Market Sector Scanner: USD/JPY Rises Again as Gold Finally Falls Ahead of Central Bank Decisions
The USD/JPY climbed back toward monthly highs amid improved risk sentiment and optimism over Japan’s new leadership. Meanwhile, gold saw profit-taking after reaching record levels, with traders bracing for a volatile week as the Fed, Bank of Japan, and ECB prepare to announce key policy decisions.
U.S. equities hit record highs this week, led by technology stocks, after softer U.S. Core CPI data boosted expectations of a Fed rate cut. Risk-on sentiment strengthened as U.S.–China trade tensions eased, and in Japan, Sanae Takaichi’s appointment as prime minister lifted market optimism while lowering expectations of near-term BOJ tightening. The USD/JPY climbed and Japanese stocks advanced, while gold fell for the first time in weeks as profit-taking and reduced safe-haven demand weighed on prices.
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Key Events Calendar for October 27 – 31
Market Sector Scanner
Forex Market
USD/JPY
Last Week Recap
The USD/JPY had a strong week, climbing back to this month’s highs after Sanae Takaichi officially became Japan’s prime minister. Weaker-than-expected U.S. inflation data had little impact, as traders focused more on Japan’s political developments and renewed risk-on sentiment.
Technical Picture
Prices have returned to the upper area of the 150–153 range, hovering near the middle of the Bollinger Bands. The 10-day moving average has turned slightly upward again, suggesting that a test of higher levels may be ahead.
Outlook This Week
It’s a big week for the USD/JPY, with the U.S. Federal Reserve expected to cut rates and the Bank of Japan likely to keep policy unchanged. The pair may test higher levels ahead of the BoJ meeting, though any hint of a more hawkish stance or earlier rate hike from Japanese officials could trigger a sharp pullback.
💡 Fun fact:
This pair is highly sensitive to market sentiment – if something big happens in the world, USD/JPY usually reacts first.
GBP/JPY
Last Week Recap
It was a positive week for GBP/JPY, as stronger-than-expected U.K. Retail Sales and Manufacturing PMI data helped the pair hold firm at the 200 level and resume its move higher. Additional weakness in the yen also supported the rally, keeping overall sentiment bullish.
Technical Picture
The Bollinger Bands remain relatively wide, with prices now trading closer to the upper band, indicating that the market is still in an uptrend. The 10-day moving average is also pointing slightly higher, reinforcing the short-term positive bias.
Outlook This Week
While the overall trend remains slightly bullish, volatility is expected to increase with both the U.S. Federal Reserve and Bank of Japan holding policy meetings this week. Range trading between 200 and 205 is likely to be the most practical approach in the near term.
EUR/USD
Last Week Recap
EUR/USD resumed its downtrend last week, testing the lower end of its recent range as markets fully priced in this week’s expected U.S. interest rate cut. However, weaker-than-expected U.S. inflation data toward the end of the week encouraged some short-covering and buying interest near support.
Technical Picture
After once again holding firm at the 1.1600 level, the 10-day moving average has flattened out, suggesting a period of sideways trading in the short term. The pair remains confined within a broad consolidation range.
Outlook This Week
EUR/USD is likely to stay under pressure, with rallies expected to attract selling. The preferred approach is to sell into strength, while any long positions near support should be exited quickly if the market turns lower.
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Equities
U.S. Stock
Last Week Recap
The Nasdaq reached new highs last week, supported by strong corporate earnings despite rising concerns about a potential AI-driven market bubble. Weaker-than-expected U.S. inflation data and positive comments regarding U.S.–China trade relations further boosted sentiment, encouraging continued buying across technology stocks.
Technical Picture
The 10-day moving average has turned upward again, confirming a renewed uptrend. Prices are now testing the upper Bollinger Band, suggesting the market may be slightly overbought in the short term.
Outlook
The overall uptrend remains intact and should be followed in the near term, though investors are likely to stay cautious ahead of this week’s FOMC meeting, which may provide clues on the timing of future interest rate moves.
Commodities
Gold
Last Week Recap
Gold finally pulled back from record highs last week as profit-taking emerged ahead of this week’s FOMC meeting and as U.S. equities climbed to new records. While the decline was sharp, it followed a significant multi-week rally, making the correction unsurprising given recent gains.
Technical Picture
The upper Bollinger Band acted as firm resistance, and although gold has slipped below the 10-day moving average, the overall short-term trend remains slightly upward for now.
Outlook This Week
Volatility is expected to stay high ahead of the U.S. Federal Reserve meeting as the market attempts to resume its uptrend. In the short term, range trading appears most effective, with a break below last week’s lows likely to trigger additional speculative liquidation.
This week could bring big market moves as three major central banks announce their policies. The Federal Reserve is expected to cut rates by 0.25%, while the Bank of Japan and the ECB will likely keep rates unchanged. Traders are watching to see if the USD/JPY keeps climbing or if talk of intervention pushes it lower. Investors are also watching whether gold keeps falling and if U.S. stocks face more profit-taking after recent highs.
