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Daily Pivots: (S1) 1.1842; (P) 1.1874; (R1) 1.1914; More….

Intraday bias in EUR/USD stays on the upside as current rally should target a test on 1.1917 key resistance. Firm break there will resume larger up trend to 1.2000 key psychological resistance. On the downside, below 1.1812 minor support will mix up the outlook and turn intraday bias neutral again.

In the bigger picture, as long as 55 W EMA (now at 1.1443) 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 1.25841. 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) 153.23; (P) 154.29; (R1) 155.27; More...

Intraday bias in USD/JPY stays on the downside at this point. For now, fall from 159.44 is seen as correcting the rise from 139.87. Deeper decline should be seen to 38.2% retracement of 139.87 to 159.44 at 151.96. Strong support should be seen there to bring rebound, at least on first attempt. On the upside above 155.33 minor resistance will turn intraday bias neutral and bring consolidations first. However, decisive break of 151.96 will argue that it is reversing whole rise from 139.87. Deeper decline would then be seen to 61.8% retracement at 147.34.

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 151.35) 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) 1.3644; (P) 1.3678; (R1) 1.3714; More...

Intraday bias in GBP/USD stays on the upside at this point. Sustained trading above 61.8% projection of 1.3008 to 1.3567 from 1.3342 at 1.3687 should prompt upside acceleration through 1.3787 high to 100% projection at 1.3901. On the downside, below 1.3641 minor support will turn intraday bias neutral. But retreat should be contained well above 1.3342 support to bring another rally.

In the bigger picture, price actions from 1.3787 (2025 high) are seen as a correction to the larger up trend from 1.3051 (2022 low). That might have completed at 1.3008 already. Firm break of 1.3787 will confirm up trend resumption. Next target is 1.4284 key resistance (2021 high). This will remain the favored case as long as 1.3008 support holds.

The forex market has finally slipped into a period of stabilization, with Dollar shifting into consolidation after several volatile sessions. All major pairs and crosses are trading within yesterday’s ranges, signaling a collective pause. Part of the calm reflects a temporary cooling in geopolitical and trade-war rhetoric. Recent fears of an imminent joint US–Japan intervention to support the Yen have faded. At the same time, broader trade tensions appear contained for now.

Attention is also shifting to tomorrow’s FOMC rate decision. With little fresh macro impetus elsewhere, markets appear content to wait on guidance from policymakers rather than force directional moves prematurely. There is little doubt about the outcome itself. The Fed is universally expected to keep rates unchanged at 3.50–3.75%, making this meeting more about communication than action.

As such, focus will fall on the policy statement and Chair Jerome Powell’s press conference. With the outlook still clouded by political and trade uncertainty, expectations for dramatic shifts in tone remain low. The most likely outcome is a reaffirmation of a wait-and-see approach, emphasizing data dependence and flexibility. Policymakers have little incentive to pre-commit in an environment where fiscal, trade, and geopolitical risks remain fluid.

Still, subtle nuances could matter. The Fed may seek to reassure markets that the current hold is merely a pause within an easing cycle, awaiting clearer confirmation before delivering another cut. Alternatively, though less likely, the messaging could evolve toward a more open-ended pause, dropping any implicit bias toward future easing. The distinction is small on paper, but meaningful for market expectations and forward pricing.

On the trade front, fresh headlines reminded markets that policy risk has not disappeared. US President Donald Trump threatened to raise tariffs on South Korean exports to 25% from 15%, citing delays in Seoul’s parliament approving a bilateral trade framework agreed last year. South Korea moved quickly to respond. A spokesperson for the ruling Democratic Party said Trump was likely referring to legislation linked to the USD 350 billion investment commitment to the US, adding that multiple related bills are already under review and likely to pass with bipartisan support.

Elsewhere, trade developments offered a more constructive signal. Prime Minister Narendra Modi announced that India and the EU had finalized a “landmark” free trade agreement, with details expected to be unveiled later alongside President Ursula von der Leyen. The deal would link economies representing roughly a quarter of global GDP.

In currency markets, Yen remains the strongest performer for the week, though momentum has started to fade. Swiss Franc follows, with Aussie also holding firm. Loonie is the weakest, weighed down by trade concerns, followed by Dollar and Sterling, while Euro and Kiwi sit in the middle.

Australia NAB business survey reinforces solid backdrop for RBA

Australia’s NAB business survey showed a modest but broad-based improvement in December, pointing to resilient momentum into year-end. Business Confidence edged up from 2 to 3, while Business Conditions rose from 7 to 9.

The details underline that improvement. Trading conditions climbed from 13 to 16, while profitability rose from 4 to 7. Employment conditions were unchanged at 4, suggesting hiring demand remains steady rather than accelerating. Capacity utilisation eased slightly to 83.2%, down from its recent peak but still well above its long-run average.

Cost pressures also edged higher, with purchase costs rising from 1.3% to 1.4% in quarterly equivalent terms, labour costs from 1.5% to 1.8%, and product prices from 0.6% to 0.9%, even as retail price growth slowed to 0.4% from 0.8% in November.

Overall, the survey suggests the economy ended the year on a firm footing, with most indicators sitting modestly above late-Q3 levels. Meanwhile, NAB noted that for the RBA, the small pullback in capacity utilisation is unlikely to materially ease concerns that the economy remains close to capacity.

AUD/CAD rises to 0.95, waits on Ausssie CPI verdict for next surge

Aussie has steadied after last week’s strong advance, entering consolidation as markets brace for Q4 inflation data that could prove pivotal for RBA's policy in the near term. With expectations firmly skewed toward a firm print, traders appear to wait for confirmation before extending long positions.

Consensus forecasts point to a renewed pickup in inflation. Headline CPI is expected to rise to 3.6%, while trimmed mean CPI is forecast at 3.2%, pushing both measures further above the RBA’s target band. The upcoming release is likely to reinforce concerns that inflation pressures remain sticky. That would make it harder for the RBA to justify an extended pause, particularly with labor market conditions showing renewed strength.

Market opinion remains divided on timing. Some see scope for a 25bp hike as early as next week, while others argue the RBA may prefer to wait another quarter to avoid premature action. Ultimately, the decision will hinge on the size and composition of the inflation print, alongside the bank’s assessment of broader economic conditions.

Technically, AUD/CAD edged higher this week and remains on upward acceleration mode as seen in D MACD. With current momentum, AUD/CAD should be on track to 161.8% projection of 0.l8902 to 0.9225 from 0.9055 at 0.9578, or even further to 200% projection at 0.9701. Outlook wil stay bullish as long as 0.9344 resistance turned support holds, in case of retreat.

In the bigger picture, last week's strong break of 0.9375 key resistance (2024 high) should confirm that whole down trend from 0.9991 (2020 high) has completed as a correction to 0.8440 (2025 low). There is prospect for the current up trend to extend in the medium term to have a test on 0.9991 at least.

How far and how fast AUD/CAD extends will ultimately depend two factors: The pace and extent of RBA tightening; and the depth of deterioration in Canada–US trade relations.

USD/CHF Daily Outlook

Daily Pivots: (S1) 0.7736; (P) 0.7765; (R1) 0.7799; More….

Intraday bias in USD/CHF is turned neutral with 4H MACD crossed above signal line, and some consolidations would be seen. But upside of recovery should be limited by 0.7860 support turned resistance. On the downside, break of 0.7729 will resume larger down trend to 0.7382 projection level.

In the bigger picture, larger down trend from 1.0342 (2017 high) is still in progress and resuming. 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 0.8184) holds.

Daily Pivots: (S1) 0.7736; (P) 0.7765; (R1) 0.7799; More….

Intraday bias in USD/CHF is turned neutral with 4H MACD crossed above signal line, and some consolidations would be seen. But upside of recovery should be limited by 0.7860 support turned resistance. On the downside, break of 0.7729 will resume larger down trend to 0.7382 projection level.

In the bigger picture, larger down trend from 1.0342 (2017 high) is still in progress and resuming. 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 0.8184) holds.

Daily Pivots: (S1) 0.6902; (P) 0.6922; (R1) 0.6937; More...

Intraday bias in AUD/USD is turned neutral first with 4H MACD crossed below signal line, and some consolidations could be seen. But further rise is expected as long as 55 4H EMA (now at 0.6802) holds. ON the upside, sustained trading above 61.8% projection of 0.5913 to 0.6706 from 0.6420 at 0.6910 will pave the way to 100% projection at 0.7213.

In the bigger picture, current development argues that rise from 0.5913 (2024 low) is reversing whole down trend from 0.8006 (2021 high). Further rally should be seen to 61.8% retracement of 0.8006 to 0.5913 at 0.7206. This will remain the favored case as long as 0.6420 support holds, even in case of deep pullback.

Daily Pivots: (S1) 1.3682; (P) 1.3701; (R1) 1.3730; More...

Intraday bias in USD/CAD is turned neutral with current recovery, and some consolidations would be seen above 1.3670 temporary low. Risk will stay on the downside as long as 55 4H EMA (now at 1.3788) holds. Below 1.3670 will bring retest of 1.3641 support. Firm break there will will resume the decline from 1.4139 and target a retest on 1.3538 low.

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, and break of 1.3538 will target 61.8% retracement of 1.2005 to 1.4791 at 1.3069. For now, medium term outlook will be neutral until there are signs that the correction has completed, or that a bearish trend reversal is confirmed.

Aussie has steadied after last week’s strong advance, entering consolidation as markets brace for Q4 inflation data that could prove pivotal for RBA's policy in the near term. With expectations firmly skewed toward a firm print, traders appear to wait for confirmation before extending long positions.

Consensus forecasts point to a renewed pickup in inflation. Headline CPI is expected to rise to 3.6%, while trimmed mean CPI is forecast at 3.2%, pushing both measures further above the RBA’s target band. The upcoming release is likely to reinforce concerns that inflation pressures remain sticky. That would make it harder for the RBA to justify an extended pause, particularly with labor market conditions showing renewed strength.

Market opinion remains divided on timing. Some see scope for a 25bp hike as early as next week, while others argue the RBA may prefer to wait another quarter to avoid premature action. Ultimately, the decision will hinge on the size and composition of the inflation print, alongside the bank’s assessment of broader economic conditions.

Technically, AUD/CAD edged higher this week and remains on upward acceleration mode as seen in D MACD. With current momentum, AUD/CAD should be on track to 161.8% projection of 0.l8902 to 0.9225 from 0.9055 at 0.9578, or even further to 200% projection at 0.9701. Outlook wil stay bullish as long as 0.9344 resistance turned support holds, in case of retreat.

In the bigger picture, last week's strong break of 0.9375 key resistance (2024 high) should confirm that whole down trend from 0.9991 (2020 high) has completed as a correction to 0.8440 (2025 low). There is prospect for the current up trend to extend in the medium term to have a test on 0.9991 at least.

How far and how fast AUD/CAD extends will ultimately depend two factors: The pace and extent of RBA tightening; and the depth of deterioration in Canada–US trade relations.

Australia’s NAB business survey showed a modest but broad-based improvement in December, pointing to resilient momentum into year-end. Business Confidence edged up from 2 to 3, while Business Conditions rose from 7 to 9.

The details underline that improvement. Trading conditions climbed from 13 to 16, while profitability rose from 4 to 7. Employment conditions were unchanged at 4, suggesting hiring demand remains steady rather than accelerating. Capacity utilisation eased slightly to 83.2%, down from its recent peak but still well above its long-run average.

Cost pressures also edged higher, with purchase costs rising from 1.3% to 1.4% in quarterly equivalent terms, labor costs from 1.5% to 1.8%, and product prices from 0.6% to 0.9%, even as retail price growth slowed to 0.4% from 0.8% in November.

Overall, the survey suggests the economy ended the year on a firm footing, with most indicators sitting modestly above late-Q3 levels. Meanwhile, NAB noted that for the RBA, the small pullback in capacity utilization is unlikely to materially ease concerns that the economy remains close to capacity.

Full Australia NAB Monthly Business Survey release here.

Markets

Just the idea of a potential coordinated JPY intervention by the US and Japan sufficed for yen bears to back off. For now, we have to add, because we wouldn’t be surprised if the market will at some point test authorities’ resolve to actually step in. USD/JPY’s two-day slide ended at 154.18 yesterday after having traded as low as 153.31, below the 100 dMA. The currency pair is slightly recovering to 154.53 this morning as the dust is settling. The stronger JPY was much less visible in EUR/JPY: 183.17 compared to the 184.06 record high on Friday. Broader dollar weakness with spillovers from USD/JPY were visible elsewhere: in new record highs for the likes of gold, silver & platinum as well as in other FX pairs. EUR/USD which for the first time since September attempted to take out 1.19. That failed but the eventual 1.1880 closing level was the highest in more than four years nevertheless. GBP/USD rose to 1.368 compared to 1.34 mid last week. The trade-weighted dollar index kept the 97 barrier, a five-month low, afloat. Stocks struggled for direction in Europe while eking out some small gains in the US. Core bonds grabbed some kneejerk haven flows with Bunds outperforming Treasuries. Bund yields fell 2.6-3.9 bps in a bull flattener. US rates eased between 0.4 (2-yr) and 2.6 bps (20-yr). Gas prices grabbed some headlines too by shooting higher to a seven month high (storm Chandra) before paring gains again.

It’s unlikely we’ve seen the last in the JPY sage but for the time being it may move a bit to the background. We’ll have to see how market dynamics play out, for the US dollar in particular, with the economic calendar now slowly heating up in the US. The weekly ADP job creation numbers and Conference Board consumer confidence is up for release, along with some (second-tier) housing data and Richmond business confidence. They serve as a minor distraction from tomorrow’s FOMC policy meeting. The latter is at risk of being its thunder stolen by US President Trump announcing the new Fed chair shortly beforehand. European news centers around the free trade deal struck between the EU and India after nearly two decades of negotiations. The “mother of all deals”, dixit EC president von der Leyen, follows the Mercosur deal (still subject to EU Parliamentary approval) and cannot be decoupled from the changing global order and the move towards diversification – in this case away from the US and China - is central. Trump’s renewed tariff threat vs South Korea (see below), real or not is irrelevant, serves as case in point.

News and views

US President Trump threatened to raise South Korean tariffs on all goods covered by reciprocal tariffs along with cars, lumber and pharmaceutical goods from 15% to 25%. He blames the Asian country for slowplaying the trade deal both nations reached last year. Part of that deal included annual South Korean investments in the US. A bill to set up a $350bn investment fund is currently stalled in South Korean parliament. Concerns over the currency impact are one of the reasons for the delay given that KRW is trading near lowest levels against USD since 2009. The South Korean National Assembly so far also didn’t ratify both countries’ over trade agreement which is more of a Memorandum of Understanding and factsheet rather than a formal treaty. The Kospi initially shed 1.5% on the news, but managed to turn those early losses into 2.5% (!) gains. An all-time high for SK Hynix (+8%) on reports that the company is the sole supplier of advanced memory for Microsoft’s new AI chip helped enabling the turnaround.

UK shop price inflation rose by a strong 0.4% M/M in January, lifting annual growth from 0.7% to 1.5%, the fastest pace since February 2024. Details showed non-food prices rising by 0.1% M/M and 0.3% Y/Y (from -0.6%), while food price inflation accelerated by 1.1% M/M to 3.9% Y/Y (from 3.3%). The British Retail Consortium said that shop price inflation jumped due to high business energy costs and the hike to national insurance continuing to feed through to prices. Meat, fish and fruit were particularly affected, also reflecting weak supply and stronger demand, while non-food categories, including furniture, flooring, and health and beauty, all saw inflation rise.