There is no change on the temporary sideways moves of GBPJPY pair, to fluctuate near 209.00 level due to the continuation of the main indicators’ contradiction, which obstacles the chances of resuming the main bearish trend, the sideways trading might continue temporarily until gathering negative momentum, attempting to press on 208.10 barrier, which extend the trading towards the main negative stations near 206.80 and 206.25.

While the risk of changing the negative trend and begin building a bullish path, which requires surpassing 210.45 and holding above it, to begin recording several gains to expect forming an initial station at 211.35. 

The expected trading range for today is between 208.10 and 209.55

Trend forecast: Bullish

• EUR/JPY could find initial support at the lower boundary of the channel around 176.60.
• The 14-day Relative Strength Index is at 29.78, signaling potential seller exhaustion and eventual stabilization.
• The primary resistance lies at the nine-day EMA at 178.18.

EUR/JPY halts its seven-day losing streak, trading around 177.40 during Asian hours on Tuesday. Technical analysis of the daily chart shows that the currency cross is remaining close to the lower boundary of the descending channel, suggesting the price holds support and a temporary bounce. However, a break below the channel would signal accelerating downward momentum in a steeper downtrend.

The EUR/JPY cross is maintaining a bearish tone as it holds beneath both the nine- and 50-period Exponential Moving Averages (EMAs). The currency cross has recently slipped below the nearer structural floor at 175.70, turning recent price action into a corrective phase, while the 14-day Relative Strength Index (RSI) at 29.78 hovers in oversold territory, hinting that while downside pressure is strong, fresh selling could become more measured in the short term.

The initial support lies at the lower boundary of the channel around 176.60, followed by an 11-month low of 175.70, recorded in November 2025. Further support lies at the 14-month low of 169.72.

On the upside, the EUR/JPY cross may rebound and test the nine-day EMA at 178.18, followed by the 50-day EMA at 181.20. Further resistance lies at the upper boundary of the descending channel around 184.20, followed by the all-time high of 187.95 set on April 17.

ECB tone softens as Lagarde flags growth risks from rising yields

Analysts at Commerzbank argue that the ECB has scope to ease market tensions through communication before resorting to more forceful tools. They note that, despite elevated inflation, ECB representatives could “adopt a less hawkish tone in their public comments, thereby dampening expectations of interest-rate hikes and easing pressure on government bonds.” In their view, Christine Lagarde’s recent appearance before the European Parliament’s Committee on Economic and Monetary Affairs already points in this direction, as she stressed that “the sharp rise in bond yields would dampen economic growth and limit the pass-through of higher energy costs to consumers,” signalling greater sensitivity to the impact of tighter financing conditions.

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

U.S. Dollar Index gains ground as traders react to ISM Services PMI report. The report showed that ISM Services PMI declined from 55.4 in August to 54.9 in September, compared to analyst forecast of 55. Numbers above 50 show expansion. The weaker-than-expected report did not put any pressure on the American currency.

Currently, U.S. Dollar Index is trying to settle above the resistance level at 102.35 – 102.50. In case U.S. Dollar Index manages to settle above the 102.50 level, it will head towards the next resistance, which is located in the 103.35 – 103.50 range.

– Written by


James Fuller

STORY LINK EUR/USD Forecast: Analysts Slash 12-Month Target to 1.12

The Euro to Dollar exchange rate (EUR/USD) traded near 1.1204 on Monday afternoon, down around 0.4% as concerns over French government finances weighed on the single currency.

Weaker US employment figures have failed to produce a lasting Euro recovery, with ING warning of further losses and Rabobank cutting its forecasts despite the softer American data.

EUR/USD Forecasts: ING warns of 1.10 risk

ING expects EUR/USD to retreat towards 1.1100-1.1120 in the near term, with French fiscal uncertainty threatening a deeper decline.

According to ING; “We stick with our 1.1100/1120 EUR/USD target for the time being, with the risk of an extension to the 1.10 area.”

