Track market-moving stories before they get noisy

NZD/CAD is showing signs of a potential swing low ahead of the RBNZ and Bank of Canada's interest-rate decisions on 28 October. While New Zealand's headline inflation undershot expectations, accelerating underlying pressures have reinforced expectations for another RBNZ hike.

USD/CAD extends its losing streak for the sixth consecutive day, trading around 1.4040 during Asian hours on Thursday. The currency pair experienced downward pressure as the commodity-linked Canadian Dollar (CAD) gained strength from a rally in crude oil prices. Oil prices advanced following a drone attack on Saudi Aramco’s Shaybah oil field that resulted in two casualties, intensifying geopolitical friction in the Middle East and raising concerns over potential energy supply disruptions.

Adding to the regional geopolitical complexity, Iranian Foreign Minister Abbas Araghchi stated on Wednesday that the United States must lift its naval blockade and demonstrate a genuine commitment to a diplomatic resolution. Araghchi emphasized Tehran's readiness to resume negotiations if there is concrete evidence of a sincere American effort toward a just and permanent end to the conflict.

In tandem, Ukraine executed large-scale drone strikes against critical Russian oil infrastructure this week, signaling Kyiv's intent to impede Moscow's planned expansion of diesel exports under a recent agreement between Presidents Trump and Putin.

Meanwhile, market participants are carefully evaluating the trajectory of the Federal Reserve’s (Fed) monetary policy leading into next week’s meeting. Uncertainty persists after Fed Chair Kevin Warsh refrained last week from offering guidance on the timing or necessity of future interest rate hikes.

USD/CAD under pressure as IMF highlights widening North American growth gapStrategists at Societe Generale flag that the latest IMF projections underscore a deteriorating relative backdrop for Canada, noting that “with the IMF’s US growth forecast revised up to 2.5% this year (while remaining at 2.1% in 2027), the North American growth gap is widening.” They point out that “the chart on the right shows relative Bloomberg consensus growth forecasts for 2027, but the IMF’s assessment (1.2% growth in Canada next year versus 2.1% in the US) is even less favourable for Canada,” reinforcing the idea of weaker Canadian momentum. At the same time, Societe Generale highlight the policy and market-rate dimension, observing that “the chart on the left shows the two-year rate differential plotted against USD/CAD,” underlining how relative front-end yields continue to frame the Canadian Dollar’s performance against the US Dollar.

The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.

The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.

The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.

While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.

Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.

Gold price (XAU/USD) holds steady around $4,125 during the early Asian session on Thursday. The precious metal fluctuated as traders continue to assess the outlook for the Federal Reserve’s (Fed) interest-rate path on the back of ongoing tensions in the Middle East.

Fed Chairman Kevin Warsh last week avoided signalling the outcome of this month’s policy meeting but noted that hotter-than-expected inflation had not changed his assessment of the US economy. According to the CME FedWatch tool, the chance of no change in rate at the October meeting now stands at 84%.

Even with a hold widely expected next week, markets continue to price in another increase at the December meeting, which keeps the policy outlook tilted toward tightening. This, in turn, could weigh on the yellow metal. Higher interest rates typically weigh on gold because the precious metal does not pay interest, making yield-bearing assets relatively more attractive.

Additionally, elevated energy costs increase the possibility that the US central bank will need to further adjust monetary policy to contain price pressures.

Escalating supply risks in the Middle East keep traders on edge. Iran’s Foreign Minister Abbas Araghchi said on Wednesday that “while ‌‌Iran is firmly committed to seeking a dignified peaceful resolution to the conflict, we are also fully prepared to defend ourselves.” Meanwhile, Iranian President Masoud Pezeshkian stated that the US cannot expect dialogue with Iran while blockading and threatening it.

Risk appetite shifts as France unrest weighs on equities and Dollar firmsAnalysts at Commerzbank highlight a clear divergence across markets, noting that "European equities declined amid political unrest in France, while US Treasury yields rose as the equity recovery reduced safe-haven demand." In this backdrop, they add that "the USD was slightly firmer," reflecting a modest shift back toward the Dollar as risk sentiment stabilised in US assets.

Commerzbank also points to softer commodity prices, reporting that "Brent crude oil prices fell 0.3% to USD109.55" and that "Gold fell 0.6% to USD4,141," underscoring how the combination of higher US yields and reduced safe-haven demand has weighed on traditional hedges.

