Dollar mixed as oil tops $100, European stocks slide

In the morning video, I examine three main currency pairs—EURUSD, USDJPY and GBPUSD—from a technical standpoint. For each one, I describe the bias, the levels that define risk, and the targets that would shift control to buyers or sellers. Having a technical roadmap is crucial, and I help provide that guidance.

The North American session begins with the dollar showing mixed performance but mostly weaker, crude oil trading above $100, and both US and European equity markets under pressure. Treasury yields are divided, with the 2-year yield moving slightly higher while longer-term yields decline.

This combination warrants attention. Higher oil keeps inflation concerns alive, but the drop in longer-term yields indicates the bond market is not responding with a uniform increase in borrowing costs.

Housing takes center stage on the US economic calendar. Building permits and housing starts are released first, followed by pending home sales. These reports will give traders another view of how the housing market is coping with elevated financing costs.

Dollar mixed, with gains concentrated in the Canadian dollar and Swiss franc

The dollar is weaker against six of the seven major currencies, though the euro is virtually unchanged.

From a dollar perspective:

• Against the CAD: down about 0.39%, with USDCAD at 1.4055.

• Against the CHF: down about 0.33%, with USDCHF at 0.8238.

• Against the GBP: down about 0.28%, with GBPUSD at 1.3339.

• Against the NZD: down about 0.26%, with NZDUSD at 0.5677.

• Against the JPY: down about 0.21%, with USDJPY at 158.14.

• Against the AUD: down about 0.07%, with AUDUSD at 0.6983.

• Against the EUR: marginally higher, with EURUSD down about 0.01% at 1.1209.

The Canadian dollar is outperforming the US dollar as oil prices rise. The euro stands out as the exception to the broader dollar weakness, with EURUSD trading near the lower end of its overnight range.

Currency ranges: EURUSD still has room to roam

Using the displayed session highs and lows and the 22-day average ranges (about a month of trading):

• EURUSD: 1.1205 to 1.1235 — approximately 30 pips, or 46% of its 65-pip average.

• USDJPY: 158.04 to 158.59 — approximately 55 pips, or 59% of its 94-pip average.

• GBPUSD: 1.3301 to 1.3363 — approximately 62 pips, or 85% of its 73-pip average.

• USDCHF: 0.8239 to 0.8271 — approximately 32 pips, or 62% of its 52-pip average.

• USDCAD: 1.4046 to 1.4110 — approximately 64 pips, or 102% of its 63-pip average.

• AUDUSD: 0.6971 to 0.6998 — approximately 27 pips, or 56% of its 48-pip average.

• NZDUSD: 0.5662 to 0.5689 — approximately 27 pips.

EURUSD has completed less than half its average daily range, leaving significant room for extension. AUDUSD and USDJPY also have space to move.

GBPUSD has already covered most of a normal day's range, while USDCAD has slightly exceeded its average. That does not prevent either pair from extending further. The average provides context; technical levels determine where traders can define and limit risk.

Oil above $100 as Middle East risks persist

Crude oil is trading higher:

• WTI futures: $101.01, up $2.47 or 2.51%.

• The separate USOIL quote: $100.56, up $2.33 or 2.37%.

InvestingLive's article “Crude oil surges further amid Houthis attacks on Saudi energy targets and stalled US-Iran negotiations” reports that stalled negotiations and ongoing Saudi-Houthi hostilities are keeping the geopolitical risk premium elevated. Reports of a possible diplomatic breakthrough remain unconfirmed.

For traders, this leaves oil sensitive to the next headline. A confirmed agreement could quickly alter the supply-risk outlook. Continued attacks or another setback in negotiations would keep those risks in focus.

European data show an uncomfortable mix

The European releases combined stronger producer-price inflation with weaker expectations:

• German PPI: up 1.9% month over month versus 1.5% expected and 1.1% previously.

• German ZEW economic sentiment: 28.1 versus 30.2 expected and 34.7 previously.

