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USDCHF: ⬇️ Sell

• USDCHF reversed from resistance level 0.7800
• Likely to fall to support level 0.7600

USDCHF currency pair recently reversed down from the resistance level 0.7800 (former strong support from September, acting as the resistance after it was broken last month) intersecting with the 50% Fibonacci correction of the downward impulse 5 from January.

The downward reversal from the resistance level 0.7800 started the active impulse wave (3).

Given the clear daily downtrend and the strongly bearish US dollar sentiment seen across FX markets today, USDCHF currency pair can be expected to fall toward the next support level 0.7600 (low of the previous impulse wave (3)).

Markets

(Bear) steepening is name of the game today with UK Gilts underperforming. UK yields add up to 8.2 bps at the 30-yr tenor, lifting it to the highest level (5.4%) since mid-November of last year. UK PM Starmer’s chief of staff McSweeney offered his resignation this weekend, taking “full responsibility” for his advice in hiring Peter Mandelson as UK ambassador in the US. It doesn’t take pressure off the PM though with several Labour members suggesting that Starmer should quit his job. McSweeney was credited with taking Labour policy away from the hard-left to a more centrist approach. Markets fear that the (fiscal) credibility of whoever, if any, comes next will be tested. If Starmer stays on, his political mandate will also be significantly weakened. Apart from UK Gilt yields, the higher risk premium is visible in sterling as well. EUR/GBP moves from 0.8682 to 0.8720.

Changes on the US yield curve range between -1.8 bps (2-yr) and +1.5 bps (30-yr). The long end of the curve responded this morning to news that China urged banks to curb US Treasuries exposure in the context of diversifying market risk, but that move didn’t really stick. The front end of the curve will continue to (out)perform, we believe, in the run-up to January non-farm payrolls which are up for release on Wednesday. Last week, some disappointing second tier labour data caused a US jobs recession scare and added to Thursday’s risk-off move. US National Economic Council Director Hassett, long frontrunner to succeed Fed Chair Powell, warned to expect slightly smaller job numbers but that those are consistent with high GDP growth this year because population growth is going down and productivity growth is skyrocketing. It’s unsure whether animal spirits will take into account that disclaimer in case of disappointing data. Today, markets ignored the “lower jobs numbers shouldn’t trigger panic” part of his story. Intraday dollar weakness became more pronounced after the Hassett remarks with EUR/USD starting the week at 1.1816 but currently clearing the 1.19-handle.

USD/JPY (155.50 from 157) moved away from potential FX intervention territory after the landslide LDP-victory in lower house elections. PM Takaichi gets the strong mandate she was looking for with a 2/3rd constitutional majority. Markets take it from the political stability point of view rather than the fiscally irresponsible one. The very long end of the Japanese yield curve erased an initial increase of around 5 bps, unlike the <=10y part of the curve.

News & Views

Norwegian GDP (excluding the offshore energy and shipping industry) grew by 0.4% in the final quarter of last year. The outcome was close to expectations. The Norges Bank (NB) in its Q4 monetary policy report forecasted growth of 0.5%. GDP growth for the mainland economy over 2025 was 1.8% (0.6% in 2024). Growth was driven by solid domestic demand including a 1% Q/Q rise in household consumption and 0.4% Q/Q rise in government consumption. Gross capital formation rose by 7.2% Q/Q. External trade components were reported at 3.6% volume growth for both exports and imports in Q4. Today’s data should confirm the assessment of the Norges Bank that a restrictive policy is needed as inflation is still too high. The NB guided that the policy rate might be reduced later this year, if the economy evolves as expected. The Q4 data release today suggests that there is no need for the NB to rush to rate cuts to support economic activity, as growth is holding up fairly well. The Norwegian krone gains marginally. After the recent (USD & commodity driven) rebound of the krone, EUR/NOK at 11.43 is coming closer to a MT-range bottom in the 11.26 area (2025/2024 lows).

Bank of France governor Francois Villeroy de Galhau announced that he will resign from his job as Bdf head in June of this year. The resignation was due to personal reasons as Villeroy said he will take the opportunity to lead a foundation supporting vulnerable youth and families. His (second) full term was only scheduled to expire end of October 2027. In this respect, it is now up to French president Macron to propose a new candidate for the job. The new candidate will be subject to hearings at the financial committees of the Senate and the National Assembly. They can block the presidents’ choice by a combined overall negative vote of three-fifths over the two Committees. Villeroy was one of the more dovish, heavy-weight, governors at the ECB.

