Today market outlook

[Zeologic]

The Canadian dollar faces pressure from US-Canada trade risks.

The USDCAD commodity currency pair shows a bullish bias, indicating that the CAD remains under significant pressure relative to the USD, although the pair's upward momentum could stall if oil prices strengthen. On September 23, USDCAD formed a bullish candlestick, extending previous gains. The price currently hovers around 1.41029, with a high of 1.41096 and a low of 1.40566 on the FXOpen chart.

The US dollar retains its appeal amidst global geopolitical uncertainty and market expectations for a relatively cautious Fed interest rate policy path. The Fed raised interest rates by 25 basis points to the 3.75%–4.00% range on September 16—the first hike since 2023—whereas the Bank of Canada (BoC) held rates steady at 2.25% on September 2. An interest rate differential of 1.50–1.75 percentage points between the Fed and the BoC provides support for the USD against the CAD.

Canadian inflation remains around 3%, driven primarily by a surge in energy prices, while core inflation holds steady near the 2% target. The USD is gaining support from rising US bond yields, driven by relatively strong US economic data and expectations of a more hawkish Fed policy, making USD-denominated assets relatively more attractive.

The CAD faces risk-related pressure stemming from US-Canada trade dynamics. BoC Governor Tiff Macklem stated that new US tariffs could suppress Canadian growth in the fourth quarter to below 1%, down from the previous projection of 1.5%. However, relatively high oil prices provide support for the CAD, given Canada's status as an energy exporter. Macklem also noted that oil prices around the $100 mark could keep Canadian inflation elevated.

Today, the market will focus on retail sales data. For the USD, attention is centered on the release of Initial Jobless Claims and New Home Sales figures, as well as comments from Fed officials. Strong US data could once again drive up US bond yields and support the USD. Technically, USDCAD is trading above the MA50 and shows a bullish bias; the primary trading range is estimated to be between 1.39700 and 1.41200. Immediate support is around 1.40000, with the next target at 1.3960. Immediate resistance is around 1.4100, with the next target at 1.4150. This forecast could be wrong.

[Zeologic]

The Australian Dollar retreated due to the strengthening US Dollar.

The AUD/USD pair has shown a bearish trend; although both central banks lean towards a hawkish stance, USD demand has been stronger, driven by safe-haven flows. According to the FXOpen chart, AUD/USD formed a bearish candle on September 24, closing at approximately 0.70086, with a high of 0.70451 and a low of 0.70057.

The RBA has maintained the cash rate at 4.35%, but Governor Michele Bullock noted that core inflation risks remain at 3.6%—above the 2–3% target—and the market anticipates a high probability of a rate hike at the September 29 meeting. This factor could limit the AUD's decline.

Australia added approximately 39,500 jobs in August, well above the expected figure of around 20,000. However, the unemployment rate rose from 4.5% to 4.6%, resulting in mixed data. Employment figures and slowing domestic economic growth limit the RBA's room to raise interest rates more aggressively without disrupting economic activity.

As a commodity-proxy currency, the AUD is highly sensitive to price dynamics in iron ore and copper, as well as the outlook for China's economic recovery. The Xi-Trump meeting is a major focus, as developments in US-China trade relations could influence risk sentiment and China's economic outlook. If the meeting boosts optimism regarding global trade, the AUD could receive a boost; conversely, if new tensions arise, the AUD could come under pressure.

The US Dollar continues to draw strength from market expectations that the Fed will keep interest rates higher for longer to curb inflation. The Fed raised rates by 25 basis points to a range of 3.75%–4.00% on September 16 and signaled that further hikes might be necessary, as inflation is not yet fully under control.

US PCE inflation in July stood at 3.7%, well above the Fed's 2% target. Additionally, the USD has received a boost from safe-haven sentiment. High global geopolitical uncertainty is driving global capital flows back into the USD as a safe-haven currency.

From a technical perspective, AUD/USD has crossed below the 200-day EMA, signaling a bearish outlook. However, this does not yet represent a strong fundamental bearish trend, as expectations of RBA interest rate hikes continue to provide a buffer for the AUD. The projected price range for AUD/USD is 0.69700–0.71400. Immediate support is around 0.70000, with the next target at approximately 0.69800. Immediate resistance is around 0.70500, with the next target at approximately 0.71000. This forecast could be wrong.

[Zeologic]

EUR/JPY caught in a tug-of-war between central bank policies

The EUR/JPY cross-pair is exhibiting interesting price dynamics characterized by high volatility. Recently, the pair experienced a sharp decline, forming a long-bodied bearish candle with virtually no wicks. Prices dropped from a high of 180.797 to a low of 178.917, closing at 178.972 on the FXOpen chart.

Fundamental factors remain relatively supportive for the Euro. The ECB raised interest rates by 25 basis points on September 10, bringing the deposit rate to 2.50%. The ECB also raised its inflation projections for 2027 and 2028, noting that inflationary pressures stemming from energy prices remain a significant risk. Major institutions like Goldman Sachs anticipate the deposit rate could reach 2.75%, while BofA also sees the possibility of a 25-basis-point hike in December.

These factors support the Euro by maintaining a substantial interest rate spread against Japan. However, a headwind for the Euro comes from rising energy prices driven by geopolitical conflicts, which are fueling inflation while simultaneously dampening European economic growth.

Regarding the JPY, the Bank of Japan (BoJ) recently raised interest rates to 1.25%—the highest level in approximately 31 years. However, the market does not view this move as fully hawkish, leaving the JPY vulnerable to continued pressure. On the other hand, Japan has signaled the possibility of foreign exchange intervention. There were even earlier reports of "rate checks" by Japanese authorities, a move that typically makes traders cautious about taking aggressive short positions.

