The Pound Sterling (GBP) extended its losing streak for the third consecutive trading session against the US Dollar (USD) on Thursday, weighed by a broad rebound in the greenback and persistent caution ahead of remarks from Federal Reserve Chair Jerome Powell. The GBP/USD pair fell toward the 1.3365 mark in early European trading, slipping to its weakest level in nearly two weeks, as investors adjusted positions following the latest Federal Open Market Committee (FOMC) minutes.

The US Dollar Index (DXY), which measures the greenback’s performance against a basket of six major currencies, rebounded firmly toward the two-month high of 99.00, reversing a mild correction that briefly pulled it down to around 98.70 earlier in the session. The index’s recovery underscores renewed demand for the dollar as investors continue to favor it amid mixed global growth signals and heightened uncertainty over central bank policy paths heading into the final quarter of the year.

The dollar’s strength comes despite the September FOMC minutes revealing a broadly dovish undertone. Policymakers appeared increasingly confident that inflationary pressures have continued to ease, while labor market conditions have softened enough to justify additional monetary easing later this year. The minutes stated that “upside risks to inflation have diminished or not increased,” suggesting that the Fed sees growing scope for rate cuts to support economic momentum.

Crucially, officials agreed that it would “likely be appropriate to ease policy further over the remainder of 2025,” reflecting the central bank’s evolving assessment that the disinflation process is advancing faster than initially anticipated. The market reaction, however, was nuanced — traders read the minutes as confirming expectations of two more 25-basis-point cuts before year-end, but they also viewed the Fed’s measured tone as a sign that policymakers remain cautious about overcommitting to an aggressive easing cycle.

According to the CME FedWatch Tool, the probability of a 25-basis-point rate cut at the November policy meeting stands near 78.6%, with another cut largely priced in for December. This positioning suggests that while the Fed is moving toward policy normalization, investors still prefer the dollar for its relative yield advantage and its safe-haven appeal amid global political and economic uncertainty.

Market attention now shifts to Fed Chair Jerome Powell, who is scheduled to deliver remarks at the Community Bank Conference in Washington at 12:30 GMT. Investors will be parsing his speech for clues about how the ongoing US government shutdown might influence the Fed’s economic outlook and future policy decisions.

So far, Fed officials have largely downplayed the short-term economic impact of the shutdown, but extended disruption could weigh on government spending, data collection, and consumer confidence — complicating the central bank’s assessment of underlying economic trends. Powell’s tone will therefore be critical in determining whether the recent dollar strength can be sustained or if markets will begin pricing a faster pace of rate cuts into early 2026.

Meanwhile, Treasury yields have stabilized after retreating modestly earlier in the week, lending additional support to the dollar. The benchmark 10-year yield continues to hover around the 3.75% level, with investors balancing expectations of policy easing against concerns over fiscal uncertainty and the still-tight labor market.

For the Pound Sterling, the recent slide reflects more than just a stronger dollar — it highlights persistent investor skepticism over the UK’s economic resilience. Despite modestly improving business sentiment and recent relief in inflation readings, concerns about stagnant growth and elevated borrowing costs continue to undermine sterling’s appeal.

The Bank of England (BoE) has signaled that while it is nearing the end of its tightening cycle, it remains cautious about declaring victory over inflation. Markets currently expect the BoE to deliver one final rate cut in early 2026, though much will depend on how the UK’s labor market evolves and whether wage pressures ease meaningfully by year-end.

The UK economy remains in a fragile position, with consumer spending constrained by high interest rates and persistent fiscal challenges. Analysts note that without a clear rebound in productivity or investment, the pound could struggle to sustain upward momentum even if US monetary policy turns more accommodative in the coming months.

From a technical perspective, the GBP/USD pair remains entrenched in a short-term bearish trend. The pair briefly attempted a recovery during the previous session, retesting the 1.3415 resistance level, but failed to build sustained momentum. The Relative Strength Index (RSI) continues to show mildly positive signals as the pair attempts to offload oversold conditions; however, the broader bias remains to the downside.

