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Eurozone Sentix Investor Confidence edged down from -17.5 to -17.7 in January, meeting expectations while marking the lowest level since November 2023. Current Situation Index fell from -28.5 to -29.5, its weakest reading since October 2022. Meanwhile, Expectations Index improved marginally from -5.8 to -5.0 but remained in negative territory.

Sentix highlighted Germany's economic struggles as a major drag on the Eurozone, with its overall index at -33.3. German Current Situation Index held steady at -50.8, underscoring a deep recessionary environment, while expectations fell to -13.8. Political uncertainty in Germany, exacerbated by electoral challenges, compounds the economic woes, adding to the region's fragility.

Sentix also warned that the broader Eurozone economy is at risk of falling "even deeper into crisis." Inflation concerns persist, with the thematic inflation index dropping from -12 to -15.25. This trend further constrains ECB, which limited room for additional rate cuts is "rapidly diminishing". Governments are also contending with high deficits as they attempt to stimulate growth.

Full Eurozone Sentix release here.

UK PMI Services for December was finalized at 51.1, slightly up from November's 50.8, marking the fourteenth consecutive month of expansion. However, growth was marginal, with the index's quarterly average at its lowest in a year. PMI Composite slipped to 50.4, down from 50.5, its weakest reading since October 2023.

Tim Moore, Economics Director at S&P Global Market Intelligence, noted a "near-stalling" of new business inflows due to falling business and consumer confidence. Respondents cited concerns over "domestic economic prospects" for 2025 and lingering post-Budget uncertainty as major factors curbing growth momentum.

Cost pressures intensified, with input price inflation hitting an eight-month high. Service providers responded by raising prices at a rate well above pre-pandemic levels, further straining demand.

Nearly one in four firms reported payroll reductions, marking the steepest non-pandemic-related job shedding in over 15 years as subdued demand and rising employment costs forced businesses to delay hiring or reduce staff.

Full UK PMI services final release here.

Daily Pivots: (S1) 1.0273; (P) 1.0291; (R1) 1.0328; More...

EUR/USD's recovery from 1.0223 extends higher today but stays below 1.0457 resistance. Intraday bias remains neutral first, and further decline is in favor. Below 1.0223 will resume the fall from 1.1213 to 61.8% projection of 1.1213 to 1.0330 from 1.0629 at 1.0083. Nevertheless, firm break of 1.0457 will bring stronger rise back to 1.0629 structural resistance next.

In the bigger picture, fall from 1.1274 (2023 high) should either be the second leg of the corrective pattern from 0.9534 (2022 low), or another down leg of the long term down trend. In both cases, sustained break of 61.8 retracement of 0.9534 to 1.1274 at 1.0199 will pave the way back to 0.9534. For now, outlook will stay bearish as long as 1.0629 resistance holds, even in case of strong rebound.

Daily Pivots: (S1) 156.92; (P) 157.24; (R1) 157.62; More...

USD/JPY is staying in consolidations below 158.06 and intraday bias remains neutral. Further rally is expected as long as 155.94 support holds. On the upside, break of 158.06 will resume the rally from 139.57 to 61.8% projection of 139.57 to 156.74 from 148.64 at 159.25. Firm break there will target 161.94 high. However, break of 155.94 will turn bias to the downside, for deeper pull back to 55 D EMA (now at 153.50).

In the bigger picture, price actions from 161.94 are seen as a corrective pattern to rise from 102.58 (2021 low). The range of medium term consolidation should be set between 38.2% retracement of 102.58 to 161.94 at 139.26 and 161.94. Nevertheless, sustained break of 139.26 would open up deeper medium term decline to 61.8% retracement at 125.25.

Daily Pivots: (S1) 1.2369; (P) 1.2402; (R1) 1.2453; More...

GBP/USD breaks 1.2474 minor resistance as recovery from 1.2352 extends and intraday bias is turned neutral first. Some consolidations could be seen risk with of stronger rebound. But near term outlook will remain bearish as long as 1.2810 resistance holds. Below 1.2352 will resume the fall from 1.3433 to 1.2256/98 cluster support zone. Strong support is expected there to contain downside to bring more sustainable rebound, at least on first attempt.

