Following the release of GDP data from Germany and the euro area, the EURUSD exchange rate remained stable. Traders are treading cautiously ahead of the ECB's imminent interest-rate decision. Markets widely expect the ECB to keep rates unchanged at its October meeting, which will be the third consecutive hold, and see no policy shift through the end of 2025. Attention is also centered on unemployment figures for both Germany and the euro zone, as well as on Germany's CPI.

Following their high-profile meeting in South Korea, U.S. President Donald Trump announced that tariffs on Chinese goods will be reduced from the current 57% to 47%. He also stated that the rare-earth dispute has been resolved, ensuring that no additional restrictions will be imposed on China's exports of critical minerals. In addition, Chinese President Xi Jinping emphasized that "both sides should focus on the long-term interests of cooperation."

The U.S. dollar remains under pressure amid uncertainty over the Fed's policy stance in December. Policymakers acknowledge that inflationary pressures could broadly pick up in the second half of the year, yet this is not seen as sufficient to preclude a further reduction in the federal funds rate. Chair Jerome Powell emphasized, however, that the likelihood of another cut in December is far from assured.

The Federal Open Market Committee (FOMC) approved the rate reduction by a 10-to-2 vote, lowering the target range for the federal funds rate by 25bps to 3.75%–4%. The Fed also announced that balance-sheet runoff will cease effective 1 December, when maturing agency debt will be reinvested into Treasury bills.

Among them, Fed Governor Stephen Miran dissented from the decision, advocating for a 50 bps rate cut. Kansas City Fed President Jeff Schmid favored keeping rates unchanged. The statement continued to use the previous description of the labor market, saying that "employment growth has slowed, and the unemployment rate has risen but remains low as of August." The statement added that "recent indicators are consistent with the above changes" and "the downside risks to employment have increased in recent months."

The Fed stated that existing indicators suggest that economic activity is expanding at a moderate pace, reiterating that inflation has risen since the beginning of the year and is still at a relatively high level.

On the daily timeframe, following a death cross signal on EURUSD, the MACD fast and slow lines have dropped below the zero axis, indicating the market has entered a bearish phase. The Bollinger Bands are expanding downward, with moving averages diverging downward. Price is oscillating lower along the EMA12. The RSI reading of 45 reflects pessimistic market sentiment. If the pair breaks below 1.16 again, it will likely decline toward the previous low of 1.154 and the EMA200 level near 1.139.

From a weekly perspective, the Bollinger Bands are contracting, with price oscillating around the middle band. After the MACD death cross, the fast and slow lines are pulling back toward the zero axis but still have some distance to go, suggesting the correction is not yet complete. The RSI at 55 shows gradually lower highs, indicating a wait-and-see sentiment in the market. Once the middle Bollinger Band fails to hold as support, price will likely drop toward the EMA50 or even the lower Bollinger Band.

Therefore, the short-term trading strategy suggests prioritizing short positions on rallies.

Trading Direction: Sell

Entry Price: 1.1613

Target Price: 1.12

Stop Loss: 1.182

Support: 1.145/1.14/1.12

Resistance: 1.182/1.192/1.2

The market widely anticipates that the Bank of Japan will maintain its current monetary policy stance for a sixth consecutive meeting, yet the 7-2 voting outcome has exerted pressure on the yen. As trade tensions ease and domestic inflation picks up, BOJ officials are expected to discuss conditions necessary to resume policy tightening. However, the newly elected Prime Minister, Sanae Takaichi, advocates for an accommodative monetary stance and opposes premature tightening measures, complicating the policy outlook. Japan's October monthly economic report indicates a modest recovery, supported by steady growth in capital expenditure. The report adopts a cautiously optimistic outlook, suggesting that Japan's economy, as the world's fourth-largest, is expected to gradually rebound alongside improvements in employment conditions. However, it also warns that uncertainties in U.S. trade policies pose downside risks to the recovery. Supported by increased investment in the software and digitalization sectors, Japanese capital expenditure shows a moderate uptick; private consumption exhibits signs of rebound, though its pace remains behind capital investment and exports due to ongoing inflationary pressures. Overall export stability persists, with sustained robust demand within Asia, though exports to the U.S. have declined since July due to tariff increases. Additionally, the report highlights a rise in corporate insolvencies in September influenced by labor shortages, though the persistence of this trend remains uncertain.

