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Daily Pivots: (S1) 0.8256; (P) 0.8280; (R1) 0.8295; More...

EUR/GBP's fall from 0.8472 resumed by breaking through 0.8264 temporary low. Intraday bias is now back on the downside for retesting 0.8201/21 key support level. Firm break there will carry larger bearish implications. For now, risk will stay on the downside as long as 0.8304 resistance holds, in case of recovery.

In the bigger picture, the medium term down trend remains intact with EUR/GBP staying well inside the falling channel. Prior rejection by 55 W EMA (now at 0.8431) also affirm bearishness. Decisive break of 0.8201/8221 support zone will resume whole down trend from 0.9449 (2020 high) and carry larger bearish implications.

Daily Pivots: (S1) 1.4297; (P) 1.4333; (R1) 1.4372; More...

USD/CAD's break of 1.4378 resistance suggests that corrective pullback from 1.4791 has already completed at 1.4150. Intraday bias is back on the upside for retesting 1.4791 high next. On the downside, though, break of 55 4H EMA (now at 1.4276) will extend the correction through 1.4150 to 1.3946 cluster support (61.8% retracement of 1.3418 to 1.4791 at 1.3942).

In the bigger picture, long term up trend is tentatively seen as resuming with prior breach of 1.4667/89 key resistance zone (2020/2015 highs). Next target is 100% projection of 1.2401 to 1.3976 from 1.3418 at 1.4993. This will remain the favored case as long as 1.3976 resistance turned support holds (2022 high), even in case of deep pullback.

Daily Pivots: (S1) 148.52; (P) 149.20; (R1) 149.78; More....

Intraday bias in USD/JPY is turned neutral first, but further fall is in favor with 150.92 support turned resistance intact. Current fall from 158.86 is seen as the third leg of the pattern from 161.94 high. Below 148.55 will target 61.8% retracement of 139.57 to 158.86 at 146.32 next. On the upside, however, break of 150.92 will indicate short term bottoming and bring stronger rebound.

In the bigger picture, price actions from 161.94 are seen as a corrective pattern to rise from 102.58 (2021 low). In case of another fall, strong support should be seen from 38.2% retracement of 102.58 to 161.94 at 139.26 to bring rebound. However, sustained break of 139.26 would open up deeper medium term decline to 61.8% retracement at 125.25.

Daily Pivots: (S1) 0.8920; (P) 0.8943; (R1) 0.8969; More…

Intraday bias in USD/CHF stays neutral at this point. On the upside, firm break of 0.9053 resistance will suggest that corrective pattern from 0.9200 has already completed. Further rally should then be seen to retest 0.9200 resistance. In case of another fall, downside should be contained by 38.2% retracement of 0.8374 to 0.9200 at 0.8884 to bring rebound.

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) 1.2635; (P) 1.2676; (R1) 1.2716; More...

Further rise in GBP/USD remains mildly in favor with 1.2602 minor support intact, towards 1.2810 resistance. However, considering bearish divergence condition in 4H MACD, firm break of 1.2602 will indicate short term topping. Intraday bias will be turned back to the downside for near term channel support (now at 1.2424).

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.

The second estimate of fourth quarter real GDP growth was unchanged at 2.3% quarter-over-quarter (annualized) – in line with the consensus forecast. This marked a slight deceleration from the 3% pace in the prior two quarters.

Consumer spending remained strong and unchanged at 4.2%, but goods spending was revised down to 6.1% (from 6.6%), while services spending was revised up to 3.3% (from 3.1%). Non-residential investment fell 3.2% ( revised down from 2.2%), but residential investment remained a bright spot as it grew by 5.4% (up from 5.3%). The drag from private inventories was pared back slightly, with this category subtracting 0.8 percentage points (pp) to overall GDP (from -0.9 pp previously).

Government spending expanded by a healthy 2.9% (up from 2.5%), with federal spending up 4% and state & local spending up 2.2%.

Net exports contributed a minor 0.1 percentage points to Q4 GDP growth (up modestly from the flat reading in the prior estimate). This as the decline in exports was pared back slightly to -0.5% (from -0.8%), while imports fell more than in the initial estimate (-1.2% from -0.8%).

