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Equity markets are largely moving lower on Tuesday, reversing part of Monday's gains in what remains quite choppy trade.

Earnings season will continue to dominate and so far, there isn't really anything positive to take away from it. There are still a lot of huge names to report, of course, but so far it basically underlines everything investors already think about the economy at the moment.

The environment is currently very challenging and uncertain, while the labour market is overly tight under the circumstances and highly likely to loosen considerably over the coming months. Investors are looking for any indication that this may be too pessimistic but they aren't really getting what they want.

What's more, the economic data we've seen this morning doesn't exactly inspire either. The European PMIs were a little better than expected and improved in many cases while still being pretty weak. The all-important UK services sector on the other hand was both weak and softer than expected, and even last month's number was revised lower into contraction territory.

So basically the euro area may in fact avoid a recession while not really growing in any significant way, and the UK is almost certainly heading for one even if it manages to have avoided it in the second half of last year. And that's before we talk about interest rates again and whether market expectations are in fact too optimistic which would make the situation worse. It clearly doesn't take much to shift the mood in the markets.

Starting to run on fumes?

Oil prices are marginally higher again, continuing the good run they've been on since early in the year, but momentum is starting the fade. The China reopening trade has boosted oil prices considerably but we perhaps need more data to justify a continuation of that.

Reports suggest that OPEC+ delegates expect the panel to recommend no changes to output when they meet next week which indicates they believe the market is fairly balanced at the moment. Of course, there's considerable uncertainty in the global outlook and the China transition so that remains subject to change.

Rising on declining momentum

Gold is edging higher again on slightly softer yields in the bond market. Of course, it is once again doing so on weaker momentum which suggests that, barring any bullish catalyst that would change that, it may be shaping up for a correction of some kind. It's come well off its early November lows at this point and plenty of there's potentially plenty of resistance ahead. Of course, how much very much depends on the signals central banks and the economic data send over the coming weeks.

Choppiness continues

Bitcoin has been very choppy in recent days, trading largely between $22,300 and $23,300. That's a fairly tight range but importantly, it's not really given back any of the extraordinary gains it enjoyed over the last couple of weeks. That will continue to provide encouragement the longer it remains the case, especially if it can once again break higher from here.

The US 100 cash index is flirting with the long-term downtrend line, taken from the peak in March 2022 and the 200-day SMA around 11,970. The index has been consolidating within a sideways channel with upper boundary the 12,080 resistance and lower boundary the 10,660 support. The RSI is sloping down in the positive region; however, the MACD is still extending its momentum above its trigger and zero lines.

Traders would be more eager to engage in buying activities if the price manages to surpass the nearby barrier of the 200-day SMA at 11,970. If this is successfully breached, the rally may next rest somewhere between 12,890 and 13,207.

On the flip side, the selling pressure could accelerate again if the market deteriorates below the 50- and the 100-day SMAs lines. Such a move could next bring the 10,660 lower boundary under the spotlight, which if violated could trigger sharper losses probably towards 10,424.

In the long-term timeframe, the pair is in a bearish trend, while in the medium-term it is neutral. A push above 12,080 may shift the outlook to slightly bullish.

Daily Pivots: (S1) 1.2319; (P) 1.2384; (R1) 1.2443; More...

Intraday bias in GBP/USD remains neutral despite today's decline. On the downside, firm break of 1.2252 minor support will turn bias to the downside, and extend the corrective pattern from 1.2445 with another falling leg. On the upside, decisive break of 1.2445 will confirm resumption of whole rise from 1.0351. Next target will be 1.2759 fibonacci level.

In the bigger picture, rise from 1.0351 medium term bottom is at least correcting whole down trend from 1.4248 (2021 high). Further rise is expected as long as 1.1644 resistance turned support holds. Next target is 61.8% retracement of 1.4248 to 1.0351 at 1.2759. Sustained break there will pave the way back to 1.4248.

