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The Dollar-Yen pair is losing ground to the 152.95 level during the early Asian session on Tuesday. The pair is declining as the U.S. dollar (USD) retreats from the nearly three-month high reached in the previous session. However, the pair's decline may be limited amid uncertainty surrounding the composition of the next government and the Bank of Japan's (BoJ) rate hike plan.

The loss of Japan's ruling coalition in the elections increases political and monetary policy uncertainty and could put pressure on the Japanese yen (JPY). “The ruling LDP and its coalition partner lost their majority in the lower house of parliament, raising concerns about the shape and direction of the next government's policies. Markets have also slightly reduced expectations of Bank of Japan policy tightening (which has helped local equities),” said Scotiabank chief currency strategist Sean Osborne.

The Bank of Japan's interest rate decision will take center stage on Thursday. Nearly 86% of economists polled by Reuters expect Japan's central bank to leave rates unchanged at its October meeting on Thursday.

On Tuesday, Japan's Statistics Bureau released data that the country's unemployment rate fell to 2.4% in September, down from the previous reading and the market consensus forecast of 2.5%

Trading recommendation: Trade predominantly with Buy orders from the current price level.

The GBP/USD pair started the new week on a weaker note and is trading around 1.2960-1.2955. Spot prices, however, remain within striking distance of the lowest level since August 16, near 1.2900 reached last week, and appear vulnerable to an extension of the month-long downtrend amid a bullish US Dollar (USD).

On Friday, the U.S. Census Bureau reported that U.S. Durable Goods Orders fell 0.8% in September, which was slightly better than expectations of a 1% decline. Additional details of the report showed that new orders excluding transportation costs rose 0.4% in the reporting month. In addition, the University of Michigan's consumer sentiment index hit a six-month high of 70.5 in October, which was better than both the preliminary result and the previous month's reading.

This data supports the view that the Fed will continue to moderate rate cuts throughout the year, which in turn triggers a new rise in US Treasury yields and continues to support the dollar. The British Pound (GBP), on the other hand, is weakened by rising bets on further interest rate cuts by the Bank of England (BoE) in November and December, backed by a drop in the UK Consumer Price Index to its lowest level since April 2021 and below the central bank's 2% target.

The aforementioned fundamental backdrop suggests that the path of least resistance for the GBP/USD pair lies to the downside. Even from a technical perspective, recent repeated failures near the psychological 1.3000 mark support the prospects of a continued decline from the 1.3435 area, or the highest level since February 2022, reached last month.

Trading recommendation: Trade predominantly with Sell orders from the current price level.

Trade recommendation: Trading predominantly Sell orders from the current price level.

On Thursday, the EUR/USD exchange rate made a partial recovery, rebounding by four-tenths of a percent to reach 1.0800. Despite a rebound at the end of the week, the Fibonacci retracement remains well below recent highs, having dropped by over four per cent from late September peaks near 1.1200.

The pan-European purchasing managers' index (PMI) data from HCOB on Thursday showed a mixed picture, with the October EU manufacturing PMI rising to 45.9 from 45.0 in the previous month, beating expectations of 45.1. Meanwhile, the October EU Services PMI declined to 51.2, down from the previous reading of 51.4 and below the projected increase to 51.6.

The euro's presence on this week's economic data list is limited, with only marginally significant data scheduled for release on Friday. Markets will have to contend with US durable goods orders and an update on expectations for 5-year consumer inflation from the University of Michigan (UoM). It is anticipated that US Durable Goods Orders will decline by 1.0% in September compared to the previous month, representing a continuation of the recent downward trend observed in August, when there was a 0.0% drop. The October 5-year UoM consumer expectations are expected to be in line with the previous reading of 3.0%.

Trading recommendation: Trading predominantly Buy orders from the current price level.

The Japanese yen (JPY) saw fluctuations against its US counterpart during the Asian session on Thursday, with a decline to its lowest level since 31 July. Meanwhile, the near-term outlook is unfavorable for the Japanese yen amid uncertainty surrounding the Japanese election, raising doubts about the Bank of Japan's (BoJ) ability to continue raising interest rates this year.