Warsh cautious on crisis scars but upbeat on investment surge and AIFed Chair Warsh delivered a moderately constructive tone, with the FXS Speechtracker score at 5.6/10, slightly softer relative to the historical average of 6.1/10 and suggesting only modest incremental information for markets. The admission of being “over-scarred” by the Global Financial Crisis underscores a persistent bias toward caution on financial stability, even as Warsh highlights structural growth, an investment surge, and confidence in delivering price stability without pre-committing to October or December decisions. Warsh’s focus on AI as a near-term demand-side force and a tool to strengthen data and monetary policy signals a forward-looking stance that could ultimately support the Dollar if productivity and growth expectations firm.

The FXS Fed Sentiment Index was unchanged, moving by 0.00 points to a still-hawkish level of 127.51, indicating that the speech did not materially shift the perceived policy stance despite the slightly lower FXS Speechtracker score. The combination of elevated index readings and a neutral day-on-day change suggests that markets continue to view the Fed as firmly in hawkish territory, with Warsh’s cautious crisis scars balanced by optimism on investment and AI-driven growth.

Technical Analysis: Gold remains capped under the 100-day SMAIn the daily chart, XAU/USD remains under pressure, with spot quoted below the 20-period Bollinger simple moving average and the 100-day moving average, which keeps the near-term bias bearish. Price is holding above the lower Bollinger Band, hinting at a short-term consolidation rather than a full-fledged breakdown, while the Relative Strength Index at 42.60 stays in neutral-to-soft territory, suggesting downside momentum is present but not overstretched.

On the topside, initial resistance emerges at the Bollinger midline near $4,160, followed by the 100-day moving average at $4,230, with the upper Bollinger Band at $4,255 acting as a stronger cap if bulls attempt a rebound. On the downside, immediate support is located at the lower Bollinger Band around $4,070; a sustained break beneath this floor would open the door for a deeper pullback, whereas holding above it would keep XAU/USD in a bearish but range-bound posture.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Gold FAQs Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.

Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.

Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.

The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.

The AUD/JPY surges for the fourth straight day and approaches key resistance levels as bulls gather momentum, hitting a new monthly high above the October 14 daily high of 111.13. The cross-pair trades at 111.04, up 0.24%.

Price action shows that a ‘double bottom’ chart pattern has formed, with AUD/JPY poised for a breakout above 111.50, slightly below the 50-day Simple Moving Average (SMA) of 111.57.

A decisive break opens the door for a move towards the 200-day SMA at 111.76 ahead of 112.00. Up next is the 100-day SMA at 112.12. Once those key resistance levels are taken out, bulls' next target is the ‘double bottom’ measured target objective of 227 pips, from around 111.13 to 113.40.

On the downside, the most difficult part is that the AUD/JPY must drop below 110.00 for sellers to retest the monthly lows reached on October 15 at 108.64.

Australian Dollar FAQs One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.

The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.

China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.

Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.

The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.

While the stage was set for AUD/USD to breakout of a long-term head-and-shoulders top, bears are yet to have their pound of flesh. A weaker US dollar, hawkish RBA commentary and surging November rate hike expectations have helped the Australian dollar emerge as one of the strongest FX majors this week.

Based on Arc Cycle Analysis applied to the 4h chart, Gold Spot/U.S. Dollar has rebounded from the 1 (100%) Support Arc within the current Arc Cycle after failing to break below this strong support.

Silver price retreated after hitting a daily high of $58.18, falling below the $58.00 mark as the US Dollar strengthened amid rising US Treasury yields. The XAG/USD trades at $57.87 a troy ounce, down 0.20%.

XAG/USD Price Forecast: Technical outlookThe trend is downward, exacerbated by Silver prices falling below $60.00. This week, after trending up for two of the last three days, XAG/USD failed to reach a higher high, hinting that buyers are losing steam and sellers are moving in.

From a momentum standpoint, the Relative Strength Index (RSI) is bearish, though it has turned flat. This means that neither buyers nor sellers are in charge.

For a bearish continuation, the XAG/USD must clear the October 20 low of $56.38. Beneath the next stop is the $55.00 psychological level, followed by the $50.00 milestone.

