Daily Report – October 5, 2026
Oct 05,2026 
By admin Euro slides to its lowest since May 2025 on French fiscal worries as the week opens
The euro has broken to fresh lows near 1.1185, its fourth straight weekly decline, as French budget troubles and a widening French-German bond spread weigh on the currency and lift the dollar index to a 17-month high. The move is specific to Europe: sterling, the yen, the Aussie and the Dow are broadly steady, even after Friday's weak payrolls cut October hike odds sharply. Gold has slipped to 4,137 as long-dated yields climb, and oil has slid toward 91. Today's ISM services survey is the main scheduled release.
Market snapshot
| INSTRUMENT | LEVEL | BIAS | Note |
|---|---|---|---|
| FX MAJORS | |||
| EUR/USD | 1.11848 | Weak | Lowest since May 2025; oversold |
| GBP/USD | 1.32094 | Steady | Holding 1.32 as the euro sinks |
| USD/JPY | 157.976 | Steady | Just under 158, intervention zone |
| AUD/USD | 0.69389 | Steady | Bouncing off lows near 0.6904 |
| COMMODITIES | |||
| Gold (XAU/USD) | 4,137.36 | Softer | Gave back ground to 4,125 |
| Silver (XAG/USD) | 60.991 | Steady | Rangebound above 60 |
| Crude oil (WTI) | 91.690 | Soft | Slid from 94 toward 91 |
| INDICES & CRYPTO | |||
| Dow Jones (US30) | 51,153.55 | Steady | Flat after Friday weak jobs data |
| Bitcoin (BTC/USD) | 85,499.18 | Pullback | Gave up the 86,900 spike high |
Levels are indicative at the time of writing and can differ between spot and CFD quotes. Check live prices on your trading platform.
Top story: France drives the euro lower while payrolls cut hike odds
Friday's September payrolls were weak. The economy added just 29,000 jobs against a forecast near 90,000, unemployment rose to 4.2% and prior months were revised down by a combined 60,000. That cut the odds of an October Fed hike from around 70% to the low 20s, so a hold is now the base case. The report was released on schedule, with government funding running to 11 December, so there is no shutdown risk in play.
A weak jobs report would normally pull the dollar lower, but the euro is falling for reasons of its own, which is why the other majors have held steady.
French budget wrangling, a French-German bond spread at multi-year highs and the risk of a credit downgrade have pushed EUR/USD to 1.1185, its lowest since May 2025. That euro weakness has lifted the dollar index to a 17-month high even though United States data were soft. Gold has eased to 4,137 because the long end of the Treasury curve keeps rising on deficit worries, with the 30-year yield near a multi-decade high, while oil has slid toward 91 on recovering supply and a G7 stock release. Bitcoin is holding near the top of its recent range.
Why it matters for traders
- France is the euro story. The pressure comes from French fiscal and political risk rather than from US strength, so the pair can fall even when American data disappoint.
- Rates, not the dollar, are weighing on gold. Soft payrolls would normally help bullion, but rising long-dated yields on deficit concerns are offsetting that support.
- The euro is stretched. With momentum at 32 and the pair at its lowest in over a year, EUR/USD is vulnerable to a sharp short-covering bounce on any positive French or European headline.
- The Fed path has shifted. With October hike odds in the low 20s, today's ISM services survey and the FOMC minutes later this week will show how much appetite remains for tightening.
FX majors
The euro is the one major under real pressure as the week opens, while sterling, the yen and the Aussie are holding their ground. The euro's momentum reading near 32 is close to oversold, which cuts both ways: French headlines can extend the slide, while any relief invites a sharp bounce.
EUR/USD
1.11848The euro has broken to fresh lows and now sits near oversold territory, with France's budget problems the main driver. The trend is down, but a fourth weekly decline has stretched momentum and raised the odds of a corrective bounce. A break below 1.1161 opens 1.1140; a recovery above 1.1196 could squeeze the pair back toward 1.1214.
GBP/USD
1.32094Sterling has held its ground despite the euro's slide, trading in a tight range around 1.321 with momentum neutral. It needs to clear 1.3218 to build a bounce; a loss of 1.3181 would reopen the lows, with the ISM services survey the likely catalyst.
USD/JPY
157.976The pair is pressing 158 again after recovering from the 156.95 low, with momentum neutral to firm. The 158 area stays the line where the risk of Japanese intervention rises, so upside is likely to be cautious; a softer dollar after the weak payrolls would favor a pullback toward the 157.50 support.