Dow eases from new record high (50337) on Monday but remains steady and holds above broken magic 50K barrier that was taken out last Friday after almost 2.7% advance (the biggest daily gain since 9 April 2025).

The index outperformed major Wall St peers, with gains of Caterpillar, Goldman Sachs and Nvidia shares being mainly behind the latest strong rally.

Violation and weekly close above 50K (also the top of recent range at 49900) was strong bullish signal which looks for validation on sustained break higher that would open way towards projections at 50434, 50599, 50764 and 51000 round figure barrier.

Positive daily studies (strong bullish momentum, MAs in bullish setup and the action being underpinned by rising and thickening daily cloud) remain supportive, along with formation of bullish engulfing pattern (Friday).

Profit taking after strong gains last Friday should be limited and provide better levels to re-enter bullish market, as overall environment remains positive.

Broken 50000 barrier and 49900 former range top reverted to solid supports which should ideally hold dips and keep bulls intact.

Res: 50337; 50434; 50600; 50764
Sup: 50000; 49900; 49750; 49400

Market Overview

The crypto market cap has declined by approximately 10% over the past seven days to $2.36 trillion. Ironically, this appears to be positive news, as it represents a 10% increase from Friday’s lows. However, we remain very sceptical about the near future, as the recovery momentum lost steam over the weekend, encountering a sell-off near the $2.4T level. Perhaps we have only seen a bounce on the way down, which is not yet complete.

The sentiment index plunged to 6 over the weekend, repeating the lows of June 18-19 from 2022, and we have only seen this indicator lower on August 22, 2019. By Monday, this indicator had recovered to 14, following the quotes. These are still too low levels for confident purchases.

Bitcoin grew steadily on Friday after crashing at the very beginning of the day, but since Saturday, it has faced resistance near $71K. There is still a huge supply in the markets from those who want to exit the first cryptocurrency on the rebound. In such conditions, it is worth being prepared for a new test of the 200-week moving average soon.

News Background

The fall in Bitcoin prices was accompanied by a reduction in liquidity, a surge in volatility, a decline in risk appetite, and an increase in correlation with stock indices. CryptoQuant admits that BTC could fall to $54,600, where the market could move from a phase of capitulation to a phase of accumulation.

Against the backdrop of the crypto market decline, Strategy’s net loss for the fourth quarter was $12.6 billion, according to the company’s quarterly report, and its operating loss reached $17.4 billion. Strategy CEO Fong Le assured investors that risks to the company’s debt servicing would only arise in the event of an extreme drop in BTC to $8,000.

Cardano founder Charles Hoskinson reported unrealised losses of more than $3 billion. He stressed that he does not intend to liquidate positions, even if the market situation worsens.

Bitcoin miners are massively shutting down their equipment due to mounting losses. The BTC mining profitability indicator has fallen to record lows amid a decline in the crypto market and rising electricity prices. JPMorgan estimates the cost of mining to be around $87K.

As a result of the latest recalculation, the difficulty of mining Bitcoin has plummeted by 11.16% to 125.86 T. This is the most significant drop since 2021, when the Chinese authorities banned cryptocurrency mining.

Despite the current negativity, JPMorgan is optimistic about BTC and predicts that in the long term, the first cryptocurrency could reach $266K. Earlier, the bank raised its long-term forecast for gold to $8,000–8,500.

Daily Pivots: (S1) 1.3624; (P) 1.3675; (R1) 1.3725; More...

USD/CAD's break of 1.3625 support suggests that corrective rebound from 1.3480 has completed at 1.3723 already. Intraday bias is back on the downside for retesting 1.3480 first. Firm break there will resume larger down trend from 1.4791 to 61.8% projection of 1.4791 to 1.3538 from 1.4139 at 1.3365.

In the bigger picture, price actions from 1.4791 are seen as a corrective pattern to the whole up trend from 1.2005 (2021 low). Deeper fall could be seen as the pattern extends, to 61.8% retracement of 1.2005 to 1.4791 at 1.3069. For now, medium term outlook will be neutral at best, until there are signs that the correction has completed, or that a bearish trend reversal is confirmed.

Daily Pivots: (S1) 1.1780; (P) 1.1803; (R1) 1.1840; More….

