Markets Eye U.S. Data as Dollar Weakens (02.10.2026)

The dollar index stayed under pressure on Tuesday as fears of softer foreign demand for US assets, reports of Chinese banks cutting Treasury holdings, expectations of delayed US jobs and inflation data, and a firmer yen on intervention talk weighed on the greenback.

The euro extended gains early this week, breaking above the $1.19 mark against the US dollar as global currency dynamics shifted. The move comes amid renewed dollar weakness, particularly against the yen, following Japan’s political developments. Meanwhile, the European Central Bank maintains a steady stance, expressing confidence in reaching its inflation target. Traders are now turning attention to upcoming U.S. employment and inflation figures, which may shape expectations for future Fed decisions.

Euro Climbs Past $1.19

The EUR/USD pair strengthened early this week, climbing past $1.19 on Tuesday. This rally persists as the US dollar faces pressure from a stronger yen following Japan’s recent elections. Despite the euro's rise, the European Central Bank remains unconcerned. Officials kept rates steady, noting that inflation is on track to meet the 2% target. President Christine Lagarde described recent price trends as encouraging, though she advised caution regarding future data. Markets now await upcoming US employment and inflation reports, which could further influence the dollar's direction.

For EUR/USD, the closest resistance level is at 1.1940, while the initial support is located at 1.1880.

Yen Holds Gains Following Election

The Japanese yen stayed near 155.7 per dollar on Tuesday. It held onto recent gains after officials offered verbal support for the currency following Prime Minister Sanae Takaichi’s decisive election win. Investors were reassured by her promise that new stimulus measures would not compromise fiscal stability. With a strong majority, the ruling party plans to increase spending and introduce tax relief, such as a temporary food sales tax cut. Additionally, record-breaking performance in Japanese stocks has attracted capital inflows, further supporting the yen despite a selloff in domestic bonds.

Technically, resistance stands near 156.00, while support is firm at 154.50.

Gold Trades Near Weekly Highs

Gold slipped slightly below $5,050 on Tuesday. Despite this minor dip, the metal remains near its highest levels in a week as investors await crucial U.S. economic data. The upcoming non-farm payrolls and inflation reports will likely dictate the Federal Reserve's next moves, especially after White House hints of a potential hiring slowdown. Support for gold remains solid, with markets pricing in at least two rate cuts this year. Furthermore, steady central bank purchases from China and ongoing frictions between the U.S. and Iran continue to drive safe-haven demand.

Gold sees support near $4960, while resistance is around $5095.

Pound Near $1.36 Amid Political Friction

The British pound remained near $1.36 on Tuesday, staying under the four-year highs reached in January. Growing political instability is weighing on the currency. Prime Minister Keir Starmer is facing internal pressure following the exit of his chief of staff and a disputed diplomatic appointment. Meanwhile, the Bank of England's cautious tone has led markets to price in more potential rate cuts. Since inflation is still projected to hit targets by April, there is little momentum to drive sterling significantly higher.

From a technical view, support stands near 1.3650, with resistance around 1.3720.

Silver Slips Below $82

Silver prices fell nearly 2% to under $82 an ounce on Tuesday, ending a brief two-day recovery. The metal remains significantly lower than its record peak in late January, following a massive selloff that wiped out nearly half its value. US Treasury Secretary Scott Bessent attributed the extreme volatility to speculative "unruly" trading, particularly among Chinese investors. Market attention has now turned to this week’s delayed US employment and inflation data. These reports will be vital in determining the Federal Reserve’s next steps, with two interest rate cuts still anticipated later this year.

From a technical view, resistance stands near $83.70 while support is located around $78.70.