Key Implications

The second reading of fourth quarter U.S. GDP carried through only modest revisions, leaving intact the theme of solid economic activity at the end of last year. The consumer continued to power growth, while government spending and residential investment also lent a hand. But elsewhere, there were some signs of softness, with pullbacks in non-residential investment and inventories impeding an even better showing in overall growth.

Focusing on 2025, while there's plenty of uncertainty with things like tariffs and other policy measures hanging in the balance, we anticipate the U.S. economy will have another solid year, with growth to ease only moderately to 2.4% (from 2.8% in 2024). The consumer remains central to this theme and should continue to provide plenty of support ahead (see our Quarterly Q&A publication). That said, spending in 2025 appears to have got off to a slow start, after a strong December. A weak January retail sales report already alludes to this, but tomorrow's "personal income and spending" report will confirm if this was indeed the case.

Daily Pivots: (S1) 1.0464; (P) 1.0496; (R1) 1.0518; More...

EUR/USD dips notably in early US session but stays above 1.0400 support. Intraday bias stays neutral first. Firm break of 1.0400 should indicate that corrective pattern from 1.0400 has completed. Intraday bias will be back on the downside for retesting 1.0176/0210 support zone. Overall, near term outlook will stay bearish as long as 38.2% retracement of 1.1213 to 1.0176 at 1.0572 holds in case of another recovery.

In the bigger picture, immediate focus is 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. However, reversal from 1.0199 will argue that price actions from 1.1274 are merely a corrective pattern, and has already completed.

Dollar surged sharply across the board in early US session trading after US President Donald Trump reinforced his tariff plans, clarifying uncertainties that had lingered in the market. In a Truth Social post, Trump confirmed that the tariffs on Canada and Mexico will "go into effect, as scheduled" on March 4. Additionally, China will face an extra 10% tariff on the same date. The April 2 reciprocal tariff announcement will also remain "in full force and effect," he stated.

Market reaction was swift, with the greenback rallying against all major peers, even as incoming US economic data provided a mixed picture. January durable goods orders came in stronger than expected, but only driven largely by transportation equipment. Also, the labor market flashed a potential warning sign, as initial jobless claims surged to their highest level since December.

Yen and Swiss Franc are on the softer side today as US and European benchmark yields rebounded. However, neither currency showed a strong directional push. Euro, on the other hand, appears increasingly vulnerable, particularly against the British Pound. The latest selloff in EUR/GBP looks poised to gain further traction, as Eurozone fundamentals remain weak and tariff threats linger.

For the week so far, Dollar is now the strongest one with today's rally. Sterling is sitting as the second, followed by Yen. Kiwi and Aussie are the worst performers for now, followed by Loonie. Euro and Swiss Franc are mixed in the middle.

Technically, USD/CAD's strong break of 1.4378 resistance suggests that corrective pullback from 1.4791 has already completed at 1.4150. Further rise is expected as long as 55 4H EMA (now at 1.4275) holds, for retesting 1.4791 high. Strong resistance might be seen there to limit upside on first attempt.

However, the final implementation of tariffs on Canada might provided the needed fuel to power USD/CAD through 1.4791 to resume the larger up trend.

In Europe, at the time of writing, FTSE is up 0.04%. DAX is down -1.20%. CAC is down -0.77%. UK 10-year yield is up 0.014 at 4.520. Germany 10-year yield is up 0.002 at 2.438. Earlier in Asia, Nikkei rose 0.30%. Hong Kong HSI fell -0.29%. China Shanghai SSE rose 0.23%. Singapore Strait Times rose 0.34%. Japan 10-year JGB yield rose 0.003 to 1.396.

US durable goods orders rise 3.1% mom, led by transportation equipment

US durable goods orders rose 3.1% mom to USD 286.0B in January, well above expectation of 2.0% mom. Transportation equipment led the increase by 9.8% to USD 96.5B.

Ex-transport orders was flat at 189.5B, below expectation of 0.4% mom. Ex-defense orders rose 3.5% mom to USD 268.7B.

US initial jobless claims jump to 242k, above expectation 220k

US initial jobless claims rose 22k to 242k in the week ending February 22, above expectation of 220k. Four-week moving average of initial claims rose 8.5k to 224k.

Continuing claims fell -5k to 1862k in the week ending February 15. Four-week moving average of continuing claims rose 3k to 1865k.

