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Daily Pivots: (S1) 0.9097; (P) 0.9119; (R1) 0.9131; More....

Intraday bias in EUR/CHF remains neutral and more consolidations could be seen above 0.9092. With 0.9180 resistance intact, further decline is expected. On the downside, firm break of 0.9092 will resume larger down trend and target 261.8% projection of 0.9394 to 0.9268 from 0.9347 at 0.9143. However, considering bullish convergence condition in 4H MACD, decisive break of 0.9180 will indicate short term bottoming, and bring stronger rebound towards 55 D EMA (now at 0.9224).

In the bigger picture, down trend from 0.9928 (2024 high) is still in progress with falling 55 W EMA (now at 0.9258) intact. Next target is 61.8% projection of 1.1149 to 0.9407 from 0.9928 at 0.8851. Outlook will stay bearish as long as 0.9394 resistance holds, in case of recovery.

Daily Pivots: (S1) 0.8716; (P) 0.8734; (R1) 0.8751; More…

Intraday bias in EUR/GBP stays neutral and outlook is unchanged. On the upside, decisive break of 0.8744 resistance will indicate that fall from 0.8863 has completed as a correction. Further rally should then be seen back to retest 0.8863 high. On the downside, sustained break of 38.2% retracement of 0.8221 to 0.8663 at 0.8618 will carry larger bearish implications and turn outlook bearish.

In the bigger picture, rise from 0.8221 medium term bottom (2024 low) is seen as a corrective move. Upside should be limited by 61.8% retracement of 0.9267 to 0.8221 at 0.8867. Sustained trading below 55 W EMA (now at 0.8631) should confirm that this corrective bounce has completed. In this case, deeper fall would be seen back to 0.8201/21 key support zone. However, decisive break of 0.8867 will suggest that EUR/GBP is already reversing whole decline from 0.9267 (2022 high). That should pave the way back to 0.9267.

Daily Pivots: (S1) 1.6704; (P) 1.6733; (R1) 1.6762; More...

Intraday bias in EUR/AUD remains neutral at this point. More consolidations could be seen. But with 1.7060 resistance intact, outlook stays bearish and further decline is expected. On the downside, break of 1.6620 will resume larger down trend from 1.8554 to 138.2% projection of 1.8554 to 1.7245 from 1.8160 at 1.6351 next. However, firm break of 1.7060 will indicate short term bottoming, and bring stronger rebound.

In the bigger picture, fall from 1.8554 medium term top is seen as reversing the whole up trend from 1.4281 (2022 low). Deeper decline should be seen to 61.8% retracement of 1.4281 to 1.8554 at 1.5913, which is slightly below 1.5963 structural support. For now, risk will stay on the downside as long as 1.7245 support turned resistance holds, even in case of strong rebound.

Daily Pivots: (S1) 207.91; (P) 208.56; (R1) 209.57; More...

Intraday bias in GBP/JPY remains neutral for the moment. On the downside, sustained break of 38.2% retracement of 197.47 to 214.98 at 208.29 will suggest that larger scale correction is already underway and target 203.27 fibonacci level. Nevertheless, strong rebound from current level, followed by break of 210.47 minor resistance will retain near term bullishness, and bring retest of 214.83/98 resistance zone.

In the bigger picture, considering the break of 55 D EMA, a medium term top could be formed at 214.98. Deeper correction would be seen, but downside should be contained by 38.2% retracement of 184.35 to 214.98 at 203.27. On the upside, break of 214.98 will resume larger up trend from from 123.94 (2020 low), and target 61.8% projection of 148.93 (2022 low) to 208.09 (2024 high) from 184.35 at 220.90.

Equity indices across European and US markets rose yesterday. Big Tech and software stocks rebounded, alongside gold and silver. Bitcoin lagged, underperforming the broader risk rally, but overall it was a constructive session.

The rebound was partly driven by a mixed – but less negative than expected – set of US data. Durable goods orders declined, though by less than anticipated. Housing starts improved and industrial production rose faster than expected, adding to last week’s jobs report showing the US economy added 130’000 jobs. The data pushed the US 2-year yield higher from its October lows, though this did not weigh on risk appetite.

On the corporate front, Meta announced that it will deploy millions of Nvidia processors over the coming years – a commitment worth tens of billions of dollars. Nvidia rose more than 1.5%, though it remained capped around the $190 level. Amazon gained 1.81% as investors shrugged off news that Berkshire Hathaway reduced its Amazon holdings by 75%. While some interpret that move as a warning about competitive risks from AI-driven disruption in e-commerce, the broader strategic picture may be more nuanced. Amazon has substantial upside leverage to AI across multiple segments — from warehouse automation and logistics optimisation to its AWS cloud franchise, one of the largest AI infrastructure providers globally, as well as its role in chip distribution. From a structural standpoint, Amazon remains one of the more diversified AI beneficiaries. With the stock pulling back toward long-term technical support, the risk-reward profile may look increasingly compelling to longer-term investors.

