Brazil Central Bank Interest Rate Cuts Are Nowhere In Sight, Ex-Officials Say

Central Bank

Summary:

Brazil's central bank could delay its long-awaited interest rate cuts further into 2026 given the institution is waging a solo f

Brazil's central bank could delay its long-awaited interest rate cuts further into 2026 given the institution is waging a solo fight against inflation, according to economists and former policymakers.

President Luiz Inacio Lula da Silva's administration is making a stronger push to both create and expand social programs as a way to boost his popularity before next year's elections. Those initiatives, which facilitate everything from home mortgages to gas purchases, will stoke consumption, hence making it harder to tame consumer price increases, according to analysts.

"A more spendthrift fiscal policy could lead the central bank to delay the start of interest rate cuts," said Gustavo Loyola, a partner at the consultancy Tendencias who was central bank governor between 1992 and 1993. "Brazil's central bank is practically isolated in this fight against inflation."

He predicts that the Selic rate, currently at an almost two-decade high of 15%, will only begin to decline in the first quarter of 2026.

The warnings from private sector analysts come as Lula intensifies pressure for lower borrowing costs, saying this week that he is preparing Latin America's largest economy to have a "more serious" monetary policy. While inflation expectations have eased in recent weeks, they still show cost-of-living increases above the 3% target through 2028. Meanwhile, the government is rushing to find new sources of income to help plug its fiscal deficit.

"The central bank is alone, and those who should be supporting it are getting in the way," Luiz Fernando Figueiredo, chairman of the board of Jive Investimentos and a former central bank director, said on the effect of higher government spending. "You need to slow down the car, but someone is accelerating. So, the central bank has to brake more aggressively."

Brazil's government posted a primary deficit of 17.3 billion reais ($3.1 billion) in August, according to the central bank. The nominal deficit — which includes interest payments on debt — hit 91.5 billion reais on the month. While the administration is aiming for a primary surplus of 0.25% of gross domestic product next year, very few investors believe that goal could be met.

Policymakers have said keeping borrowing costs steady for the coming months is starting to deliver results. But the effects of ultra-tight monetary policy have been partly undercut by factors including a strong labor market, they say.

In August, Brazil's unemployment rate held at 5.6%, a record low level that has encouraged workers to seek higher wages. "This has kept inflation resilient, particularly in services, which is a key concern for the central bank," said Adriana Dupita, Brazil and Argentina economist at Bloomberg Economics.

Central bankers have also highlighted investor worries over the fragility of Brazil's public finances, indicating the effectiveness of monetary policy hinges partly on the government's ability to restore fiscal confidence.

"At this stage, monetary policy is the only credible anchor in the system," said Alberto Ramos, chief Latin America economist at Goldman Sachs Group Inc. Ramos expects the Selic to be cut in the first quarter of 2026, though he warns the move could come later if inflation fails to converge toward the 3% target.

Brazil inflation expectations are hovering near 4.7% for the end this year and 4.27% for late 2026, according to a central bank survey published on Monday.

"Looking strictly at the numbers, although there has been an improvement in inflation and expectations, they remain above target, even over the relevant horizon," said Loyola.

Source: Bloomberg Europe

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Samantha Luan

Economic

Cryptocurrency

Forex

Key Points:

● Tether announces major milestone of 500 million global users.

● Stablecoin remains dominant, impacting market dynamics.

● USDT continues to expand in global markets.

Tether CEO Paolo Ardoino announced that Tether's USDT has reached 500 million users globally, marking a historic milestone in crypto adoption and financial inclusion, shared on Telegram.This achievement highlights Tether's role in expanding financial access, especially in unbanked regions, and boosts its market position amid ongoing funding discussions to enhance its liquidity and strategic presence.Tether CEO Paolo Ardoino revealed that USDT has achieved a significant milestone by reaching 500 million users worldwide. This development underscores the growing adoption of stablecoins in the global financial ecosystem.

Tether has emerged as a key player in the cryptocurrency world, with significant expansion under Paolo Ardoino's stewardship. Cantor Fitzgerald serves as the financial adviser for Tether's negotiations to potentially raise $20 billion in funding.

