USD/JPY reached a high of 153.08 on October 10, 2025, marking its highest level in 2025. However, since then, the pair has declined, with the latest close on October 15 at 151.14.

This represents a 1.23% decrease from the peak. The recent rally was driven by factors such as a weakening Japanese yen and expectations of Federal Reserve rate cuts.

Sentiment towards USD/JPY is currently cautious. The recent decline suggests that traders are becoming more risk-averse, possibly due to profit-taking and a strengthening U.S. dollar.

The market is closely monitoring developments in U.S. fiscal policy and upcoming economic data releases to assess the sustainability of the current trend.

Support Levels: The immediate support level is at 150.90, followed by 150.50.

Resistance Levels: The nearest resistance is at 152.00, with a stronger resistance at 153.00.

MACD: The Moving Average Convergence Divergence indicator is below the signal line, indicating a bearish trend.

Entry: Consider entering a short position if USD/JPY breaks below the 150.90 support level, with confirmation from technical indicators.

Take Profit: 150.50

Stop Loss: Place a stop loss above the 152.00 resistance level to manage risk.

During the European session on Wednesday, the AUDUSD rose 0.5% to around 0.6520. The AUD outperformed other currencies as markets anticipated the Reserve Bank of Australia (RBA) is unlikely to implement aggressive monetary easing in the near term.

The minutes of the RBA's September meeting confirmed the soundness of its policy stance, with board members concluding that "there is no immediate need to lower" the cash rate. The Board unanimously agreed that economic data and forecasts since August support maintaining the current restrictive level, while emphasizing that decision-making will remain “cautious and data-dependent.”

The discussion focused on inflation risks, particularly following the strong monthly CPI growth in July and August. Committee members acknowledged that these data are incomplete and volatile, but noted that unexpected increases in market services and housing costs suggest the September quarterly CPI may exceed the August forecast.

Meeting minutes revealed growing concerns that if this pattern persists, the Bank of England's assumptions regarding the balance between aggregate demand and aggregate supply may prove overly optimistic. Committee members also cited lessons from overseas experiences where persistently elevated inflation in the services sector sounded an alarm for adjusting domestic policy.

Nevertheless, the Executive Committee acknowledged that risks remain "two-sided". On the upside, consumption recovery could outpace expectations, potentially intensifying capacity pressures. On the downside, members highlighted the drag from weak consumer confidence, slowing job growth, and subdued wage indicators.

A balanced view suggests that the RBA will proceed cautiously in the coming months, awaiting confirmation from the full third-quarter inflation report before deciding at its November meeting whether further policy easing is warranted.

The AUDUSD initially shifted to neutral intraday movement and is now showing signs of a rebound. A break above the 0.6628 resistance level would sustain the recent bullish momentum and pave the way for a retest of the 0.6706 high.

However, a break below 0.6439 will test the 38.2% retracement of 0.5913 to 0.6706, located at 0.6403. A sustained breach of this support level will open the path to the 61.8% retracement at 0.6216.

Trading Direction: Buy

Entry Price: 0.6500

Target Price: 0.6706

Stop Loss: 0.6400

Valid Until: October 30, 2025 23:55:00

Support: 0.6497, 0.6472, 0.6440

Resistance: 0.6533, 0.6572, 0.6612

The U.S. dollar weakened broadly on Wednesday, with investors accelerating bets on near-term Federal Reserve rate cuts following a dovish policy outlook from Chair Jerome Powell. The greenback’s decline pushed the USD/CHF pair below the psychologically important 0.8000 level during the European session, bringing it dangerously close to Friday’s multi-month low around 0.7990.

The shift in sentiment marks a notable turn from earlier in the week when market focus was dominated by rising Sino-American trade tensions. Traders are now reorienting toward monetary policy expectations, with Powell’s latest remarks reinforcing the view that the Fed is prioritizing growth stabilization over inflation containment as the U.S. economy shows signs of losing momentum.

Speaking on Tuesday, Powell acknowledged that while inflation remains somewhat above the 2% target, the “greater risk” now lies in a cooling labor market. He suggested that the Federal Reserve is increasingly confident inflation pressures are abating and that monetary policy is already “restrictive enough.”

Market participants interpreted these comments as a strong hint that the Fed will cut its benchmark rate by 25 basis points at its late-October meeting. Futures markets are now pricing in nearly a full probability of such a move, with growing speculation that another reduction could follow in December if economic indicators continue to deteriorate.

Powell also revealed that the central bank is nearing the end of its balance sheet reduction programme—often referred to as quantitative tightening—signaling a potential pivot toward a more accommodative stance. The Fed chief noted emerging signs that liquidity in the financial system is tightening, implying that policymakers may soon pause the runoff of assets to prevent excessive strain on credit markets.

This dovish tone represents a notable shift from the cautious rhetoric seen earlier in the year and suggests that the Fed is preparing to recalibrate policy amid rising concerns over employment weakness and slowing business investment.

