I wrote on the 19^th October that the best trades for the week would be:

1. Long of the USD/JPY currency pair following a New York close above ¥153.08.
2. Long of Gold following a daily (New York) close above $4,326.
3. Long of Silver following a daily (New York) close above $54.25 with a small position.
4. Long of Platinum following a daily (New York) close above $1,716 with a small position.
5. Long of the NASDAQ 100 Index following a daily (New York) close at or above 25,187.
6. Long of the S&P 500 Index following a daily (New York) close at or above 6,766.

None of these trades set up until Friday’s close, so there were no trades last week.

A summary of last week’s most important data:

1. US CPI (inflation) – all the data came in 0.1% lower than expected, which boosted stock markets but had very little effect on the US Dollar.
2. US, German, British Flash Services & Manufacturing PMI – all data were more robust than expected.
3. UK CPI (inflation) – the annualized rate was expected to increase from 3.8% to 4.0%, but remained unchanged, which weakened the Pound somewhat as it dampened prospects for a rate cut.
4. Canadian CPI (inflation) – this was higher than expected, increasing by 0.1% month-on-month when it was expected to contract by the same amount, which may have helped keep the Loonie relatively strong over the week.
5. New Zealand CPI (inflation) – this was higher than expected, which may have helped keep the Loonie relatively strong over the week.

Last week’s big event was Friday’s lower than expected US CPI (inflation) data, which effectively gave the Federal Reserve every reason to make a rate cut of 0.25% at its meeting this week, and again at its meeting in December. This pushed major US stock market indices to new all-time highs, most strongly in the tech-focused NASDAQ 100 Index.

We saw UK inflation data surprise analysts to the downside, which triggered a dip in the British Pound. However, inflation data released in Canada and New Zealand were higher than expected, suggesting there are still inflationary pressures alive and well in the global economy.

It was a relatively minor detail but the broadly better than expected PMI data in major economies probably added a little to the generally bullish mood in stocks.

US President Trump has begun a tour of Asia, which will conclude on Thursday in a meeting with Chinese leader Xi. This dovetails with the 1^st November deadline on which President Trump’s new 100% tariff on Chinese imports will be take effect, unless he stops or amends it. It is widely expected that Trump and Xi will make a mutually beneficial deal on tariffs and rare earths export restrictions, and whether that is concluded well or not, we can expect some strong volatility is likely in markets at the end of the week. Trump’s meetings with leaders during the earlier part of the forthcoming week might also trigger movement in particular markets and currencies from day to day.

There will be four major central bank policy meetings over the coming week.

The US government shut down goes on but is having little effect.

Keep in mind that many countries have put their clocks back an hour over this weekend to switch away from summer time but North America has yet to move, so time zone differentials have changed by an hour between North America and elsewhere.

The coming week will probably see more activity in the market, due to the Trump / Xi meeting, and the four major central banks which will be holding policy meetings this week. Two of the banks (The US Federal Reserve and the Bank of Canada) are expected to announce rate cuts of 0.25%.

This week’s most important data points, in order of likely importance, are:

1. US Federal Reserve Policy Meeting
2. European Central Bank Policy Meeting
3. Bank of Japan Policy Meeting
4. US Core PCE Price Index
5. US Advance GDP
6. Bank of Canada Policy Meeting
7. US Employment Cost Index
8. Australian CPI (inflation)
9. Canadian GDP
10. Chinese Manufacturing PMI

Due to the ongoing government shutdown in the USA, US data may be postponed indefinitely.

Currency Price Changes and Interest Rates

For the month of October 2025, I forecasted that the EUR/USD currency pair would rise in value. Its performance so far this month is shown in the table below.

October 2025 Monthly Forecast Performance to Date

I made no weekly forecast last week.

Although there were notably larger price movements in the Forex market last week, there were still no unusually large price movements in currency crosses, so I have no weekly forecast this week.

The Australian Dollar was the strongest major currency last week, while the Japanese Yen was the weakest. Directional volatility increased last week, with 37% of all major pairs and crosses changing in value by more than 1%.

Next week’s volatility is quite likely to increase.

You can trade these forecasts in a real or demo Forex brokerage account.

Key Support and Resistance Levels

Last week, the US Dollar Index printed a bullish inside bar pattern with small wicks on both the upper and lower side. However, what is most significant here is the fact that the price has again failed to make a weekly close above the key resistance level at 98.60. If we do eventually get a breakout above this level by the US Dollar, we have already seen a real bottom put in so this could be the start of a major long-term upwards trend. Despite being just below its level of 26 weeks ago, the price is above where it was 13 weeks ago, so by my preferred metric, I can declare the long-term bearish trend is over. This places the US Dollar in an interesting position and very close to technically starting a new long-term bullish trend.

