On Friday, amid a broader retreat in the US dollar index (DXY), gold (XAU/USD) tried to extend its recovery and drew investor attention. Nevertheless, the metal's price action remains contained within the sideways trend that has formed during October.

The US dollar index (DXY), a barometer of the greenback's strength versus a basket of major currencies, weakened.

That decline followed remarks by Federal Reserve chair Kevin Warsh at the IMF–World Bank meetings, which had little effect on market expectations for future monetary policy. In his discussion with IMF managing director Kristalina Georgieva, Warsh stressed the Fed's unwavering commitment to price stability while noting that it is premature to conclude future policy before actual meetings take place. This, combined with the recent sharp drop in US Treasury yields, has put downward pressure on the dollar and, as a result, created a more favorable environment for gold investment.

However, accelerating inflation in the US — fueled by higher energy prices — keeps alive the possibility of additional Fed rate hikes before year-end. According to US Bureau of Labor Statistics data published on Wednesday, consumer prices broadly rose in September, partly driven by sustained high oil prices amid an escalation in the Middle East involving the US, Israel and Iran.

Moreover, the US Producer Price Index (PPI), published on Thursday, showed a 1.3% increase for the past month — the largest monthly rise since March 2022 — and the year-on-year rate jumped to 6.3%. Excluding the volatile food and energy categories, core PPI rose 0.7% month-on-month and 5.0% year-on-year. These figures indicate that inflationary pressure is spreading beyond the energy sector, creating conditions for further monetary tightening by the Fed. According to CME Group's FedWatch tool, traders now price in a greater than 90% chance of a Fed rate hike at the December meeting.

This factor, combined with rising geopolitical tensions in the Middle East, restrains the dollar's decline and limits gold's upside potential. Among recent events, Houthi forces backed by Iran struck the presidential palace in Aden — where the internationally recognized Yemeni government supported by Saudi Arabia is based. In addition, French Foreign Minister Pascal Confavreux confirmed the deployment of French forces to Saudi Arabia. Against this backdrop, US military planners are developing strike plans — including the possible use of large, non-nuclear munitions — against Iranian energy and nuclear infrastructure. All these developments raise the risk of further escalation in the Middle East, which may continue to support the US dollar and weigh on commodity prices.

From a technical perspective, gold is still unable to break above the 20-day SMA and therefore remains under pressure. Oscillators are negative, giving the bears the advantage.

The table below shows the US dollar's percentage change against major world currencies as of today. The US dollar's largest gain was recorded against the Japanese yen.

Price tested 157.97 as the MACD indicator began moving up from the zero line, confirming a valid entry point to buy the dollar. However, the pair only moved up about 10 pips and stalled.

The yen is in waiting mode for US data, as no major events remain in the second half of the day and the market sees no strong reasons to buy the dollar. The dollar lost support after Federal Reserve chair Kevin Warsh did not clearly signal more hikes or hint at an imminent pause. Attention now shifts to US industrial data. The consensus for September industrial production is +0.4% month-on-month after 0.0% previously, and capacity utilization is expected at 76.5% versus 76.3% prior. Manufacturing output previously fell 0.3%. Industrial production shows what factories, mines, and utilities produced, while capacity utilization indicates what share of capacity is used. If prints come close to forecasts, the dollar is unlikely to get a strong boost, and risk-asset upside will probably continue.

Earlier, the market will see September import-price data — an early inflation signal. The monthly forecast is +0.6% (previous +0.7%); the year-on-year prior reading was 7.0%. After that, the monthly US budget execution report for September is due. The market will note a big difference: a deficit of $34.7bn is expected vs. $166.8bn previously. A larger deficit means the Treasury needs to borrow more, which can pressure bond yields. Recently falling yields have weighed on the dollar, so the yen may get a chance to strengthen by the end of the week.

For intraday strategy, I will mainly rely on Scenarios 1 and 2.

Buy signal

Scenario 1: Buy USD/JPY today near 157.97 (green line on the chart), targeting 158.33 (thicker green line). I will exit long positions at 158.33 and open short positions there, aiming for a 30–35 pip retracement. Expect limited upside potential today. Important: before buying, ensure MACD is above zero and only beginning to rise.

Scenario 2: Also consider buying if price tests 157.81 twice while MACD is in the oversold area. That would limit downside potential and trigger a reversal higher. Expect moves to 157.97 and 158.33.

Sell signal

Scenario 1: Plan to sell USD/JPY after a break below 157.81 (red line). That should lead to a rapid decline. Sellers' key target is 157.54, where I will exit shorts and immediately open longs (aiming for a 20–25 pip reversal). Pressure on the pair would return if the central bank intervenes. Important: before selling, ensure MACD is below zero and only beginning to fall.

Scenario 2: Also consider selling if price tests 157.97 twice while MACD is in the overbought area. That would limit upside potential and trigger a reversal downward. Expect declines toward 157.81 and 157.54.

What's on the chart:

• Thin green line — entry price at which you can buy the instrument.
• Thick green line — suggested Take-Profit area or a level where you may choose to lock in gains, because further upside above that level is unlikely.
• Thin red line — entry price at which you can sell the instrument.
• Thick red line — suggested Take-Profit area or a level where you may choose to lock in gains, because further downside below that level is unlikely.
• MACD indicator — when entering the market, watch for overbought and oversold zones.

Important. Beginner Forex traders must be very cautious when deciding to enter the market. It is best to stay out of the market before major fundamental releases to avoid getting caught in sharp price moves. If you trade during news releases, always place stop orders to limit losses. Without stop orders,, you can lose your entire deposit very quickly, especially if you don't use money management and trade large volumes.

And remember: successful trading requires a clear trading plan like the one shown above. Spontaneous trading decisions based solely on current market noise are a losing strategy for intraday traders.

A price test at 1.3305 occurred as the MACD indicator began moving up from the zero line, confirming a valid entry point to buy the pound. As a result, the pair rose toward the 1.3337 target area.

Sterling is in a favorable position today. There are no UK releases, and the external backdrop is supportive. In the second half of the day, the US calendar is also light; attention will shift to US industrial production, manufacturing output and capacity utilization. Those prints are unlikely to give the dollar a fresh impulse, so risk-asset appetite should continue and support demand for the pound. The UK picture also remains resilient heading into the end of the week: August GDP rose 0.1% month-on-month versus -0.1% expected and +0.7% over three months versus +0.5% expected, while industrial production jumped 0.8%. These figures bolster Bank of England hawks Huw Pill, Megan Greene and Catherine Mann. The dollar has little to help it—Kevin Warsh gave no clear signal for a hike or a hint of a pause.

For intraday strategy, I will mainly rely on Scenarios 1 and 2.

Buy signal

Scenario 1: Buy the pound today near 1.3353 (green line on the chart), targeting 1.3399 (thicker green line). I will exit long positions at 1.3399 and open short positions there, aiming for a 30–35 pip retracement. Expect pound gains today after weak US prints. Important: before buying, ensure MACD is above zero and only beginning to rise.

Scenario 2: Also consider buying if price tests 1.3326 twice while MACD is in the oversold area. That would limit downside potential and trigger a reversal higher. Expect moves to 1.3353 and 1.3399.

Sell signal

Scenario 1: Plan to sell the pound after a break below 1.3326 (red line). That should lead to a quick decline. Sellers' key target is 1.3293, where I will exit shorts and immediately open longs (aiming for a 20–25 pip reversal). Strong renewed pressure on the pound would require a hawkish turn from policymakers. Important: before selling, ensure MACD is below zero and only beginning to fall.

Scenario 2: Also consider selling if price tests 1.3353 twice while MACD is in the overbought area. That would limit upside potential and trigger a downward reversal. Expect declines toward 1.3326 and 1.3293.

What's on the chart:

• Thin green line — entry price at which you can buy the instrument.
• Thick green line — suggested Take-Profit area or a level where you may choose to lock in gains, because further upside above that level is unlikely.
• Thin red line — entry price at which you can sell the instrument.
• Thick red line — suggested Take-Profit area or a level where you may choose to lock in gains, because further downside below that level is unlikely.
• MACD indicator — when entering the market, watch for overbought and oversold zones.

Important. Beginner Forex traders must be very cautious when deciding to enter the market. It is best to stay out of the market before major fundamental releases to avoid getting caught in sharp price moves. If you trade during news releases, always place stop orders to limit losses. Without stop orders,, you can lose your entire deposit very quickly, especially if you don't use money management and trade large volumes.

And remember: successful trading requires a clear trading plan like the one shown above. Spontaneous trading decisions based solely on current market noise are a losing strategy for intraday traders.

A price test at 1.1236 occurred as the MACD indicator began moving up from the zero line, confirming a valid entry point to buy the euro. As a result, the pair rose toward the 1.1269 target area.

EUR/USD moved higher today despite few eurozone-specific drivers. Key points: final September eurozone CPI confirmed 3.8% year-on-year as expected (preliminary was the same) versus 3.2% in August. Core CPI remained at the expected 2.5% (2.4% prior). These readings show inflation is not only high but spreading into more components. Trade data were weaker: the eurozone recorded a €6.8bn goods deficit in August versus an expected €4.5bn surplus. The market mostly ignored that because attention focused on the dollar.

The euro enters the second half of the day with good chances to extend gains because the US calendar is almost empty. The only US items of note are industrial production, manufacturing output, and capacity utilization — measures of how active industry is — and they are unlikely to give the dollar a fresh impulse. If those prints are weak, dollar demand will soften, and risk assets should continue to rally.

For intraday strategy, I will mainly rely on Scenarios 1 and 2.

Buy signal

Scenario 1: Buy the euro today near 1.1275 (green line on the chart), targeting 1.1309. I plan to exit at 1.1309 and also sell EUR there, aiming for a 30–35 pip retracement from the entry. Expect euro gains today after weak US data. Important: before buying, ensure MACD is above zero and just beginning to rise.