Across the Atlantic, the Swiss franc is seeing only modest gains despite the dollar’s weakness. That’s largely because Switzerland’s latest producer price data underscored deflationary pressures that could constrain the Swiss National Bank (SNB) from adopting an aggressively hawkish tone.

The Swiss Producer Price Index (PPI) showed factory-gate inflation contracting for the fifth consecutive month in September, dropping 0.2% after a 0.6% decline in August. The reading came as a disappointment to markets that had expected a 0.2% increase, signaling that disinflation remains entrenched in the Swiss economy.

This persistent weakness in producer prices could revive speculation that the SNB may need to reintroduce negative interest rates if the global slowdown deepens. While such a move remains unlikely in the near term, it underscores the policy dilemma facing Swiss authorities: balancing the need to support domestic prices while avoiding excessive franc appreciation that could weigh on exports.

From a technical perspective, USD/CHF is showing increasing vulnerability after breaking below key psychological support at 0.8000. The pair has been trading within a bearish flag formation, suggesting that the recent pause in the downtrend could be giving way to another leg lower.

Currently, the pair is hovering near an ascending trendline and a crucial horizontal support area. A decisive break below this confluence could trigger a 100 to 120-pip bearish extension, potentially targeting the 0.7880–0.7850 region, which aligns with prior swing lows.

Momentum indicators such as the RSI and MACD continue to point lower, reinforcing the view that sellers remain in control. On the upside, immediate resistance lies near 0.8040, followed by 0.8080; only a sustained recovery above these levels would negate the short-term bearish setup.

SELL USDCHF

ENTRY PRICE: 0.7990

STOP LOSS: 0.8040

TAKE PROFIT: 0.7850

Gold (XAU/USD) continued its record-breaking ascent through the first half of Wednesday’s European session, extending beyond the psychological $4,200 mark for the first time in history. The metal’s powerful rally, which shows few signs of exhaustion, comes amid a confluence of supportive macroeconomic forces — ranging from escalating geopolitical tensions and renewed fears of a prolonged U.S. government shutdown to a growing conviction that the Federal Reserve will maintain a dovish stance well into next year.

The latest leg higher in gold underscores investors’ appetite for safety in a world increasingly defined by economic and political instability. The widening fissures in U.S.-China relations, now spilling over from technology and trade to broader economic spheres, have rekindled concerns about global supply chains and trade disruptions. The rhetoric between Washington and Beijing has hardened, raising fears of retaliatory measures that could disrupt global markets — a scenario that has historically benefited gold, the world’s oldest store of value.

At the same time, the lingering political gridlock in Washington and the possibility of an extended government shutdown have added another layer of uncertainty to the outlook for the U.S. economy. Investors are growing increasingly wary of fiscal dysfunction at a time when consumer spending is softening and business sentiment is cooling. These developments have led to renewed speculation that the Federal Reserve may be forced to ease monetary policy more aggressively than previously thought.

Markets are now pricing in at least two additional rate cuts by the end of this year, a dovish shift that has exerted pressure on the U.S. dollar. After touching its highest level since early August last week, the greenback has retreated as traders position for looser policy and falling yields across the Treasury curve. This drop in the dollar — combined with subdued real yields — has provided a powerful tailwind for gold, which traditionally thrives in low-interest-rate environments.

Despite the strength of the recent rally, XAU/USD bulls appear largely unfazed by overbought technical conditions. The underlying momentum remains firmly positive, with each minor dip attracting renewed buying interest. The market’s resilience suggests that investors continue to view gold as an essential hedge against both inflationary pressures and systemic risks — a narrative that has defined much of this year’s performance.

From a technical perspective, gold’s breakout above $4,200 marks a historic milestone and reinforces the dominant bullish trend that has governed price action over recent months. The metal’s upward trajectory remains firmly intact, supported by a sequence of higher highs and higher lows. The immediate resistance near $4,200, previously the target in earlier forecasts, has now been breached — but traders should be alert to potential short-term pullbacks.

A temporary correction cannot be ruled out, particularly given the potential for negative divergence on shorter-term oscillators. Should prices encounter profit-taking or a short-lived reversal, initial downside support is seen near the $4,161 level. A decisive break below this threshold could open the door for a deeper correction, though such a move would likely be viewed as a buying opportunity rather than a trend reversal. On the upside, the next target for bullish traders lies near $4,250 — the recent rebound high and a minor resistance level.

BUY GOLD

ENTRY PRICE: 4200

STOP LOSS: 4160

TAKE PROFIT: 4250

The deterioration in the labor market has paved the way for the Bank of England (BOE) to adopt a more dovish tone.

The number of people claiming unemployment benefits in the UK rose by 25,800 in September after three consecutive months of decline, reaching a total of 508,000. This increase was stronger than the expected 10,000.

Over the three months ending in August, the unemployment rate rose to 4.8%, the highest level since May 2021, despite earlier forecasts averaging that the rate would remain unchanged.

