The EUR/USD pair is trading near 1.1500, remaining confined to a narrow range, although weakness in the US dollar continues to provide some support for the price.
Possible technical scenarios:
EUR/USD on the daily chart is consolidating above 1.1494 while maintaining its broader downtrend. From this level, the pair has room for a corrective recovery toward the upper boundary of the channel near 1.1589, as well as potential for a renewed decline toward the next downside target at 1.1399.
Fundamental drivers of volatility:
Economic data from Europe remains weak. Germany’s GDP confirmed zero growth in the third quarter, following a 0.3% contraction in the second, while the IFO business climate index declined to 88.1, missing expectations of improvement. Ongoing weakness in the eurozone’s largest economy continues to weigh on the euro.
The US dollar, meanwhile, is under pressure following dovish comments from Federal Reserve officials. Christopher Waller supported a 0.25% rate cut in December, echoing similar remarks from John Williams. As a result, the CME FedWatch tool shows that the probability of a December rate cut has surged above 80%, up from roughly 40% the week before, driving the dollar index lower.
Traders are also awaiting several delayed US data releases. The September PPI is expected to show a 0.3% monthly increase after a 0.1% decline previously, with the annual rate projected to rise to 2.7%. Retail sales are forecast to grow by 0.4%, slightly below the prior month’s 0.6%. Softer-than-expected figures would strengthen expectations for a December rate cut and support the EUR/USD rally, while stronger data could revive dollar demand and put downward pressure on the pair.
Intraday technical picture:
As we can see on the 4H chart, EUR/USD continues to consolidate within a narrow range above 1.1494. The pair is trading in the middle of its downtrend channel, leaving potential for movement in either direction, with the short-term trajectory likely to be determined by upcoming US economic data.
The GBP/USD pair is recovering amid weakness in the US dollar, though gains remain limited as markets also anticipate monetary easing from the Bank of England.
Possible technical scenarios:
Judging by the unfolding situation on the daily chart, GBP/USD is trading below 1.3147. The upward correction could potentially extend toward the dotted resistance level at 1.3279 or even the highs of November 13 before the pair turns lower again toward the November lows.
Fundamental drivers of volatility:
Investors are reducing short positions on the pound ahead of Wednesday’s autumn budget presentation. At the same time, the US dollar remains in a consolidation phase amid mixed signals from Federal Reserve officials, which is providing additional support to the pair. However, uncertainty surrounding Chancellor Rachel Reeves’ upcoming fiscal statement continues to cap gains in the pound.
Reports suggest that Reeves has abandoned plans to raise income taxes due to an improved economic outlook and is instead considering alternative revenue sources. Meanwhile, a series of weak UK macroeconomic indicators has strengthened expectations for a December rate cut by the Bank of England.
Inflation fell to a four-month low in October, retail sales dropped 1.1%, and new PMI readings confirmed a cooling in the services sector. Taken together, these factors reinforce the likelihood of further policy easing and temper bullish sentiment toward the pound.
In the US, the Federal Reserve’s tone remains dovish: John Williams noted that a rate cut could occur soon without jeopardizing inflation goals, while Christopher Waller indicated that labor market softness justifies a 0.25% cut in December. According to FedWatch, the probability of such a move is now approaching 80%, limiting the dollar’s upside ahead of delayed PPI and retail sales data releases.
Intraday technical picture:
The 4H chart shows that GBP/USD has formed a sideways range between 1.3010 and 1.3196 around the 1.3147 area, leaving room for a local recovery within the range.
The USD/JPY pair remains in an uptrend, as the yen once again comes under pressure from several directions.
Possible technical scenarios:
According to the daily chart, USD/JPY is trading at the 156.71 level. Depending on whether the breakout proves true or false, the price may either continue climbing toward the November highs and further toward 158.93, or retreat back to support at 155.03.
Fundamental drivers of volatility:
The market continues to challenge the patience of Japanese authorities, and the recent Trump–Xi conversation — during which Taiwan was discussed — has heightened market nerves. Investors fear that rising tensions between Beijing and Tokyo could lead to economic repercussions. According to ING analysts, the yen is gaining an additional risk premium precisely because of concerns over potential Chinese countermeasures.