EUR/USD has slipped further from Friday’s close near 1.1252, extending the pressure that drove a 2.5% decline during September.

ING noted that markets have removed around 30 basis points of expected European Central Bank tightening since late September, compared with only 13 basis points for the Federal Reserve.

The smaller adjustment to US expectations has preserved a source of support for the Dollar.

Rabobank has also become more cautious, lowering its three-month EUR/USD forecast to 1.13 from 1.16 and its 12-month projection to 1.12 from 1.18.

The bank commented; “We have revised our EUR forecasts lower across the board”.

The revised targets are close to current levels, but represent a substantial retreat from its previous expectations of a stronger Euro.

Rabobank warned that investors selling French bonds may increasingly move funds outside the Eurozone rather than switch into other Euro-denominated assets.

It added; “This raises the prospect that the EUR could be impacted by outflows.”

French public debt reached 119.0% of GDP in the second quarter, up from 117.5% during the opening three months of the year.

US economic developments nevertheless remain an important counterweight to the Euro’s domestic difficulties.

Non-farm payrolls increased by just 29,000 in September, while revisions removed 60,000 jobs from the previous two months and unemployment increased to 4.2%.

Annual wage growth also eased to 3.0%, providing further evidence that labour-market inflation pressures are cooling.

ING said “the Fed leadership is clearly leaning in the direction of an October hold”, although it still expects another increase later this year.

It added; “December remains our call on the next Fed hike.”

Deutsche Bank’s analysis published last week offered a more constructive outlook, forecasting EUR/USD at 1.17 by the end of 2026.

The bank believes resilient growth outside the US, an eventual easing of energy pressures and already substantial expectations of Fed tightening should limit sustained Dollar gains.

According to Deutsche Bank; “This global growth environment is not consistent with US exceptionalism.”

The forecast is under pressure following the latest decline, but the bank argued that conditions did not justify assuming the Dollar’s advance would continue.

“This is the wrong time to be chasing EUR/USD lower,” the analysts added.

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The Japanese yen has become an important variable for currency markets in 2026, particularly after Japan returned to direct foreign exchange intervention. For traders studying the GBPJPY forecast, intervention risk matters because official yen buying can create sudden moves even when broader interest rate trends point in another direction. The key question is how intervention expectations interact with Bank of Japan policy, British monetary policy, positioning, and risk sentiment.

Why Yen Intervention Matters for GBP/JPY

Foreign exchange intervention is designed to influence currency conditions, usually by buying or selling a currency in the market. When authorities buy yen, the immediate effect can be yen appreciation. Because GBP/JPY expresses the value of one pound in yen, stronger yen conditions can place downward pressure on the pair.

This makes intervention a major risk factor even though GBP/JPY is not the direct target of Japanese authorities. An intervention focused on dollar-yen can spread quickly across yen crosses as traders adjust positions. A sharp yen rally can therefore push GBP/JPY lower, potentially changing short-term technical structures and market expectations.

2026 Has Already Changed the Intervention Landscape

Japan’s intervention activity has made this risk more concrete in 2026. The Ministry of Finance stated that Japan purchased yen in coordination with the United States on July 31, describing the action as a response to excessive volatility and disorderly yen movements. The ministry also said it would not hesitate to conduct further joint intervention.

Reuters reported that Japan’s foreign exchange intervention between July 30 and August 26 reached 15.4 trillion yen, the largest intervention operation recorded in a single month. The yen initially strengthened sharply, although some of that move later reversed. These developments show why intervention is a practical risk when assessing yen crosses.

The Possibility of Surprise Intervention

One of the most important developments for 2026 is the possibility that Japanese authorities could avoid identifying a specific exchange rate level before acting. Reuters reported in July that Japan was considering a more unexpected approach intended to make speculative yen selling more difficult.

For GBP/JPY traders, this increases uncertainty. If intervention is no longer preceded by obvious warnings or a predictable threshold, positioning around technical resistance becomes more complicated. A pair can remain supported by carry-trade dynamics and still experience a sudden decline if yen buying begins.

