Created on October 09, 2025

• The US dollar initially did rally a bit during the early hours here on Wednesday but gave back those gains to show signs of life again. Ultimately, this is a market that I think is going to continue to be very noisy in general.
• But I also recognize that we have a situation where we are basically hanging around between the 1.39 level on the bottom and the 1.40 level on the top. I do think that eventually the US dollar ends up outperforming the Canadian dollar and we do break above the 1.40 level. If and when we do that, I think we’ve got a situation where traders will really start to look towards the 1.4250 level.

On a Move Lower…

A breakdown below the 1.39 level opens up a potential move down to the 200 day EMA. But in general, I think you’ve got a situation where you’re still looking to buy dips. The interest rate differential still favors the uh US dollar over the Canadian dollar. And I think with this being the case, we look at any opportunity to buy on a dip as a gift. Now, keep in mind that Friday we have the Canadian employment numbers coming out. And that of course has a major influence on this pair and will continue to be important to keep in the back of our mind. With this, I like the idea of buying this pair. I do think eventually we will go much higher. But really at this point in time, we’re just looking for the next catalyst. And again, that catalyst could very well be the Friday session with that jobs number. Also, keep in mind that the US government is still shut down, and therefore we are without any significant US data at the moment, but this could change suddenly.

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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.

Created on October 09, 2025

• It looks like we are going to see yet another situation like we have seen over the last several days where the Euro gets sold off pretty early. But when the Americans show up, the United States dollar starts to shrink. And I think that is part of what’s going on here. American traders are just simply selling the US dollar.
• That being said, the 1.16 level continues to offer support. And if we were to break down below that level, I think you’ve got a situation where we could really start to break down at that point, the market could drop to the 1.14 level, which of course is right about where the 200 day EMA is currently hanging around.

US Dollar Was Supposed to Collapse.

Remember, we were told that the US dollar was going to lose its world’s reserve currency status and that it was going basically to zero. And just about any time you start hearing talk like that, you’ve hit the bottom. I don’t know if the US dollar has bottom yet, but it’s definitely in the process of making that argument. The circled candlestick is from the FOMC press conference and that clearly did not weaken the US dollar. We are seeing gold shoot straight up in the air and seeing people talk about de-dollarization because of gold, but both are strengthening. The 1980s had both strengthening, so it doesn’t necessarily mean anything at this point in time. If we were to rally from here, the 1.18 level will offer significant resistance, and that’s assuming that we can even get there, because we’ve tried multiple times over the last two weeks and just haven’t been able to do that. So, with that being said, I think you’ve got a situation where you’re fading rallies at the first signs of exhaustion still.

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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.

The EURJPY pair succeeded in resuming its bullish attempts yesterday, to hit the extra target at 177.80, to settle below it announces its confinement within tight track that is represented by the initial support at 176.95, and 177.80 level forms a key barrier against the bullish trading.

We remain neutral due to the instability of the price, until surpassing the previously- mentioned levels, to confirm the suggested targets in the near trading, the price success in breaching the barrier and holding above it will increase the chances for resuming the main bullish trend, attempting to reach 178.45 followed by the trading towards the bullish channel’s resistance at 179.60 level, while the decline below the extra support will support activating the attempts of gathering the gains, to reach 176.20 directly, then testing the next support near 175.20.

The expected trading range for today is between 176.90 and 177.80

Trend forecast: Neutral

With yields rising at the same time that the is falling, the Japanese economy is highly vulnerable to any additional setbacks, especially given the country’s extreme sovereign debt load.

USD/JPY Key Points

• With the yen falling and Japanese bond yields on the rise, the Japanese economy is vulnerable to a budget crisis akin the UK’s in 2022.
• Komeito’s failure to endorse Japan’s new PM-apparent Sanae Takaichi is an ominous omen for her tenure.
• For USD/JPY, there’s little in the way of technical resistance until 155.00 (the 78.6% Fibonacci retracement) and then the 159.00 zone beyond that.

If you were actively trading this time three years ago, this current environment may feel eerily familiar.

