News & Insights

Back to All News

SystematicEdge October 2021 FX Commentary

05 October 2021

Click here to read the full SystematicEdge October 2021 Monthly FX Commentary for more information about currency drivers and their trends set by fundamental economic data.


Economic headwinds ahead of Q4

Main scenario

The US dollar seems capped: the price action configuration shows that the USD is stuck close to major resistance levels and may resume its bearish trend once market anxiety decreases (EURUSD resistance: 1.16, USDRMB resistance: 6.50).

Risks

Depending on US growth and inflation levels, if the Fed reduces its bond purchasing program faster than initially expected or announces a more aggressive rate hike plan than the +0.25% anticipated for end-2022 at the November meeting (Fed funds rate at 0.08% currently), the 10-year US Treasury yield will likely surge. As a result, the greenback would appreciate against major currencies like EUR, RMB, JPY, and GBP.

Click here to read the full SystematicEdge October 2021 Monthly FX Commentary for more information about currency drivers and their trends set by fundamental economic data.