Elev8 broker: see more in Forex and commodity markets

Introduction

Momentum indicators help traders understand market direction. In this article, Elev8 broker looks at various momentum indicators, including the 14-week Relative Strength Index (RSI), overextension analysis, and traders’ positioning as per the Commodity Futures Trading Commission’s (CFTC) Commitments of Traders (COT) report. However, it is not always clear what is behind the momentum. To give traders the full picture, Elev8 broker will outline the fundamental developments and real-world events currently shaping FX pairs and commodities.

Momentum indicators

The chart below shows major currencies and commodities ranking across various momentum indicators. Dark khaki marks commodities, deep teal marks currencies with indirect quotes, and olive green marks all the other currencies (direct quotes). DXY is the symbol for the U.S. Dollar Index. For the Chinese renminbi, the onshore rate (USDCNY) is used.

Source: Elev8 broker, CFTC COT

The highest 14-week RSI readings appear in USDMXN, sugar, European coal, European natural gas (TTF), and UK natural gas (NBP). A high 14-week RSI in these five markets points to sustained multi-month upward momentum. The common thread is the Iran war’s cascading energy shock, compounded by El Niño weather disruption. These moves are linked.

USDMXN is rising because the dollar draws safe-haven demand while Mexico’s central bank turns more dovish. Sugar is rising on a global El Niño-driven supply shortfall. European coal, TTF and NBP are all rising on the same energy crisis, which includes Middle East refining losses, Norwegian supply outages, and approaching winter demand.

For USDMXN, a high RSI means sustained peso weakness against the dollar. Multiple forces combine here. The Bank of Mexico held rates at 6.50% in September but removed the language signalling a prolonged pause. At the same time, the protocols released on 8 October showed that three of five board members stated that future interest rate cuts could be considered if the inflation outlook improves.

International investors are beginning to lose interest in Mexican assets, and Elev8 broker’s analysts flag 18.50 as a resistance level that could be reached soon if nervousness persists. The International Monetary Fund (IMF) recently stated that greater efforts are needed to put Mexico’s debt on a declining trajectory. It projects growth of just 1.5% in 2026 and 1.8% in 2027, with public debt rising to 55% of Gross Domestic Product (GDP). Finally, broad dollar strength near 18-month highs, driven by safe-asset demand spurred by the Middle East conflict and relatively hawkish Federal Reserve (Fed) policy, compounds peso weakness.

Raw sugar touched a 19-month high of 21.24 cents per pound on 7 October, gaining 1.6% for the week. Extreme climate events are hitting yields hard across the world, causing waterlogged cane in Brazil, drought-hit beet in Europe, and stalled planting in western India.

European coal benefits from the broader energy crisis. Middle East refining destruction has taken roughly 2.3 million barrels per day (Mbbl/d) of refining capacity offline, driving record fuel prices globally. The International Energy Agency suggested that member countries assess whether additional diesel releases are necessary ahead of governing board meetings. When gas prices rise sharply, European utilities switch from gas-burning to coal-burning power generation, directly boosting demand for thermal coal. Plant activity data shows multiple large European coal plants are returning online across Germany, Poland, and the Netherlands.

Natural gas prices at the Dutch TTF and UK NBP hubs are closely correlated and driven higher by similar factors. In summer, Norwegian gas operator Gassco reported multiple unplanned outages complicating storage build in Europe. Because Norway is Europe’s single largest pipeline gas supplier, these unplanned outages tighten TTF and NBP prices. Broader energy drivers include the Iran war spillover pushing energy commodities higher and the arrival of October, marking the beginning of the European heating season.

Conversely, the lowest 14- week RSI values appear in EURUSD and iron ore.

EURUSD has posted five consecutive weekly losses and hit an 18-month low, with analysts describing a potential ‘falling knife’ situation. The single most damaging factor for the euro is France, where government borrowing rates and risk premia versus Germany have risen to levels unseen since the 2011 euro crisis. The French 10-year yield reached a 24-year high of 4.994%, the budget deficit exceeds 5% of GDP, and a divisive presidential election next year adds political uncertainty.

A European Central Bank (ECB) leadership vacuum compounds pressure as board member Isabel Schnabel departs for the IMF, chief economist Philip Lane leaves by May, and Christine Lagarde faces persistent resignation rumours. Germany is lobbying to retain the seat vacated by Schnabel, meaning the presidency battle will likely occur between Spain and the Netherlands, with neither seen as an interventionist figure.

Global money market funds attracted massive inflows as the global bond selloff, European fiscal concerns, and inflation fears pushed investors toward safety. Meanwhile, the United States 10-year Treasury yield climbed to a high of 5.365%, supporting the dollar. Technically, the EURUSD pair trades above structural support, but the Elev8 broker believes that significant buying may not appear until lower zones are reached.

Iron ore remains in a sustained downtrend, extending declines to multi-month lows, weighed down by weak steel consumption and rising supply expectations. China consumes roughly 70% of global seaborne iron ore, and its protracted property downturn continues to suppress steel demand from the construction sector. Furthermore, the Iran war created record freight shipping rates through Strait of Hormuz disruptions, squeezing miners’ margins. Australian and Brazilian producers continue to ship at high volumes, while India targets massive steel capacity expansion.

Overextension analysis

Overextension analysis measures how far each currency’s exchange rate has moved from its historical three-year trading range, expressed as a percentage (0% = the lower bound of the range, 100% = the upper bound of the range). We use a three-year lookback period to strike an effective balance. The three-year window is long enough to capture more than half of a typical business cycle (the National Bureau of Economic Research estimates the average cycle at roughly 60 months) yet short enough to retain meaningful volatility and generate actionable signals.

Through this lens, USDCNY, USDSGD, USDPEN, USDINR, and USDTRY appear overextended. Specifically, the Chinese yuan, Singapore dollar, and Peruvian sol are overvalued, while the Indian rupee and Turkish lira are undervalued.

USDCNY has slipped close to its 44-month low, touching 6.692 despite a firm dollar index. The drivers of exceptional yuan strength include managed appreciation by the People’s Bank of China (PBoC), which leans toward pro-market conditions and allows the yuan to strengthen to anchor confidence. China also launched a fiscal stimulus push to reach its GDP target and support the stock market, making yuan-denominated assets more attractive. Furthermore, growing international yuan usage, with brokers pushing for offshore clearing, increases demand.

USDSGD reflects monetary policy tightening by the Monetary Authority of Singapore (MAS), driven by robust growth from the AI boom. Singapore manages inflation by allowing its currency to appreciate to absorb rising import prices, supported by strong fiscal fundamentals, as reflected in low government bond yields relative to U.S. Treasuries.

USDPEN benefits from record copper prices near $6.50 per pound, boosted further by supply disruptions such as a mudslide at Chile’s El Teniente mine. As the world’s second-largest copper producer, Peru generates massive export receipts that flow into the domestic foreign exchange market, structurally strengthening the sol. Combined with orthodox monetary policy from the central bank, the sol remains a top-performing emerging market currency.

USDINR highlights how an overwhelming oil import bill renders central bank interventions ineffective. The rupee trades near record lows despite emergency measures by the Reserve Bank of India, which opened special dollar windows for state-run oil companies, slashed derivatives limits, imposed risk reserves, and conducted open market bond sales to drain liquidity while foreign exchange reserves declined.

USDTRY represents a unique case of managed depreciation, in which the Turkish lira depreciates by design. Recent pressures include a capital markets investment fund crisis affecting hundreds of thousands of savers, heightened central bank foreign-exchange volatility, and carry-trade dynamics in which investors maintain long positions to capture high policy interest rates while monitoring domestic trust in the currency.

Traders’ positioning

Market positioning reveals clear trends across commodities and currencies. Speculative long positions concentrate in soybeans, sugar, gasoline, corn, and the Brazilian real.

