The Pound-Dollar rate could extend gains if UK inflation strengthens BoE hike bets, although softer labour data may limit Sterling’s upside.
Trade in the Pound US Dollar (GBP/USD) exchange rate was highly volatile last week amid dramatic swings in pricing for a Federal Reserve interest rate hike this month.
At the time of writing, GBP/USD was trading at around $1.3226. Almost unchanged from the start of last week’s session.
Latest — Exchange Rates:
Pound to Dollar (GBP/USD): 1.33301 (+0.44%)
Euro to Dollar (EUR/USD): 1.12394 (+0.23%)
Dollar to Yen (USD/JPY): 157.99261 (-0.09%)
DAILY RECAP:
Trade in the US Dollar (USD) proved to be highly volatile last week, striking a new year-to-date high before swiftly collapsing.
USD was initially subdued this week amid a modest improvement in risk appetite and investor caution ahead of the latest US consumer price index.
The US Dollar then stormed higher as the CPI figures outpaced expectations, reporting that inflation accelerated to 3.7% in September.
The figures raised concerns that inflationary pressures were becoming entrenched and saw USD investors rush to reprice Fed rate hike expectations, with the odds of an October hike climbing as high as 50% in the hours following the inflation data.
However, the ‘Greenback’ suffered a swift correction as it was hit by mounting concerns over the sustainability of AI spending, which has underpinned the bulk of US economic growth over the past couple of years.
The USD selloff then gathered pace following comments from Federal Reserve Chair Kevin Warsh, as his reluctance to commit to a specific policy path saw the odds of an October hike plummet back below 15%.
The Pound (GBP) struggled to find a strong directional bias through the first half of last week’s session.
While GBP investors welcomed an upgrade to the International Monetary Fund’s (IMF) latest growth forecast for the UK, Sterling’s upside potential remained limited following comments from Bank of England (BoE) Chief Economist Huw Pill.
Despite being one of the Monetary Policy Committee’s most hawkish members, Pill pushed back against market pricing that the BoE will deliver four hikes within a year.
Sterling then fared much better in the second half of the session as the UK’s latest GDP figures offered a welcome surprise after defying expectations for a contraction of growth in August.
Near-Term GBP/USD Forecast: Rising inflation to Lift Sterling?
Turning to this week, the Pound to US Dollar exchange rate could be pushed higher with the publication of the UK’s own consumer price index.
Consensus estimates predict inflation will have accelerated to 3.4% in September, likely strengthening Sterling sentiment as it reinforces bets the BoE will begin tightening monetary policy next month.
However, potentially tempering the upside in Sterling will be the UK’s latest labour figures, which are forecast to report a rise in unemployment in August.
Meanwhile, US economic data is in short supply this week, but the US Dollar may mount a recovery if fresh geopolitical uncertainty underpins safe-haven demand.
Exchange Rates UK Research
Our currency coverage draws on live market data, official economic releases and published bank research.
The GBP/USD pair holds steady around 1.3330 during the early European trading hours on Monday. Traders continue to assess the US interest rate path after Federal Reserve (Fed) Chair Kevin Warsh’s remarks. All eyes will be on the UK jobs data on Tuesday. On Wednesday, the UK Consumer Price Index (CPI) inflation report will be in the spotlight.
During the 2026 IMF-World Bank annual meetings in Bangkok on Friday, the Fed Chairman said that he does not "prejudge" interest-rate decisions, giving no preview of whether the central bank will hike or hold short-term rates steady at its upcoming October 27-28 meeting.
Fed funds futures are pricing an implied 84% chance that the US central bank stays on hold at its next two-day meeting on October 28, according to the CME FedWatch tool.
UK economic data later this week are likely to help seal the deal on the first rate hike from the Bank of England (BoE) in over three years in November. “We expect a 25-basis-point hike at the central bank’s next meeting in November. We also see another move in February,” said Bloomberg Economics chief UK economist Dan Hanson.
Pound resilience masks growing UK consumer strains and rate repricing risksAnalysts at MUFG note that the Pound “continues to show resilience,” with recent economic data reinforcing expectations of further monetary tightening by the BoE. They point out that the Pound is “roughly unchanged versus the US Dollar since the end of June,” with only the energy-linked CAD and NOK outperforming, alongside the Yen, which has been supported by “yen buying intervention by the MoF, with assistance from the US.” In this context, MUFG argues that “the pound has done well on the back of improving sentiment and evidence of economic resilience.”
That resilience has been underpinned by stronger-than-expected growth figures. MUFG highlights that “the GDP data again was stronger than expected – the m/m gain of just 0.1% was modest but still better than expected, helping the 3mth/3mth rate to 0.7%, 0.2ppt stronger than expected.” They add that the three‑month gain “was helped by services activity,” although the “one-month reading was flat in August and could be a sign of weakening momentum.” Within services, the breakdown “showed consumer-facing weakness,” while a Bloomberg Intelligence survey “indicated vulnerabilities that could see a slowing in the months ahead.”
Those vulnerabilities are already showing up in credit dynamics. MUFG flags that the BoE’s quarterly Credit Conditions Survey “revealed an increase in defaults on credit card debt for the sixth consecutive quarter underlining the increased strains on UK consumers.” Despite this, “these exposures are increasing with consumer credit up GBP 2.5bn in August to a new record high.” MUFG cautions that “if rates remain around these levels, it’s very likely that these figures will deteriorate further in the final quarter of the year.”
As a result, the bank sees a tension between the recent data and the outlook. “So while the backdrop of the economic data has been positive, the outlook does point to increasing risks,” MUFG writes. They note that “the OIS market indicates 100bps of tightening is priced by next September” but reiterate that “we continue to doubt the BoE delivering that, especially following the comments from Chief Economist Huw Pill who stated this week that he is sceptical that the UK will require four 25bp rate hikes.” Even so, MUFG concedes that “it will be difficult for the markets to adjust lower given the global backdrop of higher rates.”
In their view, this leaves the Pound exposed if the global rate environment turns. “In circumstances of a broader move back lower in rates, UK rates could fall more notably,” they argue, warning that “the pound remains vulnerable to signs that recent economic resilience could be undermined by the notable move higher in yields.”
Bailey frustration on inflation keeps GBP supported but cautiousFXS Speechtracker scores this speech at 6.2, slightly below Governor Bailey’s historic 6.4 average, pointing to a marginally softer tone overall. Bailey’s frustration with above-target UK inflation and comments that the economy is “more resilient than we expected, not as strong as we need” lean mildly hawkish, as they keep the door open to maintaining restrictive policy for longer.
However, remarks that it is “too early to form strong views on the strength of 2nd round effects” and that such effects are “subdued” with businesses focused on cost cutting temper the hawkishness. For GBP, the mix suggests limited immediate upside, with support from ongoing inflation concerns but capped by caution over second-round dynamics and external risks such as Middle East-driven moves in UK gilt yields.
Technical Analysis: GBP/USD remains capped under the 100-day SMAIn the daily chart, GBP/USD holds below the 100-day simple moving average (SMA) and thus retaining a capped, mildly bearish near-term bias. Price is hovering just under the upper Bollinger Band, suggesting upside attempts are meeting supply, while the Relative Strength Index (RSI) at 52.4 has turned neutral, hinting that recent recovery momentum is losing traction rather than evolving into a sustained bullish trend.
On the topside, initial resistance level is aligned at the upper boundary of Bollinger Band around 1.3335, with a more meaningful barrier at the 100-day SMA at 1.3390. A daily close above this level could see a rally to the September 9 high of 1.3568.
On the downside, the Bollinger middle band, a 20-day SMA now around 1.3250, offers the first layer of support ahead of the lower band near 1.3165. A breach of the mentioned level could expose the November 20, 2025 low of 1.3038.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Pound Sterling FAQs The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
The Pound-Euro rate could remain supported if UK jobs and inflation data reinforce November BoE hike bets, while firmer Eurozone PMIs may offer the Euro some relief. The Pound to Euro (GBP/EUR) exchange rate accelerated to a fresh 16-month high last week, supported by surprisingly resilient UK economic growth.
At the time of writing, the GBP/EUR exchange rate was trading at around €1.1849. Up roughly 0.3% from the start of last week’s session.
Latest — Exchange Rates:
Pound to Euro (GBP/EUR): 1.186015 (+0.20%)
Pound to Dollar (GBP/USD): 1.33301 (+0.44%)
Euro to Dollar (EUR/USD): 1.12394 (+0.23%)
DAILY RECAP:
The Pound (GBP) was a little erratic in the first half of last week as market participants digested competing economic signals.
Initial tailwinds arrived from the International Monetary Fund (IMF), which upgraded its 2026 growth outlook for the UK economy from 1.0% to 1.3%.
However, that optimism was quickly checked by remarks from Bank of England (BoE) Chief Economist Huw Pill, who dampened currency sentiment by questioning aggressive market bets on four quarter-point interest rate rises over the next twelve months.
Sterling then accelerated in the second half of the week courtesy of a surprise uptick in monthly GDP.
August's unexpected expansion not only reinforced expectations that the Bank of England (BoE) will lift borrowing costs in November, and was also seen as offering more fiscal headroom for Chancellor John Healey in his upcoming Autumn Budget.
The Euro (EUR) opened last week’s session on the defensive, as persistent concerns over France’s mounting debt crisis continued to weigh on EUR sentiment.
The uncertainty surrounding the country’s proposed budget and the approaching 2027 presidential election drove French borrowing costs higher, while the premium investors demanded to hold French government bonds over German Bunds remained elevated.
The Euro then found a much-needed reprieve in the second half of the week, drawing strength from its negative correlation with the US Dollar (USD) as the latter tumbled.
Although fears that France’s fiscal woes could morph into a wider Eurozone debt crisis ultimately capped the Euro’s upside potential.
Near-Term GBP/EUR Forecast: Markets Brace for Deluge of UK Data Turning to this week, movement in the Pound to Euro exchange rate is likely to be dominated by several top-tier UK macroeconomic releases.
Particular highlights are likely to be the UK’s latest labour market report and consumer price index, the final major economic barometers due before the BoE convenes for its November policy gathering.
Any indications of cooling inflation or labour market slack that cast doubt on the case for an imminent rate increase could see Sterling quickly surrender its recent gains.
Meanwhile, in addition to ongoing French debt concerns, the Euro will also be influenced by the Eurozone’s latest PMI figures, with the Euro potentially finding further relief if the bloc’s private sector continued to expand at a healthy pace this month.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
The Dollar Index has fallen below 102 after the absence of a hawkish signal from Kevin Warsh’s speech on Friday and could extend its decline towards 101.25-101.00, while the Euro may rise towards 1.13 before the broader downtrend resumes. USDJPY could consolidate within 157-159, and EURJPY may decline towards 176 while below 178. EURINR remains bearish towards 105, below 107, though a near-term bounce towards 107 or higher is possible in the next couple of sessions. USDCNY has broken below 6.69 and could move towards 6.68. USDINR may trade within 94.75-95.20/30, with a break on either side determining the next move. The Pound looks bullish towards 1.35 while above 1.33, whereas the Aussie needs a decisive break above 0.70 to target 0.72/0.73.
