The EUR/USD pair is holding near the 1.1900 mark after rising from last week's lows, as pressure on the US dollar intensifies due to concerns over the US labor market and expectations of Fed policy easing. Meanwhile, the euro is receiving neutral support from the ECB, which is signaling interest rate stability.
Possible technical scenarios:
As evidenced by developments on the daily chart, the EUR/USD pair has shifted into a decline within the 1.1788–1.1898 range, remaining halfway to its support level. Sideways movement within these boundaries may persist for some time, after which the price could drop further toward the dotted support at 1.1682.
Fundamental drivers of volatility:
The EUR/USD pair is trading under pressure following the release of weak German business sentiment data. Despite certain structural factors favoring the euro, the market is focusing more on the dollar's resilience in the short term. The ZEW Indicator of Economic Sentiment for Germany unexpectedly dropped to 58.3, missing growth forecasts, while the Eurozone figure also deteriorated. This has heightened doubts regarding the pace of the region's economic recovery and capped demand for the euro. Statistics demonstrated that business optimism remains volatile, and improvements in current conditions have yet to offset the weakness in expectations.
The expansion of the ECB's EUREP liquidity programs is viewed as a step toward strengthening the Euro's international role and may signal a more relaxed stance by the regulator toward its appreciation. That being said, this factor is long-term in nature and does not have an immediate impact on the pair's dynamics.
The dollar is finding support amid cautious global market sentiment and anticipation of the FOMC meeting minutes. Investors are also monitoring upcoming US GDP data and the PCE inflation gauge, which could influence interest rate expectations. For now, the US currency appears more stable, and if the current backdrop persists, the market allows for a move in EUR/USD in the coming sessions.
Intraday technical picture:
The 4H chart shows that EUR/USD still has room to move lower toward the support of the 1.1788–1.1898 range.
The GBP/USD pair is trading under pressure following the release of weak UK labor market statistics. Rising expectations of a Bank of England rate cut are weighing on the Pound.
Possible technical scenarios:
Given the unfolding scenario on the daily chart, the GBP/USD pair is still holding above the mirror level of 1.3533 marked with a dotted line. However, if this level gets broken out with the price consolidating below it, the targets for further weakening will be 1.3436 and 1.3339.
Fundamental drivers of volatility:
Data from the United Kingdom pointed to a deteriorating labor market. The unemployment rate rose to a five-year high of 5.2%, while job creation slowed. Wage growth also continues to cool, with the figure excluding bonuses falling to 4.2% year-over-year, and total pay growth slowing even further. The higher unemployment, coupled with weak wage dynamics, has bolstered expectations of Bank of England policy easing in the coming months.
The market is pricing in a higher probability of a rate cut amid signs of an economic slowdown. An additional source of uncertainty for the pound remains the upcoming UK inflation data, which could adjust expectations regarding the Central Bank's monetary policy trajectory.
As far as the dollar is concerned, dynamics remain more resilient, limiting the recovery potential for GBP/USD. Consequently, the fundamental backdrop is tilted toward further pressure on the pair as UK rate expectations continue to worsen.
Intraday technical picture:
The 4H chart shows a series of lower highs that create the preconditions for an eventual breakout of the 1.3533 support. However, the price may temporarily bounce upward from this level each time with gradually lower peaks, forming a descending triangle. Later on, it is likely to exit it to the downside.
The USD/JPY pair is trading under pressure as the yen found support amid declining US Treasury yields and a weaker dollar. Market sentiment, however, remains mixed without signs of outright panic.
Possible technical scenarios:
The USD/JPY pair is consolidating above the dotted support level of 152.09. If this level holds, the price could transition into a recovery within the 152.09–157.90 range. In the event of a negative backdrop for the dollar and a drop below 150 yen, the path would open toward the 149.94 target.
Fundamental drivers of volatility:
The yen has become the leader among G10 currencies due to rising demand for safe-haven assets and a powerful rally in Japanese government bonds (JGBs). A successful 5-year JGB auction with robust demand eased investor concerns regarding Japan's fiscal sustainability. Additional support for the yen came from reports that Prime Minister Sanae Takaichi is preparing steps to boost confidence in budgetary policy, reducing the fiscal risk premium previously priced into the exchange rate.
The monetary factor also favors the Japanese currency. Diverging rate expectations between the Bank of Japan (BoJ) and the Fed are capping the upside for USD/JPY. The market continues to price in a more dovish trajectory for the Fed, while the BoJ remains on a path toward normalization. Simultaneously, the risk of potential currency interventions persists, deterring aggressive dollar purchases against the yen.
Weak Japanese GDP data for the fourth quarter slightly dampened expectations of rapid BoJ tightening, which limits aggressive projections for yen appreciation. That said, the overall fundamental backdrop—falling US yields, cautious Fed expectations, and easing fiscal risks in Japan—suggests that pressure on USD/JPY will persist in the short term.
Intraday technical picture:
As we can see on the 4H chart, USD/JPY shows price consolidation within a narrow range. The pair's future direction will technically hinge on whether the dotted support level at 152.09 holds.
