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• USD/JPY falls to 152.02, erasing February 12 gains as sellers take control.
• Bearish RSI signals further downside; key support at 150.93 and 148.64.
• A recovery above 152.73 could open the door to 153.22 and 154.00.

The USD/JPY extended its losses, dropping below the 200-day Simple Moving Average (SMA) of 152.73 and hitting a three-day low of 152.02. Worse than expected, US Retail Sales data weighed on the American currency, which has fallen to a year-to-date (YTD) low, according to the US Dollar Index (DXY). The pair trades at 152.26, below its opening price by 0.36%.

USD/JPY Price Forecast: Technical outlook

The downtrend resumed after the February 12 gains were erased during the last few days as sellers regained control. The Relative Strength Index (RSI) remains bearish, an indication that further downside lies ahead. Therefore, the USD/JPY's first support would be the February 7 swing low of 150.93, followed by the December 3 daily low of 148.64.

Conversely, if USD/JPY reclaims the 200-day SMA, the pair could aim for 153.00, followed by the Tenkan-sen at 153.22 and the 154.00 figure.

USD/JPY Price Chart – Daily

• Aussie edges higher following delayed reciprocal tariffs.
• US Retail Sales contracted, disappointing market forecasts.
• Fed watchers see 55% chance rates remain on hold in March.
• RBA rate cut speculation remains amid cooling domestic inflation.

The Australian Dollar (AUD/USD) strengthens for the second consecutive day on Friday, supported by US President Donald Trump’s decision to delay implementing reciprocal tariffs. At the same time, concerns linger over a potential global trade war, especially if further tariff measures are announced later. Market participants also dumped the USD after weak Retail Sales data from the US.

Daily digest market movers: Aussie gains after US data

• President Trump postponed a 25% tariff on selected imports, offering short-lived optimism for risk-linked currencies like the Australian Dollar.
• Recent trade frictions have tempered the US Dollar’s gains as the currency treads water amid Washington’s uncertain stance on tariffs.
• Thursday’s US Retail Sales data showed a -0.9% MoM contraction in January, missing the -0.1% forecast and stoking fears of a slowing economy.
• Industrial Production advanced 0.5% in January , down from 1% in December yet beating the 0.3% estimate, generating mixed signals about the health of the US economy.
• Poor Retail Sales figures could prompt traders to reduce bets on the Federal Reserve maintaining interest rates in the 4.25%-4.50% range for an extended period, though Fed Chair Jerome Powell hinted that policy changes hinge on verifiable inflation or labor-market weakness.
• Despite the Aussie’s steady tone, speculation of a 25-basis-point Reserve Bank of Australia rate cut remains high, citing cooling inflationary pressure and a subdued consumer outlook.

AUD/USD technical outlook: Bulls maintain momentum above 20-day Simple Moving Average

The AUD/USD pair gained 0.65% to reach 0.6355 on Friday, extending its climb above the 20-day Simple Moving Average (SMA). The Relative Strength Index (RSI) sits at 66, hovering near overbought territory but still rising sharply, signaling robust buyer interest.

Meanwhile, the Moving Average Convergence Divergence (MACD) histogram prints increasing green bars, indicating building upside momentum.

With the pair hitting its highest levels since December, traders remain alert to looming uncertainties, including fresh tariff announcements and US data surprises, which could rapidly shift the market’s direction.

• Gold set to end the week up 0.80% despite Friday’s drop.
• US Retail Sales plunge, fueling US Dollar weakness and lower Treasury yields.
• Investors price in over one Fed rate cut, boosting bullion’s longer-term appeal.

Gold price has fallen below $2,900 on Friday, yet it will end the week with solid gains of over 0.80% as traders book profits ahead of the weekend. Economic data in the United States (US) was mixed, although the Greenback touched yearly lows and US Treasury yields plunged.  XAU/USD trades at $2,883, down 1.48% daily.

Retail sales in the United States plunged sharply in January, weighing on the Greenback, which continues to weaken across the board. However, the golden metal benefitted from traders squaring off their positions amid tailwinds for bullion, which usually push prices higher.

After the data, investors priced in more than one interest rate cut by the Federal Reserve (Fed). Consequently, the US 10-year T-note yield dropped six basis points to 4.472%.

Other data revealed that Industrial Production improved in January after registering disappointing figures in the previous month.

Daily digest market movers: Gold price dives amid failing US yields, soft US Dollar

• The US 10-year Treasury bond yield tanks five basis points (bps) and is down at 4.48%.
• US real yields, which correlate inversely to Bullion prices, dip four basis points to 2.041%, a tailwind for XAU/USD.
• US Retail Sales contracted by -0.9% MoM in January, sharply underperforming the expected -0.1%, despite an upward revision of December’s figure to a 0.7% increase.
• Industrial Production grew by 0.5% MoM in January, slowing from December’s 1% expansion but exceeding the forecasted 0.3% increase.
• The World Gold Council (WGC) revealed that central banks purchased over 1,000 tons of gold for the third consecutive year in 2024. Following Trump's electoral victory, purchases by central banks surged by more than 54% year-over-year to 333 tons, according to WGC data.
• Money market fed funds rate futures are pricing 38.5 basis points of easing by the Federal Reserve in 2025.

XAU/USD technical outlook: Gold price pulls back after reaching an all-time high

Gold price uptrend remains intact, though it is retracing and has hit a two-day low of $2,878. It should be said that the Relative Strength Index (RSI) exited from overbought territory after staying there for most of February. Therefore, XAU/USD’s drop might be halted if buyers defend the February 12 daily low of $2,864.

This exposed the first key support level as the psychological $2,850 mark. Once surpassed, the October 31 cycle high turned support at $2,790 is next, followed by January 27’s swing low of $2,730.

Conversely, if buyers lift Gold prices above $2,900, the next resistance would be the all-time high at $2,942. A breach of the latter will clear the path towards $2,950, followed by the $3,000 milestone for the golden metal.

• The Canadian Dollar gained another 0.15% against the Greenback on Friday.
• Cooling US Dollar demand is giving the Loonie a much-needed leg up.
• Canadian CPI inflation data looms ahead next week.

The Canadian Dollar (CAD) gained another leg up on the Greenback on Friday, climbing around one-sixth of one percent against the safe haven US Dollar (USD) as markets short the Greenback. US Retail Sales figures came in much softer than expected in January, but investors are holding steady in their risk-on stance for the time being.

Canada was functionally absent from the economic data docket this week. Canadian Consumer Price Index (CPI) inflation data is due next week, slated for Tuesday. US Retail Sales contracted sharper than expected; not enough to knock investor sentiment off of the table entirely, but still enough to leave a mark on overly-aggressive USD bulls.

Daily digest market movers: US Retail Sales crimp Greenback flows, bolster Loonie

• The Canadian Dollar rose 0.15% against the US Dollar, pushing USD/CAD further below 1.4200.
• US Retail Sales contracted by 0.9% in January, a much steeper decline than the expected -0.1%.
• However, the previous month’s figure was revised upwards to 0.7%, limiting the fallout of January’s downside print.
• US Industrial Production beat forecasts, bolstering market sentiment, although the figure still represented another backslide, falling to 0.5% versus the forecast 0.3% and last revised print of 1.0%.
• Despite the overall below-expectations prints in key data, markets are focusing on the broad range of revisions, which skewed heavily higher.

Canadian Dollar price forecast

The Canadian Dollar managed to chalk in its fourth straight session of gains against the Greenback on Friday, but overall bullish momentum remains limited. USD/CAD has waffled further back below the 50-day Exponential Moving Average (EMA) near 1.4280, but a firm technical floor is still priced in at the 200-day EMA just south of 1.4000.

USD/CAD daily chart

• Mexican Peso set for over 1% weekly gain as USD tumbles.
• The US Dollar Index falls to YTD lows as Fed rate-cut bets increase
• US Retail Sales drop fuels slowdown fears, boosting Fed easing expectations to 43.5 bps.
• Banxico minutes, Mexico GDP, and Retail Sales are in focus next week.

The Mexican Peso (MXN) extended its rally on Friday, set to end the week with gains of over 1% against the Greenback. A worse-than-expected Retail Sales report tumbled the US Dollar (USD) to new year-to-date (YTD) lows as depicted by the US Dollar Index (DXY). The USD/MXN pair trades at 20.32, down 0.39%.

