Forex Market Analysis: Major pairs remain mixed as key inflation risk approaches
EUR/USD and GBP/USD remain under their 20-day and 50-day averages, keeping their technical bias bearish despite oversold conditions in EUR/USD. USD/JPY is holding above both averages and remains within reach of its 20-day high. USD/INR is mixed after a sharp daily decline, with price below its 20-day average but above its 50-day average. US CPI releases at 16:30 UAE on Wednesday are the most important scheduled events for dollar pairs over the next 48 hours.
What to watch today
- EUR/USD: 1.1157 low, 1.1188 resistance and 1.1216 pivot.
- GBP/USD: 1.3182 low, 1.3207 support and 1.3230 pivot.
- USD/JPY: 158.40 and 158.74 resistance, with 159.00 as the 20-day high.
- USD/INR: 95.20 low, 96.34 resistance and 96.73 pivot.
- US CPI: Wednesday, 14 October at 16:30 UAE; monitor volatility across dollar pairs.
Technical analysis
EUR/USD
Bearish 1.1176 -0.33% liveEUR/USD is in a declining short- and medium-term trend below its 1.1358 SMA20 and 1.1503 SMA50, close to its 20-day low at 1.1157.
Daily candles, last 90 sessions. Green dashed = support, red dashed = resistance.
EUR/USD closed at 1.1178, below the 1.1216 pivot and both the 20-day average at 1.1358 and the 50-day average at 1.1503. The pair has declined 3.59% over 20 days and is trading near the 20-day and 60-day lows at 1.1157.
The 14-day RSI, a momentum measure, is 21.5, which indicates deeply weak momentum and leaves room for a technical rebound if selling pressure eases. However, the average true range, or ATR, is 0.0073, so daily movement remains meaningful relative to the nearby levels.
A sustained move below 1.1163 would keep attention on the 1.1157 low. If price instead reclaims 1.1188 and then holds above the 1.1216 pivot, the immediate downside pressure would be reduced, although the broader average-based trend would remain weak.
GBP/USD
Bearish 1.3221 -0.06% liveGBP/USD remains below its 1.3292 SMA20 and 1.3439 SMA50, with price positioned near the lower end of its recent 20-day range.
Daily candles, last 90 sessions. Green dashed = support, red dashed = resistance.
GBP/USD closed at 1.3221, below the 1.3230 pivot, the 20-day average at 1.3292 and the 50-day average at 1.3439. The pair is down 2.25% over 20 days and remains above, but close to, its 20-day low at 1.3182.
The RSI is 38.0, below the neutral 50 area but not as weak as EUR/USD. ATR is 0.0074, indicating that normal daily fluctuations can be substantial compared with the nearby pivot levels.
Holding above 1.3207 could allow consolidation around the pivot. A break below the 1.3186 pivot support area would place the 1.3182 recent low back in focus, while a move above 1.3251 would be needed to show stronger short-term recovery pressure.
USD/JPY
Bullish 158.33 +0.17% liveUSD/JPY is above its 157.34 SMA20 and 157.68 SMA50, with a positive 20-day change and price close to its 20-day high at 159.00.
Daily candles, last 90 sessions. Green dashed = support, red dashed = resistance.
USD/JPY closed at 158.29, above the 158.08 pivot, the 20-day average at 157.34 and the 50-day average at 157.68. The pair has gained 3.17% over 20 days and remains near its 20-day high at 159.00.
RSI, the 14-day momentum measure, is 55.9, showing moderately positive momentum without an extreme reading. ATR is 1.05 yen, so price can move through several nearby levels during a normal daily session.
Holding above 158.08 would preserve the recent upward structure, with 158.40 and 158.74 acting as nearby resistance levels. A move back below 157.74 would weaken the short-term picture and bring 157.43 into view.
USD/INR
Neutral 95.22 -1.65% liveUSD/INR is below its 96.07 SMA20 but above its 95.54 SMA50, leaving the trend mixed after a sharp one-day decline toward the 20-day low.
Daily candles, last 90 sessions. Green dashed = support, red dashed = resistance.
USD/INR closed at 95.76, below the 96.73 pivot and the 20-day average at 96.07, but above the 50-day average at 95.54. The pair fell 1.10% in one day, while its 20-day change remains positive at 0.77%, creating a mixed short- and medium-term picture.
