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TD Securities’ Ryan McKay argues that Brent crude Oil is entering a higher-for-longer regime, with fair value estimated at $90-100/bbl once the Iran and broader Middle East conflicts conclude, narrowing to $80-90/bbl into H2 2027–2028. He highlights persistent risk premia, fragile Middle East flows, tight product markets and recovering global demand as key supports for elevated Brent pricing.

Brent fair value and risk premia

"We continue to see medium-term fair value for Brent crude oil in the $90-100/bbl region after the eventual conclusion of the conflict in the Middle East, with that fair value range contracting to $80-90/bbl into H2 2027 and 2028. This is because the market will require one to two years of surpluses to rebuild inventories and buffers to required levels."

"In recent weeks, this risk premium is translating somewhat into a fundamental reality with attacks beginning to weigh on flows, at least on a short-term basis. If flows begin to notably contract for weeks or months at a time again, the fair value estimates for crude move higher, and extreme upside scenarios would once again be in play."

"Without a conclusion to the conflicts in the Middle East and in Russia-Ukraine, a $10-20/bbl risk premium above our fair value remains viable, and we would expect the higher range to last for longer. If flows are notably and sustainably reduced again, either via escalation, IRGC tanker attacks or Houthi attacks on Saudi infrastructure, our view fair value would be at risk of moving significantly higher again."

"Without notable escalation and/or damage to Saudi infrastructure, the impetus for prices to continue moving higher from current levels is limited due to the largely normalized level of crude supply from the Middle East. Because of the improved supply and the elevated risk premium baked into prices, crude will remain extremely prone to diplomacy headlines and any sign of easing tensions. There also remains a risk that sky-high freight rates could cannibalize refiner margins leading to potential refiner run cuts, particularly in North West Europe."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

• Euro ticks higher against the US Dollar amid caution ahead of US Midterm elections.
• ING says Democrats have a 70-72% chance of taking both the House and the Senate.
• Investors also await the US JOLTS Job Openings and the flash Eurozone HICP data.

The Euro (EUR) trades marginally higher at around 1.1195 against the US Dollar (USD) during the European trading session on Tuesday. The EUR/USD pair ticks up as the US Dollar is under pressure amid caution ahead of United States (US) Midterm elections later in the day.

At press time, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades slightly lower to near 101.73.

Dollar outlook clouded as US midterm odds point to Democrat sweep

ING’s Chris Turner flags the US midterm elections as the key event risk for FX this week, noting that betting markets now give the Democrats a “70-72% chance of taking both the House and the Senate.” He argues that “one could make the case that the Dollar should come lower on such an outcome,” as a Democrat clean sweep would likely “lead to gridlock on the debt ceiling, a prolonged government shutdown next year and could encourage President Trump to pursue an even more activist foreign policy agenda.” Against that backdrop, Turner suggests investors will be weighing these political risks against the still-supportive mix of strong US growth, above-target inflation and ongoing Fed tightening for the Dollar and DXY around the 102.00 area.

On the economic front, investors await the JOLTS Job Openings data for September, which will be published at 15:00 GMT. According to estimates, US employers posted 7.13 million fresh jobs, slightly higher than 7.097 million in August.

In the Eurozone, investors await the preliminary Harmonized Index of Consumer Prices (HICP) data for October, which will be released on Wednesday. The data is expected to have a significant impact on European Central Bank’s (ECB) monetary policy expectations.

The HICP growth is expected to have remained at 3.9% Year-on-Year (YoY), faster than 3.8% in September. The core HICP – which strips off volatile components like food, energy, alcohol, and tobacco – is seen remaining steady at 2.5% YoY.

EUR/USD Technical Analysis

In the daily chart, EUR/USD trades at 1.1187, maintaining a bearish near-term bias as spot holds beneath the 20-day exponential moving average (EMA) at 1.1214. The pair continues to trade below this short-term trend gauge, suggesting rallies remain capped, while the Relative Strength Index (14) around 42 hints at moderating downside pressure but stops short of signaling oversold conditions.

On the topside, immediate resistance is located at the 20-day EMA at 1.1214, and a sustained break above this level would be needed to ease the current bearish tone and allow for a more constructive recovery phase. In the absence of clearly defined nearby support levels from the present dataset, traders may instead look to price action around recent lows to gauge whether selling momentum resumes or consolidative flows dominate.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann report a sharp drop in USD/CHF, with the pair closing down 0.80% and testing key supports. Intraday, they see potential for a brief break below 0.8165, though oversold conditions may limit follow-through. On a 1–3 week horizon, rapidly increasing downward momentum points to a move toward 0.8165 and possibly 0.8140, while resistance at 0.8255 must cap rallies to preserve the bearish bias.

Swiss Franc strength weighs on Dollar

"24-HOUR VIEW: USD dropped to a low of 0.8191 last Friday and then rebounded to close at 0.8250. Yesterday, we indicated that “momentum indicators are turning flat” and we held the view that USD “is likely to range-trade between 0.8225 and 0.8270.” We did not expect the sharp drop that sent USD to a low of 0.8174. USD closed sharply lower, down 0.80% at 0.8184. Today, USD could break below the major support at 0.8165. Given the deeply oversold conditions, USD might not be able to hold below 0.8165. The next support at 0.8140 is unlikely to come into view. Resistance is at 0.8200, followed by 0.8220."

"1-3 WEEKS VIEW: Last Friday (30 Oct, spot at 0.8240), we highlighted “the slight increase in downward momentum suggests USD could edge lower.” However, we held the view that “any decline should stay within a 0.8190/0.8290 range.” In a sudden and sharp move yesterday, USD broke below 0.8190 and plunged to a low of 0.8174. Downward momentum is increasing rapidly, and USD could decline to 0.8165, potentially testing 0.8140. To keep the momentum going, USD must hold below the ‘strong resistance’ level, now at 0.8255."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

• EUR/GBP softens to near 0.8345 in Tuesday’s early European session.
• The BoE is set to hike the interest rate at its November policy meeting on Thursday.
• German Retail Sales unexpectedly fell by 2.0% MoM in September.

The EUR/GBP cross trades with mild losses around 0.8345 during the early European trading hours on Tuesday. The British Pound (GBP) strengthens against the Euro (EUR) amid hawkish rate expectations from the Bank of England (BoE).

The BoE is likely to raise the Bank Rate to 4.0% from 3.75% at its November policy meeting on Thursday, according to economists polled by Reuters. This would be its first hike since August 2023, when inflation was still more than the BoE’s 2% target.

Traders will take more cues from the BoE Governor Andrew Bailey’s press conference. Any hawkish comments from the BoE policymakers could boost the British Pound (GBP) in the near term.

"While we don't expect a clear steer from the Committee on how many hikes they're planning, it's possible that the meeting minutes or Bailey ... signal that Bank Rate is unlikely to reach the level that is priced in by financial markets," said Alexander Harvey, UK economist at consultancy Oxford Economics.

Weaker-than-expected German Retail Sales data could weigh on the EUR. The figure fell by 2.0% MoM in September, versus a rise of 1.2% prior, below the market consensus of a 0.4% growth. On an annualized basis, Retail Sales arrived at -2.3% in September, compared to a 0.3% decline in August.

BoE seen kicking off tightening cycle but guidance may cap Pound gains

Strategists at Brown Brothers Harriman note that the upcoming “Bank of England (BoE) policy decision and Monetary Policy Report (MPR)” on Thursday is widely expected to mark the start of a new tightening phase, with the BoE “widely expected to start tightening with a 25bps hike to 4.00% after standing pat all year.” They point out that “firmer UK inflation and economic activity back the move,” while the vote is anticipated to split “7-2 with doves Alan Taylor and Swati Dhingra supporting a hold.”

However, BBH cautions that “BoE guidance and the updated MPR will test market expectations for 100bps of tightening over the next twelve months.” In their view, “persistent spare capacity across the forecast horizon would strengthen the case for pricing out hikes and limit GBP upside,” suggesting that even a hawkish policy shift may not translate into sustained Pound strength if the Bank’s projections remain subdued.

