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Key Highlights

• EUR/USD started a downside correction from the 1.1145 level.
• A connecting bullish trend line is forming with support at 1.0840 on the 4-hour chart.
• GBP/USD dipped heavily below the 1.3050 and 1.3000 levels.
• Gold prices corrected gains and traded below the $3,050 level.

EUR/USD Technical Analysis

The Euro faced a strong rejection near 1.1150 against the US Dollar. EUR/USD started a major decline below the 1.1050 and 1.1000 levels.

Looking at the 4-hour chart, the pair traded below the 50% Fib retracement level of the upward move from the 1.0732 swing low to the 1.1146 high. However, the pair is still above the 100 simple moving average (red, 4-hour) and the 200 simple moving average (green, 4-hour).

There is also a connecting bullish trend line forming with support at 1.0840 on the same chart. If there is a fresh increase, the pair could face resistance near the 1.0980 level.

The next major resistance is near the 1.1050 level. The main resistance is now forming near the 1.1150 zone. A close above the 1.1150 level could set the tone for another increase. In the stated case, the pair could even clear the 1.1200 resistance.

On the downside, immediate support sits near the 1.0840 level. The next key support sits near the 1.0820 level. Any more losses could send the pair toward the 1.0750 level.

Looking at Gold, the price started a sharp downside correction and there was a clear move below the $3,050 level.

Upcoming Economic Events:

• Euro Zone Retail Sales for Feb 2025 (MoM) - Forecast +0.5%, versus -0.3% previous.

Gold had a shaky start to the week, being dragged below 3000 psychological level briefly, alongside broader risk asset liquidation. But as stock markets across Asia extended their crash into Monday, the precious metal caught some safe haven flows and bounced back above 3030 quickly.

Meanwhile, a critical 2950/60 zone appears to be providing strong support for Gold too. Reaction to this zone would unveil whether the intensifying global trade tensions and deepening equity losses are re-anchoring Gold as a defensive asset.

The 2950/60 zone marks the confluence of 2956.09 resistance turned support, 38.2% retracement of 2832.41 to 3167.62 at 2960.46, and trend line support at 2957.62.

Technically, break above 55 4H EMA (now at 3075.81) will set the range for sideway consolidations. That would also keep outlook bullish for extending the long term up trend at a later stage.

However, sustained break of 2950/60 will argue that Gold is also in medium term correction, with risk of falling back to 2584.24/2789.92 support zone.

Japan’s nominal wages rose 3.1% yoy in February, a notable jump from downwardly revised 1.8%yoy in January, matching expectations.

However, this strong print was largely driven by a surge in special payments, which skyrocketed 77.4% yoy. Regular pay, considered a more stable indicator of wage trends, actually slowed to 1.6% yoy from the prior month’s 2.1% yoy, signaling only moderate momentum in base salary growth.

Despite the upbeat headline figure, real wages—which adjust for inflation—fell for the second consecutive month, down -1.2% yoy. This came as consumer inflation, as calculated by the labor ministry, remained elevated at 4.3% yoy, down slightly from January’s 4.7% yoy.

Nikkei 225: ⬇️ Sell

• Nikkei 225 broke support zone
• Likely to fall to support level 30600.00

The Nikkei 225 index recently broke the support zone located at the intersection of the support level 35000.00 (former monthly low from September) and the support trendline of the daily down channel from January.

The breakout of this support zone accelerated the active downward impulse wave 3 of the higher-order impulse wave (C) from January.

The Nikkei 225 index can be expected to fall to the next support level 30600.00 (former major support from August of 2024).

Gold: ⬇️ Sell

• Gold broke daily up channel
• Likely to fall to support level 3000.00

Gold recently reversed down from the resistance level 3150.00 (which formed the daily Bearish Engulfing) and broke the sharp daily up channel from February.

The breakout of this up channel added to the bearish pressure on Gold – accelerating the active downward correction to the higher-order impulse wave (3) from November.

Gold can be expected to fall to the next round support level 3000.00 (which stopped the previous short-term correction iv).

EUR/USD's rally from 1.0176 resumed last week and spiked higher to 1.1145. But a temporary top was formed there with subsequent retreat. Initial bias remains neutral this week for consolidations. Downside of retreat should be contained by 38.2% retracement of 1.0176 to 1.1145 at 1.0775 to bring rebound. Above 1.1145 will target 1.1213/74 key resistance zone next.

In the bigger picture, fall from 1.1274 (2024 high) has completed as a three wave correction to 1.0176. Rise from 0.9534 ready to resume. Decisive break of 1.1274 will target 100% projection of 0.9534 to 1.1274 from 1.0176 at 1.1916. Also, that will send EUR/USD through the multi-decade channel resistance will carries larger bullish implication. This will now be the favored case as long as 1.0731 support holds.

In the long term picture, the case of long term bullish reversal is building up. Sustained break of falling channel resistance (now at around 1.1350) will argue that the down trend from 1.6039 (2008 high) has completed at 0.9534. A medium term up trend should then follow even as a corrective move. Nevertheless, rejection by the channel resistance will keep outlook bearish.

USD/JPY's fall from 158.86 resumed last week and hits as low as 144.54. But a temporary low should be formed with subsequent recovery. Initial bias is turned neutral this week for consolidations first. Outlook will remain bearish as long as 151.20 resistance holds. Below 144.54 will target 61.8% projection of 158.86 to 146.52 from 151.20 at 143.57. Break there will target 139.57 low.

In the bigger picture, price actions from 161.94 are seen as a corrective pattern to rise from 102.58 (2021 low), with fall from 158.86 as the third leg. 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.

In the long term picture, it's still early to conclude that up trend from 75.56 (2011 low) has completed. A medium term corrective phase should have commenced, with risk of deep correction towards 55 M EMA (now at 137.30) and even below.

GBP/USD spiked higher to 1.3206 last week but subsequent reversal indicates that a short term top was formed. Initial bias is on the downside this week for 38.2% retracement of 1.2099 to 1.3206 at 1.2783. Decisive break there will target 61.8% retracement at 1.2522. On the upside, above 1.2961 minor resistance will turn intraday bias neutral first.

In the bigger picture, price actions from 1.3433 are seen as a corrective pattern to the up trend from 1.3051 (2022 low). Rise from 1.2099 could be the second leg. Overall, GBP/USD should target 1.4248 key resistance (2021 high) on break of 1.3433 at a later stage.

In the long term picture, price actions from 1.0351 (2022 low) are seen as a corrective pattern to the long term down trend from 2.1161 (2007 high) only. Outlook will be neutral at best as long as 1.4248 structural resistance holds, even in case of strong rebound.

USD/CHF's fall from 0.9196 resumed last week and accelerated to as low as 0.8475. But a temporary was formed with subsequent recovery. Initial bias is turned neutral this week for consolidations first. Recovery should be limited by 0.8757 support turned resistance. Below 0.8475 will target 100% projection of 0.9196 to 0.8757 from 0.8854 at 0.8415.

In the bigger picture, rejection by 0.9223 key resistance keep medium term outlook bearish. That is, larger fall from 1.0342 (2017 high) is not completed yet. Firm break of 0.8332 (2023 low) will confirm down trend resumption. Next target is 61.8% projection of 1.0146 (2022 high) to 0.8332 from 0.9196 at 0.8075.

In the long term picture, price action from 0.7065 (2011 low ) are seen as a corrective pattern to the multi-decade down trend from 1.8305 (2000 high). Fall from 1.0342 (2016 high) is seen as the second leg. Firm break of 61.8% retracement of 0.7065 to 1.0342 at 0.8317, will pave the way back to 0.7065.