The ECB announced its monetary-policy decision on Thursday. As widely expected, the Governing Council left the three key policy rates unchanged: the main refinancing operations (MRO) rate at 2.15%, the marginal lending facility (MLF) rate at 2.40% and the deposit facility (DF) rate at 2.00%. The hold was fully priced in, given both the Council's prior guidance and the fact that the euro-area easing cycle started well ahead of the Fed's.

The ECB has been cutting rates since June 2024, with a cumulative total of eight rate cuts. These measures have finally brought the rates to a relatively comfortable neutral level, without any signs of rising price pressures, while the economy has maintained moderate and stable growth. Christine Lagarde, President of the ECB, reiterated at the subsequent press conference that the ECB is currently in a good position. She further emphasized that officials are prepared to ensure inflation stabilizes at the 2% target level over the medium term. Finally, Lagarde noted that some downside risks to growth have eased, but this is not the case for inflation. The ECB's decision had no real impact on the euro. After market participants digested this news, EURUSD continued its downward trend for the week.

The FOMC lowered the federal funds target range by 25 bp to 3.75%–4.00%.

Governor Stephen Miran dissented in favor of 50 bp, while Kansas-City Fed president Jeffrey Schmid preferred no change. The Committee also announced an immediate end to quantitative tightening. The statement itself moved markets little. However, the reaction came only after Chair Jerome Powell's press conference. Powell struck a distinctly hawkish tone, framing the cut as a risk-management move but stressing that a December reduction is "not a given. "On speculative repricing, the DXY spiked and equities closed marginally lower, while the probability of a December cut fell sharply.

Furthermore, Powell also emphasized the challenges posed by the government shutdown to assessing the economic situation, which has led to a lack of official data, particularly employment-related figures. "Perhaps we should be more cautious," Powell noted. "I am not making a commitment here; I am simply saying that there is indeed a possibility that we might say, 'We really can't see the situation clearly right now, so let's slow down.'"

At the moment, the U.S. government shutdown has entered its fourth week. Federal coffers ran dry on 1 Oct and the Senate has yet to coalesce around a continuing-resolution bill. After the Fed's announcement, price action shows markets are pricing in a protracted closure, but overall sentiment remains relatively orderly.

Trade-war headlines again dominated the newswires this week. After a Seoul sidebar between President Trump and President Xi Jinping, the news-flow turned constructive: Washington will roll back its fentanyl-linked tariff to 10%, while Beijing pledged stepped-up U.S. farm purchases, suspended rare-earth export curbs and agreed to launch energy-sector talks.

Separately, the U.S. unveiled an Enhanced Trade Agreement with Tokyo aimed at aligning critical-mineral supply chains and reaffirming prior joint pledges. Following a Tuesday meeting with Prime Minister Takashi Tachibana, President Trump confirmed that the previously threatened 25% levy on Japanese goods will be set at 15%. In return, Japan committed to a $550 bn industrial-investment package and market-opening steps for U.S. rice, autos and defence hardware.

On the daily timeframe, after the MACD on the EURUSD formed a death cross signal, the fast and slow lines fell below the 0-axis. This indicates the market has entered a bearish phase. The Bollinger Bands are opening downward, and the moving averages are diverging downward. The price is fluctuating downward along the EMA12. The RSI reads 37, meaning the market has entered the oversold zone. If the price breaks below 1.16 again, it will most likely drop to the integer level of 1.15 and around 1.139 (near the EMA200).

From the weekly perspective, the Bollinger Band channels are narrowing. The price broke below the Bollinger Middle Band in a large bearish candlestick pattern. After the MACD formed a death cross, the fast and slow lines are pulling back toward the 0-axis but still have a certain distance to cover, indicating the correction is not yet complete. The RSI reads 50, and the highs are gradually lowering, showing the market has entered a wait-and-see sentiment. Once the price fails to hold above the Bollinger Middle Band after a rebound, it will most likely fall to the EMA50 or even near the Bollinger Lower Band.

Therefore, the short-term trading strategy is recommended to focus on selling at highs.

