EUR/JPY extended its powerful upswing on Wednesday, climbing around 0.45% to trade near 180.90 and marking a fresh multi-year high as the Japanese yen continued to face broad-based selling pressure. The move reflects a deepening divergence between the Eurozone’s steady macro backdrop and Japan’s increasingly fraught fiscal and geopolitical environment, which has fuelled a sharp selloff in Japanese government bonds (JGBs) and pushed long-term yields to their highest levels in more than 17 years.

Benchmark 10-year JGB yields surged to 1.77%—a level not seen since before the global financial crisis—after renewed expectations of a more aggressive fiscal stimulus package in Tokyo. Japan’s new Finance Minister, Satsuki Katayama, reiterated on Tuesday that the government remains committed to reviving domestic growth but stopped short of detailing the scale and timing of the package. Markets interpreted her comments as a strong indication that further debt issuance is likely, adding fresh pressure to an already fragile bond market.

Analysts at Brown Brothers Harriman noted that rising Japanese yields are not merely the result of shifting rate expectations, but also a reflection of growing fiscal concerns and the deterioration of Tokyo’s diplomatic relationship with Beijing. Japan-China tensions escalated further after Chinese Foreign Ministry spokeswoman Mao Ning warned of “serious countermeasures” should Tokyo fail to retract Prime Minister Sanae Takaichi’s recent remarks on Taiwan. The threat of retaliation injected additional volatility into Japan’s financial markets, amplifying the selloff in JGBs and deepening the downward spiral in the yen.

The geopolitical backdrop reinforces a story that traders have become increasingly familiar with in recent months: Japan’s policy mix is pulling the yen in a sharply divergent direction from other major currencies. While other central banks move closer to stabilizing or even easing policy, Japan’s fiscal trajectory and political frictions are driving bond yields higher in an environment where the Bank of Japan remains cautious about normalizing monetary policy. The result is a structural imbalance that keeps the yen vulnerable.

On the European side, the euro found firmer footing after the latest Eurozone inflation report underscored further progress toward the European Central Bank’s 2% target. October’s Harmonised Index of Consumer Prices (HICP) rose 0.2% month-over-month, while annual headline inflation eased to 2.1%. Core inflation—the ECB’s preferred gauge—held steady at 2.4%. The data supports the view that the ECB is likely to maintain its current policy stance for an extended period, offering a stable backdrop for the euro at a time when policy uncertainty is weighing heavily on the yen.

This widening macro divergence—geopolitical pressure and fiscal strain lifting Japanese yields, while Eurozone inflation softens—continues to underpin EUR/JPY’s upward trajectory. The pair sits comfortably near 181.00, and momentum signals show little sign of exhaustion, keeping bulls firmly in control.

Momentum indicators continue to favor the upside. The pair successfully maintained a bullish close above 179.30, a key support level that now acts as a launchpad for continued upward pressure. The stochastic oscillator had previously shown some negativity, but price action quickly invalidated downside risk by reclaiming the upper band of its recent range.

A sustained move above 180.60—an important intermediate resistance—has strengthened expectations for a continuation of the bullish structure. Based on current momentum, traders are eyeing a move toward 180.95, followed by the next major target at 185.55. With EUR/JPY trading at multi-year highs, a break above this level could open the door for an extended bullish run in Q4.

However, risk remains tilted toward downside correction if the pair slips back below 178.60. A break of this level would likely activate a bearish corrective phase, exposing 177.65 and 177.05 as near-term support zones. Such a scenario would require renewed yen strength—unlikely unless geopolitical tensions ease or JGB yields stabilize.

For now, the expected trading range for the day sits between 179.30 and 180.60, though any fresh escalation in Japan-China tensions or further rise in JGB yields could easily extend the upper bound.

BUY EURJPY

ENTRY PRICE: 180.80

STOP LOSS: 178.00

TAKE PROFIT: 186.00

The Canadian dollar strengthened due to multiple factors, the most significant of which was undoubtedly the easing of domestic political tensions.

On the 17th local time, the Canadian Parliament passed the first federal budget under Prime Minister Carney's administration by a vote of 170 to 168.

Canadian Prime Minister Carney unveiled his first federal budget on November 4, outlining plans to increase spending by approximately CAD 141 billion over the next five years. To offset these expenditures, the government intends to save about CAD 51 billion through spending cuts and other cost-saving measures.

New spending priorities focus on areas such as housing and healthcare. The budget plan projects that Canada's defense spending will increase to CAD 81 billion over the next five years. The document forecasts a fiscal deficit of approximately CAD 78 billion for the 2025-2026 fiscal year.

