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Daily Pivots: (S1) 154.34; (P) 154.78; (R1) 155.64; More...

Intraday bias in USD/JPY remains neutral as range trading continues above 153.70. 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) 0.9083; (P) 0.9099; (R1) 0.9129; More…

Intraday bias in USD/CHF remains on the upside for 0.9200/9223 resistance zone. Decisive break there will carry larger bullish implication. Next near term target will be 100% projection of 0.8735 to 0.9200 from 0.8964 at 0.9429. On the downside, below 0.9114 minor support will turn intraday bias neutral again first. But outlook will stay bullish as long as 0.8964 support holds, in case of retreat.

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) 1.2361; (P) 1.2416; (R1) 1.2447; More...

Intraday bias in GBP/USD Is turned neutral first with current recovery. While corrective rebound from 1.2099 might extend with another rise, strong resistance should be seen from 38.2% retracement of 1.3433 to 1.2099 at 1.2609 to limit upside. Below 1.2248 will bring retest of 1.2099 low first. Firm break there will resume whole decline from 1.3433.

In the bigger picture, rise from 1.0351 (2022 low) should have already completed at 1.3433 (2024 high), and the trend has reversed. Further fall is now expected as long as 1.2810 resistance holds. Deeper decline should be seen to 61.8% retracement of 1.0351 to 1.3433 at 1.1528, even as a corrective move. However, firm break of 1.2810 will dampen this bearish view and bring retest of 1.3433 high instead.

Daily Pivots: (S1) 1.0328; (P) 1.0381; (R1) 1.0412; More...

Intraday bias in EUR/USD remains on the downside for the moment. Decisive break of 1.0176 will resume whole fall from 1.1213. Next target will be 61.8% projection of 1.1213 to 1.0176 from 1.0531 at 0.9890. On the upside, above 1.0349 resistance will turn intraday bias neutral again first. But outlook will stay bearish as long as 1.0531 resistance holds, in case of strong recovery.

In the bigger picture, immediate focus is back on 61.8 retracement of 0.9534 (2022 low) to 1.1274 (2024 high) at 1.0199. Sustained break there will solidify the case of medium term bearish trend reversal, and pave the way back to 0.9534. For now, risk will stay on the downside as long as 1.0531 resistance holds, in case of rebound.

Eurozone CPI rose from 2.4% yoy to 2.5% yoy in January, above expectation of 2.4% yoy. CPI core (ex-energy, food, alcohol & tobacco) was unchanged at 2.7% yoy, above expectation of 2.6% yoy.

Looking at the main components, services is expected to have the highest annual rate in January (3.9%, compared with 4.0% in December), followed by food, alcohol & tobacco (2.3%, compared with 2.6% in December), energy (1.8%, compared with 0.1% in December) and non-energy industrial goods (0.5%, stable compared with December).

Full Eurozone CPI flash release here.

UK manufacturing sector remained in contraction at the start of 2025, with January’s final PMI rising slightly to 48.3 from December’s 11-month low of 47.0. Despite the modest improvement, four of the five key components—output, new orders, employment, and stocks of purchases—declined. The only positive indicator was longer average vendor lead times, which typically reflect supply chain constraints rather than stronger demand.

Rob Dobson, Director at S&P Global Market Intelligence noted that Weak domestic and international demand remains a key drag on the sector, with no clear signs of recovery in sight. Rising cost pressures are also adding to the strain, with input price inflation reaching a two-year high.

The effects of last year’s Budget changes, particularly increases in the minimum wage and employer National Insurance contributions, are expected to feed further into rising costs. These factors could keep pressure on profit margins and limit any near-term rebound in manufacturing activity. Business confidence remains low, hovering near December’s two-year low, reflecting ongoing uncertainty in both economic conditions and policy direction.

Full UK PMI manufacturing final release here.