Scenario 2: Also consider buying if price tests 1.1254 twice while MACD is in the oversold area. That would limit downside potential and trigger a reversal higher. Expect moves to 1.1275 and 1.1309.

Sell signal

Scenario 1: Plan to sell the euro after it reaches 1.1254 (red line on the chart). Target 1.1221, where I will exit short positions and immediately open long positions (aiming for a 20–25 pip reversal). Pressure on the pair can return at any time. Important: before selling, ensure MACD is below zero and just beginning to fall.

Scenario 2: Also consider selling if price tests 1.1275 twice while MACD is in the overbought area. That would limit upside potential and trigger a reversal down. Expect declines to 1.1254 and 1.1221.

What's on the chart:

• Thin green line — entry price at which you can buy the instrument.
• Thick green line — suggested Take-Profit area or a level where you may choose to lock in gains, because further upside above that level is unlikely.
• Thin red line — entry price at which you can sell the instrument.
• Thick red line — suggested Take-Profit area or a level where you may choose to lock in gains, because further downside below that level is unlikely.
• MACD indicator — when entering the market, watch for overbought and oversold zones.

Important. Beginner Forex traders must be very cautious when deciding to enter the market. It is best to stay out of the market before major fundamental releases to avoid getting caught in sharp price moves. If you trade during news releases, always place stop orders to limit losses. Without stop orders,, you can lose your entire deposit very quickly, especially if you don't use money management and trade large volumes.

And remember: successful trading requires a clear trading plan like the one shown above. Spontaneous trading decisions based solely on current market noise are a losing strategy for intraday traders.

Starting with the eurozone. Final September CPI came in at 3.8% year-on-year — exactly in line with the preliminary estimate and consensus, so there was no revision. It is up from 3.2% in August, so the acceleration remains noticeable. Core CPI (excluding energy and food) stayed at the expected 2.5%, up from 2.4% previously. Core shows the persistent part of inflation — the portion not explained by oil spikes — so even a small rise matters for the European Central Bank. The deposit rate is 2.50%, the next meeting is October 29, and markets expect a final hike to 2.75% in December.

Trade data disappointed. In August, the eurozone recorded a €6.8bn goods deficit versus an expected €4.5bn surplus (July was a €1.4bn surplus). The trade balance measures the difference between goods sold abroad and goods purchased; a switch from surplus to deficit means countries buy more than they sell and foreigners need fewer euros to pay for eurozone goods. In Italy, September CPI was as expected at 4.2% y/y and 0.7% m/m, while the Italian goods surplus narrowed to €1.77bn from €8.24bn (forecast €7.50bn). Eurozone industrial production in August fell 0.5% m/m versus 0.0% expected — the trade data confirmed a weakening real sector.

But the market focused on something else. Elevated inflation remains a problem for the ECB and supports the case for tight policy. Christine Lagarde has warned that high energy prices will keep inflation above target into early 2027, and September's numbers give her no reason to change that view. Frankly, it is puzzling that the euro is rising despite a worsening trade balance — to me that looks more like dollar weakness after Warsh's remarks than strength in the European economy.

No UK releases were published today, so the pound could rally unbothered. The lack of news helped it. Yesterday's UK figures were strong: August GDP rose 0.1% m/m versus -0.1% expected, and industrial production jumped 0.8% m/m versus -0.1% expected, which supports sterling's recovery after its recent prolonged decline.

With few major events in the second half of the day, market attention will shift to US industrial data: industrial production, manufacturing output, and capacity utilization. The first two show how much factories, mines and power plants actually produced. Capacity utilization answers the simple question of what share of their capacity firms are using. High utilization can signal overheating and upward pressure on prices; low utilization points to weak demand. In dollar terms, these are secondary releases and unlikely to give the greenback a big boost. I expect risk-asset upside to continue unless these data surprise strongly.

Momentum

For the euro, the range between breakout points is 41 pips, from 1.1234 to 1.1275. Price at 1.1268 sits in its upper part — 34 pips above the lower boundary and only 7 pips below the upper. The euro is rising almost without pause today, and the upper level is very close. If price convincingly closes above 1.1275, the next targets will be 1.1310 and 1.1336. For such a move, the dollar must remain weak, and US industrial data should not revive it. I think this scenario is the main one for today, but don't rush entries: seven pips is very small, and price may oscillate at the level several times before deciding where to go. If price drops below 1.1234 and holds there, targets will be 1.1193 and 1.1156 — which would require a noticeable dollar reversal, and so far there is no sign of that.

For the pound, the range is narrower, 34 pips from 1.3307 to 1.3341, but price at 1.3344 stands 3 pips above the upper boundary. The pound has effectively already approached a breakout. But three pips is normal market noise, and until price convincingly closes above 1.3341, this cannot be called a breakout. If a close occurs, targets will be 1.3368 and 1.3397. Support for such a move remains yesterday's strong UK data and a weak dollar. If price returns below 1.3341 and then falls under 1.3307, targets will be 1.3273 and 1.3233 — but that reversal would require very strong US prints. Remember, Friday is near, and some buyers may take profits before the weekend, pushing price back into the range.

Mean Reversion

For the euro, two reversion levels stand out: 1.1276 and 1.1242. The upper one sits only one pip above the breakout point at 1.1275, so special caution is required. One pip is even less than normal market noise, and on the first touch you cannot tell whether a true breakout has started or the price merely poked the boundary. If price clears 1.1276, reaches 1.1310, and convincingly closes above it, that is a confirmed breakout and selling is not allowed. If instead price rises slightly above 1.1275 and quickly returns below, I would consider selling with a stop above 1.1310. It is wiser to skip the first reaction in this zone. The lower level 1.1242 lies 8 pips above the 1.1234 breakout point and 26 pips below the current price. If price pulls back to 1.1242 and quickly reverses up, buyers have a rebound idea with a stop below 1.1234. But if price moves below 1.1234 and closes there, buying is not allowed.

For the pound, the lower reversion level 1.3317 sits 10 pips above the 1.3307 breakout point and 24 pips below the upside breakout point at 1.3341. If price returns to 1.3317 after a rise and quickly bounces up, buyers have an idea to continue the move with a stop below 1.3307. The distance here is larger than for the euro, so it is easier to distinguish a genuine rebound from the start of a real decline. But if price breaks 1.3307 and closes convincingly below it, buying there is not allowed. I am not covering an upper reversion level for the pound this time because the value provided in the data appears to be erroneous.

Meanwhile, Peter Schiff, head of investment firm Euro Pacific Capital, again criticized Bitcoin and compared it with gold. Recall that Mr Schiff has repeatedly argued that traditional gold has several advantages over Bitcoin and that "digital gold" will eventually collapse. Now Mr. Schiff said ordinary gold has a much better chance of delivering tenfold gains in the coming years than "digital." The investor also said Bitcoin could fall sharply again. The only thing keeping it afloat now is investor demand. He reminded listeners that gold has intrinsic value and physical utility, unlike cryptocurrencies. Precious metals will continue to rise over time as sovereign debts increase worldwide and inflation erodes trust in governments and the purchasing power of fiat currencies.

Mr Schiff also noted that central banks use gold as a reserve, unlike Bitcoin, and that gold's value does not depend on short-term market swings and trends. We remind you that Bitcoin remains a high risk, highly volatile investment vehicle for most market participants, nothing more. In plain terms, Bitcoin can increase capital quickly, which attracts many investors. However, Bitcoin's growth rate slows over time, so a tenfold rise is not something to expect—even assuming perpetual growth of the money supply.

Trading recommendations for BTC/USD:

Bitcoin shows signs of the start of a new bull trend. This trend begins, as is often the case, with a pump that has no concrete, clear reasons. The Fed has not started cutting rates, and the Clarity Act was not adopted. In the near term on the daily timeframe, Bitcoin may be in decline, since the price reacted to a bearish FVG and generated two sell signals. Also note that the current breakout beyond the daily sideways channel may be a deviation. Yes, a deep deviation, but still a deviation. If so, Bitcoin could head to $70,800 and even preserve the downtrend that began last year. We believe short positions are most relevant in the near term. On the 4-hour timeframe, be careful near the upper boundary of the sideways channel—a deviation may form and the decline may resume.

Trading recommendations for ETH/USD:

On the daily timeframe the technical picture for Ether has changed completely. Now the Ether is oriented toward a new uptrend. However, bulls can rely only on the weekly chart, where Ether has set a course for $4,800, the upper boundary of a five-year sideways channel. On the daily timeframe the first bearish FVG did not prompt a noticeable price reaction, but Bitcoin reacted to its own FVGs, and recall that Ether's price depends on Bitcoin's by roughly 80–90%. Bitcoin began to correct, and Ether also plunged. Thus, in the near term, we expect declines (as before). Ether targets are around $2,300 and lower, down to $1,850. On the daily timeframe, Ether received a sell signal from the nearest FVG. Liquidity removal warns of a pause in the decline or a possible end to the downward correction.

Explanations for the illustrations:

CHOCH—change of character, break of trend structure.

Liquidity—liquidity, stop losses, and pending orders that market makers use to build positions.

FVG—fair value gap, an area of price inefficiency. Price moves quickly through such areas, indicating the absence of one side in the market. Later prices tend to return and react to these areas in the direction of the main trend.

IFVG — inverted fair value gap. After a return to such an area, Price receives no reaction and impulsively breaks through, then tests from the other side.

OB — order block. The candle on which a market maker opened a position to capture liquidity and form a position in the opposite direction.

The euro held firm even after another US release. US producer prices for September came in at 1.3% month-on-month and 6.3% year-on-year versus forecasts of 0.5% and a drop to 5.3% y/y. In August, PPI was 0.5% and 5.6% y/y. This was well above economists' expectations and temporarily boosted dollar demand, and you can see a sharp downward move on the chart after the print. Core producer prices also surprised to the upside—0.7% versus 0.3% and 5.0% y/y after 4.8% in August. Retail sales for September rose 0.8% versus a 0.3% forecast. The figure looks decent, but August saw a 1.3% surge, so this is a slowdown relative to that, and traders were more inclined to sell the dollar than buy it. All that allowed the euro and the pound to retain upward potential. In today's Asian trading the pound pushed toward weekly highs, and the euro also strengthened, but it has not yet cleared 1.1241.

