The 2-year yield is the first place I’m starting, and this, of course, has been a major driver of what happens on a day-to-day basis recently, as yields being higher over time has worked against certain risk appetite-based products. Furthermore, we also have to keep in mind that it has a major influence on what’s going on with the U.S. dollar. So far, it has been pretty quiet on Tuesday.

Despite the pair’s mixed sideways trading, with the price currently holding near 209.15, this does not affect the previously suggested bullish corrective trajectory, supported by the continued role of 208.10 as additional support. We will therefore continue to look for the price to gain further positive momentum, increasing the chances of reaching the corrective targets currently located near 210.40, followed by the key resistance barrier at 211.25.

However, if the price comes under strong bearish pressure and falls below 208.10, this would trigger a renewed bearish move, exposing the pair to further losses, initially toward 207.40 and 206.85.

The expected trading range for today is between 208.70 and 210.40

Trend forecast: Bullish

The pair confirmed its continued surrender to the bearish scenario, amid several negative factors, including the alignment of the main indicators in signaling negative momentum, along with repeated stability below the initial resistance barrier at 179.45. The price is currently posting further losses, trading near 176.80 and approaching the first target anticipated in the previous report.

Continued bearish pressure would increase the chances of a renewed downward move in the near term, with the price likely to test 175.75. A break below this level would pave the way toward the next main target at 174.95.

The expected trading range for today is between 175 and 177.40

Trend forecast: Bearish

EUR/USD is trading at 1.1181 on the 2-hour chart after bouncing off 1.1161 support. Currently, the price is near the 1.12-area and pressing against a descending trendline, with both moving averages above it, suggesting the bearish trend is likely to continue.

The first resistance I am looking at is at 1.1218, above which we would see 1.1275 and 1.1315. As for support, we have 1.1180-1.1161, and below that we have 1.1128 and 1.1092.

RSI is neutral and in the middle, suggesting that the pair may consolidate rather than trend strongly in either direction. Until it breaks above 1.1218, I’ll maintain a bearish bias. A break below 1.1161 would increase the likelihood of a move toward 1.1128.

– Written by


Minesh Chaudhari

STORY LINK Pound Sterling Price News and Forecast: GBP/USD Slips on UK Fiscal Concerns

The Pound US Dollar (GBP/USD) exchange rate fluctuated on Monday, as expectations of a Bank of England (BoE) interest rate hike next month offered some support to Sterling, while concerns surrounding the UK’s upcoming Autumn Budget kept the pairing unsettled.

At the time of writing, GBP/USD was trading at $1.3230, having wavered throughout the session.

The Pound (GBP) drew some support on Monday as rising inflationary pressures strengthened expectations that the Bank of England could raise interest rates next month.

According to accountancy and advisory firm BDO, businesses are facing their most acute inflationary pressures since June 2023, with higher energy and raw material costs driving the increase.

However, concerns over the UK’s public finances capped Sterling’s support, after the Institute for Fiscal Studies (IFS) warned that rising inflation had helped create a £35bn funding shortfall ahead of the Autumn Budget.

The US Dollar (USD) initially came under pressure on Monday as investors showed a greater appetite for risk, but the ‘Greenback’ later regained some support.

Sentiment deteriorated following reports that Russia had attacked Ukrainian energy infrastructure on Sunday evening, despite US President Donald Trump claiming earlier that morning that both sides had agreed to an ‘energy ceasefire’.

Near-Term GBP/USD Forecast: BoE and Fed Speakers in Focus

Looking ahead, Tuesday’s speeches from Bank of England policymakers Megan Greene and Swati Dhingra could offer fresh clues about the outlook for UK interest rates.

With Greene generally taking a hawkish stance and Dhingra leaning dovish, any conflicting messages could leave the Pound without a clear direction.

Federal Reserve officials are also scheduled to speak.

If their comments strengthen expectations of a December rate hike, the US Dollar could find further support.

Meanwhile, changing risk appetite is likely to remain a key driver for the safe-haven ‘Greenback’.

Shifts in sentiment could therefore keep the Pound US Dollar exchange rate volatile.

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U.S. Dollar Index gains ground as traders focus on rising oil prices. Oil markets gained 2% amid escalation in the Middle East. Iran-backed Houthis attacked Saudi airports, killing civilians. Traders bet that U.S. may intervene to provide additional support to Saudi Arabia. Such a scenario would be bullish for oil prices and will raise inflation risks, providing additional support to the U.S. dollar.

Currently, U.S. Dollar Index is trying to settle above the resistance level at 102.35 – 102.50. This resistance level has been tested many times and proved its strength. In case U.S. Dollar Index manages to settle above 102.50, it will head towards the next resistance at 103.15 – 103.30.

The first market I’m watching, of course, will be the two-year yield. That’s been the game for a while. It is rising slightly during the day. Although let’s keep in mind, today is Columbus Day, so certain bank traders won’t be at work. In Canada, we have Thanksgiving, so North America is going to be pretty thin at this juncture.

