← Back to posts
Overall Market Sentiment: Mixed risk. The greenback holds recent gains, but with an October Fed cut heavily priced and Canada’s jobs report in focus, additional USD upside looks hard to sustain ahead of next week’s CPI.
Currency Outlooks
🔺 USD: Futures imply a near-certain 25 bp cut on Oct 29 and high odds of another move by year end. That backdrop caps front-end yields and usually limits fresh dollar traction unless services activity re-accelerates. Street consensus has core CPI ~+0.3% m m next week, which would validate near-term easing. DXY resistance 98.20 and 98.80, support 97.70. Nuance, a firmer CPI or a hawkish shift in rhetoric could squeeze the dollar, but the bar is high while cuts are firmly priced.
⚖️ EUR: The ECB accounts reinforce a preference to stay put, so EURUSD trades mostly off the USD path and French risk premium. The 10-year OAT–Bund spread has eased back toward the low-80s bps, a small euro tailwind but not a game changer. Levels: 1.1600 and 1.1760. Follow-through higher likely needs softer U.S. data or further narrowing in French spreads.
⚖️ GBP: Sterling is range-bound with the BoE effectively sidelined near term and domestic catalysts light. Price action is largely a function of DXY and European risk sentiment. Key levels: 1.3400 support, 1.3600 resistance.
🔻 CAD: Today’s jobs print is pivotal. Markets look for unemployment to edge up to ~7.2%, which would reinforce BoC-cut pricing and keep USDCAD supported on dips. Softer energy tone is another headwind. Levels: support 1.3850, resistance 1.3950 and 1.4000.
🔻 JPY: The yen stays heavy while U.S. yields remain elevated, but intervention sensitivity increases into 150. Fresh warnings from the finance ministry keep traders cautious on breakouts. Levels: resistance 148.80 and 150.00, support 147.20 then 146.50. A USD pullback on softer U.S. inflation would flip momentum quickly in JPY’s favor.
⚖️ AUD: With the RBA on hold and China signals mixed, AUD trades the global risk tone and the dollar. Levels: 0.6500 support, 0.6670 resistance.
🪙 Gold: Constructive while Fed cuts are priced and the front end is anchored; any USD fade adds support.
🧠 Dollar firm, momentum likely to fade into CPI
Published: 10/10/2025
Overall Market Sentiment: Mixed risk. The greenback holds recent gains, but with an October Fed cut heavily priced and Canada’s jobs report in focus, additional USD upside looks hard to sustain ahead of next week’s CPI.
Currency Outlooks
🔺 USD: Futures imply a near-certain 25 bp cut on Oct 29 and high odds of another move by year end. That backdrop caps front-end yields and usually limits fresh dollar traction unless services activity re-accelerates. Street consensus has core CPI ~+0.3% m m next week, which would validate near-term easing. DXY resistance 98.20 and 98.80, support 97.70. Nuance, a firmer CPI or a hawkish shift in rhetoric could squeeze the dollar, but the bar is high while cuts are firmly priced.
⚖️ EUR: The ECB accounts reinforce a preference to stay put, so EURUSD trades mostly off the USD path and French risk premium. The 10-year OAT–Bund spread has eased back toward the low-80s bps, a small euro tailwind but not a game changer. Levels: 1.1600 and 1.1760. Follow-through higher likely needs softer U.S. data or further narrowing in French spreads.
⚖️ GBP: Sterling is range-bound with the BoE effectively sidelined near term and domestic catalysts light. Price action is largely a function of DXY and European risk sentiment. Key levels: 1.3400 support, 1.3600 resistance.
(background consistent with recent BoE communications)
🔻 CAD: Today’s jobs print is pivotal. Markets look for unemployment to edge up to ~7.2%, which would reinforce BoC-cut pricing and keep USDCAD supported on dips. Softer energy tone is another headwind. Levels: support 1.3850, resistance 1.3950 and 1.4000.
🔻 JPY: The yen stays heavy while U.S. yields remain elevated, but intervention sensitivity increases into 150. Fresh warnings from the finance ministry keep traders cautious on breakouts. Levels: resistance 148.80 and 150.00, support 147.20 then 146.50. A USD pullback on softer U.S. inflation would flip momentum quickly in JPY’s favor.
⚖️ AUD: With the RBA on hold and China signals mixed, AUD trades the global risk tone and the dollar. Levels: 0.6500 support, 0.6670 resistance.
(watch USD leg into CPI)
Conclusion
🪙 Gold: Constructive while Fed cuts are priced and the front end is anchored; any USD fade adds support.
🛢 Oil and gas: Energy beta is soft. U.S. natural gas inventories +80 Bcf to ~3.64 Tcf, about 4.5% above the five-year average, which keeps Henry Hub under pressure and limits support for CAD.
📈 Stocks: Quality growth holds leadership if the dollar stalls and long yields stay contained; cyclicals need stronger activity data to outperform.
Week-Ahead Playbook
U.S. CPI preview: core expected around +0.3% m m; a print near consensus would validate an October cut and likely cap the dollar.
Europe: ECB tone remains steady, so EUR direction is mostly USD-driven with an eye on French spreads.
Canada: Labor data today set the tone for BoC October odds and USDCAD’s 1.3850–1.4000 range.
Japan: Watch USDJPY behavior into 150 and any fresh MoF rhetoric.