The US Treasury Yields remain lower. There is some more room to dip further from here. Thereafter a fresh rise can happen to keep the broader uptrend intact. The German Yield have inched up. But the upside can be capped. A dip to test its support is likely to be seen first before the broader uptrend resumes. The 10Yr GoI is stuck inside a narrow range now. The bias is positive. Support is there to limit the downside. The yield has potential to rise more from here.
Dow remains capped below 52500, with scope to decline towards 51500. DAX can move towards 26000 while it holds above 25250. Nifty can extend towards 23500 while it holds above 22800. Nikkei remains vulnerable to a pullback towards 64000 or lower while below 65000. Shanghai needs to sustain above 3700 to move towards 3800, else it can fall towards 3600.
Brent and WTI crude prices have surged amid a weaker dollar and escalating Middle East tensions. The near-term outlook remains upward. Gold needs to hold above $4100 to target $4300-$4400, while silver remains vulnerable to a fall towards $52-$50 below $60. Copper could rise towards $6.70-$6.80 if support holds, while natural gas may trade within the $3.00-$3.50 range amid forecasts of mild US autumn temperatures.
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The minor range is $61.74 to $55.56. Its 50% level at $58.65 is the nearest upside target. Trader reaction to this level will set the tone.
A sustained move over $58.65 will indicate the presence of counter-trend buyers. If this creates enough upside momentum, buyers could try to break out over the two main tops at $61.74 and $62.45. Overtaking these tops could drive the market into a short-term retracement zone at $63.81 to $65.75. Inside this zone is the 50-day moving average at $64.41.
A failure to overcome the pivot will signal the presence of sellers. This could lead to a retest of last week’s low at $55.56.
What to Watch There is no fresh news driving the early move. The trade is coming from the yield pullback and the dollar’s retreat from last week’s high. If the 10-year yield continues to work lower and the Dollar Index breaks last week’s low at 101.58, silver buyers have a chance to test $58.43 with momentum behind them. A recovery in either market would put the focus back on $55.40.
For spot silver, with the main trend down on the swing chart and the market below the 50-day moving average, my bias is to the downside. I will be watching the reaction to the pivot at $58.43 to determine if seller rejection of the level leads to another round of selling or if a breakout over the pivot leads to a counter-trend rally, thereby weakening my bearish outlook.
For December Comex silver futures, my bias is to the downside, but this outlook will weaken if counter-trend buyers overcome the pivot at $58.65.
Silver price (XAG/USD) gains ground after posting losses in the previous day, trading around $57.60 per troy ounce during Asian hours on Monday. Silver climbed amid fading expectations for a Federal Reserve (Fed) rate hike in October.
Market sentiment shifted after Fed Chairman Kevin Warsh spoke at an International Monetary Fund event on Friday, stating that he does not prejudge interest-rate decisions and offering no clear indication of whether the central bank will raise or hold short-term rates at its upcoming October 27–28 meeting.
Market expectations for a rate increase have dropped significantly. According to the CME FedWatch Tool, traders are now pricing in nearly an 83.9% probability that the Fed will keep interest rates unchanged later this month, a sharp rise from the 49% chance priced in just a month earlier.
Safe-haven demand further supported precious metals as rising anxieties around AI-related investments sparked a broader stock market selloff and dragged bond yields down. Rabobank observes that recent market turbulence has been particularly acute in the AI complex, noting that “AI-related stocks have had a tough few days.” At the same time, stress has also surfaced in associated credit markets. The bank notes that “CoreWeave’s bonds made headlines for not exactly the best reasons” and adds that, according to the Financial Times, investors are now “dumping data centre bonds” more broadly, underscoring how quickly sentiment has soured across this previously favoured theme.
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.
The AUD/JPY cross attracts some follow-through buyers for the second straight day on Monday, recovering further from an eight-month low, around the 108.65-108.60 region, touched last week. Spot prices climbed back above the 110.00 psychological mark during the Asian session amid a combination of supporting factors.
The Australian Dollar (AUD) gets a minor lift in reaction to Reserve Bank of Australia (RBA) Assistant Governor Chris Kent's hawkish remarks and China's better-than-expected Gross Domestic Product (GDP), showing that the economy expanded by 4.5% YoY in the third quarter. The Japanese Yen (JPY), on the other hand, is undermined by cautious Bank of Japan (BoJ) expectations, acting as a tailwind for the AUD/JPY cross. Traders, however, remain on high alert that Japanese authorities might step in again to prop up the domestic currency. This, in turn, warrants some caution for bullish traders.
From a technical perspective, spot prices retain a bearish near-term bias beneath the 200-period Simple Moving Average (SMA) on the 4-hour chart and a dense Fibonacci retracement band overhead. This, in turn, suggests that rallies could be sold into despite a mildly constructive backdrop from the Relative Strength Index around 52 and a modestly positive Moving Average Convergence Divergence (MACD) reading. The AUD/JPY cross currently trades just under the 38.2% retracement at 110.17, and the next relevant hurdle is pegged near the 50.0% level at 110.63 ahead of the 200-period SMA at 110.93.
Further up, the 61.8% retracement at 111.10 could cap the currency pair ahead of 111.76 and 112.61. On the downside, immediate support is seen at the 23.6% retracement near 109.59, with a break below exposing the recent swing low around 108.66 as the next significant bearish target.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
AUD/JPY 4-hour chart
Economic Indicator
Gross Domestic Product (YoY)
The Gross Domestic Product (GDP), released by the National Bureau of Statistics of China on a monthly basis, is a measure of the total value of all goods and services produced in China during a given period. The GDP is considered as the main measure of China’s economic activity. The YoY reading compares economic activity in the reference quarter compared with the same quarter a year earlier. Generally speaking, a rise in this indicator is bullish for the Renminbi (CNY), while a low reading is seen as bearish.
Gold is struggling to sustain the renewed uptick, remaining below $4,200 in Monday’s Asian trades. The bright metal is torn between dip-buying in the US Dollar (USD) and renewed geopolitical optimism, which has sent Oil prices southward.
Gold lacks bullish conviction?Despite fresh attempts to resume last week’s recovery from weekly troughs of $4,074, Gold seems to lack bullish conviction as the USD draws support from broad weakness in the Euro (EUR) amid civil unrest spreading across the European Union (EU).
On Saturday, France witnessed one of the most violent days of unrest in years, leaving public buildings burned, hundreds of shops destroyed and looted and at least 2,400 people arrested in cities across the country, per The Guardian.
The French protests spread to Lisbon, Portugal, and Milan, Italy, as tensions over housing and living costs intensify. Italy’s Prime Minister, Giorgia Meloni, said that while demonstrating was a right, “setting our cities ablaze is not”
However, falling US Treasury bond yields and Oil prices continue to pressure the Greenback, limiting its upside and thereby keeping Gold bulls hopeful.
After US Federal Reserve (Fed) Chairman Kevin Warsh’s silence on the central bank’s interest rate path, an October rate hike is almost priced out, which weighs negatively on the US Treasury bond yields across the curve, supporting the non-yielding bullion.
Warsh delivered a moderately constructive but cautious message, with a 5.6/10 FXS Speechtracker score that is slightly softer relative to the historical average of 6.1/10, underscoring a less forceful tone than usual. The acknowledgment of being “over-scarred” by the Global Financial Crisis highlights a persistent risk-averse bias even as Warsh emphasizes structural growth and an investment surge driven by “good policies,” suggesting no rush to pre-commit ahead of the October and December meetings. Warsh’s focus on AI as a near-term demand catalyst with uncertain employment effects, alongside plans for an AI field hearing and new Fed task forces, points to a central bank that sees technology as both a support for data-dependent policy and a potential source of new tail risks.
The retreat in Oil prices from monthly highs, after US President Donald Trump waived sanctions and tariffs on Russian energy to keep Moscow in Ukraine peace talks, eases inflation fears and Fed tightening expectations.
Trump’s waiver on Russian energy offset an Iranian report that a tanker exploded after hitting a naval mine in the Strait of Hormuz on Sunday.
Meanwhile, Ukrainian President Volodymyr Zelenskyy has become increasingly critical of Trump’s actions as the US has piled pressure on Ukraine to cease striking refineries in Russia and end the war quickly on Putin’s terms.
Gold is also holding ground following a slew of upbeat Chinese economic activity data. China’s Gross Domestic Product (GDP) rose to 4.5% year-over-year (YoY) in the third quarter from 4.3% prior, beating estimates for 4.4% growth.
The country’s annual Retail Sales and Industrial Production climbed 1.1% and 5.5%, respectively, in September, exceeding market expectations. Note that China is the world’s largest Gold consumer.
Against fresh optimism on the geopolitical front and strong Chinese data, Gold traders will likely pay close attention to the civil crisis in Europe and USD price action, as the US economic docket remains data-empty on Monday amid the Fed’s ‘blackout period’ before the October 27-28 monetary policy meeting.
Gold price technical analysis: Daily chart
In the daily chart, XAU/USD trades at $4,176.14, holding beneath a dense band of moving average resistance that keeps the near-term bias tilted lower. Spot is currently capped by the 21-day simple moving average (SMA) at roughly $4,191, with the 100-day SMA higher near $4,239 and the 50-day SMA even further overhead around $4,327, all reinforcing a corrective tone after the recent pullback. The 14-day Relative Strength Index at 46 sits just below the neutral 50 line, hinting at subdued bullish momentum and suggesting that rallies may struggle while price remains under these key averages.
On the downside, the next meaningful technical cushion emerges toward the prior rising trend-line break zone around $4,000, where buyers may attempt to rebuild a floor if selling pressure resumes. On the topside, initial resistance is seen at the 21-day SMA near $4,191, followed by the 100-day SMA at about $4,239; a daily close above these would be needed to ease immediate bearish pressure, while a sustained move through the 50-day SMA at $4,327 would start to undermine the current corrective phase, with the longer-term 200-day SMA higher up at $4,520 acting as a major cap for the broader uptrend.
(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.
Gold and silver find support from falling Treasury yields, but persistent inflation and Fed rate hike risks could limit their recovery.
Gold (XAU) rose towards $4,183 in early Asian trading on Monday as US Treasury yields continue to drop. Concerns about AI funding needs and shipping risk in the Middle East pushed investors towards government bonds.
Oil prices also eased after Trump waived some Russian sanctions, but the policy remains under review. However, Brent oil trades above $108 and leaves the cost of energy elevated. In my view, the drop in Treasury yields could support further gains in both metals. But another surge in oil could revive fears of inflation and weaken the recovery.