Kevin Warsh's remarks also played a notable role. The euro's and pound's gains were timed to the period after his speech. He said he would not provide new forecasts or rate guides, that he remains committed to the strategy he set when taking office, and that inflation is a concern, but the committee will act cautiously for now. Recall that after the US CPI print, Wednesday market odds of an October hike rose sharply. Warsh's remarks largely wiped those odds out, and attention has shifted to a December hike, which markets price—the chart shows about an 80% probability of a step to 4.00–4.25%.

Now to the economic calendar. Today there is a lot of important Eurozone data. The main event will be the final CPI for September, with a forecast of 3.8%, the same as the initial flash estimate. Note that eurozone inflation has been accelerating since June: 2.8% in June, 2.9% in July, 3.2% in August, and 3.8% in September. The flash estimate showed the main contribution came from energy—18.8% y/y versus 14.3% a month earlier. If the final figure is revised above 3.8%, that would provide additional support for the euro because high inflation implies high rates and the need for the ECB to act. The deposit rate is now 2.50%, and the market expects a pause on October 29 and a final hike in December to 2.75%; a strong number would reinforce that scenario.

Besides inflation, today's releases include the eurozone trade balance and Italy's CPI (forecast +0.7%). They are unlikely to move the market much; the focus will be on eurozone inflation. In the afternoon US industrial production for September is due, forecasted to be +0.4% after zero in August, and manufacturing output is also expected to show modest improvement. Good prints there could support the dollar.

EUR/USD. For shorts the stable level remains 1.1241, but note it was active on October 9 and again yesterday. A false break of 1.1241, formed today in the Asian session, has already worked well for a 15-point downside move, so be careful selling this level again. If eurozone inflation matches forecasts, nothing new will happen, but bears will likely act at 1.1241. If data exceed forecasts, we will probably see a break and close above 1.1241, and then longs toward 1.1275 would be in play. Here I expect renewed bear activity and would only consider selling on false breaks, with a farther target at 1.1310, where I would sell rallies for 25-point moves. If pressure on the euro returns in the first half of the day, I would look to buy—as yesterday—near 1.1193 on a false break or on a false break of 1.1156, also aiming at least for a return to 1.1193. I look to buy bounces from 1.1117 with a 25–30 pip objective.

GBP/USD. I expect first active shorts around 1.3307 on a false break, giving a correction to 1.3273. If buyers fail to show, a break and close below will quickly return the pound to the 1.3233 area, where longs are possible on a failed hold. Further bear targets are 1.3209 and 1.3183; from those levels I would buy bounces for 20–25 pips. If the pound's upside continues, a break and close above 1.3307 would open a move to 1.3341, where I would sell on a failed hold or sell a rebound from 1.3368 for 25–30 pips.

What concerns me most today is this: the dollar withstood both strong inflation and the PPI surge and still failed to sustain gains, which means the issue now is where bond yields go. I think while Warsh remains silent on rates and the market looks to December, the euro and pound have enough headroom to stay near weekly highs. But if the eurozone inflation disappoints and US industrials surprise, I would not be surprised if this rebound ends sooner than many expect.

As the company's release states, the platform gives banks, fintechs, and enterprises a modular toolkit they can embed into their own white-label products. It includes multi-currency accounts where fiat and stablecoins sit side by side, instant conversion between them, cards linked to stablecoins, and payouts to local bank accounts via Mastercard Move. Clients can enable only the functions they need and add new ones as they go, so they will not have to integrate multiple separate providers at every stage of money movement.

A practical use case in the press release illustrates a manufacturer that receives payments in several currencies and pays suppliers worldwide. Today such a company must hold separate accounts, work with different vendors, and tie up working capital in prepaid balances across markets. The new platform allows liquidity management, transfers between fiat and stablecoins, and inbound and outbound payments in one place. Through Mastercard Move—which reaches more than 17 billion endpoints—users will be able to pay out stablecoins in local currency directly to recipients' bank accounts, with coverage expected to expand to more than 40 currencies across over 200 countries and territories by 2027. Stablecoins will also be spendable at Mastercard's merchant acceptance network in hundreds of millions of points of sale, and cards will be available for issuance in more than 130 countries.

Stablecoin issuers also benefit because their tokens gain a ready spending channel. The platform plans also include support for agency commerce and other regulated forms of money, including tokenized deposits—what Mastercard executives call a multi-money strategy.

For the market this event is more structural than price moving. On the eve of the launch, Standard Chartered downgraded its stablecoin market forecast, pushing a $2 trillion milestone out to 2030 on the back of a plateau around $309 billion, and noted that growth today comes from transaction frequency rather than new issuance. Mastercard's launch addresses that challenge: the more spending scenarios there are, the more often coins change hands.

Technical picture for Bitcoin

Buyers are currently targeting a reclaim of $82,300, which would open a direct path to $84,200 and then toward $86,000; breaking $86,000 would signal attempts to restore a bull market. On the downside, buyers are expected at $80,200. A return of the trading instrument below that area could quickly push BTC toward $78,100. The most distant downside target would be around $76,900.

Technical picture for Ethereum

A clear hold above $2,508 would open a direct path to $2,600. The furthest upside target is the high near $2,679; breaking that level would indicate strengthening bullish sentiment and a return of buyer interest. On the downside, buyers are expected at $2,417. A return below that area could quickly push ETH toward $2,339. The most distant downside target would be around $2,274.

What we see on the chart:

- Red lines indicate support and resistance levels where either a price slowdown or active growth is expected;

- Green lines indicate the 50-day moving average;

- Blue lines indicate the 100-day moving average;

- Light green lines indicate the 200-day moving average.

A crossover, or a price test of moving averages, typically either halts the move or sparks fresh market momentum.

The main point of his remarks was that the Fed will not pre-announce future rate decisions. Warsh clarified that decisions will be evaluated at the October and December meetings—he therefore left both dates open. That is a material departure from the prior practice of preparing the market in advance, and it differs from the more cautious messaging of officials such as John Williams and Philip Jefferson in September. Now the market will have to assess each meeting on its own, which increases uncertainty and reduces the value of any rate path forecasts.

The second important theme was financial stability. Warsh said the Fed must weigh risks to stability and acknowledged he may be overly sensitive to the legacy of the global financial crisis. "I may be too sensitive to the consequences of the global financial crisis," Fed chair Kevin Warsh said. In my view that line was the most important for the dollar because it signals the central bank's readiness to approach tightening more cautiously if systemic risks accumulate. Risk assets and currencies competing with the dollar benefit from that stance, while the dollar—whose appeal rests partly on expectations of an aggressive Fed—loses ground.

Warsh's global assessment is also telling. He noted that since the September meeting the world has broadly evolved as expected and that monetary policy is tightening simultaneously across jurisdictions. Inflation, he said, is not only a US problem but a global one. For FX markets this means the policy gap between the Fed and other central banks is unlikely to widen as much as dollar bulls had hoped. If the ECB reads a December hike and the Bank of England and the Bank of Japan also tighten, the US rate advantage narrows, supporting the euro, the pound, and the yen.

In the economy, Warsh sounded relatively upbeat. He spoke of structural growth and said investment has risen sharply. He expects AI to raise productivity, but he cautioned the technology's initial impact will appear on the demand side. That is an important nuance: demand for AI infrastructure first pushes prices up, while productivity gains come later. This echoes Austan Goolsbee's prior warning about overheating, so Warsh's comments cannot be called dovish. The Fed will also hold in-person hearings on AI on November 16, underscoring how seriously the bank treats the factor.

Recall consumer inflation in September hit 3.7%, with core at 2.6%, while producer prices rose 1.3% for the month and 6.3% year-on-year. Markets price about 40 basis points of hikes by the end of January and nearly full odds of a December move, with low odds for October. Against that backdrop, Warsh could have strengthened hawkish rhetoric but did not, and that is why the dollar lost its footing. I believe the chair deliberately preserved flexibility rather than tying the Fed to commitments to the market.

My forecast is as follows. The October 27–28 meeting will most likely end in a pause, and the decision on a December hike will depend on incoming data; the probability of a step remains high because of inflation. But without explicit commitments from the Fed, the market will be more willing to pare back bets on aggressive tightening in 2027, and the dollar will remain under pressure versus the euro, the pound, and the yen. The main risk to this scenario is another run of strong inflation readings that would push the central bank back toward firmer signaling; for the euro, the situation in France remains an important variable.

Technical picture for EUR/USD

Buyers now need to think about reclaiming 1.1241. Only that would allow targeting a test of 1.1275. From there, one can reach 1.1310, but doing so without support from large players will be difficult. On the downside, I expect serious buying only around 1.1193. If nobody appears there, it would be sensible to wait for a new low near 1.1156 or to open longs from 1.1117.

Technical picture for GBP/USD

Pound buyers need to take the nearest resistance at 1.3310. Only that would allow targeting 1.3340; breaking above that will be fairly difficult. The far target is the 1.3370 area. On a decline, bears will try to seize control of 1.3275. If they succeed, a break of the range would deal a serious blow to bulls and push GBP/USD to a low near 1.3230 with scope to reach 1.3200.

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Important:

The begginers in forex trading need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp market fluctuations due to increased volatility. If you decide to trade during the news release, then always place stop orders to minimize losses.

Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. For successful trading, you need to have a clear trading plan and stay focues and disciplined. Spontaneous trading decision based on the current market situation is an inherently losing strategy for a scalper or daytrader.