Impact on the Cryptocurrency Market

The increase in USDT users potentially impacts a range of assets, including ETH and BTC, as Tether remains a core stablecoin on exchanges. Ardoino emphasized its role in financial inclusion, especially in economies with high inflation."Tether has reached 500 million users worldwide. This is potentially the largest financial inclusion achievement in history, providing vital services to those excluded from the traditional banking system." — Paolo Ardoino, CEO, Tether

Tether's dominance with a market cap of $182.4 billion highlights its influence in the cryptocurrency market. The USDT's liquidity continues to provide a stable trading platform amidst volatile market conditions.

Future Prospects and Regulatory Considerations

Tether's growth is reflected in its role as a store of value for users in emerging markets. This milestone may prompt increased scrutiny from regulatory bodies worldwide.The milestone could lead to significant financial, regulatory, and technological outcomes, influenced by historical trends. USDT's integration within global exchanges highlights its importance in the cryptocurrency landscape.

Source: CryptoSlate

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Risk Warnings and Disclaimers

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Adam

Economic

If I can give you one piece of advice now, it’s this: Don’t fear this talk of an AI bubble.

In fact, we should love it, because it’s set to hand us a shot at big dividends and gains—especially in closed-end funds (CEFs), which yield around 8% today and regularly hand us “dividend deals” that simply shouldn’t exist.

Our job: Buy, then ride along as CEF investors, who tend to be slowpokes compared to stock buyers, finally come around and bid our funds’ prices up. And we collect those rich dividends—often paid monthly—while we wait.

One CEF is giving us just such a nonsensical discount today: a 7.7%-payer called the Virtus Artificial Intelligence & Technology Opportunities Fund.

This one holds many key AI players, including Meta Platforms, NVIDIA, Oracle and Microsoft, as well as some companies that stand to gain as they work AI into their daily operations, like JPMorgan Chase and Citigroup.

With most of these stocks skyrocketing, AIO should be pricey (“artificial intelligence” is right in the name, after all!). But it’s ridiculously cheap, trading at a 6.7% discount to net asset value (NAV, or the value of the AI stocks it owns).

And any selloff in AI stocks would make it even cheaper.

Which leads us back to the question on everyone’s mind: Are we in an AI-driven bubble? That’s critical to a buy of AIO now, so let’s dive in. We’ll start with an often-overlooked measure of where people’s heads are: a chart of common Google searches, in this case for the term “stock market bubble.”

How an AI Bubble Is Set to Ignite This Unloved 7.7% Dividend_1

You can see at the right side of this chart that the term has been gaining since hitting a low in September 2024. It’s now at its highest point in almost five years.

Why the bubble fears? Well, if you’ve been investing for a long time, your experience likely includes the popping of two major bubbles: the dot-com bubble in the late 1990s and real estate in 2008. A couple generations were traumatized by those events, and as a result, we’re now in a kind of “bubble” of bubble talk.

But are we really in an AI bubble? I’d say no. To start, let’s present the bubble case at its most dire: A Harvard academic recently suggested that, without AI investment, America’s GDP growth would’ve been a meager 0.1% in the first half of 2025.

There are a lot of problems with this argument. For one, it ignores the fact that a lot of AI investment is imported from abroad (Bloomberg estimates that imports account for about half of all AI investment), and GDP only measures productivity inside a country.

Bloomberg estimates that America’s 1.6% growth in the first half of 2025 would probably be more like 1.1% without AI investment. So, to be sure, AI is contributing much, but not most, of the country’s GDP growth, let alone all of it. Anyone trying to convince you otherwise is simply fear-mongering.

Don’t take the bait—especially when other indicators point to a stable economy:

How an AI Bubble Is Set to Ignite This Unloved 7.7% Dividend_2

This chart, for example, tells us that over the last year, Americans have been less delinquent on their credit cards than they were a year ago, and the overall percentage is pretty small—now about 3.1%, much lower than it was in the 1990s and 2000s.

But let’s keep the focus on AI for a moment longer, because it sets up just how out of step that discount on our 7.7%-paying AI fund, AIO, really is.