Furthermore, the recent increase in US Treasury yields, driven by expectations of a less aggressive monetary policy from the Federal Reserve (Fed) and concerns over the budget deficit following the US election, should limit the appreciation of the low-yielding yen. Additionally, the strong bullish sentiment surrounding the US dollar (USD) indicates that the USD/JPY pair is still likely to appreciate.

Trade recommendation: Trading predominantly Sell orders from the current price level.

On Tuesday, the GBP/USD remained stable, testing the 1.3000 mark. The intraday price action tested a new nine-week low, while there was no upside trading above 1.3000. This leaves short-term momentum at a mid-range just below the key mark.

Bank of England (BoE) Governor Andrew Bailey delivered the first of four scheduled speeches this week. For the most part, Mr Bailey reiterated the stance taken in previous statements, although he did express regret at the Bank's complacency over recent financial stability risks.

With three further speeches by the Bank of England Governor scheduled for this week, market participants will be monitoring for any recurring themes in Governor Bailey's speech notes. On Wednesday evening, Bank of England Governor Bailey will deliver a speech, and on Thursday, market participants will focus on the UK Purchasing Managers' Index (PMI) data.

Analysts anticipate a modest decline in UK economic activity, with the October services PMI projected to decline from 52.4 to 52.2.

Trading recommendation: We follow the level of 1.3000, when fixing above it we consider Buy positions, when rebounding we consider Sell positions.

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The EUR/USD exchange rate failed to maintain its position on Monday, commencing the new trading week with a downward trajectory as the price reverted to a familiar 12-week low, hovering just above 1.0800. The market is cautious about the future pace of rate cuts, particularly from the Federal Reserve (Fed). The purchasing managers' activity index (PMI) data, due for release later this week, will provide insight into the state of the global economy in the coming weeks.

European Central Bank (ECB) President Christine Lagarde is scheduled to make several statements this week. The main public appearance will take place on Wednesday, when ECB President Lagarde will speak on Europe's current financial challenges at the Atlantic Council in Washington, DC.

Global PMI data is due out on Thursday. The EU PMI survey results are eagerly awaited by the markets, with average market forecasts suggesting a slight increase in October's EU services PMI to 51.6 from September's 51.4.

Trading recommendation: We follow the level of 1.0800, if it is fixed below we consider Sell positions, if it bounces back we consider Buy positions.

Gold prices (XAUUSD) have reached a new all-time high, surpassing $2700 per ounce for the first time in history! The yellow metal, which has been rising for nine consecutive months, received fresh momentum in September from the Fed’s rate cut. Silver (XAGUSD) hasn’t been left behind either, and is currently trading at highs not seen since 2012. Prices are now around $32.30 per ounce, with silver’s growth this year increasing to 35%!

On November 21, 2023, we first alerted traders to the immense potential of precious metals. Less than a year has passed, and the returns since our forecast have reached 36%! After reaching yet another historical high, gold shows no signs of slowing down.

The main reason for the drop is growing investor dissatisfaction with the lack of new economic stimulus measures from the Chinese government. Expectations were high, especially after the National Development and Reform Commission's press conference, where economic support was promised but no concrete actions were provided. This has heightened uncertainty in the market.

Factors driving precious metal price growth and expert opinions:

• Major purchases by central banks: Gold prices are rising due to significant metal purchases by central banks, increasing its value.
• Geopolitical instability: Escalating geopolitical instability, particularly in the Middle East, is driving demand for metals as safe-haven assets. Ongoing conflicts in various regions also contribute to rising gold and silver prices.
• Expectations of a Fed rate cut: Investors are anticipating a possible interest rate cut by the U.S. Federal Reserve, making metals more attractive as investment tools. According to CME data, the probability of a rate cut at the upcoming Fed meeting on November 7 stands at 92.3%, increasing the appeal of precious metals as investments.
• Growth forecasts: Analysts predict that gold prices could reach $2850 per ounce by the end of the year and $3100 in the long term.
• Projections by major financial institutions: ING and other financial organizations expect gold prices to peak in the fourth quarter of this year, with potential prices reaching up to $2900 per ounce by mid-2025.

