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Daily Pivots: (S1) 153.91; (P) 154.90; (R1) 155.79; More...

Range trading continues in USD/JPY above 153.70 and intraday bas remains neutral. Deeper fall is mildly in favor as long as 156.74 resistance holds. Break of 153.70 will resume the fall from 158.86 to 38.2% retracement of 139.57 to 158.86 at 151.49. Nevertheless, break of 156.74 resistance will indicate that fall from 158.86 has completed as a correction. Intraday bias will be back on the upside for 158.86 and above to resume the whole rally from 138.57.

In the bigger picture, price actions from 161.94 are seen as a corrective pattern to rise from 102.58 (2021 low). The range of medium term consolidation should be set between 38.2% retracement of 102.58 to 161.94 at 139.26 and 161.94. Nevertheless, sustained break of 139.26 would open up deeper medium term decline to 61.8% retracement at 125.25.

Daily Pivots: (S1) 1.4284; (P) 1.4539; (R1) 1.4687; More...

A short term top should be in place at 1.4791 with the deep retreat from there. Intraday bias is turned neutral for consolidations. Downside should be contained by 1.4260 cluster support (38.2% retracement of 1.3418 to 1.4791 at 1.4267), which is also close to 55 D EMA (now at 1.4267), to bring rebound. Larger up trend is expected to resume through 1.4791 at a later stage.

In the bigger picture, the break of 1.4667/89 key resistance zone (2020/2015 highs) confirms long term uptrend resumption. Next target is 100% projection of 1.2401 to 1.3976 from 1.3418 at 1.4993. Medium term outlook will remain bullish as long as 1.3976 resistance turned holds (2022 high), even in case of deep pullback.

Daily Pivots: (S1) 0.6130; (P) 0.6184; (R1) 0.6279; More...

Intraday bias in AUD/USD is turned neutral as it recovered notably after dipping to 0.6087. Some consolidations would be seen first. But outlook will stay bearish as long as 0.6329 resistance holds. Break of 0.6087 will resume larger decline from 0.6941. Next target is 61.8% projection of 0.6687 to 0.6130 from 0.6329 at 0.5985.

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 0.6511) holds.

Global markets found some stability after the US agreed to a 30-day delay on tariffs against Mexico and Canada following agreements on fentanyl trafficking and border security measures. However, trade tensions remain elevated as Washington proceeded with the additional 10% tariff on all Chinese imports. In response, China retaliated by imposing a 15% tariff on US coal and LNG, along with a 10% levy on crude oil, farm equipment, and select automobiles, set to take effect on February 10.

Further escalation could be on the horizon, as US President Donald Trump signaled that additional tariff hikes on China remain a possibility unless Beijing takes further steps to curb fentanyl exports. Meanwhile, trade friction with the EU is also building. Trump hinted over the weekend that European imports could be his next target, prompting EU leaders at a summit in Brussels to prepare countermeasures while expressing willingness for negotiations. Developments on both fronts will be closely monitored in the days ahead.

In the currency markets, Canadian Dollar is leading gains for the week so far, rebounding strongly following the tariff delay. Japanese Yen follows as the second-strongest performer, benefiting from risk aversion, while British Pound holds up well. On the weaker side, New Zealand Dollar is underperforming, followed by Euro and Australian Dollar. Dollar has retraced most of its earlier gains and is now trading in the middle of the performance rankings alongside Swiss Franc.

Technically, Gold hit another record high on risk aversion yesterday after initial volatility. For now, outlook will stay bullish as long as 2730.34 support holds. Next target is 38.2% projection of 1810.26 to 2789.92 from 2584.24 at 3074.07, which is close to 3000 psychological. This level will be crucial in determining the underlying momentum of Gold.

In Asia, at the time of writing, Nikkei is up 0.82%. Hong Kong HSI is up 1.76%. China is still on holiday. Singapore Strait Times is down -0.13%. Japan 10-year JGB yield is up 0.0228 at 1.272. Overnight, DOW fell -0.28%. S&P 500 fell -0.76%. NASDAQ fell -1.20%. 10-year yield fell -0.026 to 4.543.

