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• Gold fell overnight as the September US CPI confirmed that the inflationary backdrop will likely lead to further rate hikes.  
• The headline US CPI accelerated by +0.6% MoM, pushing the annualized rate to+3.7% (est. +3.6%, prior +3.4%).  This saw a repricing of monetary policy as markets ramped up bets for an interest rate hike at the October FED,  and DXY rose.  Earlier in the month the probability of a rate rise at the October FED was around 18% - now it is up to 32% with December at 87%.  
• This saw gold down -1.33% to finish at US$4,105 - recovering from an intraday low of $4,073.
• The key for gold today will be whether it breaks and consolidates below $4,100 or whether the selling pressure subsides. If it does break below, there seems little resistance below until $4,000.  
• The 14-day relative strength index at 38 tells you that the overnight selling pressure has pushed gold's momentum down close to oversold, reflecting a market that is controlled by the bears, albeit with signs of exhaustion.
• US PPI Inflation Data is the next challenge for bullion.   If wholesale inflation echoes yesterday’s core CPI overshoot, expectations for a Federal Reserve rate hike on October 28 will ratchet up further.  

Fig 1:  Gold Reaches 38 on the 14-day Relative Strength Index

source: Bloomberg Finance LP / MNI 

The USD/JPY range overnight was 158.05-158.95, Asia is currently trading around 158.32. The pair whipped around on a 158.00 handle overnight. The USD surged in reaction to a firmer CPI print but Risk has turned lower and Cross-Yen is showing signs of exhaustion(Fig.1) which saw the pair ease back lower. The leveraged market is looking to rebuild Yen shorts after the BOJ dropped the ball, though Asset managers seem content that the long Yen trade can still develop. I will be keeping a close eye to see if these cracks in risk sentiment continue to widen and what the impact that has on the Crosses. The 159.00-160.50 area technically looks quite important now and I suspect the BOJ/MOJ will be doing what they can to keep it below there. The first support is around 157.50 which continues to provide support and then the 156.00-156.50 area. Lets see how things unfold and if Cross-Yen can do the work for the BOJ/MOF.                                         

• “Traders Weigh Three Hikes by March After Hot CPI. Traders are going where the data points, and hotter-than-expected CPI figures point to a greater likelihood of more rate increases. The outlook for rates over the next few months has shifted toward at least two hikes by March, with more than a 70% probability of a third priced in.” - BBG
• MNI US INFLATION: PPI Preview: Higher Energy, Food Prices (And Passthrough) Eyed Looking ahead to PPI (Thursday Oct 15 830am ET) resumes its typical post-CPI release timing after August’s round saw producer prices out a day prior to consumer counterparts. While that means that PPI will again be looked at most closely for the PCE component read-through, the aggregates will also be scrutinized for signs that rebounding energy prices are being reflected in pipeline pressures.
• CFTC Data up to 06/10/2026 shows Asset Managers paring back their newly built Yen longs, +68 749(Last +51 961). The Leveraged community is back rebuilding a short after a very brief and unsuccessful attempt at going long, -30 379(Last -16 809). 
• Options : Close significant option expiries for NY cut, based on DTCC data: 156.00($1.39b), 158.00($1.34b), 158.50($734m). Upcoming Close Strikes : 156.00($2.05b Oct 16), 159.00($869m Oct 20) - BBG.
• The USD/JPY Average True Range(ATR) for the last 10 Trading days: 72 Points
• Data/Event : Core Machine Orders, Industrial Production 

Fig 1 : EUR/JPY Spot Weekly Chart

Source: MNI - Market News/Bloomberg Finance L.P

Fig 2 : USD/JPY Spot Daily Chart

Source: MNI - Market News/Bloomberg Finance L.P

• RES 3: 95.925 - High Jan 9 (cont) and a key resistance 
• RES 2: 95.670 - High Jun 25 / 29 and the bull trigger
• RES 1: 95.255 - Low Jul 24 
• PRICE: 95.010 @ 15:22 BST Oct 14
• SUP 1: 94.883 - Lower 3.0% Bollinger Band
• SUP 2: 94.870 - Low Sep 24
• SUP 3: 94.125 - 1.0% 10-dma envelope

A medium-term downtrend in Aussie 3-yr futures remains intact. On the continuation chart, moving average studies are in a bear-mode position highlighting a dominant bear cycle. Furthermore, the contract has recently breached 95.035 (cont), the Mar 23 low. This opens a moving average envelope support around 94.125. Key resistance and bull trigger is 95.670, the Jun 25 / 29 high.