Market analysis

Date: Monday 03rd of November 2025

EUR/USD : Federal Reserve opened the door for additional US Dollar gains .

GBP/USD : Pound Sterling faces BoE test as budget woes weigh .

USD/JPY : S its near eight-month top amid bullish USD .

Dow Jones : C loses higher as Amazon surges on strong Q3 results .

Gold : Fed commentary and US data to drive XAU/USD .

Crude Oil : E nds slightly up, trade choppy on report .

EUR/USD

Federal Reserve opened the door for additional US Dollar gains

The EUR/USD pair ended October with a weak note, barely holding above a three-month low of 1.1522 posted on the last trading day of the month. The pair is down for a second consecutive week following the Federal Reserve (Fed) and European Central Bank (ECB) monetary policy decisions. The Federal Open Market Committee (FOMC) decided to trim the benchmark interest rate by 25 basis points (bps) to a range of 3.75% to 4%. There were two dissenters: Stephen Miran, who voted for a 50-bps cut, and Jeffrey Schmid, who preferred to keep rates unchanged. Policymakers also announced an end to the quantitative tightening (QT) program. The decision, alongside the statement, had a limited impact on financial markets, but things changed after Chair Jerome Powell delivered a press conference. Chair Powell was hawkish, noting that the decision to trim interest rates was risk management while adding that a December cut should not be taken for granted. The US Dollar (USD) soared, and stocks edged firmly lower amid speculative interest rolling back bets for a December cut. Additionally, Powell highlighted the challenges in assessing the economic situation amid the government shutdown, resulting in the absence of official data, particularly employment-related data. “There’s a possibility that it would make sense to be more cautious,” Powell noted, adding, “I’m not committing to that, I’m just saying it’s certainly a possibility that you would say, ‘we really can’t see, so let's slow down. ” The ECB announced its decision on monetary policy on Thursday, and as widely anticipated, European policymakers kept interest rates on hold. Therefore, the interest rate on the main refinancing operations, the interest rates on the marginal lending facility and the deposit facility stood at 2.15%, 2.4% and 2%, respectively. The decision came as no surprise, given that not only policymakers anticipated, but also that the loosening cycle had begun much earlier than the Fed. The ECB started trimming rates in June 2024 and delivered eight cuts that resulted in interest rates reaching a comfortable neutral rate, without any signs of increased price pressures and the economy posting modest yet steady growth. President Christine Lagarde repeated that the ECB is in a good place during the press conference that followed the decision, also reiterating that officials stand ready to ensure that inflation stabilizes at its 2% target in the medium term. Finally, Lagarde mentioned that some of the downside risks to growth have abated, but that with inflation is not the same. The ECB decision had no real impact on the Euro (EUR), with EUR/USD extending its weekly decline after market participants digested the news. Meanwhile, the US government shutdown has been ongoing for a month. The federal government ran out of funding on October 1, and the Senate has been unable to agree on a bill to reverse the situation. Financial markets have become more aware of the long-term effects after the Fed’s announcement yet are still looking at the situation with a dose of calm. Also, trade war back-and-forth dominated headlines throughout the week. News from such a front was mostly positive after US President Donald Trump met with his Chinese counterpart, Xi Jinping, in South Korea. Both leaders announced a de-escalation of the latest measures, with the US reducing fentanyl-related tariffs to 10%, and China agreeing to buy more agricultural goods from the US. Beijing also suspended rare-earth export controls and agreed to explore energy sector cooperation. The US also announced an enhanced trade agreement with Japan, a framework to coordinate on important minerals that reaffirmed their previous mutual commitments. US President Trump met with Prime Minister Sanae Takaishi on Tuesday, later announcing the US will charge 15% tariffs on Japanese goods, down from the initially threatened 25%, while Japan pledged to invest $550 billion in US industry and open its market to some American goods such as rice, cars, and defense equipment. Germany released data throughout the week, which came in mixed. The IFO Business Climate survey improved in October to 88.4 from 87.7 posted in September, yet Consumer Confidence deteriorated according to the GfK survey, which shrank to -24.1 in November from -22.3 previously. The country also published the preliminary estimate of the Q3 Gross Domestic Product (GDP), which showed the economy did not grow in the three months to September. The reading was better than -0.3% posted in Q2, but still discouraging. Finally, Germany released the preliminary estimate of the October Harmonized Index of Consumer Prices (HICP), which rose at an annualized pace of 2.3% as expected. The monthly HICP rose by 0.3%, slightly higher than the 0.2% posted in September. As for the Eurozone, the Q3 GDP was up 0.2% QoQ, better than the previous 0.1%, while October Consumer Confidence printed at -14.2, matching September's reading and expectations. Regarding the HICP, the preliminary October estimate printed at 2.1% YoY, easing from the previous 2.2%, while the core annual reading remained steady at 2.4%, higher than the 2.3% expected. The macroeconomic calendar will include the final estimates of the October S&P Global Manufacturing Purchasing Managers’ Indexes (PMIs) for both economies, and the official US ISM Manufacturing PMI on Monday.