#instaforex #analysis #sebastianseliga

Rising Treasury yields are hitting not only small caps but also the tech sector. Investors joke that it is a kind of marginal tax on any company that is not a high-quality hyperscaler. CoreWeave rents compute for training and running AI models and has recently seen a sharp rise in leverage. Higher Treasury yields toppled its stock.

CoreWeave and peer stock dynamics

Saxo added fuel to the fire by warning that investors are becoming more demanding about profitability, funding, and capital discipline. The firm contrasted high-earning chipmakers such as TSMC, Samsung, and ASML with indebted names like CoreWeave, Nebius, and Oracle. That prompted thoughts of rotation not only between sectors but within the tech universe itself.

NVIDIA's assurance that CoreWeave will be OK rescued the market and put the S&P 500 back on a roller-coaster ride. Treasury yields also stabilized, and robust US macro data combined with the Fed's reluctance to rush further tightening created a so-called Goldilocks backdrop for US equities.

US retail sales dynamics

Retail sales have risen in seven of the past eight months. In September, the indicator beat Bloomberg consensus by roughly two-to-one, up 0.8% month-on-month. Producer price inflation jumped to 6.3% year-over-year, the highest since late 2022. Together with headline CPI accelerating to 3.7%, this risks feeding through to the PCE price index, the Fed's preferred inflation gauge.

Still, the odds of an October rate hike rose only modestly, from about 25% to 28%. The central bank is in no rush to tighten policy, and against a still-solid US economy, this provides a tailwind for the S&P 500. The core investor concern remains the ability of the market's pillars, the tech giants, to generate returns. Panic can subside quickly, however, if Wall Street's earnings forecasts hold up.

Technically, the S&P 500 reclaimed fair value at 7,725 on the daily chart, which is a constructive sign. As long as the price stays above that support level, bulls remain in control, and buying is again justified.

The most notable bounce came from South Korea. The Kospi rallied by 4% after Thursday's sell-off sent it to its lowest close since April, while Samsung Electronics and SK Hynix each gained more than 4% after plunging by over 10% on Thursday. The S&P 500 is also clawing back losses after three down days. It's worth noting that the market had already been recovering before Warsh spoke, as pressure on semiconductors eased — his remarks simply added further optimism.

Warsh offered little about policy direction or the near-term US economic outlook beyond reaffirming the Fed's commitment to price stability. He called AI possibly the most significant change for the US and global economy in his lifetime and described it as a medium-term supply-side positive. "I don't prejudge meetings," Warsh said in Bangkok, adding that he doesn't believe in committing to moves ahead of meetings this year.

The market reaction was quick. The odds of an October rate hike fell to about 15% from more than 25% on Thursday. Warsh's refusal to commit to another interest rate hike led to partial unwinding of aggressive tightening bets, and his saying that he's not pre-deciding policy after strong inflation data helped restore risk appetite. Bonds remained a little weaker on the day after yields eased across the curve on Thursday.

Recall that September's quarter-point rate hike was the Fed's first since 2023 and had unanimous support from all 19 voting members, with a majority viewing another hike this year as possible. In recent weeks, several officials signaled that further tightening might be needed but emphasized they have time to gather data.

Other markets were quiet. Gold was little changed near $4,172/oz versus $4,145.80 on Thursday, while Brent eased by 0.7% to $105.20/bbl after trading at $106.30 on Wednesday.

All of this suggests that, for now, with the Fed unwilling to commit to more rate hikes and oil trading near $105, the equity rebound can continue. However, I don't see it as a durable reversal. If tech earnings disappoint, the market would likely resume risk-off behavior quickly, and the dollar would benefit from higher rate expectations. Without broader sector participation and stabilization in semiconductors, I expect indices to remain vulnerable.

As for S&P 500 technicals, the immediate task for buyers today is to overcome the resistance level of $7,756. That would show upside momentum and open a move toward $7,774. Holding $7,793 is also a priority for bulls to strengthen their position. If the price moves lower amid falling risk appetite, buyers must show up near $7,737. A break below that level would likely push the index down to $7,718 and open the way to $7,698.

Washington is exerting downward pressure on prices. IEA members agreed to release the remaining 100 million barrels after persistent US requests. Donald Trump is pressing to reduce high gasoline and diesel prices at home because energy costs driven by the US-Iran conflict are a major voter concern ahead of next month's midterm elections.

Uncertainty around physical flows from the Persian Gulf remains elevated, even though the situation seemed to calm earlier in the week. US Central Command confirmed that the Singapore-flagged container ship GFS Pride sank in the Strait of Hormuz this week after being struck by a projectile attributed to the Islamic Revolutionary Guard Corps. Still, more than 40 vessels transited the strait in the past day, so flows continue — which is why the market is reacting cautiously rather than panicking.

Geopolitics remains worrying. Trump did not rule out strikes on Iran after the elections, and CNN reported that the US has developed strike plans that could include new weapons. Many analysts have raised the probability of conflict escalation from 35% to about 65%, arguing the current standoff is increasingly unstable for the US. For oil, that means any easing of tensions may be temporary, and the risk of price spikes remains the main concern.

US data underscore the market's tightness. US crude inventories fell by 8.6 million barrels last week — the largest weekly draw since February — and industry data had pointed to an 11.1 million barrel decline.

That matters for inflation and the Federal Reserve. Expensive oil supports consumer and producer price pressures already visible in September's data, and Kevin Warsh did not promise further action. Thus any Brent advance will bring policy rates back into focus, while price falls would give the dollar and equities a respite.

As long as the US continues to release reserves and the flow of ships through Hormuz persists, Brent will likely trade around $104–106, and WTI will narrow the gap with the European grade. The risk is asymmetric: escalation with Iran or fresh attacks on shipping could quickly push prices above $106, while a sustained decline would probably require a genuine diplomatic breakthrough.

Buyers need to take the nearest resistance at $98 to target $101, above which a breakout will be difficult. The farther upside target is the $104 area. On the downside, bears will try to seize $95; if they succeed, a range break would damage bull positions and push oil down to $92, with a prospect of extending to $89.

Warsh said nothing at the IMF meeting that would destroy expectations of a pause in October, and he gave the market few hints before the blackout period, which starts Saturday and runs until the meeting in two weeks. The probability of a rate increase at that meeting fell to about 17%. That is constructive for gold, because a hike would pressure a non-yielding asset.

Still, the support is limited. Gold rose on Thursday partly because doubts about the AI investment boom pushed investors out of tech stocks and rising bond demand pushed yields down. Today equity selling eased, and Treasury yields ticked up modestly across the curve, so the factor that helped gold yesterday has partially faded. Note that yields remain the principal guide for the metal.

Against this background, gold looks set to finish the week marginally lower. It is being pulled down by the inflation suite for September — producer prices and retail sales — which surprised to the upside and earlier reinforced bets on an October hike. Since the US–Iran conflict began in late February, the metal has lost about a fifth of its value as the conflict disrupted energy markets, fuelled inflation, and prompted central banks to tighten, with the Fed raising rates last month for the first time since 2023.

All this suggests that until the Fed gives a clear signal in December and yields remain elevated, gold will trade in a narrow $4,150–4,200 range. If oil weakens and inflation shows signs of cooling, I expect a move toward the top of that range; but without lower yields and sustained momentum above $4,200, I don't expect a breakout. If new data revive rate-hike bets, the metal will come under renewed pressure.

Buyers need to take the nearest resistance at $4,192 to target $4,249, above which a breakout becomes difficult. The farther upside target is the $4,304 area. On the downside, bears will try to seize $4,124; if they succeed, a range break would deal a serious blow to bull positions and push gold down to $4,062 with the prospect of extending to $4,047.

The mechanics are simple. Funding is a periodic payment between futures buyers and sellers that keeps contract prices close to spot. When funding is positive, long positions pay; when negative, shorts pay. A drop into negative territory means sellers outnumber buyers and are willing to bear a cost to hold their positions. Last week, funding dipped into negative territory, but not this deep—around -0.0043% in early October. Now the move has accelerated for a clear reason: September US CPI printed above expectations, and yesterday's PPI surprised even more. Producer prices rose 1.3% month-on-month versus 0.5% expected, the annual rate hit 6.3% versus a 5.3% forecast, and core PPI rose 0.7% month-on-month and 5.0% year-on-year. On those prints, Bitcoin briefly dipped below $80,000 and then returned above $81,000.

In practice, negative funding is a double-edged signal. On one hand, it confirms persistent selling pressure and the popularity of short bets. On the other, crowded short positions create the risk of a sharp short-squeeze: if price unexpectedly moves up, shorts will be forced to cover and that accelerates the rally. So funding alone is not decisive.

The Fear & Greed Index complements the picture. Yesterday it fell to 52 — 11 points below the previous day — and other feeds showed 53 versus 62–63 earlier in the day, shifting the gauge from greed into neutral territory. The 7-day average is about 60, the 30-day about 66, and the annual high was 82 on August 26. Different trackers use different methodologies and some register lower values down to the fear zone, but the direction is the same: optimism is evaporating quickly. Negative funding and a cooling fear-and-greed index suggest the market is shifting from summer euphoria to caution, which typically precedes either further declines or a violent reversal driven by crowded short positions.

For Bitcoin, the price trades in a narrow range between support at 81,900 and resistance at 82,400, with outer boundaries at 81,300 and 83,100, and the plan centers on two mirror directions: full breakout and rejection scenarios. There are two entries for buying. First, a confirmed breakout above 82,400: buy with a target at 83,100, take profit there, and consider a short on the pullback, provided price is above the 50-day moving average, and the Awesome Oscillator is above zero. Second, a rebound off 81,900 if the downside breakout is unconfirmed and the drop proves false: buy with a return first to 82,400, then to 83,100.

Sales are symmetric. On a confirmed break below 81,900, consider a short targeting 81,300, provided the moving average is above price and Awesome is below zero. If the breakout above 82,400 fails and price returns below the level, short from resistance with a return to 81,900, then to 81,300.