Bank of Japan Policy Adds Another Layer

Intervention is only one part of the yen outlook. The Bank of Japan’s monetary policy also matters because higher Japanese interest rates can make yen-denominated assets relatively more attractive and reduce the incentive for some carry trades.

2026 developments have strengthened this connection. The Bank of Japan changed its monetary policy guidance in September, while market attention remained focused on the future path of rate increases. Reuters reported that the yen’s September rally had been strengthened by expectations for a more hawkish policy direction, although uncertainty remained over how quickly the central bank would continue tightening.

For GBP/JPY, this creates two sources of yen strength. A policy-driven yen rise can reinforce an intervention-driven move, making downward pressure on the pair more pronounced.

The UK Rate Outlook Still Matters

Intervention risk does not operate independently of the British pound. GBP/JPY reflects two economies, so developments in the United Kingdom remain important. If expectations for UK interest rates increase while Japanese policy stays comparatively cautious, the pound can receive support against the yen.

The opposite can also occur. If UK economic data weakens or expectations for further Bank of England tightening fade while Japanese rate expectations rise, the interest rate differential can move against the pound. In that environment, intervention risk could amplify an existing downward trend rather than create it from nothing.

Technical Levels Could Become More Important

Technical levels can become especially important during policy-sensitive periods because sudden yen buying may create sharp movements in GBP/JPY. Support and resistance zones can help identify areas where buying or selling pressure has previously appeared. A strong intervention move could push the pair below an established support level, while reduced intervention concerns and renewed carry-trade demand could support a recovery.

Moving averages and oscillators can also help assess whether market momentum is strengthening or weakening. However, technical indicators cannot anticipate unexpected intervention decisions. Instead, they can provide useful context for understanding existing price trends, momentum, and potential reactions when Japanese authorities enter the currency market.

Market Positioning and Risk Sentiment

Positioning is another important variable. When traders accumulate large short-yen positions, the market can become vulnerable to a rapid reversal. Intervention can force traders to close positions, creating additional yen demand and accelerating the move.

Risk sentiment also matters because the yen can respond to changes in global market confidence. A shift toward risk aversion may encourage investors to reduce leveraged positions and reconsider carry trades. For GBP/JPY, this can compound pressure created by Japanese policy actions.

What Could Shape GBP/JPY Through Late 2026?

Several developments deserve attention in late 2026. First, traders may watch Japanese government communication for signs that authorities consider yen movements excessive or disorderly. Second, Bank of Japan decisions and guidance will remain important for expectations about future rates. Third, UK inflation, growth, employment, and Bank of England communication can change the relative appeal of sterling.

The relationship between these factors matters more than any single headline. Intervention may produce a sharp short-term reaction, but sustained GBP/JPY direction can still depend on interest rate differentials and economic fundamentals.

Conclusion

Yen intervention risks can influence the GBPJPY forecast in 2026 because Japanese yen buying can transmit quickly into other yen crosses. The risk has become more significant after Japan’s intervention activity this year, while changing Bank of Japan policy expectations provide another potential source of yen strength. For GBP/JPY analysis, traders therefore need to monitor communication, intervention activity, Japanese and UK monetary policy, economic data, positioning, and technical levels together. This framework can explain why the pair may experience abrupt moves even when longer-term fundamentals appear stable.

The 2-year rate in the United States continues to be something I watch for signs of trouble. Ultimately, this is a market that shows that we still have quite a bit of stress out there, although it is fairly quiet today on Monday. Nonetheless, elevated rates do cause some issues for various risk appetite-based assets out there and are something that you need to be watching.

GBPJPY price continued to trade sideways with weak momentum, stabilizing near 208.60 and being affected by conflicting signals from the main indicators, particularly as the Stochastic indicator has remained above the 50 level recently.

We would like to reiterate that the repeated bearish stability below 210.40 barrier supports the chances of the price forming new bearish waves, with expectations of breaking below the obstacle at 208.10 and then renewing attempts to reach the bearish targets at 206.80 and 206.25.