The rate hikes by the Fed remain the main threat to the gold and silver outlook. US inflation increased to 3.7% in September from 3.4% in August. Gasoline prices jumped 9.1% during the month. The market expects a pause in October, but expectations for a hike in December still remain at 85%.
Fed Chair Kevin Warsh gave no clear signal about the next move. The high rates could strengthen the US dollar and renew pressure on both metals. Silver (XAG) could face additional pressure if the high cost of borrowing weakens industrial demand. This leaves room for a rebound but a strong recovery needs further relief in yields and the US dollar.
Gold Price Forecast: Recovery Faces Resistance at $4,200–$4,250 The daily chart for spot gold shows that the price is still trading at the support of the triangle pattern that has been forming since May 2025. The price remains below the 50- and 200-day SMAs, and the RSI remains below the midline. This suggests a negative trend and indicates that prices remain under pressure.
The immediate resistance in the gold price remains the $4,200 region. A break above $4,200 will likely push the price towards $4,330. However, the gold price needs to break above the $4,520 area at the 200-day SMA to indicate that the bottom is in and open the way for a strong rally in the gold market.
The weekly chart for spot gold also shows that the price is consolidating below the ascending trend line that stretches from the October 2023 lows. However, the price must break below $3,950 to indicate a strong drop and a deeper correction. However, if the price recovers successfully above the ascending trend line at $4,300, it will likely confirm a positive trend and open the way for further upside towards the $5,000 level.
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The 4-hour chart for spot gold also shows that $4,200 remains the key resistance in the short term. The price must break above the $4,200-$4,250 zone to signal a recovery in the short term. However, a break below the ascending trend line at $4,070 will likely push prices further down towards the $3,900-$4,000 area.
Silver Price Forecast: Break Above $64 Could Open Path to $72 The daily chart for spot silver shows that the price produced a rebound from the $55 support zone. The price must break above the $64 area to open the way for further upside towards the 200-day SMA at $72. A recovery above $72 is required to push prices towards $89.
On the other hand, a break below $55 will open the way for a further drop towards the $45 support area. The RSI also entered oversold territory as the price reached the $55 support. However, a break below $55 will likely push the RSI into oversold territory. If the silver price continues to drop, it will likely mark a long-term bottom at the $45 support zone.
The 4-hour chart for spot silver also shows strong consolidation in prices above the $55 area. The price remains between $55 and $63. A break of either of these levels is required to push prices in the next direction.
A break below $55 may push prices towards the $50 area, as indicated by the lower boundary of the descending wedge pattern. However, a break above $63 is required to push prices up to the $72 region.
What to Watch Next Gold and silver prices could extend their rebound if Treasury yields continue to drop. However, high oil prices and the risk of further rate hikes by the Fed could limit gains by keeping inflation pressures elevated. Gold needs to break above $4,200-$4,250 to strengthen the recovery, while silver needs to clear $63-$64. On the downside, a break below $3,950 in gold or $55 in silver could open the way for deeper losses. Both metals need further relief in yields and the US dollar to build a stronger recovery.
Read more: Falling Yields Fuel Rebound in Gold and Silver Despite Hot PPI
Muhammad Umair is a finance MBA and engineering PhD. As a seasoned financial analyst specializing in currencies and precious metals, he combines his multidisciplinary academic background to deliver a data-driven, contrarian perspective. As founder of Gold Predictors, he leads a team providing advanced market analytics, quantitative research, and refined precious metals trading strategies.
EUR/USD opens lower following widespread civil unrest in France French sovereign spreads widened sharply before stabilising last week Net short positioning approached the extremes reached in July Hot US inflation failed to produce sustained dollar strength Buyers have repeatedly emerged on EUR/USD dips beneath 1.1200 EUR/USD opened lower in Asia on Monday following scenes of widespread civil unrest across France over the weekend, with some of the most violent clashes, looting and vandalism taking place in Paris.
However, it's been the performance of French government debt, rather than political headlines alone, that's had a more powerful influence on the euro recently, as seen in the graphic below tracking the rolling correlation between French OAT-German bunds.
While we won't get a proper assessment of how bond traders are responding to the weekend's developments until European markets open, there's a reasonable question to ask: what exactly have we learned that we didn't already know?
Source: LSEG
France's deteriorating fiscal position, political fragmentation and difficulties pushing through meaningful budget consolidation have been apparent for years, even if they've attracted renewed scrutiny over recent months. French government bond spreads have already widened substantially relative to German Bunds, with political uncertainty hardly a new consideration ahead of next year's presidential election.
While that doesn't mean the situation can't deteriorate further, for the latest unrest to drive a sustained reassessment of the euro, markets arguably need evidence that France's fiscal or political outlook is becoming materially worse than investors had already anticipated.
And when you consider this pair faces political uncertainty not only in Europe but also in the United States ahead of the US midterm elections, it's difficult to see why this weekend's unrest alone would justify another sustained bout of aggressive euro selling.
French spreads show stress, but little fresh deterioration There's no question French debt has been under the pump recently. Over the past 20 sessions, the yield premium to own French bonds over comparable German Bunds has widened by roughly 21, 33 and 25 basis points at the two, 10 and 30-year tenors respectively.
However, that deteriorating trend stalled last week, with the two-year spread narrowing by around five basis points and the 10-year tenor virtually unchanged.
Source: LSEG
One week's price action always needs to be treated with caution, but at face value, it suggests renewed French fiscal concerns and political uncertainty may already be largely baked into the price.
If the weekend's developments fail to spark another meaningful widening in French sovereign spreads, the latest unrest may not lead to an extension of the euro's early weakness in Asia, especially with bearish positioning among leveraged traders already sitting at fairly extreme levels.
Leveraged funds pile into euro shorts
Source: LSEG
According to CFTC data, leveraged funds increased their net short euro exposure by 41,478 contracts over the four weeks to October 13, a shift ranking among the most bearish 5.6% of comparable periods since 2006.
That left net short positioning at 92,833 contracts, almost identical to the levels reached in late July.
Importantly, those figures predate the weekend's unrest, providing a snapshot of positioning as of Tuesday afternoon in New York last week.
But with leveraged funds already heavily positioned short, extending the euro's decline will require existing bears to become even more bearish, or fresh sellers to enter the market. Neither is out of the realms of possibility, clearly, but it does raise the question of how much additional selling pressure the latest developments will generate.
US dollar bulls had their chances It's not just positioning that raises questions about the potential for a resumption of EUR/USD downside, with the US dollar's performance last week revealing in its own right.
US CPI and PPI data for September both came out way hotter than expected, while sharp declines in tech stocks, driven by renewed AI doubts, provided another source of safe-haven demand, which was seen in Treasury markets.
Yet despite those apparent tailwinds, the dollar struggled, particularly towards the back end of the week, ultimately resulting in EUR/USD breaking out of the downtrend running from the early September highs.
If the dollar is unable to rally on obvious fundamental catalysts, perhaps that's the strongest message of all in terms of its near-term directional risk.
EUR/USD technical analysis
Source: TradingView
EUR/USD broke the downtrend running from the early September highs last week, bouncing strongly from just above 1.1100, which coincides with the 50% retracement of the January 2025 to January 2026 bull move.
From there, the price reclaimed 1.1200 before stalling around 1.1270 late last week. The opening four-hourly candle in Asia on Monday saw EUR/USD dip back beneath 1.1200, but as was the case towards the back end of last week, buyers stepped in aggressively, pushing the pair back above that level.
While the momentum indicators are warning bulls against chasing the move higher, they're not providing a definitively bearish signal either. RSI (14) has been setting lower highs and is back around the neutral 50 level, while MACD is converging towards its signal line but remains in positive territory.
Looking at the price action, what's clear is that dips beneath 1.1200 have been well supported recently, with buyers repeatedly stepping in following sharp declines since the beginning of October.
On the downside, 1.1152 is a minor level to watch beneath Monday's earlier low, followed by 1.1113, the swing low set last week.
Overhead, last week's high around 1.1270 is the first level to watch, followed by minor resistance at 1.1285 and 1.1312, before the 38.2% Fibonacci retracement of the January 2025 to January 2026 bull move at 1.1358.
With little on the economic calendar this week, political headlines could play a larger role in driving short-term price action than would ordinarily be the case, at least until Friday's flash PMI releases.
Record short positions in Australian dollar futures have emerged just as AUD/USD tests the neckline of a potential head-and-shoulders top. While weak employment figures have dampened RBA hike expectations and strengthened the bearish case, stretched positioning and tentative bullish divergences suggest bears should remain cautious.
Daily Spot Gold (XAU/USD) Spot Gold fell late in the session on Friday after the buying dried up at $4,199.08 earlier in the session. The main trend is down according to the daily swing chart. A trade through the swing top at $4,217.40 will change the main trend to up. A move through the secondary higher bottom at $4,073.55 will reaffirm the downtrend and likely lead to a test of the main bottom at $4,066.54. Taking out $4,066.54 will signal a resumption of the downtrend.
A 50% support cluster at $4,145.48 to $4,141.97 appears to be the key factor controlling the near-term direction. If it fails, sellers are likely to press the market into the two main bottoms. If buyers can sustain the move over this area, then they could take a shot at $4,217.40 and possibly turn the main trend higher.
I don’t see a quick breakout developing after a change in trend to up because of a resistance cluster at $4,217.40 to $4,233.10. Overtaking this could create some upside volatility with potential targets at a 61.8% level at $4,272.41, an intermediate 50% level at $4,319.60 and the 50-day moving average at $4,331.35.
Although the main trend is down and the market is below the 50-day moving average, the formation of the two bottoms at $4,073.55 and $4,066.54 suggests there may be some passive bidding defending against a washout to the downside. However, until buyers start aggressively taking out offers, the market could continue to build a support base.
Gold Price Forecast
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See all Gold forecastsDaily US Dollar Index (DXY) The Dollar Index fell 0.22% Friday to 101.779 and was headed for its first weekly decline in more than a month. The 10-year Treasury yield finished near 5.08%, while the two-year yield slipped to 4.715%.
Those moves gave gold a better backdrop than it had after the inflation reports earlier in the week. Buyers pushed Spot Gold to $4,199.08 and December futures to $4,220.40. Neither contract could stay there.
That was the Friday trade. The dollar gave up some ground. Yields stopped climbing. Gold bounced, but it did not attract enough new buying to get through the nearby tops.
The split between the two contracts showed the same hesitation. December futures finished higher, while Spot Gold settled slightly lower after the late-session pullback.
What to Watch The December rate decision remains the problem for gold buyers. A pause in October took pressure out of the immediate trade, but the hot inflation reports and December hike odds are keeping the metal from turning a softer dollar into a sustained rally.
Spot Gold has a support cluster at $4,145.48 to $4,141.97 and two main bottoms below it at $4,073.55 and $4,066.54. The main trend remains down, but Friday’s action showed buyers are still defending the lower part of the range. They need to take out $4,217.40 to change the main trend.