For Ether, the logic fully mirrors Bitcoin on its own price scale: inner range between support 2,431 and resistance 2,455, outer bounds 2,407 and 2,486. Buy on a confirmed breakout above 2,455, targeting 2,486, where I take profit and consider a short on the pullback; the same conditions apply: price above the 50-day moving average and Awesome above zero. Buy on a rebound off 2,431; if the downside breakout is unconfirmed, go first to 2,455, then to 2,486.

For selling, a confirmed break below 2,431 opens a short targeting 2,407, provided the moving average is above price and Awesome is below zero. A rejection from 2,455 when the upside breakout fails gives a short with a return to 2,431, then to 2,407. Both indicators filter out false moves rather than serving as standalone reasons to enter early, and decisions are made only after price confirms the specified levels.

A price test at 157.90 occurred as the MACD indicator began moving up from the zero line, confirming a good entry point to buy the dollar. As a result, the pair rose toward the target area 158.13.

The yen is holding up weaker against the dollar than it may seem. The dollar found support after yesterday's US data, enough to push it higher against the yen. US PPI for September rose 1.3% month-on-month versus 0.5% expected. Retail sales rose 0.8% versus 0.3% expected, and the Empire Manufacturing index jumped to 25.5 versus 10.3 expected (7.6 previously). For USD/JPY, what matters is not the print itself but the impact on US Treasury yields and Federal Reserve-rate expectations — a December hike is already priced in.

Support for the yen comes from Bank of Japan board member Junko Koeda. She warned against excessive caution on rate hikes and said the neutral rate is noticeably above 1%, so the bank has room to raise from the current 1.25%. This aligns with Kazuo Ueda's October 6 remarks about continuing hikes; the market prices in roughly a 25% chance of a BOJ move on October 30.

In my view, as long as US data do not trigger a new dollar rally and the BOJ remains hawkish, the yen should hold its positions. A sharp rise in US yields remains the main risk, but yesterday's prints did not produce that.

For intraday strategy, I will mainly rely on Scenarios 1 and 2.

Scenarios to buy

Scenario 1: Buy USD/JPY today near 157.97 (green line on the chart), targeting 158.33 (thicker green line). I will exit long positions at 158.33 and open short positions there, aiming for a 30–35 pip retracement. It is best to return to buying the pair on corrections and sizable pullbacks. Important: before buying, ensure MACD is above zero and just beginning to rise.

Scenario 2: Also consider buying if price tests 157.81 twice while MACD is in the oversold area. That would limit downside potential and trigger a reversal higher. Expect moves to 157.97 and 158.33.

Scenarios to sell

Scenario 1: Plan to sell USD/JPY only after a break below 157.81 (red line on the chart), which should lead to a rapid decline. Sellers' key target is 157.54, where I will exit shorts and immediately open longs (aiming for a 20–25 pip reversal). Sellers can return at any moment — you need any hint from the central bank. Important: before selling, ensure MACD is below zero and just beginning to fall.

Scenario 2: Also consider selling if price tests 157.97 twice while MACD is in the overbought area. That would limit upside potential and trigger a reversal down. Expect declines toward 157.81 and 157.54.

What's on the chart:

Thin green line — entry price where you can buy the instrument.

Thick green line — approximate price where you can place Take Profit or manually lock in profits, because further upside above this level is unlikely.

Thin red line — entry price where you can sell the instrument.

Thick red line — approximate price where you can place Take Profit or manually lock in profits, because further downside below this level is unlikely.

MACD indicator. When entering the market, it's important to consider overbought and oversold zones.

Important. Novice Forex traders must be very cautious when deciding to enter the market. It is best to stay out before major fundamental reports to avoid getting caught in sharp price swings. If you decide to trade during news releases, always place stop orders to minimize losses. Without stop orders, you can quickly lose your entire deposit, especially if you don't use money management and trade large volumes.

Remember: successful trading requires a clear trading plan, like the example above. Spontaneous trade decisions based solely on the immediate market situation are, by definition, a losing strategy for an intraday trader.

A price test at 1.3243 occurred after the MACD indicator had already moved far below the zero line, limiting the pair's downside potential. A second test of 1.3243 triggered Buy Scenario 2 and resulted in a 30-pip rise.

US data remained only background for the pound. The dollar found temporary support but lacked the strength to rally against sterling. US PPI in September rose 1.3% month-on-month versus 0.5% expected and accelerated to 6.3% year-on-year from 5.6%. Retail sales rose 0.8% versus 0.3% expected, and initial jobless claims were 199k versus 200k expected. For the Federal Reserve, these prints strengthen the case for a December hike, but the market had priced that in long ago. The key bullish case for the pound came from the UK: August GDP rose 0.1% month-on-month versus an expected -0.1%, three-month growth was +0.7% versus +0.5%, industrial production jumped 0.8% month-on-month versus -0.1% expected, and the goods trade deficit narrowed to £18.0bn. These figures bolster the Bank of England hawks: Huw Pill, Megan Greene and Catherine Mann voted in July for immediate tightening (Bank Rate is 3.75%). With that backdrop, the pound has double support—strong domestic data and no fresh driver for the dollar.

Today's UK calendar is empty for Friday, which is supportive for the pound. With no fresh UK releases to revise market expectations about BoE policy, the recent positive momentum can persist. I think the pound has a good chance of holding gains through the end of the week without new domestic news.

For intraday strategy I will mainly rely on Scenarios 1 and 2.

Scenarios to buy

Scenario 1: Buy the pound today near 1.3305 (green line on the chart), targeting 1.3337 (thicker green line). I plan to exit long positions at 1.3337 and open short positions there, aiming for a 30–35 pip retracement. Expect pound gains today as a continuation of the trend. Important: Before buying, ensure MACD is above zero and just beginning to rise.

Scenario 2: Also consider buying if price tests 1.3287 twice while MACD is in the oversold area. That would limit downside potential and trigger an upward reversal. Expect moves to 1.3305 and 1.3337.

Scenarios to sell

Scenario 1: Plan to sell the pound after a break below 1.3287 (red line). That should lead to a quick decline. Sellers' key target is 1.3265, where I will exit shorts and immediately open longs (aiming for a 20–25 pip reversal). Bad news would restore pressure on the pound. Important: before selling, ensure MACD is below zero and just beginning to fall.

Scenario 2: Also consider selling if price tests 1.3305 twice while MACD is in the overbought area. That would limit upside potential and trigger a downward reversal. Expect declines toward 1.3287 and 1.3265.

What's on the chart:

Thin green line — entry price where you can buy the instrument.

Thick green line — approximate price where you can place Take Profit or manually lock in profits, because further upside above this level is unlikely.

Thin red line — entry price where you can sell the instrument.

Thick red line — approximate price where you can place Take Profit or manually lock in profits, because further downside below this level is unlikely.

MACD indicator. When entering the market, it's important to consider overbought and oversold zones.

Important. Novice Forex traders must be very cautious when deciding to enter the market. It is best to stay out before major fundamental reports to avoid getting caught in sharp price swings. If you decide to trade during news releases, always place stop orders to minimize losses. Without stop orders, you can quickly lose your entire deposit, especially if you don't use money management and trade large volumes.

Remember: successful trading requires a clear trading plan, like the example above. Spontaneous trade decisions based solely on the immediate market situation are, by definition, a losing strategy for an intraday trader.

A price test at 1.1203 occurred after the MACD indicator had already moved far below the zero line, limiting the pair's downside potential. A second test of 1.1203 triggered Buy Scenario 2 and resulted in a 20-pip rise.

The euro weathered strong US data without serious losses — and that is an important signal. The dollar got only temporary support and lacked the strength to push harder against the single currency, even though the US prints were strong. US PPI for September rose 1.3% month-on-month versus a 0.5% forecast (and 0.5% in August) — the strongest monthly increase since March 2022. Core PPI gained 0.7% versus 0.3% expected, and retail sales rose 0.8% versus 0.3% expected. This package makes a December Federal Reserve hike more likely, but the market had long priced it in, so the reaction was muted.

Today EUR/USD depends on whether final eurozone inflation figures match the preliminary estimates. The first estimate showed September eurozone CPI at 3.8% year-on-year versus 3.2% in August, which is why the market has penciled in a final European Central Bank hike to 2.75% in December. The deposit rate is currently 2.50%, and the next meeting is October 29. Christine Lagarde has said energy will keep prices elevated into the first half of 2027, and September's 18.8% jump in energy fits that thesis.

If the final data are revised higher, the euro should continue to rise — a realistic scenario given Germany's September CPI of 3.3% versus 2.9% in August and a 1.9% monthly jump in producer prices. The headline CPI will show whether price pressure has become persistent, and the trade balance will indicate external demand.

For intraday strategy, I will mainly rely on Scenarios 1 and 2.

Scenarios to buy

Scenario 1: Buy the euro today near 1.1236 (green line on the chart), targeting 1.1269. I plan to exit at 1.1269 and also open short positions there, aiming for a 30–35 pip retracement from the entry. Expect euro gains today only after strong European data. Important: before buying, ensure MACD is above zero and only beginning to rise from it.

Scenario 2: Also consider buying if price tests 1.1215 twice while MACD is in the oversold area. That would limit downside potential and trigger an upward reversal. Expect moves to 1.1236 and 1.1269.

Scenarios to sell

Scenario 1: Plan to sell the euro after it reaches 1.1215 (red line on the chart). Target 1.1188, where I will exit short positions and immediately open long positions (aiming for a 20–25 pip reversal). Strong renewed pressure on the pair could return at any time. Important: before selling, ensure MACD is below zero and only beginning to fall from it.

Scenario 2: Also consider selling if price tests 1.1236 twice while MACD is in the overbought area. That would limit upside potential and trigger a reversal downward. Expect declines toward 1.1215 and 1.1188.

What's on the chart:

Thin green line — entry price where you can buy the instrument.

Thick green line — approximate price where you can place Take Profit or manually lock in profits, because further upside above this level is unlikely.

