We’re heading into a potentially volatile week. The U.S. government shutdown that began October 1 is now injecting serious uncertainty into markets. In times like these, money typically seeks safety, namely the U.S. dollar or gold, and that age‑old flight to quality trade is flashing its warning lights again. Compounding matters: the October nonfarm payrolls (NFP) report has been delayed to October 10 because of the shutdown. Ahead of that, we’ve got key events: the RBNZ rate decision and FOMC meeting on October 8, followed by Fed Chair Powell speaking on October 9. Nikkhil has already mapped the flows ahead, where price may break, where money might rotate, and where we can position ourselves with clarity. Let’s walk through his forecast, instrument by instrument:
US 10‑Year Yield (U.S. 10Y)
On the monthly and weekly charts, the 10‑year yield just struck resistance near the 78.6 - 85.4% Fibonacci retracement zone of the prior swing and is now forming a series of lower highs. The setup points to a likely continuation lower. Using the latest extension counts, Nikkhil sees 3.97% as a near target, with the path extending toward 3.50% in a deeper move.
But in the short term, expect a corrective bounce. The yield has held a support “magnet zone” 3.92 - 4.00% and is now probing resistance seated around the 50% retracement level. Any rally toward 4.20 - 4.25% would be your entry window to reengage the bearish thesis.
Because yields and the dollar tend to move in tandem, this near‑term bounce in yields could provide strength to USD, before the next leg down resumes.
U.S. Dollar Index (DXY)
DXY is caught in a tug‑of‑war. At the monthly level, we see bearish divergence between the last two highs, hinting that upside may be capped. Still, the breakout structure hasn’t fully confirmed.
On the daily and 4‑hour charts, buyers have reentered, breaking trendlines and forming new higher highs. But unless the dollar breaks convincingly below the 78.6–85.4% retracement zones (in price terms ~97.12 to ~97.02), the short‑term bounce remains in play. The extension targets on the upside stretch from ~97.85 to ~98.64 and even toward ~99.47 or psychological 100.
So yes, I’m expecting a short‑term bounce in the dollar before a larger fade.
EUR/USD
Given DXY’s potential short‑term strength, EUR/USD is tilted to the downside for now. On monthly and weekly timeframes, we’re seeing lower lows with signs of exhaustion among sellers. A key break to watch is 1.1825 - 1.1839: if EUR fails to crack above that zone, the path of least resistance is lower.
On the 4‑hour chart, the resistance zone near 1.1765 - 1.1773 is likely to act as a ceiling. If that rejection holds, Nikkhil’s target is 1.1698, and possibly 1.1621. He’s not hunting long entries here, he’s patiently waiting for sellers to reveal themselves.
Silver (XAG/USD)
Silver continues to outshine gold in momentum right now. On the monthly frame, it’s breaking past its 2011 highs around $50 and has no visible signs of exhaustion. Extension targets push toward $54.45 and beyond, and the weekly magnet sits near $50.7.
Zooming in, the daily and 4‑hour charts confirm clean, consistent higher highs with no bearish divergence. Nikkhil’s plan: buy the dips, so long as price holds above support zones ($46.53) and doesn’t collapse below the longer‑term base ($43.48). Shorting is off the table for now.
Gold (XAU/USD)
Gold remains in a bullish posture, though it’s now extremely overbought.
Short-term view:
Nikkhil’s initial target is 3,908, followed by 3,943. A pullback is highly probable - either from the current level near 3,886 or after touching 3,908/3,943 - before the trend resumes upward.
Medium-term outlook:
After the potential pullback, Nikkhil expects continuation toward the 4,077 - 4,105 zone.
Support zones:
Magnet supports remain between 3,665 - 3,709, with additional support clustered between 3,786 and 3,592.
As we approach the October 8-9 Fed events, volatility may spike, shaking out weak hands before the next leg higher.
For now, Nikkhil remains buyers-only, unless gold decisively breaks below 3,807 or 3,780
We’re entering a “risk of two way volatility” regime this week. The shutdown, delayed NFP, and Fed events are likely to stoke sharp moves, but direction will matter. The key is to trade with intention, not reaction. Trust the process. Let the setups form. Use confirmed structure to size in.
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