Back in September 2022, the UK selected Liz Truss as its next Prime Minister. At the time, the was in a clear downtrend while UK sovereign yields were on the rise. A few weeks later, Truss’s Finance Minister, Kwasi Kwarteng, introduced a “mini-budget” focused on fiscal stimulus (large-scale borrowing and tax cuts) for the economy, and the market soundly rejected the budget, driving long-term to multi-decade highs and the pound to multi-decade lows against most major rival currencies:

Source: StoneX, TradingView

Liz Truss ultimately dismissed Kwarteng a few weeks later and then resigned, making her the shortest-serving UK Prime Minister in UK history.

It’s cliché to say that “history doesn’t repeat, but it does rhyme,” but there are some eerie parallels with Sanae Takaichi’s nascent tenure as Japan’s Prime Minister. Last weekend, Takaichi was selected as the leader of the ruling LDP party, making her the Prime Minister apparent.

Takaichi is seen as a protégé of Shinzo Abe, who advocated heavily for fiscal and monetary stimulus to support the moribund Japanese economy. Like the pound three years ago, the yen has been in a clear downtrend for months, and have been rising consistently for years:

Source: StoneX, TradingView

Much like Truss at the outset of her tenure, Takaichi’s leadership has encountered early turbulence, as Komeito, the LDP’s coalition partner, hesitated to endorse her, sparking doubts about her grip on power. While we have yet to see a catalyst akin to Kwarteng’s mini-budget fiasco, the yen is hitting multi-decade lows against the euro and pound, while longer-term sovereign yields are surging.

With yields rising at the same time that the yen is falling, the Japanese economy is highly vulnerable to any additional setbacks, especially given the country’s extreme sovereign debt load:

Source: IMF

Japanese Yen Technical Analysis: USD/JPY Daily Chart

Source: StoneX, TradingView

Looking at the chart above, USD/JPY is in the midst of a huge three-day, post-election surge, rising more than 500 pips from Friday’s close to today’s high. More to the point for technically-inclined traders, the rally has taken the pair through previous resistance at 150.80 and the 61.8% Fibonacci retracement of the H1 drop at 151.65. From here, there’s little in the way of technical resistance until 155.00 (the 78.6% Fibonacci retracement) and then the 159.00 zone beyond that.

While the short-term price momentum remains strong, the pair is now peeking into “overbought” territory on the 14-day RSI, hinting at the potential for a near-term pullback if we get any kind of positive political news out of Japan. That said, traders would likely look to buy any short-term dips as long as the breakout above 150.80 (and the longer-term fiscal issue) remains intact.

Original Post

– Written by


David Woodsmith

STORY LINK Pound to Dollar Forecast: GBP/USD Slips as BoE’s Pill Calls for Cautious Approach

The Pound to Dollar exchange rate (GBP/USD) traded mostly flat on Wednesday ahead of the release of the Federal Reserve’s September FOMC meeting minutes.

At the time of writing, GBP/USD was trading at approximately $1.3423, virtually unchanged from the start of Wednesday’s session.

The US Dollar (USD) strengthened against most of its major counterparts on Wednesday, extending its gains as investors sought safe-haven assets amid ongoing geopolitical tensions in Europe and Japan.

The prevailing risk-off sentiment continued to underpin demand for the ‘Greenback’, keeping USD exchange rates on the front foot through the first half of the session.

However, later in the day, the Dollar could face headwinds with the release of the Federal Reserve’s latest FOMC meeting minutes.

If the minutes strike a dovish tone or hint at a greater willingness to cut interest rates, this could prompt a pullback in USD, potentially halting the currency’s recent winning streak.

The Pound (GBP) held its ground against most major peers on Wednesday, showing resilience despite a lack of UK economic data and a broadly risk-off market mood.

Sterling was offered mild support later in the session after comments from Bank of England (BoE) Chief Economist Huw Pill.

Speaking at the University of Birmingham, Pill said policymakers should take a “conservative” approach to setting interest rates and stand ready to act firmly if inflation risks rise.

He reiterated that the Bank must remain focused on price stability, while acknowledging the high level of uncertainty facing the economy.

Pound to US Dollar Forecast: Sparse Data to Prompt Choppy Trade?

Looking ahead to Thursday’s European session, the Pound US Dollar (GBP/USD) exchange rate is likely to remain at the mercy of broader market sentiment amid a continued lack of key economic data.