United States (US) economic data revealed earlier was the main driver of the session after investors shrugged off reciprocal tariffs not yet enacted by US President Donald Trump. Nevertheless, a dismal January Retail Sales report could increase the chances of a deeper economic slowdown in the United States.

This highlights that Americans are cutting spending due to high interest rates. Henceforth, investors had begun to price in 43.5 basis points of easing by the Federal Reserve (Fed), according to data from the Chicago Board of Trade (CBOT).

The Federal Reserve revealed that Industrial Production improved in January yet failed to halt the Greenback’s plunge during the North American session.

In Mexico, the docket was empty yet. Next week, USD/MXN traders will be watching the release of Retail Sales, Banco de Mexico (Banxico) monetary policy meeting minutes, and Gross Domestic Product (GDP) figures for Q4 2024.

Daily digest market movers: Mexican Peso soars as the Greenback gets battered

• The deterioration in Mexico's automobile industry and the possibility that the US applies tariffs on cars could weigh on the Mexican economy, which is expected to show a contraction in the last quarter of 2024.
• Monetary policy divergence between Banxico and the Fed favors further USD/MXN upside, as the Fed would likely hold rates unchanged. At the same time, Banxico targets another 50-basis point rate cut in the next meeting.
• The US Dollar Index (DXY), which tracks the performance of the buck against a basket of currencies, edged from 107.12 to 106.68, another reason for USD/MXN's downside.
• On Thursday, US President Donald Trump tasked his economic team with devising plans for reciprocal tariffs on every country taxing US imports.
• US Retail Sales fell sharply by -0.9% MoM in January, significantly missing expectations of -0.1% and disappointing investors. However, December’s figure was revised higher to a 0.7% increase.
• Meanwhile, Industrial Production expanded by 0.5% MoM in January, down from December’s 1% growth but surpassing economists’ forecasts of 0.3%.
• Trade disputes between the US and Mexico remain in the boiler room. Although the countries found common ground previously, USD/MXN traders should know that there is a 30-day pause and that tensions could arise toward the end of February.

USD/MXN technical outlook: Mexican Peso surges as USD/MXN drops below 20.50

USD/MXN has fallen below the 50-day Simple Moving Average (SMA) of 20.45, which cleared the path to test the 20.25 area ahead of the 100-day SMA at 20.23. Further downside lies once sellers surpass those levels, with the 20.00 psychological figure. It is worth noting that the losses could drive the exotic pair toward the 200-day SMA at 19.35.

Conversely, if buyers want to regain control, they must clear key resistance levels such as the January 17 high of 20.90, the 21.00 figure, and the year-to-date (YTD) high of 21.29.

• The US Dollar Index fell close to 107.00 after Thursday’s sharp decline.
• US Retail Sales fell 0.9% in January, missing expectations and fueling rate cut speculation.
• US Treasury yields continue to decline with the 10-year yield below 4.50%.

The US Dollar Index (DXY), which tracks the US Dollar's performance against six major currencies, remains stable after posting losses in the previous session. At the time of writing, the DXY hovers around 107.00, as economic data continues to paint a mixed picture. Weak Retail Sales weigh on sentiment, but Industrial Production provides some support.

Daily digest market movers: US Dollar weakens as traders reassess Fed outlook

• US Retail Sales dropped 0.9% in January, far worse than the -0.1% forecast, raising concerns about consumer spending.
• December Retail Sales were revised higher to 0.7%, slightly offsetting the latest disappointing data.
• Industrial Production rose 0.5% in January, beating expectations of 0.3% but slowing from December’s 1.0% growth.
• Weak Retail Sales may lead traders to reassess expectations for the Federal Reserve’s rate path.
• Fed Chair Jerome Powell reiterated that monetary policy adjustments require tangible inflation progress or labor market weakness.
• As for now, the CME FedWatch Tool now shows a 55% probability of unchanged rates in June, reflecting market uncertainty.
• US Treasury yields continue to decline sharply with the 10-year yield falling to 4.47% and making investors lose interest in the US Dollar.

DXY technical outlook: Further downside risk as bearish momentum builds

The US Dollar Index remains under pressure after losing the 20-day Simple Moving Average (SMA), signaling a bearish shift. The Relative Strength Index (RSI) continues to weaken, confirming negative momentum, while the Moving Average Convergence Divergence (MACD) remains entrenched in bearish territory.

Immediate support is seen at the 100-day SMA near 106.30 with a break below this level likely to confirm a short-term negative outlook. On the upside, resistance is now seen at 107.50, followed by the 20-day SMA at 108.00.

• The Dow Jones index is stuck below 44,750 on Friday.
• Retail Sales missed forecasts, prompting investor caution.
• The Dow is still poised to end the week in the green, but headwinds are building.

The Dow Jones Industrial Average (DJIA) cooled on Friday, shedding around 100 points and waffling into the 44,600 region after US Retail Sales missed the mark in January. US data broadly came in below previous figures, except for the Export Price Index, which accelerated at its fastest pace in nearly three years.

US Retail Sales came in well below expectations in January, contracting by 0.9% versus the forecast of -0.1%. The previous month’s print was revised higher to 0.7%, but the steep dropoff knocked investor confidence for a loop early during the US market session. Core Retail Sales fared better but still fell to -0.4% against the 0.3% forecast and 0.7% last post-revision.

January’s Export Price Index rose to a 32-month high of 1.3%, well above the 0.3% forecast and 0.5% last. Industrial Production beat forecasts, coming in at 0.5% versus the expected 0.3%, but the figure still fell short of the previous revised print of 1.0%.

Markets will get an extended weekend with the President’s Day holiday set for Monday. The key prints next week will be the Federal Reserve’s (Fed) latest Meeting Minutes, due to release on Wednesday, with Purchasing Managers Index (PMI) survey results slated for next Friday.

Dow Jones news

Roughly two-thirds of the Dow Jones equity board is tilted into the bearish side on Friday after Retail Sales came in much lower than expected. Key energy and banking giants are propping up the bullish side of the equity index, but concentrated losses at the bottom end are dragging the Dow Jones lower. Chevron (CVX) and Goldman Sachs (GS) both rose around 1.6%, hitting $660 and $156 per share, respectively. Procter & Gamble (PG) fell 3.4% to $165 per share after the conglomerate noted that “recent volatility” is crimping its food sales growth expectations for the upcoming year.

Dow Jones price forecast

The Dow Jones is grinding its way into a consolidation pattern between 45,000 and 44,000. The major equity index has been cycling between the two price levels since rising into the region in mid-January, and price action is getting boxed in by a technical ceiling at record highs near 45,070, a level the Dow hasn’t been able to recover since last November. 

Bearish momentum still remains limited, and a dip back to the 50-day Exponential Moving Average (EMA) will present a tempting jump-in point for bulls looking to reload on long positions.

Dow Jones daily chart

• EUR/USD extends gains, rising to 1.0500 on Friday, hitting its highest level since late January.
• The pair strengthens above the 20-day SMA, reinforcing a shift in sentiment toward the upside.
• Momentum indicators remain firmly bullish, with RSI climbing deep in positive terrain.

EUR/USD continued its upward trajectory on Friday, climbing to 1.0500 and marking its highest level in weeks. The pair's steady ascent above the 20-day Simple Moving Average (SMA) suggests that buyers are regaining control, potentially shifting the short-term outlook to a more constructive stance. This break above resistance levels could set the stage for further upside if momentum remains intact.

Technical indicators signal growing bullish momentum. The Relative Strength Index (RSI) has surged to 61, confirming strong buying interest, while the Moving Average Convergence Divergence (MACD) histogram prints rising green bars, reinforcing the ongoing upward push. The pair's ability to hold above the 20-day SMA suggests that dips may be viewed as buying opportunities rather than signs of renewed weakness.

Looking ahead, the next test for bulls will be the 1.0525-1.0550 zone, which could act as the next resistance area. If buyers maintain control, a move toward 1.0600, around the 100-day SMA, is not out of the question. On the flip side, should the pair slip back below the 20-day SMA, initial support emerges at 1.0450, with a deeper retracement potentially targeting 1.0420.

EUR/USD daily chart

• US Retail Sales plunge 0.9% in January, missing forecasts.
• UK GDP surprises to the upside, boosting Pound momentum.
• GBP/USD eyes 100-day SMA at 1.2694 despite Fed-BoE policy divergence.

The Pound Sterling rallied for the second consecutive day on Friday, reclaiming the 1.2600 figure following a dismal US Retail Sales report that reflected American consumers cut their expenses. The GBP/USD trades at 1.2626, up over 0.50%.

