USD/JPY is moving higher as traders focus on rising Treasury yields and react to PMI reports from Japan. Manufacturing PMI declined from 54.9 in August to 54.1 in September, compared to analyst forecast of 55. Services PMI decreased from 52.5 to 51.6, compared to analyst consensus of 52.7. Numbers above 50 show expansion.
From the technical point of view, USD/JPY attempts to settle above the resistance level at 158.00 – 158.50. If USD/JPY manages to settle above the 158.00 level, it will head towards the next resistance level, which is located in the 160.00 – 160.50 range.
CADCHF’s latest bullish surge was halted by the stability of the barrier at 0.5910, forcing the pair to form some corrective trading as it slips toward 0.5820. We would like to note that this decline will not affect the main bullish scenario, which remains supported by the stability of the support at 0.5770.
Based on the above, we expect the price to enter new mixed trading while awaiting the accumulation of additional positive momentum, which would enable it to renew pressure on the aforementioned barrier. A breakout above this level would open the way toward further targets, initially at 0.5945 and 0.6010, respectively.
Expected trading range for today: 0.5825 and 0.5910
Strong economic data bolstered expectations for another large rate hike next month. The latest CME Group data shows the odds for a 75 basis point hike in October are now at 66 percent. A 50 basis point hike was considered more likely earlier in the week.
Multiple Fed officials spoke yesterday and reiterated the need for further rate increases. Governor Barr said that rate increases would continue until inflation is more in line with the Fed’s 2 percent target. The other members of the Fed who spoke yesterday all gave similar remarks and said that the recent economic data justified the need for continued rate hikes to combat inflation.
The dollar has stronger nearby drivers of demand than the euro. The European Central Bank (ECB) hiked rates last month, but has signaled no strong preference to raise rates again. Bets against the euro could pay off if energy prices keep falling and further easing measures are put in place.
Sterling is more balanced. The Bank of England (BoE) held rates steady at 3.75% last week, but revised its outlook to more hawkish. The BoE and other hawkish central banks give the British currency some protection against falling energy prices. Barclays and UBS expect an interest rate hike by the BoE in November.
Ongoing Middle East diplomacy will also influence inflation. Falling energy prices should ease inflation across the U.S., Europe and Britain, which could impact rates set by the three central banks.
Overall, we have a DXY bullish bias, bearish EUR and GBP bias.
Interestingly, Treasury yields are moving lower in today’s trading session. The bond market has calmed down, and some traders are ready to buy U.S. bonds, betting that Fed will control inflation. The yield of 2-year Treasuries declined towards the 4.75% level, while the yield of 10-year Treasuries pulled back towards the 4.96% level. I’d note that the pullback in Treasury yields did not provide any support to gold markets in today’s trading session.
U.S. dollar moved higher against a broad basket of currencies as traders ignored the pullback in Treasury yields and focused on hawkish Fed policy outlook. Stronger dollar put pressure on gold markets today.
The nearest support level for gold is located in the $4300 – $4320 range. If gold pulls back below the $4300 level, it will head towards recent lows near the $4250 level. A move below $4250 will open the way to the test of the support at $4160 – $4180.
On the upside, gold needs to climb above the $4400 level to have a chance to gain upside momentum in the near term. In this case, gold will head towards the resistance at $4480 – $4500.
GBPJPY resumed its negative trading, reaching 208.75 and surpassing the previously suggested first bearish target, confirming its continued adherence to the previously proposed bearish path.
Repeated stability below the barrier at 210.40, along with the continued negative momentum from the key indicators, will increase the chances of the pair soon declining toward the additional support at 208.10. A break below this level would open the way for new bearish targets, initially at 207.40 and 206.80, respectively.
Expected trading range for today: 208.10 and 210.00
EURJPY took advantage of the repeated negative pressures during yesterday’s trading, forming a new bearish attack and currently touching the bearish target at 179.45, while settling above it after forming additional support against further downside moves.
The price may be forced to trade sideways amid its confinement between the current support, while 180.80 continues to form a strong barrier against bullish attempts. However, a successful break below 179.45 followed by a bearish close would strengthen the bearish scenario, with the price expected to gradually target 178.60, followed by 177.80.
Expected trading range for today: 178.60 and 180.35
(MENAFN– Daily Forex) The interest rate differential continues to be a major development in this pair, as with all the other JPY-denominated markets.EUR/JPYThe euro has been very noisy against the Japanese yen during the trading session on Tuesday as traders continue to try to determine where the interest rate differential is going. The Bank of Japan has recently intervened a few times to save its own currency, but recently we have seen a lot of questions asked about the efficacy of Japanese tightening, as there were a couple of dissenters at the latest interest-rate decision when they hiked the overnight rate.Top Regulated Brokers1 Get Started 74% of retail CFD accounts lose money That being said, this is a market that continues to see a lot of interest-rate differential play out as part of the carry trade. However, when it comes to the euro, it is a little bit different in the sense that the Europeans have to worry about energy this winter. If that does, in fact, come to fruition, it will be interesting to see if this pair diverges from the other yen-denominated markets, or if we just focus on the interest-rate differential after all. The ECB may have to raise rates due to energy inflation 170 yen level underneath has offered significant support
The 170 yen level underneath has offered significant support, and it now looks as if the 182 yen level above could be a bit of a target, with the 50-day EMA getting ready to break down below the 200-day EMA. This could be a“death cross”, a very bearish sign for the trend.
