Markets enter the new week caught between an escalating oil shock and a Federal Reserve edging closer to another rate hike. Brent crude touched $110 on Friday for the first time since May and settled at $109.69, up 4.7% on the week, as Iran stepped up attacks on shipping in the Strait of Hormuz, Houthi missiles targeted Saudi Arabia, and Ukraine’s strikes on Russian refineries unravelled the short-lived “energy ceasefire”. The spike revived inflation fears after a week of hot US data: consumer prices rose 3.7% year on year in September (3.4% in August), core CPI reached 2.6%, producer prices accelerated sharply and retail sales beat forecasts. After the CPI report, futures priced about a 52% chance of a rate hike at the October 27–28 FOMC meeting, up from roughly 22%, even though several Fed officials had signalled little urgency beforehand. The 10-year Treasury yield held near 5.10%, and the Nasdaq lost about 4% on the week, its worst since June, with the VIX jumping to around 20.
The week ended with a split picture: oil and the euro finished higher, Bitcoin was flat, and precious metals and Ethereum closed lower, with silver the biggest loser. The Fed decision on October 28 and the ECB decision on October 29 loom over every market, and headlines from the Gulf are likely to set the tone for the next five sessions. Below are our baseline views for the main assets.
Asset | Close, Oct 16 | Prev. week | Weekly change | Base case, Oct 19–23 |
EUR/USD | 1.1239 | 1.1202 | +0.3% | 1.1130–1.1300 |
Brent | $109.69 | $104.72 | +4.7% | $104–116 |
Gold | $4,186.70 | $4,216.30 | –0.7% | $4,100–4,300 |
Silver | $57.14 | $61.05 | –6.4% | $54.5–60.0 |
Bitcoin | $82,650 | $82,624 | 0.0% | $78,500–86,000 |
Ethereum | $2,429 | $2,488 | –2.4% | $2,250–2,600 |
EUR/USD
The pair closed the week at 1.1239, up about 0.3%, after printing a fresh 52-week low of 1.1113 on Wednesday in the wake of the hot US CPI report. It then rebounded by more than 1% to a weekly high of 1.1269 on Friday, while the dollar index slipped to about 101.6 from roughly 102.0 a week earlier. Daily and weekly technical indicators still point to Strong Sell, and the pair is trading right on its 50-, 100- and 200-day averages around 1.120–1.122, a sign of indecision. The Fed and ECB decisions are the next big tests; further gains in oil would weigh on the euro area, while a firm flash PMI on Friday could offer some support.
Base case: 1.1130–1.1300, with a cautious bias while the pair stays below 1.1269.
Resistance: 1.1269 and 1.1340.
Support: 1.1113 (52-week low) and 1.1050.
Brent
Brent rose about 4.7% to $109.69, its highest level since May, after touching $110.00 on Friday. At least nine commercial ships have come under attack near Hormuz since Sunday, flows through the strait are running at only about 70% of prewar levels, Houthi missiles have targeted Saudi Arabia, and unverified reports of a possible pre-emptive Iranian strike add to the risk premium. WTI settled at $101.41, up more than 10% on the week. Daily and weekly indicators show Strong Buy, but the 14-day RSI near 77 signals deeply overbought conditions, so a pullback of a few dollars on any de-escalation headline would not change the broader picture.
Base case: $104–116, with an upward bias while Hormuz risks persist and sharp swings in both directions on geopolitical news.
Resistance: $110.00 and $115.
Support: $105.9 and $102.3.
Gold
Gold settled at $4,186.70, down about 0.7% on the week. It dropped 1.7% on Wednesday to a low of $4,095 after the CPI release, then recovered 1.7% on Thursday, but the weekly high of $4,242 set on Monday remained out of reach. Treasury yields near multi-decade highs and rising Fed hike odds continue to cap the metal despite the geopolitical backdrop. The daily indicator reads Neutral, while the weekly one still shows Strong Sell, and price is sitting on its 50-, 100- and 200-day averages near $4,180.
Base case: $4,100–4,300, with consolidation near current levels most likely.
Resistance: $4,242 and $4,300.
Support: $4,095 and $4,000.
Silver
Silver was the weakest metal on our list, falling about 6.4% to $57.14. The sell-off came on Wednesday, when it dropped more than 6% to $55.88 on the hot CPI print, and the metal only managed a partial recovery afterwards (weekly range $55.56–61.75). Daily and weekly indicators show Strong Sell, with the RSI near 40 and oscillators already in oversold territory, which leaves room for a technical bounce but no sign yet of a reversal. The 52-week range stands at $45.51–121.79.
Base case: $54.5–60.0, with a cautious bias and a possible short-term bounce from oversold levels.
Resistance: $59.5 and $61.7.
Support: $55.6 and $54.0.
Bitcoin
Bitcoin closed Friday at $82,650, flat on the week, but the path was choppy: it ranged between $79,842 and $84,324 and slipped to about $81,500 on Saturday morning, just below its 50-, 100- and 200-day averages (about $81,750–82,600). The daily indicator reads Sell, while the weekly one still shows Strong Buy, which reflects a consolidation inside a broader uptrend. The tech-led risk-off in equities and 10-year yields above 5% limit demand for risk assets, so a daily close below $79,800 would open the way to the mid-$70,000s.
Base case: $78,500–86,000, with a neutral-to-cautious tone.
Resistance: $84,300 and $87,100.
Support: $79,800 and $76,000.
Ethereum
Ethereum lost about 2.4% to $2,429 and again lagged Bitcoin, trading between $2,326 and $2,579 during the week and holding near $2,420 on Saturday morning. The daily indicator reads Strong Sell and price sits below its 50-, 100- and 200-day averages, while the weekly indicator is Neutral. A move back above $2,580 would be needed to cancel the bearish scenario, and a loss of $2,326 would put the $2,200 area in focus, especially if Bitcoin slips below $80,000.
Base case: $2,250–2,600, with downside risk if Bitcoin loses $79,800.
Resistance: $2,500 and $2,580.
Support: $2,326 and $2,200.
Key events of the week
Tuesday, October 20: US housing starts and building permits for September.
Wednesday, October 21: UK CPI for September.
Friday, October 23: October flash PMIs for the US, eurozone and UK; Moody’s rating review of France.
Canada’s September CPI is also due during the week. Just beyond it, the FOMC decision on October 28, the ECB decision on October 29 and US PCE inflation on October 29 will set the next direction.
NordFX Analytical Group
Risk disclaimer: This material is provided for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any financial instrument. Trading forex, CFDs and cryptocurrencies involves a high level of risk and may not be suitable for all investors. Past performance is not indicative of future results. You may lose some or all of your invested capital; trade only with funds you can afford to lose.
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