Insights 
VT 
India’s manufacturing output rose to 4.8% in September, up from 3.8% in the prior period. This increase reflects a positive change in the country’s industrial production metrics.
In other market news, the EUR/GBP has surpassed the 0.8760 mark due to generalised weakness in the pound. Additionally, the GBP/USD has declined as UK shop price inflation eases, and the gold market continues to slide amidst growing optimism about US-China trade relations.
Forex Market Movements
The EUR/USD has experienced a drop, nearing daily lows around the 1.1630 level. Meanwhile, the GBP/USD is testing two-month lows close to 1.3260, partly due to anticipated Federal Reserve policy movements and domestic economic concerns in the UK.
Gold prices remain weak, trading under $3,900 as trade hopes between the US and China offer a more positive outlook. Positive momentum is also seen in the Cardano market, pushing towards a breakout, encouraged by increased whale accumulation and supportive technical indicators.
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Analysis of Indian Market Trends
The jump in India’s manufacturing output to 4.8% is a clear bullish signal we are watching. This supports a long position on Indian assets, especially with the Nifty 50 index pushing past the 25,500 mark this quarter. Call options on the Nifty or futures contracts could be a way to capitalize on this continued growth momentum.
We see continued weakness in the Pound Sterling, with UK shop price inflation contracting for the third straight month. This fuels speculation that the Bank of England, which has held rates at 5.25% since August 2023, might finally pivot to a cut before year-end. This makes put options on GBP/USD an attractive strategy against the relatively strong dollar.
Gold’s retreat to the sub-$3,900 level shows how sensitive it is to risk-on markets, much like we saw during past events like the US-China trade truce announcements years ago. With US 10-year Treasury yields firming above 4.5% last week, the opportunity cost of holding non-yielding bullion is increasing. Traders should consider buying puts or selling call spreads on XAU/USD to hedge against further downside.
The US Dollar is showing strength ahead of the Federal Reserve’s decision this Wednesday, pushing EUR/USD towards the 1.1600 handle. We are advising caution, as recent Core PCE inflation data came in at 2.6%, still above the Fed’s target. Any hawkish language from the Fed could extend this dollar rally, making short-term straddles on the euro a viable play for volatility.