The Dollar may take a hit over the coming days if China does not back down over its proposed rare earth export restrictions in the face of President Trump’s 100% China tariff threat, but this situation is producing much more predictable movement in other currencies such as the Australian and New Zealand Dollars (heavily linked to the Chinese economy) and the Japanese Yen (the current haven currency of choice). The Canadian Dollar, as a proxy for Crude Oil, is also sensitive to perceived changes in risk-on demand. President Trump and President Xi will be meeting Thursday, and the tariff deadline is next weekend, so it should be an interesting and decisive week.

The Federal Reserve will be holding a policy meeting this week and is almost unanimously expected to cut its interest rate by 0.25%. That meeting will likely also trigger USD volatility.

I will be most comfortable being long of USD above 98.31 and even more so above 98.60.

US Dollar Index Weekly Price Chart

The USD/JPY currency pair weekly chart printed a large, bullish candlestick with little upper wick which engulfed the real body and upper wick of the previous week’s range. These are bullish signs, and we are in a bullish long-term trend which was triggered by a recent breakout to a new 6-month high price, and such breakouts in this currency pair have historically tended to give traders a trend-following edge.

It should be noted on the bearish side, that the long-term price chart below shows that there is an important upper trend line in the dominant narrowing triangle pattern which has not even been tested yet. However, this probably will not happen until the price reaches the ¥155 area, so bullish action still has a meaningful way to run.

This is likely to be an important week for this currency pair, with the US Federal Reserve and the Bank of Japan both holding policy meetings, an incoming Japanese Prime Minister whose policies are sending the Yen lower, and a tariff showdown between President Trump and China’s President Xi scheduled for this Thursday.

If the developments of this week, especially Thursday’s meeting, are seen as good for the global economy and trade, we will probably see this pair rise significantly.

Like many trend traders, I am already long of this currency pair, but for a new long trade entry, I would like to see a daily (New York) close above ¥153.08.

USD/JPY Weekly Price Chart

The Index started last week higher and showed a muted bullishness until Friday’s lower-than-expected CPI (inflation) data was released, which looks likely to put the Fed more firmly on a path of rate cuts, with two cuts in 2025 virtually assured.

Markets reacted to this by moving firmly though not excessively higher, with tech stocks leading the way, which caused this index to underperform the tech-based NASDAQ 100 Index but close at a new record high, very near the high, which was a short way above 6,800.

US stock market indices going to a new record high is one of the best bullish signs you can get, as is a rate cut and a trade deal, and both of those latter two are on the cards to happen later this week. These events could send this index even higher, so I think it makes sense to be long here already without any conditions.

If Thursday’s meeting between President Trump and President Xi does not lead to a satisfactory deal on rare earths export from China – which would be surprising – we would certainly see this Index fall strongly at the end of this week.

It is very easy to assume this trend is overstretched and cannot last. For traders, trying to pick the top of a stock market rally is very unlikely to be useful.

S&P 500 Index Weekly Price Chart

Everything I wrote above about the S&P 500 Index also applies to the NASDAQ 100 Index, but it is worth noting that the NASDAQ 100 outperformed the S&P 500 last week, and the price chart shown below is more bullish.

The tech-base index’s outperformance against the broader market suggests that markets believe China and the USA will make a deal about rare earth exports and tariffs.

I remain long here and think it makes sense to be long of this index without any conditions.

NASDAQ 100 Index Weekly Price Chart

The main South Korean equity index has put in a stunning performance this year, significantly surpassing even the traditionally dominant US market. The Index is up almost 70% since April, an astonishing advance, driven partly by the global tech boom and partly by legal reforms affecting corporate governance and the stock market.

The last two weekly candlesticks have been long, strong, and both closed very near their respective highs.

A new long trade is certainly likely to be late to the party, but maybe a quarter-sized long position using a trailing stop could be a sensible trade.

The main Japanese equity index the Nikkei 225 has put in a great performance this year, surpassing even the traditionally dominant US market. The Index is up by more than 60% since April, an astonishing advance, driven partly by the global bull market and partly by an increasing sense that Japan is really coming back economically after a long period of deflation.

A new long trade is certainly likely to be late to the party, but maybe a quarter-sized long position using a trailing stop could be a sensible trade.

Although the price closing at a record high is certainly a bullish sign, there are two things here bulls should watch out for:

1. The sizable upper wick of last week’s candlestick.
2. The huge round number just above at 50,000 which is very likely to see some profit-taking and so will probably act as strong resistance.

For these reasons, I would only want to take a small long trade, and that only after we get a daily close above 50,000.

