Forex News
Federal Reserve (Fed) Vice Chair for Supervision Michelle Bowman said the central bank needs time to assess how financial markets and the US economy evolve following the latest interest rate hike before considering further policy action, according to Reuters.
Bowman signals cautious post-hike pause, keeping Dollar bulls watchful
Fed’s Bowman delivered a moderately hawkish message, with an FXS Speechtracker score of 6.2, slightly above the 5.9 historical average and signaling a tone that remains firm relative to the established baseline. The key remark that it will “take time to wait and see” how financial markets and the economy evolve after the last rate hike before any more action underscores a data-dependent pause rather than a clear pivot, which keeps expectations for further tightening alive but delayed. This stance suggests the Dollar may retain underlying support as markets price in a prolonged higher-for-longer rate environment, even if immediate hike odds are tempered.
The FXS Fed Sentiment Index fell by 1.42 points to 130.21, indicating a modest pullback in perceived hawkishness despite remaining well above the neutral 100 threshold. This configuration shows that, while the overall policy tone is still firmly in hawkish territory, the latest speech marks a slight softening in momentum, aligning with a cautious wait-and-see approach captured by the FXS Speechtracker.
Market reaction
The US Dollar (USD) shows little reaction to Bowman's comments, with the US Dollar Index (DXY) remaining broadly unchanged around 102.22 at the time of writing on Wednesday.
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
ING’s Frantisek Taborsky argues recent Central and Eastern European (CEE) FX and rates gains may not last. Czech inflation data show core rising to 3.1%, reinforcing expectations for a Czech National Bank (CNB) rate hike in November unless geopolitics improve. ING’s separate report warns of emerging inflation risks from energy and food, with higher global prices expected to pass through and undermine the region’s recent respite.
Inflation risks threaten CEE rally
"Market sentiment yesterday was mixed, reflecting a catch-up following Monday’s US close alongside natural gas prices hitting new highs. The latter, in particular, suggests that the CEE region cannot enjoy a respite for long."
"Yesterday’s inflation data from the Czech Republic confirmed a rise in core inflation from 3.0% to 3.1%. Although this is an increase of only one-tenth of a percentage point, it marks the highest figure since December 2023."
"More importantly, the underlying structure and accelerating momentum effectively cement the case for a CNB rate hike in November – barring a significant improvement in the geopolitical situation."
"Speaking of inflation, a new report we released yesterday discussed emerging inflationary risks for the CEE region stemming from energy and food prices."
"Until now, food prices have offset higher fuel costs in the region, keeping headline inflation in check. This dynamic is expected to shift in the coming months as we see a lagged pass-through of global prices into local inflation."
"While we saw a rally in FX and rates yesterday, we do not believe the rates rally is justified at this juncture, given the rising risk of higher inflation and the strong correlation observed recently between interest rates and energy prices. Consequently, we expect these gains to be short-lived."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- The US Consumer Price Index is expected to rise by 3.6% YoY in September.
- Annual core CPI inflation is expected to edge higher to 2.5% from 2.4% in August.
- The inflation report could influence the Fed’s policy outlook and drive the US Dollar valuation in the near term.
The US Bureau of Labor Statistics (BLS) will publish the September Consumer Price Index (CPI) data on Wednesday. The report is expected to show a further increase in headline prices and a small uptick in annual core inflation. Any divergence from analysts’ estimates could influence the Federal Reserve’s (Fed) policy outlook and impact the US Dollar’s (USD) valuation.
The monthly CPI is forecast to rise 0.6%, following the 0.4% increase recorded in August, while the annual reading is seen edging higher to 3.6% from 3.4%. Core CPI figures, which exclude volatile food and energy prices, are expected to rise 0.2% and 2.5%, on a monthly and yearly basis, respectively.
Crude Oil prices rose sharply in the first half of September before correcting lower in the second half. Still, West Texas Intermediate (WTI) gained about 5% for the month. In this period, diesel prices per gallon in the US increased from $5.6 to $6.38, rising about 14%.