Sterling climbs past 1.2600 as UK data outperforms expectations

The financial markets narrative revolved around US President Donald Trump's tariffs, with the Greenback treading water. US Retail Sales data disappointed investors after contracting over -0.9% MoM in January, missing estimates of -0.1% and December figures upwardly revised by 0.7%.

Other data revealed that Industrial Production expanded in January, over 0.5% MoM down from December’s 1% but exceeded economists’ projections of 0.3%

Today’s data and better-than-expected Gross Domestic Product (GDP) figures in the UK keep the GBP/USD tilted to the upside. Buyers are eyeing a test of the 100-day Simple Moving Average (SMA) at 1.2694.

This is despite the divergence in monetary policy between the Federal Reserve and the Bank of England (BoE). The former is expected to keep policy in check, with 35 basis points of easing priced in by traders for the year’s end. Meanwhile, the BoE reduced borrowing costs last week, with two members voting for a 50-basis point cut.

Next week, the economic docket in the UK will feature BoE’s Baily, jobs data, the latest inflation report, and Retail Sales. On the US, the Fed parade will continue, the release of the latest FOMC meeting minutes, housing data, and S&P Flash PMIs.

GBP/USD Price Forecast: Technical outlook

The GBP/USD shifted neutral after witnessing a fall of close to 10% since September 26, 2024. However, buyers stepped in and pushed the pair above the 50-day Simple Moving Average (SMA) of 1.2472, taking advantage of a weaker US Dollar.

The Relative Strength Index (RSI) reveals that momentum shifted in favor of buyers; henceforth, further upside is seen. If GBP/USD climbs past the 100-day SMA, the next resistance would be 1.2700, followed by the 200-day SMA at 1.2786.

Conversely, if GBP/USD drops below the February 5 daily high at 1.2549, the next support would be the 50-day SMA at 1.2472.

For as long as this set-up in gold persists, you have been better served by throwing caution to the wind, TDS' Senior Commodity Strategist Daniel Ghali notes. 

CTAs remain effectively 'max long' in Gold

"This extremely positive set-up for Gold is underscored by currency depreciation pressures in Asia, which are acute enough to catalyze buying activity in non-USD denominated assets. Conversely, recent macro fund liquidations have refilled their warchest to deploy in Gold markets when global macro price action is favorable." 

"CTAs remain effectively 'max long', but won't liquidate in any reasonable scenario for prices, given the first threshold that can catalyze marginal liquidations lies south of $2800/oz." 

"This dynamic is ultimately fueling a bubble in positioning, by keeping macro funds from stopping out on adverse global macro price action, which ultimately drives Gold's outperformance relative to Treasuries."

• USD/CAD refreshes a two-week low near 1.4160 as the US Dollar weakens on the faster-than-expected decline in the US Retail Sales data for January.
• Poor US Retail Sales data could boost Fed dovish bets
• Canadian Manufacturing Sales grew at a slower-than-expected pace of 0.3% in December.

The USD/CAD pair extends its downside and posts a fresh two-week low near 1.4160 in Friday’s North American session. The Loonie pair weakens as the US Dollar (USD) slides further after the release of the poor United States (US) Retail Sales data for January.

The US Census Bureau reported that Retail Sales, a key measure of consumer spending, declined by 0.9%, faster than estimates of 0.1%. In December, the consumer spending measure rose by 0.7%, revised higher from 0.4%.

Technically, a contraction in households’ spending indicates that the purchasing power of individuals has reduced. Such a scenario paves way for monetary policy easing by the Federal Reserve (Fed) as lower consumer spending results in a slowdown in inflationary pressures.

Poor Retail Sales data is expected to force traders to pare bets supporting the Fed to keep interest rates steady in the range of 4.25%-4.50% for longer.

On the contrary, Fed Chair Jerome Powell said in the last policy meeting that monetary policy adjustments will not be appropriate until the central bank sees “real progress in inflation or at least some weakness in the labor market.”

Though the Canadian Dollar (CAD) is outperforming the US Dollar, it remains broadly on the backfoot. The Bank of Canada (BoC) is expected to continue reducing interest rates to ease the deepening risks of inflation undershooting the 2% target.

On the economic front, month-on-month Manufacturing Sales data for December misses estimates. The economic data rose by 0.3%, slower than estimates of 0.6% and the former reading of 0.7%.

The Bank of Canada is caught in a conundrum, trying to balance the impacts of trade uncertainty - and the threat of escalating tariffs - against a decent run of economic data, TDS' Head of Canadian and Global Rates Strategy Andrew Kelvin reports. 

Terminal rate expectations are below levels from January 29th

"Even with the last minute reprieve from broad US trade action, the Canadian rates market is carrying a lingering tariff risk premium - terminal rate expectations are below levels from January 29th, despite strong data in both Canada and the US."

"In the most likely non-tariff scenarios, 2s are somewhere between fair and rich here. We see better asymmetry in steepeners than in outright long positions. Similarly, with Canada-US spreads at extreme levels across the entire curve, we see an appealing asymmetry in legging into short Canada/long US positions."

• Retail Sales in the US declined more than expected in January.
• The US Dollar Index stays in negative territory below 107.00.

Retail Sales in the United States (US) declined by 0.9% in January to $723.9 billion, the US Census Bureau announced on Friday. This reading followed the 0.7% increase (revised from 0.4%) reported in December and came in worse than the market expectation for a decrease of 0.1%.

"Total sales for the November 2024 through January 2025 period were up 4.2% from the same period a year ago," the press release noted. "Retail trade sales were down 1.2% from December 2024, and up 4.0% from last year."

Market reaction

The US Dollar (USD) stays on the back foot following the disappointing data. At the time of press, the USD Index was down 0.15% on the day at 106.90.

Pound Sterling (GBP) is up modestly vs US Dollar (USD) on the session at writing after backing off slightly from the overnight peak just shy of 1.26—its highest level since the end of last year, Scotiabank's Chief FX Strategist Shaun Osborne notes. 

GBP nears key 1.2610 resistance

"GBP is up a solid 1.4% on the week, lagging only the SEK among the major currencies. The UK’s trade position with the US—it runs a small bilateral deficit, with the only trade advantage for the UK coming in services—gives the pound some plot armour in the still developing tariff story. The BoE stressing a cautious approach to the policy outlook has been helpful over the past week as well."

"GBP/USD price action is constructive. Spot is trading at a YTD high this morning, with the late December peak at 1.2607 coinciding with the 38.2% retracement of the late 2024 sell-off in Cable at 1.2610. A push through the low 1.26s should pave the way for additional gains to the mid-1.27s. Support is 1.2550 intraday."

The Euro (EUR) is little changed on the day against the US Dollar (USD) but has racked up a solid net gain on the week, Scotiabank's Chief FX Strategist Shaun Osborne notes. 

Eurozone Q4 GDP revised up

"Eurozone GDP rose 0.1% in Q4 after an upward revision to the initial estimate—better but hardly anything to shout about. Stronger growth from the Netherlands and Spain helped lift growth, with the major core economies (Germany, France, Italy) flat or weaker." 

"Spot gains are stalling in the upper 1.04s, leaving the EUR a little shy of the late January high at 1.0533 and retracement resistance at 1.0551 (38.2% of the EUR decline from 1.12 to 1.01) that figure the major block on a deeper EUR rebound." 

"The EUR will need to keep generating solid support on dips (after seeing solid demand below 1.04 yesterday) to sustain the near-term uptrend. Support is 1.0375/85."

The Canadian Dollar (CAD) is up only smalls on the day and is lagging most of its G10 peers in their recovery against the big dollar on the week but the push under 1.42 is quite impressive from my point of view, Scotiabank's Chief FX Strategist Shaun Osborne notes. 

CAD improves on the day

"There is clearly a big relief trade supporting the CAD here as CAD shorts cover amid the temporary reprieve from tariffs. I still rather think the USD’s significant yield advantage will limit how far the CAD can recover in the short run. However, the apparent delay to tariff implementation perhaps means that the Bank of Canada will not feel the urgent need to ease policy again at the March meeting." 

"Pricing for a 25bps cut on March sits at 13-14bps currently. USD/CAD’s estimated fair value is 1.4299 currently. Oil prices have firmed after US Treasury Sec. Bessent commented that the US is committed to limiting Iranian oil exports to 100k/bpd (significantly below recent exports which have been around 1.5mn bpd)." 

