Sample Category Title

Daily Pivots: (S1) 0.8953; (P) 0.8980; (R1) 0.9023; More…

Intraday bias in USD/CHF remains neutral for the moment. On the upside, firm break of 0.9053 resistance will suggest that corrective pattern from 0.9200 has already completed. Further rally should then be seen to retest 0.9200 resistance. In case of another fall, downside should be contained by 38.2% retracement of 0.8374 to 0.9200 at 0.8884 to bring rebound.

In the bigger picture, decisive break of 0.9223 resistance will argue that whole down trend from 1.0342 (2017 high) has completed with three waves down to 0.8332 (2023 low). Outlook will be turned bullish for 1.0146 resistance next. Nevertheless, rejection by 0.9223 will retain medium term bearishness for another decline through 0.8332 at a later stage.

Daily Pivots: (S1) 1.4356; (P) 1.4402; (R1) 1.4483; More...

Intraday bias in USD/CAD remains on the upside for the moment. Corrective pullback from 1.4791 should have completed at 1.4150 already. Further rise should be seen to retest 1.4791. Firm break there will resume larger up trend. ON the downside, below 1.4298 minor support will turn intraday bias neutral and bring consolidations before staging another rally.

In the bigger picture, long term up trend is tentatively seen as resuming with prior breach of 1.4667/89 key resistance zone (2020/2015 highs). Next target is 100% projection of 1.2401 to 1.3976 from 1.3418 at 1.4993. This will remain the favored case as long as 1.3976 resistance turned support holds (2022 high), even in case of deep pullback.

Global stock markets are under heavy selling pressure as risk-off sentiment dominates the final trading day of February. The selloff intensified across major indices, with Japan’s Nikkei plunging -3% and Hong Kong’s Hang Seng Index down -2.8%, following the steep declines in US equities overnight. Investors are increasingly wary of escalating trade tensions, which could further weigh on the fragile global recovery.

Market sentiment took a sharp hit after confirmation that the 25% US tariffs on Mexico and Canada will take effect on March 4. The more consequential reciprocal tariffs, set for April 2, have also drawn attention, particularly with US President Donald Trump threatening to extend a 25% tariff on European Union imports.

NASDAQ was the hardest hit among US indices, tumbling -2.78%, with semiconductor giant Nvidia leading the declines with an -8.5% drop. Despite reporting strong quarterly earnings, the company is facing increased concerns that it won’t be immune to the broader trade war, particularly if Taiwan’s chip industry comes under new US tariff measures. Given Nvidia’s dominant role in the AI sector, any disruption in its supply chain could ripple through the entire tech sector.

In the currency markets, Dollar is now firmly leading the weekly performance rankings after its sharp rally overnight. Swiss Franc follows as the second-strongest, while Sterling also benefits from the broader selloff in Euro. Meanwhile, commodity-linked currencies are bearing the brunt of risk aversion, with New Zealand Dollar plunging the most, followed by Australian and Canadian Dollars. While Euro and Yen are positioned in the middle of the performance spectrum, the single currency is looking rather vulnerable.

Technically, Gold’s extended decline is another confirmation of the Dollar’s underlying strength. The break of 2876.93 support confirms short-term topping at 2956.09, just below the key psychological 3000 level, with bearish divergence in 4H MACD.

Deeper correction should be seen to 38.2% retracement of 2584.24 to 2956.09 at 2814.04. Rebound from there indicate that it's just a near term correction, and keep the larger up trend intact. However, sustained break of 2814.04 will suggest that a larger scale correction is already unfolding.

In Asia, at the time of writing, Nikkei is down -2.97%. Hong Kong HSI is down -2.58%. China Shanghai SSE is down -1.11%. Singapore Strait Times is down -0.72%. Japan 10-year JGB yield is down -0.023 at 1.373. Overnight, DOW fell -0.45%. S&P 500 fell -1.59%. NASDAQ fell -2.78%. 10-year yield rose 0.036 to 4.285.

BoJ’s Uchida: Yield rise reflects market’s views on economic and global developments

Speaking in parliament today, BoJ Deputy Governor Shinichi Uchida said recent rise in JGB yields "reflects the market's view on the economic and price outlook, as well as overseas developments."

"There's no change to our stance on short-term policy rates and government bond operations," he emphasized, adding that the bond holdings "continue to exert a strong monetary easing effect" on the economy.

When asked whether the prospect of further rate hikes and tapering would continue to drive yields higher, Uchida responded that it is ultimately “up to markets to decide.”

Japan's Tokyo CPI slows to 2.2% yoy in Feb, industrial production down -1.1% mom in Jan

Tokyo’s core CPI (ex-food) slowed to 2.2% yoy in February, down from 2.5% yoy and below market expectations of 2.3% yoy. This marks the first decline in four months, largely due to the reintroduction of energy subsidies. Meanwhile, core-core CPI (ex-food and energy) held steady at 1.9% yoy. Headline CPI slowed from 3.4% yoy to 2.9% yoy.

In the industrial sector, production contracted by -1.1% mom in January, a sharper decline than the expected -0.9%. Manufacturers surveyed by Japan’s Ministry of Economy, Trade, and Industry anticipate a strong 5.0% mom rebound in February, followed by a -2.0% mom drop in March.

On the consumer front, retail sales grew 3.9% yoy in January, slightly missing the 4.0% yoy forecast, but still pointing to resilient domestic demand.

Fed’s Hammack signals cautious approach, stresses policy patience

Cleveland Fed President Beth Hammack said Fed has the "luxury of being patient" given the strength of the labor market and the uneven progress in reducing inflation.

In a speech overnight, she noted that while inflation has moderated, it remains above the 2% target, and policymakers are not yet confident that price pressures will fully subside. As a result, she expects the federal funds rate to stay steady "for some time".

Hammack acknowledged that the current policy stance has helped ease inflation, but she warned that risks remain. While Fed anticipates a gradual return to 2% inflation over the medium term, she stressed that this is "far from a certainty."

She suggested Fed will need to take a "patient approach" in monitoring how inflation and the labor market adjust before making any policy changes.

Fed's Harker says one inflation report shouldn't sway policy in either direction

Philadelphia Fed President Patrick Harker noted in a speech overnight that recent inflation data continues to show an uneven path toward the 2% target. He acknowledged that January’s consumer price data came in hotter than expected, marking the fastest increase in 18 months.

However, he stressed that policymakers should "not be moved to act, in either direction" based on a single month’s data.

Harker reaffirmed his stance that the Fed’s current policy rate remains sufficiently restrictive to keep inflation in check without undermining overall economic stability.

Despite inflation’s persistence, Harker remains optimistic about the economic outlook. He stated, “I am of a position that we let monetary policy continue to work.”

Looking ahead

Germany will release CPI flash, import prices, retail sales and unemployment in European session. Swiss will release KOF economic barometer.

Later in the day, Canada will publish GDP. Focus is also on US PCE inflation, goods trade balance and Chicago PMI.

AUD/USD Daily Report

Daily Pivots: (S1) 0.6207; (P) 0.6261; (R1) 0.6291; More...

AUD/USD's fall from 0.6407 accelerated lower today and intraday bias stays on the downside for retesting 0.6087 low. Decisive break there will resume larger decline from 0.6941. On the upside, above 0.6284 minor resistance will turn intraday bias neutral first. But outlook will remain bearish as long as 38.2% retracement of 0.6941 to 0.6087 at 0.6413 holds, in case of recovery.

In the bigger picture, fall from 0.6941 (2024 high) is seen as part of the down trend from 0.8006 (2021 high). Next medium term target is 61.8% projection of 0.8006 to 0.6169 from 0.6941 at 0.5806. In any case, outlook will stay bearish as long as 55 W EMA (now at 0.6505) holds.

Daily Pivots: (S1) 0.6207; (P) 0.6261; (R1) 0.6291; More...

AUD/USD's fall from 0.6407 accelerated lower today and intraday bias stays on the downside for retesting 0.6087 low. Decisive break there will resume larger decline from 0.6941. On the upside, above 0.6284 minor resistance will turn intraday bias neutral first. But outlook will remain bearish as long as 38.2% retracement of 0.6941 to 0.6087 at 0.6413 holds, in case of recovery.

In the bigger picture, fall from 0.6941 (2024 high) is seen as part of the down trend from 0.8006 (2021 high). Next medium term target is 61.8% projection of 0.8006 to 0.6169 from 0.6941 at 0.5806. In any case, outlook will stay bearish as long as 55 W EMA (now at 0.6505) holds.

Short Term Elliott Wave View in FTSE suggests that cycle from 11.13.2024 low is in progress as a 5 waves impulse. Up from there, wave ((i)) ended at 8388.37 and pullback in wave ((ii)) ended at 8002.34. Wave ((iii)) higher subdivided into another 5 waves in lesser degree. Up from wave ((ii)), wave (i) ended at 8326.32 and pullback in wave (ii) ended at 8192.31. Wave (iii) higher ended at 8584.73 and dips in wave (iv) ended at 8462.18 as the 1 hour chart below shows.

The Index then resumed higher. Up from wave (iv), wave i ended at 8692.84 and wave ii pullback ended at 8520.2. Wave iii higher ended at 8767.5 and pullback in wave iv ended at 8685.78. Final leg wave v ended at 8820.93 which completed wave (v) of ((iii)). Pullback in wave ((iv)) is currently in progress as a double three Elliott Wave structure. Down from wave ((iii)), wave (w) ended at 8638.63 and wave ((x)) ended at 8768.05. Expect the Index to extend lower in wave (y) of ((iv)) to reach 8475 – 8587 area before it resumes higher. Near term, as far as pivot at 8818.31 high stays intact, expect rally to fail for further downside.

FTSE 60 Minutes Elliott Wave Chart

FTSE Video

https://www.youtube.com/watch?v=a4sMieAdzZQ

Speaking in parliament today, BoJ Deputy Governor Shinichi Uchida said recent rise in JGB yields "reflects the market's view on the economic and price outlook, as well as overseas developments."

"There's no change to our stance on short-term policy rates and government bond operations," he emphasized, adding that the bond holdings "continue to exert a strong monetary easing effect" on the economy.

When asked whether the prospect of further rate hikes and tapering would continue to drive yields higher, Uchida responded that it is ultimately “up to markets to decide.”

Tokyo’s core CPI (ex-food) slowed to 2.2% yoy in February, down from 2.5% yoy and below market expectations of 2.3% yoy. This marks the first decline in four months, largely due to the reintroduction of energy subsidies. Meanwhile, core-core CPI (ex-food and energy) held steady at 1.9% yoy. Headline CPI slowed from 3.4% yoy to 2.9% yoy.

In the industrial sector, production contracted by -1.1% mom in January, a sharper decline than the expected -0.9%. Manufacturers surveyed by Japan’s Ministry of Economy, Trade, and Industry anticipate a strong 5.0% mom rebound in February, followed by a -2.0% mom drop in March.

On the consumer front, retail sales grew 3.9% yoy in January, slightly missing the 4.0% yoy forecast, but still pointing to resilient domestic demand.

Philadelphia Fed President Patrick Harker noted in a speech overnight that recent inflation data continues to show an uneven path toward the 2% target. He acknowledged that January’s consumer price data came in hotter than expected, marking the fastest increase in 18 months.

However, he stressed that policymakers should "not be moved to act, in either direction" based on a single month’s data.

Harker reaffirmed his stance that the Fed’s current policy rate remains sufficiently restrictive to keep inflation in check without undermining overall economic stability.

Despite inflation’s persistence, Harker remains optimistic about the economic outlook. He stated, “I am of a position that we let monetary policy continue to work.”

Cleveland Fed President Beth Hammack said Fed has the "luxury of being patient" given the strength of the labor market and the uneven progress in reducing inflation.

In a speech overnight, she noted that while inflation has moderated, it remains above the 2% target, and policymakers are not yet confident that price pressures will fully subside. As a result, she expects the federal funds rate to stay steady "for some time".

Hammack acknowledged that the current policy stance has helped ease inflation, but she warned that risks remain. While Fed anticipates a gradual return to 2% inflation over the medium term, she stressed that this is "far from a certainty."