EUR/USD's break of 1.1870 minor resistance suggest that pullback from 1.2081 has completed at 1.1764. Intraday bias is back on the upside for retesting 1.2081 high. Decisive break above 1.2 will carry larger bullish implications. On the downside, however, sustained trading below 55 D EMA (now at 1.1730) will raise the chance of reversal on rejection by 1.2 psychological level, and target 1.1576 support for confirmation.

In the bigger picture, as long as 55 W EMA (now at 1.1470) holds, up trend from 0.9534 (2022 low) is still in favor to continue. Decisive break of 1.2 key psychological level will add to the case of long term bullish trend reversal. Next medium term target will be 138.2% projection of 0.9534 to 1.1274 from 1.0176 at 1.2581. However, sustained trading below 55 W EMA will argue that rise from 0.9534 has completed as a three wave corrective bounce, and keep long term outlook bearish.

Daily Pivots: (S1) 1.3540; (P) 1.3581; (R1) 1.3654; More...

Intraday bias in GBP/USD remains neutral for the moment. On the downside, below 1.3507 will resume the fall from 1.3867 to 55 D EMA (now at 1.3490). Sustained break there will raise the chance of larger scale correction, and target 1.3342 support for confirmation. On the upside, above 1.3732 minor resistance will bring retest of 1.3867. Firm break there will resume larger up trend towards 1.4284 key resistance.

In the bigger picture, rise from 1.0351 (2022 low) is resuming by breaking through 1.3787 high. Further rally should be seen to 1.4284 key resistance (2021 high). Decisive break there will add to the case of long term bullish trend reversal. For now, outlook will stay bullish as long as 1.3008 support holds, even in case of deep pullback.

Daily Pivots: (S1) 156.75; (P) 157.01; (R1) 157.51; More...

Intraday bias in USD/JPY remains neutral for the moment. Rise from 152.07 is seen as the second leg of the corrective pattern from 159.44. Above 157.65 will target a retest on 159.44 high. However, on the downside, below 155.51 minor support will bring deeper fall as another falling leg. But downside should be contained by 38.2% retracement of 139.87 to 159.44 at 151.96.

In the bigger picture, outlook is unchanged that corrective pattern from 161.94 (2024 high) should have completed with three waves at 139.87. Larger up trend from 102.58 (2021 low) could be ready to resume through 161.94. This will remain the favored case as long as 55 W EMA (now at 151.68) holds. However, sustained break of 55 W EMA will argue that the pattern from 161.94 is extending with another falling leg.

Daily Pivots: (S1) 0.7746; (P) 0.7767; (R1) 0.7782; More….

USD/CHF's break of 0.7713 support suggests that corrective rebound from 0.7603 has already completed at 0.7816. Intraday bias is back on the downside for retesting 0.7603 first. Firm break there will resume larger down trend to 0.7382 projection level next.

In the bigger picture, larger down trend from 1.0342 (2017 high) is still in progress. Next target is 100% projection of 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.7382. In any case, outlook will stay bearish as long as 55 W EMA (now at 0.8152) holds.

Dollar is softer across the board today as its recent rebound appears to be losing momentum. The move lacks a single defining trigger, instead reflecting a convergence of sentiment shifts and near-term positioning adjustments. One important backdrop is the stabilization in risk appetite. After markets spent much of last week grappling with AI-related disruption fears and concerns over surging capital expenditure, those anxieties have eased. Equity markets, particularly in the US, have steadied, reducing the need for defensive Dollar exposure.

Another factor may be growing caution ahead of the delayed January non-farm payroll report. Following a string of softer labor market signals last week, some traders appear to be hedging against the risk of a downside surprise in headline job creation. Adding to the pressure are reports suggesting Chinese regulators have encouraged financial institutions to scale back holdings of US Treasuries due to heightened market volatility. While the immediate impact is unclear, the headlines add to broader uncertainty surrounding foreign demand for US assets.

Despite these pressures, the Dollar’s pullback remains orderly. Many market participants appear reluctant to commit to larger directional trades, at least until the payroll data provides clearer guidance on the Fed’s policy path.

Meanwhile, Sterling is also under pressure today, particularly against Euro and Swiss Franc, as domestic political risk resurfaces sharply. UK Prime Minister Keir Starmer’s government is facing its most severe crisis yet following the back-to-back resignations of two senior aides. Chief of Staff Morgan McSweeney resigned on Sunday, followed less than 24 hours later by Director of Communications Tim Allan, intensifying scrutiny around leadership stability.