Germany will publish September Factory Orders, while the Eurozone will unveil the Producer Price Index (PPI) for the same month on Wednesday. S&P Global will release the same day the Services and Composite PMIs for both economies, while the US will publish the October ADP Employment Change survey and the ISM Services PMI for the same month. Finally, the Eurozone will release September Retail Sales on Thursday. A self-note goes for policymakers: multiple ECB and Fed officials will be on the wires throughout the week after the blackout period ended with monetary policy announcements .

Source : https://www.fxstreet.com/analysis/eur-usd-weekly-forecast-is-there-life-for-the-us-dollar-after-the-federal-reserve-surprise-202510311526

EUR/USD

GBP/USD

Pound Sterling faces BoE test as budget woes weigh.

The Pound Sterling (GBP) accelerated its recent decline against the US Dollar (USD), as GBP/USD briefly revisited levels under the 1.3150 psychological mark. Pound Sterling suffered amid UK budget woes, USD rebound . Market sentiment was largely driven by hopes of a US-China trade deal and the anticipation of dovish US Federal Reserve (Fed) monetary policy announcements at the start of the week, fueling fresh declines in the USD . The odds of a US-China trade deal ramped up after a preliminary consensus on topics including export controls, fentanyl and shipping levies was reached by both sides during their two-day talks in Malaysia. On October 24, the Bureau of Labor Statistics (BLS) showed that the US Consumer Price Index (CPI) rose 0.3% in September, which drove the annual inflation rate from 2.9% to 3%, the highest it has been since January. The annual CPI inflation came in softer than the market forecast of 3.1%. Following the softer-than-expected US inflation data, markets almost fully priced in two interest rate reductions this year, with a 25 basis points (bps) cut each in the October and December monetary policy meetings. This Greenback weakness helped GBP/USD buyers gather some courage to briefly regain the 1.3350 barrier. However, the pair quickly reversed course and resumed its downtrend after the US Dollar staged a solid comeback against its six major currency rivals on Wednesday, even as the Fed delivered on the expected 25 bps cut. The rebound occurred because, during the post-policy meeting press conference, Fed Chairman Powell noted that policymakers are likely to become more cautious if the current government shutdown deprives them of further job and inflation reports, tempering bets for another rate cut by the Fed at year-end. Following the Fed event, the CME Group’s Fed Watch Tool showed a 72.8% probability of a quarter percentage point Fed rate cut in December compared with a 91.1% chance a week earlier. Investors remained nervous heading into Thursday’s highly anticipated meeting between US President Donald Trump and his Chinese counterpart Xi Jinping in South Korea, exerting additional downside pressure on the higher-yielding Pound Sterling. On Thursday, both leaders reached a major trade truce on the sidelines of the APEC Summit in Busan, South Korea. The landmark agreement covers key critical points, including rare earth minerals, fentanyl trade, and semiconductor sales. Trump said that “tariffs on China will be 47% down from 57%.” Meanwhile, China’s Commerce Ministry confirmed that Beijing will pause rare earth export controls for a year, adding that “both sides reached consensus on fentanyl cooperation, expanding agriculture trade.” The US-China trade deal optimism provided extra legs to the USD upswing, in the aftermath of a less dovish Fed, exacerbating GBP/USD’s pain. The currency pair breached critical support levels to reach six-month lows near 1.3115. On the UK side of the equation, the Pound Sterling faced additional headwinds as investors grew increasingly anxious ahead of Chancellor Rachel Reeves’s Autumn Budget, due on November 26. Reuters reported that the Office for Budget Responsibility (OBR) is expected to lower productivity forecasts, raising financial stress and boding ill for the British Pound. The GBP was also undermined by the markets’ beliefs that mounting concerns over UK economic growth prospects could persuade the Bank of England (BoE) to resume its easing cycle in December after a rates-on-hold decision expected on Thursday. With the Fed event and the Trump-Xi meeting finally out of the way, traders now focus on the BoE policy announcements and the private sector employment and economic activity data from the United States (US). While official data is very unlikely to be published due to the shutdown, some private-sector indicators are expected to provide insights into the state of the US economy and the labor market. On October 30, the US Senate adjourned and won't meet again until Monday, extending the government shutdown until at least its 34th day, which would almost make it the longest funding lapse in American history. This leaves traders again in a data drought situation on the US calendar. In case the government reopens, a bunch of delayed top-tier statistics will be published. In this scenario, the spotlight would be on the September Nonfarm Payrolls (NFP) data. Tuesday will see the release of the US ISM Manufacturing PMI data, while the JOLTS Job Openings survey is unlikely to be published unless the US government reopens. On Wednesday, the monthly private employment data from the Automatic Data Processing (ADP) will be closely scrutinized to gauge the health of the US labor market. ADP's employment report showed private payrolls decreased by 32,000 jobs in September. Meanwhile, the ADP published its National Employment Report's inaugural weekly preliminary estimate on Tuesday, showing that US private payrolls increased by an average of 14,250 jobs in the four weeks ending October 11. The US ISM Services PMI will also feature on Wednesday. The BoE ‘Super Thursday’ will help determine the next trend in GBP/USD. The BoE is widely expected to hold the key policy rate at 4%, but the updated projections and Governor Andrew Bailey’s hints on future rate cuts will likely boost volatility around the Pound Sterling. Apart from the economic news, trade and geopolitical headlines will be monitored in the upcoming week. Speeches from Fed policymakers will also affect the USD-driven GBP/USD price action.

