Technical analysis

Brown Brothers Harriman’s (BBH) Elias Haddad expects the Bank of Japan (BoJ) to keep its policy rate at 1.25% while assessing September’s hike before tightening again. Firmer underlying inflation could lead to a more hawkish Outlook Report, with swaps pricing a high probability of a December move to 1.50%. This shift in expectations is seen as supportive for the Japanese Yen (JPY).

The Euro (EUR) extends gains against the British Pound on Monday, following the release of a better-than-expected German IFO Business Climate report.

United Overseas Bank analysts Quek Ser Leang and Lee Sue Ann note that USD/CHF has shifted from a prior negative bias into a range-trading phase. They see the Dollar’s rapid rebound losing momentum below key resistance, with intraday support levels defining near-term risks.

Societe Generale’s Dev Ashish analyzes Brazil after Lula’s surprise re-election over Flávio Bolsonaro. The note highlights likely pressure on Brazilian assets as markets unwind positions built on a Bolsonaro victory.

Silver prices (XAG/USD) rose on Monday, according to FXStreet data. Silver trades at $54.02 per troy ounce, up 0.20% from the $53.92 it cost on Friday.

TD Securities’ Oscar Munoz and Eli Nir expect the FOMC to keep the Fed Funds Rate at 4.00% in October, validating current market pricing while avoiding fresh forward guidance.

The Euro (EUR) trades higher against its peers on Monday. In the European trade, the major currency is slightly higher at around 1.1210 against the US Dollar, but has given back some of its early gains.

EUR/CAD depreciates after opening at a bullish gap, remaining in positive territory and trading around 1.5710 during European hours on Monday. The currency cross moves little following the release of Germany’s IFO business data.

The AUD/USD pair pulls back slightly from a fresh one-month high touched earlier this Monday, failing to decisively break out through the 100-day Simple Moving Average (SMA) pivotal resistance.