December Comex Gold futures held above their $4,175.10 and $4,166.80 pivots into the close. The $4,242.30 swing top is the next chart decision, with $4,095.00 marking the secondary higher bottom under the market.
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Gold remains at risk of staging a deeper correction. Though the dollar has eased back a bit along with yields, both still remain fundamentally supported. The US 10-year yield holds support around 5% and a late surge in oil prices on Friday revives inflation concerns. In fact, both precious metals reversed lower on Friday after initially extending Thursday's broad-based recovery, a sign that the sellers have not gone away. With crude elevated and yields still near recent highs, the risk to the near-term gold forecast is tilted to the downside, although central bank buying could limit the damage.
The US 10-year yield is testing former resistance between 5.00% and 5.05% as support. Crude added around $3 late on Friday as concerns over a potential US attack on Iran resurfaced. Central bank demand, including from the People's Bank of China, could provide a floor under gold. Watch the Full Video
Oil rally revives the risk premium Oil prices surged in the final hours of Friday's session, with crude adding around $3 as concerns over a potential US attack on Iran resurfaced. With no obvious new catalyst in the headlines, the move appears to reflect lingering anxiety over the possibility of US military action, particularly after reports that the Pentagon was preparing for potential ‘mother of all bombs’ strikes on Iran.
Donald Trump did not directly push back against those reports when given the opportunity, although he has previously said the US would not attack Iran before the midterm elections. That leaves markets trying to reconcile two conflicting signals, while the risk premium in crude remains elevated. Iran itself could also seek to escalate tensions, since higher oil prices and the squeeze on global consumers could give Tehran additional leverage, even at considerable cost.
Whatever the explanation, the oil move is increasingly spilling into other markets. Higher crude prices reinforce inflation concerns and complicate the outlook for interest rates. The Nasdaq suffered one of its worst sessions of the year, falling around 2.2%. Any further gains for oil could be particularly problematic for equities, and it could also limit the downside in bond yields, creating a more favourable backdrop for the dollar and a difficult one for gold.
Bond yields find a floor around 5% The US 10-year yield is meanwhile holding its own above a major area of support between 5.00% and 5.05%, which acted as resistance until the big breakout on 23 September. The pullback in yields earlier in the week, despite hotter-than-expected CPI and PPI readings, raised questions over whether yields had topped out. I don't think they have. With no change in the underlying macro backdrop, the path of least resistance for yields remains higher, and a renewed climb from this former resistance area could allow the dollar to make a comeback at gold's expense.
With a light US calendar next week, oil and Treasury yields are likely to dominate the outlook for the dollar and gold.
Central bank buying could put a floor under gold That said, the fundamental backdrop is more complicated than the short-term price action suggests. China provides the main macro event on Monday. The world's second-largest economy grew 4.3% year on year in the second quarter, slightly below expectations, while third-quarter growth is forecast to edge up to 4.4%. Industrial production, retail sales and employment data are also due. A weak set of numbers would probably weigh on metals, particularly industrial metals such as copper and silver, and gold could also come under pressure if concerns over Chinese demand intensify.
For gold, however, Chinese demand is only part of the story. Continued buying by the People's Bank of China and other central banks remains an important structural support, and there is little evidence so far that official-sector demand is about to disappear in the final months of the year. If purchases remain strong, investors and speculators could attempt to front-run that demand through ETFs, spot and futures markets. In other words, while the near-term technical picture has deteriorated, central bank buying could provide an important floor under gold.
Technical gold outlook and key levels to watch From a technical analysis point of view, gold staged a decent recovery from key support around $4,075 to $4,100, the base of the rally that began in early August, before reversing lower on Friday. Friday's bearish close suggests the sellers are still active, and silver's collapse through key support at $59 earlier in the week is a warning that gold could follow.
Source: TradingView.com For gold, a move above the trend line would be a constructive signal, but the area of resistance above it near $4,223-$4,282 also needs to be taken out before a bottom can be confirmed. Until then, XAUUSD could face another bout of selling early next week, especailly if oil remains elevated and Treasury yields recover.
Consolidation remains the name of the game until gold clears resistance or loses its August base.
Frequently Asked Questions Why could higher oil prices weigh on gold? Higher crude prices reinforce inflation concerns and could limit the downside in bond yields, which in turn could help the dollar recover at gold's expense.
How could China's GDP data affect gold? Weak Chinese data would probably weigh on metals, particularly copper and silver, and gold could also suffer if concerns over Chinese demand intensify.
Could central bank buying support gold prices? Continued purchases by the People's Bank of China and other central banks remain an important structural support. If that demand holds up, it could cushion gold even if the dollar strengthens or yields rise.
-- Written by Fawad Razaqzada, Market Analyst | Follow Fawad on Twitter @Trader_F_R
Euro Technical Forecast: EUR/USD Weekly Trade Levels EUR/USD has fallen more than 5% from the August high, with the latest rebound snapping a five-week losing streak. The decline has reached a major technical support confluence, raising the prospect of a larger price inflection. Weekly momentum has deteriorated and although the broader bearish outlook remains intact, the bears may be vulnerable above critical support. Bulls face significant overhead resistance, with a stronger recovery needed to suggest a more meaningful low is in place. Eurozone and U.S. PMI data headline next week's event risk ahead of the Fed and ECB rate decisions later this month. Resistance 1.1276, 1.1355/65 (key), 1.1483- Support 1.1110/63 (key), ~1.1030s, 1.0905 EUR/USD enters the second half of October at a critical technical juncture after sustained selling pressure drove the pair to its lowest levels in 17 months. The latest recovery offers an initial sign of stabilization, but the broader downtrend remains firmly intact as buyers confront significant resistance overhead. With weekly momentum deeply stretched, the immediate focus is on whether Euro can build on this initial rebound or whether renewed selling pressure triggers another leg lower. Battle lines drawn on the EUR/USD weekly technical chart.
Review my latest Weekly Strategy Webinar for an in-depth breakdown of this EUR/USD setup and more. Join live on Monday’s at 8:30am EST.
Euro Price Chart – EUR/USD Weekly
Chart Prepared by Michael Boutros, Sr. Technical Strategist; EUR/USD on TradingView
Technical Outlook: In last month’s Euro Q4 Outlook we noted that EUR/USD was trading into a pivotal support into the close of Q3 and that, “From a trading standpoint, rallies would need to be limited to 1.1578 IF price is heading for a break lower on this stretch with a close below 1.1355 needed to fuel the next major leg of the decline.” Euro broke below support the following week with price plunging more than 5.1% off the August highs. The decline has already extended into the next major support barrier with EUR/USD snapping a five-week losing streak on Friday.
The support zone in focus is 1.1110/63- a region defined by the 38.2% retracement of the broader 2022 advance, the 2024 high-week close (HWC), and the 2025 May low-week close (LWC). Weekly RSI has now fallen to the lowest levels since January of 2025 and while the momentum profile continues to favor the bears, the downtrend remains vulnerable while above this key threshold.
Initial resistance is eyed at the 2023 swing high at 1.1276 and is backed by bearish invalidation at the 38.2% retracement of the 2025 advance and the April 2025 high week close at 1.1355/65. A breach / weekly close above this key pivot zone is needed to suggest a more significant low is in place and a larger reversal in underway. Subsequent resistance objectives are eyed at the median line of the yearly downtrend (currently near ~1.1430s) and the 61.8% retracement of the August decline at 1.1483.
A break below last week’s low would keep the focus on the lower parallel of the yearly downtrend which converges on the 25% parallel of the broader 2025 uptrend near ~1.1030s. Look for a larger reaction there IF reached with a break / weekly close below likely to trigger another accelerated decline. Subsequent support objectives rest with the 61.8% retracement at 1.0905.
Bottom Line: EUR/USD responded to a major support zone last week and while the broader outlook remains weighted to the downside, the decline may be vulnerable while above this level. From a trading standpoint, rallies would need to be limited to 1.1355/65 IF price is heading lower on this stretch with a close below 1.1110 needed to fuel the next leg of the decline.
EUR/USD event risk is concentrated at the end of next week, with euro-area flash consumer confidence due Thursday and preliminary October PMIs on Friday. The PMI release will be the key test of whether the recent improvement in euro-area activity is holding into the fourth quarter and could directly shape expectations ahead of the ECB’s October 29 meeting. On the U.S. side, September housing data and the October flash PMIs are also due, while Fed officials remain in their blackout period ahead of the October 27–28 decision. The result is a data-heavy Friday where any divergence between European and U.S. activity could produce a sharp move in EUR/USD. Stay nimble into the releases watch the weekly close for directional guide. I’ll publish an updated Euro Short-term Outlook once we get further clarity on the near-term EUR/USD technical trade levels.
Key EUR/USD Economic Data Releases
Economic Calendar - latest economic developments and upcoming event risk.
Active Weekly Technical Charts Swiss Franc (USD/CHF) Gold (XAU/USD) US Dollar Index (DXY) Canadian Dollar (USD/CAD) Australian Dollar (AUD/USD) S&P 500, Nasdaq, Dow Japanese Yen (USD/JPY) Bitcoin (BTC/USD) British Pound (GBP/USD) --- Written by Michael Boutros, Senior Technical Strategist
Australian Dollar Recovers Above $0.69 vs US Dollar After Jobs Shock Cuts RBA Hike Bets Crédit Agricole retains its Australian Dollar recovery forecast, arguing that weaker jobs have yet to remove the RBA's case for tackling inflation. The Australian Dollar-to-US Dollar exchange rate recovered to US$0.6942 on Friday evening, up 0.35% from Thursday's close, after September's employment slump weakened expectations for further Australian rate increases.
Latest-Exchange Rates:
Pound to Australian Dollar (GBP/AUD): 1.919204 (+0.04%)
Euro to Australian Dollar (EUR/AUD): 1.618195 (-0.16%)
Crédit Agricole has kept its end-2026 AUD/USD forecast at 0.69, close to Friday's rate, but still expects the currency to reach 0.73 by December 2027.
Its recovery case depends in part on inflation remaining persistent enough to preserve Australia's interest-rate advantage, even as the labour market weakens.
Westpac economist Luka Belobrajdic writes: "Australian government bond yields fell following weaker labour market data, with both the 3-year and 10-year yields declining 10bps."
His early-Friday report adds: "The probability of a November hike fell to just above 12%, taking the implied year-end cash rate to 4.73%."
The current cash rate is 4.60%, following September's quarter-point increase.
Reduced expectations for further rises weaken the appeal of Australian assets to investors seeking interest income.
Part-time losses account for September's jobs decline The ABS reported a 39,300 fall in employment in September.
Part-time employment fell by 73,700 while full-time employment rose by 34,400, and total hours worked increased slightly.
A drop in participation also limited the increase in unemployment, which reached 4.7%.
The release has strengthened the argument for an RBA pause, although Crédit Agricole's senior FX strategist David Forrester cautions against assuming the central bank will treat it as decisive:
"It is worth noting that the RBA has raised doubts about the labour market data, which has become even more volatile than usual due to the ABS introducing a new survey method. So, the labour market data will carry less weight than usual with the RBA leaving another rate hike on the table."