The Federal Reserve announced a 25 basis point reduction in the federal funds target range to 3.75%–4.00%, marking the second consecutive easing decision and the fifth cut since September 2024. The Federal Reserve indicated that U.S. economic activity is expanding modestly, employment growth is slowing, and the unemployment rate has risen slightly yet remains low. Inflation remains marginally above the target. The committee stated it will continue to assess data and risks to ensure the attainment of maximum employment and the 2% inflation goal. After the Federal Reserve Chair Powell's press conference, he stated that the balance sheet reduction has concluded, and potentially, an expansion may be warranted in the future to sustain liquidity and stabilize interest rates within the financial system. He emphasized that monetary policy remains data-dependent with no predetermined trajectory, and the possibility of a rate cut by year-end remains uncertain. Due to the government shutdown, policymaking has partly relied on employment data up to August; however, moderate inflation upticks suggest that year-end PCE inflation could approach approximately 3%. Despite signs of a softening labor market raising concerns, the Federal Reserve maintains a cautious stance overall, with future policy paths tending toward prudence and a slightly hawkish bias.

In the 1D timeframe, the Bollinger Bands are expanding upwards with the SMAs diverging positively, and the price has broken above the EMA12 with a strong bullish engulfing candlestick, continuing its upward momentum. The MACD exhibits a golden cross, and the RSI stands at 63, indicating strong bullish sentiment in the market. A breakout above key psychological level and the upper Bollinger Band is highly probable, with target prices around 154 and 154.6. In the 1W timeframe, the Bollinger Bands are similarly widening upward, and the SMAs are diverging positively with a golden cross formation. Meanwhile, the MACD shows an "angel's kiss" pattern, with the MACD line and signal line returning above the zero-axis, confirming ongoing bullish momentum. The RSI at 64 further signals strong bullish sentiment, with the potential for the price to advance towards 157 and 159. It is recommended to go long at the lows in the short term.

Trading Direction: Buy

Entry Price: 153.4

Target Price: 158.8

Stop Loss: 150

Support: 150, 148.5, 146.6

Resistance: 155, 156.7, 158.8

Spot EUR/CAD is quoted near 1.617–1.618 in Asia trade, modestly above yesterday’s post-BoC low, with public dashboards printing today’s range roughly 1.6170–1.6182. The macro mix leans tactically EUR-positive against CAD. The BoC’s 25 bp cut to 2.25% softens Canada’s short-end carry and came alongside a weaker growth outlook tied to US trade frictions, limiting reasons to buy CAD on policy grounds into year-end.

By contrast, the ECB is expected to hold after this year’s easing, which keeps the euro’s rate differential from deteriorating further. Oil is not providing a strong CAD tailwind this morning, with WTI hovering near $60 and Brent near $64.6, a neutral setting for energy-beta. With equity volatility contained in the mid-teens, EUR/CAD dips have met responsive buying rather than momentum selling.

Positioning is cautiously inclined to fade CAD strength on rallies while the BoC’s easing bias is still fresh and growth projections have been revised down. The bank’s communication hinted cuts may be nearing completion but did not deliver a hawkish turn, so the burden of support for CAD shifts back to commodities and risk sentiment. With crude stabilizing rather than surging and the VIX near 16–17, discretionary accounts prefer to buy EUR/CAD pullbacks ahead of the ECB, especially with yesterday’s high-1.61s proving sticky support on multiple intraday tests

Price is riding just above the Bollinger mid-line after rejecting the lower band near 1.615–1.616, a continuation pattern that typically precedes another upper-band check if the 20-period mean holds. On Ichimoku, price is rotating on or slightly above the Kumo, with Tenkan attempting to hold at or marginally above Kijun; repeated defenses of the cloud top in the 1.6160–1.6165 area define a tight buy zone. Stochastic (5/3/3) is turning up from mid-range; a clean %K re-cross above %D from the 40–50 band on a shallow dip usually precedes an upper-band extension.