The resignations are tied to a widening scandal surrounding the appointment of Peter Mandelson as UK ambassador to the US, amid revelations about the depth of his past relationship with the late convicted sex offender Jeffrey Epstein. The issue has quickly escalated from reputational risk to a full-blown political liability.

Reports suggest Downing Street is bracing for a delegation of Cabinet ministers to urge Starmer to step aside. Names such as Health Secretary Wes Streeting and former Deputy Prime Minister Angela Rayner are already being floated as potential successors, injecting fresh uncertainty into the UK political outlook.

In Japan, the so-called “Takaichi trade” partially resurfaced after Prime Minister Sanae Takaichi secured a historic supermajority in the Lower House, delivering the LDP its strongest result since World War Two. The result significantly strengthens her legislative authority.

While Nikkei surged to new record highs on the back of the election outcome, Yen did not collapse as some had expected. Instead, it staged a modest recovery as a chorus of senior Japanese officials stepped up verbal intervention, warning against one-sided FX moves. Still, this should not be mistaken for a structural Yen reversal. The currency is merely retracing a portion of recent losses as traders adopt a wait-and-see stance, likely looking for better levels to re-establish short positions.

For the day so far, Dollar sits at the bottom of the performance table, followed by Kiwi and Sterling. Swiss Franc leads gains, with Euro and Yen also firmer, while Loonie and Aussie are trading in the middle of the pack.

In Europe, at the time of writing, FTSE is down -0.12%. DAX is up 0.44%. CAC is up 0.09%. UK 10-year yield is up 0.049 at 4.562. Germany 10-year yield is up 0.009 at 2.853. Earlier in Asia, Nikkei rose 3.89%. Hong Kong HSI rose 1.76%. China Shanghai SSE rose 1.41%. Singapore Strait Times rose 0.54%. Japan 10-year JGB yield rose 0.059 to 2.294.

Eurozone Sentix jumps to 4.2, growth hope without inflation alarm

Eurozone investor confidence showed notable improvement in February, with the Sentix Investor Confidence Index rising from -1.8 to 4.2, above expectations of -0.2 and marking the highest reading since July 2025. The improvement was broad-based. Current Situation Index climbed from -13.0 to -6.8, its strongest level since April 2023. Meanwhile, Expectations Index rose from 10.0 to 15.8, also the highest since last summer, pointing to growing belief that the worst of the downturn has passed.

Sentix described the data as a “silver lining” for the Eurozone economy, arguing that the recession phase has likely ended and an upturn is beginning. While private investors remain somewhat cautious, institutional investors appear to be turning decisively more optimistic, with professional expectations reportedly rising to +24 points.

Inflation concerns have not re-emerged despite volatility in commodity markets and firmer oil prices. Investors surveyed see little risk of renewed inflation pressure, a backdrop that should allow the ECB to maintain its current policy stance. Markets continue to expect monetary policy to remain mildly supportive, and "definitely do not anticipate a restrictive phase."

Japan's nominal pay accelerates to 2.4% in December, but real wages still negative

Japan’s real wages fell -0.1% yoy in December, marking the 12th consecutive monthly decline, though the contraction was the smallest seen in 2025. While the pace of erosion is clearly slowing, the data underline how inflation continues to outpace pay gains for households.

Nominal wages rose 2.4% yoy, extending a 48-month streak of increases, but the outcome fell short of expectations for a 3.0% rise. The acceleration from November’s 1.7% growth points to improving momentum, but not yet at a pace sufficient to deliver sustained real income gains.

Breaking down the components, base salaries rose 2.2% yoy, picking up from November's 1.7% yoy. Overtime pay increased 0.9%, slightly slower than the prior month's 1.2%. Special payments, largely winter bonuses, rose 2.6% up from 1.5%.

Attention now shifts firmly to the upcoming spring wage negotiations. The key questions are whether large firms can again deliver pay hikes above 5% for the third straight years, and whether those gains finally spill over to smaller companies.

USD/CHF Mid-Day Outlook

Daily Pivots: (S1) 0.7746; (P) 0.7767; (R1) 0.7782; More….

USD/CHF's break of 0.7713 support suggests that corrective rebound from 0.7603 has already completed at 0.7816. Intraday bias is back on the downside for retesting 0.7603 first. Firm break there will resume larger down trend to 0.7382 projection level next.

In the bigger picture, larger down trend from 1.0342 (2017 high) is still in progress. Next target is 100% projection of 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.7382. In any case, outlook will stay bearish as long as 55 W EMA (now at 0.8152) holds.