Thin red line — entry price where you can sell the instrument.

Thick red line — approximate price where you can place Take Profit or manually lock in profits, because further downside below this level is unlikely.

MACD indicator. When entering the market, it's important to consider overbought and oversold zones.

Important. Novice Forex traders must be very cautious when deciding to enter the market. It is best to stay out before major fundamental reports to avoid getting caught in sharp price swings. If you decide to trade during news releases, always place stop orders to minimize losses. Without stop orders, you can quickly lose your entire deposit, especially if you don't use money management and trade large volumes.

Remember: successful trading requires a clear trading plan, like the example above. Spontaneous trade decisions based solely on the immediate market situation are, by definition, a losing strategy for an intraday trader.

Producer prices were the main shock. The PPI rose by 1.3% in September versus a 0.5% forecast and a 0.5% gain in August (0.2% in July). It was the largest monthly jump since March 2022 (then +1.7%). On a year-over-year basis, producer price inflation accelerated to 6.3% from 5.6% a month earlier (consensus 5.3%), marking the highest reading since December 2022 (6.4%).

Where the pressure came from is revealing. Goods prices jumped by 2.6%, the largest monthly rise since the series began in December 2009. Energy accounted for more than 80% of that move, climbing by 10.8%, with gasoline up 20.3%. Food rose by 1.2%, while core goods (ex-food & energy) were up just 0.3%. Services gained 0.8%, the strongest monthly increase since April, with trade margins contributing about half of that (up 1.4%) and transport & warehousing costs rising by 3.4%.

Core measures were also hot. PPI ex-food & energy rose by 0.7% (consensus 0.3%, 0.2% in August), and on a year-over-year basis, it accelerated to 5.0% from 4.8% (consensus 4.4%). The measure, excluding food, energy, and trade services, added 0.5% after 0.3% in August. The losers here are companies unable to pass higher input costs to customers; winners are those with pricing power that have already raised margins.

Retail sales confirmed resilient demand. Headline retail receipts rose by 0.8% in September (consensus 0.3%), though August was revised up to 1.3%. Industrial surveys painted a mixed picture: the Philly Fed index fell to 20.9 (consensus 26.5, 37.8 prior), while the Empire Manufacturing index jumped to 25.5 (consensus 10.3, 7.6 prior). The labor market remains firm: initial jobless claims were 199k (consensus 200k, 198k prior), while continuing claims matched expectations at 1,710k (vs. 1,714k). Commercial inventory levels added 0.4% in August as expected, after +0.9% the month before.

What this means for the Fed is straightforward. Producer inflation typically feeds through to consumer prices with a lag, so PPI strength implies continued CPI pressure in the coming months. Combined with the hotter-than-expected core CPI, the data undercut John Williams's suggestion that a single hike this year might suffice. In my view, a December rate increase now looks highly likely, and hawkish votes from officials such as Beth Hammack and Ostan Gulsby carry more weight. The October 27–28 meeting will probably be a pause, but guidance toward December should be firm.

So why didn't the dollar rally further? Because the market had already priced in a hawkish Fed, and bond markets were dominated by safe-haven demand that pushed yields down amid AI-related equity selling. At the same time, the euro, the pound, and the yen had their own supports — notably strong UK GDP for the pound. The dollar's failure to run on such tough numbers is itself a signal: it suggests that market expectations for further near-term Fed tightening are mostly exhausted.

My outlook: unless new evidence emerges that the Fed will be more aggressive than currently priced, the dollar's upside will be limited, and rallies will attract sellers. If yields continue to decline due to demand for Treasuries, I expect some pullback in the dollar against the euro, the British pound, and the yen. If inflation keeps surprising to the upside and the Fed reaffirms further hikes, the dollar will reclaim the initiative.

EUR/USD technicals

Buyers need to reclaim 1.1241 to target a test of 1.1275. From there, a push to 1.1310 is possible, but doing so without support from large players will be difficult. On the downside, I expect sizable buyer interest around 1.1193. In case of subdued buying activity in this area, wait for a decline to the 1.1156 low or consider long positions from 1.1117.

GBP/USD technicals

Sterling buyers should reclaim near the resistance level of 1.3310 to target 1.3340. A break above that mark would open a path to 1.3370. On the downside, bears will try to take control at 1.3275. A break below that level would hit bulls and could push GBP/USD toward 1.3230 and then 1.3200.

Technical Analysis and Price Action

Price Channel Structure: The overall trend has shifted decisively from bearish to strongly bullish. The price has fully exited the previous downward channel and is now positioned within a primary bullish channel (in blue) and an accelerated sub-channel (in pink/red). The upward movement has intensified, with the price touching the upper boundaries of the sub-channel and surpassing previous highs—a clear sign of strong buying pressure.

Interaction with Pivot Levels: Crude Oil rallied from lows near the first weekly support (Weekly S1) at 87.94, moving past the weekly pivot point at 90.57. The sharp ascent continued, breaking through the first weekly resistance (Weekly R1) at 94.27, followed by a breach of the second weekly resistance (Weekly R2) at 96.90, as the asset eyes even higher levels.

Key Support and Resistance Levels

Major Resistance Levels:

First Resistance: 97.80 – 98.50 (new intraday highs and the upper boundary of the sub-channel). Second Resistance: 100.60 (Weekly R3).

Pivot Resistance: 102.00 and above (should the major bullish wave continue).

Key Support Levels:

First Support: 96.90 (formerly Weekly R2; currently acting as support).

Second Support: 94.27 (formerly Weekly R1).

Main Support: 90.57 (Weekly Pivot).

Price Action Outlook and Trading Recommendations

Bullish Scenario (Primary):

A positive trend strongly dominates the price action as long as trading remains above 96.90, and—more importantly—above the Weekly Pivot at 90.57.

Recommendation: Buy on any minor corrective pullback toward the support levels near 96.90, or upon stabilization above this level.

Technical Targets: 98.50 as an initial target, followed by an extension toward the third weekly resistance (Weekly R3) at 100.60.

Stop Loss: A 4-hour candle close below 95.50.

Bearish Corrective Scenario (Alternative):

This scenario is triggered if intense selling pressure emerges, leading to a breakdown below current support levels and a return to a position below 94.27.

Confirmation Condition: A break below 94.27, followed by a 4-hour candle close beneath that level. Technical objectives: To pave the way for a deeper downward correction, targeting a retest of the weekly pivot point at 90.57.

The daily timeframe chart for Crude Oil (#CL) shows notable positive performance and strong bullish momentum. The price is currently trading at 97.21, having achieved a clear and sustained breakout above key pivotal levels, while continuing its upward trajectory within established bullish price channels.

Technical Analysis and Price Action

Price Channel Structure: Crude Oil is clearly moving within a broad, primary bullish channel (in blue) and an accelerated, secondary bullish channel (in pink/red). Following a corrective pullback, the price rebounded strongly from the channel's midline and the lower boundary of the secondary channel. It subsequently broke above the midline of the primary bullish channel and reached new highs, reflecting buyer dominance and robust medium-term bullish momentum.

Interaction with Monthly Pivot Levels: The price has successfully broken through and stabilized above the monthly pivot point at 94.39. This level, which previously served as a major resistance, has now transitioned into a solid support line, reinforcing the ongoing positive trend. Furthermore, the price is gradually approaching the next major resistance target: the first monthly resistance level (Monthly R1) at 102.65.

Key Support and Resistance Levels

Major Resistance Levels:

First Resistance: The 99.25 – 100.15 range (covering recent intraday highs and the upper boundary of the secondary channel). Second Resistance: 102.65 (Monthly R1).

Pivotal Resistance: 106.40 and above (the upper boundary of the primary ascending channel).

Key Support Levels:

First Support: 94.39 (Monthly Pivot and current pivotal support level).

Second Support: 82.07 (Monthly S1).

Major Support: 73.81 (Monthly S2 and the lower boundary of the primary channel).

Price Action Outlook and Trading Recommendations

Bullish Scenario (Primary):

A positive trend strongly dominates the daily timeframe as long as trading remains above the monthly pivot (94.39) and within the ascending channel.

Recommendation: Buy on any minor corrective pullback toward nearby support zones near 94.39, or upon stabilization above this level.

Technical Targets: 99.25 as an initial target, followed by an extension toward the first monthly resistance level at 102.65.

Stop Loss: A daily close below 93.00.

Bearish Corrective Scenario (Alternative):

This scenario is triggered if intense selling pressure emerges, leading to a downward break of the monthly pivot and a return below the 94.39 level.

Confirmation Condition: A daily close below 94.39. Technical Objectives: Paving the way for a deeper downward correction, targeting the 89.80 level, followed by the first monthly support level at 82.07.

Risk Management

Trading crude oil on a daily timeframe during periods of strong momentum requires strict adherence to rigorous capital management rules. Risk per trade should be limited to a maximum of 1% to 2%, and stop-loss orders must be carefully placed to protect the portfolio from the sharp volatility expected in energy markets.

US data yesterday were strong. Producer prices for September rose 1.3% month-on-month versus 0.5% expected (and 0.5% in August) — the strongest monthly increase since March 2022. The annual rate accelerated to 6.3%. PPI measures prices at the factory gate and typically leads retail prices, so the market reads it as a hint that pressure on consumer prices will persist. Energy contributed the most: gasoline rose about 20.3% month-on-month. Core PPI (ex food & energy) jumped 0.7% versus 0.3% expected and accelerated to 5.0% year-on-year from 4.8%.

Retail sales also beat expectations, up 0.8% month-on-month versus 0.3% expected, and August was revised up to +1.3%. That shows Americans keep spending despite higher prices. Regional surveys were mixed: Empire Manufacturing jumped to 25.5 (vs 10.3 expected), while the Philadelphia Fed index fell to 20.9 (vs 26.5 expected and 37.8 prior). Initial jobless claims were 199k vs 200k expected, so the labor market remains firm.