"The USD’s soft end to the week after last week’s significant net decline plus the push under firm support at 1.4250/60 suggests the CAD’s technical condition is improving, giving spot a shot at extending losses to the 1.40/1.41 range. But let’s not get too carried away just yet. Spot is trading off the intraday low and short-term price signals suggest the USD slide may have stalled for now, at least. USD rebounds have to remain capped in the mid/upper 1.42s if the CAD is to have a chance at pushing higher in the next few weeks."

• Silver price soars to near $33.30 despite multiple headwinds.
• US Trump didn’t reveal a detailed reciprocal tariff plan on Thursday.
• The Fed is expected to hold interest rates steady in the next three policy meetings.

Silver price (XAG/USD) surges over 2.5% to near $33.30 in Friday’s North American session, the highest level seen in more than three months. The white metal soars even though risks of a global trade war have paused temporarily and the Federal Reserve (Fed) is expected to maintain a restrictive monetary policy stance for longer.

US President Donald Trump seems short of imposing reciprocal tariffs than what market participants had anticipated. Investors had expected that Trump could unveil a detailed plan of reciprocal tariffs on Thursday. The assumption was based on his tweet at his Truth Social account that “Three great weeks, perhaps the best ever, but today is the big one: reciprocal tariffs!!! Make America great again!!!", which came in early North American trading hours on Thursday.

However, Trump only passed an order to the Commerce and Treasury departments to prepare a plan on reciprocity, which confirmed that tariffs are not happening, at least for now.

This scenario diminished fears of global uncertainty, which is technically not favorable for the Silver price.

The impact of a delay in Trump’s reciprocal tariffs is visible on the US Dollar (USD), with the US Dollar Index (DXY) revisiting the four-week low around 106.80.

According to the CME FedWatch tool, the Fed is expected to keep interest rates steady in the next three policy meetings.

Silver technical analysis

Silver price breaks strongly above the key resistance of $32.50, which is plotted from the December 9 high. The outlook of the white metal was already bullish as the 20-day Exponential Moving Average (EMA) has been sloping higher, which trades around $31.60.

The 14-day Relative Strength Index (RSI) oscillates in the 60.00-80.00 range, suggesting that the momentum is strongly bullish.

Looking down, the December 9 high of $32.50 will be the key support for the Silver price. While, the October 31 high of $33.90 will be the key barrier.

Silver daily chart

The US Dollar (USD) is generally softer on the day and is ending the week with a sizeable loss that leaves the DXY trading at its lowest level since mid-December. Tarifffatigue is weighing on USD sentiment. After a series of empty threats, with the 'big one' yesterday on reciprocal tariffs also a no show perhaps the icing on the cake, long USD position holders are squaring up and reassessing, Scotiabank's Chief FX Strategist Shaun Osborne notes.  

USD extends losses

"The risk of tariffs has not gone away but the April 1 deadline for the Trump-ordered review of trade and FX practices by the Treasury looks increasingly like the point at which we may find out with a bit more certainty the who, what and when of how tariffs will be imposed. There is also the suspicion that the Trump team is concerned about the impact of the president’s trade policy on domestic prices, with inflation still proving hard to beat down." 

"Businesses may be more inclined to try and pass on higher costs to the consumer now than in the past, given the familiarity we all have with rising prices after the past few years. And for students of Trump 1.0, the pattern of trade in the USD is still looking quite familiar under 2.0. Recall that the outlook for the USD looked constructive in the early stages of Trump’s first term for similar reasons to those that have lifted sentiment in the past couple of months, only for the DXY to slide 10% over the course of 2017." 

"A soft weekly close for the DXY—which looks highly likely, barring a major turnaround this morning— will indicate risk of a bit more weakness in the USD ahead, with the index at risk of sliding back another 1-2%-ish I think to correct a bit more of the rally seen since September. It’s a long weekend ahead for the US and much of Canada and market participation already feels light so traders may not lean too heavily on the USD today. Headline US Retail Sales are expected to fall slightly (ex-autos data may be a little better). Industrial Production is forecast to rise slightly."

• The US Dollar takes a beating and loses traction against nearly all major peers on Friday. 
• Traders brace for the US Retail Sales, although tariffs and geopolitics are making the scene. 
• The US Dollar Index (DXY) drops substantially below 108.00 and is on its way to the lower 106-region. 

The US Dollar Index (DXY), which tracks the performance of the US Dollar (USD) against six major currencies, sinks lower, trading around 106.80 at the time of writing on Friday. The Greenback came under pressure again after US President Donald Trump signed a memo on Thursday that instructed staff to work on reciprocal tariffs. These tariffs will take weeks or even months before being implemented, which gives time to US trading partners to negotiate and find solutions. 

The economic calendar is focusing on US Retail Sales this Friday. Although US data tends to be market-moving, it seems markets are rather ignoring this week’s figures. Next week, investors will focus on the S&P Global Purchase Managers Index (PMI) preliminary data for February due on Friday 21. 

Daily digest market movers: Signed but not there yet

• At 13:30, nearly all important data for this Friday will be released:
  • January Import/Export prices are due, with the monthly Export Price Index expected to rise steadily by 0.3% and the Import Price Index to jump 0.4% compared to 0.1% in December.
  • January Retail Sales will be published, with the headline figure expected to shrink by 0.1% compared to 0.4% growth in December. Retail Sales without Cars and Transportation should fall to 0.3% from 0.4% in the previous month.
• Equities are mixed due to all the geopolitical elements moving around. On average, most indices are down or up by less than 0.5%. 
• The CME FedWatch tool shows a 57.4% chance that interest rates will remain unchanged at current levels in June. This suggests that the Fed would keep rates unchanged for longer to fight against persistent inflation. 
• The US 10-year yield is trading around 4.54%, a deep dive from this week’s high of 4.657%.

US Dollar Index Technical Analysis: There it goes

The US Dollar Index (DXY) is done for this week. A clear weekly loss is unavoidable, and the strong resistance at 107.35 is far away. From here, the DXY is technically handed over to the mercy of the moving averages and the Relative Strength Index (RSI), which is still bearing plenty of room for more downturn. The 200-day Simple Moving Average (SMA), trading around 104.93, might be the one to look out for. 

On the upside, that previous support at 107.35 has now turned into a firm resistance. Further up, the 55-day SMA at 107.90 must be regained before reclaiming 108.00. 

On the downside, look for 106.52 (April 16, 2024, high), 106.34  (100-day SMA), or even 105.89 (resistance in June 2024) as better support levels. Even though the RSI shows room for more downside, the 200-day SMA at 104.93 could be a possible outcome. 

US Dollar Index: Daily Chart

AUD/USD recently carved out a trough near the lower band of a multi-month channel at 0.6080 and has evolved within a base, Societe Generale's FX analysts report.

Larger bounce can’t be ruled out towards 0.6440

"Daily MACD has entered positive territory denoting receding downward momentum. The pair is now challenging the upper part of its recent range. Graphical levels at 0.6330/0.6360 representing lows of last April/August is crucial resistance."

"If this is overcome, a larger bounce can’t be ruled out towards 0.6440 and the 200-DMA at 0.6510/0.6550. Recent pivot low at 0.6230 is near term support."

Provided that 7.2950 is not breached, there is a chance for US Dollar (USD) to drop below 7.2685 against CNH (Chinese Yuan). The next support at 7.2500 is unlikely to come into view. In the longer run, USD must break and remain below 7.2500 before a sustained decline is likely, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

Below 7.2500, a sustained decline is likely

24-HOUR VIEW: "We pointed out yesterday that 'momentum indicators remain flat, and we continue to expect USD to trade in a range between 7.3000 and 7.3200.' However, in a sudden move, USD plunged and reached a low of 7.2685 in late NY trade. Although deeply oversold, the weakness has not stabilised. Today, provided that 7.2950 (minor esistance is at 7.2870) is not breached, there is a chance for USD to dip below the 7.2685 low before stabilisation is likely. The next support at 7.2500 is unlikely to come into view."

1-3 WEEKS VIEW: "We highlighted last Friday (07 Feb, spot at 7.2865) that 'while the outlook remains mixed, the decreasing volatility over the past couple of days suggests USD could trade in a narrower range of 7.2500/7.3300.' Yesterday, USD fell sharply to a low of 7.2685. There has been an increase in momentum, but not enough to indicate the start of a sustained decline. To continue to decline, USD must break and remain below 7.2500. The likelihood of USD breaking clearly below 7.2500 will increase in the next few days as long as 7.3070 is not breached."