Trading Direction: Sell

Entry Price: 1.1526

Target Price: 1.12

Stop Loss: 1.173

Support: 1.145/1.14/1.12

Resistance: 1.182/1.192/1.2

The strengthening of the Canadian dollar driven by rising oil prices has led to a subdued USDCAD exchange rate. Notably, Canada is the U.S.' largest crude oil export partner. West Texas Intermediate (WTI) crude oil prices have remained around US$61 per barrel. The increase in crude oil prices is attributed to OPEC+ signaling a pause in production hikes. On Sunday, OPEC+ announced that after a slight increase in output next month, plans are set to suspend further production increases into the first quarter of 2026. Last Wednesday, the Bank of Canada reduced its policy interest rate to 2.25%, indicating that the easing cycle may be nearing completion. The central bank announced a 25 basis point reduction in the overnight rate target to 2.25%, with the bank rate set at 2.5% and the deposit rate at 2.20%. In its policy statement, the Bank noted that, given the increasingly transparent impact of U.S. trade actions on economic growth and inflation, the monetary policy report has resumed its forecasts for the global and Canadian economies. Due to the persistent high uncertainty surrounding U.S. trade policies, these projections now face broader risk ranges than before. The Canadian economy is undergoing a structural transition. Long-term damages from trade conflicts have diminished potential output capacity and increased production costs, thereby constraining the monetary policy space to stimulate demand and maintain low inflation. The Bank of Canada emphasized its commitment to ensuring public confidence in price stability during global economic fluctuations. The next scheduled announcement of the overnight rate target is December 10, 2025, with the upcoming monetary policy report due for release on January 28, 2026.

The Federal Reserve has implemented its second rate cut of the year, lowering the target range for the federal funds rate to 3.75%–4.0%. This has diminished market expectations for a December rate cut, providing support to the U.S. dollar. Consequently, the USDCAD currency pair may recover recent losses and continue its upward trajectory for the third consecutive trading session. Federal Reserve Chairman Jerome Powell stated at the post-meeting press conference that a December rate cut remains highly uncertain. Powell also cautioned that policymakers might need to adopt a wait-and-see approach until official economic data is released. According to the FedWatch tool by the Chicago Mercantile Exchange, traders currently estimate a 69% probability of a rate decrease in December, down from 93% a week earlier. However, due to the prolonged government shutdown, traders are likely to remain cautious, potentially heightening fears about the U.S. economy. The government impasse has entered its sixth week, with Congress deadlocked over an appropriations bill backed by Republicans, and no straightforward resolution currently in sight.

In the 1D timeframe, the Bollinger Bands are contracting, indicating narrowing volatility. The short-term EMA12 has stabilized, and the price has regained support above the EMA12 and the middle Bollinger Band, signaling a shift back to bullish momentum. A golden cross in the MACD would further accelerate the upward trend. The RSI stands at 58, reflecting strong bullish sentiment. Resistance levels are near the upper Bollinger Band and previous highs around 1.407 and 1.44. In the 1W timeframe, the Bollinger Bands are expanding upward, with MACD exhibiting sustained bullish momentum. Price action oscillates near the upper Bollinger Band, and following a MACD golden cross, the MACD line and signal line have moved above the zero-axis. The RSI is at 57, with higher lows, indicating improving market confidence in continued upward movement. Therefore, it is recommended to go long at the lows.

Trading Direction: Buy

Entry Price: 1.4017

Target Price: 1.44

Stop Loss: 1.38

Support: 1.378, 1.37, 1.357

Resistance: 1.41, 1.42, 1.44

The newly announced OPEC+ decision indicates that the group has agreed to a slight production increase of approximately 137,000 barrels per day in December 2025, while pausing any further output growth in Q1 2026. This move is seen in the market as a precautionary measure against the risk of "potential supply flooding," thereby temporarily boosting sentiment of support in the crude oil market. Specifically, the crude oil market is under pressure due to global inventory accumulation, record-high U.S. shale production growth, and expectations of a slowdown in global demand recovery.