The market currently underestimates the likelihood of the BOE cutting interest rates again before December, which could weigh on the pound. If future economic data shows inflation continuing to ease and wage growth failing to rebound, the case for further monetary policy easing would strengthen.

The money market currently expects the BOE to cut interest rates by 25 basis points in February next year to stimulate the economy, with another cut anticipated in the third quarter of next year.

Additionally, the UK's Autumn Budget scheduled for November 26 may confirm that fiscal austerity is weighing on the economy. According to LSEG data, the market currently prices in only about 12 basis points of rate cuts through December.

The GBPUSD's intraday movement has turned neutral. Although it extended Tuesday's recovery, it is far from having reversed its downward trend.

On the downside, a break below 1.3247 would restart the decline from 1.3725 to 1.3140 (the 38.2% retracement of 1.2099 to 1.3787 is at 1.3142). Strong support is expected at this level, completing the corrective pattern that began at 1.3787.

On the upside, a break above 1.3526 would trigger a stronger rebound, retesting the resistance zone around 1.3727.

Trading Direction: Sell

Entry Price: 1.3390

Target Price: 1.3022

Stop Loss: 1.3500

Valid Until: October 30, 2025 23:55:00

Support: 1.3248, 1.3143, 1.3017

Resistance: 1.3442, 1.3940, 1.3535

Kato Katsunobu, Japan's Finance Minister, recently emphasized the need for a new economic strategy tailored to the current era of inflation, in response to an economic environment that differs significantly from the past. He pointed out that the former 'Abenomics' framework—characterized by bold monetary easing, flexible fiscal policy, and structural reforms—successfully pulled Japan out of prolonged deflation. However, it also led to a substantial increase in government debt. Today, inflation has replaced deflation as the primary economic challenge, necessitating the establishment of a new policy framework aligned with current realities. Kato's remarks come as Sanae Takaichi, the newly elected leader of the Liberal Democratic Party (LDP), is widely expected to continue the reflationary policies of Abenomics. Following Takaichi's appointment, markets generally anticipate no immediate interest rate hikes in Japan, leading to a rally in stock prices and depreciation of the yen. Regarding the yen's movement, Kato stressed that the government will closely monitor foreign exchange markets to prevent excessive volatility and maintain exchange rates that reflect economic fundamentals.

Meanwhile, the International Monetary Fund (IMF), in its latest World Economic Outlook, raised its growth forecast for Japan in 2025 and anticipates that the BOJ will gradually raise interest rates over the medium term. The IMF believes that a rebound in real wage growth will support private consumption, helping to offset the negative impacts of weak external demand and uncertainties surrounding U.S. trade policies. The report noted that Japan's economy grew steadily in the first half of 2024, driven by capital expenditure and automobile exports. However, new export orders have begun to decline, signaling that the adverse effects of potential U.S. tariff increases may widen. Although a bilateral trade agreement between Japan and the U.S. has temporarily eased trade frictions, its long-term impact remains to be seen. Governor Ueda reiterated that if the economy maintains a moderate recovery, the BOJ will continue hiking interest rates to keep inflation stable around the 2% target.

U.S. Monetary Policy is under the microscope. Federal Reserve Chair Jerome Powell, ahead of the FOMC meeting, noted that while the U.S. economy remains strong, adjustments in tariff and immigration policies could introduce dual risks of inflation and unemployment. Due to the government shutdown, key employment data has been delayed, leaving the Fed facing a shortage of critical information. Markets are broadly expecting a 25-basis-point rate cut at the October meeting, with the possibility of one more cut before year-end. Fed Governor Christopher Waller suggested that the contradiction between economic growth and weak employment should be addressed through a gradual pace of rate cuts to balance growth and inflation risks. Philadelphia Fed President Anna Paulson argued that gains in productivity and investments in artificial intelligence are supporting economic expansion, and she sees room for two more rate cuts this year.

As the daily chart shows, Bollinger Bands are expanding upwards with the moving averages diverging to the upside. However, after breaking above the uptrend line, the price has pulled back and is currently trading near the EMA12. The MACD forms a golden cross, with no signs of weakening momentum yet. The RSI stands at 58, entering a cautious zone, indicating market indecision. If the price holds firmly above 150, it could rise toward the previous high near 158.8. Failure to hold above 150 may lead to a drop toward the 148–149 range. Based on the 4H chart, Bollinger Bands are expanding downward, and the moving averages are diverging to the downside. The MACD line and the signal line return near the zero axis, suggesting an impending shift in market direction. The RSI is at 40, reflecting strong bearish sentiment. USD/JPY could hit 153.2 if it holds above the EMA50. Otherwise, it will return to the EMA200 (near 149.2). Thus, buying at lows is recommended as a short-term strategy.

Trading direction: Buy

Entry price: 151.36

Target price: 158.8

Stop loss: 148

Support: 150/148.5/146.6

Resistance: 155/156.7/158.8