Daily Pivots: (S1) 1.0837; (P) 1.0882; (R1) 1.0917; More...

No change in EUR/USD's outlook and further rise is expected with 1.0765 support intact. Current rise from 0.9534 should target 61.8% projection of 0.9630 to 1.0733 from 1.0482 at 1.1164 next. On the downside, though, break of 1.0765 support should now indicate short term topping, and turn bias back to the downside for 55 day EMA (now at 1.0557).

In the bigger picture, current development suggests that the rally from 0.9534 low (2022 low) is a medium term up trend rather than a correction. Further rise is in favor to 61.8% retracement of 1.2348 (2021 high) to 0.9534 at 1.1273 next. This will remain the favored case as long as 1.0482 support holds.

Daily Pivots: (S1) 0.9152; (P) 0.9193; (R1) 0.9245; More...

Intraday bias in USD/CHF is staying neutral at this point. On the downside, sustained break of 61.8% projection of 1.0146 to 0.9355 from 0.9545 at 0.9056 will pave the way to 100% projection at 0.8754, which is close to 0.8756 long term support. Nevertheless, on the upside, break of 0.9407 should confirm short term bottoming and turn bias back to the upside.

In the bigger picture, rise from 0.8756 (2021 low) has completed at 1.0146, well ahead of 1.0342 long term resistance (2016 high). Based on current downside momentum, fall from 1.0146 should be a medium term down trend itself. Next target is a test on 0.8756 low. Strong support should be seen there to bring rebound. Still, further decline will now be expected as long as 0.9407 resistance holds, in any case.

Daily Pivots: (S1) 129.53; (P) 130.21; (R1) 131.37; More...

Intraday bias in USD/JPY remains neutral as sideway trading continues. On the downside, break of 127.20 will resume the whole decline from 151.93 and target 121.43 fibonacci level. Nevertheless, on the upside, break of 131.56 should confirm short term bottoming, and turn bias back to the upside for stronger rebound to 55 day EMA (now at 134.49).

In the bigger picture, the break of 55 week EMA (now at 131.47) raises the chance of medium term bearish reversal, but that's not confirmed yet. Strong support could be seen around 61.8% retracement of 102.58 to 151.93 at 121.43 and 38.2% retracement of 75.56 to 151.93 at 122.75 to bring rebound. But break of 131.56 resistance is needed to indicate bottoming first. Otherwise further fall will remain in favor.

Daily Pivots: (S1) 160.83; (P) 161.32; (R1) 162.27; More...

Intraday bias in GBP/JPY is turned neutral as it failed to break through 55 day EMA (now at 162.09) again. On the downside, break of 155.33 low will resume the fall form 172.11 to 153.70 fibonacci level next. Risk will stays on the downside as long as 55 day EMA holds, even in case of another rally attempt.

In the bigger picture, as long as 163.02 support turned resistance holds, decline from 172.11 medium term top is expected to continue to 38.2% retracement of 123.94 to 172.11 at 153.70. Sustained break there will raise the change of trend reversal and target 61.8% retracement at 142.34. Nevertheless, break of 163.02 support turned resistance will argue that the decline has completed, and retain medium term bullishness.

Sterling falls broadly today and poor PMI data indicates that recession is continuing in the UK. Comparatively, Eurozone PMIs argue that it might have escaped recession. For now, the Pound is the worst performer for the day, followed by Swiss Franc, and then Aussie. Yen is the strongest, trying to recover again, followed by Canadian and Dollar. Euro is mixed in between.

Technically, some attention will be on 1.2252 minor support in GBP/USD for the rest of the day. Break there will indicate that rise from 1.1840 has completed after rejection by 1.2445 resistance. Bias will be back on the downside for 1.1840 support again, as the corrective pattern from 1.2445 starts the third leg. Such development will more likely be accompanied by selloff in the Pound elsewhere, rather than Dollar buying.

In Europe, at the time of writing, FTSE is down -0.23%. DAX is down -0.23%. CAC is up 0.02%. Germany 10-year yield is down -0.0074 at 2.197. Earlier in Asia, Nikkei rose 1.46. Japan 10-year JGB yield rose 0.0338. Hong Kong, China, and Singapore were still on holidays.

UK PMI composite hit 24-month low, decline rate remains only modest

UK PMI Manufacturing rose from 45.3 to 46.7 in January, above expectation of 45.4. However, PMI Services dropped from 49.9 to 48.0, below expectation of 49.6, hitting a 24-month low. PMI Composite dropped from 49.0 to 47.8, a 24-month low too.

Chris Williamson, Chief Business Economist at S&P Global Market Intelligence said: "Weaker than expected PMI numbers in January underscore the risk of the UK slipping into recession... There were some bright spots in the survey, including improved business expectations for the year ahead and a further cooling of inflationary pressures. The overall rate of decline indicated also remains only modest. But this is undeniably a disappointing start to the year for the UK."

Eurozone PMI composite rose to 50.2, escaping recession but renewed contraction shouldn't be ruled out

Eurozone PMI Manufacturing rose from 47.8 to 48.8 in January, above expectation of 48.1. PMI services rose from 49.8 to 50.7, above expectation of of 49.4, and back in expansion. PMI Composite rose from 49.3 to 50.2, a 7-month high.

Chris Williamson, Chief Business Economist at S&P Global Market Intelligence said:

"A steadying of the eurozone economy at the start of the years adds to evidence that the region might escape recession.... The region is by no means out of the woods yet, however, as demand continues to fall – merely dropping at a reduced rate... The case for higher interest rates is fuelled further by the upturn in employment growth recorded during the month and signs of higher wages driving the latest upturn in price pressures.

"A case for policy caution is supported by the survey merely indicating a stagnation of the eurozone economy, hinting that a renewed slide into contraction should not be ruled out as borrowing costs rise, but the survey undoubtedly brings welcome good news to suggest that any downturn is likely to be far less severe than previously feared and that a recession may well be avoided altogether."

Germany Gfk consumer sentiment rose to -33.9, positive trend consolidating

Germany Gfk consumer sentiment for February rose 3.7 pts to -33.9, below expectation of -33.0. In January, Economic expectations improved from -10.3 to -0.6. Income expectations rose from -43.4 to -32.2. Propensity to buy dropped from -16.3 to -18.7.

"With the fourth increase in a row, the positive trend in consumer sentiment is consolidating. Even though the level is still very low, pessimism has eased recently", explains GfK consumer expert Rolf Bürkl.

"Falling energy prices, such as for gasoline and heating oil, have ensured that consumer sentiment is less gloomy. Nevertheless, 2023 will remain difficult for the domestic economy. Private consumption will not be able to positively contribute to overall economic development this year. This is also signaled by the still very low level of the indicator."

Japan PMI manufacturing unchanged at 48.9, services rose to 52.4

Japan PMI Manufacturing was unchanged at 48.9 in January, below expectation of 49.4. PMI Services rose from 51.5 to 52.4. PMI Composite rose form 49.7 to 50.8.

Laura Denman, Economist at S&P Global Market Intelligence, said: "Japan's private sector kicked off 2023 on a more positive note, as signalled by activity returning to growth territory in January. However, similar to trends recorded over much of the past six months, a divergence between the manufacturing and services sectors has remained.

Australia PMI composite rose to 48.2, economy is not slowing sufficiently for RBA

Australia PMI Manufacturing fell from 50.2 to 49.8 in January, a 32-month low. PMI Services rose from 47.3 to 48.3. PMI Composite rose from 47.5 to 48.2.

Warren Hogan, Chief Economic Advisor at Judo Bank said:

"Following eight consecutive rate hikes in 2022, the RBA Board will be meeting for the first time on 7 February. The latest PMI readings may raise the concern that the economy is not slowing sufficiently to bring inflation back to target in a timely manner...