She suggested Fed will need to take a "patient approach" in monitoring how inflation and the labor market adjust before making any policy changes.

• The US Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred inflation gauge, is due Friday.
• Recent US economic data has been weaker than expected, leading to increased market fear.
• Tariff threats by President Trump have added to market concerns about inflation and global growth.
• Technically, the S&P 500 is in bearish territory, having broken key support levels.

The Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s preferred gauge of inflation, is set to be released this Friday.

Market expectations indicate that the core PCE, which excludes volatile food and energy prices, could show a 0.3% month-over-month increase, with annual gains of 2.6% for core inflation and 2.4% for the headline figure. These projections suggest only modest cooling from December, signaling that inflationary pressures remain above the Fed’s 2% target.

Does US Data Show Signs of a Stalling Economy?

This week’s US data has underwhelmed and given signs that the economy may be stalling. We have seen market sentiment sour over the past few weeks with the sharp rise in US CPI adding to the market’s skepticism.

The current Fear & Greed Index of 22 reflects a market primarily driven by fear, indicating a very cautious approach among investors. A bounce-back in the US stock market would not be surprising given the extreme fear levels.

Source: Isabelnet (click to enlarge)

Earlier on Thursday we had the release of US GDP data for Q4 2024. The US economy grew by 2.3% in the fourth quarter of 2024, its slowest pace in three quarters, down from 3.1% in the previous quarter. This matches earlier estimates. Personal spending was the main driver, growing by 4.2%, the fastest since early 2023, with increases in spending on both goods (6.1%) and services (3.3%).

Exports fell slightly less than expected (-0.5% vs -0.8%), and imports dropped more (-1.2% vs -0.8%), which added positively to growth. Government spending also rose more than previously thought (2.9% vs 2.5%). However, private inventories reduced growth by less (-0.81 percentage points vs -0.93).

On the downside, business investments dropped more than estimated (-1.4% vs -0.6%), mainly because of a bigger decline in equipment investments (-9%) and no growth in intellectual property investments (0% vs 2.6%). On the bright side, residential investments improved slightly more than expected (5.4% vs 5.3%).

For the whole of 2024, the economy grew 2.8%.

Despite the lackluster data, today’s tariff comments by President Trump reignited the US Dollar Index rally and weighed on US stocks. President Trump promised reciprocal tariffs are still on course for April 2 while tariffs in Mexico and Canada are set for March 4, next Tuesday.

Tariff Threat to Inflation

Looking at the potential scenarios from tariffs and it continues to weigh on Global markets. OPEC + are having disagreements on a potential output hike in April, with tariffs cited as a key concern.

At present the concerns around tariffs relate largely to its impact on inflation and an impact on Global growth. Inflation fears have been on the rise both in the US and globally, with Central Banks all warning about the upside risks to inflation.

The US CPI print was hot this month while Michigan consumer sentiment and CB Consumer confidence both showed significant increases in the 12 month inflation expectations. This obviously does not bode well for consumers who were hoping for more rate cuts in 2025.

However, Fed Chair Jerome Powell was quick to stress the importance of the PCE data when the inflation print was released a few weeks ago. This has added to the importance of tomorrow’s data release.

Source: Table Created by Zain Vawda (click to enlarge)

The above table provides an insight into what I expect will happen depending on the PCE prints released later in the day.

My personal expectations are that the data will land quite close to expectations which could lead to some short-term volatility and whipsaw price action before markets settle down.

Technical Analysis – S&P 500

From a technical standpoint, the S&P 500 on a daily timeframe is now firmly in bearish territory having broken below the previous lower high print at 5910.

Price also trades below the 20 and 100-day MAs with immediate support at 5828 and 575 while the 200-day MA rests at 5733.

If there is to be a recovery the S&P 500 will face a challenge at 5910 and 5959 before the 6000 and 6025 handles come into focus.

S&P 500 Daily Chart, February 28, 2025

Source: TradingView.com (click to enlarge)

Support

• 5828
• 5757
• 5733

Resistance

• 5910
• 5959
• 6000
• 6025