Eurozone PMI Manufacturing was finalized at 46.6, up from December’s 45.1, marking an eight-month high. While still in contraction, the data suggests a slowdown in the sector’s decline. Germany’s PMI rose to 45.0, while France rose to 45.0. Austria (45.7) and Italy (46.3) also saw multi-month highs. Greece (52.8) and Spain (50.9) remained in expansion.

According to Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, despite the improvement, manufacturing remains under pressure. It is "too early" to signal a full recovery. Rising input costs, driven by nearly 7% increase in oil prices, pose risks for firms already facing weak demand. ECB’s easing path could also be complicated if inflationary pressures persist.

The US is expected to impose tariffs on European exports. However, business confidence has improved, with future output expectations rising four points above the long-term average, partly driven by optimism surrounding upcoming elections in Germany and possibly France.

While Germany and France remain the weakest performers, the pace of contraction has slowed across multiple sectors. De la Rubia noted that over 90% of Eurozone exports go to markets outside the US, limiting the immediate impact of potential tariffs.

Full Eurozone PMI manufacturing final release here.

The Australian dollar is coming off a nasty week, declining 1.6%, and the slide has continued on Monday. AUD/USD fell as In the European session, AUD/USD is trading at 0.6146, down 1% on the day. Earlier, the Australian dollar fell as low as 0.6082, its lowest level since April 2020.

Trump tariffs, China PMI send Aussie reeling

It has been a dismal start to the trading week for the Australian dollar. There are two factors behind the Aussie’s latest troubles. First, US President Trumph has imposed 25% tariffs on Mexico and Canada, effective Tuesday. Mexico and Canada have both announced retaliatory tariffs in response, in what could quickly spiral into a full-blown trade war in the world’s largest trade zone.

Trump has also said he will go ahead on Tuesday with 10% tariffs against China, the world’s second largest economy. Global markets have been hit by fears of a global trade war resulting from the US tariffs and the Australian dollar, a risk curency, has been hit hard.

The Australian dollar has also reacted negatively to weak data out of China. The Caxain Manufacturing PMI slowed in January to 50.1, down from 50.5 in December and shy of the market estimate of 50.5. The reading was barely above the 50 level that separates expansion from contraction and indicated stagnation in factory activity.

Domestic demand improved in January but this was offset by a decline in export orders, as manufacturers rushed to ship orders in December to avoid the US tariffs. China’s government has introduced stimulus measures to prop up the economy and there has been improvement, such as in domestic demand. However, the Trump tariffs and a possible all-out trade between China and the US will hurt growth in both countries. So far, China has refrained from announcing retaliatory tariffs but China is unlikely to continue pulling its punches once the US tariffs take effect.

AUD/USD Technical

• AUD/USD is testing support at 0.6131. Below, there is support at 0.6062
• There is resistance at 0.6171 and 0.6240

The dollar index opened with gap-higher on Monday (up 1.1%), lifted by threats of trade war after US President Donald Trump imposed tariffs on imports from Canada, Mexico and China.

Two top US trading partners, Canada and Mexico immediately announced the counter measures, while China will look for assistance from World Trade Organization.

Although the dollar eased from the session peak, near-term structure remains firm, as daily studies improved (14-momentum emerged from negative territory, RSI rose above neutral 50 zone and MA’s turned into full bullish setup.

Markets see strong potential for further dollar’s rise in the environment of growing uncertainty over the negative consequences of trade war that fuels risk aversion.

Res: 109.73; 110.00; 110.50; 111.06
Sup: 108.61; 108.40; 107.89; 107.59

Crude oil started the week with some volatility, driven by tariffs and trade war concerns. Despite the initial recovery, I see this as a temporary corrective reaction higher in Elliott wave terms, and that sooner or later weakness could resume. The most important is a five-wave impulsive decline from above $79, that suggests that the trend may have shifted, signaling further downside after an intraday wave B rally.

The first resistance is already around 75.16, but with the sharp price movement into this area, I think there’s room for slightly higher prices within the a-b-c structure. Still, I expect bears to be back this week, as long as the market remains below the 79.36 invalidation level.