Recall headline CPI already rose to 3.7% year-on-year from 3.4%; together these prints support the case for a Fed hike in December. But the market priced that in long ago, so even strong data did not give the dollar a fresh impulse. For now, the euro and pound are more likely to react to their own local data than to US surprises.

That was a relief for European currencies. EUR/USD had earlier fallen on weak Eurozone industrial production (-0.5% m/m in August vs 0.0% expected), but strong US prints did not deepen that drop. The pound held up after UK GDP for August showed +0.1% m/m (vs -0.1% expected).

Today the euro has a clear reason to move: the final September eurozone CPI release in the first half of the day. The headline showed a preliminary +3.8% y/y vs 3.2% in August, with energy up 18.8% y/y after 14.3% previously. The final print will confirm or revise that figure; markets react only to surprises. An upward revision would support the euro and add to the European Central Bank's case against easing — the deposit rate is 2.50%, and markets expect a final hike to 2.75% in December.

The final core CPI (ex energy & food) will be particularly important: it shows whether price pressure is embedded in the economy. August core was 2.4%; the final September core reading will give a clearer picture and is more relevant to the ECB than the headline, since it's less explainable by oil moves.

External trade balance will also be released — a surplus would imply stronger foreign demand for the euro.

The UK has no important releases today, which helps the pound late in the week. With no fresh UK inflation, labor, or activity data to revise Bank of England expectations (Bank Rate currently 3.75%), the pound's moves will be driven mainly by external forces — notably dollar sentiment. After yesterday's reaction to firm US prints, finding new reasons for further dollar strength is not straightforward.

Momentum

For the euro, the breakout range is 48 pips wide, from 1.1193 to 1.1241. Price at 1.1226 sits in the upper part of that range — 33 pips above the lower boundary and only 15 pips below the upper. This morning the pair nearly reached 1.1241, rising to 1.1242, but it failed to hold and pulled back. This is a good example of why a single touch of a level is insufficient. If price closes convincingly above 1.1241, the next targets are 1.1275 and 1.1310. For that to happen, the euro needs strong eurozone inflation, and preferably a strong core reading as well. If price convincingly breaks below 1.1193, the targets would be 1.1156 and 1.1117 — but that scenario is further away, since price is currently 33 pips above the lower boundary.

For the pound, the range is narrower — 34 pips, from 1.3273 to 1.3307 — and price at 1.3297 lies 24 pips above the lower boundary and only 10 pips below the upper. This morning the pair rose to 1.3305, missing 1.3307 by two pips, then pulled back. If price closes above 1.3307, targets are 1.3341 and 1.3368; this scenario is supported by strong UK data and a softer dollar backdrop. If price closes below 1.3273, the targets are 1.3233 and 1.3209 — which would require a return of dollar strength, a trigger not currently apparent. I would skip the first reaction at the level and wait for a confirmed close.

Mean Reversion

For the euro, there are two reversion levels: 1.1250 and 1.1206. The upper one sits 9 pips above the breakout point 1.1241 and 25 pips below the first target at 1.1275. If price moves above 1.1241, reaches 1.1250, fails to hold, and returns below 1.1241, I would consider selling with a protective stop sensibly placed above 1.1275. The distance here is large enough that distinguishing a reversion from a true breakout is easier. But if price clears 1.1250 and closes above it, that is a confirmed breakout and selling there is not allowed. The lower level 1.1206 lies 20 pips below the current price and 13 pips above the breakout point 1.1193. If price falls to 1.1206 and quickly reverses up, buyers get a rebound idea with a stop below 1.1193. If price falls below 1.1193 and closes there, buying is not allowed.

For the pound, the upper level 1.3315 stands 8 pips above the breakout point 1.3307 and 26 pips below the first target at 1.3341. If price moves above 1.3307, reaches 1.3315, and then returns below 1.3307, I would consider selling with a stop above 1.3341. But if it clears 1.3315 and closes above, that is a breakout and selling is not allowed there. The lower level 1.3273 is unusual because it coincides with the downside breakout point; therefore, a mere touch of the level says nothing by itself. If price drops to 1.3273, quickly bounces and re-enters the range, buyers get a reversion idea with a stop below 1.3233. If price breaks 1.3273 and closes convincingly below, that is a downside breakout, and buying is not allowed. You can distinguish the two cases only by whether price closes beyond the level, so it's wiser to skip the first reaction in that zone.

The GBP/USD pair traded very quietly on Thursday despite at least three noteworthy reports in the UK and the US. Reports are not driving the market right now — expectations are. Traders continue to expect the most hawkish actions possible from the Federal Reserve, which keeps dollar demand high. The Bank of England's policy stance therefore has little immediate impact. Rising inflation in the euro area and the UK does not change this. In short, the market either ignores pound-positive factors or looks past them. This morning both Fed chair Kevin Warsh and BoE governor Andrew Bailey are due to speak. Bailey's stance is clear: the BoE has not yet begun tightening, while UK inflation could reach 4% this year, in his view. As for Kevin Warsh, yesterday's US inflation report could stiffen his hawkish tone, but that is not certain. Many FOMC members expect inflation to slow next year as transitory factors fade, and if that proves correct, the Fed would have little reason to raise the policy rate more than about twice.

Technically, the pound has continued to form a downward trend, but it is likely complete. Sterling has returned to the sideways channel it has traded in for three weeks. Essentially, we saw liquidity taken from the lower boundary, supporting the view that a move up to the 1.3301–1.3309 area is plausible.

On the 5-minute chart, four buy signals formed in the 1.3245–1.3248 area on Thursday. Traders could have opened long positions that may develop further today.

COT Report

COT reports for the pound show that non-commercial traders have dominated on the sell side for several months. The net position is negative, despite the preservation of the long-term uptrend. Given events in the Middle East, it is unsurprising that demand for the dollar remains fairly high in 2026. The war between the US and Iran has been formally paused, but a new conflict has begun within Yemen. The Federal Reserve's shift in monetary policy stance also supports the dollar, and the uptrend line has been breached. However, it was breached within a flat, so we do not consider the uptrend finished.

In the long term, the dollar continues to decline due to Donald Trump's policies, which is clearly visible on the weekly timeframe. The trade war will continue in one form or another for a long time, and Trump's policies aim, directly and indirectly, to weaken the US currency. The long-term uptrend remains intact. According to the latest COT report (October 6), the "Non-commercial" group opened 3,800 BUY contracts and 10,400 SELL contracts. As a result, non-commercial traders' net position fell by 6,600 contracts over the week.

Analysis GBP/USD 1H

On the hourly timeframe, GBP/USD may be completing a downtrend that lasted a full month with no solid reason. On the daily and weekly timeframes, price cleared liquidity at previous lows and remained inside sideways channels. Thus, one can expect the pound to rise at least to 1.3650, the upper boundary of the daily-chart sideways channel. The pound's rise needs no more justification than the dollar's rise over the past month. Moves inside a flat rarely depend on fundamentals or macroeconomics.

For October 16 we highlight the following important levels: 1.3042–1.3050, 1.3096–1.3115, 1.3179–1.3187, 1.3248, 1.3301–1.3309, 1.3369–1.3377, 1.3465–1.3480, 1.3588, 1.3671–1.3681. Senkou Span B (1.3245) and Kijun-sen (1.3204) may also provide signals. It is recommended to move Stop Loss to breakeven once price has moved 20 pips in the correct direction. Ichimoku lines may shift during the day and should be considered when defining trading signals.

Today Andrew Bailey will speak in the UK and Kevin Warsh in the US. Their remarks will be accompanied by the US industrial-production report. The pound is likely to continue leaning toward recovery.

Summary of the above analysis:

Traders may consider the 1.3245–1.3248 area as a target for short positions if price rebounds from the 1.3301–1.3309 area. A close above 1.3301–1.3309 would allow the 1.3369–1.3377 area to be considered as targets for long positions.

Explanations for the illustrations:

• Price support and resistance levels (resistance/support) — thick red lines around which movement may end. They are not sources of trading signals.
• Kijun-sen and Senkou Span B lines — Ichimoku indicator lines transferred to the hourly timeframe from the 4-hour timeframe. They are strong lines.
• Extreme levels — thin red lines from which the price previously bounced. They are sources of trading signals.
• Yellow lines — trendlines, trend channels, and any other technical patterns.
• Indicator 1 on the COT charts — the size of the net position of each trader category.

The EUR/USD pair recovered quite well overnight on Thursday after Wednesday's collapse on US data, and we view this recovery as a positive signal. First, the pair has finally decisively broken the trendline. Second, the euro showed a more or less confident rise for the first time in a month. Third, the US dollar cannot rise forever, day after day. Fourth, the market has already priced in the dollar's bullish factors. Fifth, the pair needs a correction after a month-long decline. Thus, a meaningful correction may be beginning now—at best, an uptrend on the hourly chart. Yesterday's macro backdrop had no visible effect on trader sentiment, which again shows that traders are largely ignoring reports and releases. Eurozone industrial production was weak, yet the euro did not fall, which had not been the case in recent weeks. Both US reports could have triggered renewed dollar strength, but they did not. We especially note the US PPI, an inflation measure — if inflation rises, the logic is "the Fed will be more hawkish, buy the dollar." Yesterday that chain of logic did not work.

Technically, the downtrend may be complete, since the trendline has been breached. The market bought the dollar for five weeks on any pretext, but every story ends. The euro is now heading toward the Senkou Span B line. We believe price must clear that line to start a sustained uptrend.

On the 5-minute chart, price bounced several times from 1.1221 on Thursday, offering traders short positions. However, price traded mostly sideways with minimal volatility during the day. Therefore, none of the intraday signals produced profits — nor losses — since price could not close above 1.1221.

COT Report

The latest COT report is dated October 6. The weekly timeframe illustration clearly shows that the net position of non-commercial traders remains "bearish" and has declined significantly in 2026 due to geopolitical events. Traders have been reducing euro exposure in favor of the US dollar over the past six months. Trump's policies have not changed, but the dollar has long served as a "reserve" currency.