Overall, Roundhill’s Magnificent 7 index rebounded for a second consecutive session, recovering from its 200-day moving average. While two days of gains provided some breathing room, trend and momentum indicators suggest downside risks have not fully dissipated, particularly given concerns around leveraged AI-related worries. Big Tech now trades roughly 10% below record highs, which may attract dip buyers, though further volatility cannot be ruled out.

Will the selloff resume? That’s the million-dollar question. Futures are slightly positive this morning, but yesterday’s Fed minutes will certainly not be a great help. Despite insults, firing threats, personal attacks and public pressure from the White House and the US President himself, the latest FOMC minutes showed that some Fed members wanted to add a statement saying, “if inflation remains above target levels” , the Fed could raise rates. That would spook the White House, which wants these rate cuts, and could also create tensions over the Fed’s trajectory when Powell is replaced by Mr. Warsh, who more likely than not gave a sort of promise to the White House that he would push for lower rates come hell or high water.

It would be great, however, if the Fed’s direction is justified by economic data, because otherwise policy transmission may not go smoothly. The Fed could cut rates, but yields wouldn’t necessarily follow lower, limiting the impact on borrowing costs or mortgage rates that have a real effect on the economy and demand.

In FX markets, the US dollar is firmer following the stronger US data. The EURUSD is trading just below 1.18, hovering slightly above its 50-day moving average (1.1770). Cable has slipped below its 50-DMA and beneath the 38.2% Fibonacci retracement of the November-to-January rally, suggesting the pair has now stepped in the bearish consolidation zone and could ease further. This aligns with rising expectations of a more dovish Bank of England following softer labour market and inflation data. I like when the price action matches the fundamentals so perfectly!

And finally, crude oil rebounded yesterday as peace talks between Russia and Ukraine ended abruptly, and Iran/US talks didn’t rule out the possibility of a broad military operation in the region involving the US and Israel. It’s extremely hard to tell what’s next. If Middle East tensions ease thanks to fruitful nuclear talks between the US and Iran, oil should give back its gains at current levels. If, however, the threat of war rises — a scenario that would seriously shake the Middle East — we could see the price spike turn into a persistent medium-term positive trend. In that case, US crude could reasonably reach $80 per barrel. I really hope it doesn’t.

In focus today

The euro area consumer confidence data for February is released today and will shed light on the mood among households that are expected to drive growth this year. Consumer confidence remains low despite sound balance sheets and real income gains.

Overnight in Japan, we receive inflationary data for January and flash PMIs for February. CPI is expected to fall to 1.5% y/y in January (Dec: 2.1% y/y) and CPI ex. fresh food is expected to fall to 2.0% y/y in January (Dec: 2.4% y/y). January's PMI composite in Japan showed activity rising at the fastest pace in over a year, making February's flash figures key to assessing whether the economy can sustain its positive momentum.

Economic and market news

What happened overnight

In China, the IMF has urged China to reduce industrial subsidies, currently 4% of GDP, by 2 percentage points in a warning that China's export-heavy growth model is distorting global trade. IMF emphasised the need for China to shift towards a consumption-led growth model to address weak domestic demand and reduce reliance on manufacturing exports.

What happened yesterday

In the UK, January CPI data came in close to expectations, but if anything, slightly to the hawkish side. Headline inflation was 3.0% y/y (cons: 3.0%, prior: 3.4%), core at 3.1% y/y (cons: 3.0%, prior: 3.2%) and services at 4.4% y/y (cons: 4.3%, prior: 4.5%). A soft print today would have probably locked in a March cut from the Bank of England, but with another round of prints ahead of the next meeting, nothing is certain at this stage.

In the US, the minutes of FOMC's January meeting were released after the Fed held rates steady at 3.50%-3.75% at its January meeting. The minutes revealed that policymakers generally expect inflation to continue easing towards the 2% target. However, the minutes had a hawkish twist as 'several participants' suggested that the bank may need to raise interest rates if inflation stays above the target. The 'several' participants would have preferred a statement that raised the possibility of a hike 'if inflation remains at above-target levels'. The Fed's next meeting is in March where we expect the policy rate to remain unchanged followed by cuts in June and September.

