Published: 9/30/2025

Overall Market Sentiment: Mixed risk with a defensive tilt as the shutdown deadline approaches and fresh U.S. tariff headlines keep volatility elevated. Gold holds record highs and oil is soft on talk of incremental OPEC+ supply for November, sharpening the growth-versus-inflation tug of war in FX.

Currency Outlooks

🔺 USD: Two near-term catalysts dominate. First, the labor pulse, with markets braced for a soft NFP Friday and near 90 percent odds of a 25 bp Fed cut on Oct 29 priced. Second, fiscal noise, where a shutdown would likely delay some data and keep duration bid. The 2s10s curve remains modestly positive, which often trims USD upside when growth expectations wobble. A shutdown averted plus firmer JOLTS or ISM could trigger a squeeze. DXY support 97.50, resistance 98.50 then 99.00. Bias is modestly higher early in the week unless labor softens decisively.

⚖️ EUR: Near term, EUR trades the U.S. data path more than Eurozone idiosyncrasies. The ECB meets Oct 29–30 and is widely expected to hold. Sep flash HICP is due Wed Oct 1 with core momentum easing from mid-year. A shutdown that delays U.S. data would dampen USD carry appeal and aid EUR. Levels: support 1.1650 then 1.1600, resistance 1.1815 then 1.1860.

⚖️ GBP: Sterling stays range bound as traders price only a small chance of additional BoE easing in 2025. UK inflation is stickier than peers, which caps near-term cut expectations, but growth softness tempers rallies. GBPUSD 1.3400 support, 1.3600 resistance. Direction this week is mostly USD-driven via ISM and payrolls.

🔻 CAD: Oil softness challenges CAD as talk of an extra ~137k bpd OPEC+ increase for November weighs on timespreads. Markets lean to another BoC cut later in Q4, so spot trades as a crude proxy. USDCAD support 1.3850, resistance 1.3950 to 1.4000. Without a quick Brent reclaim of the low 70s, CAD rallies likely stay shallow.

🔻 JPY: Yen steadies as U.S. long-end yields ease on shutdown risk while markets keep ~40 to 50 percent odds of an October BoJ hike alive. That mix narrows differentials at the margin and lifts intervention sensitivity near round numbers. USDJPY resistance 149.50 and 150.00, support 147.50 then 146.80. A softer U.S. data run or a hint of BoJ tightening bias would push USDJPY lower quickly.

⚖️ AUD: RBA held at 3.60 percent today and flagged elevated uncertainty. Markets were fully priced for no change. AUD trades cleanly on global risk and China data this week, with 0.6500 support and 0.6600 resistance in focus. A firm rebound needs better China PMIs or a broad USD pullback.

🪙 Gold: Momentum stays constructive above $3,800 as policy uncertainty and shutdown risk compress real yields. Dips toward the low $3,700s should attract buyers unless U.S. data reaccelerates.

🛢 Oil: Brent’s downside bias persists as additional OPEC+ barrels are in play and balances tilt to surplus in Q4. Without a quick reclaim of the low 70s, energy-beta FX underperforms.

📈 Stocks: If Washington stumbles into a brief shutdown, defensives and quality growth should outperform cyclicals. A clean avoidance plus soft labor would favor a broader risk-on and cap the dollar.

Triggers to watch

• Tue Sep 30: JOLTS for Aug at 10:00 ET.
• Wed Oct 1: ISM Manufacturing at 10:00 ET. Eurozone flash HICP at 12:00 CET.
• Thu Oct 2: Jobless claims.
• Fri Oct 3: Nonfarm payrolls at 08:30 ET, subject to shutdown contingency.