However, we still do not see any fundamental factors that would further strengthen the US currency. The war in the Middle East made the dollar temporarily super-attractive, and the Federal Reserve's monetary policy stance surprised the dollar for the second time this year. In the long term, the euro could fall as low as $1.08 (the trendline), but the uptrend will remain relevant. Yet in recent weeks the market accounts only for positive factors for the dollar and ignores everything else.

The positioning of the red and blue indicator lines points to an approximate parity between bulls and bears. During the last reporting week, long positions in the "Non-commercial" group increased by 4,800, while shorts rose by 40,900. Accordingly, the net position decreased further by 36,100 contracts over the week.

Analysis EUR/USD 1H

On the hourly timeframe, the EUR/USD pair finally has the opportunity to form an uptrend. If you also look at the daily and weekly timeframes, it becomes clear—the odds of a strong, lasting trend remain high. Throughout 2026, "black swans" aided the dollar and arrived in the market almost in flocks. However, any long-term rise in the dollar is a correction. Perhaps that correction is now complete?

For October 16 we highlight the following levels for trading — 1.1092, 1.1154–1.1165, 1.1221, 1.1274, 1.1362–1.1368, 1.1461–1.1473, 1.1536–1.1542, 1.1585, 1.1657–1.1665, as well as Senkou Span B (1.1271) and Kijun-sen (1.1178). The Ichimoku lines may shift during the day, so account for this when determining trading signals. Don't forget to move your Stop Loss to breakeven once price has moved 15 pips in the correct direction. This will protect against potential losses if the signal proves false.

On Friday, the Eurozone will publish the second estimate of inflation, which is unlikely to differ from the preliminary reading. In the US, Fed chair Kevin Warsh will speak (which could be market-moving), and the industrial-production report will be released (which is unlikely to attract much attention).

Summary of the above analysis:

Traders may consider targets for short positions near 1.1178 and 1.1165 if price rebounds from 1.1221. If price breaks above 1.1221, consider targets for long positions in the 1.1271–1.1274 area.

Explanations for the illustrations:

• Price support and resistance levels (resistance/support) — thick red lines around which movement may end. They are not sources of trading signals.
• Kijun-sen and Senkou Span B lines — Ichimoku indicator lines transferred to the hourly timeframe from the 4-hour timeframe. They are strong lines.
• Extreme levels — thin red lines from which the price previously bounced. They are sources of trading signals.
• Yellow lines — trendlines, trend channels, and any other technical patterns.
• Indicator 1 on the COT charts — the size of the net position of each trader category.

The GBP/USD currency pair posted a fairly strong rally on the fourth trading day of the week, the first reasonable move in the market in several weeks. The US dollar should begin a prolonged, powerful decline, driven by several factors rather than any single report. The US inflation report changed nothing about the Federal Reserve's plans or market expectations. So on what basis was the dollar supposed to have risen? We believe the situation is actually more complex than it appears at first glance.

First, we want to remind readers that the pound remains within sideways channels, at least on the daily and weekly timeframes. Yesterday's drop in the pair removed liquidity at the June 24 low. Thus, a deviation of the lower channel boundary occurred, which, by logic, should provoke a rise in the pound at least to the 1.3650 area. We should immediately note: anything can happen in the market. Even when all factors point one way, price can still move the other way. That happens because the market comprises a huge number of participants, and not all of them—or even those who do— make trading decisions based on fundamentals, macroeconomics, geopolitics, or technicals.

In other words, any news, pattern, technical signal, report, or event is merely a reason to think price will move in a given direction. How market makers — who manage tens or hundreds of billions — will behave at that moment is unknown to ordinary traders. So when we talk about illogical movement, we mean the news – market reaction link simply isn't working right now.

Thus the daily-timeframe flat is not canceled; the dollar's rise over the last month raises serious questions; the market still ignores even the most important pro-pound factors (for example, the Bank of England's readiness to begin tightening in early November and to raise rates roughly three times in total). So on what basis should we expect further dollar strength absent a correction? The market can keep buying the US currency—no one can stop it—but how long can the dollar keep rising without pause?

Our view remains unchanged. The US currency cannot continue rising based on the factors currently available to the market. If the GBP/USD decline continues, it will be as illogical as the prior move. As long as the daily-timeframe sideways channel remains in place, we do not consider a technical or speculative downtrend to be confirmed. We only remind you that a deviation from a channel boundary can be deep: price may fall further, take out stop losses, and then launch higher.

The average volatility of the GBP/USD pair over the last 5 trading days is 78 pips. For the pound/dollar pair, this value is considered "average." On Friday, October 16, we therefore expect movement inside a range bounded by 1.3174 and 1.3330. The higher linear-regression channel is turning down again. The CCI indicator entered the oversold area twice and also formed a "bullish" divergence, which warns of a possible end to the downtrend.

Nearest support levels:

S1 – 1.3123

S2 – 1.3062

Nearest resistance levels:

R1 – 1.3184

R2 – 1.3245

R3 – 1.3306

Trading recommendations:

The GBP/USD currency pair continues its illogical downward move. Donald Trump's policies will continue to exert pressure on the US economy, so we do not expect long-term appreciation of the US dollar. The year 2026 so far has been favorable for the dollar due to geopolitics and inflation, which forced capital to seek safety and prompted the Fed to return to monetary tightening. However, on the weekly timeframe, a flat range between 1.3150 and 1.3780 persists within a four-year uptrend, supporting expectations for medium-term pound appreciation. Consider long positions with targets of 1.3367 and 1.3428 if price is above the moving average. If price is below the moving average, bearish trading is favored, with targets of 1.3174 and 1.3123. Be cautious with short positions, as price is at the lower boundary of the long-term sideways channel!

Explanations for the illustrations:

• Linear regression channels help determine the current trend. If both are directed the same way, the trend is currently strong.
• The moving average line (settings 20,0, smoothed) defines the short-term tendency and the direction in which trading should be conducted now.
• Murray levels are target levels for moves and corrections.
• Volatility levels (red lines) show the likely price channel the pair will trade in over the next 24 hours, based on current volatility indicators.
• The CCI indicator — entering the oversold area (below -250) or the overbought area (above +250) — signals an imminent trend reversal in the opposite direction.

The EUR/USD currency pair rallied sharply on Thursday, which immediately panicked dollar bulls. Analysts scrambled to explain why the US currency fell after nearly a month of almost daily gains. People quickly get used to good news, and not everyone bothers to check whether there are real reasons for a move. In any unclear situation, it's much easier to cite "rising risk-off sentiment," "increasing geopolitical tensions," or "a stronger Fed hawkish stance." Those three explanations can justify almost any dollar rally at any time.

So what happened on Wednesday? Why did the market first drop about 100 pips and then rally about 130 pips? Did the US inflation report confuse traders? First, the report itself. US headline CPI rose to 3.7% — only 0.1 percentage point above forecasts. Core CPI rose to 2.6% — also only 0.1 percentage point above forecasts. No one denies inflation is rising and the Federal Reserve must respond with tightening. But right now most of the discussion concerns two hikes in total. In other words, whether inflation rises a bit or not, the Fed is still targeted toward roughly two rate increases.

Recall the Fed delivered its first hike in three years in September, even though inflation was falling at the time. In May, CPI was 4.2% and in August only 3.4%—and that didn't stop the Fed from tightening. Why? Because the Fed looks at other indicators and works from its own projections. For traders, headline and core inflation figures are a reference, but they are not the Fed's only guide. Inflation rising to 3.7% was not unexpected — a slowdown was not anticipated. "The Fed will continue tightening in December" was already priced in; no one expected a materially different outcome even before the unlucky inflation print.

Put simply, the inflation report changed nothing. Even the market didn't meaningfully raise its hawkish expectations, as it sometimes does. The probability of an October hike remains minimal. So what drove the dollar's drop? The inflation report was merely the trigger or the pull of the trigger. The dollar had risen almost every day for a month, with virtually no pullbacks or corrections. How long was that supposed to continue? The CCI formed four bullish divergences and entered overbought territory five times. On daily and weekly charts, the recent downward move is clearly a correction. The dollar has no remaining fundamental drivers left to push it higher (no unpriced factors). Can the dollar really keep rising against the euro and the pound for a whole month simply because the Fed plans two hikes — while the European Central Bank has already tightened twice and the Bank of England appears set for three tightenings?

The average volatility of the EUR/USD currency pair over the last 5 trading days as of October 16 is 73 pips and is characterized as "average." We expect the pair to move between the levels 1.1130 and 1.1276 on Friday. The higher linear-regression channel has turned down, indicating another trend change. The CCI indicator entered the oversold area for the fifth time and formed four "bullish" divergences, warning of the end of the illogical downtrend. However, the market is not responding to technical signals.

Nearest support levels:

S1 – 1.1169

S2 – 1.1108

Nearest resistance levels:

R1 – 1.1230

R2 – 1.1292

R3 – 1.1353

Trading recommendations:

The EUR/USD pair continues to move downward, but we still view the decline as a correction before a new uptrend. The global fundamental backdrop for the dollar remains negative, but in 2026, geopolitics and then the Fed's hawkish stance provided strong support to the US currency. With price positioned below the moving average, short positions are possible, targeting 1.1130 and 1.1108. Above the moving average, long positions are relevant, targeting 1.1276 and 1.1292.

Explanations for the illustrations:

• Linear regression channels help determine the current trend. If both are directed the same way, the trend is currently strong.
• The moving average line (settings 20,0, smoothed) defines the short-term tendency and the direction in which trading should be conducted now.
• Murray levels are target levels for moves and corrections.
• Volatility levels (red lines) show the likely price channel the pair will trade in over the next 24 hours, based on current volatility indicators.
• The CCI indicator — entering the oversold area (below -250) or the overbought area (above +250) — signals an imminent trend reversal in the opposite direction.