The expected trading range for today is between 206.80 and 209.55.

Trend forecast: Bearish

• EUR/JPY could slip below the lower boundary of the channel around 176.50.
• The 14-day Relative Strength Index of 27.00 signals oversold conditions.
• The initial barrier lies at the nine-day EMA at 178.27.

EUR/JPY continues its losing streak for the seventh consecutive day, trading around 176.70 during Asian hours on Monday. Technical analysis of the daily chart shows that the currency cross is testing the lower boundary of the descending channel, suggesting the price could either hold support and trigger a temporary bounce toward the channel’s upper limits, or break below it to signal accelerating downward momentum in a steeper downtrend.

The 14-day Relative Strength Index (RSI) at 27.00 signals oversold conditions that could slow the decline but do not yet challenge the prevailing negative bias. The EUR/JPY cross is maintaining a bearish near-term tone as it sits beneath both the nine- and 50-day Exponential Moving Average (EMAs). The pair’s slide below these key averages suggests downside pressure dominates.

A successful break below the lower boundary of the channel around 176.50, followed by an 11-month low of 175.70, recorded in November 2025. Further support lies at the 14-month low of 169.72.

On the upside, the EUR/JPY cross may rebound toward the nine-day EMA at 178.27, followed by the 50-day EMA at 181.34. Further resistance lies at the upper boundary of the descending channel around 184.40, followed by the all-time high of 187.95 set on April 17.

BoJ flags AI as a new positive demand shock for the Yen

BoJ’s Uchida speech scores 7.2 on FXS Speechtracker, exactly in line with Uchida’s historic average, signaling a stable tone rather than an escalation in policy urgency. The emphasis on AI as a major positive demand shock, pushing up economic activity, prices, and long-term rates via equity gains and bond issuance, tilts the message modestly hawkish for the Yen as it highlights upside risks to inflation and financial conditions.

By stressing that AI affects output gaps, financial conditions, and key “star” variables, Uchida effectively frames AI as a structural force that could justify tighter policy over time if demand-side effects dominate. The caution about correction risks if profits disappoint tempers the hawkish bias, but the commitment to closely monitor AI-driven indicators keeps the balance of risks skewed toward gradual normalization rather than renewed easing, mildly supportive of the Yen.

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

Fundamental Backdrop and Market Sentiment

I wrote on 27th September that the best trades for the week would be:

1. Long of the S&P 500 Index following a daily close above 7803. This did not set up.

2. Short of the EUR/USD currency pair following a daily close below 1.1358. This set up on Tuesday and gave a weekly return of 0.78%.

3. Long of Soybeans. Soybean futures fell by 3.11%.

4. Long of Ethereum. Ethereum was unchanged over the week.

The total loss of 2.33% averages 0.58% per asset.

A summary of last week’s most important data in the market:

1. US Core PCE Price Index – this came in lower than expected, at a month-on-month increase of only 0.2% compared to the expected increase of 0.3%. Dovish for the USD.

2. US Average Hourly Earnings – this came in considerably lower than expected, at a month-on-month increase of only 0.1% compared to the expected increase of 0.3%. Dovish for the USD.

3. US Final GDP – higher than expected at 2.2% instead of the expected 1.5%. Somewhat hawkish for the USD.

4. US Non-Farm Employment Change – notably lower than expected. Dovish for the USD.

5. RBA Cash Rate & Rate Statement – the RBA hiked 0.25%, but the dovish language left it as a dovish hike for the AUD.

6. Australia CPI (Inflation) – this was expected to rise from an annualized rate of 3.5% to 4.1% but rose only to 4.0%, so this was just fractionally dovish.