Chart: https://fred.stlouisfed.org/series/GASDESW
Analysts at Societe Generale highlight diesel’s outsized role in shaping US inflation dynamics, noting that “few fuels are as deeply embedded in the US economy as diesel, with its importance spanning freight, agriculture, construction and industry.” This deep integration creates “a clear transmission channel from diesel prices into broader inflation,” and the bank stresses that “the empirical relationship is striking – diesel price changes explain roughly 70% of the variation in US inflation surprises.” Societe Generale calculates that “a 1% YoY increase in diesel prices is associated with a 0.06 percentage point rise in the inflation surprise,” underscoring how moves in this single fuel can materially influence headline inflation outcomes.
How could the US Consumer Price Index report affect EUR/USD?
Some relatively cautious comments on further policy tightening from Fed policymakers and the disappointing September labor market caused investors to scale back bets for a 25 basis points (bps) interest rate hike in October. According to the CME FedWatch Tool, markets are currently pricing in about an 80% probability of a policy hold at the upcoming meeting.
Fed Vice Chair for Supervision Michelle Bowman said there is "no urgent need for more rate moves this year," while Minneapolis Fed President Neel Kashkari told Bloomberg that if they keep raising rates, they will put different pressure on different parts of the economy. On a similarly cautious note, Fed Governor Christopher Waller said that they need to hike the policy rate further but added that they also need to be flexible about the pace. In the meantime, the Bureau of Labor Statistics reported that Nonfarm Payrolls rose by 29K in September, missing the market expectation of 90K by a wide margin, and the Unemployment Rate edged higher to 4.2% from 4.1% in August.
At this point, a significant upside surprise, at least a reading of 0.7% or higher, in the monthly CPI print could revive October rate hike expectations or confirm the federal funds rate will be higher than the current level in December, which currently has a probability of about 85%, as it would point to a spillover from high energy prices into the wider economy and consumer inflation. In this scenario, the USD could gather strength with the immediate reaction and cause EUR/USD to come under renewed selling pressure.
Conversely, a soft monthly inflation print of 0.4% or lower could reaffirm a policy hold in October. Even though such a reading is likely to weigh on the USD and help EUR/USD stabilize in the near term, it might not be enough to trigger a steady recovery, given markets’ waning confidence in the European Central Bank’s (ECB) ability to tighten monetary policy amidst the growing uncertainty surrounding France’s fiscal outlook and the widening spread between German and French government bonds, also called Obligations Assimilables du Trésor (OAT).
Finally, a monthly CPI print matching the market consensus, or coming in just 0.1 percentage points below it, could fail to materially alter the market pricing of the Fed rate outlook and have limited impact on the USD’s performance.
Analysts at MUFG/BTMU argue that Marine Le Pen’s, the main opposition party leader in France, fiscal plans are unlikely to materially alter the outlook for French government bonds before voters go to the polls, stating that “this alternative budget is unlikely to make much difference to the risks associated with OATs ahead of the election next year – especially given a plausible scenario of a presidential election run-off in the second round between Le Pen and the hard-left candidate Jean-Luc Melechon, who is now usually polling second on around 20% versus Le Pen on around 30%.” Against this backdrop of persistent political uncertainty and sensitivity to global rates moves, MUFG/BTMU conclude that “EUR/USD downside risks are set to prevail.”
Valeria Bednarik, Chief Analyst at FXStreet, notes: “The EUR/USD pair remains depressed near its lowest level since May 2025 in the 1.1150 price zone, and aims to extend its decline from a technical point of view. The daily chart shows the pair trading below all bearish moving averages, with the 20-day Simple Moving Average (SMA) gathering strong downward momentum at 1.1325. Technical indicators are turning marginally higher after reaching oversold readings, reflecting the near-term bounce rather than suggesting the pair has found an interim bottom.”
Bednarik adds: “Once the October low near 1.1150 gives up, EUR/USD can extend its slide initially towards the 1.1100 area, and then towards 1.1060. The next relevant support is the 1.1000 psychological threshold, although it seems unlikely that the pair will reach such a level just with the CPI release. Conversely, an extension of the ongoing recovery would meet initial resistance at around 1.1260, while once the area is cleared, the rally can continue towards the 1.1320 price zone.”