How an AI Bubble Is Set to Ignite This Unloved 7.7% Dividend_3

This chart comes from a recent Yale study showing that the share of workers exposed to AI hasn’t changed since the tech was released. “If AI were automating jobs at scale, we would expect to see a smaller share of workers in some of the jobs that are most negatively impacted,” the authors wrote. Yet this chart shows no change at all.

In other words, AI isn’t making Americans poorer. It isn’t taking their jobs, and it isn’t a bubble set to burst. That doesn’t mean it won’t turn into any of those things—but it is none of them now.

And that sets us up for a tempting trade.

If AI starts taking jobs or making Americans feel more uncertain, we should expect a stock pullback that would hit all sectors, including AI names like Alphabet (NASDAQ:GOOGL) (GOOGL), Meta and, of course, NVIDIA.

If AI doesn’t take jobs because the tech doesn’t wind up meeting expectations, AI investment will drop and, again, take down names like Google, Meta and NVIDIA.

Of course, everyone is watching these companies’ stocks like hawks, eager to sell at any sign of trouble. And that’s why, if we see a selloff driven by fear that any of the above-mentioned things will happen without data backing that up, they’ll be great buys.

A 7.7%-Payer That’s Cheap Now—and Will Get Even Cheaper in a Selloff

That’s where AIO comes back into the picture. It’s a diversified play on AI that rewards investors with that healthy 7.7% dividend, which comes our way monthly.

How an AI Bubble Is Set to Ignite This Unloved 7.7% Dividend_4

A High Monthly Payout From AI? AIO Delivers

We bought it in September 2020—long before AI was on investors’ radar—and rode it to a nice 23% total return (including its 6.4% dividend at the time we bought) in the following three years.

And, as I mentioned before, AIO is cheap today. In fact, it’s cheaper than it was during the April “tariff terror, ” if you can believe it. That’s a setup that makes no sense at all! Yet here it is:

AIO’s Comical Discount

We saw last spring’s deep discount flip to a premium by June. Now that premium has disappeared again, and AIO is back in bargain-bin territory.

That doesn’t mean it’s worth buying now—but it does mean AIO is more sensitive to sentiment than the AI stocks it invests in. If investors sell off AI stocks, they’ll sell off AIO aggressively, opening up an even bigger discount and boosting its yield (since prices move in opposition to yields). That will be the time to pounce.

Meantime, we’ll keep watching AIO and waiting for that bigger dividend, and discount, to materialize, thanks to the crowd’s overwrought bubble fears.

Source: investing

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Risk Warnings and Disclaimers

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Michelle

Political

It was earlier assessed that "The Next Putin-Trump Meeting Might Lead To Something Tangible This Time Around" due to newfound mutual interests in reaching a deal, but then Trump canceled the Budapest Summit on the grounds that he didn't think it'd be worth his time.

He also imposed new energy sanctions on Russia and might be lying about not having approved Ukraine's use of long-range missiles.

Trump's latest flip-flop surprised many but can be attributable in hindsight to the following five reasons:

1. He's Driving A Hard Bargain To Coerce Putin Into Maximum Concessions

Russia's minimum goal is to obtain full control over Donbass, without which Putin can't hypothetically freeze (let alone end) the war without "losing face". Trump refuses to coerce Zelensky into withdrawing from there, instead believing that he can coerce Putin into freezing the conflict without first controlling Donbass, thus amounting to maximum concessions. That's still unacceptable for Putin and might always be, but Trump seems to be taking his refusal personally, perhaps seeing it as a challenge to his authority.

2. The Warmongers Appear To Have Once Again Made Him Change His Mind

Trump's announcement was made during a meeting with NATO chief Mark Rutte, thus suggesting that warmongers like him, Zelensky, Lindsey Graham, and others still have his ear. He's infamously capricious, with many having noticed that he tends to be influenced by the last person who talked to him. This idiosyncrasy makes him comparatively easier to manipulate than most, which has enormous implications in terms of how certain lobbies and foreign forces could influence US policy throughout his second term.

3. Trump Seems To Truly Believe That The Any Escalation Will Remain Manageable

Trump wouldn't try to drive a hard bargain and end up giving in to the warmongers unless he truly believed that any Russian-US escalation would remain manageable. His calculation presupposes that there won't be any overwhelming response from Putin that would then push them towards climbing the escalation ladder all the way to the top. It's predicated on the assumption that Russia is weaker than the US and will therefore back down if significantly pressured. That's a gamble to take.

4. He's Also Not Abandoning His Stratagem Of Dividing-And-Ruling Eurasia

Senior refinery executives told NDTV that "Flows of Russian oil to major Indian processors are expected to fall to near zero" after the latest sanctions, which could divide the newly solidified Russia-India-China (RIC) triangle if true. Trump might also expect that China will do the same to get him to curtail the additional 100% tariffs that he threatened to impose on it next month. He could still be proven wrong on both counts, but in any case, his latest escalation shows that he's still trying to divide-and-rule Eurasia.

5. Trump Might Be Betting On Chinese Non-Compliance With The Latest Sanctions

China isn't expected to comply with the US' latest sanctions since it'll gain by purchasing at a steep discount whatever oil Russia might soon be unable to sell to India. The interim Sino-US trade deal might then collapse if Trump imposes his threatened tariffs on China and makes their curtailing conditional on it dumping Russian oil. He might even want this predictable sequence of events to unfold, however, so as to justify accelerating his planned "Pivot (back) to (East) Asia" for more muscularly containing China.

Trump's reason for once again escalating against Russia is primarily due to his belief (however possibly mistaken) that Putin won't risk tensions spiraling out of control in response even if he never agrees to the maximum concessions being demanded of him.

The US might have also concluded, whether rightly or wrong, that India is the weak link in RIC which can be coerced into breaking up BRICS.

To be clear, these explanations don't equate to endorsements, but they cogently account for what Trump just did.

Source: Zero Hedge

Risk Warnings and Disclaimers

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Warren Takunda

Economic

The European Union on Thursday heaped more economic sanctions on Russia, adding to U.S. President Donald Trump’s new punitive measures the previous day against the Russian oil industry. Russian officials and state media dismissed the Western measures, saying they are largely ineffective.

The sanctions are intended as part of a broadened effort to choke off the revenue and supplies that fuel Moscow’s invasion of Ukraine and compel Russian President Vladimir Putin to negotiate an end to the war.

The measures are a triumph for Ukrainian President Volodymyr Zelenskyy, who has long campaigned for the international community to punish Russia more comprehensively for attacking his country.

“We waited for this. God bless, it will work. And this is very important,” Zelenskyy said in Brussels, where EU countries attending a summit announced the latest round of Russia sanctions.

Despite U.S.-led peace efforts in recent months, the war shows no sign of ending after nearly four years, and European leaders are increasingly concerned about the threat from Russia.

Ukrainian forces have largely held Russia’s bigger army at bay in a slow and ruinous war of attrition along a roughly 1,000-kilometer (600-mile) front line that snakes along eastern and southern Ukraine. Almost daily Russian long-range strikes have taken aim at Ukraine’s power grid before the bitter winter, while Ukrainian forces have targeted Russian oil refineries and manufacturing plants.

Targeted sanctions

Energy revenue is the linchpin of Russia’s economy, allowing Putin to pour money into the armed forces without worsening inflation and avoiding a currency collapse.

The EU measures especially target Russian oil and gas. They ban imports of Russian liquefied natural gas into the bloc, and add port bans on more than 100 new ships in the Russian shadow fleet of hundreds of aging tankers that are dodging sanctions. The latest sanctions bring the total number of such ships to be banned to 557.

The measures also target transactions with a cryptocurrency increasingly used by Russia to circumvent sanctions; prohibit operations in the bloc using Russian payment cards and systems; restrict the provision of artificial intelligence services and high-performance computing services to Russian entities; and widen an export ban to include electronic components, chemicals and metals used in military manufacturing.

A new system for limiting the movement of Russian diplomats within the 27-nation EU will also be introduced.

International crude prices jumped more than $2 per barrel Thursday on news of the additional sanctions.

Trump-Putin dynamics

The U.S. sanctions against Russian oil companies Rosneft and Lukoil came after Trump said that his plan for a swift meeting with Putin was on hold because he didn’t want it to be a “waste of time.” It was the latest twist in Trump’s hot-and-cold efforts to end the war as Putin refuses to budge from his demands.

However, the sanctions don’t take effect for almost a month, until Nov. 21, potentially giving Putin a chance for a change of heart.

Chris Weafer, CEO of the Macro-Advisory Ltd. consultancy, said “that’s a window where they hope Russia will more seriously engage, and if it does, then those sanctions could be suspended.”

While the U.S. sanctions won’t have an immediate impact, they will over time erode revenue for Moscow.

“You can be sure that every oil buyer in Asia today is trying to find anything that floats that they can buy Russian oil before that sanction kicks in,” Weafer told The Associated Press from London. “And therefore, Russia will sell a lot of oil in the next 30 days, which probably will help the budget for a few months.”

He also noted that, unlike the European sanctions, the U.S. measures carry the threat of secondary penalties against anyone violating them. China and India are major importers of Russian oil.

Russia brushes off sanctions

Russian Foreign Ministry spokeswoman Maria Zakharova described the new U.S. sanctions as “entirely counterproductive, including in terms of signaling in favor or achieving a meaningful negotiated solution to the Ukrainian conflict.”

“If the current U.S. administration follows the example of its predecessors, who attempted to coerce or force Russia into sacrificing its national interests through unlawful sanctions, the result will be exactly the same — disastrous from a domestic political standpoint and detrimental to the stability of the global economy,” Zakharova said.

Former Russian President Dmitry Medvedev, now deputy chair of Russia’s National Security Council, said Thursday that Trump has “fully embarked on the path of war against Russia” with the new sanctions.

State-run and pro-Kremlin Russian media mostly shrugged at the news.

“Pressure or no pressure, it won’t make things any sweeter for Zelenskyy. And what’s more, it won’t bring peace any closer,” said Komsomolskaya Pravda, a popular pro-Kremlin tabloid.

Russian state news agency RIA Novosti said in a column that the new sanctions were “painful, as usual, but not deadly. Also as usual.”

The effectiveness of economic sanctions in forcing Putin’s hand is questionable, analysts say. Russia’s economy has proved resilient so far, although it is showing signs of strain.

It took nearly a month for the new EU measures to be decided upon. The bloc has already slapped 18 packages of sanctions against Russia over the war, but getting final agreement on whom and what to target can take weeks. Moscow has also proved adept at sidestepping sanctions.

In what appeared to be a public reminder of Russian atomic arsenals, Putin on Wednesday directed drills of the country’s strategic nuclear forces.

In a separate development, a Russian drone killed two Ukrainian journalists in the Donetsk region Thursday, according to regional administration head Vadym Filashkin. The journalists, Olena Hubanova and Ievhen Karmazin, worked for Ukraine’s Freedom TV channel in Ukraine.

Source: AP

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Risk Warnings and Disclaimers

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Adam

Forex

For traders, it’s a market defined by divergence, between a cautious Federal Reserve and a cornered European Central Bank, between resilient rhetoric and weakening fundamentals.

The core conflict facing the Euro is that the ECB remains trapped by stubborn price pressures while the region’s economic fundamentals continue to erode. The tension is amplified by policy divergence, with the Fed turning dovish amid concerns about the labor market, while the ECB remains reluctant to ease.

Internal risks with the Eurozone, from France’s fiscal challenges to Germany’s deepening slowdown, add another layer of fragility. Externally, rising geopolitical tensions, particularly the renewed US-China trade dispute, further darken the outlook.

Market sentiment, meanwhile, remains cautiously optimistic. Speculative positioning suggests a bullish stance of the Euro, indicating that much of the positive narrative, including policy divergence, may already be priced in. That makes the single currency increasingly vulnerable to negative surprises in economic data.

Snapshot of Key Macroeconomic Indicators (as of October 21, 2025)

The stickiness of core inflation is almost entirely driven by the services sector, where inflation edged up from 3.1% to 3.2%.

Services inflation is a closely watched indicator by the ECB. It is closely linked to domestic demand and wage growth, is less susceptible to global factors, and is harder to control through monetary policy.