The ABS says residual effects from changes in supplementary-survey collection may still be influencing September's figures, but its quality checks found the statistics fit for use.
It recommends the trend estimates for judging underlying conditions.
Those showed employment rising by 15,700 and unemployment holding at 4.6% in September, contrasting with the seasonally adjusted jobs decline.
Over the year, however, trend unemployment was up 0.3 percentage points, while the proportion of workers wanting more hours had also increased.
Forrester writes: "The trend labour market data points to a grind higher in the unemployment rate as well as broader measures of labour market slack including the underemployment and underutilisation rates."
The RBA has already accepted a cost to employment The policy question is how much cooling the RBA considers necessary to bring inflation back under control.
Its September meeting minutes show officials willing to accept slower growth in demand and employment in response to more persistent cost pressures.
The minutes predate the latest jobs figures.
Policymakers were concerned that underlying inflation reflected greater domestic capacity constraints, with weak productivity keeping labour costs elevated even without particularly strong wage growth.
Crédit Agricole describes the resulting support for the currency:
"The AUD is clinging to its rate advantage as sticky inflation forces the RBA to continue raising rates even while other central banks join the tightening cycle, making the currency a favoured carry trade."
Forrester records the repricing after the jobs release:
"Weak labour market data has seen the Australian rates market reduce pricing for further rate hikes from another hike as a certainty with some chance of two more 25bp rate hikes by mid-2027 to pricing in only a strong chance of another 25bp rate hike by mid-2027."
UBS also projects AUD/USD at 0.73, although it reaches that level by September 2027, three months earlier than Crédit Agricole.
The next Australian inflation release on 28 October will include the September-quarter figures.
It follows August's annual headline inflation of 4.0% and trimmed-mean inflation of 3.6%, a measure that reduces the influence of unusually large price changes.
Forrester expects the RBA to resist those softer rate expectations:
"The views of RBA Deputy Governor Andrew Hauser and Assistant Governor Chris Kent on the recent labour market data will be key drivers of the AUD in the coming week. We think that both will remain hawkish pointing to inflation being the ultimate determinant of the next move in rates."
AUD/USD Exchange Rate FAQ What does Crédit Agricole forecast for AUD/USD?
It forecasts 0.69 at end-2026 and 0.73 by December 2027. UBS projects 0.73 by September 2027.
Has September's jobs report ruled out another RBA hike?
No. It weakened market expectations for further increases, but Crédit Agricole argues that inflation could still require another move.
When is Australia's next inflation release?
The ABS schedules the September release for 28 October, including September-quarter figures.
Dollar-Rupee Rebounds Towards 95 as Rupee Recovery Divides Banks
UBS expects the Indian Rupee to weaken against the US Dollar in 2027, while Crédit Agricole sees recovery if overseas rate and oil pressures ease.
The US Dollar recovered towards 95 Indian Rupees on Friday.
USD/INR stood at 94.9614 at 20:43 BST, up 0.46% on the day but still 1.59% lower over five days.
Image: USD to INR exchange rate 1-month chart 16/10/2026
UBS expects the exchange rate to reach 97 by September 2027, reversing that recent improvement in the Rupee.
Crédit Agricole projects 92 for the same month, leaving a five-Rupee gap between the banks' expectations of what one US Dollar will buy.
Both foresee some renewed Rupee weakness before the end of 2026, but their paths then diverge as Crédit Agricole anticipates a recovery and UBS projects gradual depreciation through next year.
A sustained Rupee recovery would require external pressures to ease beyond the immediate support provided by the Reserve Bank of India.
Crédit Agricole's own assessment is cautious about relying on intervention, despite its more optimistic currency forecast.
David Forrester, the bank's senior FX strategist, wrote earlier this week: "The INR's problems are primarily structural rather than speculative and include rising oil prices, Fed rate hikes and the sharp sell-off in USTs eroding Indian government bonds' rate advantage and investor portfolio outflows as foreign investors remain bearish on Indian equity markets, despite 7-8% real GDP growth."
India's trade figures offer some relief
The latest official September trade figures, released after that assessment, give a more mixed picture than an uninterrupted deterioration in India's external position.
Goods imports exceeded exports by $30.21bn, although that was narrower than the $33bn deficit a year earlier.
An estimated services surplus reduced the combined goods-and-services deficit to $13.30bn, also slightly smaller than a year before.
These are trade figures, rather than a complete measure of the current account, and September's services numbers remain estimates.
Export earnings provide a counterweight to import-related Dollar demand, although purchases abroad still exceeded goods-and-services receipts in September.
The RBI's special Dollar window for state-owned oil companies moves some of their purchases away from ordinary market trading, while tighter derivatives rules target speculative activity.
Forrester cautions: "Importantly, earlier clamp-downs on speculative activity have already reduced this activity and so RBI is addressing an increasingly smaller part of the INR's problems."
That limitation also ran through Exchange Rates UK's earlier examination of the oil-company facility, which distinguished calmer trading from a lasting reduction in pressure on the Rupee.
Why Crédit Agricole still expects a stronger Indian Rupee
The bank's recovery case relies on a less demanding overseas backdrop, including a smaller rise in US interest rates than markets had anticipated.
That assessment preceded the US inflation release and subsequent swings in Treasury yields.
Forrester wrote: "The larger potential surprise is on the US side, where our US economist expects the Fed to skip hiking at its October meeting and anticipates only two more 25bp rate hikes, to take the Fed Funds rate to a peak of 4.50%."
Friday's broader Crédit Agricole analysis continued to describe expected Fed tightening as excessive, even after the inflation figures.
For the Indian Rupee, lower-than-expected US yields would help preserve the relative income available from Indian bonds, reducing one reason for investors to favour Dollar assets.
Another Indian rate rise would offer less of a surprise under Crédit Agricole's assumptions.
Forrester says: "We expect another two 25bp rate hikes by RBI, taking the Repurchase rate to 6.00% and modestly into restrictive territory. This outlook is about in line with the market pricing following the RBI meeting outcome and so would not move the INR much if realised."
The RBI's October policy decision raised its repo rate to 5.50% and left subsequent action dependent on growth and inflation, rather than promising an uninterrupted series of increases.
Oil supplies a second condition for recovery, with Crédit Agricole expecting some relief for India's import bill.
Forrester wrote earlier this week: "Our oil analyst forecasts Brent to average USD95/bl in the coming six months as the US and Iran continue their "cold war" via economic blockades. Such an outcome would be modestly positive for the INR."
Crédit Agricole plans to reassess its longer-term Rupee forecasts after the US midterm elections, when it expects greater clarity on the direction of US policy towards Iran and the implications for oil prices.
Capital flows present a harder question for the bullish Rupee case.
Forrester wrote: "Despite 7-8% real GDP growth, investors remain bearish Indian equity markets. Portfolio managers continue to see India as behind the curve on AI and even subject to downside risks to growth as the technology reduces the demand for the country's IT and business consultancy exports."
He also identified a potential offset: "The only positives on this front are that India's IT and business consultancy exports remain strong and that some investment managers are looking at Indian equities as a hedge against the bursting of the AI bubble."
USD/INR Exchange Rate FAQ
What is UBS's Indian Rupee forecast?
UBS projects USD/INR at 97 by September 2027, implying a weaker Rupee than Friday's rate near 94.96.
Why does Crédit Agricole expect a different outcome?
Its forecast of 92 for the same month relies on less US rate tightening than previously priced and some relief from oil costs, alongside India's policy support.
The Euro-Dollar Edges Higher Near $1.124 as Nordea Cuts Its Recovery Outlook
Nordea analysts forecast the Euro to weaken against the US Dollar as French fiscal risks and US investment flows outweigh the currency's latest recovery.
The Euro-to-Dollar exchange rate edged higher on Friday, trading at $1.1237 ahead of the weekly close, although EURUSD remained about 2% lower over the past month.
Latest-Exchange Rates:
Euro to Dollar (EUR/USD): 1.12394 (+0.23%)
Pound to Dollar (GBP/USD): 1.33301 (+0.44%)
Dollar to Yen (USD/JPY): 157.99261 (-0.09%)
FX analysts at Nordea expect that recovery to falter, having cut its end-2026 EUR/USD forecast to 1.10 from 1.14 after the exchange rate reached its previous first-half 2027 objective sooner than anticipated.
The bank now sees a test of 1.08 in the first half of next year.
Nordea argues that France's financing difficulties and continued demand for American technology investments leave Europe at a disadvantage even after the Euro's recent losses.
That is a more cautious December view than the latest projections from UBS and Crédit Agricole, which put EUR/USD at 1.16 and 1.13 respectively for end-2026.
France's higher yields carry a different message
Higher bond yields can attract currency demand when they reflect stronger growth and better prospective returns.
Nordea sees a less reassuring explanation for the extra yield investors require to hold French government bonds rather than German Bunds.
The bank writes: "The sharp widening in OAT-Bund spreads therefore appears to reflect more than a routine bout of risk aversion around the French budget. Markets are assigning a broader premium to France's fiscal and political outlook, reinforcing downside risks to the euro."
France's challenge is to convince investors that its borrowing needs can be contained while it negotiates a credible 2027 budget ahead of next year's presidential election.
With debt-servicing costs increasing, further monetary tightening could make that task harder even if it helps restrain inflation.
Nordea identifies a problem extending beyond France: "The pressure is greatest in highly indebted economies, where weak growth and limited appetite for reform leave public finances increasingly exposed to higher global yields."
It adds: "Unlike the US, these economies lack the nominal growth needed to offset rising borrowing costs, further constraining fiscal space as interest expenses climb."
Exchange Rates UK's coverage of France's increasingly country-specific borrowing premium also examined why a rise in French yields need not strengthen the Euro.
Money switching into other Euro-denominated assets would have a different currency effect from investors reducing their exposure to the region altogether.
Inflation does not give Europe the same rate advantage
Friday's final Eurostat inflation release confirmed annual price growth of 3.8% in September, with energy making the largest contribution.
That keeps pressure on the European Central Bank, but Nordea expects expensive energy to favour the US relative to Europe through its effect on trade and economic activity.
A larger import bill can squeeze European household and business spending while supporting income in an energy-producing economy.
Nordea's policy assessment is explicit: "Our baseline remains a strong US economy and two further Fed hikes, with risks skewed to the upside. By contrast, the balance of risks around the ECB's hawkish stance has shifted to the downside, keeping the short-end rate differential in the dollar's favor."
The difference in expected short-term rates influences the relative return available on Dollar and Euro assets.
Subsequent US activity figures give that argument some support without settling the policy outlook.
The Federal Reserve's September industrial-production report, released on Friday, showed output rising 0.7% on the month, although a large utilities increase helped drive the headline gain.