With the risk of political turmoil receding, the Canadian dollar has effectively “breathed a sigh of relief,” appreciating against other currencies. However, despite the Bank of Canada not cutting rates further in the near term, the currency's trajectory remains fragile.

The USDCAD re-entered an upward channel as it retraced to near the 50-day exponential moving average at 1.3968. Currently, as the asset trades within the ascending channel pattern, its overall trend remains bullish.

In terms of momentum, the Relative Strength Index (RSI) remains slightly below 50.00, indicating that the market continues to undergo adjustment.

Given that the USDCAD is approaching the lower boundary of its ascending channel pattern, the likelihood of a rebound is high. Should the USDCAD break above the November 7 high of 1.4144, it could extend its test of the April 8 high at 1.4297 and ultimately target the April decline's starting point at 1.4419.

On the other hand, should the asset break below the October 30 low of 1.3888, it could slide toward the 1.3760 range.

Trading Direction: Buy

Entry Price: 1.3985

Target Price: 1.4200

Stop Loss: 1.3890

Valid Until: December 4, 2025 23:55:00

Support: 1.3970, 1.3954, 1.3897

Resistance: 1.4017, 1.4062, 1.4080

Today, the UK's October Consumer Price Index (CPI) declined to 3.6%, marking the first decrease since March of this year. Detailed figures indicate a modest easing in core inflation (excluding energy and food), along with a softening in services sector inflation—these developments have prompted market participants to reassess whether the Bank of England should maintain its previously hawkish monetary stance.

Official statistics and market analysis indicate that the decline in prices for sub-sectors such as energy, accommodation, and hospitality significantly contribute to the overall CPI reduction. However, food prices remain relatively high, and wage growth continues to be a sticky factor driving inflation. Consequently, although headline inflation is gradually cooling, persistent structural resistance suggests limited scope for radical shifts in monetary policy. In the short term, weaker-than-expected data compared to previous figures already prompt the markets to revise down expectations of imminent or near-term interest rate cuts, leading to a brief downturn in the pound.

Meanwhile, recent surveys show that inflation expectations among the public and businesses have edged higher (although not fully receding), which continues to serve as a domestic counterbalance within the Bank of England. This outlook encourages policymakers to adopt a cautious tone when signaling any policy shifts.

In the 1D timeframe, the GBPUSD has recently oscillated around the 1.3180 level, failing to establish a decisive breakout above this resistance zone. Short-term bearish momentum is gradually intensifying. Concurrently, the SMA system exhibits a bearish alignment, indicating that the overall trend for the GBPUSD leans towards depreciation, with a strong likelihood of continued downside momentum.

It is recommended to go short at the highs.

Trading Direction: Sell

Entry Price: 1.3130

Target Price: 1.2750

Stop Loss: 1.3230

Valid Until: December 3, 2025 23:00:00

Support: 1.3000, 1.2700

Resistance: 1.3215, 1.3248

European Central Bank: Warns of "Unprecedented Shocks" strengthen banking supervision. On the same day, the ECB issued its regulatory priorities for the next three years, sounding the alarm for the eurozone banking sector. The central bank pointed out that due to factors such as geopolitical tensions, climate crises, and technological changes, all of these forces are now piling up at the same time, pushing the likelihood of extreme events "to levels without precedent". This could have profound implications for the financial system. To this end, the ECB is requiring banks to prepare for various unpredictable shocks through core measures, including: Maintaining Adequate Capital Buffers:​ Ensuring banks hold sufficient capital to absorb potential losses. New supervision tool: The implementation of "reverse stress test," Supervisors will:

Set a capital exhaustion point, the moment a bank would run out of core equity.2. Ask the bank to design the scenario that could realistically push it there. Monitoring Geopolitical Risks:Banks must closely watch their overseas exposures, including international operations, export credits, and foreign exchange activities. The ECB acknowledged that the banking sector currently enjoys strong profitability, stable asset quality, and that overall capital requirements will remain steady. However, it also warned that this "benign environment" is unlikely to last, with significant downside risks. Financial markets may be experiencing overvaluation, making them prone to sudden corrections.