For a bullish reversal, buyers must push Silver above $60.00. A breach of that level will expose the March 23 low-turned resistance at $61.01, followed by the 100-day Simple Moving Average (SMA) at $62.56 and the 50-day SMA at $63.51.

XAG/USD Price Chart – Daily

Silver daily chart
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.

India's festival Gold buying peaks with Dhanteras on November 6 and Diwali on November 8, 2026. Last year's season already showed buyers shifting from jewelry to bullion as prices climbed, and this year's opens with a 15 percent import duty and a weaker rupee.

India's jewelry demand fell 24 percent in 2025 to 430.5 tonnes, according to the World Gold Council (WGC), while bar and coin demand climbed 17 percent to 280.4 tonnes. Gold had gained about 73 percent in rupee terms by late December, so the same budget bought far less metal in jewelry form.

The festival quarter widened the gap. Jewelry volumes fell 23 percent to 145.3 tonnes in Q4 even with wedding demand, and bar and coin demand rose 26 percent to 96 tonnes. Jewelry sales still rose 26 percent in rupee terms, so value and volume moved in opposite directions.

Retailers adapted. A bullion dealer cited in Commerzbank's note said jewelers had stocked small coins and bars ahead of Dhanteras and Diwali, and dealer premiums on Gold reached $25 an ounce, up from $15 a week earlier.

What changed in 2026In mid-May, India raised its import duty on Gold from 6 percent to 15 percent, which one analysis called the largest increase on record, to narrow a trade deficit that was weighing on the rupee. Prime Minister Narendra Modi also urged citizens to pause Gold purchases for a year.

Jewelry demand fell 15 percent year on year to 75.1 tonnes in April to June, while bar and coin demand rose 9 percent to 50.3 tonnes. First-half bar and coin buying reached about 113 tonnes, the highest in 13 years.

Source: Gold.orgReuters reported that dealers moved from discounts of up to $6 an ounce to premiums of up to $7 in mid-October, the first premium in more than three months, as the price pullback lifted jewelry purchases. A WGC and Kantar survey of 1,963 consumers (May 22 to June 3) found stronger purchase intent for investment Gold than for jewelry, yet one bullion merchant told Reuters that investors were still holding back as prices fall.

Supply data are mixed. India's September Gold imports fell to $1.8 billion from $9.6 billion a year earlier, trade ministry data showed, and a Mumbai dealer told Reuters the shortfall is tightening domestic supply, while the WGC's second-quarter report called supply adequate.

Why it matters for XAU/USD and the RupeeIndia accounted for 27 percent of global jewelry demand and 16 percent of global bar and coin demand in the second quarter, according to the WGC, so festival buying is a visible input to the physical market behind XAU/USD. Spot Gold trades near $4,170 an ounce, about a quarter below its January record.

The rupee is the other channel. Importers sell rupees to buy the dollars that pay for Gold, and Gold and silver made up about 11 percent of India's imports against 22 percent for oil, according to Money Metals Exchange analysis. In the second quarter, the LBMA Gold price was 37 percent higher than a year earlier while the domestic price was 59 percent higher, a gap the WGC tied to the duty hike and rupee depreciation.

What to watch through November 8Dealer premiums are the first reading. Commerzbank expected last year's premium spike to fade after the holidays, so a premium that holds after Diwali would say more than one during the festival.

October import data will show whether restocking came before the festivals or after. Several large Indian mutual funds also suspended bulk subscriptions to Gold ETFs in mid-October at the market regulator's nudge, Reuters reported, so ETF access is worth tracking too.

A weaker rupee lifts domestic prices even when spot Gold is flat, and the WGC noted that both price dips and price stability have supported purchases. Metals Focus has observed that Indian consumers tend to delay purchases after sharp price increases and then adjust, which would make the winter wedding season a second test of this year's demand. No single reading above predicts the festival total.

The Mexican Peso weakened for the second straight day, with losses of over 1.49% against the US Dollar, as the US-Iran conflict continues to underpin Oil prices, increasing the chances that the Federal Reserve might raise interest rates to control high inflation.

Gold price (XAU/USD) registers modest gains on Wednesday as Oil prices edge lower after the US authorized the offloading of cargo from some blocked vessels, triggering a downside reaction in Oil markets.