Manufacturing rose a more modest 0.3%, so the report offers evidence of continued expansion rather than an equally strong acceleration across industry.
The Dollar call depends on investment holding up
A rate advantage is only part of Nordea's explanation for persistent Dollar demand.
"Inflows into US equities and credit are unlikely to fade simply because interest rates are slightly higher."
"Passive investment reinforces this trend because broad indices remain heavily concentrated in US mega-cap technology stocks. To the extent that these flows remain unhedged, they create sustained demand for dollars."
Overseas investors can protect themselves against exchange-rate movements, reducing the net currency exposure associated with buying American assets.
The possible stabilisation discussed in our earlier coverage of Scotiabank's oversold-Euro assessment concerns a shorter horizon than Nordea's fundamental call.
A rebound need not require an immediate reversal in the investment flows supporting the Dollar.
For now, Nordea finds little evidence that the cycle is turning: "South Korean and Taiwanese exports are improving, as are global PMIs, while earnings have remained solid and repeatedly exceeded analysts' expectations in recent quarters. These indicators do not rule out high valuations, but they provide little evidence that the investment cycle is already turning."
Nordea does expect conditions to become more favourable for the Euro later in 2027 as US inflation eases and Fed tightening ends.
An earlier disruption to technology investment could bring that reassessment forward: "The main risk to our EUR/USD forecast is a sharp reversal in the AI investment cycle. A bursting AI "bubble" would weaken US asset inflows and challenge our dollar-positive view."
Euro to Dollar exchange rate FAQ
What is Nordea's EUR/USD forecast?
Nordea has cut its end-2026 projection to 1.10 and expects a test of 1.08 in the first half of 2027.
Why does Nordea expect further Euro weakness?
It points to US rate support, European fiscal and energy pressures, and continued investment flows into American assets.
What could challenge that forecast?
An abrupt reversal in AI investment could weaken US capital inflows and undermine Nordea's positive Dollar view.
USD/JPY is going nowhere fast, showing little response to renewed volatility in equity markets or a sharp decline in US Treasury yields, leaving the pair range-bound as it has been for weeks. With the Fed in blackout ahead of its October meeting and next week's economic calendar devoid of major risk events, it's hard to see what might break the deadlock.
Spot gold weekly chart shows larger trend structure Weekly Structure Hints at a Trend Reversal The weekly chart provides a perspective that is less apparent on the daily timeframe. This week formed a higher weekly high and higher weekly low, signaling an attempted reversal in the bearish correction. Although the breakout was not confirmed by a daily or weekly close above last week’s high of $4,208, it suggests improving underlying demand and leaves open the possibility of another attempt to break above the two-week consolidation range.
Breakout Triggers Define the Bullish Case A move above the 20-day moving average would provide an initial sign of strength and could attract additional bullish momentum. However, a decisive advance above the recent lower swing high of $4,226 is needed to trigger a bullish reversal signal in the daily trend structure. Another earlier sign of strength would be seen on a rise above this week’s high of $4,217, as a rise above it would signal renewed strength in the weekly advance. A sustained move above the relevant swing high would also reinforce the potential for a new advance from the $4,066 support area, following the initial recovery from the early-August consolidation low.
ABCD Pattern Points Toward $4,821 An upside breakout would open the way toward a measured-move target near $4,821 (D), projected by the rising ABCD pattern on the chart. Price symmetry for the two upswings converges at that level, making it a potential resistance zone. A decisive breakout above this target, however, would signal continued strength and expose the next upside resistance zone. Until gold clears those near-term resistance levels, the ability to hold support above $4,066 remains central to the potential recovery.
If you’d like to know more about how to trade gold and silver, please visit our educational area.
US Dollar Talking Points: It was a big week for US data and, initially, stronger-than-expected inflation led to a sizable ramp in the Greenback. But shortly after that CPI release prices began to pullback and that continued into the weekly close, allowing for the build of a bearish engulfing candlestick on the weekly chart. The 101.80 level continues to loom large in the DXY basket and, as usual, picking spots is important as USD-weakness showed well in GBP/USD while USD strength remains more attractive in USD/JPY and perhaps even USD/CAD. All are setups looked at in the Tuesday webinar and updated below. When the fundamental backdrop diverges from price action, we have a possible turn, and that’s what the past week has been for the US Dollar. While inflation remains high in the US and the Fed is on track to hike rates again by the end of the year, the US Dollar sold off and put in a bearish engulfing candlestick on the weekly chart even despite strong CPI and PPI prints.
To be sure, there’s more to it as the Dollar came into the week overbought and showing signs of exhaustion, fueled by a stringent sell-off in the Euro. But, as we go into the next week the shadow of that bearish engulf remains prominent.
For levels, it’s the 101.80 level that stands out as support as the long-term Fibonacci level had previously held resistance back in June; and for the past two weeks that price has kept bears at bay.
US Dollar Weekly Price Chart Chart prepared by James Stanley; data derived from Tradingview
EUR/USD The big push point for the USD rally of late has been the continued sell-off in the Euro, with EUR/USD going oversold as DXY went overbought. And while the engulfing pattern of the above setup wasn’t quite mirrored in EUR/USD, there was a glimmer of hope that had started to show as the pair put in its first green week since the September open.
EUR/USD Weekly Chart Chart prepared by James Stanley; data derived from Tradingview
EUR/USD Daily The Euro is 57.6% of the DXY basket so there’s probably some intertwined fates between the two markets at this point, and while bulls did pullback in late-week trade which takes some of the shine off of the move, there is a case for capitulation, as looked at in the Tuesday webinar. The extended underside wick from the Wednesday candle led to a rally and fresh short-term higher-high, and this highlights the 1.1200 level as key support into early trade next week. And overhead, it’s the zone from 1.1275-1.1285 that looms large.
EUR/USD Daily Chart Chart prepared by James Stanley; data derived from Tradingview
GBP/USD For USD-weakness, I still prefer GBP/USD and the weekly contrast below illustrates why. While EUR/USD printed an indecisive candle (albeit green) GBP/USD showed greater strength following two prior weeks of indecision.
And the low on Thursday printed at a huge spot – the 38.2% Fibonacci retracement of the 2025 rally, a level that had also caught support back in June.
The 23.6% retracement of that move is the next resistance level up, plotted at 1.3390 and, above that, I’m tracking a swing at 1.3451 and then the 1.3500 psychological level.
GBP/USD Weekly Price Chart Chart prepared by James Stanley; data derived from Tradingview
USD/JPY On the other hand, for USD-strength, I still prefer USD/JPY, which retains bullish structure on the daily chart even despite that bearish engulf in the DXY weekly.
This is a market that’s difficult to chase at fresh highs and we saw another example of bulls pulling back before a breakout as price re-approached the 159.00 level. The pullback, so far, has remained rather moderate as support hits can remain attractive especially given the still-positive carry on the long side of the pair.
For next week, I’m tracking supports at 157.50 and the 156.68-157.22 zone, and if we do see the USD sell-off deepen, the next look is for re-test of the familiar 155.00 zone.
USD/JPY Daily Chart Chart prepared by James Stanley; data derived from Tradingview
--- written by James Stanley, Senior Market Analyst, Global Macro
The trading week is coming to an end, and a sense of neutrality remains evident around gold's short-term price action. Over the last five trading sessions, the metal has posted a move of barely -0.3%, a situation that continues to highlight a growing phase of indecision and reflects a clear lack of direction across the market.
Gold Remains Stuck Near Resistance At $4160 – $4180
Gold 161026 Daily Chart
Gold pulls back as traders focus on the strong rally in the oil markets and react to rising Treasury yields.
Oil prices gained 3.5% as traders focused on rising tensions in the Middle East. From a big picture point of view, oil markets prepare for another round of war between U.S. and Iran. President Trump has recently said that he would not use nuclear against Iran but could use the “Mother of all Bombs”. There are no signs indicating that U.S. – Iran talks have any chance for success in the near term, so traders prepare for escalation. High oil prices boost inflation and may force the Fed to raise rates aggressively.
FedWatch Tool indicates that there is a 17.2% probability that Fed will raise rates at the next meeting in October. However, traders are convinced that the central bank will raise rates in December and January.
Treasury yields have started to rebound after yesterday’s strong pullback. The yield of 2-year Treasuries settled near the 4.75% level, while the yield of 10-year Treasuries climbed above the 5.10% level. Rising Treasury yields served as a negative catalyst for gold markets in today’s trading session.
U.S. dollar moved lower against a broad basket of currencies as pullback continued. Howeve, weaker dollar did not provide sufficient support to gold prices.
Gold continues its attempts to settle above the resistance level at $4160 – $4180. In case gold manages to settle above the $4180 level, it will head towards the next resistance, which is located in the $4300 – $4320 range. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.
Silver Pulls Back As Gold/Silver Ratio Rebounds
Silver 161026 Daily Chart
Silver moved lower as gold/silver ratio climbed towards the 73.00 level. In case gold/silver ratio settles above 73.00, it will head towards the 75.00 level, which will be bearish for silver.
Currently, silver is trying to settle back below the support at $56.00 – $57.00. In case this attempt is successful, silver will move towards the next support level at $51.00 – $52.00.
On the upside, silver needs to stay above the $57.00 level to have a chance to gain upside momentum in the near term. In this case, silver will head towards the resistance level at $61.00 – $62.00.
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Platinum Moves Away From Session Highs
Platinum 161026 Daily Chart
Platinum was mostly flat as traders focused on the situation in the oil markets. Palladium markets were down by -1.7%, which was bearish for platinum.
From the technical point of view, platinum made an attempt to settle above the support level at $1600 – $1620 but lost momentum and pulled back. In case platinum declines below the $1600 level, it will head towards the next support level at $1520 – $1540.
On the upside, a move above the $1650 level will push platinum towards the resistance level at $1700 – $1720.
If you’d like to know more about how to trade gold and silver, please visit our educational area.
Scotiabank analysts highlight that Bank of England Governor Bailey sees little evidence of second-round inflation effects and a more resilient UK economy, with markets still pricing a 25bp hike next month. Technically, GBP/USD has rebounded strongly from mid-week lows, forming a bullish weekly outside range and opening scope to retest the 1.3650–1.3675 area, with key resistance at 1.3435.
Pound recovery points to range highs"BoE Governor Bailey remarked that there was little evidence yet of second-round inflation effects in the UK while noting that the UK economy was more resilient than expected. The comments had no impact on OIS, with swaps still all but fully committed to a 25bps rate hike early next month."
"Elsewhere, Chancellor Healey will reportedly increase the corporation tax bank surcharge from 3% to 8% as part of next week’s budget in a bid to shore up UK public finances."
"Bullish – Solid GBP gains from Wednesday’s post-US CPI low have driven Cable back to the mid-1.33 area. A clear, bullish reversal is forming on the weekly chart as a result (a major outside range week)."
