Mixed trading analysis

[fxoday]

EUR/USD leans bearish in the short term as the market reprices Fed policy

The EUR/USD major pair has trended downward for three consecutive days as the market begins to reprice Federal Reserve interest rate policy ahead of the September 16 FOMC decision. The price currently sits around 1.15499 on the FXOpen chart, showing a slight rebound from a low of 1.15232.

The USD is currently finding strong support as the market anticipates the Fed will raise interest rates by 25 bps to the 3.75%–4.00% range at the September 15–16 meeting. Reuters notes an 85%–90% probability of such a hike. This is crucial for EUR/USD because a hawkish Fed could drive up US Treasury yields, strengthening the USD and consequently pushing EUR/USD lower. Additionally, persistent US inflation and rising oil prices have led the market to expect US interest rates to remain high for longer.

The ECB recently raised interest rates to 2.50%, and some officials have begun to signal the possibility of further hikes as European inflation faces renewed pressure from rising energy costs. Although this is positive for the Euro, interest rate differentials appear to still favor the USD. Even after the ECB's hawkish move, EUR/USD actually fell due to expectations of an even more hawkish Fed.

Meanwhile, geopolitical risks stemming from the conflict in the Middle East are also supporting the USD as a safe-haven currency. The Middle East conflict has kept Brent crude prices around $107–$108 per barrel. Such "risk-off" conditions typically boost demand for the USD as a safe-haven asset.

Rising oil prices also pose a problem for Europe, given the region's sensitivity to energy costs. Moving forward, the market will focus on Fed rate hike expectations, US Treasury yields, oil prices, European sentiment and industrial production data, and the FOMC meeting.

From a technical perspective, EUR/USD is currently trading below the 200-day EMA. The projected price range for EUR/USD is 1.14700–1.17000. Immediate support is around 1.15300, with the next target at 1.14900. Immediate resistance is around 1.58000, with the next target around 1.63500. This forecast could be wrong.

 

[fxoday]

GBP/JPY consolidates within a range ahead of UK CPI data

The GBP/JPY cross pair is currently exhibiting volatility, trading around the 208.900–209.100 level, with a daily range of approximately 208.250–209.230. The price currently stands at 209.804 on the FXOpen chart, following a previous close of around 208.262. From a technical perspective, the 207.000–207.500 zone serves as key support, while the 209.500–210.000 area acts as immediate resistance.

The fundamental outlook for GBP is complex. UK inflation remains elevated; the July CPI stood at 2.9% year-on-year (YoY), up from 2.6%. Surging oil prices could sustain inflationary pressure in the UK. Markets are even anticipating at least one Bank of England (BoE) rate hike of around 25 basis points before the end of 2026.

Today’s release of the UK’s August CPI data is crucial for GBP. If the CPI exceeds forecasts, expectations of a tighter BoE policy stance could bolster the currency. Market consensus currently projects a rise in the YoY CPI to 3.1%, up from the previous 2.9%, while Core CPI YoY is expected to remain steady at around 2.6%.

Meanwhile, the UK labor market is weakening. Payroll employment fell by 26,000 in August, and job vacancies dropped to 702,000. Regular wage growth also slowed to 3.5%. Consequently, the BoE faces a dilemma between high inflation and a softening labor market.

On the other hand, the JPY has recently experienced significant strengthening. Reuters reported that the yen has appreciated by approximately 5% in its strongest rally in 18 months, driven by growing market expectations that the Bank of Japan (BoJ) will adopt a more hawkish policy stance. USD/JPY briefly touched 152.890, marking the yen's strongest level in seven months. This matters for GBP/JPY, as a stronger yen typically puts downward pressure on the pair. The greatest risk to a GBP/JPY long position at present is the possibility of rising expectations for a Bank of Japan (BoJ) interest rate hike.

The market is also anticipating a decision from the Federal Reserve, which is another influential factor. Markets expect changes in US policy to affect the USD and bond yields, indirectly influencing GBP/JPY sentiment. Reuters reports that oil prices exceeding $100 and inflationary pressures are pushing the Fed toward a more hawkish stance. While the direct impact on GBP/JPY is indirect, volatility in yen crosses has increased.

Global oil price dynamics and geopolitical tensions are fueling a resurgence in demand for safe-haven assets; this could bolster the yen at any moment should market sentiment deteriorate.

The daily structure of GBP/JPY shows the pair in a high-level consolidation phase, tending to trade within a range ahead of the UK CPI release. GBP/JPY is expected to trade within an intraday range of approximately 207.000–211.000. Immediate support lies around 208.200, with the next target at 207.000. Immediate resistance is near 210.000, with the next target at 211.300. This forecast could be wrong.

 

[fxoday]

USD/CAD: US Dollar gains Fed support; Canadian Dollar buoyed by oil prices and hawkish risks.

The US dollar strengthened after the Fed raised interest rates by 25 bps to a range of 3.75%–4.00%. The US Dollar Index (DXY), which measures USD performance, surged from 99.357 to roughly 100.354. This sharp USD appreciation caused the USD/CAD pair to rise significantly—climbing from a low of 1.39057 to a high of 1.39949 and forming a long bullish candle on the FXOpen chart—indicating that the Canadian Dollar is coming under increasing pressure from the strengthening USD.

Historically, the USD/CAD pair has shown a bullish trend since September 9, 2026, rising gradually from a low of 1.137661 to a high of 1.39949 over approximately six consecutive days.

The Fed’s recent rate hike on September 16 has bolstered the USD, as the US-Canada interest rate spread has shifted back in the USD's favor. Fed projections place the median interest rate at approximately 4.1% by the end of 2026, with PCE inflation projected at 3.7%, suggesting the Fed still anticipates significant inflationary pressure.

Given the recency of the Fed's decision, the USD/CAD pair remains susceptible to high volatility as the market assesses whether this hike will be followed by further tightening measures.

Meanwhile, the Bank of Canada (BoC) maintained its interest rate at 2.25%. Minutes released on September 16 indicate that the BoC views high inflation risks as persisting due to geopolitical tensions and energy prices. Governor Macklem has even stated that further rate hikes may be necessary if inflation remains persistent.

Oil prices exceeding $100 per barrel have previously supported the CAD—given Canada's status as a major energy exporter—though rising oil prices also stoke inflation concerns. Canada's economic outlook continues to face challenges stemming from trade uncertainties with the US, particularly regarding tariffs. Today's market will focus on several data points, including the Industrial Price Index, Raw Materials Price Index, New Housing Price Index, and international securities transactions. Producer price data is the most relevant for assessing inflationary pressure in Canada.

From a technical perspective, USDCAD is trading above the EMA200; the pair is expected to move within the 1.38400–1.40700 range. Immediate support is roughly at 1.39000, with the next target at 1.38600. Immediate resistance is around 1.40000, with the next target at 1.40060. This forecast could be wrong.