Price action suggests that as long as GBP/USD remains below the 1.3415–1.3450 resistance zone, the path of least resistance points lower. A decisive break below 1.3350 could open the door toward the 1.3200 psychological level, where buyers may attempt to defend the pair. Conversely, a rebound above 1.3450 could signal the beginning of a short-term corrective phase toward 1.3520.

SELL GBPUSD

ENTRY PRICE: 1.3340

STOP LOSS: 1.3440

TAKE PROFIT: 1.3200

Silver (XAG/USD) extended its upward momentum on Thursday, climbing toward the key $52.00 psychological mark after briefly touching $51.20 — its highest level in years. The rally comes as precious metals continue to draw investor demand amid heightened global political risks and dovish Federal Reserve commentary, even as the US Dollar maintains its strength.

The metal’s latest ascent underscores a broader bullish trend in the commodities market, driven by safe-haven flows as uncertainty deepens in major economies. Political unrest in France and Japan has fuelled investor caution, while Washington remains paralyzed by a government shutdown that has stretched into its eighth day, eroding confidence in the US political landscape. This mix of political tension and fiscal gridlock has encouraged traders to seek refuge in assets like gold and silver, which are traditionally viewed as hedges against volatility and policy instability.

Earlier in the session, comments from New York Federal Reserve President John Williams reinforced expectations that the US central bank will deliver additional rate cuts before year-end. Williams noted that policy easing may be warranted to support growth amid signs of moderating inflation and slowing consumer spending. Markets quickly interpreted his remarks as a signal of a more dovish pivot, pushing Treasury yields lower and adding further support to precious metals.

Investors now await speeches from Fed Chair Jerome Powell and Governor Michelle Bowman at a banking forum in Washington later today. Any hint of growing support for policy loosening could further weigh on the Dollar and strengthen the case for continued gains in non-yielding assets like silver.

“The market is starting to look through the near-term resilience of the US economy and pricing in the Fed’s next move,” said one market strategist. “If Powell echoes Williams’ tone, silver could easily challenge and break through the $52 threshold before the week is out.”

Political headlines also continue to drive the narrative. In France, fresh uncertainty surrounding fiscal reforms and growing street protests have rekindled concerns about the country’s stability, prompting investors to trim exposure to European equities. Meanwhile, Japan’s political scene remains fragile following renewed speculation over leadership challenges, weakening the yen and diverting domestic investors toward precious metals as a hedge against further turbulence.

The ongoing US government shutdown adds to the unease. With federal operations now partially suspended for more than a week, analysts warn of potential disruptions to economic data releases and public services — a scenario that could further pressure the US administration and weigh on consumer confidence. Historically, such events have lent support to gold and silver prices as investors seek safety from policy paralysis.

From a technical perspective, silver remains firmly within a dominant bullish trend. The metal has established a new all-time high in intraday trading at $51.20, supported by consistent movement above its 50-day exponential moving average (EMA50). This positioning signals that upward momentum remains intact, with the broader trend continuing to favor buyers.

Relative strength indicators (RSI) also suggest that the metal has successfully unwound its previous overbought conditions, leaving room for renewed bullish extension. The correction toward the $50.00 handle is viewed by many traders as a healthy retracement rather than a reversal — a consolidation phase before another upward leg.

Price action remains aligned with a short-term ascending trendline that has guided the rally since early September. If silver can sustain support above $50.00 and reclaim momentum above $51.20, the path appears open toward the next key resistance at $52.00, followed by potential extensions toward $53.30. On the downside, immediate support is seen at $49.80, where buying interest is likely to re-emerge if the market experiences profit-taking.

BUY SILVER

ENTRY PRICE: 50.30

STOP LOSS: 48.50

TAKE PROFIT: 53.30

The euro remains under pressure in Thursday’s European session, holding just above its one-month lows near 1.1600, as persistent political uncertainty in France and renewed caution from the Federal Reserve keep traders on edge. At the time of writing, EUR/USD trades around 1.1615, with every attempt to regain ground meeting renewed selling interest. Investors appear reluctant to build long positions in the common currency ahead of a highly anticipated speech by Federal Reserve Chair Jerome Powell, who is scheduled to speak later today at a banking event in Washington.