"With recent price action basing around the low point of the sideways range in place since April, the pound’s rebound suggests gains may extend to retest the upper end of the range (1.3650/75) in the coming weeks. Initial, key resistance sits at 1.3435 (200-day MA)."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
The Pound Sterling (GBP) advances against the US Dollar (USD) on Friday after Federal Reserve (Fed) Chair Kevin Warsh didn’t provide forward guidance on interest rates, while expectations that the Bank of England (BoE) would hike rates in November supported GBP/USD, pushing it above 1.3350 and registering gains of over 0.61%. Read More...
British Pound hits three-week highs near 1.3350 as the US Dollar tumblesThe British Pound (GBP) appreciates against a weak US Dollar (USD) on Friday as risk appetite improves, with global yields pulling back from highs, and investors reprice Federal Reserve’s (Fed) monetary tightening bets. The GBP/USD has rallied more than 1% over the last two days, breaching the top of the last three weeks' range and hitting session highs at 1.3349 so far. Read More...
GBP/USD Price Forecast: Fits fresh monthly high as bulls retain control above 1.3265The GBP/USD pair attracts some follow-through buyers for the second straight day on Friday, recovering further from the year-to-date low, around the 1.3135 region, touched earlier this week. The momentum lifts spot prices to the 1.3325 area, or a fresh monthly peak during the early European session, and is supported by a combination of factors. Read More...
Swiss Franc Technical Forecast: USD/CHF Weekly Trade Levels USD/CHF is poised to snap a seven-week winning streak after three unsuccessful attempts to secure a weekly close above major resistance. A developing outside-week reversal and deteriorating daily momentum suggest that sellers may be gaining control. The immediate focus is on a break of key support to confirm a deeper correction within the broader yearly advance. Bulls would need to reclaim overhead resistance to ease downside pressure, with a larger technical barrier still standing in the way of broader trend resumption. Resistance 8300, 8333, 8407/17 (key)– Support 8200/09 (key), 8093, 8009 USD/CHF is poised to snap a seven-week winning streak after a sharp reversal from fresh yearly highs, marking a potentially significant shift in the near-term technical outlook. The failure to sustain gains through major resistance has left the pair vulnerable, with a developing outside-week reversal and weakening momentum raising the prospect of a deeper correction. While the yearly uptrend remains intact for now, the coming weekly close could prove critical in determining whether the recent pullback develops into a more meaningful correction. With the Fed entering its pre-meeting blackout period and the U.S. economic calendar relatively light, Treasury yields and shifting risk sentiment may provide the next catalyst for the dollar-franc exchange rate. Battle lines drawn on the USD/CHF weekly technical chart.
Review my latest Weekly Strategy Webinar for an in-depth breakdown of this USD/CHF setup and more. Join live on Monday’s at 8:30am EST.
Swiss Franc Price Chart – USD/CHF Weekly
Chart Prepared by Michael Boutros, Sr. Technical Strategist; USD/CHF on TradingView
Technical Outlook: In last month’s Swiss Franc Technical Forecast we noted that USD/CHF was approaching major lateral resistance and that, “From a trading standpoint, losses should be limited to the monthly open at 8083 with a breach / close above 8215 needed to mark uptrend resumption and fuel the next leg higher.” USD/CHF broke through resistance the following week with the advance extending more than 4.2% off the September lows before exhausting.
Despite three weekly attempts, the bulls have been unable to mark a weekly close above the 2023 low at 8333. USD/CHF is now poised to mark an outside weekly reversal with price attempting to break below the 75% parallel of the yearly pitchfork today- watch today’s close. Note that daily RSI dipped 50 today for the first time since August and further highlights the threat for a larger pullback here.
Weekly support now rests at 8200/09 – a region defined by the 100% extension of the January advance, the July swing high, and the 23.6% retracement of the yearly range. A break / weekly close below this threshold would be needed to suggest a more significant high is in place and that a larger correction is underway within the yearly uptrend. Subsequent support objectives rest with the 38.2% retracement at 8093 with broader bullish invalidation now raised to the March high week close (HWC) and the August low week close (LWC) at 8009/12.
Initial resistance is eyed with the high-close for the year near 8301 and is backed closely by 8333. Critical resistance remains unchanged at 8407/16 – a region defined by the 2024 low close, the 2023 low-week close, and the 2024 yearly open. Note that numerous slopes converge on this zone next month and a breach / weekly close above would be needed to invalidate the broader 2022 downtrend. Look for a larger reaction there IF reached. Subsequent resistance objectives are eyed at the May 2025 high and the 1.618% extension of the January advance at 8471/76.
Bottom line: USD/CHF is about to post an outside weekly reversal off fresh yearly highs with daily bearish momentum starting to gather pace. The risk remains for a deeper pullback with support now within striking distance. From a trading standpoint, rallies would need to be limited to 8333 IF USD/CHF is heading lower on this stretch with a break below 8200 needed to fuel the next major leg lower in price.
USD/CHF event risk is relatively light on the Swiss side next week, with the SNB scheduled to publish monetary-policy data on Monday. Attention will therefore remain centered on the U.S. calendar, particularly September housing data on Tuesday and the preliminary October S&P Global PMIs on Friday, as markets assess the outlook ahead of the Fed’s October 27–28 decision. With the central bank also entering its blackout period, the absence of Fed commentary will leave incoming data and shifts in Treasury yields to drive expectations. Strong U.S. data and firmer yields would favor USD/CHF, while signs of economic weakness—or a broader deterioration in risk sentiment that boosts demand for the franc—could reinforce downside pressure on the pair. Stay nimble into the release and watch the weekly close for directional guide. Review my latest Swiss Franc Short-term Outlook for a closer look at the near-term USD/CHF technical trade levels.
Key USD/CHF Economic Data Releases
Economic Calendar - latest economic developments and upcoming event risk.
Active Weekly Technical Charts Gold (XAU/USD) US Dollar Index (DXY) Canadian Dollar (USD/CAD) Australian Dollar (AUD/USD) S&P 500, Nasdaq, Dow Euro (EUR/USD) Japanese Yen (USD/JPY) Bitcoin (BTC/USD) British Pound (GBP/USD) --- Written by Michael Boutros, Senior Technical Strategist
Gold (XAU/USD) started the week under bearish pressure but reversed its direction in the second half as United States (US) Treasury bond yields declined sharply. The economic calendar will not feature high-impact data releases next week and the Federal Reserve (Fed) will be in the blackout period, possibly limiting the precious metal’s volatility in the near term.
Gold finds support as US bond yields declineGold edged lower on Monday as geopolitical tensions in the Middle East escalated further following news of an unidentified projectile hitting a passenger terminal at King Khalid International Airport in Riyadh. The Houthis swiftly claimed the attacks, saying they were a response to “Saudi aggression.” Nonetheless, with US bond markets remaining closed in observance of the Columbus Day holiday, XAU/USD’s volatility remained limited.
Ahead of Wednesday’s critical September inflation data from the US, the market action turned subdued and Gold closed marginally lower.
The US Bureau of Labor Statistics reported that annual inflation, as measured by the change in the Consumer Price Index (CPI), climbed to 3.7% in September from 3.4% in August. This print came in above the market expectation of 3.6%. On a monthly basis, the CPI and the core CPI, which excludes volatile food and energy prices, increased by 0.6% and 0.3%, respectively.
With the immediate reaction to hot inflation prints, the probability of a Federal Reserve (Fed) rate hike climbed to about 40%, according to the CME FedWatch Tool. As a result, the USD gathered strength and XAU/USD came under bearish pressure, losing more than 1% on Wednesday to close near $4,100.
However, Gold gathered recovery momentum on Thursday and gained 1.6% to erase a large portion of its weekly losses as US T-bond yields declined sharply. Bloomberg reported that China seems to be moving US securities to non-US custodian banks in other countries, masking its role in financing US deficits. The report further added that Canada’s holdings of US debt securities have grown to nearly $600 billion of Treasuries and bonds despite a tariff war, indicating that China has shifted its holdings to Canada.
While speaking at an International Monetary Fund (IMF) event during the early trading hours of the Asian session on Friday, Fed Chair Kevin Warsh refrained from hinting at the possibility of a rate hike in October. In turn, US T-bond yields stretched lower with the CME FedWatch Tool’s probability of a rate hike in October falling to about 10% and allowed Gold to extend its recovery toward $4,200.
Fed Chair Warsh’s speech scored 5.6/10 on the FXS Speechtracker, below the historical average of 6.1/10. His admission of being “over-scarred from the global financial crisis” underscored a persistent risk-aware bias even as Warsh highlighted structural growth and an investment surge driven by “good policies,” and stressed that upcoming Federal Open Market Committee (FOMC) meetings will be the “crystalizing moment” for decisions on output, employment and inflation.
Warsh’s focus on AI as a near-term demand catalyst and a tool to strengthen data confidence, alongside attention to negative tailside risks, pointed to a cautious optimism that keeps the Fed open to tightening while avoiding pre-commitment on the policy path.
Gold investors will stay focused on bond marketsThe Fed will be in its blackout period ahead of the October 27-28 policy meeting, and officials won’t be commenting on monetary policy. The only noteworthy data in the US economic calendar will be the preliminary S&P Global Manufacturing and Services Purchasing Managers Index (PMI) figures for October, scheduled to be released on Friday. Unless either of the headline PMIs unexpectedly drop into contraction territory below 50, the market reaction is likely to be muted.
Hence, investors will continue to pay close attention to Treasury bond yields and headlines coming out of the Middle East. In case US yields decline further, Gold could attract buyers and extend its recovery. On the other hand, the precious metal could have a hard time gathering bullish momentum in case bond yields rebound or stabilize.
In the meantime, a leg higher in crude Oil prices could feed into inflation concerns and cap Gold’s upside, even if bond yields continue to edge lower.
Commenting on Gold's near-term outlook, FX strategists at OCBC say they “remain cautiously constructive, particularly if the pullback in long-end yields and the USD extends,” but stress that the latest upswing in the metal is “another reminder that Gold is trading the bond market’s reaction to US data rather than the data itself.” They also caution that “underlying inflation pressures remain elevated, and the recent decline in yields has been partly driven by risk aversion rather than improving inflation fundamentals,” suggesting the current support for Gold may prove fragile if bond market dynamics reverse.
Meanwhile, TD Securities analysts note that the precious metals complex has received "much-needed support" as interest rates and US Dollar strength have moderated following the initial surge after the CPI release.
They explain that alongside this shift in macro conditions, "macro discretionary positions remain elevated, while ETF inflows and central bank demand also remain strong." Analysts further argue that these combined flows "have ultimately offered strong support for [G]old," and add that they expect them to "remain robust, especially in the $4,000-4,100/oz region."
Gold technical analysis: A bullish reversal is yet to be confirmedThe Relative Strength Index (RSI) indicator on the daily chart stays below 50 despite the bullish action seen in the second half of the week, and Gold continues to trade below the 20-day, 50-day, 100-day and 200-day Simple Moving Averages (SMA), reflecting buyers’ hesitancy.
