Softer US Inflation Offers Limited Relief (10.01.2026)

Cooling US inflation provided some relief across markets, but elevated Treasury yields continued to support the dollar and limit broader recoveries. 

Gold rebounded toward $4,200 as expectations for an October Fed rate hike fell to 38%, while silver remained near a two-month low around $61. The euro stayed below 1.1350 ahead of eurozone inflation data, and sterling remained under technical pressure near 1.3265. Meanwhile, USD/JPY tested 158 as slower Japanese manufacturing growth added pressure on the yen.

EUR/USD Closes Below 1.1350

The euro remained under pressure as accelerating inflation across major European economies contrasted with rising US Treasury yields that continue supporting the dollar. EUR/USD closed below 1.1350 for a second straight session after Spain’s annual inflation rate reached 5% in September, its highest mark since 2023. Financial markets now await Friday's preliminary eurozone inflation data, where headline consumer price growth is projected to pick up to 3.6%.

The first resistance is positioned at 1.1361 while the support starts from 1.1301.

Gold Rebounds Toward $4,200

Gold advanced toward $4,200 per ounce on Thursday, rebounding after cooler US PCE inflation data reduced market expectations for an October Federal Reserve rate hike to 38%. Easing crude oil prices also lent support amid signs of improving Middle East energy supply. However, elevated Treasury yields near multi-decade highs continue to limit broader gains, with markets still pricing in a 97% probability of a Fed rate increase in December.

First resistance is seen at $4230, with initial support near $4140.

Japan Manufacturing Slows as USD/JPY Tests 158

Japan’s S&P Global Manufacturing PMI was finalized at 54.1 for September 2026, dropping from August's 54.9 reading to mark the slowest pace of expansion since March amid moderating output and new orders. Following the release, USD/JPY tested above 158.00, with technical analysts noting that a decisive break past 158.28 could clear the path toward 159.00 and 161.10.

First resistance is seen at 159.50, with initial support near 155.00.

GBP/USD Slips Near 1.3265

GBP/USD weakened to around 1.3265 in early European trading on Thursday, remaining under downward pressure below its 100-day SMA. Despite deeply oversold conditions, the technical outlook favors further weakness. Key technical levels highlight initial resistance around 1.3260, with immediate support resting at 1.3200 on the downside.

From a technical view, resistance stands near 1.3260, with support around 1.3200.

Silver Hits Two-Month Low Near $61

Silver traded near $61 per ounce on Thursday, touching a two-month low as high Treasury yields and elevated energy costs overshadowed softer US inflation figures. August PCE data showed headline inflation slowing to 3.4% year-over-year, undercutting expectations and lowering the market-implied probability of an October Federal Reserve rate hike to roughly 38%. However, persistent crude oil strength linked to slow progress in US-Iran negotiations continues to weigh on precious metal sentiment.

From a technical view, resistance stands near $62.70, while support is located around $59.60.