Current Market Observations

EUR/CHF is near an important trend line from April and is fluctuating around its 50-day moving average. The pair has resistance at 0.9375. If it doesn’t break this level, it could drop deeper to 0.9260, and possibly down to 0.9210. EUR/CHF is currently lacking clear direction, making that resistance level critical. If the trend continues downward, we might see support near 0.9260 and 0.9210. In other currency pairs, USD/JPY isn’t able to rise above 153.00 but remains above 152.40. EUR/USD is hovering near one-month lows, while NZD/USD is expected to range between 0.5760 and 0.5805. GBP/USD is declining toward 1.3350 as the USD strengthens. AUD/USD is likely to move between 0.6570 and 0.6605, and gold has bounced back near $4,000. Monero is trading well at about $333, continuing its positive trend. These observations reflect the current market mood, highlighting both uncertainties and opportunities.

Impact of US Government Shutdown

The US government shutdown, now in its second week, is causing significant market uncertainty and pushing investors toward safety. This trend is strengthening the US Dollar against major currencies, similar to past political tensions. We expect this to continue until Congress indicates a resolution, leading to downward revisions of Q4 GDP forecasts. For the EUR/CHF pair, we are closely watching the important ascending trend line established since April 2025. The resistance at 0.9375 is holding strong, and if the pair doesn’t break through, we may see a drop to the 0.9260 support level. This indicates that put options could be a smart way to prepare for a potential decline in the next few weeks. The strength of the dollar is impacting other pairs, pulling EUR/USD to one-month lows near 1.1600, which is further weakened by political news from France. GBP/USD is also dropping toward 1.3350. This downward pressure is likely to continue while the shutdown shapes market sentiment. Despite a strong dollar, gold is staying steady around $4,000. Traders believe the shutdown raises the chances of the Federal Reserve cutting rates later this year. We saw something similar during the 35-day shutdown from 2018 to 2019, which led the Fed to begin an easing cycle afterward. Current market data suggests over a 70% chance of a rate cut by December, according to CME FedWatch. Given these mixed signals, the best strategy is to trade the increased volatility rather than expect a clear direction. The CBOE Volatility Index (VIX) has already risen over 15% since October 1st, reflecting significant market anxiety. Everyone is now waiting for Federal Reserve Chair Powell’s upcoming speech for insights regarding policy changes. Create your live VT Markets account and start trading now.

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