1. FX Outlook
  2. Daily FX Report
Daily FX Report

Dollar Rebound Raises Mean Reversion Risk

Read disclaimer

EUR / USD

Eurusd 09112026

Source: Massive (polygon.io) 

EUR/USD slid about 0.7% late last week, easing from a Thursday peak near 1.123 to settle around 1.114 at Friday's close after briefly tagging 1.113. The pair now trades below the 20-day moving average at 1.1192. The 50-day (about 1.1330) and 200-day (about 1.1538) averages both slope lower, and a daily RSI near 39 signals soft but not oversold momentum.

Fundamentals lean toward the dollar. October payrolls rose by 165,000, with 4.1% unemployment, upward revisions and the strongest wage gain since January, lifting the odds of a December Fed hike back toward the high 70s. Expectations for a December ECB hike have slipped to roughly 60% from 75%, even with euro-area inflation near a three-year high of about 4%, and sharper falls in French and German short-term yields tilt rate differentials against the euro.

The main counterweight is positioning: speculative net euro shorts sit at an 11-year extreme and gross shorts at record highs, leaving the pair prone to a sharp squeeze if US data disappoint. Tuesday's US CPI, expected to cool to 0.3% headline and 0.2% core, is the pivotal catalyst, with a soft print likely to revive the euro and an upside surprise reinforcing the dollar. Technically, the late-October trough near 1.1115 is the critical pivot. Holding it and reclaiming 1.12 would open a squeeze toward 1.128 and the 50-day near 1.13, whereas a decisive break would mark fresh yearly lows and expose 1.10.

USD / JPY

Usdjpy 09112026

Source: Massive (polygon.io) 

USD/JPY remains underpinned by a wide rate gap: US two-year yields sit roughly 2.8pps above Japanese equivalents, keeping yen-funded carry attractive after October payrolls rose a stronger-than-expected 165,000. That support is weakening, as a tech-led equity rout tightens US financial conditions and markets have cut the odds of a December Fed hike to about 70% from above 80%. In Japan, the Bank of Japan says underlying inflation has reached its 2% target, yet markets price only about 42% odds of a December hike, given an expected tenth straight monthly fall in household spending.

Technically, the pair recovered from an early dip toward 157.25 to finish near 158.48, up 0.43%, clearing the 20-day average near 157.98 and finding resistance at the 200-day moving average at 158.68, with RSI around 56 signalling firm but not stretched momentum. Meanwhile, the 157.40–157.95 band now acts as the first cushion. Sustained trade above 158.94 would open a test of 159.10 and potentially 160, whereas a rejection followed by a break below 157.40 would expose 156.35.

The main near-term risks are a soft reading from Tuesday's October CPI and a hawkish BOJ summary of opinions this week, either of which could narrow the differential and cap the rally, while persistent US price pressure, with producer prices at multi-year highs, would favour further dollar gains.

GBP / USD

Gbpusd 09112026

Source: Massive (polygon.io) 

Cable sold off over the past few sessions, falling from near 1.345 to around 1.335. Heavy early-US trading briefly took it to 1.334 and erased most of the earlier push toward 1.350. The pair now sits below the 50-day and 100-day moving averages at 1.3358 and 1.3420, respectively, which act as overhead resistance, while the 20-day average at 1.3347 act as nearest support, and daily RSI reads a neutral 48.

Fundamentally, the pair pits two hawkish central banks against each other. The Bank of England has delivered its first hike since 2023, and Thursday's third-quarter GDP is expected to show growth quickening to about 0.7%, while October's 165,000 payrolls lifted odds of a December Fed hike to roughly 78%. Tuesday's US CPI, forecast at 0.3% headline and 0.2% core month on month, is the week's key swing factor, since a softer print could trim Fed tightening bets and favour sterling.

Holding the 1.33 confluence and reclaiming 1.34 would reopen the 1.350 swing high, whereas a decisive break below 1.33 exposes 1.326 and the October low near 1.315.

Economic Calendar

09112026 13112026

Contents

Disclaimer

This is a marketing communication. The information in this report is provided solely for informational purposes and should not be regarded as a recommendation to buy, sell or otherwise deal in any particular investment. Please be aware that, where any views have been expressed in this report, the author of this report may have had many, varied views over the past 12 months, including contrary views.

This report was prepared with the assistance of artificial intelligence.

A large number of views are being generated at all times and these may change quickly. Any valuations or underlying assumptions made are solely based upon the author’s market knowledge and experience.

Please contact the author should you require a copy of any previous reports for comparative purposes. Furthermore, the information in this report has not been prepared in accordance with legal requirements designed to promote the independence of investment research. All information in this report is obtained from sources believed to be reliable and we make no representation as to its completeness or accuracy.

This report is not subject to any prohibition on dealing ahead of the dissemination of investment research. Accordingly, the information may have been acted upon by us for our own purposes and has not been procured for the exclusive benefit of customers. Sucden Financial believes that the information contained within this report is already in the public domain. Private customers should not invest in these products unless they are satisfied that the products are suitable for them and they have sought professional advice. Please read our full risk warnings and disclaimers.

Sign up to get the latest market insights

We will email you each time a new report has been published.