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
Economic Indicator
Consumer Price Index (MoM)
Inflationary or deflationary tendencies are measured by periodically summing the prices of a basket of representative goods and services and presenting the data as The Consumer Price Index (CPI). CPI data is compiled on a monthly basis and released by the US Department of Labor Statistics. The MoM figure compares the prices of goods in the reference month to the previous month.The CPI is a key indicator to measure inflation and changes in purchasing trends. Generally, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.
Read more.Next release: Wed Oct 14, 2026 12:30
Frequency: Monthly
Consensus: 0.6%
Previous: 0.4%
Source: US Bureau of Labor Statistics
The US Federal Reserve (Fed) has a dual mandate of maintaining price stability and maximum employment. According to such mandate, inflation should be at around 2% YoY and has become the weakest pillar of the central bank’s directive ever since the world suffered a pandemic, which extends to these days. Price pressures keep rising amid supply-chain issues and bottlenecks, with the Consumer Price Index (CPI) hanging at multi-decade highs. The Fed has already taken measures to tame inflation and is expected to maintain an aggressive stance in the foreseeable future.
OCBC strategists Sim Moh Siong and Christopher Wong note the US Dollar (USD) has rallied on higher US Treasury yields, energy prices and a hawkish Federal Reserve (Fed) bias, but still lacks conditions for a decisive move beyond its recent range. Calmer bond markets and potentially contained US inflation could curb further hawkish repricing, leaving the USD supported but without a clear breakout path in the near term.
Dollar supported but capped for now
"To break higher or not? That remains the key question for the USD. The DXY has rallied more than 3% over the past five weeks as markets priced a more hawkish Fed path and rising US Treasury yields amplified concerns about European sovereign debt."
"Our base case remains that the USD should stay well supported. However, we do not yet see the conditions for a sustained breakout from its recent range. Treasury market conditions have become noticeably calmer, with some of the technical factors that amplified the earlier surge in yields appearing to fade. That could reduce an important source of support for further USD gains."
"While inflation remains above the Fed's 2% target and justifies a restrictive policy stance, the need for aggressive tightening is less compelling if inflation is being driven primarily by supply-side factors such as energy costs and AI-related investment rather than overheating demand."
"Today’s CPI report is therefore critical. If the data confirm that underlying inflation pressures remain contained, markets may further scale back expectations for additional Fed tightening, limiting the USD's upside."
"We continue to expect only one additional Fed hike by mid-2027, compared with market pricing that still implies roughly three hikes. Unless inflation surprises materially to the upside, that gap leaves limited room for further hawkish repricing and argues against a decisive USD breakout in the near term."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
United Overseas Bank (UOB) strategists Quek Ser Leang and Lee Sue Ann describe choppy USD/JPY price action around 158.35, with Monday’s spike followed by a brief drop below strong support at 157.85. That breach has eased immediate upside pressure, and they now see the pair in a higher range-trading phase between 157.50 and 159.05. Despite a firmer underlying tone, their 1–3 months view still anticipates further Dollar-Yen weakness driven by increasing downward momentum.
Higher range consolidates after support breach
"24-HOUR VIEW: USD rose to a high of 158.75 on Monday. Yesterday, we indicated that “despite the relatively sharp rise, upward momentum has not strengthened much,” and we held the view that USD “is likely to trade within a range of 158.20/158.80.” The subsequent price movements did not unfold as expected, as USD fell sharply, but briefly, to 157.81 before rebounding to close at 158.29 (-0.20%). The choppy price action provides no fresh clues. Today, USD could trade between 157.95 and 158.70."
"1-3 WEEKS VIEW: After expecting USD to trade in a range since late last month, we highlighted the following yesterday (13 Oct, spot at 158.50): “Upward momentum is starting to build, and from here, USD could edge higher toward 159.05. USD must break clearly above this level before further sustained rise is likely. To sustain the momentum build-up, USD must hold above the ‘strong support’ level, now at 157.85.” However, USD broke below 157.85 as it fell briefly to a low of 157.81. The breach of our ‘strong support’ indicates that the immediate upward pressure has eased, and USD has likely moved back into a range-trading phase. That said, the firmer underlying tone suggests that USD is likely to trade within higher range of 157.50/159.05."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- XAU/USD extends its reversal from the $4,200 area to session lows below $4,150.
- Mild US Dollar weakness is keeping Gold from retreating further this week.
- Dovish comments from Fed's Williams added bearish pressure on the USD on Tuesday.
Gold (XAU/USD) extends losses on Wednesday, despite the lower US Treasury yields, with investors looking from the sidelines ahead of the release of September’s US Consumer Price Index (CPI) report and speeches from Federal Reserve (Fed) officials due later in the day. The XAU/USD pair has retreated below the $4,150 level after rejection at the $4,200 area on Monday, with technical indicators showing building bearish momentum.
Fed officials failed to provide any significant support to the US Dollar on Tuesday. New York Fed President John Williams said in a Bloomberg interview that the US central bank might have to raise interest rates once more this year, but he also affirmed that he sees no need to hike borrowing costs higher in 2027.
These comments contrast with the market expectations of at least two interest rate hikes next year, and increase interest in Wednesday's US CPI figures and Thursday’s Producer Price Index (PPI) data. The market consensus anticipates a further acceleration in consumer prices in September that would pave the path for another Fed rate hike, most likely in December.
Technical Analysis: Momentum indicators turn bearish
XAU/USD is showing a growing bearish momentum after failing to break the top of the monthly trading range, at the $4,230 area earlier this week. The 4-hour Relative Strength Index (14) has dipped below the key 50 level, hinting at fading bullish pressure, while the Moving Average Convergence Divergence (MACD) turned negative, reinforcing a corrective bias after the recent advance.
Price action has extended below Monday's and Tuesday's lows, in the $4,150 area, bringing the range bottom in the $4,070 area into focus. A confirmation below here would expose the $4,000 psychological area.
On the topside, a break of the mentioned $4,230 area (October 2 high) would confirm an inverted Head & Shoulders (H&S) pattern and shift the focus to the September 25 high, a few pips above $4,300.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
(This story was corrected on October 14 at 09:50 GMT to say that XAU/USD reached session lows below $4,150 and not session highs, as previously stated)
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
DBS Group Research economists, led by Chua Han Teng, say the Monetary Authority of Singapore (MAS) left its Singapore Dollar (SGD) Nominal Effective Exchange Rate (NEER) policy band unchanged at the October 2026 review after two earlier tightening moves. The pause reflects lower-than-expected 2026 inflation and expectations that slightly elevated price pressures will ease from mid-2027. DBS also revises Singapore growth and inflation forecasts higher.
MAS holds SGD NEER settings steady
"The Monetary Authority of Singapore (MAS) did not tighten its SGD policy a third time this year."
"The SGD NEER policy band’s slope, width, and mid-point were left unchanged at the October 14 review, following a “very slight” increase in the slope in July, which was less than the pace of the “slight increase” in April."
"Policymakers expect slightly elevated underlying price pressures in the near term, but see them easing more discernibly from the middle of 2027."
"Concurrently, economic growth in 3Q26 based on advance estimates was robust, but a steady expansion in the coming quarters would still result in a narrower positive output gap, capping underlying inflationary pressures."
"We account for stronger-than-expected expansion in the first three quarters of 2026, and our expectations for normalised but firm and above-potential growth in the coming quarters."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Silver prices (XAG/USD) fell on Wednesday, according to FXStreet data. Silver trades at $58.56 per troy ounce, down 1.06% from the $59.18 it cost on Tuesday.
Silver prices have decreased by 17.62% since the beginning of the year.
Unit measure | Silver Price Today in USD |
|---|---|
Troy Ounce | 58.56 |
1 Gram | 1.88 |
The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, stood at 70.78 on Wednesday, up from 70.31 on Tuesday.
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
(An automation tool was used in creating this post.)
- WTI falls as OPEC+ September output jumped 900,000 bpd, led by Saudi Arabia's production boost.
- Markets expect added diesel supplies from a US-Russia deal, which Moscow says is unrelated to peace talks.
- Trump announced Taiwan’s $4.4 billion investment in the Alaska LNG pipeline, citing falling energy prices.
West Texas Intermediate (WTI) declines after four days of gains, trading around $93.20 per barrel during European hours on Wednesday. Oil prices fall after OPEC+, the alliance comprising the Organization of the Petroleum Exporting Countries members and allies like Russia, reported a sharp September production increase of 900,000 barrels per day, averaging 39.07 million bpd. The surge was led by Saudi Arabia, which boosted output by over 2 million bpd.
Meanwhile, markets hope a US-Russia diesel deal will unlock additional supplies, though Moscow clarified the export agreement is unrelated to Ukraine peace talks, countering reports that it was meant to encourage negotiations.
Energy prices eased following an announcement by US President Donald Trump that Taiwan will purchase 30% of the gas produced by the Alaska LNG pipeline and invest approximately $4.4 billion in the project. This commitment adds to South Korea's previous $50 billion pledge toward the initiative. In his statements, Trump reiterated his expectation that energy prices will decline soon and predicted a swift resolution to the war with Iran.
However, energy traders remain cautious about the outlook. Escalating hostilities between Saudi Arabia and Iran-backed Houthi rebels continue to spark persistent fears of potential supply disruptions across the Middle East, keeping market sentiment guarded.
Oil policy calculus shifts as US midterms approach
Analysts at Rabobank highlight the political sensitivity around current energy prices, noting that “the Trump Administration does not want Brent crude oil at $106/bbl going into the midterm elections, just a month away.” They add that the White House “has said that he only plans to escalate offenses against Iran after the midterms are over, with what he hopes to be, a red wave,” underlining how the timing of US actions on Iran is being calibrated against the domestic electoral calendar and the perceived tolerance for higher Oil prices.
Technical Analysis: WTI falls despite ongoing bullish bias
In the daily chart, WTI US Oil trades at $93.20, retaining a bullish near-term bias as it holds above both the nine- and 50-day Exponential Moving Averages (EMAs). The alignment of price above these trend-following gauges suggests that the broader upswing remains intact, even after recent consolidation. The 14-day Relative Strength Index (RSI) at 55.07 sits comfortably above the neutral 50 line, hinting at steady, rather than overstretched, buying pressure, while the FXS Fed Sentiment Index near 131.63 points to a still-supportive macro backdrop for crude.
On the downside, immediate support is seen at the nine-day EMA around $91.73, with a deeper cushion at the 50-day EMA near $89.31, where dip-buying interest would likely re-emerge if prices retreat. With no clearly defined overhead technical barriers in the current dataset, the bullish structure suggests room for further gains as long as WTI continues to trade above these moving average floors; a daily close back under $91.73 would be the first sign that upside momentum is starting to fade.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
Geoff Yu notes that custody clients tracked by BNY Mellon’s iFlow have shifted back to net short Euro, with hedging activity driving a rotation out of the Eurozone into Switzerland, Nordic economies and the U.K. He stresses that EUR/USD is not yet aggressively underheld, leaving room for further selling and making a durable bottom in the currency unlikely until tightening is priced out of the curve.
Custody flows point to more downside
"iFlow shows custody clients are back to net short in euros. This was the default position for much of Q2 as markets scrambled for dollars, but the latest move is more euro-specific, driven by increased hedging among cross-border clients."
"The euro still isn’t aggressively underheld. The sharp swing in EUR holdings – from around 50% overheld relative to the rolling 1y average to slightly underheld – is striking, but in absolute terms current EUR shorts aren’t excessive."
"Unlike overall EUR holdings, EUR/USD holdings aren’t weak relative to recent history, suggesting more of the EUR hedging is taking place on the crosses. iFlow points to some rotation out of the Eurozone into Switzerland and the Nordic economies, where fiscal strength is unimpeachable, while the U.K. has also been a beneficiary."
"Weaker euro eases pressure to tighten elsewhere in Europe. As a byproduct, this rotation has pushed up effective exchange rates across the rest of Europe and, at the margin, reduced the need for tightening there."
"Current EUR holdings and valuations are a long way from 2024 levels, leaving room for further selling. We’re reluctant to call a bottom in the currency until tightening is priced out of the curve."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
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