Also in the US, December housing permits were 1.448mn (cons: 1.400mn). US residential construction outlook improved slightly at the end of last year, but the recovery is still in its very early stages. High long-end mortgage rates are still weighing on housing market activity, and demand for new mortgages has declined again in early 2026. Residential construction is not expected to be a major growth driver in 2026, and housing prices will continue to put downward pressure on CPI inflation at least for the next year.

Equities rebounded on Wednesday, led by tech stocks (including software). It was a classic rotation session, with investors moving back into growth cyclicals (tech, consumer discretionary) while taking profits in defensives that have rallied over the past month (utilities, real estate and staples down 1-2%). On an index level, S&P 500 rose 0.6% and the Stoxx 600 by 1.2%. Futures, however, are little changed this morning.

FI and FX: Risk-on sentiment dominated markets yesterday with yields rising, equities performing and oil climbing higher. 2Y US Treasury yields rose around 3bp and 10Y up 2bp. EUR/USD slipped below 1.18 as the broad USD extended its strength this week. While part of the rebound appears driven by crowded positioning being unwound, we still see limited scope for a sustained USD recovery. EUR/GBP moved slightly lower during yesterday's session as inflation figures for January surprised slightly to the topside. Beside GBP, the SEK is month's underperformer within G10 even though EUR/SEK and USD/SEK slipped back from the 10.67 and 9.03 highs from earlier in the week. The setbacks were attributable to the positive turn in risk sentiment bolstering the krona rather than any macro noise or domestic news. This was also the driver behind the rebound in NOK which was not least aided by energy having a strong session.

Daily Pivots: (S1) 181.67; (P) 182.10; (R1) 182.89; More...

EUR/JPY's break of 182.99 minor resistance argues that a short term bottom was formed at 180.78, after drawing support from 38.2% retracement of 172.24 to 186.86 at 181.27. Intraday bias is back on the upside for retesting 186.22/186.86 resistance zone first. One the downside, however, sustained break of 181.27 will argue that fall from 186.86 is correcting whole up trend from 154.77.

In the bigger picture, considering bearish divergence condition in D MACD and break of 55 D EMA, a medium term top could be formed at 186.86 already. Deeper correction would be seen but downside should be contained by 38.2% retracement of 154.77 to 186.86 at 174.60 to bring rebound. Meanwhile, firm break of 186.86 will resume larger up trend to 78.6% projection of 124.37 to 175.41 from 154.77 at 194.88 next.

Risk appetite was strong in Asian markets today, with several centers returning from Lunar New Year holidays and equities advancing. South Korea led the gains, with the Kospi hitting a fresh record high, driven by strength in technology heavyweights like Samsung Electronics and SK Hynix. Japan’s Nikkei also posted notable gains, although it remains below its historic peak.

Against this backdrop, Yen trades broadly lower, and the selloff appears to be gathering momentum. For the Japanese currency, the immediate question is whether the post-election rally has fully run its course and the cross-asset relationship with risk sentiment — traditionally inverse — is reasserting itself.

Meanwhile, Dollar jumped broadly higher overnight and remains generally firm this morning. Minutes from the January FOMC meeting indicated that another rate cut in the first half of the year is far from warranted. The fact that some Fed officials even brought up the idea of a rate hike on the table — albeit prematurely — was enough to perk up USD sentiment.

Aussie is also firmer today, buoyed by solid Australian job data that moves RBA one step closer to another hike in May. The firm labor prints reinforce the case that domestic monetary tightening may continue if inflation doesn’t ease materially.

Geopolitically, peace talks in Geneva appeared stuck without a major breakthrough. U.S.–Iran nuclear talks showed only modest progress, and Iran has not fully addressed U.S. red lines, according to Vice President JD Vance, prompting warnings that military options remain an option. Meanwhile, two days of Ukraine-Russia peace talks concluded without a breakthrough, and Ukrainian President Zelenskiy expressed dissatisfaction with the outcome. That uncertainty helped keep oil prices elevated and supported haven assets like Gold, even as markets remain cautiously positioned.

On the FX leaderboard this week, Dollar remains the strongest so far, followed by Kiwi and Loonie. Yen is the weakest, trailed by Sterling and then Kiwi. Euro and Swiss Franc sit in the middle.

In Asia, Nikkei rose 0.55%. Hong Kong and China were still on holiday. Singapore Strait Times is up 1.22%. Japan 10-year JGB yield is up 0.006 at 2.146. Overnight, DOW rose 0.26%. S&P 500 rose 0.56%. NASDAQ rose 0.78%. 10-year yield rose 0.027 to 4.079.

Rate hike mention in Fed minutes boosts dollar, USD/JPY back at 155

Dollar rallied across the board after release of FOMC minutes that were interpreted as more hawkish than markets anticipated. Strength was most visible against Yen, with USD/JPY back at around 155.