7. US Unemployment Rate – unexpectedly rose a fraction, from 4.1% to 4.2%. Dovish for the USD.

The USD turned more dovish last week as weak US employment data sharply reduced expectations for another near-term Fed increase. CME FedWatch pricing for an October 0.25% rate hike fell from 64.2% a week earlier to roughly 17–23% after payrolls, while futures implied only about 0.22% of total additional tightening through end-2026, down from roughly 0.255% before the jobs report.

US non-farm payrolls rose only 29,000 in September, far below the 90,000 consensus forecast, prior months were revised lower, and unemployment increased to 4.2%. The data pushed Treasury yields lower and supported risk appetite: US equities rallied into Friday, with technology and smaller-cap shares benefiting most, while the USD lost some ground as markets unwound immediate Fed-hike expectations.

Earlier in the week, markets had been dealing with a more inflationary—and USD-supportive—mix: elevated energy prices and higher global government-bond yields, amid the US-Israel/Iran conflict had revived concern that central banks might have to keep policy restrictive. The Fed’s recently hawkish tone, the RBA’s rate hike, and firmer euro-area inflation had reinforced that concern.

Geopolitical risk remained the principal counterweight to the softer US data narrative. The conflict-driven oil shock had helped fuel the bond sell-off, but Friday brought relief as expectations of recovering Middle Eastern supply and discussions of releasing European diesel reserves pushed WTI down 3.7% to $89.43 and Brent down 2.7% to $99.45. Lower crude reduced immediate inflation anxiety, aided bonds and equities, and compounded the post-payrolls dovish repricing of Fed expectations.

Markets ended the week favouring a softer-US-growth / less-imminent-Fed-tightening narrative, weakening the USD’s rate advantage. However, oil and geopolitical developments remain capable of quickly reversing that move by reviving global inflation and rate-hike concerns. We may now be entering a period where risk assets will strengthen, and the US Dollar will begin to decline.

The Week Ahead: Key Data and Events to Watch

Next week will see very few highly important data items. The coming week’s most important data points, in order of likely importance, are:

1. FOMC Meeting Minutes

2. BoJ Governor Ueda Speaks

3. Canada Unemployment Rate and Employment Change

It is a public holiday in Australia on Monday and in China from Monday to Wednesday.

Monthly Forex Forecast: October 2026 Overview

For the month of September, I made no forecast, as the US Dollar had no real long-term trend.

For the month of October, I forecast that the EUR/USD currency pair will decline in value.

Weekly Forecast 4th October 2026

There were no excessive moves in currency crosses last week, so I make no forecast.

Volatility remained low last week, with 19% of the notable currency pairs and crosses moving by more than 1% in value. Next week’s volatility is likely to be similarly low, or maybe even lower.

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

Technical Overview and Key Levels

Key Support and Resistance on Major FX Pairs

Key Support and Resistance Levels

US Dollar Index

The US Dollar printed a bullish candlestick of healthy size last week, which reached a new 18-month high and closed above the resistance level at 101.39. This is a significant bullish breakout, and just a few days ago things were looking extremely bullish for the USD, but that may be starting to change with the lower than expected PCE Price Index and Average Hourly Earnings data, which suggest that the US economy is slowing down, and that the Fed only need to make one further hike of 0.25% before the end of 2026.

Despite these dovish factors, it is worth noting that the greenback held up quite well towards the end of last week, even after these data surprises. This is a sign of real strength in the USD, although it may not last.

Turning back again to technical factors, there is a clear long-term bullish trend on most momentum metrics, which gives Dollar bulls a tailwind. Additional supportive factors include relatively high US Treasury Yields, with even the 10-Year reaching well above 5.20%.

I think there are good reasons to take a bullish bias here, but be cautious as this could change, especially if there is any more dovish news for the USD. It might be best to focus on other assets and to just be neutral on the USD over the coming week.

US Dollar Index Weekly Price Chart

EUR/USD

The EUR/USD currency pair fell strongly last week, making a significant technical bearish breakdown to a new 16-month low and reaching close to the 1.1200 handle before clawing back some of its losses towards the end of the week.

