The EUR/USD pair has strengthened for the fifth straight session amid rising demand for riskier assets and ahead of key meetings by the Federal Reserve and the European Central Bank this week.
Possible technical scenarios:
As we can see on the daily chart, EUR/USD has approached resistance within the downtrend formed between 1.1494 and 1.1788. From this level, a reversal and a move lower toward 1.1494 remain possible.
Fundamental drivers of volatility:
Market sentiment has improved following the US–Japan agreement on rare earth metals cooperation and softer rhetoric from US officials regarding China. President Donald Trump voiced optimism about achieving a “good deal” with Beijing, while the US Treasury confirmed that the threat of 100% tariffs has been temporarily lifted. These developments boosted global risk appetite and exerted pressure on the dollar as a safe-haven asset.
Weak US inflation data also weighed on the greenback, strengthening expectations that the Federal Reserve will cut interest rates by 0.25% at Wednesday’s meeting and potentially hint at another cut in December. Meanwhile, the ongoing US government shutdown is restricting the release of economic data, leaving markets more reliant on the Fed’s rhetoric.
Investors are also focused on the European Central Bank’s meeting this coming Thursday, where rates are expected to remain unchanged at 2.15%. Market participants will closely analyze ECB President Christine Lagarde’s remarks on the future direction of monetary policy, as they could influence the euro’s performance later in the week.
Intraday technical picture:
As evidenced by developments on the 4H chart, EUR/USD has reversed lower from the resistance of the descending channel, maintaining potential for further weakness toward the support level at 1.1494.
The GBP/USD pair is gaining strength, supported by improving risk sentiment and expectations of dovish rhetoric from the Federal Reserve at its upcoming meeting on Wednesday.
Possible technical scenarios:
Given the unfolding situation on the daily chart, GBP/USD continues its gradual decline within the 1.3147–1.3436 range. For the downward trend to extend, the pair needs to consolidate below the October lows.
Fundamental drivers of volatility:
The domestic outlook for the pound remains mixed. Data from the British Retail Consortium showed retail prices declining in October for the first time since March, reinforcing expectations that the Bank of England may move toward policy easing. The possibility of a rate cut by year-end continues to limit the pound’s upside potential.
ВMeanwhile, the US dollar weakened as market optimism returned following comments from President Donald Trump about a potential imminent trade deal with China. The U.S. Secretary of the Treasury, Scott Bessent, confirmed that Washington will not impose new tariffs, while Beijing is reportedly ready to postpone export restrictions. These developments have reduced demand for the dollar as a safe-haven asset.
This week, investors are primarily focused on the Federal Reserve meeting on Wednesday, where a 0.25% rate cut is widely anticipated. Slowing inflation, a softening labor market, and the ongoing US government shutdown are fueling expectations for more accommodative measures — factors that could maintain pressure on the dollar and support the pound in the short term.
Intraday technical picture:
The 4H chart shows that GBP/USD continues its steady decline within the 1.3147–1.3436 sideways range, leaving room for movement toward the lower boundary after completing the sideways trend of the intermediate dotted line level at 1.3332.
The USD/JPY pair is declining on Tuesday, as the Japanese yen remains firm amid concerns about possible currency intervention and diverging policy paths between the Federal Reserve and the Bank of Japan.
Possible technical scenarios:
From the look of things on the daily chart, USD/JPY has retreated from 153.19, moving toward the 151.53 level. A confirmed breakout below this mark would open the way for a further decline toward 149.94.
Fundamental drivers of volatility:
Speculation about potential government intervention to curb yen weakness, along with profit-taking ahead of this week’s central bank meetings, is boosting demand for the Japanese currency.
Data released on Monday showed that inflation in Japan’s service sector accelerated to 3% in September, reinforcing expectations for a gradual rate hike by the Bank of Japan. This outlook contrasts with the anticipated 0.25% rate cut from the Federal Reserve on Wednesday and the possibility of further easing in December, both of which are weighing on the US dollar.
The yen also received additional support from comments by Economy Minister Minoru Kiuchi, who emphasized the importance of maintaining exchange rate stability — remarks that further fueled concerns over potential FX intervention. Investors are now turning their attention to Thursday’s Bank of Japan meeting, where the central bank is expected to keep its key rate at 0.50%. The policy statement will serve as a key signal regarding the likelihood of a rate hike in December or early next year.
Until decisions from the Fed and the Bank of Japan are announced, traders are expected to stay cautious, keeping USD/JPY trading within its current range.
Intraday technical picture:
According to the unfolding scenario on the 4H chart, USD/JPY has a bit of room to move toward support at 151.53, with potential for a breakout and subsequent decline toward the 149.94 target.
The USD/CAD pair is moving lower amid improving risk sentiment and growing expectations of monetary easing by the Federal Reserve.
Possible technical scenarios:
On the daily chart, USD/CAD remains within an overall uptrend but is currently correcting after pulling back from resistance. The decline toward the channel support may continue until it reaches the local levels of 1.3924, which is marked with a dotted line, or 1.3861.
Fundamental drivers of volatility:
The US dollar is weakening as markets anticipate a 25-basis-point rate cut from the Federal Reserve on Wednesday. Expectations of another rate reduction in December are also increasing pressure on the greenback.
However, the pair’s decline is being partially limited by weaker oil prices, which continue to weigh on the Canadian dollar. Oil remains under pressure due to expectations that OPEC+ will raise production in December—a development that typically pushes commodity currencies lower.
Traders are also looking ahead to the Bank of Canada’s meeting on October 29, where a 0.25% rate cut to 2.25% is widely expected. An additional headwind for the CAD is the US decision to impose a 10% tariff on Canadian goods, which could hurt investment and export revenues, further reinforcing the likelihood of continued monetary easing.
Intraday technical picture:
The pair on the 4H USD/CAD chart shows medium-term technical potential for a decline toward 1.3924, marked with a dotted line, or 1.3861.
Oil prices continue to decline amid uncertainty surrounding US sanctions on Russian oil companies and expectations of a possible production increase by OPEC+.
Possible technical scenarios:
Brent prices on the daily chart are approaching the support zone between 63.23 and 65.02. A breakout and consolidation below 63.23 would open the way for a further decline toward the next support level at 61.10.
Fundamental drivers of volatility:
Brent futures dropped 2% to $64.33 per barrel, reversing recent gains that followed the announcement of sanctions against LUKOIL and Rosneft. The previous price rally was driven by expectations of reduced Russian oil exports, but investors are now reassessing the likelihood of a significant supply shortage in the market.
Market participants are evaluating the real impact of sanctions on Russian exports, with part of last week’s risk premium already priced out. According to the International Energy Agency, the overall effect of these sanctions on global supply remains limited due to excess production capacity, while LUKOIL has announced plans to sell its international assets. Meanwhile, Indian refiners are delaying new purchases of Russian oil as they await further guidance from the government and suppliers, adding additional downward pressure on prices.
Expectations that OPEC+ could raise production in December, following a series of earlier cuts aimed at stabilizing the market, are also weighing on sentiment. Against this backdrop, traders are closely watching ongoing US–China negotiations, which could influence global oil demand. Any signs of progress toward a trade agreement between the two largest oil consumers could improve risk appetite and limit further declines, whereas renewed tensions would likely deepen the sell-off.
Intraday technical picture:
On the 4H chart, Brent still has room to move toward the lower boundary of the 63.23–65.02 range. If support at 63.23 holds, the price could continue to trade within this sideways corridor.
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