EURUSD Chart by TradingViewUltimately, this is a very choppy and noisy market. The market remains more of a buy-on-the-dip situation, but if we were to break down below the 178 yen level, then you have a situation where the Japanese yen probably not only strengthens from here, but against multiple other currencies.Begin trading our daily forecasts and analysis. Here is a list of Forex brokers in Japan to work with.
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The Pound US Dollar (GBP/USD) exchange rate extended its recent decline on Wednesday, falling to its weakest level since late July as stronger US economic data reinforced expectations of further Federal Reserve tightening.
At the time of writing, GBP/USD was trading at around $1.3280, down roughly 0.5% on the day.
US Dollar (USD) Strengthens after Powerful US PMI Release
The US Dollar (USD) strengthened on Wednesday after the latest US business surveys pointed to unexpectedly strong economic momentum.
S&P Global’s flash composite PMI jumped to 58.4 in September from 56.0 in August, marking the strongest rate of private-sector expansion since July 2021.
The improvement was driven by strong growth across both services and manufacturing, while new orders increased sharply and hiring accelerated.
However, the survey also showed that stronger demand was putting renewed pressure on capacity and supply chains, contributing to another rise in business costs and selling prices.
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The data reinforced expectations that the Federal Reserve may need to tighten monetary policy further following last week’s 25-basis-point interest-rate increase.
US Treasury yields moved sharply higher after the release, with the 10-year yield climbing above 5% to its highest level since 2007.
Recent Federal Reserve commentary has also remained hawkish.
Richmond Fed President Tom Barkin said that US economic conditions appeared to be firming and warned that inflation pressures were no longer confined to energy and tariff-related factors.
The combination of strong economic activity, persistent inflation and rising US yields helped underpin demand for the ‘Greenback’.
Pound (GBP) Pressured by Softer UK PMI Data
The Pound (GBP) came under additional pressure after the latest UK business surveys painted a much softer picture.
The flash services PMI fell to 51.7 in September from 52.5 in August, marking a three-month low and undershooting expectations for a reading of 52.0.
The composite PMI also fell to 51.7, indicating that overall private-sector growth slowed markedly during the month.
Although readings above 50 still signal expansion, the survey suggested that UK economic growth may have slowed towards only around 0.1% during the third quarter.
At the same time, inflationary pressures intensified.
Services companies reported the fastest increase in prices charged for four months, while input-cost pressures also accelerated following the recent increase in energy prices.
This leaves the Bank of England facing an increasingly difficult balance between slowing economic activity and persistent inflation.
The contrast with the US was particularly stark, with the US composite PMI at 58.4 compared with the UK’s 51.7.
Near-Term GBP/USD Forecast: Strong US Growth Leaves Pound Vulnerable
Looking ahead, GBP/USD may remain under pressure if the divergence between US and UK economic momentum continues.
The strong US PMI figures have increased expectations that the Federal Reserve could raise rates again in October, while UK data has raised fresh concerns over the strength of domestic growth.
For Pound Sterling, the $1.3250-$1.3280 area represents the immediate support zone.
A sustained break below this region could expose the $1.3200 level.
GBP/USD would need to recover above $1.3350 to ease the immediate downside pressure.
Thursday’s meeting between US President Donald Trump and Chinese President Xi Jinping will also attract considerable market attention.
Any deterioration in US-China relations could further support the safe-haven Dollar, while signs of progress on trade could improve global risk appetite and offer Sterling some relief.
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Coffee price continued forming negative trading as the negative momentum provided negative momentum in the last period, approaching the support base that is represented by 260.15 level, the suggested scenario in the near trading depends on the strength of the current support, to expect forming bullish waves, to attempt to reach 285.25, repeating the pressure on 295.20 barrier.
Facing new bearish pressures and breaking the current support, will push it to suffer extra losses by reaching 262.20 and 257.30.
The expected trading range for today is between 269.00 and 285.25
Platinum price remains under the sideways track by its fluctuation near $1815.00 level, affected by the stability of the barrier at $1840.00, which obstacles the chances of activating the bullish trend again.
The price might be forced to provide more sideways trading until gathering extra positive momentum, easing the mission of achieving the breach, to begin targeting the positive stations by its rally towards $1880.00 and $1960.00.
The expected trading range for today is between $1780.00 and $1880.00