The USD/CAD pair continues its moderate growth in anticipation of January inflation data, which could influence Bank of Canada rate expectations ahead of the March 18 meeting.
Possible technical scenarios:
On the daily chart, the USD/CAD pair continues to trade within the 1.3503–1.3744 sideways range, recovering from its support. The price currently has sufficient room to move upward toward the 1.3744 resistance.
Fundamental drivers of volatility:
The Canadian forecast suggests annual inflation will remain at 2.4%, with core inflation staying above the 2% target. In the previous report, core CPI stood at 2.8% year-over-year. Sustained readings at these levels limit the room for monetary easing and support the scenario of holding the rate at 2.25%. Higher inflation could reduce expectations of a rate cut and support the Canadian dollar, while a slowdown in price pressure would fuel talk of a more dovish Bank of Canada stance.
Oil price dynamics remain an additional factor for the loonie. Risks of increased OPEC+ production starting in April are creating fears of an oversupply. This serves as a restraining factor for the Canadian currency, which is highly sensitive to commodity trends.
Meanwhile, the US dollar remains stable ahead of the FOMC minutes, as well as GDP and PCE index data. Despite expectations of potential Fed rate cuts later this year, current demand for the dollar persists. In the short term, USD/CAD dynamics will be driven by the market reaction to Canadian CPI and further oil price movements.
Intraday technical picture:
As the 4H chart suggests, USD/CAD needs to break out a local mirror resistance level at 1.3642, marked with a dotted line, to continue its ascent toward the upper boundary of the wide 1.3503–1.3744 range.
Gold prices have hit a fresh weekly low as a strengthening dollar and anticipation of Fed signals reduce short-term demand for safe-haven assets.
Possible technical scenarios:
During its recovery, the price of gold consolidated above the 4939.80 level, clearing the path toward resistance at 5348.71, with significant room still left for an upward move.
Fundamental drivers of volatility:
The price of gold continues to test the 4939.80 support level. As long as it remains unbroken, the price may see a local recovery toward the psychological $ 5,000-per-ounce mark. If the price consolidates below 4939.80, it may continue its downward path toward support at 4635.63.
The US dollar, which gold trades inversely with, is rising ahead of the release of the January FOMC minutes, which may clarify the timing of a possible rate cut. The market is still pricing in a first easing step in June. However, the regulator's rhetoric remains the key factor for the precious metal's dynamics.
The geopolitical backdrop also has an impact on prices. Indirect talks between the US and Iran regarding the nuclear program are taking place on Tuesday, alongside meetings between representatives from Russia and Ukraine. The absence of a sharp escalation has temporarily weakened demand for safe-haven assets, intensifying the correction in gold.
In the coming days, investor attention will shift to the PCE index release, the Fed's preferred inflation gauge. Softer data could reignite interest in the metal, given its sensitivity to interest rates. In the medium term, ongoing geopolitical and economic uncertainty continues to act as a supportive factor for gold, though short-term dynamics remain dependent on the dollar and Fed policy expectations.
Intraday technical picture:
From what appears to unfold on the 4H gold chart, we see that quotes are once again turning downward from the local dotted resistance at 5090.38. A downside exit from the 4878.26–5090.38 range would create the preconditions for XAU/USD to weaken toward the 4635.63 level.
Oil prices remain volatile amid geopolitical developments. The market is assessing risks of supply disruptions against the backdrop of Iranian military drills in the Strait of Hormuz and upcoming negotiations with the US.
Possible technical scenarios:
On the Brent daily chart, the price has consolidated above the 66.51 level, opening the path toward the $70 per barrel target, with sufficient room for growth still available.
Fundamental drivers of volatility:
On the daily Brent chart, the price is holding above the 66.51 level, which opens a path for the price toward the $70 per barrel target, with plenty of room still left to travel.
Iran's military maneuvers in the strategically vital strait, through which a significant portion of global oil exports pass, are supporting a geopolitical premium in prices. However, investors are exercising caution ahead of the Geneva talks, hoping for diplomatic signals. Any signs of progress could reduce tensions and ease the risk of supply disruptions, thereby limiting the upside for quotes.
OPEC+ policy remains an additional factor of uncertainty. As sources claim, the alliance is considering the possibility of resuming production increases from April in preparation for the summer demand surge. Citi analysts note that if Brent stays in the $65–$70 range in the coming months, the cartel may more actively utilize its spare capacity.
Negotiations between Russia and Ukraine, also scheduled in Geneva, are fueling expectations of a possible stabilization of supplies in the second half of the year. In their base-case scenario, Citi allows for agreements on both the Iranian and Russian fronts by summer, which could lead to Brent falling into the $60–$62 per barrel range.
Short-term Brent dynamics are primarily determined by geopolitical signals rather than the fundamental balance of supply and demand, which may trigger increased market volatility.
Intraday technical picture:
Based on the developments we witness on the 4H chart, Brent prices are recovering from the support of the 66.51–70.62 range, with sufficient room still available to move toward its upper boundary.
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