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The Japanese Yen (JPY) begins the new week on a modestly positive note against its US counterpart, with indications that it may build on Friday's recovery from its lowest level since early August. The JPY is receiving some support from recent verbal intervention from Japanese authorities. However, uncertainty over the timing and pace of further interest rate hikes by the Bank of Japan (BoJ) should limit any significant appreciation.

On Friday, BoJ Governor Kazuo Ueda cautioned that the outlook for Japan's economic recovery remains uncertain and underscored the importance of monitoring the impact of market volatility on the economy. This follows Japanese Prime Minister Shigeru Ishiba's unexpected remarks opposing further interest rate increases, indicating that the Bank of Japan will not hasten the implementation of additional policy measures in advance of Japan's general election on 27 October.

This, along with the prevailing risk sentiment, should provide support for the safe-haven yen. Meanwhile, expectations that the Federal Reserve (Fed) will continue to moderate interest rate cuts next year are keeping US Treasury yields high and limiting the US dollar's corrective fall from a two-month high. This could have the effect of further undermining the low-yielding Japanese Yen and supporting the prospects of dip-buying in USD/JPY.

Trade recommendation: Trading predominantly Sell orders from the current price level.

The dollar bulls decided to lock in some profits, which, in turn, supports the pair.

An unexpected drop in UK inflation confirms bets on further rate cuts by the Bank of England and puts pressure on the British pound.

The GBP/USD pair is attracting some follow-through buying during the Asian session on Friday and looks to consolidate an overnight bounce from the 1.2975-1.2970 area, or a two-month low. Spot prices are currently trading in the 1.3020-1.3025 area, up 0.10% on the day amid a moderate decline in the US dollar (USD), although significant appreciation still seems unlikely.

In addition, the unexpected drop in the UK Consumer Price Index (CPI) to its lowest level since April 2021 and below the Bank of England's 2% target paves the way for further interest rate cuts. In fact, money markets are now pricing in the likelihood that the U.K. central bank will cut borrowing costs by 25 basis points (bps) at its upcoming meeting in early November and cut rates again in December, by more than 90%.

This could further deter traders from aggressively bullish bets on the British Pound (GBP) and help hold the GBP/USD pair. Hence, it would be prudent to wait for strong buying before confirming that the recent pullback from the 1.3435 area, or the highest level since March 2022 reached last month, has exhausted itself and positioning for further gains.

Trading recommendation: trade predominantly with Buy orders from the current price level.

The Euro-dollar pair continued to decline to the 1.0850 level in the early Asian session on Thursday. Further growth of the US dollar puts selling pressure on the main pair. Investors will keep a close eye on the European Central Bank (ECB) monetary policy meeting, which is expected to cut interest rates again on Thursday.

The Federal Open Market Committee (FOMC) took the unusual step of lowering the benchmark interest rate by half a percent to a target range of 4.75-5.00% at its September meeting.

Fed Chairman Christopher Waller said Monday that future interest rate cuts will be less aggressive than the big move in September because he is concerned that the economy could still be operating at a faster pace than expected. Later on Thursday, investors will focus on U.S. retail sales data, which is expected to rise to 0.3% in September from 0.1% in August.

Across the ocean, the ECB is likely to make its third interest rate cut in a year at its October meeting, and money markets are all but pricing in three more rate cuts through March 2025.

Trading recommendation: Trade mainly with sell orders at the price level of 1.0890.

Small bets on a Fed rate cut support the dollar and provide some support for USD/JPY.

The Japanese Yen (JPY) strengthened against its US counterpart on Tuesday and rolled back most of the previous day's losses to its lowest level since early August. Overnight declines in US equity markets, as well as lingering geopolitical risks, proved to be key factors that sent flows rushing towards the safe-haven yen. Nevertheless, uncertainty over the Bank of Japan's (BoJ) rate hike plans held back significant appreciation.

Adding to this, disappointing Japanese August Core Machinery Orders data is contributing to the JPY's decline in Wednesday's Asian session. Meanwhile, the US Dollar (USD) is holding near its highest level in over two months amid expectations that the Federal Reserve (Fed) will continue to moderate interest rate cuts over the next year. This is helping the USD/JPY pair to hold near the 149.00 level and making the JPY bulls cautious.

