4,110.87 is the level underneath.
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Interest Rates Did Fall After the U.S. Jobs Numbers Came In Anemic That was the initial reaction, but whether or not it changes everything, we’ll have to wait and see. I do like gold long term, but right now, this is all about the rates market, which has been somewhat all over the place.
The idea that the Federal Reserve now has to think about being a little bit more dovish with its monetary policy helps, I guess. But let’s be honest, a big part of inflation is due to energy, which is something that they have no control over. This is a tough situaiton for them.
Slightly bullish, but expect a lot of noise, would be my summary of what I’m looking at. This is a market that has a lot of things to pay attention to at the same time currently.
That being said, I do believe that it is probably a market that still has a lot of headwinds because of inflationary concerns and, of course, the fact that most of the inflation is based on energy. That is not a simple equation for central banks around the world. They do not simply start loosening monetary policy in that environment, so we will have to wait and see.
Interest Rates Impact on Silver Silver does like lower rates, so do pay attention to those. If they continue to drop, then it is what it is. Most of the time, historically speaking, at least, silver thrives on lower rates. Rates are still pretty elevated, so when I say thrive, keep that in mind. It is not like we are going to go parabolic, but it does provide a little bit of support.
It is interesting that $60 has held so far. Longer term, I like silver. There is a lot of demand for silver out there from an actual fundamental standpoint, and there is not enough supply to satiate all of the demand most of the time.
This is an interesting spot. I suspect this is probably something that might become a little clearer on Monday morning. Friday does tend to be choppy after the jobs report as liquidity dries up.
The EUR/USD has this week tagged a fresh year-to-date low as French public-finance concerns triggerred a government bond sell-off. Today's US jobs report may change little, with resilient activity, elevated energy prices and hawkish Fed bets keeping the greenback supported.
EUR: Inflation Returns as French Fiscal Stress Adds Pressure Rising political risk in the EU and heightened inflation pose challenges to the euro. The ECB is firmly focused on containing inflation. It looks increasingly likely that the ECB could be forced to act further. Rising inflationary pressures will probably push the ECB to take more aggressive action. Yet, the ECB’s Governing Council remains unconvinced that there is a significant increase in underlying pressures. Regarding price and wage pressures, many officials believe that there is not enough evidence to support that they will persist.
French-German yield spreads have increased this month. Concerns over France’s finances are increasing, including high levels of public debt and political risk.
GBP: BoE Debate Intensifies as Fiscal Concerns Build Strikes have disrupted the energy supply in Britain. The strike is expected to cause significant disruption to British production and further elevate inflation. Longer-term expectations are for inflation to return to target, and the Bank of England remains focused on controlling it. BoE officials have stated there will be a good case to increase interest rates.
Others have stated they are happy to wait and see if there is further evidence of second-round effects. A fiscal risk premium has increased in the UK as there is increased uncertainty ahead of the October 28 budget.
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U.S. Dollar Index Technical Analysis: DXY Holds 101.76 as 101.94 Becomes the First Recovery Test
EUR/USD Price Chart – Source: Tradingview The EUR/USD pair is trading at 1.1260 on the 2-hour chart as it rebounds from the latest decline. I see price trading below both moving averages, and still within a longer-term bearish move. The bounce, however, is improving momentum in the near-term, and I am looking for the first Fibonacci level at 1.1278 to be tested.
The next resistance would be at 1.1298, with 1.1317 above that. The support would be at 1.1254, and then 1.1215 and 1.1189.
RSI is moving up from the oversold area, but is still below the center line. This means the bullish momentum is not confirming a trend reversal, and I would expect price to continue falling, while staying below 1.1278 and 1.1298. I would see a break above 1.1317 as bullish and a break below 1.1254 as more bears coming in toward 1.1215.
Gold: Fed Caution Meets Strong Dollar and Persistent Safe-Haven Demand On October 2, gold was trading against a backdrop of contradictory conditions: Federal Reserve officials expressing concern about the economy and financial markets, and bullion traders increasingly worried about the strength of the U.S. dollar, rising Treasury yields, and the risk of an energy price-induced recession. Market participants are once again questioning the relationship between inflation and lower gold prices.
The U.S. labor report for September will be released soon. Analysts expect only about 90,000 new jobs last month with the unemployment rate remaining at 4.1%. Some Federal Reserve officials have indicated little concern for another rate increase in October if the labor report reflects a continued strengthening of the labor market. However, other Fed officials have indicated they will need to see more, especially with the recent declines in inflation.
With major central banks continuing with their policies of reserve diversification and other major-economy central banks expanding their currency reserves, gold is expected to continue its rally. This week’s Reuters report indicated many emerging-market central banks continue to purchase gold in an effort to reduce their exposure to the U.S. dollar. Gold ETFs continued to see inflows in the past eleven weeks.