The Euro weakened mainly because Europe-specific risk overwhelmed the supportive effect of higher euro-area inflation: France’s fiscal concerns triggered a sharp widening of French/German bond spreads, while markets also scaled back expectations of an imminent ECB hike.

The US Dollar has been strong as markets were expecting further rate hikes, although that has evaporated after last weeks US economic data releases which had a dovish impact upon those expectations. Yet the Dollar remained strong even after that.

This currency pair has historically tended to trend very reliably. It also likes to pull back within trends, so when it moves this quickly, that is significant.

Note in the weekly price chart below, how there is a clear sequence of lower highs and lower lows, supporting a bearish interpretation.

It might be somewhat late to enter a new short trade now, but it is worth holding on to this short trade if you are already in it and using a trailing stop – I like to use three times the ATR (100) from the lowest daily close.

EUR/USD Weekly Price Chart

NASDAQ 100 Index

The tech-based NASDAQ 100 Index briefly reached another short-term high price before pulling back. This is interesting as the broader S&P 500 Index has not been able to make a new record high for a while, so we are seeing tech outperformance, although this is nothing unusual over the long term.

In tech, focus remains on the AI sector and the incredible valuations, although this has started to become a drag as many analysts see that collapses of some companies are bound to start as revenue is not yet matching valuations – prices are being driven by expectations, and many see it as likely that the smaller and more exposed AI companies will start to go under, with the first being a catalyst for more.

Despite that negative outlook, the tape or chart if you prefer, still looks bullish, as can be seen below. The US stock market has historically shown a tendency to keep rising even when analysts start to say it shouldn’t.

As a trend trader, I am long here, but I will not “bet the farm” on tech. However, as we are seeing data which is going to make the Fed less hawkish, I am somewhat more optimistic on the outlook for the US stock market.

NASDAQ 100 Weekly Price Chart

WTI Crude Oil

WTI Crude Oil has reached a very interesting technical point, which suggests higher prices are on the way. The price chart below shows that the key support level at $87.68 has held, and the confluent lower trend line of the ascending price channel evidenced by the linear regression analysis drawn from the end of the major phase of the Iran war has also held. This is significant, and points to the line of least resistance being upwards.

As has been the case for many months, what happens militarily and geopolitically in the Strait of Hormuz and in the Gulf is the main driver here, making trading unpredictable.

It is obvious that President Trump will do all he can to keep the price of crude oil from going overly high, but while the situation with Iran remains unresolved, that is going to be difficult to achieve – it is a Sisyphean task.

Longer-term traders might do well to look for buying opportunities if they think a resumption of the war is going to happen after the mid-terms, but they might need to be quick to take profit, as President Trump tends to make moves pretty quickly to bring down the price of Crude Oil once it exceeds $100.

WTI Crude Oil Spot Daily Price Chart

Ethereum

This cryptocurrency has continued to consolidate, and it looks like a tight and exciting consolidation which could produce an explosive breakout to the upside. Look in the daily price chart shown below and note how well the resistance turned support levels are being respected and have been respected.

Many trend traders will already be long, but there is a case for tightening the stop and adding to this position if we get a strongly bullish daily close above $2,800, where a recent high and a round number are confluent.

I don’t think Ethereum is especially useful or even much practical use at all, but it is widely traded and it looks like a great breakout candidate. There are even micro Ethereum futures available at the CME.

I will be holding on to my long Ethereum position.

Ethereum Daily Price Chart

Bitcoin

I can say all the same things about Bitcoin that I just wrote about Ethereum above. Arguably, Bitcoin is even more important, as it leads the crypto market both psychologically and by market capitalization.

The level to watch for a new entry (adding to the position, if you want to and already have some) is the high at $78,293.

Bitcoin Daily Price Chart

Bottom Line

I see the best trades this week as:

1. Long of the S&P 500 Index following a daily close above 7803.

2. Long of the NASDAQ 100 Index.

3. Short of the EUR/USD currency pair.

4. Long of Bitcoin.

5. Long of Ethereum.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights