Market Digest

On Thursday, the US Dollar Index rose for the fourth consecutive trading day, surpassing the 99 level and closing up 0.56% at 99.39, reaching its highest level in over two months.
The benchmark 10-year US Treasury yield closed at 4.144%, while the 2-year Treasury yield, sensitive to Fed policy, closed at 3.605%.

Gold hit a record high of $4,059.05 but then fell sharply on Thursday (October 9), declining nearly 2% to close below the $4,000 level near $3,976.
The primary drivers of this drop were a stronger US Dollar and easing geopolitical tensions in the Middle East.

Meanwhile, crude oil prices gave up some risk premiums as tensions in the Middle East eased. WTI ended its four-day rally, briefly falling below $61, and closed down 1.29% at $61.17 per barrel; Brent crude closed down 1.2% at $65.01 per barrel.

Technical Analysis:

EUR/JPY – Consolidates Below 177.60 Resistance After Hitting Fresh Record High

Technical Analysis:
EUR/JPY is consolidating below 177.60 after hitting a fresh record earlier this week.
Momentum remains bullish with strong EMA alignment, but RSI near overbought levels and an upper Bollinger Band breakout suggest a potential short-term pullback before continuation higher.
A sustained break above 177.60 could open the path toward 186.60, while holding above 175.20 keeps the bullish structure intact.

Technical Indicators & Key Levels:

• RSI (14): 66 – Bullish signal
  

• MACD: MACD line > Signal line – Bullish crossover
  

• Bollinger Bands: Price above upper band – Overbought
  

• Moving Averages (D1): Price above 20, 50, 100 & 200 EMA – Long-term bullish
  
  

Key Levels:

• Resistance: 177.60, then 186.60
  

• Support: 175.20, then 172.40
  

GBP/USD – Tests 1.3300 Support Amid Deepening Selling Pressure and Weak UK Outlook

Technical Analysis:
GBP/USD remains under pressure after breaking below 1.3340, extending losses toward 1.3200 amid a stronger USD and ongoing UK fiscal uncertainty.
Momentum signals confirm bearish control, but proximity to the lower Bollinger Band and RSI near oversold could trigger a mild corrective bounce.
A sustained close below 1.3200 would target 1.3100, while reclaiming 1.3340 could shift sentiment toward resistance at 1.3640.

Technical Indicators & Key Levels:

• RSI (14): 36 – Bearish
  

• MACD: MACD line < Signal line – Bearish
  

• Bollinger Bands: Price below lower band – Oversold
  

• Moving Averages (D1): 20 & 50 EMA below price – Medium-term bearish
  

• 100 EMA: Price breaking above – Weakening bearish momentum
  

• 200 EMA: Price above – Long-term bullish
  

Key Levels:

• Resistance: 1.3340, then 1.3640
  

• Support: 1.3200, then 1.3100
  

XAU/USD – Consolidates Below $4,000 After Sharp Rally

Technical Analysis:
Gold’s explosive rally paused just below $4,000 as buyers digest gains and overbought indicators signal potential pullback.
All EMAs remain aligned to the upside, while RSI above 70 warns of exhaustion.
A breakout above $4,100 could accelerate the uptrend toward $4,200, while failure to hold $4,000 may trigger profit-taking toward 3,900 support.

Technical Indicators & Key Levels:

• RSI (14): 74 – Overbought
  

• MACD: MACD line > Signal line – Bullish
  

• Bollinger Bands: Price above upper band – Overbought
  

• Moving Averages (D1): Price above 20, 50, 100 & 200 EMA – Long-term bullish
  

Key Levels:

• Resistance: 4,100, then 4,200
  

• Support: 4,000, then 3,900
  

Economic News:

1. XAU/USD – Gold Slides Below $4,000 Amid Powell Anticipation and Geopolitical Shifts

Details:
Gold retreated sharply from its record high of $4,059 as traders booked profits following a tentative ceasefire deal between Israel and Hamas and a rebound in the US Dollar.

Impact on Markets:
XAU/USD: Dropped from $4,050 to test $3,950 before rebounding to $3,974.

2. USOIL – WTI Falls on Larger-Than-Expected EIA Build; Gaza Truce Eases Risk Premium

Details:
WTI eased after EIA data showed a +3.715M bbl crude build and higher production, with softer exports. Ceasefire headlines further trimmed Middle East risk premiums.

Impact on Markets:
USOIL: Declined from 62.60–62.80 to around 61.30

3. JPY – Yen Remains Weak as Markets Price Delayed BoJ Tightening

Details:
JPY softened after Sanae Takaichi’s LDP leadership win, with weak wage data and positive risk sentiment from the Gaza ceasefire pressuring the Yen.

Impact on Markets:
USD/JPY: Recovered from 152.30–152.40 to 153.10–153.20
EUR/JPY: Fell from 177.60 to 176.80–177.00
GBP/JPY: Retraced from 204.30–204.50 to 203.30–203.50
NZD/JPY: Drifted lower from 88.30 to 87.80–87.90

4. EUR – Euro Remains Heavy Amid French Politics; ECB Minutes Neutral

Details:
Political uncertainty in France continues after PM resignation. ECB minutes maintained neutral communication. Weak German trade data adds pressure.

Impact on Markets:
EUR/USD: 1.1550–1.1560
EUR/CHF: 0.9320–0.9325
EUR/GBP: 0.8690–0.8700
EUR/CAD: 1.6200–1.6225

5. GBP – Pound Softens as BoE Turns Cautious; Budget Concerns Cap Gains

Details:
BoE officials signaled conservative rate setting and highlighted global risk. UK fiscal uncertainty keeps risk premiums elevated.

Impact on Markets:
GBP/USD: 1.3280–1.3300
EUR/GBP: 0.8690
GBP/CHF: 1.0720
GBP/CAD: 1.8640

6. USD – Dollar Holds Near Two-Month High Amid Fed Divisions and Tariff Escalation

Details:
FOMC minutes revealed division on rate cuts. Trump reiterated tariffs up to 100% on selected imports.

Impact on Markets:
USD/CAD: surged above 1.4030, cooled near 1.4018
USD/CHF: 0.8070
AUD/USD: 0.6550
NZD/USD: 0.5740

Upcoming Economic Indicators – October 10

JPY: PPI YoY SEP: Forecast 2.7% | Previous 2.7%
MXN: Industrial Production MoM AUG: Forecast 0.3% | Previous -1.2%
CAD: Employment Change: Forecast 15K | Previous -65.5K; Unemployment Rate: Forecast 7.1% | Previous 7.1%
USD: Michigan Consumer Sentiment (Preliminary, October): Forecast 54.0 | Previous 55.1