FX technical outlook: EURUSD, USDJPY, GBPUSD set the tone into the North American session

Currency and Bond Market Overview

The US Dollar is trading marginally higher today, stabilizing after two days of declines. Treasury yields have also ticked up to start the North American session, with the 10-year yield rising 3.7 basis points, retracing a similar fall from last week.

The Japanese Yen and Central Bank Watch

• USD/JPY: The biggest mover among majors, gaining 0.26% to 156.00.

• Bank of Japan (BoJ) Outlook: The BoJ is signaling that its rate-hiking cycle will likely extend beyond 0.75%. However, policymakers are avoiding a fixed path or a precise “neutral rate,” preferring a flexible, data-dependent approach.

• Upcoming Rate Decisions: Next week will be pivotal for central banks, with interest rate decisions due from the Bank of Japan, the ECB, and the Bank of England.

Technical Analysis Video:
In the video above, I (Greg Michalowski, author of Attacking Currency Trends) break down the technical factors driving the three major currency pairs—EURUSD, USDJPY, and GBPUSD. I outline the bias, risks, and map out the next targets that matter most for traders.

US Equity Markets: Sector Rotation and Tech Weakness

US stock futures are mixed as the week comes to a close, following the Federal Reserve’s third rate cut of the year on Wednesday. The rate cut is encouraging a broader market rotation, with small-cap stocks outperforming and global markets generally trending higher.

• Dow Futures: Slightly higher (+86 points).

• S&P 500 & Nasdaq: Marginally lower, with the Nasdaq underperforming due to pressure on high-valuation technology stocks.

Key Tech Concerns:
Weakness in AI-related names is weighing on the Nasdaq. Investors are growing concerned that rising AI infrastructure costs may hurt margins, despite the long-term growth narrative.

Corporate Movers: AI & Earnings Focus

Broadcom (AVGO)

• Price Action: Down ~5.8% in pre-market trading to $382.75 (despite hitting a record high of $414.61 earlier this week).

• Earnings: Beat expectations with $18.02B revenue (vs. $17.5B expected) and raised its dividend by 10%.

• The Narrative: Management highlighted surging AI demand and an expanded $73B AI backlog. However, investors are locking in profits after a ~75% YTD rally, citing concerns over valuation and slower non-AI revenue growth.

Oracle (ORCL)

• Price Action: Trading roughly -0.8% lower today, following a sharp -10.83% drop yesterday.

• The Narrative: While cloud and AI metrics were strong, overall revenue and guidance disappointed. The sell-off reflects anxiety over aggressive capital spending plans and skepticism regarding the immediate payoff of their AI investments.

Market Snapshot

US Stock Futures

US Treasury Yields
Yields are higher across the curve:

• 2-Year: 3.545% (+1.5 bps)

• 5-Year: 3.743% (+2.8 bps)

• 10-Year: 4.178% (+3.7 bps)

• 30-Year: 4.831% (+4.2 bps)

Commodities and Crypto

Funds continue to flow into precious metals, with Silver and Gold seeing significant strength.

Silver ($64.13, +0.81%)
Silver has hit another new record, outperforming due to a “perfect storm” of drivers:

1. Safe-Haven & Rate Cuts: Lower real yields and geopolitical uncertainty increase its store-of-value appeal.

2. Industrial Demand: Critical need for silver in electronics, solar, EVs, and data centers.

3. Supply Crunch: Mine supply is lagging demand while exchange inventories are drawing down.

Other Commodities

• Gold: Up $49 (+1.15%) to $4,328.56, within striking distance of the all-time high close ($4,355.62).

• Crude Oil: Up $0.06 at $57.67.

• Bitcoin: Down $347 at $92,184.

Fed Speak & Events

• Austan Goolsbee: The Chicago Fed President will be speaking this morning at 8:30 AM ET on CNBC.

• Context: Recall that Goolsbee was a dissenter at this week’s FOMC meeting, voting for no change in policy while the majority voted to cut.