The muted tone in the pair underscores the delicate balance between diverging monetary policy expectations in the U.S. and the euro area. While the Fed’s recent commentary suggests a cautious path toward further easing, the European Central Bank (ECB) remains hesitant to alter its current stance despite rising geopolitical uncertainty and slowing economic momentum across the bloc.

Earlier on Thursday, New York Fed President John Williams added to dovish sentiment by signaling support for additional monetary easing in the coming months. Speaking in an interview with The New York Times, Williams emphasized that underlying inflation is gradually declining, while labor market conditions are showing early signs of softening, particularly in hiring momentum and wage growth.

His remarks have reinforced market expectations that the Fed could deliver two more rate cuts before the end of the year, aligning with investors’ view that the central bank may err on the side of caution as economic growth moderates. Futures markets now imply a near 80% probability of a rate cut in December, with traders closely watching Powell’s tone for further confirmation.

Williams’ comments follow a series of cautious statements from other Fed officials, suggesting that policymakers are increasingly concerned about maintaining economic stability amid global headwinds. However, despite this dovish undertone, the dollar has remained resilient, buoyed by safe-haven demand and its interest rate advantage relative to other major currencies, particularly the euro.

Across the Atlantic, the European Central Bank’s Monetary Policy Meeting Accounts, released earlier today, highlighted growing unease among policymakers over the uncertain global economic outlook. While the governing council acknowledged downside risks to growth from sluggish global trade and persistent geopolitical tensions, members appeared divided over the direction of inflation.

Some officials pointed to persistent upside risks to price growth, arguing that energy volatility and wage gains could sustain inflation above the ECB’s target for longer. Others, however, viewed the current uptick as transitory, citing weak domestic demand and fiscal restraint across several member states.

Overall, the minutes reaffirmed that there is no immediate pressure for policy adjustments, with the ECB likely to remain on hold in the near term. The euro’s reaction was muted, as traders remain primarily focused on U.S. data and policy commentary to gauge near-term direction.

Adding to the euro’s fragility, France’s political scene continues to unsettle investors. The ongoing uncertainty surrounding government stability and fiscal plans has weighed on European assets, particularly sovereign bonds and the common currency. Markets fear that extended gridlock or populist pressure could delay key reforms and limit fiscal coordination within the eurozone, amplifying the region’s economic vulnerability.

For now, traders remain wary of holding euro-denominated positions until the domestic situation in France stabilizes. This political risk premium has been a recurring drag on the euro since early September, overshadowing otherwise resilient data from Germany and southern Europe.

From a technical standpoint, EUR/USD maintains a bearish tone in the short term, having decisively broken below its recent rising channel. The pair continues to trade below the 50-day Exponential Moving Average (EMA50), a sign that downward momentum remains intact.

Momentum indicators echo this weakness. The Relative Strength Index (RSI) has shown negative divergence, retreating from overbought levels and reinforcing the potential for further downside. The pair’s failure to sustain gains above 1.1650 suggests that sellers are still dominant, with near-term support located around 1.1600—a psychological level that, if breached, could expose 1.1550 and eventually 1.1500 as the next key targets.

On the upside, the area between 1.1800 and 1.1850 remains a formidable resistance zone, as price action in recent weeks has repeatedly rejected attempts to break higher. For any meaningful reversal to take shape, the pair would need to reclaim the 1.1700 handle on a daily closing basis, supported by stronger European fundamentals or a broader decline in the U.S. dollar.