Reduced liquidity during Thanksgiving week is also making the market more vulnerable to sharp swings, increasing the likelihood of foreign exchange intervention by the Bank of Japan, especially if USD/JPY pulls back, giving the regulator a more favorable entry point.
That being said, the domestic backdrop remains unfriendly to the yen. The government is preparing the largest stimulus package since the pandemic, totaling 21.3 trillion yen, raising concerns about long-term fiscal sustainability. Japan’s economy also contracted in the third quarter, increasing the likelihood that the Bank of Japan will proceed cautiously with policy tightening.
Meanwhile, the US dollar is hovering near multi-month highs, despite the market pricing in roughly an 80% probability of a Fed rate cut in December. Comments from Fed official Christopher Waller regarding labor market weakness strengthened expectations for easing but did not undermine broader dollar support. Under these conditions, the yen’s potential for sustained strengthening remains limited. Geopolitical tensions, fiscal risks, and uncertainty surrounding the Bank of Japan’s future actions continue to push USD/JPY higher, while intervention threats only temporarily slow the movement.
Intraday technical picture:
From the look of things on the 4H chart, USD/JPY is holding above the dotted local support at 156.20, though the level appears fragile due to the formation of lower highs. A breakdown and consolidation below this mark would open the way toward the next downside target at 155.03.
The USD/CAD pair remains close to its two-week high, with the fundamental backdrop continuing to support further growth.
Possible technical scenarios:
On the daily chart, USD/CAD has resumed rising within its uptrend. A consolidation above 1.4108 would open the path toward the next upside target at 1.4179.
Fundamental drivers of volatility:
The Canadian dollar remains under pressure due to weak oil prices: the market is once again confronting concerns about a potential supply surplus in 2025, and crude prices are struggling to extend yesterday’s rebound from monthly lows.
Lower commodity prices are directly weighing on the oil-dependent Canadian dollar, supporting the pair’s upward momentum. Broad demand for the US dollar is also providing additional strength to the greenback. Despite expectations of a Federal Reserve rate cut in December, market participants are still showing appetite for safe-haven assets.
However, the pair’s ascent is being restrained by investor caution ahead of several important upcoming releases. This week’s key data includes delayed US PPI and retail sales, housing sales, and manufacturing indicators, as well as durable goods orders. The week will conclude with Canada’s September GDP report, which will play a crucial role in shaping expectations for the Canadian dollar.
Intraday technical picture:
As evidenced by the 4H chart, USD/CAD is attempting to consolidate above 1.4108, creating the technical groundwork for a move toward the next target at 1.4179.
Brent crude oil prices are edging lower on Tuesday, as oversupply concerns outweigh geopolitical risks linked to Russian supply disruptions.
Possible technical scenarios:
The daily chart suggests that Brent remains in a broader downtrend while attempting an upward correction. Locally, prices still have technical room to rise toward 63.23, testing the upper boundary of the range.
Fundamental drivers of volatility:
Oil prices are pulling back after Monday’s increase, which was driven by doubts about the prospects for a Russia–Ukraine peace agreement and renewed expectations that sanctions on Russian oil will remain in place longer than anticipated.
That said, the short-term outlook is increasingly shifting toward oversupply: forecasts for 2025–2026 indicate that production growth may outpace demand. Pressure is also coming from the rerouting of Russian oil flows. Due to new restrictions, India is reducing purchases from Rosneft and Lukoil, while Russia attempts to increase exports to China. This adds uncertainty regarding how the latest EU and US sanctions will affect actual export volumes.
In the longer term, the market is focusing on expectations of a surplus. Deutsche Bank projects an excess of at least 2 million barrels per day in 2026 and sees no clear path back to a deficit even by 2027.
Prices are receiving limited support from rising expectations of a Federal Reserve rate cut in December, which could stimulate economic activity and energy demand. As a result, the oil market is currently balancing between downward pressure from excess supply and hopes for a recovery in demand driven by monetary easing.
Intraday technical picture:
Based on the developments on the 4H chart, Brent is moving within the boundaries of a descending channel while correcting upward. With some room left to trend resistance, the local recovery target is near $64 per barrel, after which a reversal and a return to the broader downtrend may occur.
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