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Global markets opened the week with renewed optimism as the US Dollar softened across major peers following dovish comments from Federal Reserve Chair Jerome Powell. Investors interpreted Powell’s remarks as a sign the Fed is preparing for a potential rate cut before year-end, which weighed on Treasury yields and boosted risk sentiment. Meanwhile, commodity-linked currencies like the Australian and Canadian Dollars saw mild support, though oil prices remained pressured by oversupply concerns and fragile demand outlook.
WTI remains subdued near $58.00, pressured by persistent concerns over global oversupply and cautious demand outlook. Despite modest optimism surrounding US–China trade relations, weak refinery margins and slower global manufacturing recovery continue to weigh on crude sentiment.
Geopolitical Risks: Middle East tensions remain contained, reducing safe-haven demand in oil.
US Economic Data: Softer US inflation expectations signal slower industrial activity, limiting oil demand.
FOMC Outcome: Dovish Fed tone implies slower growth momentum, indirectly dampening oil demand outlook.
Trade Policy: Limited progress on US–China trade issues continues to cloud the energy trade flow outlook.
Monetary Policy: Prospects of Fed rate cuts weaken the USD but fail to offset oversupply pressures in oil.
Trend: Sideways to slightly bearish.
Resistance: $59.20
Support: $57.40
Forecast: WTI may trade in a narrow range with a bearish bias unless global demand indicators improve.
Market Sentiment: Bearish amid persistent oversupply narrative.
Catalysts: Upcoming US inventory data and OPEC’s monthly report.
USD/CAD trades below 1.4050, softening after the Fed’s dovish stance weighed on the greenback. A mild rebound in oil prices has lent support to the Canadian Dollar, helping it outperform against the USD.
Geopolitical Risks: Stable oil-producing regions ease CAD volatility.
US Economic Data: Weaker retail and CPI readings support expectations for future Fed cuts.
Trade Policy: Stable North American trade environment supports CAD stability.
Trend: Mildly bearish.
Forecast: Pair may extend losses toward 1.3980 if crude oil stabilizes and USD weakness persists.
Market Sentiment: Neutral-to-bearish for USD/CAD.
Catalysts: Canadian CPI and upcoming Fed minutes.
GBP/USD extends gains toward 1.3350 as investors bet on Fed rate cuts, while the UK economic calendar remains light. The softer USD backdrop is providing upward momentum for the Pound despite ongoing concerns over UK growth.
Geopolitical Risks: Calm political landscape in the UK limits volatility.
US Economic Data: Weak figures reinforce dovish Fed expectations.
FOMC Outcome: Markets price in higher odds of a December rate cut.
Trend: Bullish near-term.
Resistance: 1.3380
Support: 1.3280
Market Sentiment: Bullish as traders unwind USD long positions.
Catalysts: UK jobs data and Fed’s Powell follow-up remarks.
EUR/USD advances above 1.1600 as the dollar weakens following dovish Fed remarks. The pair is drawing moderate support from expectations that the ECB will maintain its current policy stance, contrasting with the Fed’s tilt toward easing.
Geopolitical Risks: Easing trade tensions lift investor sentiment in Europe.
US Economic Data: Soft inflation readings weigh on USD demand.
FOMC Outcome: Dovish tone encourages fresh buying in EUR/USD.
Trend: Bullish short-term.
Resistance: 1.1650
Support: 1.1550
Forecast: Pair likely to remain supported while the Fed maintains an easing stance.
Market Sentiment: Optimistic toward EUR recovery.
Catalysts: Eurozone inflation data, Fed minutes.
AUD/USD strengthens modestly, trading around 0.6590, lifted by a weaker USD and firming risk appetite. The Aussie benefits from renewed optimism around China’s economic outlook and dovish Fed expectations.
Geopolitical Risks: Stable Asia-Pacific environment supports AUD resilience.
US Economic Data: Weaker CPI data heightens Fed cut expectations.
FOMC Outcome: Dovish comments drive fresh AUD demand.
Trade Policy: China’s improved trade sentiment bolsters AUD.
Trend: Gradually bullish.
Resistance: 0.6620
Support: 0.6540
Forecast: AUD/USD could extend gains toward 0.6620 as long as USD softness continues.
Market Sentiment: Mildly bullish on risk-on tone.
Catalysts: China’s economic data and upcoming Fed minutes.
Overall, the market’s focus remains squarely on the Fed’s policy trajectory and its impact on global growth expectations. A softer US Dollar has lent support to major currencies, while WTI crude continues to trade under pressure amid excess supply and geopolitical caution. Traders are now awaiting upcoming US economic data and FOMC minutes for further confirmation of the Fed’s easing stance, which could set the tone for the next leg of the market’s direction.
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