Nikkei 225 Index Price Chart

I see the best trades this week as:

1. Long of the USD/JPY currency pair following a daily (New York) close above ¥153.08.
2. Long of the NASDAQ 100 Index.
3. Long of the S&P 500 Index.
4. Long of the KOSPI Composite with a ¼ size position.
5. Long of the Nikkei 225 Index following a daily close above 50,000 with a ¼ size position.

Ready to trade our weekly Forex forecast? Check out our list of the top 10 Forex brokers in the world.

– Written by


Frank Davies

STORY LINK Pound to Dollar Forecast: Focus Turns to Fed, UK Budget

The Pound to Dollar exchange rate (GBP/USD) steadied just above 1.33 heading into the new week after briefly dipping to 10-day lows late Friday.

Pound Sterling struggled to find lasting traction despite encouraging UK data, as markets digested US inflation figures and renewed trade tensions.

GBP/USD Forecasts: Sterling Finds Support but Sentiment Fragile

The US September inflation release came broadly in line with expectations, with headline CPI edging up to 3.0%, below the 3.1% consensus. The outcome reinforced expectations of a Federal Reserve rate cut this month, though traders remain wary of further geopolitical and fiscal risks.

According to UoB, “Downward momentum has increased further, but for a continued decline, GBP must first close below 1.3295.”

Scotiabank noted some tentative optimism for the Pound, stating that “options market data show a continued fade in the premium for protection against GBP weakness.” The bank, however, added that the UK’s fiscal backdrop remains a major headwind: “Media remain intensely focused on potential measures to be included in the November 26 budget release.” Near-term support is pegged at 1.33.

Danske Bank maintains a 12-month GBP/USD forecast of 1.37, citing expectations of a weaker dollar over the longer term.

The greenback held firm after Friday’s inflation data, supported by slightly higher oil prices and lingering caution over trade and government shutdown risks.

MUFG highlighted that persistent policy uncertainty continues to undermine confidence: “The constant uncertainty over trade policy cannot be a positive for US business planning and prospects of a deal between the US and Canada took a knock when President Trump announced that trade negotiations were off following anti-tariff ads aired by Ontario.”

Meanwhile, ING warned that energy developments could bolster the dollar: “A meaningful reduction in Russian oil supply could drive Brent prices back to the $70-75 range. These are levels that would drive some noticeable dollar appreciation.”

Domestic data offered mild encouragement for the UK. Retail sales volumes rose 0.5% in September versus expectations for a 0.2% decline, while the UK composite PMI climbed to a two-month high of 51.2, underpinned by a rebound in manufacturing.

For those with upcoming USD purchases or international payments, recent volatility shows how quickly market sentiment can shift around economic data and fiscal speculation. Compare today and secure a stronger rate before further swings.

With another pivotal Bank of England meeting and the November budget approaching, both monetary and fiscal narratives are likely to dominate the week ahead.

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TAGS: Currency Predictions Pound Dollar Forecasts

“This includes export controls, tariff suspensions, fentanyl-related measures, anti-drug cooperation, trade expansion, and US Section 301 fees.”

Takaichi-Trump Trade Talks and Yen Dynamics

The prospect of lower US duties on Chinese shipments could draw Prime Minister Takaichi’s attention. President Trump is reportedly meeting with Japan’s prime minister on Monday, October 27.

Takaichi criticized the US-Japan trade deal inked in August before being elected. While defense spending could be a key topic, the US-China trade deal could provide Takaichi an opportunity to discuss the 15% levy on Japanese goods, affecting businesses. Reports suggesting President Trump is open to further trade talks and lower tariffs on Japan could strengthen demand for the yen.

BoJ board members have raised concerns over the impact of US tariffs on the Japanese economy and have called for delays to rate hikes to assess the effect of duties on the broader economy.

Lower tariffs could lift demand for Japanese goods and raise expectations for a BoJ rate hike. For context, the S&P Global Japan Manufacturing PMI fell from 48.5 in September to 48.3 in October.

US Durable Goods Orders, Capitol Hill, and the USD/JPY Outlook

Across the Pacific, durable goods orders will be in focus later on Monday. Economists forecast durable goods orders to rise 0.3% month-on-month in September after August’s 2.9% surge.

A higher reading could signal resilient business demand. Sustained demand may boost hiring and wages, potentially fueling inflation. A higher inflation outlook could support a less dovish Fed rate path. A less dovish Fed policy stance could lift demand for the US dollar and send USD/JPY toward 155.

On the other hand, an unexpected drop in orders could lead to job cuts and slower wage growth. Job cuts and softer wage growth may curb consumer spending and dampen inflationary pressures. A softer inflation outlook would support a more dovish Fed rate path, potentially pushing USD/JPY toward 150.