The Dollar Index (DXY) failed to cross above January high of 110.15 in recent attempt and has gradually pulled back below the 50-DMA, Societe Generale's FX analysts report.

Next potential objective can be located at 106.30

"It is now challenging the upper limit of previous multiyear range. Recent pivot low of 106.90/106.65 is first layer of support. Daily MACD posted negative divergence and has dipped below equilibrium line highlighting lack of steady upward momentum."

"If the index struggles to reclaim the MA at 108 there would be risk of a deeper decline. Below 106.90/106.65, next potential objectives could be located at 106.30 and December low of 105.40/105.10."

Outlook is unclear after the sharp swings; US Dollar (USD) could trade in a choppy manner between 152.00 and 154.00 against the Japanese Yen (JPY). In the longer run, upward momentum has largely faded; USD is likely to trade in a 151.00/155.00 range for the time being, OCBC's FX analysts Frances Cheung and Christopher Wong note.

USD is likely to trade in a 151.00/155.00 range

24-HOUR VIEW: "Following the surge in USD on Wednesday, we indicated yesterday (Thursday) that 'the rally appears to be overdone, and USD is unlikely to rise much further.' We held the view that USD 'is more likely to consolidate between 153.30 and 154.85.' We did not expect the subsequent price movements as after rising to a high of 154.66, USD plunged and gave up almost all of the previous day’s strong gains (low has been 152.68). The outlook for today is unclear after the sharp swings, and USD could continue to trade in a choppy manner, likely between 152.00 and 154.00."

1-3 WEEKS VIEW: "We highlighted yesterday (13 Feb, spot at 154.25) that 'while USD could continue to rise, deeply overbought conditions suggest that any advance may not reach the major resistance at 155.80.' We also highlighted that 'a breach of 152.50 would indicate that USD is not rising further.' In a surprising move, USD plunged and gave up most of its gains, reaching a low of 152.68. While our ‘strong support’ level at 152.50 has not been breached yet, upward momentum has largely faded. For the time being, USD is likely to trade in a 151.00/155.00 range."

USD/JPY fell sharply as reciprocal tariff delay led to a turnaround in UST yields. The pair was last seen at 152.60 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.

Consolidation likely in the interim

"USD/JPY fell, last at 152.60 levels. Daily momentum is flat while RSI fell. Consolidation likely in the interim. Support at 152.50/80 levels (100, 200 DMAs), 151.50 (38.2% fibo retracement of Sep low to Jan high), 150 levels. Resistance at 154.30, 155.30 levels (50 DMA)."

"We believe Japan may not be spared. When it comes to automobiles, Japanese cars are amongst the top 5 most popular in US and Korean cars make it to the top 10 list. On agricultural products, Japan has a high tariff rate of 204.3% for rice and 23.3% for meat."

"The risk is a direct tariff hit on Japanese goods and JPY may come under pressure in this scenario. In fact, Trump yesterday ordered his administration to consider imposing reciprocal tariffs on numerous trading partners, singling out Japan and South Korea as nations that he believes are taking advantage of the US."

• NZD/USD refreshes an over two-week high near 0.5700 amid weakness in the US Dollar.
• The upbeat market mood amid a delay in Trump’s reciprocal tariff plans has diminished the USD’s safe-haven demand.
• The RBNZ is expected to cut its Official Cash Rate (OCR) by 50 bps to 3.75% on Wednesday.

The NZD/USD pair posts a fresh over two-week high around 0.5700. The Kiwi pair strengthens as the US Dollar (USD) underperforms its peers amid a cheerful market mood. The demand for risk-sensitive assets has increased as fears of an immediate global trade war evaporate.

On Thursday, United States (US) President Donald Trump didn’t reveal a detailed reciprocal tariff plan and guided his team to work on that. However, market participants anticipated that reciprocal tariffs would be announced after Trump’s tweet on his account at Truth Social that that “Three great weeks, perhaps the best ever, but today is the big one: reciprocal tariffs!!! Make America great again!!!", which came in early North American trading hours on Thursday.

An unexpected delay in Trump’s reciprocal plan diminished the USD’s safe-haven appeal. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, revisits an almost four-week low around 106.80.

Meanwhile, investors await the Reserve Bank of New Zealand’s (RBNZ) first monetary policy meeting of the year, which is scheduled on Wednesday. Traders expect the RBNZ to continue easing the monetary policy further at the current pace of 50 basis points (bps). Such a scenario will be unfavorable for the New Zealand Dollar (NZD).

NZD/USD rebounds strongly from the support zone plotted around 0.5500 on a weekly timeframe. However, the outlook of the Kiwi pair is still bearish as the 20-week Exponential Moving Average (EMA) near 0.5777 is sloping downwards.

The 14-week Relative Strength Index (RSI) attempts to return inside the 40.00-60.00 range. A fresh bearish momentum would trigger if the RSI fails to do the same.

The Kiwi pair could decline to near round-level supports of 0.5400 and 0.5300 if it breaks below the 13-year low of 0.5470.

On the flip side, a decisive break above the November 29 high of 0.5930 could drive the pair to the November 15 high of 0.5970 and the psychological resistance of 0.6000.

NZD/USD weekly chart

New Zealand Dollar (NZD) is likely to trade in a higher range of 0.5650/0.5700 against the US Dollar (USD). In the longer run, for the time being, NZD is likely to trade in a range between 0.5595 and 0.5720, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

NZD is likely to trade between 0.5595 and 0.5720

24-HOUR VIEW: "Yesterday, we noted that 'the outlook is unclear' and we held the view that NZD 'is likely to trade in a 0.5605/0.5675 range.' NZD then traded in a narrower range of 0.5623/0.5678. There has been a slight increase in momentum, but not enough to suggest a sustained rise. Today, NZD is more likely to trade in a higher range of 0.5650/0.5700. In other words, a clear break above 0.5700 is unlikely."

1-3 WEEKS VIEW: "Our latest narrative was from Tuesday (11 Feb, spot at 0.5640), wherein 'for the time being, NZD is likely to trade in a range between 0.5595 and 0.5720.' Although there has been a slight increase in short-term upward momentum, NZD does not appear to be ready to break above 0.5720 just yet. We continue to expect NZD to trade in a range for now."

US Dollar (USD) longs are caught wrongfooted. Even as Trump signed an executive order to impose reciprocal tariffs, they will not come into effect until 1 Apr. These reinforced our view that tariffs – be it sectoral or reciprocal – is a bargaining chip for Trump to negotiate in attempt to unlock some agenda favouring America (to level playing ground, fair trade etc.). DXY was last seen at 107 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.

Risk remains skewed to the downside

"Markets have been positioning for tariff trade (i.e. long USD) but the repeated delay in tariffs seem to gradually build up expectations that Trump may not deliver tariffs as much as feared, depending on how trade negotiations go and if he gets any concession. With the tariff delay, prospects of Ukraine peace talks, US CPI and PPI data out of the way, the focus goes back to US data tonight – retail sales and industrial production. Softer US data may see USD longs bail."

"Daily momentum turned bearish while RSI fell. Risk remains skewed to the downside. Support at 106.20/40 levels (100 DMA, 38.2% fibo retracement of Oct low to Jan high). Resistance at 107.80 (23.6% fibo), 108.00/10 (21, 50 DMAs), and 108.50 levels."

"With regards to reciprocal tariffs, we have earlier highlighted that Korea, India, Thailand and Japan impose a higher weighted average tariff rate than the US does on these countries. Reciprocal tariff rate adjustments from US may potentially impact these countries more."

As long as Australian Dollar (AUD) remains above 0.6270 vs US Dollar (USD), there is a chance for it to rise above 0.6330. The major resistance at 0.6355 is likely out of reach for now. In the longer run, as long as 0.6250 is not breached, AUD is likely to rise to 0.6355, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

Major resistance at 0.6355 is likely out of reach for now

24-HOUR VIEW: "After AUD traded in a choppy manner two days ago, we indicated yesterday that “the outlook is mixed” and we expected it to 'trade between 0.6250 and 0.6310.' AUD then dipped to 0.6255 before staging a surprisingly strong rise that broke above 0.6310 (high has been 0.6323). AUD closed higher by 0.62% at 0.6317. Despite the advance, upward momentum has not increased significantly. However, as long as AUD remains above 0.6270, there is a chance for it to rise above 0.6330. The major resistance at 0.6355 is likely out of reach for now."