GBPJPY maintained its bullish corrective trajectory through this morning’s trading session, posting several positive closes above the 208.10 level. The pair responded to stochastic’s positive signals and is currently fluctuating near 209.60.

The price is now expected to resume its corrective bullish attempts, potentially advancing toward the resistance barrier near 210.40 in the near term. If positive factors persist, the pair may successfully test the resistance level near 211.25, which in turn represents a key threshold for confirming the broader trend in upcoming trading sessions.

The expected trading range for today is between 208.90 and 210.40

Trend forecast: Bullish

EURJPY remains on a bearish path, with the 179.45 level currently acting as an additional resistance barrier. However, continued conflicting signals from the main technical indicators have pushed the pair into some sideways trading, with the price stabilizing near 177.40.

We will continue to wait for the price to gather additional negative momentum, which could enable it to resume its bearish attempts, initially targeting 176.50 before exerting further pressure on the first additional support level at 175.75.

The expected trading range for today is between 176.50 and 178.20

Trend forecast: Bearish

The Euro could recover against the US Dollar as bearish bets unwind, but Rabobank expects French fiscal risks to limit the rebound’s staying power.

Rabobank expects a Euro recovery towards 1.13 against the US Dollar in the coming weeks, as calmer French bond markets give investors an opportunity to close bearish currency positions.

EUR/USD ended Friday near 1.1201, leaving it around 1.1% lower since the start of October despite recovering from the week’s lows.

The bank keeps its longer-term expectations subdued: “That said, we do not expect the currency pair to be able to push significantly higher medium-term. Our 12-month forecast is EUR/USD1.12.”

Buying Euros to close bets against the currency could lift it temporarily, without requiring investors to become more confident about the region’s finances or economic prospects.

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French bond selling becomes a currency problem

In our 1 October coverage of Rabobank’s Euro outlook, the bank argued that investors selling French bonds had largely remained in Euro-denominated debt, limiting the damage to the currency.

Its latest assessment puts greater weight on the risk of that money leaving the Eurozone.

Rabobank says: “By the end of last week, concerns were rising as to the risks of contagion to other highly indebted countries in the Eurozone. This was likely a crucial element in igniting pressure on the EUR.”

“Previously, it appeared that sellers of OATs were rolling into other EUR denominated assets, possibly Italian, Spanish or German government debt. The question of contagion appeared to incentivise sellers of OATs to question exposure to the Eurozone and to the EUR.”

OATs are French government bonds, while German Bunds provide the benchmark against which their borrowing costs are commonly compared.

Moving between those markets need not involve selling Euros, whereas moving money into Dollar assets can create demand for the US currency.

Rabobank cites Banque de France figures showing foreign investors held 57.84% of OATs in the second quarter, giving overseas investment decisions considerable importance for French financing.

Budget credibility complicates an ECB rescue

The bank sees little prospect of immediate European Central Bank intervention resolving France’s difficulties, arguing that support without a convincing budget could damage the ECB’s credibility.

The ECB’s Transmission Protection Instrument criteria include fiscal sustainability and compliance with the EU’s fiscal framework, with activation subject to the Governing Council’s assessment.

The programme addresses disorderly financing conditions that are not warranted by a country’s economic fundamentals.

Rabobank highlights the political obstacles: “The French government has announced a budget proposal that includes tax hikes and spending cuts which will be debated in parliament over the coming weeks. Mass protests against education provision, however, demonstrate how difficult an austerity budget will be.”

The bank says: “While opposition parties may allow a budget to pass, this may be only so that they can change it after next spring’s Presidential election.”

Rabobank points to another possible route for intervention: “In any case, it is widely considered more likely that any initial intervention by the ECB to stabilise markets would likely take the form of a pausing of QT.”

Quantitative tightening reduces central-bank bond holdings as securities mature without the proceeds being reinvested, as the ECB’s asset-purchase programme guidance explains.

Pausing that process could ease pressure on bond markets, although it would leave the French government responsible for securing a credible budget.

Dollar confidence limits the Euro’s recovery

The Euro has also lost support from investors who previously expected German fiscal expansion to improve its prospects.

Rabobank says: “In 2025, the market ratcheted up long EUR positions at the start of the year on the back of optimism regarding the loosening of Germany’s debt brake. These long positions were held up to the start of the Iran War when they quickly evaporated.”

Rabobank says: “Factors such as the region’s energy importer status, concerns about a hybrid Russian war and political worries concerning the growth of the far-right in both Germany and France are likely undermining the single currency.”

The bank reports bargain hunting in French bonds as yields retreated from their weekly peaks.

“At the same time, confidence in the outlook for the greenback is far stronger than a year ago. Just as interest in the EUR likely facilitated USD selling last year, the more positive outlook for the greenback is likely encouraging investors to stay short of the EUR.”

Rabobank also sees an imbalance in how investors are treating fiscal risks: “At the same time, the robust growth backdrop in the US has favoured the USD and distracted attention away from the US’s also very significant budget deficit.”