From a technical perspective, any further decline is likely to find decent support around 148.60-148.55. However, some follow-through selling could leave the USD/JPY pair vulnerable to further weakening below the 148.00 round figure and testing last week's low around 147.35. The latter is followed by 147.00, the break of which would mean that the recent gains seen over the past month have exhausted themselves and would open the way for deeper losses.

Trade recommendation: Following the level of 149.00, at fixation below consider Sell position, at rebound consider Buy position

On Monday, GBP/USD encountered resistance at the 1.3000 level, with markets maintaining a calm tone ahead of key UK data releases in the first half of the trading week. The UK's payroll and jobs data are scheduled for release on Tuesday, while the Consumer Price Index (CPI) and Producer Price Index (PPI) inflation figures are scheduled for release on Wednesday. The midweek will conclude with the release of US retail sales data on Thursday, while UK retail sales data will be released in the London session on Friday.

It is anticipated that UK employment data for the quarter ended August will show further signs of softening. The average market forecast is for the annualised measure of average earnings excluding bonuses for the quarter ended August to fall from the previous reading of 5.1% to 4.9%. The change in UK jobless claims is forecast to decline to 20.2k in September from 23.7k in August. Meanwhile, the ILO unemployment rate in the UK is anticipated to remain at 4.1% for the three-month period ended August.

The first half of the trading week will be focused on data related to the British pound, with the release of UK CPI inflation data scheduled for Wednesday. The core CPI is forecast to decline to 1.9% from the previous reading of 2.2%. However, UK core CPI is anticipated to continue its upward trajectory, reaching 3.4% from 3.6%.

The next significant data release from the US is scheduled for Thursday, when US retail sales are expected to accelerate to 0.3% m/m in September, following a relatively subdued 0.1% m/m in August. However, the primary focus of traders will be on the Bank of England's (BoE) monetary policy report, scheduled for release on Thursday. The trading week will conclude on Friday with the release of UK retail sales data, which is expected to show a decline of -0.3% m/m in September, down from the previous reading of 1.0%.

Trading recommendation: Trading predominantly Sell y orders from the current price level.

The Euro-Dollar pair extended declines to the 1.0920 level in the early Asian session on Monday. Risk aversion amid rising geopolitical tensions in the Middle East and conflicts between China and Taiwan is putting selling pressure on risky currencies such as the Euro (EUR).

On Monday, a US State Department spokesperson said that they have “serious concerns about People's Liberation Army (PLA) military exercises in the Taiwan Strait and around Taiwan”. They also said they would monitor the PRC's actions and coordinate with allies and partners on our shared concerns. Any signs of escalating tensions could increase safe-haven flows, which would favor the U.S. dollar and weigh on the major pair.

Traders expect a 25 basis points (bps) Federal Reserve (Fed) rate cut in November following the release of the U.S. Producer Price Index (PPI) on Friday. The CME FedWatch tool showed that the probability of a 25 bps Fed rate cut is almost 86.8%, up from 83.3% before the PPI data was released.

Overseas, the euro is under some pressure as the European Central Bank (ECB) is expected to cut interest rates further at both of its remaining monetary policy meetings this year. The ECB's softer stance has been reinforced by a faster-than-expected decline in Eurozone inflationary pressures and a “fragile” economic recovery.

Trading Recommendation: Trade mainly with Sell orders from the current price level.

The Pound-Dollar pair is unable to capitalize on a modest rebound from the 1.3020 area or the one-month low and has been fluctuating in a narrow range during the Asian session on Friday. Spot prices are currently hanging around the mid-1.3000 area, unchanged for the day, and seem vulnerable to a continuation of the recent corrective decline from the highest level since March 2022 reached last month.

US initial jobless claims data released on Thursday pointed to signs of weakness in the US labor market and suggested that the Federal Reserve (Fed) will continue to cut interest rates. This kept the US Dollar (USD) on the defensive below its highest level since mid-August and provided some support for the GBP/USD pair. Nevertheless, investors seem to have already fully appreciated the possibility of more aggressive Fed policy easing. These expectations were confirmed by the minutes of the September FOMC meeting and stronger than expected US consumer inflation data.

