Published: 10/7/2025

Overall Market Sentiment: Mixed risk as French political uncertainty weighs on Europe while Japan’s leadership shift keeps the yen heavy. The ongoing U.S. data blackout preserves high sensitivity to policy rhetoric and technicals.

Currency Outlooks

⚖️ USD: Futures imply an October cut is largely priced and markets are toying with a second by December, roughly 50 bp total for 2025. The 2s10s curve is modestly positive near the mid 50 bp area, a backdrop that typically limits dollar upside when growth expectations wobble. Core PCE is running at 2.9 percent y y, which supports an easier stance if services stay soft. Key levels, DXY support 97.80, resistance 98.80 then 99.20. Nuance, if Fed speakers lean less dovish and Washington restores data flow quickly, a squeeze toward 99.00 is feasible.

🔻 EUR: Paris politics are the near term drag. Lecornu’s resignation widened OAT Bund spreads toward the high 80s, and snap election risk has risen even if timing is unclear. Markets broadly expect the ECB to stay on hold in October, so EURUSD trades the U.S. rates story and French premia. Levels, support 1.1650 then 1.1600, resistance 1.1760 then 1.1810.

🔻 JPY: The “Takaichi trade” softened the yen as hike odds for October fell into the mid 20s. Intervention sensitivity rises as 150.00 approaches. Levels, resistance 148.80 and 150.00, support 147.20 then 146.50.

⚖️ GBP: Sterling is range bound with the BoE in wait and see mode and domestic data light. Direction is largely a function of the dollar and broader European risk sentiment. Levels, 1.3400 support, 1.3600 resistance, a daily close above 1.3600 targets 1.3720.
(technical levels are house levels)

🔻 CAD: OPEC plus approved a modest 137k bpd November hike, keeping Brent in the mid 60s and limiting CAD rallies. With the BoC later this month, spot trades mostly on oil beta. Levels, USD CAD support 1.3850, resistance 1.3950 and 1.4000.

⚖️ AUD: With China’s Golden Week thinning liquidity and the RBA quiet after holding at 3.60 percent, AUD trades global risk and the dollar. Levels, 0.6500 support, 0.6670 resistance, a sustained break above 0.6670 targets 0.6750.

🪙 Gold: Firm near record territory as shutdown uncertainty and softer real rate expectations persist, dips should find demand unless front end yields back up.

🛢 Oil: Brent holding in the mid 60s after the 137k bpd OPEC plus hike, without a quick push toward the low 70s, energy beta FX stays on the back foot.

📈 Stocks: Europe trades heavy on French risk while Japan’s equity strength contrasts with a weaker yen, quality growth retains leadership in the U.S. while data remain disrupted.

Week ahead triggers I am watching: FOMC minutes on Wednesday for cut path color, French government headlines and OAT Bund spread moves, BoJ rhetoric and any hint of pushback against market pricing, and oil timespreads after the OPEC plus decision as a compass for CAD.