Immediate resistance sits near 1.624–1.625, which capped on 29/10 and offers the first logical objective if buyers maintain control; failure to hold the cloud would risk a deeper probe toward 1.614–1.615 before bids likely re-emerge given the post-BoC backdrop. Intraday references from public feeds show today’s prints clustered around 1.617–1.618, consistent with this buy-the-dip framework.

Entry: 1.6187

TP: 1.6245

SL: 1.6138

Through Asia trade, spot clustered around 1.1615 with public dashboards marking today’s prints roughly 1.1601–1.1620, modestly firmer on the session. The macro mix leans tactically euro-supportive: the FOMC’s 25 bps cut lowers the USD carry impulse at the margin, while the ECB is widely expected to stand pat after a two-percentage-point easing cycle through June, a stance that prevents fresh deterioration in EUR-USD rate differentials.

The dollar backdrop is mixed but not aggressive; DXY is hovering near ~99 intraday rather than breaking higher, which limits immediate headwinds for EUR/USD. With VIX sitting in the mid-to-high teens and no fresh risk shock, dips into intraday support have found responsive buying rather than momentum selling.

Positioning is cautiously risk-on for the euro and measured for the dollar. The Fed’s cut accompanied by a non-committal December message removed a near-term hawkish tail, but not enough to drive broad USD liquidation; traders are instead leaning on event-driven ranges with a bias to buy EUR/USD pullbacks ahead of the ECB.

Headlines out of the euro area stress a hold-steady approach as inflation hovers close to 2%, reducing the odds of an ECB-led downside surprise for the euro in the immediate term. With volatility gauges subdued and the government-shutdown data fog complicating US macro reads, discretionary accounts prefer to fade dollar upticks while awaiting clearer guidance into November, which keeps the pair underpinned above 1.16.

Price is riding just above the Bollinger mid-line, and shallow pullbacks into the 20-period mean have bounced, a continuation pattern that typically precedes another upper-band test if momentum holds.

On Ichimoku, price is rotating on or above the cloud with Tenkan at or fractionally above Kijun; repeated defenses of the Kumo top in the 1.1605–1.1610 area define a tight buy zone. Stochastic (5/3/3) is rebuilding from mid-range; a clean %K re-cross above %D from the 40–50 band on a minor dip often triggers an upper-band extension. Immediate resistance is the 1.1645–1.1665 pocket where recent highs cluster; sustained acceptance above that zone opens a run toward 1.1685. Intraday references around 1.1616 as of today’s Asia session corroborate these levels.

Entry: 1.1610

TP: 1.1685

SL: 1.1578

The Bank of Canada (BoC) Governor, Tiff Macklem, sent a mixed signal to the markets following the recent rate cut. Macklem stated that the policy rate is now "roughly at the right level if inflation and activity evolve as projected," a comment interpreted by markets as surprisingly hawkish given the monetary easing. The BoC maintains its forecast that inflation will remain stable around 2% over the forecast horizon, even while slightly revising downward its Gross Domestic Product (GDP) projections for 2025 and 2026.

Macklem acknowledged that the Canadian economy continues to face significant headwinds, primarily stemming from restrictive U.S. trade policy and slowing global demand. Crucially, he emphasized the limited capacity of monetary policy to stimulate demand while keeping inflation low, given the economic damage inflicted by tariffs on key sectors like automotive, steel, aluminum, and lumber. The BoC now expects the GDP level to be approximately 1.5% lower by the end of 2026 compared to its January projection, as both weaker demand and lost capacity weigh heavily on growth. The central bank also highlighted a noticeable weakening in Canada's labor market, with the unemployment rate climbing to 7.1%.

Across the Atlantic, the European Central Bank (ECB) is widely expected to maintain interest rates unchanged for the third consecutive meeting, buoyed by contained inflation and signs of stabilization in the Eurozone economy.