With diminished expectations for a Fed rate cut in December, the U.S. dollar has strengthened, and the EUR/USD pair may continue to decline. The highly anticipated September non-farm payrolls data will be released on Thursday. According to the CME FedWatch Tool, financial markets now see a 49% probability that the Federal Reserve will lower the benchmark overnight borrowing rate by 25 basis points (bps) at its December meeting — down from 67% a week ago. In the U.S., initial jobless claims for the week ending October 18 came in at 232,000, as reported on Tuesday. Continuing claims rose slightly to 1.957 million from 1.926 million the previous week. Meanwhile, ADP reported that employers cut an average of 2,500 jobs per week over the four weeks ending November 1st. Richmond Fed President Thomas Barkin commented on the economic outlook on Tuesday, noting that the labor market appears more balanced, with businesses reporting improved labor supply. However, recent layoffs suggest caution is still warranted. Barkin stated that inflation does not appear to be rising, but it remains unclear whether it will return to the Fed's 2% target. He emphasized that reaching a broad policy consensus remains difficult without clearer data.

In the daily chart, after forming a golden cross signal, the MACD lines on the EUR/USD daily chart pull back near the zero axis, signaling that a potential trend reversal could occur at any time. The Bollinger Bands are opening downward, with moving averages diverging to the downside. The price is oscillating downward along the EMA12. The RSI stands at 47, indicating a shift toward bearish sentiment. Although the market has seen some rebounds, it remains within a downtrend channel. Unless the upper boundary of the channel is breached, the price is likely to test the Bollinger Lower Band around 1.148. Based on the weekly chart, the Bollinger Bands are narrowing, and the EMA12 is turning downward. After a death cross, the MACD lines are moving back toward the zero axis — though they still have some distance to cover, suggesting the downtrend is not yet complete. The RSI is at 53, with its highs gradually declining, reflecting strong market hesitation. Short-term support can be found near the Bollinger middle and lower Bands and the EMA50. In the near term, it is recommended to sell at highs.

Trading direction: Sell

Entry price: 1.158

Target price: 1.12

Stop loss: 1.175

Support: 1.145/1.14/1.12

Resistance: 1.182/1.192/1.2

As of the week ending October 18th, the number of Americans filing for continued unemployment benefits rose to 1.9 million, reaching a two-month high. Notably, weekly ADP payroll data until November 1st indicates that over the past four weeks, U.S. private sector employers have been reducing approximately 2,500 jobs per week, signaling a significant slowdown in the labor market in late October. These figures corroborate the previous increase in initial unemployment claims and collectively point to a cooling employment environment. Following the data release, market expectations for a Federal Reserve interest rate cut in December increased from around 42% to approximately 50%, with the heightened anticipation of rate cuts exerting downward pressure on the U.S. Dollar index, thereby providing vital support for dollar-denominated gold. Due to concerns over the U.S. economic outlook, global risk sentiment remains fragile, pressuring the U.S. dollar below its one-week highs and providing support for safe-haven precious metals like gold. However, with diminished market expectations for a December Fed rate cut, significant USD depreciation seems unlikely, potentially restraining gains in non-yielding gold. Traders may prefer to await further cues on the Federal Reserve's monetary policy trajectory before positioning in the XAUUSD currency pair. Consequently, market focus will remain on the upcoming Federal Reserve meeting minutes, scheduled for release later this Wednesday, and the U.S. non-farm payroll report due Thursday, as signs of labor market softening emerge.

The Federal Reserve FOMC minutes will be the focal point later Wednesday, followed by the release of the September U.S. non-farm payrolls report. Due to the government shutdown, the September and October employment data for 2025 have not been released as scheduled. The delay in employment data complicates the Fed's rate decision-making process ahead of the December policy meeting. This situation could, in turn, bolster traditional safe-haven assets such as gold. The U.S. September employment report is expected to be published on Thursday. Market consensus anticipates that September job gains will be around 50,000, with the unemployment rate remaining steady at 4.3%. If the report falls short of expectations, it could exert downward pressure on the dollar and support prices for dollar-denominated commodities. On the other hand, hawkish rhetoric from Federal Reserve officials has diminished market expectations for a rate cut in December and may constrain the upside potential of gold prices. Federal Reserve Vice Chairman Philip Jefferson indicated on Monday that the Fed should proceed with caution regarding further rate reductions. Meanwhile, several Federal Reserve policymakers, including Atlanta Fed President Bostic and Kansas City Fed President Schmid, expressed concerns about inflation, potentially signaling support for holding interest rates steady. According to the FedWatch tool from the Chicago Mercantile Exchange, traders currently assign a 46.6% probability to a 25 basis point rate cut in December, down from over 60% last week.

