Daily Forex Pulse — September 28, 2026

FX OVERVIEW

The US dollar remains the dominant currency, supported by hawkish Federal Reserve expectations, elevated Treasury yields and safe-haven demand as the US-Iran confrontation pushes oil above $100. Yen intervention risk is the key countertrend force, while commodity currencies face a split between domestic rate support and broad dollar strength.

MAJOR PAIRS

EURUSD — EURUSD remains structurally bearish as widening Fed-ECB policy divergence, higher US yields and geopolitical risk sustain demand for dollars. The pair is oversold near RSI 27–28, but a break below 1.1350/1.1325 would expose 1.1300; only a close above 1.1450 would suggest a meaningful reversal.

USDJPY — USDJPY is under pressure from explicit intervention warnings by Japanese Prime Minister Takaichi and Finance Minister Katayama, despite strong US rate support. A break below 155.20 would target the 11-month low near 152.10, while renewed upside is constrained by the risk of direct Japanese action.

AUDUSD — AUDUSD has a near-term fundamental tailwind from expectations of an RBA hike toward a 4.60% OCR, but the pair remains technically fragile below the 200-day SMA at 0.7024. A break of 0.6975 would reinforce the bearish structure and expose 0.6920 and potentially 0.6866; a hawkish RBA surprise is needed to clear 0.7051 and target 0.7235.

GBPUSD — GBPUSD remains biased lower despite hawkish BoE rhetoric, as weak labour demand, sluggish private-sector activity and the absence of an actual rate hike undermine sterling support. The pair is below its 20-period EMA at 1.3387, with the rebound toward 1.3245 viewed as exhaustion rather than a trend reversal; extreme GBP shorts create squeeze risk, but the immediate bias remains bearish.

NZDUSD — NZD remains pressured by the RBNZ’s cautious stance and unchanged 2.75% policy rate, particularly against expectations of further RBA tightening. The Kiwi lacks a domestic policy catalyst, leaving it vulnerable to renewed dollar strength and regional rate divergence.

AUDNZD — Australian rate-hike expectations continue to favor AUD over NZD, with the cross supported near 1.2370. A break above 1.2491 would confirm a stronger bullish AUD bias, although bearish RSI and MACD divergence warn that the cross is vulnerable to a corrective pullback.

USDCAD — USDCAD remains supported near 1.4155 as a widening US-Canada yield spread and 65% pricing for an October Fed hike outweigh oil-related support for the Canadian dollar. The pair is technically overbought and CAD shorts have rebuilt sharply, so hawkish BoC commentary from Gravelle or Wilkins could trigger a reversal; absent that catalyst, the bias remains higher.

USDCNY — The PBOC set a firmer central parity at 6.7399, signaling a measured effort to limit yuan depreciation and stabilize confidence. The move should contain near-term downside pressure on CNY, but sustained dollar strength and capital outflow risks limit the scope for a sharp renminbi appreciation.

CENTRAL BANK WATCH

Federal Reserve: Officials Beth Hammack and Anna Paulson emphasized persistent inflation risks, lifting market pricing for an October hike to approximately 65%. The Fed’s hawkish stance remains the central support for the dollar.
Reserve Bank of Australia: Markets expect an aggressive tightening signal, with inflation expectations around 4.1% supporting a possible move toward a 4.60% OCR. The risk is asymmetric: a hawkish surprise could lift AUD sharply, while any acknowledgment of weaker PMI or future restraint would damage the currency.
European Central Bank: President Lagarde’s emphasis on contained wage pressure reinforces the view that the ECB will not match the Fed’s tightening impulse. That policy gap remains a structural negative for EURUSD.
Bank of England: The BoE held rates at 3.75%, while Bailey and Ramsden retained a firm tone. Markets are pricing too many future hikes relative to the Bank’s cautious stance, leaving sterling vulnerable if domestic data deteriorate further.
Reserve Bank of New Zealand: The unchanged 2.75% rate and dovish outlook continue to weigh on NZD, particularly against AUD.
Bank of Japan: Markets are speculating about back-to-back hikes, but the immediate driver is political pressure and intervention risk rather than confirmed BoJ tightening.
Bank of Canada: Upcoming remarks from Deputy Governor Gravelle and Senior Deputy Governor Wilkins are pivotal. A firmer policy signal would challenge the current USDCAD uptrend.
People’s Bank of China: The stronger fixing at 6.7399, above consensus, indicates a preference for managed yuan stability without a forceful tightening of financial conditions.

MACRO DRIVERS

Geopolitical risk is driving a dollar-led flight to liquidity. The US rejection of Iran’s ceasefire proposal and threats to the Strait of Hormuz have pushed Brent above $106, raising inflation and global growth risks.
US rate differentials remain the principal FX driver. Higher Treasury yields and growing Fed-hike expectations are attracting capital into dollars, particularly against EUR, GBP, CAD and the Antipodeans.
Energy exposure is splitting commodity currencies. Higher oil offers some support to CAD, but the US yield advantage and crowded CAD shorts currently dominate; AUD and NZD remain more exposed to dollar strength and risk aversion.
Japanese intervention risk is the main destabilizing countertrend. Official warnings have forced yen shorts to reduce exposure and could produce abrupt declines in USDJPY if spot moves beyond authorities’ tolerance.

POSITIONING IDEAS

Bullish

Long JPY / short USDJPY — Japanese leadership has explicitly labeled yen weakness problematic, creating credible intervention risk. A break below 155.20 would strengthen the downside setup toward 152.10.
Long AUD / short NZD via AUDNZD — Expected RBA tightening toward a 4.60% OCR contrasts with the RBNZ’s cautious 2.75% stance. A break above 1.2491 would provide confirmation.
Long USD / short EURUSD — Fed-ECB policy divergence, higher US yields and geopolitical safe-haven demand favor continued dollar gains. The next downside trigger is a break below 1.1325.

Bearish

Short GBPUSD — Weak UK labour and activity data, an unchanged BoE rate and excessive market pricing for future hikes leave sterling vulnerable despite hawkish rhetoric.
Short AUDUSD — The pair remains below key trend support, with a break under 0.6975 targeting 0.6920 and 0.6866. A softer-than-expected RBA signal would accelerate the downside.
Long USDCAD — US rate support and widening yield spreads outweigh oil-related CAD strength for now. The trade is vulnerable to a sharp squeeze lower if BoC speakers deliver a hawkish surprise.