OPEC+'s decision to pause production growth helps alleviate oversupply concerns, which is fundamentally positive for oil prices. However, this positive also carries a "half-signal" nature: First, although the increase is paused, there is no reduction in output, nor is there a significant voluntary contraction in capacity. This means that if demand continues to weaken or U.S. shale production accelerates, the risk of oversupply still persists. Second, the pause is limited to Q1 only; subsequent resumption of production or increased output from new members could trigger another round of downward pressure. Additionally, global economic growth—especially the weak recovery in factory activity and demand in major consuming countries such as China, India, and the EU—leaves demand-side uncertainty still in play.

Therefore, OPEC+'s policy provides interim support for oil prices, but it won't fundamentally eliminate downside risks.

Based on the daily chart, WTI opened with a gap higher, driven by the short-term positive news that OPEC+ will halt production growth in Q1 2026. However, it still failed to break through the key resistance level of 61.60 and entered a phase of consolidation.

On the downside, WTI may extend the depreciation if it fails to cross above 61.60 shortly, testing 56.00 again.

On the upside, WTI is likely to ascend towards 63.00 if it breaks above 61.60 in the short term.

Trading direction: Sell

Entry price: 61.15

Target price: 56.50

Stop loss: 62.50

Valid Until: November 17, 2025, 23:00:00

Support: 59.47/56.00

Resistance: 61.60/62.37

The New Zealand Dollar (NZD) remained under pressure on Friday, marking its third consecutive daily decline as global risk sentiment soured and the U.S. Dollar strengthened across the board. The Kiwi traded around 0.5720, down roughly 0.45% for the week, retreating from its failed attempt to breach the 0.5800 resistance earlier in the week.

The decline comes amid a combination of soft economic data from China, hawkish rhetoric from the Federal Reserve, and renewed caution among investors over the global growth outlook — a mix that has left high-beta currencies like the NZD exposed.

Fresh signs of slowing momentum in China — New Zealand’s largest trading partner — added to the Kiwi’s woes. The National Bureau of Statistics (NBS) Manufacturing Purchasing Managers’ Index (PMI) for October fell to 49.0, down from 49.8 in September and missing market forecasts of 49.6. This marks the second straight month of contraction, driven by weak domestic demand, supply chain bottlenecks, and subdued external orders.

The disappointing figures underscored the lingering headwinds facing China’s post-pandemic recovery. For New Zealand, whose export economy is heavily reliant on Chinese demand for agricultural and dairy products, such readings often translate into weaker trade prospects and a softer currency outlook.

“The ongoing deterioration in Chinese manufacturing activity continues to dampen regional sentiment,” said a Wellington-based trader. “The NZD is particularly vulnerable when investors start reducing risk exposure in Asia-Pacific markets.”

Further weighing on the Kiwi were remarks from Prasanna Gai, a member of the Reserve Bank of New Zealand’s Monetary Policy Committee, who warned that escalating U.S. tariffs and global trade disruptions are creating a “negative demand shock” for the New Zealand economy. Speaking at a policy forum in Melbourne, Gai cautioned that these headwinds could amplify the challenges already facing New Zealand’s restrained growth outlook.

He added that while the RBNZ’s easing measures have provided some support, “the cumulative impact of global uncertainty and tighter financial conditions has offset much of the stimulus,” hinting at the potential need for additional rate cuts in the coming months.

Gai’s comments echoed the RBNZ’s dovish tone in recent meetings, where policymakers have signaled growing concern over persistent inflationary pressures coupled with slowing growth momentum. The combination of weak global demand and domestic fragility has put the central bank in a difficult balancing act — easing enough to support activity without reigniting price pressures.

Adding to the NZD’s downward pressure was a stronger U.S. Dollar, which extended its gains after Federal Reserve Chair Jerome Powell signaled a more hawkish stance than markets anticipated. Following a widely expected 25 basis point rate cut on Wednesday, Powell stressed that another reduction in December was “not a foregone conclusion,” suggesting the central bank remains cautious about over-easing monetary policy amid resilient labor data and sticky inflation.