• Eurozone ZEW economic sentiment: 18.5 versus 23.6 expected and 25.8 previously.

• Eurozone current-account surplus: €8.7 billion versus €29.2 billion expected and €27.2 billion previously.

The combination is tough: price pressures increased while forward-looking sentiment readings disappointed.

European equities are lower:

• Germany's DAX: down 0.75%.

• France's CAC 40: down 0.80%.

• U.K. FTSE 100: down 0.52%.

• Spain's IBEX: down 0.62%.

• Euro Stoxx 50: down 0.54%.

• Italy's FTSE MIB: down 0.97%.

China holds rates

China kept its loan prime rates unchanged overnight. InvestingLive's Asia-Pacific market wrap also highlighted a stronger yuan fixing alongside weaker Asian equities.

US stocks are lower led by the Nasdaq 100

Major US stock indices are trading lower across the board. The snapshot of the major indices implied by futures shows:

• Dow -38 points
• S&P -15.25 points
• Nasdaq 100 -122 points

Treasury yields: Longer maturities lead the decline

• 2-year: 4.7676%, up approximately 0.7 basis point.

• 5-year: 4.9219%, down approximately 0.7 basis point.

• 10-year: 5.1105%, down approximately 2.6 basis points.

• 30-year: 5.4330%, down 4.0 basis points.

The larger declines are at the longer end of the curve. Even with those declines, the 10-year yield remains above 5%, keeping financing costs an important part of the housing-market backdrop.

Gold lower; Bitcoin below $82,000

• Gold: approximately $4,124.35, down $15.75 or 0.38%.

• Silver: $57.137, up approximately 0.13%.

• Bitcoin: $81,381, down $459 or 0.56%.

Gold is lower despite the generally softer dollar and declining longer-term Treasury yields. Bitcoin is also lower, trading below $82,000.

North American calendar

All times are Eastern.

• 8:15 a.m. — ADP weekly employment update. The prior reading was approximately 24.8K. This measures the average weekly change in private employment over a rolling four-week period.

• 8:30 a.m. — Building permits: 1.39 million expected versus 1.40 million previously.

• 8:30 a.m. — Housing starts: 1.30 million expected versus 1.28 million previously. The Census Bureau confirms the release time for the September construction report.

• 10:00 a.m. — Pending home sales: down 0.6% expected versus a 0.3% increase previously. The National Association of Realtors confirms the release time.

Starts measure construction getting underway. Permits provide a look at the potential construction pipeline. Pending home sales track signed contracts for existing homes. Together, they help show whether housing activity is stabilizing or losing momentum.

EURUSD: Sellers press toward the session low

EURUSD is trading near 1.1209, just above the session low at 1.1205. The euro has not participated in the gains seen in most other major currencies against the dollar.

The immediate question is whether sellers can break below 1.1205 and hold it. A sustained break would extend the session range and give sellers more intraday control. A break that quickly reverses would show that sellers had their chance and failed to maintain the move.

The session high at 1.1235 is the upside reference. With the range still relatively narrow, there is room for the next technical break to extend.

USDJPY: Buyers need to defend the session floor

USDJPY is trading near 158.14 after declining from a session high of 158.59. The low is 158.04.

That puts the price closer to the session floor, with 158.00 just below it. Sellers have the stronger intraday hand while the pair remains near those lows. A sustained break below 158.04 and then 158.00 would extend that control.

For buyers, holding the low is the first step. They would then need a recovery through the resistance levels outlined in the video to show that the downside pressure is easing.

GBPUSD: Buyers hold a gain, but the high remains a hurdle

GBPUSD is trading near 1.3339, above its session low at 1.3301 but below the high at 1.3363.

Buyers have the gain on the day. The next question is whether they can build on it. A break above 1.3363—and the ability to stay above—would extend their control.

The pair has already completed about 85% of its average range. Further gains remain possible, but buyers need to show follow-through. A rotation back toward 1.3301 would put the day's recovery under pressure.