AUD/USD
0.69389The Aussie has stabilized above the 0.6904 low, trading as a dollar play with momentum neutral. It has not followed the euro lower, which suggests the dollar strength is concentrated in Europe. A hold above 0.6915 keeps the bounce intact, while a clean break would expose 0.6904 again.
Commodities
Gold (XAU/USD)
4,137.36Gold has given back ground, slipping to 4,137 and probing the 4,125 area, because rising long-dated yields are outweighing the support from weak payrolls. Momentum is neutral and the tone is cautious. A bounce needs to clear 4,163 to build, while a break below 4,125 would expose the 4,111 low.
Crude oil (WTI)
91.690Crude has slid toward 91 as supply recovers and a G7 stock release adds barrels to the market. Momentum is approaching oversold near 39. The 91.04 area is the first floor; a break exposes the 90.39 low, while a bounce needs to clear 92.44 to turn the tone.
Silver (XAG/USD)
60.991Silver has traded sideways near 61 after a volatile week, with momentum neutral. As the higher-beta metal it tends to amplify gold's moves, so the 60.11 shelf is the near-term floor and 61.52 the first hurdle; the direction of long-dated yields will set the tone.
Indices & crypto
Dow Jones (US30)
51,153.55The Dow is flat near 51,150 after Friday's weak jobs data, holding a mid-range position with momentum neutral. It remains sensitive to Treasury yields, so a rise at the long end is the main threat, while any easing would allow a push toward 51,290. A drop through 50,970 would put the 50,580 low back in view.
Bitcoin (BTC/USD)
85,499.18Bitcoin has pulled back from a spike near 86,900 and is now consolidating around 85,500, with momentum neutral. It continues to trade as a risk asset, so a steadier dollar and easing yields would support it, while a drop below 85,070 would expose the 83,860 low. It needs to reclaim 86,000 to restore the upward move.
Economic calendar
| GMT | GST | Event | Impact | Consensus | Prior |
|---|---|---|---|---|---|
| 08:00 | 12:00 | Eurozone services PMI, final (Sep) | MED | 53.0 | 53.0 |
| 08:30 | 12:30 | Eurozone Sentix investor confidence (Oct) | MED | 4.5 | 5.1 |
| 13:45 | 17:45 | US S&P Global services PMI, final (Sep) | LOW | 58.7 | 58.7 |
| 14:00 | 18:00 | US ISM services PMI (Sep) | HIGH | 55.3 | 55.4 |
GST is Gulf Standard Time (GMT +4). Consensus figures are market estimates and may be revised before release.
What to watch: the ISM services survey is expected near 55.3 after 55.4 in August. The prices-paid index, last at 72.6, and the employment index, last at 47.8, are the details to read alongside the headline. If the reading holds above 55, long-dated yields could stay firm, which would be a headwind for gold and equities, while a clear miss could add to the weak-jobs narrative and ease yields. Earlier, the final Eurozone services PMI and Sentix confidence, forecast to slip to 4.5 from 5.1, will show whether European sentiment is cracking further.
Analyst view: three scenarios
Base case ~45%
If ISM services prints near the 55.3 consensus, the dollar would likely stay firm against the euro, with EUR/USD holding near its lows between 1.1161 and 1.1196 and gold ranging between 4,125 and 4,163. A Fed hold in October remains the base case, so range trading would fit better than chasing the euro lower.
Strong services, dollar extends USD up ~30%
If ISM services comes in well above 55.3, long-dated yields could stay firm and the dollar bid. EUR/USD could break 1.1161 and head for 1.1140, gold could test 4,125 and then 4,111, and the Dow could lose 50,970, though the near-oversold euro may limit the downside.
Soft services, relief USD down ~25%
If ISM services misses clearly, with the headline well below 55 or a weaker employment index, it could add to the soft jobs narrative and ease yields. The near-oversold euro could bounce toward 1.1214, gold could reclaim 4,163, and the Dow could push toward 51,290.
Scenario weights are the desk's subjective assessment and are not forecasts or trade recommendations.
Risk notes
- ISM services volatility at 14:00 GMT. The headline, prices-paid and employment components can move yields and currencies sharply; spreads widen and slippage rises around the release.
- The euro is stretched. Oversold EUR/USD can snap back violently on any French or European positive headline, so manage short exposure with care.
- Political headline risk. French budget and rating news can arrive at any time and move the euro, bond spreads and European indices quickly.
- Yen and intervention. USD/JPY near 158 remains in the zone where Japanese authorities have acted before, capping the upside.
- Long-end yields. A further rise in 30-year yields on deficit concerns can pressure gold and equities even when growth data are soft.