The key takeaway is not that the Fed is turning hawkish, but that uncertainty around future cuts is greater than previously assumed. While easing remains the base case, the minutes make clear that it is far from guaranteed. Risks to Fed’s dual mandate appear to have shifted. "Vast majority" of policymakers judged that downside risks to employment have "moderated", while risks of persistent inflation "remained". Some participants even commented that the balance of risks had moved back toward inflation.

One striking detail was that "several" officials floated the possibility of rate hikes if inflation fails to recede. The minutes noted that a two-sided description of future policy — including potential upward adjustments — could be appropriate under certain conditions. At the same time, "some" participants argued for holding rates steady for an extended period until disinflation progress is firmly back on track. Others reiterated that further easing would be appropriate if inflation declines as expected. The debate highlights the tilt against imminent cuts.

Market reaction was restrained but notable. March hold probability rose toward 94%, and June cut odds hover near 61%. The shift is incremental rather than dramatic But for Dollar, nuance mattered. The suggestion that hikes are back on table — even if unlikely — shifts perceived policy asymmetry. That underpins USD strength, particularly against low-yielders such as Yen.

Technically, USD/JPY's extended rebound and break of 154.63 minor resistance suggests that fall from 157.65 has completed at 152.25 already. 38.2% retracement of 139.87 to 159.44 at 151.96 is well defended. That keeps the price structure from 159.44 corrective, and also keeps the up trend from 139.87 (2025 low) intact. More upside would now likely be seen back to 157.65/159.44 resistance zone, even though a break above 159.44 to resume the up trend still looks premature.

Australia unemployment rate unchanged at 4.1%, jobs solid enough to keep RBA May hike in play

Australia added 17.8k jobs in January, slightly below expectations of 20.3k, but the details were firm. Full-time employment rose a strong 50.5k, while part-time positions fell -32.7k. Unemployment rate held steady at 4.1%, undershooting forecasts for a rise to 4.2%, with participation unchanged at 66.7%. Monthly hours worked increased 0.6% mom, reinforcing signs of steady labor demand.

The composition matters. The shift toward full-time employment and higher hours worked suggests underlying strength rather than softening. Taken together, the data indicate the labor market remains relatively tight, with the economy still operating close to capacity.

From the RBA’s perspective, the failure of employment conditions to weaken keeps inflation risks front and center. A cooling labor market would have allowed policymakers to shift focus toward growth risks. Instead, today’s figures reinforce the view that wage pressures may remain sticky.

The base case remains for another 25bps rate hike in May, pending Q1 CPI confirmation. Whether further tightening is needed beyond that remains an open question. But for now, the labor market is not providing the RBA with any comfort that inflation pressures will fade on their own.

RBNZ’s Silk: Growth and disinflation can coexist amid spare capacity

Following the RBNZ’s decision to keep the OCR at 2.25% yesterday, Assistant Governor Karen Silk emphasized that the economy can grow even as inflation moderates.

She acknowledged that the idea may appear counterintuitive but argued that the output gap provides room for above-trend growth without reigniting price pressures. But, according to Silk, the presence of spare capacity allows output to grow above potential temporarily without reigniting inflation.

Silk described risks around the projected cash-rate path as balanced. While some sectors are showing signs of recovery, consumption remains subdued. At the same time, she warned of upside inflation risks if firms facing squeezed margins begin raising prices more aggressively.

The RBNZ estimates the neutral cash rate at around 3%, suggesting policy is still accommodative. Current projections show only a gradual move toward that neutral level by late 2027. “That’s a reflection of that spare capacity that exists within the economy and the time it will take for that to be absorbed,” Silk said.

AUD/NZD eyes 1.20 after break to 13 year high

AUD/NZD’s medium-term uptrend resumed this week, lifting the cross to its highest level since 2013. The move extends a rally that began in mid-2025 and reflects widening policy divergence between the RBA and RBNZ.

The initial leg higher was driven by aggressive rate cuts from RBNZ, which pushed the OCR down to 2.25% and weakened Kiwi across the board. Momentum then re-accelerated earlier this month after RBA reversed course and resumed tightening, lifting the cash rate to 3.85%.

Fresh upside impetus came from disappointment over RBNZ’s policy hold this week. While projections showed a slightly higher future rate path, markets had hoped for a clearer hawkish signal.

Realistically, RBNZ may deliver at most one hike by year-end from current levels, with the OCR only slowly moving toward the estimated neutral rate near 3.00% by late 2027. That path contrasts sharply with Australia’s more immediate tightening bias.