However, market expectations for future policy have shifted significantly. Markets are now pricing in an approximately 80% probability of another rate cut in 2026, a substantial change from September, when hawkish comments from the ECB had effectively dismissed such a scenario, according to Reuters. All attention will be on President Christine Lagarde's post-meeting press conference for any indications regarding the future policy path. Any surprisingly hawkish commentary could provide short-term support to the single currency, the Euro (EUR).

Despite stabilizing economic data, persistent political uncertainty in France continues to weigh on sentiment towards the Euro, following Standard & Poor’s recent downgrade of the country’s sovereign rating, citing fragile public finances. Eurozone data remains mixed; Spain’s Gross Domestic Product (GDP) slowed to 0.6% in the third quarter, while retail consumption softened to 4.2% year-over-year.

EUR/CAD recently experienced a sharp downward impulse, reaching 1.6146 in the previous session—levels not seen since September 5th. This bearish move originated from the local high of 1.6468, which was attained on October 16th. However, the price has since recovered quickly above 1.6170, a zone that serves as local support and has triggered upward reactions on two prior occasions.

If the pair successfully holds this area and demonstrates a sustained bullish reaction, we could anticipate a new upward impulse targeting the 1.6361 local resistance level. On the 4-hour chart, the 100- and 200-period Moving Averages (MAs) are closely grouped at 1.6278 and 1.6289, respectively. These levels are likely to provide technical resistance along the path toward the 1.6361 objective.

Crucially, the Relative Strength Index (RSI) is at 29, a clear indication that the pair has entered oversold territory. This level will be closely monitored by bulls, as it demonstrates a marked weakening of the selling pressure, potentially opening the door for buyers to seize control from this zone. Conversely, a strong close below the 1.6170 support would imply a continuation of the bearish move, thereby invalidating the current bullish setup.

Trading direction: Buy

Entry price: 1.6182

Target price: 1.6361

Stop loss: 1.6100

Validity: Nov 07, 2025 15:00:00

The pound may continue to weaken against the dollar in the near term due to rising market expectations of further interest rate cuts by the Bank of England and concerns over UK economic growth.

Last week's lower-than-expected UK inflation data prompted market bets that the Bank of England may cut interest rates again sooner than anticipated. We expect the EURGBP to rise to 0.9000, while the GBPUSD may fall below 1.3140. However, the pound could still rebound if UK Chancellor Reeves can create sufficient fiscal space in next month's budget to boost investor confidence.

According to British media reports, UK Chancellor of the Exchequer Rachel Reeves is expected to face a blow in the upcoming budget announcement as the government's productivity forecast is significantly downgraded. We believe this adjustment could deal a blow to public finances exceeding £20 billion.

According to informed sources, the Office for Budget Responsibility is expected to lower its long-term productivity growth forecast by approximately 0.3 percentage points, increasing the likelihood of future tax hikes including income tax increases. According to calculations by the Institute for Fiscal Studies, each 0.1 percentage point downward revision in productivity forecasts would increase net public sector borrowing by approximately £7 billion in the 2029-30 fiscal year. Consequently, a 0.3 percentage point downward revision could widen the fiscal gap by as much as £21 billion.

The GBPUSD fell below the 200-day SMA of 1.3200 today, hitting a three-month low and extending its downtrend from 1.3725. The intraday bias remains bearish, targeting the 1.3140 range (1.3142 marks the 38.2% retracement of the 1.2099 to 1.3787 range). Strong support is expected in this range to halt the decline and complete the corrective pattern since 1.3787.

On the upside, a break above the short-term resistance at 1.3368 would initially shift the intraday bias to neutral. However, a decisive decline below 1.3140 would form a double top pattern (1.3787/3725). Should market conditions deteriorate further, selling pressure could push prices below 1.3021.

Trading Direction: Sell

Entry Price: 1.3300

Target Price: 1.2995

Stop Loss: 1.3450

Valid Until: November 13, 2025 23:55:00

Support: 1.3196, 1.3140, 1.3105

Resistance: 1.3249, 1.3303, 1.3368