1-3 WEEKS VIEW: "Last Thursday (06 Feb, spot at 0.6280), we indicated that 'if AUD closes above 0.6310, it could trigger an advance to 0.6355.' After AUD traded in a range for a few days, we indicated on Tuesday (11 Feb, spot at 0.6270) that the recent 'buildup in momentum is fading, and if AUD breaks below 0.6230 (‘strong support’ level), it would mean that AUD is likely to trade in a range.' AUD then fell to a low of 0.6235, and yesterday, we highlighted that 'as long as 0.6230 is not breached, there is still a slim chance for AUD to break clearly above 0.6310.' In late NY trade, AUD soared and broke above 0.6310 (high has been 0.6323) and closed at 0.6317 (+0.62%). From here, as long as 0.6250 (‘strong support’ level previously at 0.6230) is not breached, we expect AUD to rise to 0.6355."

The US Dollar (USD) is a little weaker in Europe today on the back of slightly lower US interest rates, ongoing optimism about an end to the war in Ukraine, and a US reciprocal tariff package which was hard to decipher. The market knew that the Commerce Department was due to deliver a big report on trade in April and had expected tariffs thereafter. But it had also feared that this week's reciprocal tariffs announcement would be a separate workstream and be more immediate. News yesterday effectively laying the groundwork for the April report has therefore been seen as a relief, ING’s FX analysts Chris Turner notes.

Short-term momentum can carry DXY to the 106.35 area

"Reading through the details of the basis on which reciprocal tariffs will be delivered is mind-blowing. Each country's reciprocal tariff will be based on a relative analysis of: import tariffs, VAT rates, subsidies, regulatory burdens, FX misalignment, and 'any other practice that.. imposes any unfair limitation on market access or any structural impediment to fair competition with the market economy of the United States'."

"However, the outcome is likely to be perhaps some eye-wateringly large tariffs against some of the key countries with which the US runs a goods deficit. The EU will certainly be in the cross-hairs since it looks like Trump is using the threat of tariffs as leverage against the EU's digital service tax. We think the dollar will move a little stronger into the second quarter. This means the current dollar dip should be a correction rather than a meaningful new trend."

"For today, we think the dollar can stay soft as the focus switches to the security conference in Munich and what it means for any ceasefire in Ukraine. Speculation is building that representatives from the US, Russia, Ukraine and perhaps Europe, too, could meet in Saudi Arabia at some stage. A soft, weather-related January US retail sales figure today does not need to hit the dollar too hard. But we think short-term momentum could carry DXY below 106.95/107.00 to the 106.35 area."

• USD/JPY declines further to near 152.60 as the US Dollar underperforms its pears amid upbeat market mood.
• US Trump didn’t reveal its detailed reciprocal tariff plan on Thursday.
• The BoJ is expected to raise interest rates again.

The USD/JPY pair falls further to near 152.60 in Friday’s European session. The asset weakens as the US Dollar (USD) underperforms across the board amid cheerful market mood.

Investors turn to risky assets as United States (US) President Donald Trump didn’t unveil the concrete reciprocal tariff plan on Thursday and asked treasury, commerce chiefs to work on reciprocity. However, market participants anticipated that Trump would reveal a detailed reciprocal tariff plan immediately. This scenario has eased fears of an immediate global trade war.

The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, revisits an almost four-week low around 106.80.

Despite easing safe-haven appeal of the US Dollar in the current scenario, its outlook remains firm as investors expect the Federal Reserve (Fed) keep interest rates at their current levels for longer. Fed Chair Jerome Powell said in his two-day testimony before the Congress that the central bank can maintain “policy restraint for longer” if economy remains strong and “inflation does not move toward 2%."

Meanwhile, the Japanese Yen (JPY) is also underperforming its peers, except the US Dollar, even though traders have become increasingly confident that the Bank of Japan (BoJ) will continue tightening the monetary policy.

BoJ hawkish bets have been prompted by inflationary pressures remaining above the 2% target for longer and firm expectations that wages will increase further.

• EUR/USD climbs to near 1.0480 amid cheerful market sentiment due to multiple factors.
• US President Trump’s reciprocal tariffs are unlikely to be executed before April 1.
• The ECB is expected to cut interest rates further, while the Fed is anticipated to maintain a restrictive stance.

EUR/USD extends its winning streak for the fourth trading session on Friday. The major currency pair posts a fresh fortnight high around 1.0480 and aims to extend its upside to near the psychological resistance of 1.0500. The shared currency pair gains as demand for risk-perceived assets has increased due to multiple tailwinds.

Market sentiment becomes favorable for risky assets as the imposition of reciprocal tariffs by United States (US) President Donald Trump is unlikely to come into effect before April 1. On Thursday, Trump asked treasury and commerce chiefs to work on reciprocity. Later, Commerce Secretary nominee Howard Lutnick said the president would be ready to move on new tariffs by April 1. This scenario diminished fears of an immediate global trade war as investors anticipated that Trump would announce reciprocal levies on Thursday itself.

Investors expect US trading partners would get enough time to negotiate on potential tariffs with Trump, which will ease the scope of negative outcomes of the trade war.

Apart from the delay in reciprocal tariff imposition, optimism over the Russia-Ukraine truce has also offered a big relief to the Euro (EUR). An end to a three-year-long conflict would fix the energy crisis and supply chain bottlenecks in the Eurozone to a great extent.

In spite of multiple tailwinds behind Euro’s strength, market participants worry that expectations of widening rate differentials between the European Central Bank (ECB) and the Federal Reserve (Fed) could push the shared currency on the backfoot again.

A slew of ECB officials have been comfortable with expectations that the central bank will reduce its Deposit Facility rate three times more this year. The ECB cut its interest rates by 25 basis points (bps) to 2.75% last month.

On Thursday, ECB policymaker and Croatian central bank Governor Boris Vujčić said that the market pricing in three more interest rate cuts this year is something “not unreasonable”. Vujčić added that the ECB could remove the reference to “restrictive policy” in the March policy statement.

Daily digest market movers: EUR/USD gains at USD expense

• EUR/USD is also up by weakness in the US Dollar (USD). The safe-haven demand for the USD has diminished amid a delay in the imposition of Trump’s reciprocal tariffs and hopes of peace between Russia and Ukraine. The US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, posts a fresh almost four-week low below 107.00.
• Still, the outlook for the US Dollar has not turned bearish as traders expect the Federal Reserve (Fed) to keep interest rates steady in the range of 4.25%-4.50% for a longer period. According to the CME FedWatch tool, the Fed is expected to keep interest rates steady in the next three policy meetings. There is an almost 50% chance that the Fed can cut interest rates in the July meeting.
• Traders are confident that the Fed will maintain a restrictive interest rate stance for longer amid persistent inflationary pressures and strong labor demand. 
• This week, Fed Chair Jerome Powell said in his two-day testimony before Congress that the central bank can maintain “policy restraint for longer” if the economy remains strong and “inflation does not move toward 2%."
• In Friday’s session, investors will focus on the US Retail Sales data for January, which will be published at 13:30 GMT. The US Census Bureau is expected to report that Retail Sales, a key measure of consumer spending, declined by 0.1% in January after expanding 0.4% in December.

Technical Analysis: EUR/USD recovers to near 1.0480

EUR/USD extends its recovery to near 1.0480 in European trading hours on Friday. The major currency pair strengthens after climbing above the 50-day Exponential Moving Average (EMA), which trades around 1.04282.

The 14-day Relative Strength Index (RSI) advances to near 60.00. A bullish momentum would activate if the RSI (14) manages to sustain above that level.

Looking down, the February 10 low of 1.0285 will act as the major support zone for the pair. Conversely, the January 27 high of 1.0533 will be the key barrier for the Euro bulls.

The Eurozone economy witnessed a growth of 0.1% in the quarter to December of 2024, surpassing the preliminary reading of 0%, the second estimate released by Eurostat showed on Friday.

The bloc’s Gross Domestic Product (GDP) increased at an annual rate of 0.9% in Q4 vs. the initial estimate of 0.9%, matching the market consensus.

Meanwhile, the Eurozone Employment Change for Q4 arrived at 0.1% quarter-on-quarter (QoQ) and 0.6% year-on-year (YoY).