RSI is 47.8, close to neutral and not showing a strong directional extreme. ATR is 0.52 rupee, so the latest decline is sizeable relative to typical daily movement and may increase the chance of consolidation around nearby levels.
The 20-day low at 95.20 is the main lower reference, followed by the 60-day low at 93.55. Recovery above 96.34 and 96.58 would improve the short-term tone, while continued trading below the 96.73 pivot would keep the recent weakness visible.
Market events (next 48 hours)
| Time (UAE) | Currency | Event | Impact | Forecast | Previous |
|---|---|---|---|---|---|
| Tue 13 Oct, 11:45 UAE | USD | FOMC Member Waller Speaks | Low | - | - |
| Tue 13 Oct, 14:00 UAE | USD | NFIB Small Business Index | Low | 98.1 | 98.7 |
| Tue 13 Oct, 16:15 UAE | USD | ADP Weekly Employment Change | Low | - | 23.8K |
| Tue 13 Oct, 18:00 UAE | USD | Existing Home Sales | Low | 3.95M | 3.98M |
| Tue 13 Oct, 21:00 UAE | USD | FOMC Member Barkin Speaks | Low | - | - |
| Wed 14 Oct, 00:00 UAE | USD | FOMC Member Collins Speaks | Low | - | - |
| Wed 14 Oct, 06:10 UAE | EUR | ECB President Lagarde Speaks | Medium | - | - |
| Wed 14 Oct, 09:30 UAE | GBP | BOE Gov Bailey Speaks | Medium | - | - |
| Wed 14 Oct, 12:30 UAE | EUR | ECB President Lagarde Speaks | Medium | - | - |
| Wed 14 Oct, 13:40 UAE | USD | FOMC Member Bowman Speaks | Low | - | - |
| Wed 14 Oct, 16:30 UAE | USD | Core CPI m/m | High | 0.2% | 0.3% |
| Wed 14 Oct, 16:30 UAE | USD | Core CPI y/y | High | 2.5% | 2.4% |
| Wed 14 Oct, 16:30 UAE | USD | CPI m/m | High | 0.6% | 0.4% |
| Wed 14 Oct, 16:30 UAE | USD | CPI y/y | High | 3.6% | 3.4% |
| Wed 14 Oct, 21:30 UAE | USD | FOMC Member Barkin Speaks | Low | - | - |
| Wed 14 Oct, 22:00 UAE | USD | Beige Book | Low | - | - |
The most important scheduled event is the US CPI release at 16:30 UAE on Wednesday, 14 October. Core CPI is forecast at 0.2% month-on-month and 2.5% year-on-year, while headline CPI is forecast at 0.6% month-on-month and 3.6% year-on-year. Dollar pairs such as EUR/USD, GBP/USD, USD/JPY and USD/INR can see increased volatility when inflation figures differ from expectations.
ECB President Lagarde speaks at 06:10 and 12:30 UAE on Wednesday, while BOE Governor Bailey speaks at 09:30 UAE. These events may affect EUR/USD and GBP/USD if their remarks alter expectations about monetary policy. Several lower-impact FOMC appearances are also scheduled, including Waller at 11:45 UAE, Barkin at 21:00 UAE and Collins at 00:00 UAE.
The Beige Book is scheduled for 22:00 UAE on Wednesday. As with the speeches, market reaction can be stronger when the tone differs from prevailing expectations, particularly near already sensitive technical levels.
Algo insight: how a rules-based system treats today
A rules-based algorithm would classify EUR/USD and GBP/USD as below-average-trend markets because price is below both the SMA20 and SMA50. Their RSI readings differ, with EUR/USD deeply weak and GBP/USD moderately soft, so an algorithm may distinguish between persistent trend conditions and the risk of a short-term rebound.
ATR measures typical daily price movement. With ATR at 0.0073 for EUR/USD and 0.0074 for GBP/USD, and 1.05 for USD/JPY, volatility-adjusted stop distances and smaller position sizes may be considered rather than using identical fixed distances across pairs. USD/INR's 0.52 ATR should also be assessed against its recent one-day move.
A systematic process would normally reduce exposure or avoid opening new positions around the high-impact US CPI release at 16:30 UAE on Wednesday, then wait for spreads and volatility to stabilise. Session filters can also separate the European, UK and US trading periods, while requiring confirmation around the pivots and recent highs or lows instead of reacting to a single price spike.
