The EUR/USD pair is trading under pressure due to political and economic factors in Europe, while the US dollar remains steady.
Possible technical scenarios:
As we can see on the daily chart, EUR/USD continues to decline after reversing from the 1.1745–1.1788 resistance area. The pair retains downward potential toward 1.1589, marked with a dotted line, and 1.1494.
Fundamental drivers of volatility:
Political uncertainty in France is the key source of pressure on the euro. The resignation of Prime Minister Sébastien Lecornu less than a month after his appointment has increased doubts about President Macron’s ability to maintain stability. The risk of early elections and a possible downgrade of France’s credit rating are prompting investors to reassess their euro exposure — especially given the country’s widening budget deficit, which exceeds the EU’s 3% limit.
Weak macroeconomic data adds to the negative sentiment. ECB representatives, including Christine Lagarde and Luis de Guindos, have signaled a continued readiness to cut rates if economic conditions deteriorate further.
Meanwhile, the US dollar is holding firm thanks to the Fed’s relatively hawkish tone. Even without new data due to the temporary US government shutdown, policymakers’ comments remain supportive of the dollar.
Intraday technical picture:
No new data is available for the 4H EUR/USD chart. The prevailing downtrend confirms the potential for further weakening toward 1.1589, marked with a dotted line, and 1.1494.
The GBP/USD pair is consolidating after its recent decline, remaining influenced by the contrasting directions of UK and US monetary policy.
Possible technical scenarios:
As evidenced by the daily chart, GBP/USD is consolidating around 1.3436. If the pair holds above this level, it could extend its rise toward the next target at 1.3630. That being said, a breakout and consolidation below 1.3436 would open the way for a drop toward 1.3147.
Fundamental drivers of volatility:
Although the pound remains temporarily weak, market participants expect its downside to be limited by the Bank of England’s cautious tone and the likelihood of the Federal Reserve easing policy in the coming months.
the coming months.
Support for the pound comes from expectations that the Bank of England will move carefully. The regulator remains wary amid persistent inflationary pressures and a cooling labor market. Officials such as Claire Lombardelli and Catherine Mann stressed that inflation shocks should not be seen as temporary, signaling reluctance to cut rates too quickly. This stance helps maintain investor interest in the pound despite ongoing volatility in currency markets.
Meanwhile, the US dollar found temporary support from hawkish remarks by Kansas City Fed President Jeffrey Schmid, who stated that the Fed must remain firm in combating inflation. However, the effect of these comments is limited, as markets are already pricing in a rate cut from the Fed in October and another in December. Expectations of policy easing, combined with a prolonged US government shutdown, create room for a moderate pound rebound.
Intraday technical picture:
The 4H chart shows that the pair continues to hover above 1.3436 but keeps returning to this level. A series of lower highs suggests the possibility of a breakout ahead, which could push the pair back toward its September lows.
The USD/JPY pair has reached a two-week high, holding near early August levels amid a stronger US dollar and a weaker yen.
Possible technical scenarios:
Judging by the unfolding situation on the daily chart, USD/JPY climbed out of the 145.91–148.63 range and consolidated above 149.94. The next upside target at 151.96 is now in focus.
Fundamental drivers of volatility:
Pressure on the yen intensified after Sanae Takaichi’s victory in the LDP leadership race, which fueled expectations of a more accommodative fiscal policy and a possible delay in the Bank of Japan’s next rate hike. Despite solid consumer spending data, markets remain skeptical about the likelihood of imminent monetary tightening in Japan.
Rising stock indices point to growing risk appetite, reducing demand for safe-haven assets such as the yen. Expectations of higher government spending under the new administration are adding to the currency’s weakness, as expanded fiscal stimulus could push back the BOJ’s normalization plans.
Meanwhile, the US dollar is seeing moderate support from technical factors and a partial recovery following last week’s decline. However, the upside remains limited by rate cut expectations — markets are pricing in nearly a 95% chance of a Fed cut in October and more than 80% in December. The ongoing US government shutdown adds further uncertainty, capping the dollar’s potential gains.
Intraday technical picture:
According to the 4H chart, USD/JPY is trading within the 149.94–151.96 range, leaving room for a move toward the upper boundary.
The USD/CAD pair is consolidating near 1.3950, staying within a narrow range as traders await upcoming Federal Reserve speeches and fresh US macroeconomic data.
Possible technical scenarios:
Given the developments on the daily chart, USD/CAD has moved upward from the sideways range between 1.3721 and 1.3924 marked with dotted lines. The pair is now consolidating above 1.3924, opening room for further growth toward the next targets at 1.4013 and 1.4108.
Fundamental drivers of volatility:
Investors are continuing to evaluate the Federal Reserve’s monetary policy outlook following the extended US government shutdown, which delayed the release of key labor market statistics.
The US dollar remains steady, supported by expectations of a gradual yet controlled policy easing by the Fed. According to CME FedWatch data, markets are pricing in over an 80% probability of rate cuts in both October and December, while still viewing the dollar as a reliable safe-haven asset. The muted market response reflects confidence that the Fed will act cautiously to preserve its anti-inflation credibility, a stance emphasized by several policymakers.
For the Canadian dollar, the upcoming employment report for September will be crucial. Strong data could boost expectations of a more hawkish Bank of Canada, while weak figures may support speculation about a pause or a future rate cut. Until then, the pair is likely to remain in consolidation mode.
Intraday technical picture:
As we can see on the 4H chart, USD/CAD trading above the dotted line at 1.3924 confirms the technical potential for a continued rise toward 1.4013.
Gold prices have pulled back slightly after reaching a new all-time high, but remain close to record levels amid moderate strengthening of the US dollar.
Possible technical scenarios:
The daily chart suggests that XAU/USD is nearing the upper boundary of its sideways range between 3873.23 and 4002.27. If the price consolidates above $4,000 per ounce, the next target at 4262.71 will come into play.
Fundamental drivers of volatility:
The main pressure on gold comes from the dollar’s rebound, which has strengthened for a second consecutive day due to technical factors and cautious optimism in global markets. Record highs in the S&P 500 and Nasdaq are reducing demand for safe-haven assets, while short-term overbought conditions in gold are prompting profit-taking.
However, expectations of two Fed rate cuts before the end of the year remain a key factor capping dollar gains and supporting high gold prices.
Additional support for the metal comes from persistent geopolitical risks and the ongoing US government shutdown. Concerns about slowing economic activity, combined with rising tensions in the Middle East and Eastern Europe, continue to drive demand for safe-haven assets. Overall, fundamental factors suggest sustained medium-term interest in gold, though short-term movements are likely to remain range-bound.
Intraday technical picture:
Based on the current picture on the 4H chart, gold still has room to test the $4,000 level. From there, a pullback toward the 3873.23–4002.27 range is plausible. However, if the supportive fundamental backdrop continues, another attempt to break above $4,000 may follow.
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