That message triggered a rebound in U.S. Treasury yields, with short-term maturities climbing sharply as traders scaled back expectations for aggressive Fed easing into year-end. The resulting dollar strength has weighed heavily on most G10 currencies, particularly those sensitive to shifts in global risk sentiment like the Kiwi and Aussie.

“Powell’s tone caught investors off guard,” said a currency strategist at ANZ. “Markets were positioned for a dovish confirmation, but instead they got a reminder that the Fed is still data-dependent. That pivot sent yields and the dollar higher, leaving the Kiwi on the defensive.”

From a technical perspective, NZD/USD has broken below a key short-term bullish channel, intensifying downside momentum. The pair’s failure to hold above the 50-day Exponential Moving Average (EMA50) confirms renewed selling pressure, with the next immediate support seen near 0.5700, followed by 0.5660 — the October low.

Momentum indicators, including the Relative Strength Index (RSI), have turned south, reflecting an increase in bearish momentum and signaling the potential for deeper losses if sentiment fails to stabilize. On the upside, the 0.5800 level now stands as a critical resistance zone, and only a decisive break above it could shift the near-term outlook back toward neutrality.

SELL NZDUSD

ENTRY PRICE: 0.5720

STOP LOSS: 0.5770

TAKE PROFIT: 0.5660

The euro weakened against the dollar on Friday, slipping to around 1.1560 as risk sentiment soured and the Federal Reserve’s hawkish policy tone boosted the greenback. The move came after a largely directionless Asian and early European session, where the pair hovered just above key support near 1.1540. Despite a brief attempt to steady, the broader trend remains firmly tilted toward the downside as the market adjusts to diminishing prospects for further U.S. rate cuts this year.

Investors continue to digest Wednesday’s Federal Reserve decision, where the central bank delivered a quarter-point rate cut but paired it with a distinctly hawkish message. Fed Chair Jerome Powell said that another rate reduction at the December meeting was “not a foregone conclusion,” effectively curbing expectations for additional easing. His remarks painted a picture of a central bank intent on staying data-dependent, even as economic visibility remains clouded by disruptions from the U.S. government shutdown, which has delayed key economic releases. The tone reinforced the notion that the Fed is entering a cautious holding phase rather than embarking on a deeper easing cycle.

Markets reacted swiftly. Treasury yields ticked higher, and the dollar rallied as investors interpreted Powell’s stance as a sign of policy restraint rather than further accommodation. The Fed’s message, while signaling flexibility, also underscored its belief that the economy remains relatively resilient. This narrative has provided strong footing for the dollar and left little room for the euro to regain lost ground.

The greenback also found additional support from improving sentiment surrounding global trade. U.S. President Donald Trump and China’s President Xi Jinping reaffirmed a truce in their trade dispute, agreeing to maintain existing terms and suspend further escalation. While the agreement has been described as fragile and temporary, it was sufficient to boost confidence in U.S. assets. The development helped reinforce the dollar’s appeal, given the United States’ perceived economic resilience compared to Europe’s subdued outlook.

In contrast, Eurozone data continued to disappoint. Preliminary October figures for the Harmonized Index of Consumer Prices (HICP) showed inflation slowing slightly to 2.1% year-on-year from 2.2% in September. Core inflation held steady at 2.4%, indicating little underlying price momentum. On a monthly basis, consumer prices rose by 0.2%, marginally above the prior month’s 0.1%, while the core index advanced to 0.3%. These figures suggest inflationary pressures in the bloc remain contained, giving the European Central Bank limited room to maneuver.

The ECB, as expected, left interest rates unchanged at 2% during its latest meeting. President Christine Lagarde maintained a calm tone, stating that the central bank is “in a good place” and signaling confidence that current policy settings remain appropriate. Lagarde’s comments briefly lifted the euro, but the bounce proved short-lived as traders refocused on the widening yield gap between the Eurozone and the United States. Market participants largely interpreted her remarks as confirmation that the ECB is content to maintain its stance for now, rather than hinting at any tightening path ahead.

