📰 More war risk should support gold. Add a weak jobs report, and the case for a rally looks even stronger. Yet gold finished the week lower.
The USS Theodore Roosevelt left San Diego for the Middle East, part of a deployment of about 10,000 sailors and Marines. Trump rejected Iran’s seven-day Hormuz proposal and said renewed strikes after the November 3 midterms were possible.
Meanwhile, the US added just 29,000 jobs, against roughly 84,000 expected, and unemployment rose to 4.2%. August’s 162,000 was revised to 133,000, while July became a 10,000-job loss. October Fed hike odds fell below 25%, from 70% earlier in the week.
Yet Treasury yields reversed their initial drop, and gold gave back its gains. Oil helps explain why: the conflict is keeping energy costs and inflation fears high, supporting yields and putting pressure on gold. That’s the tension shaping this week’s charts.
👁️🗨️ And this week’s trade idea is one you’ll want to see: a setup that brings AI, the yen and oil into one chart.
⚜️ XAU/USD
War usually supports gold. This time, higher oil prices are pushing inflation and interest rates up, putting pressure on gold because it pays no income. Bullion has fallen more than 20% since the conflict began in late February.
Last week followed the same pattern. Gold futures settled at $4,162.30, while spot gold fell about 3.4% over the week. It jumped more than 1% after the weak jobs report, then gave back all those gains.
On the Daily chart, gold has reached our point of interest.
XAUUSD (Gold) Daily chart
POI: $4,105-$4,220, where August’s rally began
Current price: Around $4,140, inside the zone
Next zone below: $3,955-$4,000, the June and July lows
Normally, we’d look for a buy in this zone. But gold couldn’t hold its bounce after such a weak jobs report, and yields are still climbing. With that backdrop, we’re looking for lower prices.
📈 NQ (Nasdaq 100 Futures)
NQ has two forces pulling it in different directions. AI demand is still strong: Micron forecast revenue above expectations and said customers increased long-term supply commitments to $32 billion. The Nasdaq 100 pushed higher on Friday. But Treasury yields are climbing too: 10- and 30-year yields reached their highest levels since 2002 on Thursday.
Only a small group of stocks is driving the rally. Just 21% of S&P 500 stocks are above their 50-day average, and the Dow fell 1.3% this week while the Nasdaq gained 0.5%. Two top Fed officials favoured waiting for more data, which helps. But weak demand at this week’s Treasury auctions could push yields higher.
On the H4 chart, NQ is around 31,049, and the structure still points higher.
NQ Futures 4 Hour chart
Target: The all-time high near 31,385
Support: 30,200 - 30,400, tested twice and held
Mid-level: 30,630, reclaimed last week
The all-time high remains our target, and we may take an intraday setup along the way.
🇪🇺 EUR/USD
Europe’s inflation is rising, but the euro isn’t benefiting. September inflation hit 3.8%, above the 3.6% expected and the highest since September 2023, with energy prices up 18.8% year-on-year. Higher inflation usually raises rate-hike expectations and supports a currency. Instead, EUR/USD fell for a fourth straight week, touching 1.1215, its lowest since May 2025.
Europe relies on imported energy, so Gulf tensions raise costs for households and businesses. Lagarde said the shock hasn’t reached wages yet and favoured a measured response. Markets put October hike odds at 18%, versus 73% for December.
Washington also threatened a diesel export ban unless Germany and France released emergency stocks. The US supplied around half of EU diesel imports in August. The G7 confirmed a 100-million-barrel release of diesel and other reserves. The threat has since been withdrawn, but Europe’s dependence on US supply remains clear.
On the H4 chart, the trend is firmly down, but price is stretched.
EURUSD 4 hour chart
Current price: Around 1.1250, within our interest zone at 1.1147–1.1263
Range: 1.1653 high to 1.1215 low
Entry area: The 50% retracement near 1.1435 (or above)
We’re not selling the lows. We want a bounce toward 1.1435 first, then we’ll look for a short.
🗾 USD/JPY
USD/JPY is caught between rate expectations and political pressure. The BOJ still favours higher rates, but is cautious about moving too quickly. The Tankan large-manufacturer index rose to 24, an eight-year high, just below the 25 forecast. Markets put the chance of a December hike at 82%, compared with just 22% for October 29-30.