SELL EURUSD

ENTRY PRICE: 1.1600

STOP LOSS: 1.1700

TAKE PROFIT: 1.1400

The Ministry of Labour officials noted that August's special payments exhibited significant volatility, primarily due to the majority of bonuses being disbursed in the first two months. Following the Bank of Japan's (BOJ) recent monetary policy meeting, where interest rates were maintained, Governor Kazuo Ueda indicated that the upward trend in wages is expected to persist into next year. However, uncertainties surrounding U.S. tariffs could disrupt corporate operating environments. In this context, former BOJ executive Kazuo Momma warned that recent substantial depreciation of the yen might prompt the central bank to consider tightening monetary policy. Since Sanae Takaichi's victory in the Liberal Democratic Party leadership election, the yen has depreciated, raising market concerns that her potential premiership could pressure the BOJ to delay rate hikes. In an interview with Reuters, Kazuo Momma pointed out that rising bearish sentiment towards the yen could motivate the BOJ to act at its October 29-30 meeting. Despite Governor Kazuo Ueda's cautious outlook on the U.S. economy and his reluctance to accelerate rate increases, persistent yen weakness could shift policy stances. He emphasized that yen depreciation primarily harms government interests by increasing import costs and fueling inflation, potentially eroding support for the ruling party. If the yen's decline accelerates, Sanae Takaichi might tacitly accept an earlier rate hike. With experience in drafting monetary policy and maintaining communication with decision-makers, Kazuo Momma considers yen weakness the sole factor likely to trigger an earlier tightening of monetary policy. Furthermore, Israel and Hamas have reached an agreement on the first phase of the peace protocol, which has bolstered global risk sentiment and may constrain the appreciation potential of safe-haven currencies such as the Japanese yen.

Federal Reserve officials at the September 16-17 policy meeting assessed that the risks to the U.S. labor market have increased sufficiently to warrant rate cuts, yet many participants remained cautious about elevated inflation while discussing the impact of current borrowing costs on economic activity. The minutes indicated that most attendees considered adjusting the federal funds rate target range to a more neutral level appropriate due to rising downside risks to employment. The minutes also reflected a renewed debate among Fed officials, with newly appointed Board member Stephen Miran and others prioritizing labor market protection and showing relative indifference to inflation, while some officials expressed concern that inflation could remain above the 2% target. In September, the Fed lowered the benchmark policy rate by 25 basis points to a range of 4.00%-4.25%. Forecast indicates that among the 19 participants, 9 anticipate two rate cuts, with Miran expecting more substantial easing; the remaining 9 expect a single rate reduction or no further cuts. Federal Reserve Chair Jerome Powell stated that monetary policy remains restrictive but did not commit to additional easing. The Fed's next policy meeting is scheduled for October 28-29, with markets pricing in a 25 basis point cut. Due to the federal government shutdown, the September employment report and next week's consumer price data may be delayed.

In the 1D timeframe, the USDJPY has broken above the ascending trendline and is forming a bullish alignment at the upper Bollinger Band. The MACD has formed a golden cross without signs of weakening momentum, and the RSI is at 71, indicating overbought conditions and a strong bullish sentiment. If the price sustains above 150, it is likely to challenge the previous high near 158.8; failure to hold may lead to a decline toward 148. In the 1W timeframe, the Bollinger Bands are widening upward, with SMAs diverging upward and the MACD line and signal line crossing above the zero-axis, suggesting a potential shift to an uptrend. The RSI at 64 indicates strong bullish momentum. Overall, the upward trend is expected to continue, pending confirmation of sustained bullish weekly candles, which would affirm the strength of the trend. It is recommended to go long at the lows in the short term.

Trading Direction: Buy

Entry Price: 153.03

Target Price: 158.8

Stop Loss: 150

Support: 150, 148.5, 146.6

Resistance: 155, 156.7, 158.8

The main drivers currently influencing the USD/CAD exchange rate remain oil prices and Canadian macroeconomic data. Recently, OPEC's decision to ramp up production again, along with easing geopolitical tensions, has put downward pressure on crude oil. WTI fell back to around $62 per barrel, weakening short-term risk premiums and creating a notable relative headwind for the Canadian dollar. If oil prices continue to decline, support for the Canadian dollar as a commodity-linked currency will erode, likely driving USD/CAD higher.

On the other hand, Canada's economic and inflation pressures are showing signs of a moderate decline — labor market and capacity indicators suggest that the economy is slowing (with metrics such as the unemployment rate and output gap weakening). This paves the way for the Bank of Canada to maintain its interest rate cuts in the coming months.

