Insights 
VT 
Current Market Observations
EUR/CHF is approaching a crucial trend line from April and wavering around its 50-day moving average. The pair faces resistance at 0.9375, and failure to surpass this could lead to a deeper drop towards 0.9260, and possibly 0.9210.
The lack of a clear direction in EUR/CHF is evident, making the resistance level a pivotal point. Should the decline persist, support levels are anticipated near 0.9260 and further at 0.9210.
Meanwhile, USD/JPY fails to move beyond 153.00, maintaining above 152.40. EUR/USD hovers above one-month lows, while NZD/USD is likely to stay between 0.5760 and 0.5805, and GBP/USD falls towards 1.3350 amid a stronger USD.
AUD/USD is expected to fluctuate within 0.6570 to 0.6605, and gold has rebounded close to $4,000. Monero trades positively at about $333, continuing its upward momentum.
These observations provide a snapshot of the current market sentiment, hinting at market uncertainties and opportunities.
Impact of US Government Shutdown
The US government shutdown, now in its second week, is creating significant market uncertainty and a flight to safety. This is strengthening the US Dollar against its major peers, as we’ve seen during past periods of political stress. We anticipate this dynamic to continue until lawmakers in Washington signal a resolution, with Q4 GDP forecasts now being revised downward.
For the EUR/CHF pair, we are watching a critical test of the ascending trend line that has held since April 2025. Resistance at 0.9375 is proving solid, and a failure to break above it could easily trigger a move down toward the 0.9260 support level. This suggests that put options offer a strategic way to position for a potential decline in the coming weeks.
This dollar strength is clearly weighing on other pairs, with EUR/USD moving toward one-month lows near 1.1600, further weakened by political headlines from France. We are seeing a similar pattern in GBP/USD, which is extending its drop towards 1.3350. This pressure is likely to persist as long as the shutdown dominates market sentiment.
Despite a strong dollar, gold is holding firm near the $4,000 level, as traders believe the shutdown increases the odds of the Federal Reserve cutting rates again this year. We saw a similar situation during the 35-day shutdown in 2018-2019, after which the Fed began an easing cycle. The market is currently pricing in over a 70% probability of a rate cut by December, according to CME FedWatch data.
Given these conflicting signals, the most prudent approach is to trade the heightened volatility rather than a firm direction. The CBOE Volatility Index (VIX) has already climbed over 15% since the shutdown began on October 1st, reflecting deep market anxiety. Everyone is now awaiting Federal Reserve Chair Powell’s upcoming speech for any clues on policy shifts.