CAD rebounds as US pauses tariffs for 30 days

Canadian Dollar rebounded sharply after US President Donald Trump announced a 30-day pause on planned tariffs against Canadian imports, just hours after implementing a similar delay for Mexico.

The decision came after negotiations between Trump and Canadian Prime Minister Justin Trudeau, who confirmed that Canada would take aggressive new measures to combat fentanyl trafficking, including deploying nearly 10,000 personnel to reinforce border security. Canada also committed to appointing a "Fentanyl Czar", classifying cartels as terrorist organizations, and launching a Canada-US "Joint Strike Force" targeting organized crime and money laundering.

Markets welcomed the de-escalation, as the tariff pause removes immediate downside risks for the Canadian economy. Trump emphasized that the suspension is conditional on further progress in security measures and that an "Economic deal with Canada" may still need to be structured.

Technically, a short term top is likely formed at 1.4791 in USD/CAD after this week's strong volatility. More sideway trading should now be seen in the near term. However, outlook will continue to stay bullish as long as 1.4260 cluster support holds (38.2% retracement of 1.3418 to 1.4791 at 1.4267), which is also close to 55 D EMA (now at 1.4267). USD/CAD's up trend is still in favor to resume at a later stage when the consolidation completes.

Fed officials stress patience on rate cuts amid tariff uncertainty

A trio of Fed officials cautioned that new broad-based tariffs could add upward pressure to consumer and producer prices, suggesting a slower pace of rate cuts than previously anticipated.

Boston Fed President Susan Collins highlighted yesterday that tariffs on both final and intermediate goods risk inflating costs throughout supply chains, requiring "patient" policy decisions.

"It's really appropriate for policy to be patient, careful, and there's no urgency for making additional adjustments, especially given all of the uncertainty, even though, of course, we're still somewhat restrictive," Collins said.

Chicago Fed President Austan Goolsbee also stressed "a ton of uncertainty," warning that a premature return to lower rates could reignite inflation.

"We've got to be a little more careful and more prudent of how fast rates could come down because there are risks that inflation is about to start kicking back up again," Goolsbee said.

Meanwhile, Atlanta Fed President Raphael Bostic noted that any tariff-related surge in prices or inflation expectations might warrant close monitoring before further easing steps are taken.

BoJ's Ueda prioritizes underlying inflation trends, not short-term volatility

BoJ Governor Kazuo Ueda reiterated the central bank’s commitment to achieving its 2% inflation target on a sustained basis, emphasizing that the focus remains on underlying inflation rather than temporary price fluctuations.

Speaking before parliament, Ueda highlighted that BoJ filters out one-off factors such as fuel and volatile fresh food prices when assessing inflation trends.

However, he acknowledged "that process at times could be difficult", reinforcing the need for careful analysis before making policy adjustments.

AUD/USD Daily Report

Daily Pivots: (S1) 0.6130; (P) 0.6184; (R1) 0.6279; More...

Intraday bias in AUD/USD is turned neutral as it recovered notably after dipping to 0.6087. Some consolidations would be seen first. But outlook will stay bearish as long as 0.6329 resistance holds. Break of 0.6087 will resume larger decline from 0.6941. Next target is 61.8% projection of 0.6687 to 0.6130 from 0.6329 at 0.5985.

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 0.6511) holds.

BoJ Governor Kazuo Ueda reiterated the central bank’s commitment to achieving its 2% inflation target on a sustained basis, emphasizing that the focus remains on underlying inflation rather than temporary price fluctuations.

Speaking before parliament, Ueda highlighted that BoJ filters out one-off factors such as fuel and volatile fresh food prices when assessing inflation trends.

However, he acknowledged "that process at times could be difficult", reinforcing the need for careful analysis before making policy adjustments.

Key Highlights

• Gold started a fresh upward move above the $2,780 resistance.
• A key bullish trend line is forming with support at $2,750 on the 4-hour chart.
• Bitcoin crashed toward $90,000 before the bulls appeared.
• EUR/USD is signaling weakness and might dip toward the 1.0150 support.

Gold Price Technical Analysis

Gold prices started a fresh increase amid Trump’s trade war. The price gained pace and remained in an uptrend above the $2,780 resistance.