But a weaker yen is drawing attention from both governments. Prime Minister Takaichi said US officials told her it was hurting American trade, while Finance Minister Katayama called the yen undervalued. US support could make intervention easier, but so far it’s only talk: Japan carried out no intervention from August 27 to September 28. BOJ Governor Ueda and Katayama both speak on Tuesday, October 6.
On the H4 chart, our swing short from two weeks ago is still running.
USDJPY 4 hour Chart
Entry: 158.92, at the lower edge of resistance at 158.92-160.70
Status: 80% closed, with the rest still open
Invalidation: 160.90
Target: 152.10
Current price is around 157.85. With most of the profit taken, we’re letting the remaining position run.
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🇦🇺 AUD/JPY
AUD/JPY reflects how much risk traders are willing to take. Australia exports energy and raw materials, while Japan imports nearly all its energy. The rate gap is wide too: the RBA unanimously raised rates to 4.60% on September 29, the highest since November 2011.
Yet the Aussie fell after the hike. Governor Bullock said the board had also considered holding rates, while markets had expected a cash rate above 5% by May 2027. A more cautious RBA and Gulf tensions led some traders to unwind positions funded by borrowing yen. China’s Golden Week holiday runs through October 7, leaving fewer participants in Asian markets.
On the H4 chart, we had the right idea last week but missed the entry.
AUDJPY 4 Hour chart
Planned short: 111.08, within the 111.08 - 111.55 zone
What happened: Price turned lower just before reaching our entry
Target: 108.80, reached
The setup is now invalid. Price is back around 109.83, and we’re not chasing a move that’s already played out. On to the next one.
🇨🇦 USD/CAD
The Canadian dollar is under pressure from trade, slow growth and higher US rates. The US imposed 50% tariffs on roughly $28 billion of Canadian goods on August 22. Canada responded with tariffs on $19.9 billion of US goods from September 8. Meanwhile, the economy was flat in July, with an early estimate of 0.2% growth for August. Higher US rates are also drawing money away from Canada.
The loonie (CAD) entered Friday near an 18-month low, after eight straight losing sessions. Higher oil prices should help, but WTI fell 1.4% over the week to $91.11, while Brent held at $102.25. Supply risks are pushing Brent prices higher, while North American oil is getting less of a boost.
On the H4 chart, our trade from last week is complete.
USDCAD 4 hour chart
Entry: 1.4023
Invalidation: 1.3980
Target: 1.4248, the June highs was hit
That’s a full take-profit at roughly five times the risk. Price is now around 1.4257, above those highs, and we have no open position.
The Nikkei brings three of this letter’s stories together: AI, the yen and oil.
On Thursday, the index rose 3.3% to 68,956.72, its highest close since August 17, with Advantest gaining nearly 10%. Higher-priced shares have more influence on the index, so a few chip stocks can lift it even when most shares fall.
A weak yen helps Japanese exporters earn more. A BOJ hike or currency intervention could reverse that support, while more Gulf tensions would raise Japan’s energy costs.
👁️🗨️ The Trade Idea
Nikkei 225 (JP225) 4 hour chart (OANDA)
On the H4 chart, JP225 is around 69,605, moving toward its highs.
Buy limit: 69,271
Invalidation: 67,845
Target: The all-time high at 73,750 (potentially higher - depending on momentum)
Our order is set, but we may adjust the entry depending on how the week opens. Any changes will be shared on our Telegram channel.
To follow our trade ideas throughout the week, join our free Telegram channel:
🧩 Final Word
Weak jobs data should have changed the market’s direction. It didn’t. That’s the warning to carry into next week.
Yields are still high, the dollar is firm, and gold is struggling. Markets are watching the Gulf, and the next headline could change the picture before the next economic release.
For us, one trade hit its target, one has most of its profit banked, and one moved without us. We let it go. Missing a move costs you nothing. Chasing it can cost you capital.
You don’t need to catch every move. You need a clear entry, a level that tells you you’re wrong, and enough discipline to wait when neither is there.
Stay Informed, Stay Patient, and as always… Happy Trading!
— The UE Market Letter Team 👁️🗨️
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