Gold's 4H Bollinger Bands indicate a bearish breakout with the bands opening downward. The price temporarily broke below the key 4,000 level but rebounded strongly to around 4,100, suggesting the short-term downward trend remains intact. The MACD has generated a golden cross, with the MACD line and signal line approaching the zero-axis, indicating the ongoing rebound is not yet complete. The RSI stands at 52, reflecting a predominantly cautious market sentiment, with resistance levels at 4,100 and 4,150. In the 1D timeframe, the declining MACD histogram indicates waning upward momentum, while the price fails to new highs, signaling a potential bearish divergence. A further short-term decline is likely, with support levels at the Bollinger lower band and the EMA50, approximately 3,860 and 3,947. The RSI is at 54, with prices in a neutral zone, but the highs are gradually declining. It is recommended to go short at the highs.

Trading Direction: Sell

Entry Price: 4100

Target Price: 3600

Stop Loss: 4390

Support: 3900, 3800, 3600

Resistance: 4380, 4500, 5000

The Reserve Bank of Australia (RBA) is set to release its latest meeting minutes, which are expected to reinforce the view that policymakers see no immediate urgency to cut the Official Cash Rate (OCR). This cautious stance is attributed to persistently robust domestic demand and firm underlying inflationary pressures. However, the central bank’s recent communications also contained a caveat: monetary easing could be considered if economic growth weakens significantly or if labor market conditions materially deteriorate.

Further attention will be focused on Australian economic data this week, specifically the third-quarter Wage Price Index, due for release on Wednesday. Market expectations are for a 0.8% quarter-over-quarter increase and a 3.4% year-over-year rise. An outcome that aligns with these forecasts would likely reinforce the RBA’s data-dependent, cautious posture, effectively limiting the outlook for any rapid rate cuts. According to the latest update on November 14th, the ASX 30-day interbank cash rate futures for December 2025 were trading at 96.41, reflecting a mere 6% probability of a rate cut to 3.35% (from the current 3.60%) at the upcoming RBA Board meeting.

The latest labor market data from the U.S. continues to signal deceleration. The ADP report indicated that U.S. private payrolls recorded a weekly average decline of 2,500 in the four weeks leading up to November 1st, a notable improvement from the steeper 11,250 average loss observed in the preceding period. Separately, August Factory Orders expanded by 1.4% month-over-month (MoM), which met consensus estimates and successfully reversed the 1.3% contraction recorded in July.

Federal Reserve Governor Christopher Waller adopted a distinctly dovish tone on Tuesday, characterizing the U.S. labor market as "weak" and "near stalling speed." He suggested that the current restrictive policy appears to be dampening economic activity and reiterated his view that a 25 basis point (bps) rate cut at the December 9-10 meeting would provide "additional assurance" for the stability of the labor market.

Adding to the complexity, President Donald Trump reversed previously imposed tariffs on over 200 consumer products, including coffee and orange juice. This decision was reportedly driven by an acknowledgment of the inflationary impact resulting from increased import costs. Despite the economic rationale, the immediate market reaction to this tariff news remained marginal.

Meanwhile, commentary from other Federal Reserve officials remains divergent. Vice Chair Philip Jefferson offered cautious, slightly dovish remarks on Monday, acknowledging growing risks to employment. Conversely, Kansas City Fed President Jeffery Schmid argued that the current policy stance is "moderately restrictive," which he deems appropriate to counter demand growth. St. Louis Fed President Alberto Musalem suggested that rates are now closer to neutral than restrictive, emphasizing the limited scope for easing without risking an overly accommodative stance.

The AUDUSD pair is entrenched in a defined downtrend, evidenced by the absence of consecutively higher highs, signaling that bearish pressure remains in control. The price action is clearly situated below both the 100-period and 200-period Moving Averages (MAs) on the 12-hour chart, currently residing at 0.6555 and 0.6537, respectively. This technical positioning adds significant weight to the prevailing bearish bias. Any move back toward the vicinity of these MAs is likely to encounter strong selling interest, creating a potential opportunity for short positions from that zone.

A nearby resistance cluster is defined by the 0.6552 level, which aligns closely with the 100-period MA. This confluence zone is anticipated to trigger a downward rejection. The Relative Strength Index (RSI) is currently at the 45 level, still within neutral territory. This suggests that the pair may experience a minor corrective bounce before the primary downward movement resumes. Price action is currently showing a slight upside reaction from support levels. However, should the price decisively break its downtrend by forming a new higher high and piercing the bearish trendline resistance, it would invalidate the immediate bearish scenario and could open the path for a broader upside movement.

Trading direction: Sell

Entry price: 0.6552

Target price: 0.6372

Stop loss: 0.6590

Validity: Nov 28, 2025 15:00:00