Market reaction

The Eurozone data fails to provide a fresh boost to the Euro. At the press time, EUR/USD trades 0.12% higher on the day at 1.0478.

There appears to be enough momentum for Pound Sterling (GBP) vs US Dollar (USD) to rise further, but any advance is likely part of a higher 1.2480/1.2600 range. In the longer run, sharp increase in momentum is likely to lead to further GBP strength; the levels to watch are 1.2600 and 1.2655, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

Increase in momentum is likely to lead to further GBP strength

24-HOUR VIEW: "Following Wednesday’s price movements, we noted yesterday (Thursday) that 'there has been no increase in either downward or upward momentum.' We expected GBP to 'trade in a range between 1.2390 and 1.2490.' Instead of trading in a range, GBP surged and closed on a strong note at 1.2569 (+0.99%). While there appears to be enough momentum for GBP to rise further today, deeply overbought conditions suggest any advance is likely part of a higher 1.2480/1.2600 range. In other words, GBP is unlikely to break clearly above 1.2600. The major resistance at 1.2655 is also unlikely to come into view."

1-3 WEEKS VIEW: "One week ago (09 Feb, spot at 1.2440), we indicated that 'for the time being, GBP is likely to trade in a 1.2310/1.2550 range.' After trading in a range for several days, GBP surged and broke above 1.2550 yesterday, reaching a high of 1.2569. There has been a sharp increase in momentum, and we expect GBP to strengthen further. The levels to watch are 1.2600 and 1.2655. To sustain the momentum, GBP must remain above the ‘strong support’ level, currently at 1.2450."

The components of yesterday's US January PPI release which read over to the core PCE deflator came in quite benign yesterday, ING’s FX analysts Chris Turner notes.

Current correction might extend to the 1.0535/75 area

"Hence the drop in US rates and the firmer EUR/USD ahead of the tariff story. As above, the market senses some relief that tariffs were not immediate and allows a couple of months for trading partners to fine-tune strategies - be they buying a lot of US LNG, cutting their own trade barriers, or standing and fighting."

"Our best guess on EUR/USD is that this current correction might extend to the 1.0535/75 area - but that should be the extent of it. And we have a baseline forecast that EUR/USD will be pressing 1.00 in the second quarter."

"As an aside, we have been discussing the outperformance of eurozone equities and whether global rotation into Europe could help the euro. Yet when looking at flows into a popular eurozone equity ETF - the Ishares MSCI Eurozone - there have not been any strong signs of that rotation. This is perhaps another reason why the EUR/USD correction will peter out above 1.05."

Euro (EUR) vs US Dollar (USD) continued to trade higher on news that reciprocal tariffs does not comes into effect immediately but sometime in 1 Apr. The 6weeks+ push suggests that Trump may want to leverage on the threats to open up negotiations with some trade partners. The delay and hopes of Ukraine peace dividend is frustrating EUR shorts. Last seen at 1.0478 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.

Negotiation process can be positive to EUR

"Daily momentum turned mild bullish though rise in RSI moderated. Resistance at 1.05, 1.0540 levels. Break-out puts next resistance at 1.0570 (38.2% fibo retracement of Sep high to Jan low, 100 DMA). Support at 1.0390 (21, 50 DMAs), 1.03 levels."

"The peace talk remains in early stages and the phone call (between Trump and Putin) did not involve Ukraine or Europe. While the negotiation process is not likely to be smooth, we believe progress on this front is a positive start. It can even be a strong positive factor that overwhelms other EUR-negative factors, which were more or less in the price (stagnant economy, dovish ECB), depending on how the peace deal takes its form."

"We have turned neutral on EUR outlook (from bearish), looking to initiate buy on dips (at better levels). That said, we still caution for the risk of reciprocal tariff on EU, that may come within weeks even though effective data can be in Apr. Such announcement may undermine EUR."

Responding to US President Donald Trump’s reciprocal tariffs plan on Friday, the European Commission noted that “Trump's reciprocal tariffs are a step in the wrong direction.”

Additional takeaways

Market reaction

At the time of writing, EUR/USD is adding 0.11% on the day to trade near 1.0475, retreating from intraday highs of 1.0488.

Outlook for Euro (EUR) vs US Dollar (USD) is positive, with a technical target of 1.0530. In the longer run, scope for EUR to test 1.0495; the major resistance at 1.0530 is unlikely to come under threat, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

Outlook for EUR is positive

24-HOUR VIEW: "Two days ago, EUR rose to 1.0429 and then pulled back. Yesterday, when EUR was at 1.0385, we highlighted that 'there is a chance for EUR to retest the 1.0430 level before a more sustained pullback is likely.' We added, EUR 'is unlikely to break above the major resistance at 1.0450.' In late Asian trade, EUR rose to 1.0439 before pulling back. During the late NY session, EUR surged and broke above 1.0450, reaching a high of 1.0466. The rapid rise appears to be overdone, but there is scope for EUR to test 1.0495. The major resistance at 1.0530 is unlikely to come under threat. Support is at 1.0430; a breach of 1.0400 would indicate that the current upward pressure has eased."

1-3 WEEKS VIEW: "Last Wednesday (05 Feb, spot at 1.0375), we indicated that 'the outlook for EUR is unclear, and it could trade in a broad range of 1.0250/1.0490.' As we tracked the price action, we indicated on Tuesday (11 Feb, spot at 1.0305) that 'the outlook remains unclear, but the price movements are likely to stay within a narrower 1.0250/1.0450 range for now.' Yesterday (Thursday), EUR soared and broke decisively above 1.0450. Given the strong surge in momentum, we are revising our EUR outlook to positive, with a technical target of 1.0530. We will maintain the same outlook provided that 1.0365 (‘strong support’ level) is not breached."

Silver prices (XAG/USD) rose on Friday, according to FXStreet data. Silver trades at $33.20 per troy ounce, up 2.59% from the $32.37 it cost on Thursday.

Silver prices have increased by 14.92% since the beginning of the year.

The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, stood at 88.47 on Friday, down from 90.49 on Thursday.

(An automation tool was used in creating this post.)

• Gold nudges higher as US President Trump’s reciprocal tariffs are coming in a few weeks. 
• Bullion is benefiting from safe-haven demand and a substantially weaker US Dollar. 
• Gold is back on its way to test the all-time high at $2,942 on Friday.

Gold’s price (XAU/USD) edges higher, trading at around $2,935 at the time of writing on Friday, and holds good cards to close out this week with a new all-time high and solid gains. The latest leg up comes after United States (US) President Donald Trump signed the executive order for reciprocal tariffs on Thursday. Although it will still take weeks before tariffs are implemented, investors are not taking any chances and are parking their money in safe haven Gold.  

Meanwhile, Gold added another tailwind to its rally, with a substantially weaker US Dollar (USD) and US Dollar Index (DXY) overall. The Greenback is losing traction because President Trump’s reciprocal tariffs need weeks or months before implementation. That opens the window of opportunity for negotiations, and hence, there is no immediate flight to a safe haven on the back of any announcement or signing of an executive order by the US President. 

Daily digest market movers: Geopolitics take over

• Gold advances for a third day to trade near a record high after US President Donald Trump’s order for reciprocal tariffs against several nations increased uncertainty around trade and the global economy, Bloomberg reports. 
• Bullion futures on Comex are trading at a substantial premium to spot. The most active contract is for April, and it is currently above $2,960. Meanwhile, cash is $30 lower, just below its all-time high, Reuters reports.
• At 13:30 GMT, January’s US Retail Sales data will be released. Expectations are for a 0.1% fall in Retail sales compared to the 0.4% increase in December. 

Technical Analysis: What if

Gold is set to hit a fresh all-time high just before the weekend. If the trend continues, it will be tough to fight it. However, a positive shift in geopolitics could move the needle and no longer warrant a higher Gold price.

The first support level on Friday is $2,919, which is the daily Pivot Point. From there, S1 support stands at $2,909. Further down, the S2 support at $2,890 should act as a safeguard and prevent any additional declines to the more significant $2,790 level (October 31, 2024, high).

On the upside, the R1 resistance at $2,938 is the first level that needs to be recovered, followed by the R2 resistance at $2,948. In case the rally continues, the $2,950 big figure will be tested for a break to the upside. Further up, the $3,000 psychological level could be next.

XAU/USD: Daily Chart

West Texas Intermediate (WTI) Oil price advances on Friday, according to FXStreet data. WTI trades at $71.47 per barrel, up from Thursday’s close at $71.26.
Brent Oil Exchange Rate (Brent crude) is also up, advancing from the $74.92 price posted on Thursday, and trading at $75.21.