Canadian Dollar Forecast: Goldman Brings October Hike Into Focus After Alberta Vote The Canadian Dollar has gained against the US Dollar as Goldman brings forward its rate call, but Sterling has a tightening story of its own. Goldman Sachs now expects the Bank of Canada to raise interest rates on 28 October, bringing forward its call as rising inflation expectations add to the case for tightening despite weak employment.

The revision comes as the US Dollar to Canadian Dollar exchange rate extends its decline, trading at 1.4054 at 10:41 BST on Wednesday, down 0.09% on the day after a 0.28% fall on Tuesday.

Goldman forecasts a 25-basis-point increase to 2.50% next week.

MUFG also sees an October move becoming more likely, although its argument depends on policymakers prioritising future inflation risks and markets continuing to anticipate a hike.

The political backdrop has also improved following Alberta's vote to remain part of Canada.

Preliminary results showed roughly three-quarters of voters rejecting the proposal to begin a process towards a binding separation referendum.

For currency investors, that reduces an immediate source of uncertainty surrounding the oil-producing province, giving the Canadian Dollar a more favourable backdrop alongside rising interest-rate expectations.

The result does not resolve Canada's trade difficulties, however, and should not be confused with the inflation evidence behind Goldman's revised BoC forecast.

Image: USD/CAD exchange rate 48-hr chart Goldman Changes Its Call After the Surveys The business and consumer surveys have shifted attention towards the risk that higher costs become embedded in pricing decisions.

Goldman economists Megan Peters and Joseph Briggs wrote: "The message from today's surveys was more hawkish than we anticipated, with greater emphasis on improvements in activity, continued resilience, and price pressures than the potential headwinds from rising trade tensions with the US."

The economists also pointed to Governor Tiff Macklem's recent public remarks: "Combined with Governor Macklem's hawkish comments at this past weekend's IMF meetings, we now expect that the BoC will deliver a 25bp hike at next week's October meeting."

Consumers' five-year inflation expectations rose to 3.9% from 3.4%, while roughly half the businesses surveyed intended to pass some or all of their higher energy and tariff costs to customers.

That combination gives the BoC reason to worry about inflation persisting even without a strong jobs recovery.

But the Bank of Canada's survey findings carry an important timing qualification: around three-quarters of business interviews preceded the breakdown in US-Canada trade talks.

Responses collected after the breakdown showed weaker confidence and investment intentions alongside higher inflation expectations, leaving policymakers facing both growth and price risks.

The caution in the earlier ING and CIBC assessment of Canada's outlook therefore remains relevant, even as Goldman puts greater weight on the surveys' inflation warning.

An October Hike Would Leave December Open Goldman has also accelerated its expected second increase, but stops short of forecasting consecutive hikes.

Peters and Briggs wrote: "We are also pulling forward our forecast for a final 25bp hike to 2.75% (the center of the BoC's neutral rate range) to January 2027."

"Although a final hike in December remains a possibility, we believe that a still benign inflation backdrop and more visible headwinds from US trade tensions support a more gradual pace of policy normalization."

MUFG identifies a route to a faster repricing, rather than making the same firm forecast.

Senior currency analyst Lee Hardman cautioned: "However, it is not a done deal given the recent softer economic data flow from Canada including the second consecutive month of heavy job losses in September."

"A decision to raise rates this month would then encourage speculation that they could follow that up quickly with a second hike before the end of this year in December providing more support for the Canadian dollar."

Much of the initial adjustment has already happened.

Hardman recorded the shift on Tuesday: "There are currently around 21bps of hikes priced in compared to only 9bps at the end of last week."

Higher expected Canadian rates can support the currency by improving its prospective yield, but delivering an increase that investors largely anticipate may offer less additional support than signalling another soon afterwards.

Why GBP/CAD Faces a Different Test The Pound-to-Canadian Dollar exchange rate was up 0.05% at 1.8821 at the same time on Wednesday, illustrating Sterling's relative resilience despite the Canadian currency's gains against the US Dollar.

Wednesday's UK inflation release showed annual CPI rising to 3.5% from 3.1%, adding pressure on the Bank of England after stronger labour-market figures.

Before that release, Hardman wrote: "We continue to expect the BoE to hike rates next month and deliver a second hike early next year."

"A view that is already well priced into the UK rate market which is anticipating even more tightening and has almost three hikes priced in by March of next year."

MUFG's support for Sterling also depends on the forthcoming UK Budget preserving confidence in fiscal consolidation.