"Inflation pressures may abate somewhat but the risk for the RBA is that inflation remains stubbornly high well into 2023. This could maintain upward pressure on inflation expectations and wages growth. On this basis it seems premature for the RBA to pause the current tightening cycle....

"We expect the RBA to hike the cash rate by 25bp in each of February and March before an extended pause. Further rate hikes may be required later in 2023 if the economy and inflation prove more resilient than current consensus forecasts suggest."

Australia NAB business conditions fell to 12, confidence improved to -1

Australia NAB Business Conditions fell from 20 to 12 in December. Trading conditions fell from 27 to 18. Profitability conditions fell from 19 to 12. Employment conditions also declined from 13 to 8. Business Confidence improved from -4 to -1.

NAB Chief Economist Alan Oster said: "The main message from the December monthly survey is that the growth momentum has slowed significantly in late 2022 while price and purchase cost pressures have probably peaked".

"The gap between current business conditions and business confidence remains wider than usual though has narrowed. Ultimately while on average business reports still healthy activity at present, they don't necessarily expect that to last."

NZ BusinessNZ services dropped to 52.1, marked a significant slowdown

New Zealand BusinessNZ Performance of Services Index dropped from 53.8 to 52.1 in December. Looking at some details, activity/sales dropped notably from 58.2 to 52.1. Employment fell from 51.8 to 47.1. New orders/business rose from 57.4 to 58.4. Stocks/inventories declined from 54.6 to 51.7. Supplier deliveries increased from 46.8 to 53.4.

BNZ Senior Economist Craig Ebert said that "December marked a significant slowdown in a short space of time for the PSI, although the maintained loftiness in New Orders/Business suggested there was still a lot of demand-side pressure at play".

EUR/GBP Mid-Day Outlook

Daily Pivots: (S1) 0.8752; (P) 0.8784; (R1) 0.8813; More...

EUR/GBP's rebound from 0.8270 resumed after brief consolidations. Intraday bias is back on the upside for retesting 0.8896 resistance. Firm break there will resume whole rise from 0.8896 to 61.8% projection of 0.8545 to 0.8896 from 0.8720 at 0.8937. On the downside, below 0.8765 minor support will turn intraday bias neutral again.

In the bigger picture, the notable support from 55 day EMA (now at 0.8752) retains near term bullishness. Break of 0.8896 should target 0.9267 (2022 high) and possibly above, to resume whole up trend from 0.8201 (2022 low). However, break of 0.8270 support and sustained trading below 55 day EMA will set the stage for 0.8545 and below.

Economic Indicators Update

Daily Pivots: (S1) 0.8752; (P) 0.8784; (R1) 0.8813; More...

EUR/GBP's rebound from 0.8270 resumed after brief consolidations. Intraday bias is back on the upside for retesting 0.8896 resistance. Firm break there will resume whole rise from 0.8896 to 61.8% projection of 0.8545 to 0.8896 from 0.8720 at 0.8937. On the downside, below 0.8765 minor support will turn intraday bias neutral again.

In the bigger picture, the notable support from 55 day EMA (now at 0.8752) retains near term bullishness. Break of 0.8896 should target 0.9267 (2022 high) and possibly above, to resume whole up trend from 0.8201 (2022 low). However, break of 0.8270 support and sustained trading below 55 day EMA will set the stage for 0.8545 and below.

Gold came to new highs, but it's seen in late stages of a final fifth wave that belongs to an impulse from 1784, so we should be aware of a bearish reversal since we know that after every five waves new correction can show up. We can also see price now testing fifth wave Fib target at 1940 while RSI shows a divergence so there is s chance that bulls will slow down, especially if the USD will find some support now when US yields are turning slightly lower.

If you want to and here more about gold and also silver check the video below.

https://www.youtube.com/watch?v=vVvBAtXZQ-w&t=402s