In contrast, non-energy industrial goods inflation remains subdued, holding steady at 0.8% 2, indicating continued weak demand in the manufacturing sector. This internal structural divergence – hot services and cold industrial goods – makes the ECB’s policy decisions exceptionally complex.

Europe’s Policy Trap: When Fighting Inflation Risks Breaking the Economy_3

Inflation trends in the Eurozone vary considerably across its member states.

Germany, as the largest economy in the Eurozone, saw its inflation rate unexpectedly rise to 2.4%, mainly driven by strong services CPI. Meanwhile, France’s inflation was much milder, at only 1.1%. This divergence poses a significant challenge to the ECB “one-size-fits-all” monetary policy. Tightening policies to curb inflation in Germany could cause unnecessary harm to lower-inflation economies like France.

The combination of above-target headline inflation and accelerating core inflation has effectively closed the door to another ECB rate cut in 2025. The central bank is now locked into a data-dependent decision-making mode, and current data clearly indicates that “inflation has not yet been defeated.”

This solidifies its hawkish policy stance, which alone is beneficial for the Euro. Recent remarks by ECB President Christine Lagarde have also repeatedly emphasized the determination to bring inflation back to target, further reinforcing this message.

Europe’s Policy Trap: When Fighting Inflation Risks Breaking the Economy_4

The latest German ZEW survey shows that the economic current situation index has fallen to a deep abyss of -80.0, indicating that the economy is under immense pressure. ECB is forced to prioritize fighting stubborn service sector inflation, even if it means bringing more pain to Germany and the entire Eurozone economy. This creates a dangerous divergence between policy and the economy: monetary policy is tightening (or remaining tight), while the economy is crying out for stimulus.

This “trap” means that the risk of policy missteps is sharply rising, and the likelihood of a “hard landing” for the Eurozone economy is also increasing. In the long run, regardless of interest rate differentials, an economy in recession will ultimately have a negative impact on the Euro.

Widening Policy Gap Between the US and Europe

This widening divergence in monetary policy paths is becoming the primary driver of the EUR/USD strength.

In a key speech on October 14th, Federal Reserve Chairman Powell explicitly pointed to “rising downside risks to employment” and “a sharp slowdown in hiring activity.” This was a significant shift in tone. He noted that despite the ongoing US government shutdown leading to a lack of official economic data, existing private sector data indicated a weakening labor market. This statement was an almost direct confirmation of market expectations that the Fed would soon cut interest rates.

Powell’s remarks significantly reinforced market expectations for further Fed rate cuts, likely at the October and December meetings. He was effectively signaling that the Fed’s focus was shifting from solely combating inflation to a more balanced strategy, with increasing attention on its employment mandate. The immediate market reaction was a corresponding decline in the Dollar Index (DXY).

A seemingly contradictory phenomenon is that the US government shutdown has actually intensified the Fed’s dovish stance, indirectly supporting the Euro. Due to the government shutdown, the Fed is unable to obtain official data on employment and inflation, leaving its decision-making like “flying blind.” In uncertain environments, central banks typically choose to act cautiously.

For a Fed already concerned about a slowing labor market, this uncertainty increases its motivation for “precautionary” rate cuts to guard against an unexpectedly sharp economic downturn. Powell’s speech confirmed this, as he relied on “existing evidence” and “private sector data” to justify his dovish stance.

Therefore, the longer the government shutdown persists, the more entrenched the Fed’s cautious/dovish stance becomes, putting pressure on the Dollar. This creates a direct but counter-intuitive positive external effect for the Euro, as the EUR/USD currency pair is primarily driven by relative policy stances. US political dysfunction is, in the short term, becoming a bullish factor for the Euro.

External Pressures and Internal Tensions

Beyond monetary policy, the Euro also faces non-monetary risks. Internal political divisions and external geopolitical threats together constitute headwinds that could undermine the Euro’s stability.

French Fiscal Concerns: A key indicator measuring internal pressure is the spread between French 10-year government bonds (OATs) and German Bunds. This spread has recently widened to approximately 80 basis points, up from 65 basis points in the summer. The widening spread reflects market concerns about France’s fiscal situation, indicating a rising “political risk premium.” France’s budget deficit is 5.8% of GDP, almost double the EU’s 3% limit. While recent political maneuvering may have temporarily eased market panic, underlying fiscal vulnerability remains a weak point for the Euro.