Image: Pound to Canadian Dollar rate chart for last 2 days. What This Means for USD/CAD and GBP/CAD USD/CAD's decline leaves the Canadian Dollar approaching next week's decision with substantial tightening already anticipated. A hike accompanied by encouragement for a December follow-up could extend that strength, whereas an emphasis on trade damage and patience would fit Goldman's slower January timetable.

For GBP/CAD, Canadian tightening alone may struggle to dislodge Sterling while a November BoE increase remains expected. A more urgent Canadian policy message, or UK Budget measures that undermine confidence, would give the Canadian Dollar a clearer advantage.

A BoC hold would challenge the rate expectations supporting the recent Canadian Dollar recovery and could lift both pairs. The employment weakness highlighted by MUFG keeps that risk alive ahead of 28 October.

Democrats are priced to take the House, so November 3 comes down to the Senate and how much Washington can borrow without the other party. Treasury yields will show the answer first, then the Dollar and Gold.

UK annual CPI rose to 3.5% in September from 3.1% in August, exceeding the 3.4% forecast. Core inflation accelerated to 2.8%, while services inflation reached 3.7%. This increases the possibility of tighter monetary policy.

The interest rate remains at 3.75%, with markets expecting it to rise to 4.00% at the 5 November meeting. Committee member Megan Greene also warned that inflation risks from the energy shock could be higher than previously thought.

Rising oil and fuel prices are increasing inflationary pressure in the UK while also enhancing the US dollar’s appeal amid geopolitical uncertainty.

The unexpected rise in UK inflation is supporting the pound by increasing expectations of a Bank of England rate hike. At the same time, demand for the US dollar as a safe-haven asset and Middle East tensions may limit GBP/USD’s upside. The pair’s next moves will depend on changes in interest rate expectations in both countries and developments in the geopolitical situation.

Technical Analysis

On the H4 chart, GBP/USD completed its upward correction at 1.3405, creating the conditions for a resumption of the downward move. The main scenario for today is a decline towards 1.3326. After reaching this level, a local correction towards 1.3355 is possible, followed by a continuation of the decline towards 1.3255. A break below this support would open the way for a downward wave towards 1.3137 and then 1.3062.

The MACD histogram remains in positive territory near local highs, indicating that upward momentum persists. However, with resistance at 1.3405 nearby, the likelihood of a reversal and a downward correction increases. A weakening of the indicator’s positive momentum is needed to confirm this scenario.

On the H1 chart, GBP/USD moved up from 1.3137 to 1.3405 and is now consolidating around 1.3370. A break below the range is expected today, with the first target at 1.3326. This would be followed by a decline towards 1.3253 and 1.3235. A break below these levels would strengthen sellers’ positions and create the conditions for the downward move to continue.

The Stochastic oscillator is in neutral territory near 50, indicating weakening upward momentum. A downward turn in the signal lines would confirm the correction, with scope for the indicator to move into oversold territory. An alternative scenario envisages consolidation above 1.3405, which would temporarily invalidate the priority downward scenario and open the way for a further recovery.

Conclusion The pound has found support from stronger-than-expected UK inflation, which has increased expectations of a Bank of England rate hike at the 5 November meeting. However, the US dollar’s safe-haven appeal amid Middle East tensions and elevated oil prices continues to limit GBP/USD’s upside. Technically, the pair has completed its upward correction at 1.3405, with the main scenario pointing to a decline towards 1.3326, 1.3255 and potentially 1.3137. A break below support would increase the potential for further declines, while consolidation above 1.3405 would temporarily invalidate the priority downward scenario and open the way for a further recovery. The upcoming BoE meeting and geopolitical developments will be the key drivers of the pair’s next move.

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Key Points:EUR/USD is mostly flat despite the strong sell-off in French debt markets. GBP/USD gains ground as traders react to UK inflation report. USD/JPY stays range-bound.

U.S. Dollar Is Mostly Flat Amid Lack Of Strong Catalysts

DXY 211026 4h Chart
U.S. Dollar Index is swinging between gains and losses as traders focus on dynamics of Treasury yields. The yield of 2-year Treasuries climbed towards the 4.79% level, while the yield of 10-year Treasuries pulled back below 5.11%. Bond traders are not ready for big moves, and it looks that the market is already waiting for Fed decision, which will be released next week.