ECB Minutes: No room for forward guidance as caution prevails

ECB's January 29-30 meeting account revealed that policymakers saw a "clear case" for a 25bps rate cut. Members agreed that disinflation is "well on track", and confidence in inflation converging to target has grown.

However, the accounts highlighted several lingering uncertainties that warranted a cautious approach going forward. Policymakers emphasized the need to maintain a data-dependent stance, with "no room for forward guidance" at this stage.

Upside risks to inflation remained from elevated energy and food prices, strong wage growth, and persistent services inflation.

ECB also flagged geopolitical tensions, fiscal policy concerns within Eurozone, and global trade uncertainties as downside risks to growth, "which typically also implied downside risks to inflation over longer horizons."

Swiss GDP expands 0.2% qoq in Q4, driven by domestic demand

Switzerland's economy maintained steady growth in Q4, with GDP expanding 0.5% qoq when adjusted for sporting events. Without the adjustment, GDP rose 0.2% qoq, in-line with expectations.

Private consumption increased by 0.5%, supported by higher spending on health, recreation, and culture. Government consumption also grew at the same pace, slightly exceeding historical trends.

Investment in equipment rebounded 1.0%, breaking a two-quarter decline, largely due to higher spending on aircraft and other volatile categories.

The increase in domestic demand also led to a 0.9% rise in imports of goods and services, with foreign trade contributing positively to GDP growth.

RBA’s Hauser: Global uncertainty justifies rate cut, but more easing depends on disnflation evidence

RBA Deputy Governor Andrew Hauser told the parliament today that mounting global uncertainty had a chilling effect on economic activity, which played a role in the board’s decision to cut the cash rate by 25 bps this month.

He noted that businesses are becoming increasingly cautious, delaying investment projects and expansion plans as they wait for clearer economic signals, "just to see how things pan out."

This hesitation, he suggested, made a slight easing of monetary policy a "sensible" response to support economic stability.

However, Hauser emphasized that further rate cuts are not guaranteed and will depend on incoming inflation data. Policymakers remain optimistic about further disinflation but need to see clear evidence before committing to additional policy easing.

NZ ANZ business confidence rises to 58.4, on the path to recovery

New Zealand’s ANZ Business Confidence rose from 54.4 to 58.4 in February. However, the Own Activity Outlook, slipped slightly from 45.8 to 45.1, highlighting that while sentiment is improving, actual activity remains uncertain.

Pricing and cost indicators painted a mixed picture. Inflation expectations for the next year eased from 2.67% to 2.53% and cost expectations fell from 73.6 to 71.3. But wage expectations remained elevated at 79.2 despite fall from 83.1, and pricing intentions ticked up from 45.7 to 46.2.

ANZ noted that the economy is on the "path to recovery," supported by lower interest rates and stronger-than-expected commodity export prices. However, the bank cautioned that the next phase of growth remains "a point of debate."

The pace of expansion will depend on how households perceive current interest rates, the extent to which global uncertainty influences business investment, and whether firms push forward despite challenges. Additionally, potential labor shortages could emerge as a key constraint on further growth.

EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.0464; (P) 1.0496; (R1) 1.0518; More...

EUR/USD dips notably in early US session but stays above 1.0400 support. Intraday bias stays neutral first. Firm break of 1.0400 should indicate that corrective pattern from 1.0400 has completed. Intraday bias will be back on the downside for retesting 1.0176/0210 support zone. Overall, near term outlook will stay bearish as long as 38.2% retracement of 1.1213 to 1.0176 at 1.0572 holds in case of another recovery.

In the bigger picture, immediate focus is 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. However, reversal from 1.0199 will argue that price actions from 1.1274 are merely a corrective pattern, and has already completed.

US initial jobless claims rose 22k to 242k in the week ending February 22, above expectation of 220k. Four-week moving average of initial claims rose 8.5k to 224k.

Continuing claims fell -5k to 1862k in the week ending February 15. Four-week moving average of continuing claims rose 3k to 1865k.

Full US jobless claims release here.

US durable goods orders rose 3.1% mom to USD 286.0B in January, well above expectation of 2.0% mom. Transportation equipment led the increase by 9.8% to USD 96.5B.

Ex-transport orders was flat at 189.5B, below expectation of 0.4% mom. Ex-defense orders rose 3.5% mom to USD 268.7B.

Full US durable goods orders release here.