Source: https://www.fxstreet.com/analysis/gbp-usd-weekly-forecast-pound-sterling-remains-sell-on-bounce-trades-ahead-of-boes-rate-call-202510311437

GBP/USD

USD/JPY

Sits near eight-month top amid bullish USD.

The Japanese Yen (JPY) retains its negative bias heading into the European session on Monday and languishes near its lowest level since February 14 against a bullish US Dollar (USD). Expectations that Japan's new Prime Minister Sanae Takaichi will pursue aggressive fiscal spending plans and resist policy tightening continue to fuel uncertainty over the likely timing of the next interest rate hike by the Bank of Japan (BoJ). This, along with the upbeat market mood, is seen as another factor undermining demand for the safe-haven JPY. However, concerns about economic risks stemming from a prolonged US government shutdown and speculations that Japanese authorities could intervene to stem further weakness in the domestic currency could limit deeper JPY losses. The USD, on the other hand, is seen consolidating last week's strong gains to its highest level since early August amid the US Federal Reserve's (Fed) hawkish tilt. This, in turn, favors the USD/JPY bulls and backs the case for an extension of the pair's recent strong move up witnessed over the past three weeks or so . the Bank of Japan held rates steady last Thursday despite two dissenting votes, with board members Naoki Tamura and Hajime Takata pushing for a hike to 0.75%. In the post-meeting press conference, BoJ Governor Kazuo Ueda said that there are no preset ideas about the timing of the next rate hike. Moreover, Japan's new Prime Minister, Sanae Takaichi, has a pro-stimulus stance, advocating for significant fiscal spending to tackle inflation and boost the economy. This reaffirms expectations that the BoJ could delay raising interest rates further and continues to undermine the Japanese Yen on Monday. Meanwhile, traders trimmed their bets for another interest rate cut by the US central bank in December following Federal Reserve Chair Jerome Powell's hawkish comments last Wednesday. This assists the US Dollar to stand firm near a three-month peak and further acts as a tailwind for the USD/JPY pair.

Source: https://www.fxstreet.com/news/japanese-yen-languishes-near-multi-month-low-against-bullish-usd-amid-boj-uncertainty-202511030249

USD/JPY

Dow Jones

Closes higher as Amazon surges on strong Q3 results.