Like gold, industrial demand for silver will continue to bolster the silver price despite any corrections associated with interest rate hikes and a strengthening dollar. Electrification of the grid, increased solar manufacturing, and other infrastructure investments will continue to create ample silver demand. Based on the Silver Institute’s outlook, the silver market is expected to be in a structural deficit through 2026 of approximately 67 million ounces. Overall, ample industrial demand coupled with declining mine and processing supply will leave silver in a supply deficit despite tightening monetary policy.
Gold Technical Analysis: XAU/USD Holds $4,160 as $4,190 Remains the First Recovery Test
Gold – Chart Gold is trading at around $4183. What is interesting is that price is attempting to establish a floor above $4160 support after rebounding from the $4112 low. The recovery looks a bit better, but gold is still trading beneath both moving averages, let alone the broader bearish trendline, so the bigger picture is still bearish.
As for resistances, I am looking at the first level of $4190. Sustaining above that level is important for the bulls to maintain a short-term positive bias. If that happens, the focus would shift to $4214 and then to $4238. On the other hand, if the selling pressure returns, a break below $4160 would bring $4112 back into the picture and concentrate on $4073 and $4030.
RSI is recovering toward the midline, and I view this as bearish momentum taking a break, but not turning bullish. Until gold makes a daily close above $4190 and $4214, and the 10 and 20 SMAs respectively, I am looking to take advantage of any long biases. A daily close below $4160 and $4112 would put the focus on the $4073 and $4030 supports.
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Silver Technical Analysis: XAG/USD Consolidates Above $59.96 as $61.72 Caps the Recovery
Silver – Chart Currently, Silver is trading at $61.14 after finding support at $59.96. I see that, for the time being, Silver has stopped making new lows, but that is not a confirmation of a new trend as it is still trapped in a descending channel with both moving averages. Therefore, I consider the current price action as a sideways move within a larger bearsish trend.
The nearest resistance I see is at $61.72. If Silver breaks this level, the next resistance will come at $63.06, followed by $65.09. If, on the other hand, sellers step in and break the $59.96 support, I see additional support at $58.94 and $57.64.
RSI is also showing that downward momentum is fading as it has recovered from oversold territory. I believe the current price action remains bearish, and until it breaks the resistance at $61.72 and the descending trend line, I will maintain a bearish bias. A break of $63.06 will make me turn bullish, and if it breaks support at $59.96, I will target $58.94.
TL;DR: Dollar Index is heading towards the 102.77–103.00 resistance zone while Silver stabilizes near 60 after falling from 71.16—the two markets are trading the same macro bet from opposite sides, and September’s NFP report, including the wage component, could resolve both in the same session.
Why This Matters Dollar and Silver are trading the same macro theme from opposite directions, which means today’s jobs report carries more than its usual weight: it is a single catalyst that can confirm or break two technical setups at once. The headline payroll number matters less than it usually does here—wages and the broader composition of the report may do more to decide whether the higher-yield, stronger-Dollar regime extends or finally interrupts.
Why Wages May Matter More Than the Payroll Headline September payrolls are expected to slow sharply from 162K to around 90K, while unemployment is seen unchanged at 4.1%. Average hourly earnings are expected to rise 0.3% m/m and 3.2% y/y, with the annual pace edging up from 3.1%.
That makes the composition of the report unusually important.
The Fed enters NFP with conflicting inflation signals. Softer August PCE data sharply reduced expectations for another hike in October, while New York Fed President John Williams said there was “no need for urgency.” Minneapolis Fed President Neel Kashkari also left October open even as he maintained that further hikes will probably be needed.
But Thursday’s ISM Manufacturing report complicated that picture. Prices Paid surged from 71.1 to 77.9, while New Orders strengthened and Employment rose further into expansion. The result was not a clean slowdown signal, but an economy still showing demand resilience while input-cost pressure accelerated.
That makes wages particularly important.
A strong payroll headline would confirm that labor demand remains resilient. A hot wage print would go further, adding a domestic inflation signal to the cost pressure already visible in ISM and making it harder for policymakers to treat recent inflation pressures as primarily supply-driven.
Payroll revisions are another reason not to overweight the first headline. Recent estimates have moved materially between releases, including July’s swing from an initially reported decline to subsequent positive growth.
The cleaner question is therefore not simply whether payrolls beat 90K.
It is whether jobs, unemployment and wages collectively show an economy still generating enough demand pressure to justify earlier or more aggressive tightening.
ActionForex’s Technical View on Dollar Index and Silver Dollar Index: 102.77 Is the Breakout Test
Dollar Index has already cleared one important obstacle.
The rally from 98.599 pushed through the previous 101.800 high this week and is now pressing toward a technically significant 102.77–103.00 zone.
The first level comes from the 100% projection of the 97.625 to 101.800 advance measured from 98.599, which produces a target at 102.774. That projection also converges with the upper boundary of the rising daily channel, making the area a more substantial resistance zone than the 103 round number alone.
Momentum remains supportive but stretched.
Daily RSI is around 73.5, while MACD continues to accelerate above zero. On the 4H chart, RSI is close to 70 and price remains well above the 55 EMA around 101.15.