Key items on today's economic calendar include the BoJ's Monetary Policy Meeting Minutes and the Corporate Services Price Index. However, a speech by ECB President Lagarde is the primary focus for the Euro. If Lagarde signals further rate hikes, the Euro could receive a boost; conversely, a dovish tone could weigh on the currency. Several Fed officials are also scheduled to speak, meaning USD sentiment or global risk appetite could indirectly impact EURJPY.

Technically, EURJPY is trading below the 200-day EMA; however, the decline has been sharp enough to prompt traders to watch for a potential rebound. The projected range for EURJPY is 178.000–181.000. Immediate support lies around 178.800, with the next target at approximately 178.300. Immediate resistance is around 180.000, with the next target at approximately 180.800. This forecast could be wrong.

[Zeologic]

XAUUSD fell approximately 4% to the $4,110 level, a low not seen since August 5.

Gold prices faced significant downward pressure on September 28, dropping sharply by around 4%. Prices fell from a high near $4,279 to a low around $4,110 within a single day. Currently, gold is trading near $4,113 on the FXOpen chart, marked by a long bearish candle.

The primary drivers of this decline were rising US Treasury yields, a strengthening US dollar, and expectations that the Federal Reserve might still raise interest rates.

The 10-year US Treasury yield is hovering in the 4.9%–5.0% range. Following the Fed's 25-basis-point rate hike—bringing the target range to 3.75%–4.00%—the central bank reaffirmed its commitment to curbing inflation. These high interest rates and Treasury yields increase the opportunity cost of holding gold—a non-yielding asset—acting as a major drag on XAUUSD.

According to the CME FedWatch tool, the market currently estimates a roughly 70.3% probability of a Fed rate hike in October. The US Dollar Index (DXY) remains firm above the 100 level. Meanwhile, persistently high global crude oil prices are fueling fears of renewed inflation, reinforcing expectations that the Fed will not loosen policy anytime soon.

Tensions surrounding the Strait of Hormuz and the US-Iran conflict continue to support oil prices. This potential for rising inflation, combined with expectations of high Fed interest rates, has kept gold prices under pressure.

Gold is currently finding support from safe-haven demand driven by geopolitical dynamics in the Middle East and continued accumulation by global central banks, preventing a steeper decline.

Two key US economic data releases relevant to gold are scheduled for today: JOLTS Job Openings and the Conference Board Consumer Confidence index. If the data for both are strong, the USD could rise, potentially causing XAUUSD to turn bearish. Conversely, if the data weakens significantly, expectations for a Fed rate hike would diminish, and XAUUSD could rebound.

However, interestingly, it is not just today that matters. September 30th brings the ADP report, revised US GDP, and PCE/personal income data. Today, traders will be closely monitoring US Treasury yields, the DXY, JOLTS data, US consumer confidence, statements from Fed officials, and oil prices or news regarding the Strait of Hormuz.

From a technical perspective, the price of gold is trading well below the EMA200. The projected range for XAUUSD is between $4,000 and $4,400. Immediate support is around $4,100, with the next target at $4,050. Immediate resistance is around $4,200, with the next resistance target around $4,270. This forecast could be wrong.

[Zeologic]

Oil prices fall as Middle East oil flows recover

XTIUSD (WTI crude oil) is experiencing interesting fundamental dynamics today, causing the price to drop by approximately 3.5% in a single day. According to FXOpen charts, WTI has fallen to around $87.95 from a high of $93.30.

This price decline in XTIUSD is primarily driven by the recovery of oil export flows from the Middle East. Oil exports from Middle Eastern producers rose to 16.328 million barrels per day in September—the highest level since the onset of the US-Israel-Iran conflict. Flows through the Strait of Hormuz have also improved; Saudi Arabia has ramped up flows through the East-West Pipeline, and shipments from Yanbu have resumed.

If the export recovery continues, oil prices could extend their decline. However, should new disruptions occur in the Strait of Hormuz or military tensions escalate, prices could rebound rapidly. Despite the sharp recent drop, WTI has still recorded a monthly gain of approximately 4%.

OPEC+ is supporting prices by maintaining September production levels into October. The next meeting is scheduled for October 4, 2026. This means the market will not see a significant supply boost from OPEC+ for October, which is helping to curb the decline in XTIUSD.

The latest EIA data shows US commercial crude stocks at approximately 426.4 million barrels as of September 18, up from 423.4 million barrels the previous week. The EIA also projects that global inventories will continue to decline through the end of 2026, keeping oil prices relatively high. A crucial event today is the release of the EIA Crude Oil Inventories report, scheduled for September 30 at 14:30 UTC; previous data showed an inventory increase of 2.969 million barrels. The US also announced an offer to loan up to 40 million barrels from the Strategic Petroleum Reserve (SPR), which currently stands below 284 million barrels—the lowest level since 1982. In the short term, this additional oil supply limits price increases, although the depleted state of the SPR itself constrains the US's ability to respond to future supply disruptions.

Today, the market will also face several US economic data releases—such as ADP Employment, GDP, personal income/spending, and PCE—that could influence the USD. If the USD strengthens, downward pressure on oil prices may increase; conversely, if it weakens, it could provide room for oil prices to rise. The Federal Reserve's policy stance following the interest rate hike is also a key focus for the market.

Technically, XTIUSD remains above the EMA50, which may act as dynamic support. The projected price range for XTIUSD is $86.50–$95.00. Immediate support is around $87.00, with the next target at approximately $86.50. Immediate resistance is around $93.00, with the next target at approximately $95.00. This forecast could be wrong.