The S&P 500 closed higher on Friday, but investors had to contend with swings between gains and losses as quarterly results from big tech including Amazon and Apple continued dominating market moves. At 4:00 p.m. ET (20:00 GMT), the Dow Jones Industrial Average rose 40 points, or 0.1%, the S&P 500 gained 0.3%, and the NASDAQ Composite 0.6%. Amazon jumps, but Apple gives up gains despite solid outlook . Investor concerns made apparent earlier in the week, over the spending by the tech sector were eased, to a certain extent, by healthy results from two of Wall Street’s biggest names, reviving the week’s earlier optimism. Apple stock gave up gains even after the iPhone maker issued an upbeat outlook, saying it now expects total revenue to rise by 10% to 12% during the holiday quarter. Underpinning these forecasts, there were expectations that customers would largely opt to upgrade to Apple’s latest version of its flagship device, the iPhone 17. "We believe that the Street is still underestimating the iPhone 17 cycle that we are seeing...with our estimates of 315 million of 1.5 billion iPhones globally not upgrading their iPhones in the last 4 years," Wedbush said in a recent note. Speaking to CNBC, CEO Tim Cook said the iPhone 17 would lead to the best December quarter "in the history of the company." Amazon shares also surged after the e-commerce giant posted quarterly earnings that topped estimates, buoyed by a rebound in retail margins and solid growth at its cloud arm, Amazon Web Services. Despite being viewed by some observers as a relative laggard in the AI arms race, top-line growth at its Amazon Web Services cloud division -- which has become largely tied to its ambitions in the nascent technology -- came in at 20%, the fastest increase since 2022. "While the company’s cloud growth rate remains below peers, Amazon appears on a better course to win a growing share of marginal AI cloud revenue which, if durable, could drive further upside, particularly given the accelerated focus on securing power," RBC said in a recent note. While the Fed cut rates by 25 basis points this week, Chair Jerome Powell signaled that another cut in December was “not a foregone conclusion,” tempering hopes for aggressive stimulus. Elsewhere, U.S. President Donald Trump had an "amazing, outstanding" meeting with China’s Xi on Thursday, but offered little clear insight into how Washington and Beijing will temper their trade ties. The president said he saw a trade deal with China as "pretty soon," and that there were few stumbling blocks between the two. He did not specify when the deal would be signed but said that he would visit China in April.

Source : https://www.investing.com/news/stock-market-news/wall-st-futures-jump-as-strong-apple-amazon-results-boost-sentiment-4322289

Dow Jones

Gold

Fed commentary and US data to drive XAU/USD

Gold (XAU/USD) remained under bearish pressure and touched its weakest level since early October, below $4,000, pressured by the Federal Reserve (Fed) Chairman Jerome Powell’s cautious remarks on policy easing and a de-escalation in the United States (US) - China trade conflict. Upcoming macroeconomic data releases from the US and comments from Fed officials could influence Gold’s valuation in the near term. Gold started the week under heavy bearish pressure and lost more than 3% on Monday. Growing optimism about the US and China reaching a trade truce allowed risk flows to dominate markets, making it difficult for Gold to find demand as a safe haven. Following a high-level meeting with Chinese officials, US Treasury Secretary Scott Bessent said over the weekend that China was ready to make a trade deal to avert a new 100% tariff on Chinese imports and added that a framework was prepared for the meeting between US President Donald Trump and Chinese President Xi Jinping . As Trump signed framework trade agreements with multiple nations, including South Korea, during his Asia tour, Gold remained on the back foot and fell to its lowest level since early October, below $3,900, on Tuesday. Following a recovery attempt in the first half of the day on Wednesday, Gold turned south in the American session and closed the fourth consecutive day in negative territory. The Fed decided to cut the policy rate by 25 basis points (bps) to the range of 3.75%-4% following the October policy meeting, as anticipated. The US central bank also announced that it will conclude the aggregate balance sheet drawdown on December 1. While responding to questions in the post-meeting press conference, Fed Chair Jerome Powell noted that another rate cut in December is "far from assured" and explained that the outlook for employment and inflation has not changed much since the September meeting. Powell further reiterated that the central bank needs to manage the risk of more persistent inflation. The benchmark 10-year US Treasury bond yield climbed above 4% following Powell’s cautious remarks on policy easing, and the US Dollar (USD) gathered strength, weighing on XAU/USD. On Thursday, the negative shift seen in the risk sentiment helped gold stage a rebound. After recovering above $4,000, the precious metal went into a consolidation phase on Friday. The US economic calendar will feature several macroeconomic data releases that could provide valuable insights into the labor market conditions and the overall economic situation, given the postponed or cancelled releases due to the ongoing government shutdown. On Monday, the Institute for Supply Management (ISM) will publish the Manufacturing Purchasing Managers’ Index (PMI) data for October. A significant improvement in the headline PMI, and/or the Employment component of the survey, could support the USD with immediate reaction and cause XAU/USD to stretch lower. On Wednesday, Automatic Data Processing (ADP) will release the private sector payroll data for October. Earlier in the week, the ADP reported on Tuesday that private payrolls increased by an average of 14,250 jobs in the four weeks ending October 11 and announced that it will start publishing a weekly preliminary estimate, which will present a four-week moving average of the total employment change in the private sector. Hence, the market reaction to the upcoming ADP data could remain short-lived. Later in the day, the ISM Services PMI data for October could trigger a straightforward reaction, with the better-than-forecast headline PMI reading and a noticeable recovery in the Employment component boosting the USD while weighing XAU/USD and vice versa. Investors will also pay close attention to comments from Fed officials. According to the CME Fed Watch Tool, the probability of one more Fed rate cut in December declined below 70% on Friday from 90% ahead of the Fed meeting.