In addition, persistent geopolitical risks associated with ongoing conflicts in the Middle East serve as a tailwind for the safe-haven US Dollar and limit GBP/USD growth. From the latest developments: the Israeli army claimed to have killed the top commander of the Palestinian militant group Islamic Jihad in the Nur Shams refugee camp in the occupied West Bank. This, as well as market confidence that the Bank of England (BoE) may be about to accelerate its rate cut cycle, could continue to undermine the British Pound and keep the currency pair under control.

Market participants are now awaiting the release of UK macroeconomic data, including monthly GDP, to provide some momentum. However, the focus will remain on the US Producer Price Index (PPI), which will be released later in the North American session. In addition, on the economic front, the US will release preliminary data on the Michigan Consumer Sentiment Index and inflation expectations. This data, along with the speeches of influential FOMC members, will stimulate demand for the US dollar and allow traders to take advantage of short-term opportunities in the GBP/USD pair on the last day of the week.

Trading recommendation: Trade predominantly with Sell orders from the current price level

EUR/USD fluctuated in a narrow range below 1.0950 during the Asian session on Thursday and consolidated recent strong losses to a near two-month low reached the previous day.

The US dollar (USD) is near its highest level since 16 August as traders assessed the possibility of another 50 basis points (bps) interest rate cut by the Federal Reserve (Fed) in November. Moreover, current market pricing indicates a more than 20 per cent probability that the US central bank will keep rates unchanged next month, and these expectations were confirmed by the hawkish FOMC meeting minutes released on Wednesday. As a result, US 10-year government bond yields will exceed the 4% threshold, which will support the quid and serve as a headwind for EUR/USD.

On the other hand, the euro currency continues to be pressured by growing confidence that the European Central Bank (ECB) will cut borrowing costs by 25bps at each of its two policy meetings before the end of the year. Moreover, the risk of further escalation of geopolitical tensions in the Middle East should favour the safe-haven US Dollar and indicate that the path of least resistance for EUR/USD lies to the downside. Traders, however, may refrain from new bearish bets and prefer to wait for the latest US inflation data before positioning themselves for further rate cuts.

The all-important US Consumer Price Index (CPI) will be released later in the North American session this Thursday, followed by the US Producer Price Index (PPI) on Friday. This data will play a key role in shaping expectations about the path of the Fed rate cut, which in turn will stimulate demand for the dollar in the near term and give new directional momentum to EUR/USD.

Trading recommendation: Trade mainly with sell orders at the price level of 1.0890.

The Chinese stock market is experiencing a sharp decline following a strong rally in recent weeks. On October 8, the Hang Seng Index (#HSI on FreshForex) plummeted by 9.56%, reaching 20,893 points.

The Hang Seng China Enterprises Index, which tracks Chinese stocks traded in Hong Kong, dropped even further — by 10.9%. The CSI 300 Index of mainland China, which started the day with an 11% gain, ended with a nearly 8% loss.

The main reason for the drop is growing investor dissatisfaction with the lack of new economic stimulus measures from the Chinese government. Expectations were high, especially after the National Development and Reform Commission's press conference, where economic support was promised but no concrete actions were provided. This has heightened uncertainty in the market.

What has been done previously:

• In late September, the Chinese government announced plans to strengthen economic stimulus, promising fiscal injections and support for the real estate sector.
• The People's Bank of China lowered reserve requirements for banks, freeing up 1 trillion yuan ($142 billion) for the market.
• There are plans to lower mortgage rates and the down payment for second-home purchases to a record low of 15%.

Bottom line: The market is waiting for action. Given the history of sharp declines in the Chinese market, such as in 2015 when the CSI 300 Index lost 40% in two months, the Chinese government cannot afford a similar outcome and may direct efforts to strengthen investor confidence. Since mid-September, #HSI has experienced a steady bullish trend, and our analysts believe these trends could repeat.

The Japanese yen (JPY) saw some intraday selling on Tuesday, which helped the USD/JPY pair pause its modest pullback from its highest level since August the previous day. The latest data released on Tuesday showed a decline in real wages in Japan in August, following two months of growth. Additionally, there was a reduction in household spending, which has led to concerns about the resilience of private consumption and the potential for a sustained economic recovery. This development coincides with critical remarks from Japan's new Prime Minister regarding monetary policy, contributing to uncertainty surrounding the Bank of Japan's (BoJ) plans to raise rates further. In addition, the prospect of a ceasefire between Lebanon's Hezbollah and Israel has contributed to the decline in the perceived safety of the Japanese Yen in the lead-up to Japan's snap election on 27 October.