From the daily chart perspective, USD/CAD shows a clear bullish trend, as seen in the successive higher highs and higher lows of the price candles. Additionally, the 10-day and 20-day moving averages both cross above the 144-day moving average, forming a golden cross, which further strengthens the bullish momentum.

At present, with the price breaking above 1.3910, there is potential for an upward test of the 1.4000 level in the short term. If the pair can decisively break above and hold above this level in the near term, the upside could extend toward 1.4160.

Trading direction: Long

Entry price: 1.3950

Target price: 1.4150

Stop-loss: 1.3880

Valid Until: October 23, 2025, 23:00:00

Support: 1.3910/1.3870

Resistance: 1.4000/1.4160

On October 8th, Germany's Federal Statistical Office reported that industrial output in August fell by 4.3% month-on-month, marking the largest decline since March 2022. The office noted that production in Germany's key automotive industry dropped by 18.5% during the same period. Additionally, significant declines in the prices of machinery, pharmaceuticals, as well as electrical, computer, electronic, and optical products also weighed on the overall figures. Experts have warned that the "extremely disappointing" industrial data for August heightens the risk of another quarterly contraction in the German economy. Meanwhile, the ongoing drone incidents in Europe continue to escalate. Both Denmark and Germany have reported drone sightings within their borders. On October 2nd, an unidentified drone was spotted flying over a Belgian military base. In response, European Commission President Ursula von der Leyen stated that the Belgian Ministry of Defense is currently investigating the incident. She characterized the drone incidents as a concerning trend amid the broader escalation of various threats. Such events, along with airspace violations, are fundamentally seen as systematic actions aimed at dividing the EU and undermining support for Ukraine. The combination of weak German economic indicators and geopolitical tensions is posing a combined bearish risk to the euro. Although France's outgoing Prime Minister, Sebastien Lecornu, expressed optimism about reaching a budget agreement before the end of the year — a comment that helped ease market concerns over the possibility of snap elections in France — there are still no clear signals that could support a stable rebound for the euro. The fundamental transmission logic suggests that the currency will likely remain under bearish pressure in the short term.

The EUR/USD exchange rate managed to recover some ground during the Asian trading session on Thursday, ending a three-day losing streak. The prolonged U.S. government shutdown continues to weigh on USD/EUR. Federal Reserve Chair Jerome Powell is scheduled to deliver a speech later on Thursday. The U.S. government has been shut down since October 1st, following Congress's failure to agree on a new budget by the September 30th deadline. This marks a nine-day closure so far. The U.S. Bureau of Labor Statistics and the Bureau of Economic Analysis have suspended data collection and reporting, posing challenges for the Fed's interest rate decisions and for businesses aiming to make informed choices. This situation could drag the dollar lower and provide short-term support to major currency pairs. Besides, the minutes from the Fed's September meeting, released on Wednesday, showed that most policymakers supported the rate cut in September and signaled the possibility of further cuts later in the year. However, some officials expressed a more cautious stance due to concerns over inflation.

Based on the daily chart, the MACD shows weakening bullish momentum, with histogram bars shrinking and a death cross forming as a death cross emerges. While the highs of the signal line and the MACD line continue to decline, the corresponding price is making new highs — a classic sign of a bearish divergence. The Bollinger Bands are starting to widen downward, and the moving averages are diverging to the downside. Additionally, the RSI stands at 41, indicating a shift into a pessimistic market sentiment. If the price fails to hold above the lower Bollinger Band, it is likely to test earlier lows and the EMA 200, around 1.139 and 1.135, respectively. Furthermore, Bollinger Bands are narrowing in the weekly chart, signaling reduced volatility. The price is oscillating around the EMA12, with the RSI sitting at 56, reflecting a cautious, wait-and-see market sentiment. If the EMA12 is breached to the downside, the price may likely fall toward the Bollinger Middle Band or even the EMA50. Therefore, selling at highs is recommended in the near term.

Trading direction: Sell

Entry price: 1.1623

Target price: 1.14

Stop loss: 1.182

Support: 1.145/1.14/1.13

Resistance: 1.182/1.192/1.2