With the US government still in shutdown, the release of the latest initial jobless claims report will be delayed, leaving investors without fresh US data to guide trading.

In the absence of new catalysts, the ‘Greenback’ is expected to react primarily to shifts in risk appetite.

Should a cautious, risk-off tone persist across markets, the safe-haven US Dollar could stay in demand, extending its recent strength.

As for the Pound, the UK calendar also remains bare, likely leaving Sterling directionless once again.

GBP exchange rates may therefore fluctuate in response to prevailing risk trends and external developments, with the currency likely to struggle to find a firm footing through Thursday’s session.

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TAGS: Pound Dollar Forecasts

– Written by


Ben Hughes

STORY LINK Euro to Dollar Forecast: USD Benefits from Undermined Confidence in EUR and JPY

The Euro to Dollar exchange rate (EUR/USD) slid to its weakest level in six weeks as French political uncertainty, poor German data, and a resurgent dollar combined to leave investors braced for further volatility.

EUR/USD Forecasts: Slide to 6-Week Low

The US Dollar has continued to make headway in global markets with support from Euro and yen selling.

The Euro to Dollar (EUR/USD) exchange rate dipped sharply to 6-week lows at 1.1610 and struggled to recover amid negative sentiment. French developments will be a key element on Wednesday.

UoB commented; “The decline is oversold, but with no sign of stabilisation just yet.”

According to ING; “based on our view that the dollar will face downside risks with today’s Fed minutes and the USD rally looking a bit overdone in general, we think EUR/USD back at 1.170 is more likely than a test of 1.150 in the coming days.”

The yen has remained under pressure following the weekend election while French political fears have continued to unsettle the Euro.

MUFG commented; “The US dollar has benefitted this week from political developments outside of the US which have undermined confidence in the euro and yen in the near-term and overshadowed the more negligible negative impact on the US dollar from the ongoing US government shutdown.”

The latest German data recorded a 4.3% slide in industrial production for August compared with market expectations of a 1.0% decline.

ING commented; “Extremely disappointing industrial data in August has just increased the risk of yet another quarter of contraction for the German economy.”

MUFG added; “the weakness will add to concerns over the disruptive impact from higher tariffs.”

French political developments will continue to be watched closely with Prime Minister Lecornu facing a deadline today to find a solution to the political impasse and budget deadlock.

MUFG commented; “Lecornu’s last-ditch efforts to reach a political agreement by today’s deadline appear likely to fail. President Macron’s close ally and his first Prime Minister Edouard Philippe has even suggested that he should take a more radical step of offering to resign before the end of his term in 2027 on the condition of a budget being adopted.”

The US data flow is continuing to be disrupted by the US government shutdown

Minutes from the September Federal Reserve policy meeting will, however, be released on Wednesday.

At that meeting, interest rates were cut by 25 basis points with Miran dissenting and calling for a 50 basis-point cut.

Markets are still pricing over just over an 80% chance of two further Fed rate cuts by the end of 2025.

There are, however, also doubts whether further rate cuts are appropriate given overall financial conditions which will create further uncertainty.

Macquarie Group global forex and rates strategist Thierry Wizman commented; “With stock indexes near all-time highs, gold prices rallying higher, and corporate bond credit spreads very tight, the case for monetary policy being overly restrictive still looks rather flimsy.”

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TAGS: Euro Dollar Forecasts

Created on October 08, 2025

• The euro rose again during the trading session on Tuesday against the Japanese yen, as traders continue to price in the idea of a potentially loose monetary policy coming out of Japan. At this point, traders are blaming it on the election, but I have no idea why they thought Japan was ever going to have any other type of monetary policy. Japan has been loose for over 20 years now,and quite frankly has a demographics bomb ready to go off that will make it so that they cannot finance their debt with any type of interest at all.
• Japan is by far the most heavily indebted industrial country in the top tier of economies, and therefore in order to continue to have the economy function, low interest rates are a necessity, not a “wish.”