Technically, the euro remains on fragile footing. The 200-day simple moving average continues to act as a ceiling, repeatedly rejecting bullish attempts to push higher. A recent break below the SMA 786 level confirmed renewed bearish momentum, slicing through dynamic support that had previously cushioned declines. The technical setup points to sustained downward bias, with momentum indicators favoring a continuation toward the 1.1400 handle in the short term. The failed attempts to reclaim resistance levels suggest that sellers remain firmly in control, and unless the pair stages a decisive recovery above 1.1620, rallies are likely to be sold into.

The current structure fits well with a disciplined short-side strategy that focuses on precision and patience rather than aggressive chasing. The rejection at the 200 SMA underscores the broader weakness in the euro, while the breakdown through support zones validates the dominance of bearish sentiment. For now, the path of least resistance remains lower, with traders likely to test deeper support levels should the U.S. data continue to outperform or if Eurozone indicators fail to show meaningful improvement.

SELL EURUSD

ENTRY PRICE: 1.15350

STOP LOSS: 1.1590

TAKE PROFIT: 1.1400

The euro is expected to weaken, with the strengthening dollar exerting additional downward pressure on the EURUSD. The European Central Bank (ECB) maintained its interest rates at the October policy meeting, reaffirming its commitment to restoring inflation to the 2% target over the medium term. Policy decisions will continue to be data-dependent and assessed incrementally through successive meetings. Analysts suggest that the ECB is unlikely to cut rates in the near future. The deposit facility rate remains steady at 2%, with the main refinancing rate and marginal lending rate unchanged at 2.15% and 2.40% respectively, aligning with market expectations and reflecting confidence in the resilience of the Eurozone economy and easing inflationary pressures. Lagarde also stated at Thursday's press conference that the current monetary policy interest rate is at a "favorable levels." Although the so-called "favorable level" is not fixed, the ECB will do its utmost to maintain monetary policy within this range. With the trade agreement reached between Europe and the U.S. during the summer, the recent ceasefire in the Middle East, and today's latest developments, some downside risks to economic growth have been offset.

After the Federal Reserve's consecutive second rate cut of 25 basis points, justified by "risk management" considerations, Federal Reserve Chair Powell's remarks signaled no predetermined path toward easing and warned of significant disagreement within the FOMC regarding December policy actions. He emphasized that a rate cut in December remains "far from a fait accompli." Meanwhile, Powell highlighted the uncertainty surrounding upcoming economic data before the December meeting, noting that the lack of economic indicators could justify pausing interest rate adjustments. Furthermore, the Federal Reserve announced that it will pause its balance sheet reduction starting December 1st and will reinvest maturing principal into short-term Treasury securities. Following the announcement, U.S. Treasury yields flattened during the press conference, and futures markets showed a significant reduction in expectations for a December rate cut. The dollar initially appreciated then depreciated, reflecting the interplay between policy normalization and market pricing adjustments. Analysis indicates that the current U.S. Dollar Index and the Federal Reserve's monetary policy trajectory are approaching three critical inflection points.

Following the MACD death cross on the EURUSD 1D chart, with both the MACD line and signal line crossing below the zero-axis, the market signal indicates a bearish trend. The Bollinger Bands are expanding downward, while the SMAs are diverging downward, with price oscillating along the EMA12 support level. The RSI reading at 39 suggests increasing market pessimism. The current market has once again breached the 1.16 support level, likely approaching the EMA200 around 1.139. In the 1W timeframe, Bollinger Bands are narrowing, with prices oscillating near the middle band. Following a MACD death cross, the MACD line and signal line are pulling back toward the zero-axis, indicating ongoing correction yet to be complete. The RSI value is at 52, with peaks gradually declining, reflecting a cautious market sentiment. If the price fails to hold the middle Bollinger Band, a decline towards the EMA50 or even the lower Bollinger Band is highly probable. Therefore, it is recommended to go short at the highs in the short term.

Trading Direction: Sell

Entry Price: 1.156

Target Price: 1.12

Stop Loss: 1.182

Support: 1.145, 1.14, 1.12

Resistance: 1.182, 1.192, 1.2