BoE’s Greene flags stalled wage disinflation, keeping GBP rate hike risks alive

BoE’s Greene speech scores 7.4 on FXS Speechtracker, exactly in line with Greene’s historic average, but the emphasis on stalled wage disinflation and greater risk of second-round effects marks a clear hawkish tilt. Greene’s focus on pay growth nearer 3.5%, wage disinflation stuck above levels consistent with 2% inflation, and an economy showing surprising resilience suggests limited appetite for rapid rate cuts and supports a firmer GBP bias.

The remark that labor market slack may have peaked reinforces the idea that underlying inflation pressures could persist, validating Greene’s call to proactively lean against second-round effects. Overall, the speech backs a narrative of sticky wage dynamics and resilient demand, which is supportive for GBP yields and keeps upside risks for the currency intact.

Technical Analysis: EUR/GBP retains a bearish vibe amid oversold conditions

In the daily chart, EUR/GBP remains under clear bearish pressure as price sits below the 20-period Bollinger middle band and the 100-day moving average, keeping rallies capped by a dense overhead cluster. The Relative Strength Index (14) around 22.7 is embedded in oversold territory, which hints that while downside momentum is still strong, the pair could be vulnerable to short-covering bounces rather than a sustained recovery unless key resistance is reclaimed.

On the topside, initial resistance appears at the Bollinger middle band near 0.8405, followed by the upper band around 0.8500, while the 100-day moving average at 0.8535 marks a more significant barrier for any corrective advance. On the downside, the lower Bollinger band at approximately 0.8310 offers immediate support; a decisive break below this level would open the door to a continuation of the downtrend toward fresh lows.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Tatha Ghose at Commerzbank expects Turkey’s October Consumer Price Index (CPI) to show a renewed acceleration in monthly inflation back above 2%. With Oil prices rebounding and tax cushions removed, he argues that continued rate cuts by the central bank undermine disinflation claims, suggesting that the Turkish Lira (TRY) will likely keep depreciating under persistent inflation and easing policy.

Higher CPI and ongoing monetary easing

"Turkey’s statistics office (Turkstat) will publish October CPI and PPI data this morning: the market consensus forecasts headline inflation at 29.5% y/y and core inflation at 28.5% y/y. As usual, we do not go by year-on-year rates: our translation into month-on-month change after seasonal adjustment works out to c.2.1% m/m for headline CPI and 1.9% m/m for core prices."

"An interim decline in imported energy prices probably helped September’s reading. This benefit is now reversing as oil prices quickly jumped again, while the remaining fuel-tax cushion has been removed."

"Istanbul CPI already points in the same direction. Although year-on-year inflation slowed to 32.5% y/y in October (from 33.6% y/y), prices increased by 2.47% m/m – the third consecutive acceleration from 2.11% m/m in September and 1.66% m/m in August. Food price also accelerated by 2.6% m/m after two unusually subdued months."

"Against this background, however, Turkey’s central bank (CBRT) will probably cut its one-week repo rate again by 100bp later this month. CBRT is now locked into a rate-cutting cycle, even if on paper, it says that it remains alert to upside inflation risk and will only decide on a meeting-by-meeting basis. A return of month-on-month inflation to the c.2% range, alongside continued monetary easing, will escalate doubts about the disinflation narrative. The lira has been depreciating steadily and will probably remain under pressure because of this."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

ING commodities strategists Warren Patterson and Ewa Manthey say Gold rebounded 1.85% after last week’s sharp sell-off, helped by lower Oil prices and bargain hunting. The metal recovered from a one-year low as easing US-Iran tensions reduced inflation concerns, but they caution that higher rate expectations and a stronger Dollar limit the scope for a sustained recovery.

Bounce tempered by rates and Dollar

"Gold rebounded on Monday after last week’s sharp sell-off, helped by the pullback in oil prices and bargain hunting at lower levels."

"The precious metal settled 1.85% higher on the day, recovering from its lowest level in a year, after signs of easing US-Iran tensions sent crude sharply lower."

"The drop in oil eased some of the inflation concerns weighing on gold, providing additional support."

"The recovery follows a difficult period for gold. It's caught up in a broader risk-off move and heavy selling across technology stocks. Geopolitical risks remain elevated, while expectations for higher interest rates weigh on sentiment."

"We expect gold to regain some ground following its recent correction. But the near-term outlook remains challenging amid expectations for higher rates and a stronger dollar, limiting the scope for a more sustained recovery."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)