DBG Markets: Market Report for Sep 25, 2025

Dollar Strengthen as Fed Stays Cautious; Gold and Yen at Key Technical Levels

On Wednesday, the U.S. Dollar Index moved sharply higher, supported by recent cautious remarks from Federal Reserve officials. The dollar rebound pressured gold, which pulled back from its record high of $3,791, facing profit-taking and short-term technical correction risks.

Feds Signals Bolster Dollar

Fed Chair Jerome Powell reiterated a cautious and data-dependent approach in his latest comments. He warned that cutting rates too quickly could risk keeping inflation elevated, while keeping rates too high for too long may weigh on the labor market. Powell also noted that equity valuations appear “fairly highly valued,” adding to investor concerns.

Overall, Powell avoided a clearly dovish or hawkish stance, leaving markets to focus on upcoming U.S. data to guide expectations. This led traders to unwind some of the earlier bets on a more dovish Fed path, giving the dollar renewed support.

Bank of Japan Minutes: Hawkish Tilt Emerging

On other hand, the latest BoJ meeting minutes release today showed policymakers actively debating how and when to step away from ultra-loose policy. Some members highlighted risks of maintaining low rates for too long, while others stressed that inflation pressures remain fragile.

Importantly, the minutes noted that if economic and price trends evolve as expected, the BoJ intends to gradually normalize policy. Several members paid close attention to wage growth, exports, and USD/JPY movements as key factors shaping the outlook.

Currently, markets are pricing roughly a 50% chance of a rate hike at the October meeting. If future inflation and GDP forecasts are revised higher, the BoJ may accelerate its path toward policy normalization.

USDJPY: Upside Held Within Key Range

USDJPY pushed higher yesterday, breaking above 148 and moving close to the 149 level. However, after the release of the BoJ minutes, the pair pulled back slightly.

USDJPY, H4 Chart

From a technical view, despite the rally, the pair remains locked in the 149–146 range, where it has been consolidating for nearly two months. A break above 148 could still open room for further upside, but without strong momentum above this level, gains are likely capped within the current range.

Technically, 149–146 remains the key range for USDJPY. A sustained move above the 148.00 level could open the door for further upside in the near term.

XAUUSD: Dollar Strength May Temper Upside

Gold pulled back on Wednesday after testing major resistance around 3791–3800, as highlighted in our live webinar session.

XAUUSD, Daily Chart

On the daily outlook, the long upper wick followed by a bearish engulfing candle suggests the potential for a corrective move in the near term.

XAUUSD, H1 Chart

In the short term, gold has broken below the 3755–3740 support zone, increasing the risk of a deeper correction. If price holds below this area, the next downside target could be 3715–3700.

Bottom Line

Powells cautious remarks gave the dollar fresh momentum, while gold faced resistance and USDJPY stayed capped within a key range. With the Fed remaining data-dependent and the BoJ signaling a gradual move toward normalization, upcoming U.S. data and the October BoJ meeting will be critical drivers.

For now, with no major shift in sentiment, gold is likely to stay in a corrective phase but broadly supported above 3700, while USDJPY is expected to continue trading within its established 149–146 range.