The 4-hour chart of XAU/USD indicates that the price was able to clear the $2,800 resistance zone. It settled well above the 100 Simple Moving Average (red, 4 hours) and the 200 Simple Moving Average (green, 4 hours).

The current price action is bullish and indicates chances of more upsides. On the upside, immediate resistance is near the $2,820 level. The next major resistance sits near the $2,832 level.

A clear move above the $2,832 resistance could open the doors for more upsides. The next major resistance could be $2,850, above which the price could rally toward the $2,865 level.

On the downside, initial support is near the $2,795 level. The first key support is near $2,775. The next major support is near the $2,750 level.

There is also a key bullish trend line forming with support at $2,750 on the same chart. The main support is now $2,735. A downside break below the $2,735 support might call for more downsides. The next major support is near the $2,720 level.

Looking at EUR/USD, the pair opened with a gap down and the bears could now aim for more losses below 1.0200.

Economic Releases to Watch Today

• US Factory Orders for Dec 2024 (MoM) - Forecast -0.8%, versus -0.4% previous.

Canadian Dollar rebounded sharply after US President Donald Trump announced a 30-day pause on planned tariffs against Canadian imports, just hours after implementing a similar delay for Mexico.

The decision came after negotiations between Trump and Canadian Prime Minister Justin Trudeau, who confirmed that Canada would take aggressive new measures to combat fentanyl trafficking, including deploying nearly 10,000 personnel to reinforce border security. Canada also committed to appointing a "Fentanyl Czar", classifying cartels as terrorist organizations, and launching a Canada-US "Joint Strike Force" targeting organized crime and money laundering.

Markets welcomed the de-escalation, as the tariff pause removes immediate downside risks for the Canadian economy. Trump emphasized that the suspension is conditional on further progress in security measures and that an "Economic deal with Canada" may still need to be structured.

Technically, a short term top is likely formed at 1.4791 in USD/CAD after this week's strong volatility. More sideway trading should now be seen in the near term. However, outlook will continue to stay bullish as long as 1.4260 cluster support holds (38.2% retracement of 1.3418 to 1.4791 at 1.4267), which is also close to 55 D EMA (now at 1.4267). USD/CAD's up trend is still in favor to resume at a later stage when the consolidation completes.

A trio of Fed officials cautioned that new broad-based tariffs could add upward pressure to consumer and producer prices, suggesting a slower pace of rate cuts than previously anticipated.

Boston Fed President Susan Collins highlighted yesterday that tariffs on both final and intermediate goods risk inflating costs throughout supply chains, requiring "patient" policy decisions.

"It's really appropriate for policy to be patient, careful, and there's no urgency for making additional adjustments, especially given all of the uncertainty, even though, of course, we're still somewhat restrictive," Collins said.

Chicago Fed President Austan Goolsbee also stressed "a ton of uncertainty," warning that a premature return to lower rates could reignite inflation.

"We've got to be a little more careful and more prudent of how fast rates could come down because there are risks that inflation is about to start kicking back up again," Goolsbee said.

Meanwhile, Atlanta Fed President Raphael Bostic noted that any tariff-related surge in prices or inflation expectations might warrant close monitoring before further easing steps are taken.

• EURUSD reversed from pivotal support level 1.0225
•  Likely to rise to resistance level 1.0400

EURUSD currency pair recently reversed up from the major pivotal support level 1.0225, which has been steadily reversing the pair from the end of last year, as can be seen from the daily EURUSD chart below.

The support zone near the support level 1.0225 was further strengthened by the lower daily Bollinger Band.

Given the strength of the support level 1.0225 and the bearish US dollar sentiment seen today, the EURUSD currency pair can be expected to rise to the next resistance level 1.0400.

• USDCAD reversed from the long-term resistance level 1.4670
• Likely to correct to support level 1.4400

USDCAD currency pair recently reversed down from the major long-term resistance level 1.4670, which stopped the previous sharp uptrend at the start of 2020, as can be seen from the weekly USDCAD chart below.

The resistance level was further strengthened by the proximity of the upper daily, weekly and monthly Bollinger Bands.

Given the strength of the resistance level 1.4670, the USDCAD currency pair can be expected to fall to the next support level 1.4400.