The nearest support level for U.S. Dollar Index is located in the 101.50 – 101.65 range. A move below the 101.50 level will open the way to the test of the next support at 100.85 – 101.00.

EUR/USD Stays Range-Bound Despite Sell-Off In French Debt Markets

EUR/USD 211026 4h Chart
EUR/USD is mostly flat as traders focus on the situation in French debt markets. The yield of 10-year French government bonds climbed above the psychologically important 5.00% level. Traders are worried that French protests will force the country to boost spending, which would push yields even higher.

In case EUR/USD manages to settle above the resistance at 1.1250 – 1.1265, it will head towards the next resistance level at 1.1350 – 1.1365. On the support side, a move below the 50 MA at 1.1206 will open the way to the test of the next support at 1.1175 – 1.1190.

GBP/USD Gains Ground As UK Inflation Rate Exceeds Estimates

GBP/USD 211026 4h Chart
GBP/USD is moving higher as traders focus on inflation data from the UK. Inflation Rate increased from 3.1% in August to 3.5% in September, compared to analyst forecast of 3.4%. Core Inflation Rate grew from 2.6% to 2.8%, while analysts expected that it would increase to 2.7%.

Currently, GBP/USD is trying to settle above the resistance level at 1.3385 – 1.3400. In case this attempt is successful, GBP/USD will head towards the next resistance level, which is located in the 1.3485 – 1.3500 range. I’d note that RSI is in the overbought territory, so the risks of a pullback are rising.

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USD/CAD Failed To Climb Above 1.4080

USD/CAD 211026 4h Chart
USD/CAD is swinging between gains and losses as traders focus on dynamics of commodity markets. Gold is mostly flat in today’s trading session, while silver pulled back by -0.8%. Oil prices are losing some ground as traders wait for news from the Middle East. Other commodity-related currencies are moving higher in today’s trading session.

USD/CAD has recently made an attempt to settle above the resistance level at 1.4070 – 1.4085 but failed to develop sufficient upside momentum and pulled back. In case USD/CAD climbs above the 1.4085 level, it will head towards the next resistance, which is located in the 1.4135 – 1.4150 range.

USD/JPY Remains Stuck In A Tight Range

USD/JPY 211026 4h Chart
USD/JPY remains stuck near key resistance at 158.00 – 158.50 as traders are not ready for big moves ahead of next week’s central bank meetings. Fed and BoJ will release their interest rate decisions next week.

From the technical point of view, USD/JPY stays range-bound. Most likely, USD/JPY will need additional catalysts to get out of the current trading range. It remains to be seen whether traders will be ready to react to economic reports or prefer to wait for Fed decision, which will be released on October 28.

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About the Author

Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.

Gold: Up or down?

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Summary:

The latest rally of around 2% from the October low has taken GBP/USD to highs near 1.3375 on Wednesday as UK inflation data Introduction The latest rally of around 2% from the October low has taken GBP/USD to highs near 1.3375 on Wednesday as UK inflation data gets digested by the market. As a reminder, cable has defended the 1.3194 area September seven times this month .

Our earlier warning that sterling’s bounce looked like a possible bull trap has so far been tested rather than confirmed.

Key Support and Resistance Levels First resistance is at the 100-day simple moving average of 1.3390, then 1.3400 to 1.3406 The primary near-term upside objective is at 1.3470 to 1.3474 (61.8% Fibonacci retracement, it aligns with regards both as the.250 extension and a swing high), with additional resistance proximate to the July/August highs of 1.3558 just above that region* On the flip side, support starts at 1.3365 (upper Bollinger Band), followed by 1.3302 and 1.3264, the October open. You are 1.3194 in critical support and the bulls’ line in the sand is the October low at 1.3135.

Indicators and Pattern After the rebound Daily momentum has turned positive and price is riding up the upper Bollinger Band notably hinting at extensions in near-term. But the 100-day average remains a key hurdle and keeps the wider bias bearish. Investtech sees the pair trapped in a horizontal rectangle between 1.31 and 1.36, so a clear crossing either side should do away with uncertainty for potentially contributing to where price is next headed.

 The speed of earlier losses, when GBP/USD fell to a six-week low on UK borrowing worries, shows how quickly this range can be tested.

