Daily Market Report
10/27/2026
EUR/USD ranged in the mid to high 1.11’s overnight. The Euro (EUR) extends its losing streak against the US Dollar (USD) for the fifth trading day on Tuesday. The EUR/USD pair slumps to near 1.1140 as the Euro underperforms due to revival of concerns in French bond market.
Yields on French bonds have rebounded after a two-day correction. As of writing, 10-year French bond yields are up 1.42% to near 4.97%.
French bond yields correct in the past two days after Moody’s defied market expectations and maintained their Aa3 rating (negative outlook) on the sovereign.
Caution among market participants ahead of European Central Bank’s (ECB) monetary policy announcement on Thursday, and key economic releases such as preliminary German Harmonized Index of Consumer Prices (HICP) data for October and Q3 Gross Domestic Product (GDP) data on Friday has also weighed on the Euro.
The GBP/USD pair drifts lower for the third straight day on Tuesday, extending its recent pullback from the highest level since September 16, around the 1.3420 area, touched last week. Spot prices dropped to a one-week low during the first half of the European session and currently trade around the 1.3320 region, down 0.15% for the day amid sustained US Dollar (USD) buying.
The downside, however, seems limited as traders might opt to wait on the sidelines ahead of the key event risks on Wednesday. UK Chancellor John Healey will deliver his first Autumn Budget amid Prime Minister Andy Burnham’s big spending plans. This will be followed by the crucial US Federal Reserve (Fed) decision at the conclusion of a two-day meeting, which will influence the USD price dynamics and provide a fresh impetus to the GBP/USD pair.
From a technical perspective, spot prices hold a mildly capped tone following the recent failed attempt to find acceptance above the 200-day Exponential Moving Average (EMA) at 1.3401. The GBP/USD pair slides to the mid-range of the recent Fibonacci retracement, with immediate support emerging at the 38.2% level near 1.3311. Meanwhile, the Moving Average Convergence Divergence (MACD) indicator remains above zero, with the line still positive but contracting.
The USD/JPY pair trades with a positive bias for the third straight day on Tuesday, recovering further from an over one-month low, around the 156.00 neighborhood, touched last week. Spot prices, however, lack follow-through buying and currently trade around the 157.70 region, up just over 0.10% for the day, as traders seem hesitant ahead of key central bank events.
Expectations that the BoJ may hold off on aggressive rate hikes keep the so-called carry trade active and continue to undermine the Japanese Yen (JPY). The USD, on the other hand, attracts some follow-through buyers for the third straight day amid the growing acceptance that the US central bank will stick to its hawkish stance amid inflation fears stemming from elevated energy prices. Moreover, the geopolitical risk premium remains in play amid tensions in the Middle East, lending additional support to the safe-haven Greenback and backing the case for a further appreciating move for the USD/JPY pair.
Source: FX Street