GBPUSD TECHS: Maintains A Firmer Tone

• RES 4: 184.09 61.8% retracement of the Aug 21 - Sep 14 bear leg 
• RES 3: 182.74 50-day EMA
• RES 2: 181.93 50.0% retracement of the Aug 21 - Sep 14 bear leg  
• RES 1: 181.55 Intraday high 
• PRICE: 180.64 @ 16:39 BST Sep 21
• SUP 1: 178.94/177.85 Intraday low / Low Sep 14
• SUP 2: 177.15 Low Nov 10 2025 
• SUP 3: 176.01 1.236 proj of the Jul 29 - Aug 3 - 21 price swing  
• SUP 4: 175.29 38.2% retracement of the Feb 28 ‘25  - Apr 17 bull leg    

EURJPY is trading above its recent lows. A bearish theme remains intact, however, the latest climb has delivered a print above 180.99, the 20-day EMA. A clear break of this hurdle would signal scope for a stronger recovery, potentially towards the 50-day EMA, at 182.74. Moving average studies are in a bear-mode position, highlighting a dominant downtrend. The bear trigger lies at 177.85, the Sep 14 low.

The House Budget Committee is shortly due to hold a field hearing in Dallas, Texas, on whether Congress should establish a fiscal commission to address long-term debt and deficit challenges. LIVESTREAM

• Carolyn Bourdeaux, executive director at the Concord Coalition and Concord Action, said: "One of the big topics coming out of [the] meeting will be what do we do in the next few months to try to set the stage for building a plan to get the situation under control," referring to the US government's ceiling for borrowing, which now stands at $41.1 trillion. 

In his first post-September FOMC commentary, St Louis Fed President Musalem (who does not vote in 2026-27) told Reuters in an interview published Monday that "Both persistent demand and recurring supply forces are continuing to contribute to keeping inflation risks elevated, and I judge that without further policy restraint on inflation it is more likely to be substantially above our 2% target in 18
months than at target". It's a hawkish assessment but we think he's one of the four most hawkish members of the FOMC alongside Hammack, Logan, and Schmid - probably the four that penciled in a further two 25bp hikes by year-end to 4.375% (a reminder of the latest Dot Plot below).

• Reuters reported that Musalem "would not comment on the Fed's possible next steps or the estimated level the policy rate may need to reach to lower inflation."
• But Musalem did comment that even after the September hike, policy was "on the accommodative side".
• He told Reuters "I think it's crucial that policy puts a meaningful restraint on inflation" so that inflation returns to target in about a year and a half: "earlier and incremental policy firming is better and less disruptive than later and larger and potentially more
  abrupt policy action".
• For the moment, underlying inflation is "moving in the wrong direction", with "both strong demand forces and supply forces working themselves through the economy".
• He echoed Chair Warsh's comments on the labor market: "The labor market is not a source of inflation. There's not
  necessarily a need to slow the labor market down or to cool it to attain our inflation target... [the job market is] stable and balanced and around full employment."