In case policymakers echo Powell’s tone by refraining from committing to another interest rate reduction before the end of the year, the USD could continue to gather strength alongside rising T-bond yields, opening the door for another leg lower in Gold. Conversely, XAU/USD could hold its ground if Fed officials hint that they are on track to ease the policy rate further unless they see a convincing sign of tariffs lifting inflation .

Source: https://www.fxstreet.com/analysis/gold-weekly-forecast-correction-deepens-on-hawkish-fed-tone-us-china-trade-truce-202510311433

GOLD

Crude Oil

Ends slightly up, trade choppy on report.

Oil prices settled slightly higher after a wild trading session on Friday, popping up as media reports said U.S. air strikes on Venezuela could begin within hours and then retreating after U.S. President Donald Trump issued a denial on social media. Brent crude futures settled at $65.07 a barrel, up 7 cents, or 0.11. U.S. West Texas Intermediate crude finished at $60.98 a barrel, up 41 cents, or 0.68%. "Is this Donald Trump’s trick or treat?" said Phil Flynn, senior analyst for Price Futures Group. He noted that earlier this year, Trump denied reports of a planned attack on Iran before carrying out airstrikes against the Islamic Republic. "There definitely was an impact on the market when the first report of a planned attack on Venezuela came out," Flynn said. "If there is an attack over the weekend, prices will spike on Monday." The U.S. has deployed a task force centered around the nation’s largest aircraft carrier, Gerald Ford, off the coast of Venezuela, far beyond the needs of attacking drug traffickers on small boats, the focus of U.S. naval activity in the Caribbean in recent weeks. "It’s pretty clear something is afoot there," said John Kilduff, partner with Again Capital LLC. "For oil traders, it’s a classic situation to buy now and ask questions later." The U.S. dollar was near three-month highs against major currencies, making purchases of dollar-denominated commodities such as oil more expensive . Meanwhile, sources told Reuters that Saudi Arabia, the world’s top oil exporter, may reduce its December crude price for Asian buyers to multi-month lows, sounding a bearish note. Oil slipped after an official survey showed China’s factory activity shrank for a seventh month in October. Brent and WTI are set to fall 2.6% and 2%, respectively, in October with the Organization of the Petroleum Exporting Countries and major non-OPEC producers ramping up output. More supply will also cushion the impact of Western sanctions disrupting Russian oil exports to its top buyers China and India. A Reuters survey forecast Brent will average $67.99 per barrel in 2025, about 38 cents above last month’s estimate. WTI is expected to average $64.83, slightly above September’s estimate of $64.39. OPEC+ is leaning toward a modest output boost in December, people familiar with the talks said ahead of the group’s meeting on Sunday. Kilduff said most of the OPEC+ members except for Saudi Arabia were unable to add much to their production.

"Pretty much there is nothing they can add that is going to be meaningful beyond what the Saudis can do," Kilduff said. In August, Saudi Arabia’s crude exports hit a six-month high of 6.407 million bpd, data from the Joint Organization Data Initiative showed. A U.S. Energy Information Administration report also showed record production of 13.6 million bpd last week.

Source : https://www.investing.com/news/commodities-news/oil-heads-for-third-monthly-decline-as-strong-dollar-ample-supply-weigh-4322268

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MAJOR DATA RELEASED DURING LAST WEEK

MAJOR DATA COMING OUT THIS WEEK (Time zone GMT+2)

Disclaimer

Moving Average Convergence/Divergence (MACD):

MACD uses different exponential moving averages to generate buy and sell indicators. The lower pane of the chart shows two lines: a Differential Line and a Signal Line. The Differential Line is the difference between a short and long-period exponential moving average, typically 12 and 26 periods. The Signal Line is typically a 9-period exponential moving average. When the DL crosses the SL from above, a sell indicator is generated, and when it crosses from below a buy signal is generated.

Relative Strength Index (RSI):

This is a momentum indicator that measures a security's price in relation to itself. The lower pane of the chart shows a line that fluctuates on a scale of 0 to 100. Typically buy signals are generated at 30 and sell signals are generated at 70. If the line breaks 30, the security is oversold, and a reversal is imminent. If the line breaks 70, it is overbought and is due for a downward correction.

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