• Sugar exhibits a strong bullish momentum driven by supply-side cuts in Brazil, India, the European Union, and the United States due to irregular rainfall, severe weather deficits, and reduced planted areas.
• Soybeans experience support from China, lowering its domestic output forecast, and Black Sea sunflower oil supply disruptions, despite rising United States production estimates and rapid Brazilian planting.
• Gasoline benefits from Middle East refining capacity reductions, taking over 2.3 Mbbl/d offline, keeping crack spreads high alongside strong Asian import demand.
• Corn finds support from active Asian buying and increased Chinese industrial demand for starch production, despite higher forecasts for United States production.
• The Brazilian real attracts long positions due to high policy interest rates that make it attractive for carry trades.

Conversely, speculative short positions are concentrated in the euro, the British pound, and natural gas.

• The euro suffers from the French sovereign debt crisis, uncertainty over ECB leadership, and policymakers dampening rate-hike expectations.
• The British pound faces intense fiscal stress marked by a large gap in budget funding, surging gilt yields, and a weakening consumer backdrop where inflation acts as a consumption-destroying tax on households.
• Natural gas is a unique energy commodity lacking a compelling supply-disruption narrative, as liquefied natural gas shipments continue to move smoothly through alternative routes, autumn weather remains mild, and United States production remains near record highs above 105 billion cubic feet per day (bcf/d).

Across both the euro and the pound, the common thread remains strong: U.S. dollar strength near 18-month highs, propelled by safe-asset demand amid the Middle East conflict, relatively hawkish Fed expectations, and severe fiscal fragility in Europe and the United Kingdom.

The Elev8 broker will continue to examine momentum indicators closely to help traders see more market opportunities and navigate global volatility with confidence.

Disclaimer: This article does not contain or constitute investment advice or recommendations and does not consider your investment objectives, financial situation, or needs. Any actions taken based on this content are at your sole discretion and risk—Elev8 does not accept any liability for any resulting losses or consequences.

Elev8 is a licensed global broker serving 18+ million traders in 100+ countries. It offers market access through 3 platforms: Elev8Trader, MetaTrader 4, and MetaTrader 5. Operating under licences from Mauritius and Seychelles, Elev8 provides traders with the tools to help spot and capture more market opportunities. The broker received the ‘Best Trading Experience Broker 2026’ and the ‘Best Trading Platform Provider 2026’ awards from FxDailyInfo.

One of Elev8’s key features is Space, an analytics hub within the Elev8Trader platform that helps traders expand their market horizons. With its personalised feed, daily expert analytics, and community content, Space facilitates faster access to information and market data.

Frequently Asked Questions

Which markets show the highest 14-week RSI?

Elev8 broker’s chart puts the highest 14-week RSI readings in USDMXN, sugar, European coal, European natural gas at TTF and UK natural gas at NBP. The note reads that cluster as sustained multi-month upward momentum. It links the five markets through the Iran war’s energy shock and El Niño weather disruption, covering peso weakness, a global sugar supply shortfall, and higher coal and gas prices.

Why does the note say EURUSD is under pressure?

EURUSD has posted five consecutive weekly losses and hit an 18-month low, with analysts describing a potential falling knife. Elev8 broker calls France the most damaging factor: the 10-year yield reached a 24-year high of 4.994%, the budget deficit exceeds 5% of GDP, and a presidential election next year adds uncertainty. An ECB leadership vacuum, as Isabel Schnabel leaves for the IMF, adds to that pressure.

What does overextension say about the yuan and the lira?

Overextension places each currency inside its three-year range, with 0% at the bottom and 100% at the top. Through that lens, Elev8 broker says the Chinese yuan, Singapore dollar and Peruvian sol are overvalued, while the Indian rupee and Turkish lira are undervalued. USDCNY has slipped close to a 44-month low, touching 6.692. USDTRY is described as managed depreciation, with the lira weakening by design.