Escalating US-China Trade War: The global environment is becoming more hostile. The Trump administration is escalating its trade conflict with China ahead of an upcoming meeting with Chinese leaders during the APEC summit. US President Trump has threatened to raise tariffs on Chinese goods to 155% if no deal is reached.

Ripple Effects on Europe: A full-blown trade war would bring tremendous uncertainty to the global economy. In such a “risk-off” environment, capital typically flows to assets perceived as safe havens, primarily the US dollar. The Euro, often used as a funding currency in carry trades, tends to underperform in this scenario. Furthermore, the highly export-dependent Eurozone economy (especially Germany) would be directly impacted by a global trade slowdown, which would exacerbate its existing economic weakness.

Europe’s Policy Trap: When Fighting Inflation Risks Breaking the Economy_5

From a technical perspective, after reaching the Double Bottom pattern target, EURUSD retreated toward both EMAs. The price still sustains its uptrend without breaking the structure, showing potential bullish extension.

If EURUSD returns above both EMAs, the price may retest the resistance at 1.1700.

On the contrary, staying below both EMAs may lead to a retest of the support at 1.1600.

Building on the analysis above, a multi-layered outlook can be outlined.

The future path of the Euro is not a straight line, but a struggle between a clear and favorable monetary policy divergence and a deeply troubled domestic economic and political landscape.

Source: fxempire

Risk Warnings and Disclaimers

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Adam

Commodity

After silver prices moved above the $50 per ounce threshold, the scenario of breaking out to new historical highs became increasingly likely. However, it must be acknowledged that the magnitude of the rally and the speed with which the demand side has achieved this are surprising—even despite favorable macroeconomic and fundamental conditions. New peaks, currently located around the $54 per ounce area, failed to hold, and we are now observing a corrective phase. Still, an equally dynamic rebound does not alter the baseline scenario, which points to continued upward movement, primarily due to ongoing structural shortages of the commodity in global markets. Other factors such as the tariff war, the Fed’s policies, and the US government shutdown are expected to play an important role, at least in the short term.

Over 8% Correction in Silver

Although silver has seen a strong correction of over 8% over the past week, the overall outlook remains bullish. It should be considered, above all, that following such a sharp upward wave, this kind of pullback is usually not an attempt to reverse direction but more likely a case of profit-taking and a search for new accumulation at lower price levels. In the short term, the catalysts for the correction include reports that an agreement between Republicans and Democrats is nearing, as well as Donald Trump’s optimism about a new deal with China (though in the latter case, the optimism may be unfounded). If, in fact, the most positive scenario from the sellers’ point of view materializes, then a further decline toward the $44 per ounce level cannot be ruled out.

Nevertheless, this should be good news for market bulls, as it could offer an attractive opportunity to buy at more favorable prices while adhering to the long-term scenario of a fundamental shortage of the commodity amid steadily rising demand.

Dollar Index Will Struggle to Climb Out of Consolidation?

For more than a month, the US dollar index has been moving upward, bouncing off the lower boundary of the multi-month sideways trend defined in the 96–100 point range. Currently, the main objective for buyers is to challenge the upper limit of this range, with the intent to push even higher.

Figure 1 Technical analysis of the US Dollar Index

If the demand side succeeds in this effort, then market focus could shift to 103 points, with a possible intermediate stop at 101.50. The 96-point level, which has consistently held, remains the primary support.

Possible Ranges for Corrective Movement on Silver

Looking at the long-term technical outlook for silver, the current rebound still appears to have room for expansion. In percentage terms, this may resemble the formation of a new impulse; however, a potential drop toward the $44 per ounce area—where the nearest support and the 23.6% Fibonacci retracement converge—can still be classified as a correction within the context of the recent gains.

Figure 2 Technical analysis of silver

Problems with trend continuation and a potential reversal could be signaled if the price drops below a key level marked in part by the next internal retracement at 38.2%. It will be important to monitor the momentum of the declines and updates from the key areas referenced in today’s analysis.