Today’s robust Australian jobs data strengthened the divergence narrative. RBA remains on track for another hike in May. If inflation proves sticky and labor conditions fail to ease, risk of further tightening beyond May cannot be ruled out.

Technically, AUD/NZD is now targeting the 61.8% projection of 1.0795 to 1.1634 from 1.1412 at 1.1931. In any case, outlook will remain bullish as long as 1.1634 resistance turned support holds.

Momentum could carry the pair through the 1.20 handle, but upside may begin to fade as positioning becomes stretched. The broader medium-term hurdle sits at the 100% projection of 0.9992 (2020 low) to 1.1489 (2022 high) from 1.0649 (2025 low) at 1.2146.

Even with another RBA hike, clearing that barrier at 1.2146 decisively would require a more material shift in central bank outlooks, which is unlikely for now.  On the other hand, a topping formation between 1.2000 and 1.2146 would be likely, in particular, if RBNZ’s tightening timeline accelerates unexpectedly or if Australian data begin to soften materially.

EUR/JPY Daily Outlook

Daily Pivots: (S1) 181.67; (P) 182.10; (R1) 182.89; More...

EUR/JPY's break of 182.99 minor resistance argues that a short term bottom was formed at 180.78, after drawing support from 38.2% retracement of 172.24 to 186.86 at 181.27. Intraday bias is back on the upside for retesting 186.22/186.86 resistance zone first. One the downside, however, sustained break of 181.27 will argue that fall from 186.86 is correcting whole up trend from 154.77.

In the bigger picture, considering bearish divergence condition in D MACD and break of 55 D EMA, a medium term top could be formed at 186.86 already. Deeper correction would be seen but downside should be contained by 38.2% retracement of 154.77 to 186.86 at 174.60 to bring rebound. Meanwhile, firm break of 186.86 will resume larger up trend to 78.6% projection of 124.37 to 175.41 from 154.77 at 194.88 next.

AUD/NZD’s medium-term uptrend resumed this week, lifting the cross to its highest level since 2013. The move extends a rally that began in mid-2025 and reflects widening policy divergence between the RBA and RBNZ.

The initial leg higher was driven by aggressive rate cuts from RBNZ, which pushed the OCR down to 2.25% and weakened Kiwi across the board. Momentum then re-accelerated earlier this month after RBA reversed course and resumed tightening, lifting the cash rate to 3.85%.

Fresh upside impetus came from disappointment over RBNZ’s policy hold this week. While projections showed a slightly higher future rate path, markets had hoped for a clearer hawkish signal.

Realistically, RBNZ may deliver at most one hike by year-end from current levels, with the OCR only slowly moving toward the estimated neutral rate near 3.00% by late 2027. That path contrasts sharply with Australia’s more immediate tightening bias.

Today’s robust Australian jobs data strengthened the divergence narrative. RBA remains on track for another hike in May. If inflation proves sticky and labor conditions fail to ease, risk of further tightening beyond May cannot be ruled out.

Technically, AUD/NZD is now targeting the 61.8% projection of 1.0795 to 1.1634 from 1.1412 at 1.1931. In any case, outlook will remain bullish as long as 1.1634 resistance turned support holds.

Momentum could carry the pair through the 1.20 handle, but upside may begin to fade as positioning becomes stretched. The broader medium-term hurdle sits at the 100% projection of 0.9992 (2020 low) to 1.1489 (2022 high) from 1.0649 (2025 low) at 1.2146.

Even with another RBA hike, clearing that barrier at 1.2146 decisively would require a more material shift in central bank outlooks, which is unlikely for now. On the other hand, a topping formation between 1.2000 and 1.2146 would be likely, in particular, if RBNZ’s tightening timeline accelerates unexpectedly or if Australian data begin to soften materially.

Following the RBNZ’s decision to keep the OCR at 2.25% yesterday, Assistant Governor Karen Silk emphasized that the economy can grow even as inflation moderates.

She acknowledged that the idea may appear counterintuitive but argued that the output gap provides room for above-trend growth without reigniting price pressures. But, according to Silk, the presence of spare capacity allows output to grow above potential temporarily without reigniting inflation.

Silk described risks around the projected cash-rate path as balanced. While some sectors are showing signs of recovery, consumption remains subdued. At the same time, she warned of upside inflation risks if firms facing squeezed margins begin raising prices more aggressively.

The RBNZ estimates the neutral cash rate at around 3%, suggesting policy is still accommodative. Current projections show only a gradual move toward that neutral level by late 2027. “That’s a reflection of that spare capacity that exists within the economy and the time it will take for that to be absorbed,” Silk said.