In the bigger picture, price actions from 1.3433 medium term are seen as correcting whole up trend from 1.0351 (2022 low). Deeper decline could be seen to 38.2% retracement of 1.0351 to 1.3433 at 1.2256, which is close to 1.2298 structural support. But strong support is expected there to bring rebound to extend the corrective pattern. However, firm break of 1.2256 will argue that the trend has reversed and target 61.8% retracement at 1.1528.

Daily Pivots: (S1) 0.9066; (P) 0.9098; (R1) 0.9117; More…

Intraday bias in USD/CHF is turned neutral first with current retreat and some consolidations would be seen below 0.9136 temporary top. But outlook will remain bullish as long as 0.8956 resistance turned support holds. Above 0.9136 will resume the rally from 0.8374 to 0.9223 key resistance next.

In the bigger picture, price actions from 0.8332 (2023 low) are currently seen as a medium term corrective pattern, with rise from 0.8374 as the third leg. Overall outlook will continue to stay bearish as long as 0.9223 resistance holds. Break of 0.8332 low is in favor at a later stage when the consolidation completes. However, decisive break of 0.9223 will be an important sign of bullish trend reversal.

Eurozone PMI Services for December was finalized at 51.6, an improvement from November's 49.5, signaling a return to growth after a brief contraction.

Meanwhile, PMI Composite edged higher to 49.6, up from November's 48.3, though still indicating a slight contraction in overall activity. Among individual countries, Spain stood out with a 21-month high at 56.8, while Germany and France posted modest improvements to 48.0 and 47.5, respectively.

Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, noted that "services inflation remains elevated," driven by rising wages and higher costs being passed on to customers. These dynamics reinforce the expectation that ECB will take a cautious approach to monetary policy.

"Small interest rate cuts in the first quarter of 2025" appear likely as the central bank balances inflation concerns with sluggish economic growth.

Encouragingly, the services sector displayed resilience, with incoming business stabilizing and the decline in order backlogs slowing. Service providers, less exposed to the potential impacts of US tariffs than manufacturers, remain a crucial buffer against the region’s industrial slowdown.

However, the foundation for a robust services-led recovery in 2025 remains tenuous, with structural challenges such as high costs and fragile demand persisting.

Full Eurozone PMI services final release here.

Daily Pivots: (S1) 0.6196; (P) 0.6210; (R1) 0.6232; More...

Intraday bias in AUD/USD is neutral for now, and further decline is in favor with 0.6273 resistance intact. Decisive break of 0.6169 will extend the fall from 0.6941, and target 138.2% projection of 0.6941 to 0.6511 from 0.6687 at 0.6074. However, considering bullish convergence condition in 4H MACD, break of 0.6273 resistance will indicate short term bottoming, and turn bias back to the upside for stronger rebound.

In the bigger picture, price actions from 0.6169 (2022 low) are seen as a medium term consolidation to the down trend from 0.8006, and could have completed at 0.6941 already. Firm break of 0.6169 support will confirm down trend resumption for 61.8% projection of 0.8006 to 0.6169 from 0.6941 at 0.5806 next. In any case, outlook will stay bearish as long as 55 W EMA (now at 0.6587) holds.

Daily Pivots: (S1) 1.4400; (P) 1.4432; (R1) 1.4481; More...

Intraday bias in USD/CAD remains neutral and more consolidations could be seen below 1.4466. Outlook will stay bullish as long as 1.4304 support holds. Break of 1.4466 will resume larger up trend to 1.4667/89 long term resistance zone. However, firm break of 1.4304 will turn bias to the downside for deeper pull back.

In the bigger picture, up trend from 1.2005 (2021) is in progress for retesting 1.4667/89 key resistance zone (2020/2015 highs). Medium term outlook will remain bullish as long as 1.3976 resistance turned holds (2022 high), even in case of deep pullback.

Daily Pivots: (S1) 0.9341; (P) 0.9357; (R1) 0.9380; More....

Intraday bias in EUR/CHF remains neutral for the moment. Corrective rebound from 0.9204 could still extend higher. But upside should be limited by 0.9481 fibonacci resistance. On the downside, firm break of 0.9284 support will argue that the correction has completed, and bring retest of 0.9204 low.

In the bigger picture, while rebound from 0.9204 might extend higher, strong resistance could be seen from 38.2% retracement of 0.9928 to 0.9204 at 0.9481 to limit upside. Down trend from 0.9928 (2024 high) is still in favor to resume through 0.9204/9 support zone at a later stage.