The immediate resistance is located in the $4,190-$4,240 region, where the static level meets the 20-day and the 100-day SMAs. Once Gold clears this hurdle, the Fibonacci 23.6% retracement of the March-August downtrend and the 50-day SMA could form the next resistance area at $4,300-$4,330 ahead of $4,510-$4,520 (Fibonacci 38.2% retracement, 200-day SMA, ascending trend line).
On the downside, a static support level seems to have formed at $4,100 ahead of $4,000-$3,970 (static level, round level, end-point of March-August downtrend).
Gold daily chart
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 EUR/USD pair fell to a fresh 2026 low of 1.1113 but managed to bounce back, finishing the week with gains in the 1.1250 region. The pair was all about the US Dollar (USD) and how investors feel about the Federal Reserve (Fed) monetary policy path.
Hot US inflation boosts USD demandThe USD soared on Wednesday, following the release of the September Consumer Price Index (CPI). Annual inflation, as measured by the CPI, was up 3.7% from a year earlier, up from August’s 3.4% increase. The core figure, which excludes food and energy prices, rose 2.6% in the year to September, following the 2.4% posted in the previous month. The hotter-than-anticipated figures fueled rate hike speculation, hence pushing the Greenback higher.
Further concerns arose on Thursday, after the Producer Price Index (PPI) climbed to 6.3% YoY in September from 5.6% in August, the biggest gain since 2022. However, the USD pared gains and began retracing, turning definitively negative on Friday after Fed Chair Kevin Warsh refrained from hinting at upcoming decisions. Speaking with International Monetary Fund (IMF) Managing Director Kristalina Georgieva at a Fireside Chat, Warsh said he would deliver price stability, but decisions will be made meeting by meeting.
Treasury yields and their impact on the GreenbackGovernment bond yields also had their say in the USD behavior. Treasury yields edged sharply lower on Thursday amid resurgent safety demand. Bonds surged as stocks eased, with the tech sector taking the hit amid fears of higher inflation and rates and their effect on the outrageous AI spending. As a result, the 10-year Treasury yield stands at around 5.10% at the end of the week, down from a multi-decade peak of 5.31% achieved in early October.
Yields soared as investors continue to price in mounting inflationary pressures that could lead to higher interest rates. Fed funds futures are pricing in at least one more 25 basis points (bps) before year-end. The likelihood of no change in October stands at roughly 85%, while the odds of a 25 bps hike in December hold near 80%. Earlier in the week, speculative interest was betting on a 50 bps hike in September, although such odds decreased by Friday, adding some extra pressure on the Greenback.
At the end of the day, financial markets are all about the USD and what the market believes Fed Chair Kevin Warsh and co will decide on monetary policy.
European inflation is also hotInflation in the Old Continent also stands at concerning levels, despite the fact that the European Central Bank (ECB) has delivered two rate hikes throughout 2026 while investors anticipate at least one more 25 bps hike before year-end. Germany confirmed that the annual Harmonized Index of Consumer Prices (HICP) was 3.3% YoY in September, while for the Eurozone, it reached 3.8%, its highest in three years.
ECB President Christine Lagarde spoke at an Atlantic Council GeoEconomics Center event in Bangkok, Thailand, and noted that inflation has been rising predominantly, but not exclusively, because of energy prices. She added that the European Union (EU) has yet to see second-round effects from higher energy prices, but signaled that the ECB cannot wait until they are in full view before responding.
“Our monetary policy is data dependent, and is determined on a meeting-by-meeting basis,” Lagarde said. “We will be looking very carefully at all the data that come in. We will be focused on the 2% medium term, which, by the way, is still in the cards at the moment.” Her hawkish words failed to boost the Euro.
Middle East warMeanwhile, the Middle East war continues. Despite having limited impact on intraday market moves, the reality is that crude Oil prices remain near $100 a barrel, which, in the end, keeps feeding inflation-related fears. US President Donald Trump anticipated a few days ago that no attacks would take place before the mid-term elections on November 3, but recently threatened to drop the “mother of all bombs” on Iran afterward. Additionally, the US Treasury announced new sanctions targeting financial networks suspected to be used by Iran to circumvent international restrictions, while Iranian President Masoud Pezeshkian said sanctions are “beyond humanitarian frameworks.”
What’s next in the docketThe macroeconomic calendar will be lighter in the next few days, with Germany grabbing some attention at the beginning of the week. The country will publish the September Producer Price Index (PPI) and the October ZEW Survey on Economic Sentiment on Tuesday. Several ECB officials will be on the wires, while the Fed’s policymakers will enter the blackout period ahead of the Federal Open Market Committee (FOMC) meeting later in the month.
Things could turn a bit more interesting on Friday, as S&P Global, alongside local banks, will release the preliminary estimates of October Purchasing Managers’ Indexes (PMIs) for most major economies.
EUR/USD Technical Outlook:The latest EUR/USD bounce seems corrective, and the risk of lower lows ahead remains high.
The daily chart for the EUR/USD pair shows that it keeps developing below all its moving averages. The 20-day Simple Moving Average (SMA) maintains its sharp downward slope below the longer ones, while providing dynamic resistance at around 1.1290, an immediate resistance. The same chart shows that technical indicators corrected extreme oversold conditions, heading higher yet below their midlines, reflecting the ongoing upward correction rather than suggesting further gains ahead.
The weekly chart shows that EUR/USD met buyers around a bullish 200-week SMA currently at 1.1100, the level to beat to confirm the continuation of the dominant bearish trend. Technical indicators in the same chart have turned directionless, yet remain within negative levels, maintaining the risk skewed to the downside.
Once below 1.1100, EUR/USD could extend its slump towards the psychological 1.1000 mark. Gains beyond 1.1290, on the contrary, could anticipate additional gains, initially towards 1.1360 and later up to 1.1470.
USD/CAD Forecast: Scotiabank Sees Little Support Before 1.40 The Canadian Dollar is recovering as US yield support fades, but Scotiabank's fair-value estimate now sits close to the market after USD/CAD retreat. The US Dollar to Canadian Dollar (USD/CAD) exchange rate slipped further on Friday, with FX strategists at Scotiabank warning of little technical support before 1.40 after the pair broke below 1.4200.
USD/CAD traded near 1.4152 at the time of writing, down 0.29% from Thursday's close and almost 0.9% below Monday's closing level.
Latest-Exchange Rates:
Dollar to Canadian Dollar (USD/CAD): 1.41525 (-0.29%)
Pound to Canadian Dollar (GBP/CAD): 1.889388 (+0.30%)
Euro to Canadian Dollar (EUR/CAD): 1.592321 (+0.04%)
Scotiabank's latest short-term assessment is neutral/bearish.
Describing the earlier North American session, the bank said: "The CAD is entering Friday's NA session with a modest gain, up 0.2% vs. the USD while showing losses on the crosses against most of the G10 currencies in an environment of broad-based USD weakness and a market tone that is suggestive of risk appetite."
That leaves the Canadian currency vulnerable to a reversal in the wider Dollar sell-off, even as domestic interest-rate expectations offer more support.
Image: USD to CAD exchange rate performance over this trading week. Canadian rate expectations narrow the US advantage Scotiabank links the improved domestic support to the bond market:
"Rate expectations have firmed modestly on the week, delivering a welcome narrowing in US-Canada yield spreads in a manner that has pressured our USDCAD FV estimate over the past week or so. FV is currently estimated at 1.4140, largely closing the gap to spot."
A smaller US yield advantage can reduce the incentive to hold US Dollars rather than Canadian Dollars.
But at 1.4140, the bank's fair-value estimate is only around 12 pips below the latest market rate, leaving little further Canadian Dollar upside on that measure alone.
A decline to 1.40 would therefore go beyond the adjustment implied by its current valuation estimate.
The Bank of Canada's next decision and Monetary Policy Report are due on 28 October.
In its morning assessment, Scotiabank said "markets are currently pricing 9bpts of tightening with 23bpts expected by December."
That indicates some tightening is anticipated this month, with almost a quarter-point increase priced cumulatively by December, rather than a confirmed decision to raise rates.
Friday's housing starts release showed construction rising 3% in September to an annualised 248,896 units, although the six-month trend was virtually flat.
Limited support before 1.40, with political risk ahead The chart assessment points to more room for a decline than the valuation model.
Scotiabank says "the recent bearish turn in USDCAD is notable, with a sharp reversal from local peaks around 1.4300."
"The extension below 1.4200 is important, with a move that has seen a sharp moderation in bullish momentum dragging the RSI back to the neutral threshold at 50."
The Relative Strength Index measures momentum, so a reading near 50 suggests the previous upward impulse has faded rather than that the pair is already oversold.
The latest assessment follows our earlier coverage of Scotiabank's concerns about stretched USD/CAD momentum.
Scotiabank says: "We see limited support between current spot and 1.40. Resistance is now expected above 1.4200."
A sustained rebound above that resistance would weaken the case for an immediate slide towards 1.40.
The downside reference is roughly 1.1% below the current rate, although Monday's Alberta vote could complicate the Canadian Dollar's progress.
Scotiabank also warns: "Near-term domestic risk is elevated into Monday's Alberta vote on the possibility of a future referendum."
The provincial government's explanation of the separation question makes clear that voters are choosing whether to begin the legal process for a later binding referendum: "The referendum question does not directly trigger Alberta separating from Canada."
USD/CAD Exchange Rate FAQ Could USD/CAD fall to 1.40?
Scotiabank sees limited technical support before 1.40, but this is a downside reference rather than a dated forecast target.
Where is USD/CAD resistance?
Scotiabank expects resistance above 1.4200 following the reversal from local peaks around 1.4300.
What is Scotiabank's fair-value estimate?
The bank estimates fair value at 1.4140, close to Friday's market rate of 1.4152.
October is coming out of the rate trade. December is not.
September producer prices rose 6.3% from a year earlier, the largest annual increase since 2022. Wednesday’s CPI report showed consumer prices up 0.6% for the month and 3.7% from a year earlier.
FedWatch puts the chance of a December rate increase at 90.4%. The market assigns a 77.1% probability to a quarter-point move and a 13.3% chance of a half-point increase.
The Fed may wait this month. Silver still has to trade through the rate decision that is being pushed into December.
What to Watch
The dollar pullback gave silver a bounce, but the 10-year yield recovery kept it small. December still carries a 90.4% chance of a rate increase after the hot PPI and CPI reports. That is the part of the rate trade that has not gone away.
Spot silver remains inside Wednesday’s range with the main trend down. The move over $58.43 has to hold if counter-trend buyers are going to take control. A break under $55.40 brings the July 17 bottom at $54.78 back into play.
December Comex Silver futures are also below their midpoint at $58.655. Buyers have to recapture that level to put the $61.745 swing top back in front of the market. A failure to do that leaves the recent $55.56 low exposed.