While US data will influence demand for the US dollar, traders should also closely monitor developments on Capitol Hill. A prolonged US government shutdown could reinforce expectations of a more dovish Fed policy outlook. However, a Senate vote passing a stopgap funding bill could expedite the release of delayed labor market reports, potentially fueling uncertainty about a Fed rate cut in December.

USD/JPY Scenarios: Trade Headlines and Central Bank Divergence

• Bearish USD/JPY Scenario: hawkish BoJ rhetoric, weak US data, or US-Japan tariff talks could push USD/JPY toward 150.
• Bullish USD/JPY Scenario: dovish BoJ commentary, strong US data, or US-Japan tariff uncertainties could send USD/JPY toward 155.

– Written by


Tim Boyer

STORY LINK Euro to Dollar Forecast: EUR/USD Implied Volatility Lowes in 11 Months

The Euro to Dollar exchange rate (EUR/USD) held firm on Friday, finding support near 1.1600 before edging to around 1.1640 as softer-than-expected US inflation data curbed dollar demand.

The pair settled close to 1.1620 into the weekend, with stronger Euro-Zone PMI figures offering additional support.

EUR/USD Forecasts: Softer US CPI Reinforces Near-Term Range

The latest US consumer prices data came in slightly below expectations, reinforcing market conviction that the Federal Reserve will cut interest rates at next week’s meeting. The headline CPI rose 0.3% in September, lifting the annual rate to 3.0% from 2.9%, just under the 3.1% consensus forecast. Core CPI also undershot expectations, increasing 0.2% on the month and easing to 3.0% year-on-year.

Marc Chandler, Chief Market Strategist at Bannockburn Global Forex, commented; “The headline was a bit softer than expected. The dollar was sold on the news, even though markets were already fully confident of Fed cuts in both October and December.”

He added; “Because those cuts are already priced in, this kneejerk dollar weakness may not be sustained.”

ING also pointed to near-term uncertainty; “Markets are fully pricing in 50bp of easing by year-end, and without any jobs data at hand, it will be hard to speculate much beyond the December meeting.”

Meanwhile, Euro-Zone PMI data came in stronger than expected, offering reassurance on growth momentum and helping the euro to consolidate gains.

UoB noted the technical backdrop remains stable: “The price movements still appear to be part of a range-trading phase.”

Commerzbank’s Volkmar Baur observed that EUR/USD implied volatility has fallen to its lowest level in 11 months, cautioning that “given the current geopolitical environment, I would not bet too much on this calm persisting.”

Trade headlines added a layer of uncertainty. US President Trump confirmed his meeting with Chinese President Xi is set for next week, even as talks with Canada were abruptly suspended.

Ben Bennett, Head of Investment Strategy for Asia at L&G Asset Management, commented; “Expectations are quite high for the Trump–Xi meeting, with the upside risk of a significant de-escalation following the face-to-face. Investors are getting used to the pattern of threats followed by compromise.”

For readers planning Euro or Dollar purchases, recent swings highlight how swiftly sentiment can shift on key data and trade headlines. Get in touch to discuss your euro currency purchase requirements.

The euro’s resilience above 1.16 underscores that while Fed cuts are largely priced in, volatility could rise again as traders weigh the upcoming policy statement and any fresh US-China developments.

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This week, the Bank of Japan will take center stage, with economists widely expecting policymakers to keep interest rates at 0.5%. Forward guidance will be pivotal, given recent economic data and Takaichi’s election win. Although the BoJ interest rate decision, forward guidance, and GDP and inflation forecasts will influence USD/JPY trends, traders should closely monitor upcoming economic data releases.

Japanese Consumer Confidence in Focus

On Wednesday, October 29, consumer confidence figures will provide insights into household spending trends. Economists forecast the Consumer Confidence Index to rise from 35.3 in September to 35.6 in October.

A higher-than-expected reading could signal a pickup in consumer spending, fueling demand-driven inflation. Uptrends in household spending and inflation would support a more hawkish BoJ rate path, lifting demand for the yen. On the other hand, a lower print may suggest a softer inflation outlook, weighing on the yen.

Bank of Japan Interest Rate Decision, Governor Ueda, and Forecasts in the Spotlight

While consumer confidence is a key stat, the Bank of Japan’s interest rate decision on Thursday, October 30, will be the main event. GDP and inflation forecasts and Governor Kazuo Ueda’s press conference will also be key drivers for the week.

Barring a surprise rate hike, traders should consider the BoJ’s forecasts and Governor Kazuo Ueda’s press conference. Upward revisions to GDP and inflation could fuel speculation about a December or January hike, lifting the yen. Conversely, weaker forecasts could sink bets of monetary policy tightening and weigh on the yen.

However, Governor Ueda will have the final say. Views on Prime Minister Takaichi’s monetary policy stance and plans for fiscal stimulus would likely be crucial near-term USD/JPY trends.