Forex Market Analysis: Dollar pairs stay firm as euro and sterling remain under pressure
EUR/USD remains under pressure after a sharp decline, with its RSI near oversold territory and price below key moving averages. GBP/USD is also below its 20-day and 50-day averages, although its daily change is marginally positive. USD/JPY is consolidating above its 20-day average but remains close to its 50-day average. USD/INR retains a bullish structure above its moving averages, with the 20-day high and pivot forming nearby resistance.
What to watch today
- EUR/USD: 1.1191, 1.1168 support; 1.1220 and 1.1253 resistance
- GBP/USD: 1.3191 and 1.3182 support; 1.3212 and 1.3243 resistance
- USD/JPY: BOJ Governor Ueda speaks Tue 06 Oct at 10:35 UAE
- USD/INR: 96.36 and 96.38 resistance; 96.18 and 96.03 support
- USD events: ISM Services PMI Mon 05 Oct at 18:00 UAE
Technical analysis
EUR/USD
Bearish 1.1168 -0.73% liveEUR/USD is in a strong downward trend, trading below its SMA20 at 1.1457 and SMA50 at 1.1526 near its 20-day low of 1.1168.
Daily candles, last 90 sessions. Green dashed = support, red dashed = resistance.
EUR/USD remains bearish. The pair closed at 1.1188 after reaching a daily low of 1.1168, which is also the 20-day and 60-day low. It is trading well below the SMA20 at 1.1457, the SMA50 at 1.1526 and the EMA20 at 1.1417.
The 14-day RSI, a momentum indicator, is 13.99, showing deeply weak momentum and an oversold condition. Oversold readings can allow a short-term rebound, but they do not by themselves confirm a trend reversal. The pivot is at 1.1253, while 1.1220 and 1.1191 are important nearby reference levels.
GBP/USD
Bearish 1.3197 -0.02% liveGBP/USD remains below its SMA20 at 1.3367 and SMA50 at 1.3454, trading near its 20-day low at 1.3182 despite a nearly flat daily close.
Daily candles, last 90 sessions. Green dashed = support, red dashed = resistance.
GBP/USD retains a bearish trend structure. The pair closed at 1.3208, close to its daily low of 1.3191 and the 20-day low of 1.3182. Price remains below the EMA20 at 1.3334, SMA20 at 1.3367 and SMA50 at 1.3454.
The RSI, which measures recent momentum, is 31.56 and remains weak but is not as deeply oversold as EUR/USD. The pivot stands at 1.3212, with 1.3243 as the first pivot resistance and 1.3169 as the first pivot support if selling pressure resumes.
USD/JPY
Neutral 158.15 +0.14% liveUSD/JPY is above its SMA20 at 156.26 but just below its SMA50 at 158.04, leaving the pair consolidating within its recent range.
Daily candles, last 90 sessions. Green dashed = support, red dashed = resistance.
USD/JPY is consolidating with a neutral near-term bias. The pair closed at 157.94, above the pivot at 157.71 and the EMA20 at 157.29. It remains below the SMA50 at 158.04, while the SMA20 is lower at 156.26.
The RSI is 53.95, indicating relatively balanced momentum rather than an extreme condition. The 20-day high is 159.00 and the 20-day low is 152.90. Near-term reference points are 158.43 and 158.93 on the upside, with 157.71 and 157.20 on the downside.
USD/INR
Bullish 96.25 +0.03% liveUSD/INR is in a rising short-term trend above its SMA20 at 95.73 and SMA50 at 95.46, trading close to its 20-day high of 96.36.
Daily candles, last 90 sessions. Green dashed = support, red dashed = resistance.
USD/INR has a bullish technical structure. The pair closed at 96.32, above the pivot at 96.18, the EMA20 at 95.80 and the SMA20 at 95.73. It is also above the SMA50 at 95.46, while the 20-day high at 96.36 is nearby.
The RSI is 58.84, showing positive but not extreme momentum. The first resistance references are the 20-day high at 96.36 and pivot R1 at 96.38, followed by R2 at 96.53. The pivot at 96.18 and S1 at 96.03 are the nearest downside levels to monitor.
Market events (next 48 hours)
| Time (UAE) | Currency | Event | Impact | Forecast | Previous |
|---|---|---|---|---|---|
| Mon 05 Oct, 17:45 UAE | USD | Final Services PMI | Low | 58.7 | 58.7 |
| Mon 05 Oct, 18:00 UAE | USD | ISM Services PMI | Medium | 55.1 | 55.4 |
| Tue 06 Oct, 10:35 UAE | JPY | BOJ Gov Ueda Speaks | High | - | - |
| Tue 06 Oct, 16:15 UAE | USD | ADP Weekly Employment Change | Low | - | - |
| Tue 06 Oct, 16:16 UAE | USD | ADP Weekly Employment Change | Low | - | 20.0K |
| Tue 06 Oct, 16:30 UAE | USD | Trade Balance | Low | -95.2B | -88.6B |
| Tue 06 Oct, 18:10 UAE | USD | RCM/TIPP Economic Optimism | Low | 44.5 | 45.6 |
| Tue 06 Oct, 18:45 UAE | USD | FOMC Member Bowman Speaks | Low | - | - |
USD events: Final Services PMI is scheduled for Monday at 17:45 UAE, followed by ISM Services PMI at 18:00 UAE. The ISM release has medium impact and could affect USD pairs, particularly if the result differs from the 55.1 forecast.
JPY event: BOJ Governor Ueda speaks on Tuesday at 10:35 UAE. This is the highest-impact scheduled event in the next 48 hours for USD/JPY. Comments on monetary policy or economic conditions can increase volatility in the pair.
Lower-impact USD releases include ADP Weekly Employment Change at 16:15 and 16:16 UAE, Trade Balance at 16:30 UAE, RCM/TIPP Economic Optimism at 18:10 UAE and FOMC Member Bowman speaking at 18:45 UAE on Tuesday. Around scheduled releases, price can react quickly and spreads or volatility may change.
Algo insight: how a rules-based system treats today
A rules-based approach would classify EUR/USD and GBP/USD as weak because both are below their SMA20 and SMA50, while USD/INR is stronger because price is above both averages. USD/JPY requires more caution because it is above its SMA20 but below its SMA50.
ATR, or Average True Range, estimates typical price movement. Current ATR values are 0.0064 for EUR/USD, 0.0077 for GBP/USD, 1.27 for USD/JPY and 0.44 for USD/INR. An algorithm may use these readings to calibrate protective distance and reduce position size when expected movement is larger, rather than using identical risk settings across instruments.
A rules-based system would also filter signals near the medium-impact ISM Services PMI and especially the high-impact BOJ Governor Ueda speech. It may wait for volatility to settle after those events and assess signals separately across Asian, European and US trading sessions.