However, speculation that Japanese authorities will intervene in the currency market to support the national currency has prevented a more aggressive stance on the part of those betting on a decline in the yen. Furthermore, the weak demand for the US dollar (USD) prevented the USD/JPY pair from capitalising on the overnight rebound from the 147.35-147.30 area, resulting in a limited price range during Wednesday's Asian session. Furthermore, investors are adopting a wait-and-see approach ahead of the release of the minutes of the September FOMC meeting, scheduled for today. This data, along with the US Consumer Price Index (CPI) and Producer Price Index (PPI), will play a pivotal role in influencing the US dollar price dynamics in the near term and will help determine the next stage of directional movement of the currency pair.

Trade recommendation: Trading mainly by Sell orders from the current price level.

The Pound-Dollar pair attracted some buying during the Asian session on Tuesday and so far seems to have broken a five-day losing streak, hitting a near four-week low near 1.3160 reached the previous day. However, spot prices are unable to consolidate above the 1.3100 mark, causing bullish traders to be somewhat cautious.

Investors remain concerned that tensions in the Middle East could escalate into a larger conflict. In addition, not-so-optimistic comments from the National Development and Reform Commission (NDRC) overshadowed the recent optimism from China's stimulus measures and curbed investors' appetite for risky assets. This is evidenced by the overall weak tone in equity markets, which in turn could help drive inflows into the US Dollar and constrain the GBP/USD pairing.

Meanwhile, Bank of England (BoE) Governor Andrew Bailey said last week that there is a possibility that the central bank could become more aggressive in cutting rates if there is further good news on inflation. This could help limit British Pound (GBP) gains and suggests that the path of least resistance for the GBP/USD pair lies to the downside. As such, any further upward movement could be seen as a selling opportunity and risks quickly coming to naught.

On Tuesday, no market-important economic data will be released from either the UK or the US, so the dollar and the GBP/USD pair will depend on the Fed's words. Meanwhile, attention will be focused on the release of the FOMC meeting minutes on Wednesday. It will be followed by data on the Consumer Price Index (CPI) and Producer Price Index (PPI) in the US, which will play a key role in stimulating demand for the dollar and will give a new impetus to the currency pair.

Trading recommendation: Watch the level of 1.3100, when fixing above it consider Buy positions, when rebounding we consider Sell positions.

The EUR/USD pair starts the new week on a subdued note and consolidates last week's significant losses to its lowest level since mid-August, achieved on the back of favourable US jobs data on Friday. The pair is currently trading around 1.0970.

The US Dollar (USD) is near a seven-week high as traders further reduced their bets on another significant interest rate cut by the Federal Reserve (Fed) in November on the back of unexpectedly strong US jobs data. The key NFP figure showed that the economy added 254k jobs in September, well above consensus estimates, while the unemployment rate unexpectedly fell to 4.1%. This was an indication that the US labour market remains robust, while higher than expected growth in average hourly earnings has revived inflationary concerns, dashing hopes for more aggressive easing policies from the Fed.

In fact, current market pricing points to a nearly 95 per cent probability that the Fed will cut borrowing costs by 25 basis points at the end of its two-day meeting on 7 November. In addition, persistent geopolitical risks stemming from ongoing conflicts in the Middle East have helped the US Dollar Index (DXY), which tracks the US Dollar against a basket of currencies, register its lowest week since September 2022. On the other hand, the euro continues to be undermined by bets that the European Central Bank (ECB) will cut rates again in October amid weakening inflationary pressures and slowing economic growth.

Expectations were confirmed by comments from ECB Governing Council member Francois Villeroy de Gallo, who said the central bank will cut rates in October as weak economic growth raises the risk of inflation falling short of its 2% target. This, in turn, is seen as another factor acting as a headwind for EUR/USD and supporting the prospects for further rate cuts in the near term. Thus, any recovery attempt can be seen as a selling opportunity and risks to quickly derail.

Trading Recommendation: We follow the level of 1.0940, in case of consolidation below we consider Sell positions.