**Three Markets to Watch Next Week (26/09/2025)**
*Based on the original article by XTB Market Analysis Team*
As the financial markets approach the end of Q3 2025, investors are closely monitoring key indicators and events that could drive volatility and present trading opportunities. Next week is particularly important for traders navigating currency movements, stock indices, and commodities due to looming macroeconomic data and central bank communications. This analysis outlines three crucial markets to watch for the week ahead: the US Dollar Index (DXY), Gold (XAUUSD), and the German DAX40 index. These markets are expected to be influenced by a variety of global factors, particularly monetary policy stances and risk sentiment.
Below is a detailed breakdown of each market, what to look for, and how price movements can be interpreted in the context of the broader financial landscape.
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## 1. US Dollar Index (DXY)
The US Dollar Index (DXY) has demonstrated significant strength through much of Q3 2025. Recent economic data from the United States has reinforced the belief that the Federal Reserve will maintain a restrictive interest rate policy into early 2026. Strong US consumer spending, resilient employment metrics, and persistent inflationary pressures have kept the Fed hawkish, even after several global central banks have turned dovish or paused.
### Factors Driving the Dollar’s Strength
– **Federal Reserve Policy Outlook**
– The Fed’s latest statement and FOMC projections indicated that at least one more rate hike may be on the table before 2025 ends.
– Recent comments from Fed officials point to a data-dependent stance, with no rush to pivot toward monetary easing.
– Inflation, especially core PCE data, remains elevated and is key to future rate decisions.
– **US Economic Resilience**
– GDP growth in the US has outpaced expectations.
– Employment indicators, including the Non-Farm Payrolls (NFP), have continued to surprise to the upside.
– Retail sales and consumer sentiment show that domestic demand remains strong.
### Key Calendar Events Impacting the DXY
– **US Core PCE Price Index (Thursday)**
– This is the Fed’s preferred inflation gauge. A higher-than-expected print would support continued dollar strength.
– Markets will be particularly sensitive to any sign that inflation is not cooling fast enough.
– **Final Q2 GDP Revision (Wednesday)**
– Though a lagging indicator, any adjustment could influence rate expectations.
– **Fed Speakers and Powell’s Comments**
– Markets will look for confirmation or contradiction of the hawkish bias.
– Any indication of “higher for longer” policies will likely benefit the dollar.
### Technical Levels to Watch
– Resistance: 107.00 and 107.80
– Support: 105.30 and 104.20
A break above 107.00 could pave the way for a test of 108.50, particularly if inflation surprises to the upside. However, a close below 105.00 might signal a temporary correction and weaken the bullish momentum.
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## 2. Gold (XAUUSD)
Gold prices have faced downward pressure in September, primarily due to the resurgence of the US dollar and rising Treasury yields. Given that gold does not pay interest or dividends, its appeal diminishes in a high yield environment. As the 10-year US Treasury yield continues to flirt with multi-year highs, gold has lost favor, especially among short-to-medium term investors.
### Drivers Behind Gold’s Performance
– **US Dollar and Yields**
– Rising yields increase the opportunity cost of holding gold.
– A strong dollar puts downward pressure on commodities priced in dollars, making them more expensive for international buyers.
– **Central Bank Demand**
– While official sector demand (particularly from emerging markets) has provided some support, it hasn’t been enough to counteract macro pressure.
– Chinese and Indian demand
Read more on EUR/USD trading.