The setup therefore argues that Dollar still has upside momentum, but a clean extension through 102.77–103.00 probably requires fresh fundamental confirmation.
A strong NFP accompanied by hot wages would provide exactly that.
If the data materially rebuild expectations for an October Fed move, a sustained break above 102.77 would open the way for the broader Dollar advance to extend.
A report that merely keeps a December hike as the central scenario may not be sufficient. In that case, DXY could stall around the projection and channel ceiling without producing a genuine bearish reversal.
The key support is 101.026.
As long as that level holds, rejection from 102–103 would initially signal consolidation within the broader uptrend rather than completion of the rally.
Silver: 58.68–60 Is the Line to Defend
Silver is approaching the other side of the same macro trade.
The decline from 71.16 extended to 59.93 before stabilizing, leaving price around the psychological 60 level and just above the lower portion of its falling channel.
The more important technical support lies around 58.68.
That level is the 100% projection of the decline from 71.16 to 62.30, measured from the subsequent 67.54 rebound. Together with the channel floor, it creates a broader 58.68–60.00 support zone.
For now, the decline can still be interpreted as corrective.
Silver remains above 58.68 and within the descending channel rather than accelerating decisively through its lower boundary. But buyers have yet to demonstrate that the correction is complete.
The first meaningful bullish signal would be a sustained break back above 62.30, which sits close to the 4H 55 EMA around 62.42.
Until then, stabilization around 60 remains just that — stabilization.
A decisive break below 58.68 would materially weaken the corrective interpretation and raise the probability that the fall from 71.16 is developing into a more impulsive bearish leg.
That would expose the prior 54.77 low, followed by the 53.20 area represented by the 161.8% projection of the same decline.
One NFP, Two Confirmation Signals The cleanest scenario is a strong payroll report combined with hot wages.
That would challenge the recent reduction in October hike expectations and strengthen the argument that resilient demand is reinforcing already elevated inflation pressure.
For Dollar Index, that would provide the catalyst needed to challenge 102.77–103.00 and potentially establish a fresh breakout.
For Silver, the same repricing would increase pressure on 58.68–60.00. A decisive break below 58.68 would shift attention toward 54.77 and potentially 53.20.
The softer scenario is an in-line or weak payroll headline with wages around expectations.
That would do little to restore urgency around October. DXY could struggle to sustain a move through 102.77 while remaining structurally supported above 101.026, while Silver could continue defending the 58.68–60 zone and preserve the corrective interpretation.
The most interesting mixed outcome would be weak payroll growth but unexpectedly strong wages.
That combination would show cooling employment creation without delivering the inflation relief the Fed is looking for. Given how explicitly policymakers have focused on persistent inflation, wages could carry more weight than the headline payroll number in determining the immediate rates reaction.
Cross-Asset Confirmation Matters After the Release Because Dollar and Silver are trading the same macro theme from opposite directions, the strongest NFP signal would come from both charts resolving together.
A DXY break above 102.77 accompanied by Silver falling through 58.68 would provide powerful cross-asset confirmation that markets are repricing a firmer Fed path and extending the existing Dollar-up, Silver-down trade.
The inverse would also be significant.
A rejection of 102.77 followed by a DXY break back below 101.026, combined with Silver reclaiming 62.30, would suggest the current macro trade is losing momentum on both sides.
Divergence would be informative too.
If Dollar clears 102.77 while Silver continues defending 58.68, Silver-specific support would appear to be offsetting the macro pressure. If Silver breaks support while DXY fails to extend, the metal’s own bearish technical structure may be doing more of the work.
Both Charts Get Their Answer on the Same Day Unlike setups that need several releases to develop, Dollar and Silver should receive their primary catalyst in the same session.
The immediate levels are straightforward.
For Dollar Index, the question is whether 102.774 becomes a breakout point or a rejection zone, with 101.026 determining whether any pullback remains corrective.
For Silver, the test is whether 60 and 58.68 continue to hold, followed by whether buyers can reclaim 62.30.
NFP may therefore resolve more than the next Fed meeting probability.
It can determine whether the macro trade that has carried Dollar toward 103 and Silver toward 60 still has another leg to run.
Key Takeaways Dollar Index is testing 102.77–103.00 resistance while Silver stabilizes near 60 after falling from 71.16—the same macro trade viewed from opposite sides. September NFP is expected to slow sharply to ~90K, but wage growth (forecast 0.3% m/m, 3.2% y/y) may matter more than the headline given hot ISM Prices Paid data. A strong payroll-plus-hot-wages outcome would favor a DXY breakout above 102.77 and a Silver break below 58.68 toward 54.77 and 53.20. A weak or in-line report would likely keep DXY capped below 102.77 (above 101.026 support) and Silver defending the 58.68–60.00 zone. The strongest confirmation would come from both charts moving together—DXY above 102.77 with Silver below 58.68—while divergence between the two would point to asset-specific forces overriding the macro trade.
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