Technical Analysis

The market recently broke above the ¥172 level, pulled back to that level, and then bounced nicely. We obviously had that massive gap at the open on Monday, and despite the fact that I really want to get bullish and start buying this pair, the reality is that the gap is so big that you would be foolish to risk that type of stop loss. Yes, it could work out in your favor, but there’s also the very real possibility that we will eventually pull back in order to fill that gap, and at this point in time I believe that you would need a roughly 400 pip stop loss to make this trade even feasible. In other words, you would be looking for a massive swing trade to the upside, which of course is possible, but far beyond the scope of most retail traders.

Because of this, I’m looking for short-term drop that fills the gap or at least comes close to it and then bounces. At that point in time, I am buying this pair and hanging onto it for what will probably end up being several months. I have no interest in shorting this market in this environment.

Begin trading our daily forecasts and analysis. Here is a list of Forex brokers in Japan to work with.

Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.

Created on October 08, 2025

• The British pound fell significantly during the early hours here on Tuesday, but it looks like the 1.34 level is going to continue to offer a bit of support and as a result I think we’ve got a situation where we just go sideways Ultimately, this is a market that given enough time probably has to make a bigger decision But we are basically at fair value currently because we have been between 1.32 and 1.36 and 1.34 of course is right in the middle.

At the Top of a Big Upmove?

When you look at this market, it has gone higher for quite some time now, it looks like we are struggling to get any real footing. And it is worth noting that the US dollar is fighting back against multiple currencies. But the British pound had been stronger than many of the other. So I think this is a situation where you are looking at this as a good harbinger of what could happen. The US dollar against multiple other currencies. After all, if the British pound has been stronger and it suddenly collapses against US dollar, weaker currencies like the Canadian dollar, the New Zealand dollar, the Australian dollar, the euro are going to get eviscerated. That being said, though, we could rally from here. And if we do, I think the one point three six level is worth watching. This being the case, I would also take a look at the FOMC reaction. We’ve been down ever since then, and the US dollar looks as if it is trying to change its overall tune here. And with that being the case, I think you’ve got a situation where traders are going to continue to see a lot of volatility, I think maybe back and forth, neutral trading probably is the best way to approach this pair at the moment.

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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.

Read the full USD/JPY forecast, including chart setups and trade ideas.

As traders lower bets on an October BoJ policy adjustment, uncertainty lingers over the RBA’s rate path, spotlighting AUD/USD.

Aussie Inflation and the Aussie Dollar in the Spotlight

Turning focus to the AUD/USD pair, Aussie inflation and labor market data are clouding the RBA’s rate path. Australian ANZ-Indeed job ads slid 3.3% month-on-month in September, accelerating from a 0.3% drop in August. The job ad slump followed August’s sharp drop in full-time employment, signaling a deteriorating labor market. A softer labor market may curb wage growth, dampening inflation.

However, recent inflation figures have raised doubts about a November RBA rate cut, fueling monetary policy uncertainty. The Aussie Monthly CPI Indicator rose to 3% in August, reaching the top end of the RBA’s 2-3% target range, up from 2.8% in July. While recent labor market data has weighed on the Aussie dollar, AUD/USD remains above August levels, underscoring uncertainty over the timing of an RBA rate cut.

On Friday, October 10, RBA Governor Michele Bullock may share views on recent data and the RBA’s policy stance.

AUD/USD: Key Scenarios to Watch

• Bearish AUD/USD Scenario: Weaker Aussie data, dovish RBA rhetoric, and rising trade tensions may drag AUD/USD toward the 50-day EMA and $0.655.
• Bullish AUD/USD Scenario: Stronger Aussie data, hawkish RBA cues, and easing trade friction could drive AUD/USD toward $0.66.

See our full AUD/USD analysis for detailed trends and trade setups.

US Politics, Fed Speakers, and Interest Rate Differentials

While Aussie economic data continues to fuel speculation about an RBA rate cut, developments on Capitol Hill and Fed speakers will also influence AUD/USD trends.

Another failed Senate vote and growing calls for back-to-back Fed rate cuts in October and December would narrow the US-Aussie rate differential, favoring the Aussie dollar. A narrower rate differential would likely drive AUD/USD toward $0.66. A sustained move above $0.66 could bring $0.665 into play.

On the other hand, a US government reopening and rising support to delay monetary policy easing could widen the rate differential, favoring the US dollar. A wider rate differential may push AUD/USD toward the 50-day EMA and $0.655. If breached, $0.65 would be the next key support level.