Fundamental Drivers Event risk is high. High UK inflation or labour market figures would bolster Bank of England tightening bets, while a downside surprise could re-ignite rate cut expectations. On the dollar side, Federal Reserve pricing remains pivotal, as explained in the Fed hiked but the dollar softened. Resilient UK labour data have supported sterling recently.

Trading Scenarios Bullish scenario: a daily close above 1.3406 would target 1.3470, then 1.3558. Bearish scenario: a drop below 1.3264 would invalidate the breakout and expose 1.3194, while a close beneath that opens 1.3135 and 1.3092. For the wider picture, see GBP/USD’s resilient comeback.

Risk Management and Confirmation Cable’s short term bounce has left Cable stretched already so chasing the move near resistance is a risk. So a pullback toward 1.3302 or 1.3264 that holds should be more supportive of demand, providing bulls with a lower-risk entry (stops beneath 1.3194). A daily close below 1.3264 would strengthen the argument against bears that this is just a view correction in the scope of the larger downtrend. As the pair is inside a large rectangle, patience is probably key: the first break usually fails and a retest of resistance is typically more reliable signal. Accompanying the chart, watch the US dollar index and Federal Reserve commentary since the pound tends to react to dollar moves as much if not more than domestic data.

The bottom line is that sterling tests restores but remains facing a congested band of resistance. Do not take a position until you see a close above 1.3406 or below 1.3264. The Bank of England and Federal Reserve are both data dependent, so expect fireworks out of each major release from here on out in the week ahead. Shorter term traders are advised to play small and respect stop changes at all costs.

Gold managed to bounce off its lows after initially extending its decline for the 4th day, though there wasn't too much enthusiasm from the bulls to push the metal decisively higher, when this report was written just after the US cash market open. Once again, price held above key support in the $4070ish to $4110ish area, which has held on several occasions in recent weeks.

The USD/CHF technical outlook shifted when a U.S. CPI print sparked an outside weekly reversal from yearly highs, pulling the pair back roughly 2%. Michael Boutros, StoneX Media Senior Market Analyst, walks through the weekly, daily, and four-hour USD/CHF charts and the pivot zone now defining the trade.

British Pound: Overbought rally still has upside scope against US Dollar – UOB

GBP/USD Price Forecast: Testing resistance at 1.3400 as bullish pressure grows

Antje Praefcke at Commerzbank highlights that political and rating risks in France, plus cautious European Central Bank (ECB) expectations, weigh on the Euro (EUR) but are largely priced in. Markets now see an ECB hike in December and more tightening next year, which may be revised lower. She anticipates relatively stable EUR/USD into next week, with downside risk if French protests escalate and curfews prove ineffective.

France and ECB shape Euro outlook"The situation in France is an underlying factor weighing on the euro. More protests are expected this weekend. Moody’s could also be the last rating agency to downgrade France on Friday. And the ECB is unlikely to deliver a hawkish surprise next week. The market is no longer pricing in a rate hike for October, but is pricing in one for December and slightly more than one additional hike by the middle of next year. Here, too, the market may have to adjust its expectations should the ECB sound cautious regarding the future interest rate path, which would put the euro under downward pressure."

"In general, however, I think a great deal of negative news is already priced into the euro, particularly with regard to France; at the same time, the euro zone purchasing managers’ indices are likely to remain stable on Friday, so based on the current news landscape, I expect little new downward pressure on the euro. On the other hand, of course, a resolution to France’s debt problem or a credible budget proposal is unlikely, so there is also no reason to bet heavily on a recovery of the euro."

"At least for the coming days leading up to the central bank meetings in the middle of next week, I expect relatively stable EUR/USD rates, as there are no compelling reasons to favor one currency over the other. After all, everyone has their own cross to bear. Nevertheless, I see a slightly higher risk that the euro could see a short dip again if protests in France escalate, especially if the curfews imposed fail to have the desired effect."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Pound Sterling Price News and Forecast: Pound vs Dollar – Who wins amid the energy shock?

USD/ZAR Forecast: UBS Backs Rand Recovery Ahead of Budget UBS analysts expect the South African Rand to strengthen against the US Dollar as reforms support growth, with Wednesday's budget a test of fiscal progress. The South African Rand slipped on Wednesday morning, with the Dollar to Rand exchange rate near 16.43, around 0.2% higher on the day, ahead of the government's medium-term budget statement.

UBS nevertheless retains its forecast for USD/ZAR to reach 16.00 by March 2027, with domestic improvements expected to help the Rand recover as pressure from US interest rates and energy prices eases.

Its nearer-term projection remains 16.20 for December 2026, with 16.00 also forecast for the June and September 2027 quarter-ends.

These forecasts are unchanged.

Finance Minister Enoch Godongwana is scheduled to present the Medium-Term Budget Policy Statement at 13:00 BST on Wednesday, giving investors a fresh assessment of spending, revenue and borrowing plans.

Bond investors already recognise some fiscal progress UBS strategists Pietro Santin and Tilmann Kolb identify improvements in South Africa's public finances:

"Rising primary surpluses, better revenue collection, and the reduction in risks around contingent liabilities are key areas where improvements have been made."

A primary surplus means revenue exceeds spending before interest payments, leaving more scope to meet debt-servicing costs without additional borrowing.

They add: "After weighing on public finances over the last few years, the profitability of some key state-owned enterprises in the country has also started to improve."

UBS says the statement "could be a positive catalyst for the rand should the government demonstrate further progress on fiscal consolidation and the stabilization of the country's debt trajectory."

The bank adds: "In addition, investors will be watching closely for any measures aimed at strengthening the fiscal framework, including the potential introduction of a formal fiscal anchor."

Such an anchor would set a firmer constraint on future fiscal policy, helping investors judge whether debt control can survive competing spending demands.

There is already optimism to protect: UBS says South Africa's credit spreads, the extra yield on its foreign-currency debt relative to benchmark bonds, are close to their tightest levels in a decade.

Our reading is that a reassuring statement would validate part of that improvement, while fresh spending commitments without credible funding could challenge it.

Growth and export earnings underpin the Rand forecast UBS forecasts South African growth of 1.3% in 2026 and 2.0% in 2027, despite acknowledging that expensive fuel and tighter monetary policy have hurt households.

The bank expects growth to beat the consensus estimates cited in its assessment:

"We see scope for domestic growth to exceed these expectations, provided global growth remains resilient, as the effects of the structural reforms implemented over the last few years should start to show in GDP growth data."

Precious metals offer another source of support through South Africa's export income.

"Finally, elevated precious metal prices, particularly gold, which we expect to rise above USD 5,000/oz next year, continue to support South Africa's external position."

That exposure also leaves the Rand vulnerable when higher US yields support the Dollar and weigh on metal prices, a combination UBS identifies as an obstacle to recovery.

Carry support does not require repeated SARB hikes UBS says "the rand continues to offer a yield advantage over the US dollar (around 2.5% p.a.), and we expect the South African Reserve Bank (SARB) to retain a cautious approach to monetary policy."

This is carry support, not a guaranteed return, since an adverse exchange-rate move can outweigh the income earned.

UBS considers the two South African rate increases priced over six months at the time of its assessment excessive, while expecting the central bank to remain cautious about inflation.

The possibility of Rand gains without further aggressive tightening also featured in the earlier Crédit Agricole outlook, which questioned how much additional policy restraint the economy needed.

US rates remain the counterweight, although UBS believes much of the prospective tightening is anticipated:

"In our view, two additional rate hikes by the Fed over the next six months are likely; however, these are already largely priced into US interest rate markets."

The analysts qualify their confidence: "Overall, these factors should help absorb some of the pressure from tighter US monetary policy, as long as risk sentiment does not weaken materially."

What This Latest Outlook Means for USD/ZAR South Africa's improving public finances, precious-metal exports and yield advantage give UBS reasons to expect Rand strength even while US interest rates remain a headwind. Wednesday's budget now needs to reinforce that domestic support, with bond prices already reflecting considerable confidence in fiscal progress.

Credible measures to contain borrowing and stabilise debt would strengthen the case for UBS's unchanged USD/ZAR forecasts of 16.20 in December and 16.00 by March 2027. A firmer fiscal framework would also help investors judge whether the improvement can withstand future spending pressures.

The recovery remains vulnerable to a more aggressive Fed or weaker global growth, particularly if falling metal prices reduce South Africa's export earnings. A disappointing budget would add a domestic setback to those external risks, making the SA Rand's yield advantage less persuasive to investors.

Silver price today: Silver falls, according to FXStreet data

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