(An automation tool was used in creating this post.)

• The Pound Sterling remains uncertain against its major peers on Friday as investors worry about the UK's economic performance.
• Investors await the UK labor market and inflation data for fresh cues on BoE’s policy outlook next week.
• The US Dollar weakens as US President Trump did not impose reciprocal tariffs immediately.

The Pound Sterling (GBP) trades with caution against its major peers on Friday. The British currency struggles for a firm footing as investors are concerned over the United Kingdom's (UK) economic outlook despite upbeat Gross Domestic Product (GDP) data for December and the last quarter of the previous year.

In the latest monetary policy meeting, the Bank of England (BoE) halved its GDP forecasts for the year to 0.75%, which was a big blow for Chancellor of the Exchequer Rachel Reeves, who has been promising to lift economic growth. The BoE stated that higher global tariffs would slow down their growth rate.

The UK Office for National Statistics (ONS) reported on Thursday that the economy surprisingly expanded by 0.1% in the fourth quarter of 2024, while economists projected it to have contracted at a similar pace. In December, the GDP growth rate was robust at 0.4%.

Going forward, the next triggers for the Pound Sterling will be the labor market data for the three months ending December and the Consumer Price Index (CPI) data for January, which will be released on Tuesday and Wednesday, respectively. Both economic indicators will influence market speculation about whether the Bank of England (BoE) will reduce interest rates again in the March meeting. The BoE cut its key borrowing rates by 25 basis points (bps) to 4.5% on February 6.

Daily digest market movers: Pound Sterling holds onto Thursday’s gains against US Dollar

• The Pound Sterling trades near Thursday’s high around 1.2560 against the US Dollar (USD) in Friday’s European session. The GBP/USD pair exhibits strength as the US Dollar weakens after United States (US) President Donald Trump directed the Commerce Department and trade representatives to devise a plan to match tariffs on each product with every country.
• President Trump said in the Oval Office on Thursday, "I've decided for purposes of fairness that I will charge a reciprocal tariff." Trump added, "It's fair to all, no other country can complain." The President further added that tariffs will “level the playing field for all US companies.”
• This scenario weighed heavily on the US Dollar, as market participants anticipated that Trump would impose reciprocal tariffs immediately. These assumptions were based on his tweet at Truth Social, “Three great weeks, perhaps the best ever, but today is the big one: reciprocal tariffs!!! Make America great again!!!", which came in early North American trading hours on Thursday.
• In Friday’s European session, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, appears fragile near an over two-week low at around 107.00.
• Market participants expect higher tariffs to accelerate local manufacturing activities in the US. This scenario would boost labor demand and push price pressures higher, forcing Federal Reserve (Fed) officials to maintain a restrictive monetary policy stance for longer.
• According to the CME FedWatch tool, the Fed is expected to keep interest rates steady in the next three policy meetings. There is an almost 50% chance that the Fed can cut interest rates in the July meeting.
• In Friday’s session, investors will focus on the US Retail Sales data for January, which will be published at 13:30 GMT. The US Census Bureau is expected to report that Retail Sales, a key measure of consumer spending, declined by 0.1% after expanding 0.4% in December.

Technical Analysis: Pound Sterling gains ground above 1.2500

The Pound Sterling revisits a six-week high at around 1.2570 against the US Dollar. The GBP/USD pair strengthened after breaking above the 50-day Exponential Moving Average (EMA), which stands around 1.2490, on Thursday.

The 14-day Relative Strength Index (RSI) advances to near 60.00. A bullish momentum would activate if the RSI (14) sustains above that level.

Looking down, the February 3 low of 1.2250 will act as a key support zone for the pair. On the upside, the 38.2% and 50% Fibonacci retracements at 1.2610 and 1.2767, respectively, will act as key resistance zones.

• WTI price edges higher as a JPMorgan report reveals global Oil demand has risen to 103.4 million barrels per day.
• President Trump has instructed officials to review reciprocal tariffs on countries imposing tariffs on US goods.
• Oil prices may face downward pressure due to a possible relaxation of restrictions on Russian producers.

West Texas Intermediate (WTI) crude Oil price extends its gains for the second successive day, trading around $71.50 per barrel during early European hours on Friday. Oil prices find support from increasing fuel demand and a delay in US tariff plans.

According to a report by JPMorgan on Friday, global Oil demand has risen to 103.4 million barrels per day, marking a 1.4 million bpd increase year-over-year. "After a slow start, demand for mobility and heating fuels picked up in the second week of February, suggesting the gap between actual and projected demand will soon close," the report noted.

On Thursday, US President Donald Trump directed commerce and economic officials to study reciprocal tariffs against countries imposing tariffs on US goods, with recommendations due by April 1. This delay allows for negotiations, potentially reducing trade tensions.

However, the upside of the Oil prices was limited amid easing supply risks and speculation over a potential relaxation of restrictions on Russian producers. This follows Trump’s directive for US officials to initiate peace talks after Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskiy expressed interest in ending the conflict in separate phone calls with him.

Dollar-denominated crude Oil may face demand concerns from the United States (US), the world’s largest Oil consumer, as rising inflation strengthens expectations that the Federal Reserve (Fed) will maintain its hawkish policy stance.

Here is what you need to know on Friday, February 14:

The US Dollar holds steady in the European morning on Friday after suffering large losses against its major rivals on Thursday. Eurostat will publish preliminary Employment Change and Gross Domestic Product (GDP) data for the fourth quarter. Later in the session, the US economic calendar will feature Retail Sales and Industrial Production data for January.

In the early American session on Thursday, US President Donald Trump hinted that they could announce reciprocal tariffs later in the day. With the immediate reaction, the USD gathered strength against its peers. Later in the day, however, the market mood improved and the USD came under renewed selling pressure as investors breathed a sigh of relief. Trump refrained from imposing fresh tariffs and explained that he signed a memo ordering his economics team to devise a plan for reciprocal tariffs on every country that charges duties on US imports. Major equity indexes in the US ended the day decisively higher, and the USD Index lost more than 0.8% on the day.

EUR/USD gathered bullish momentum in the second half of the day on Thursday and climbed to a fresh two-week high near 1.0470. The pair stages a technical correction early Friday but manages to hold above 1.0450.

GBP/USD benefited from the improving risk mood and rose to its highest level in over a month, above 1.2570. The pair stays relatively quiet in the European morning on Friday and trades in a tight range, slightly above 1.2550.

Following a three-day rally, USD/JPY reversed its direction on Thursday and lost more than 1% on the day. The pair continues to edge lower to begin the European session and trades near 152.50.

Gold extended its uptrend and rose more than 0.8% on Thursday, as the benchmark 10-year US Treasury bond yield declined sharply following the latest headlines surrounding Trump's tariff policy. In the European morning on Friday, XAU/USD trades marginally higher on the day, above $2,930.

• EUR/GBP softens to near 0.8325 in Friday’s early European session. 
• UK economy grew by 0.1% QoQ in Q4, beating expectations after recording zero growth in the previous reading. 
• Investors await the preliminary reading of the Eurozone Q4 GDP report, which is due later on Friday. 

The EUR/GBP cross trades in negative territory for the second consecutive day around 0.8325 during the early European session on Friday. The upbeat UK Gross Domestic Product (GDP) data for the fourth quarter (Q4) provides some support to the Pound Sterling (GBP). 

The UK GDP expanded by 0.1% between October and December, surpassing forecasts of a 0.1% decline, the Office for National Statistics (ONS) showed on Thursday. In December alone, GDP rose by 0.4% MoM, compared to 0.1% expansion in November. 

BoE officials have been guiding a cautious approach to interest rate cuts as they are concerned about the persistence of inflationary pressure.  BoE Chief Economist Huw Pill said on Thursday that he “urges caution on interest rate cuts” because the long process of wrestling down inflation is not yet complete. 

On the Euro front, the potential trade war between Europe and the US could drag the shared currency lower. US President Donald Trump unveiled a roadmap on Thursday for charging reciprocal tariffs against every country that imposes duties on US imports. Nonetheless, commerce and economics officials need to study reciprocal tariffs against countries that place tariffs on US goods, and it will not be due until April 1.

Later on Friday, the preliminary reading of the Eurozone GDP for Q4 will be published. The Eurozone economy is estimated to grow 0.9% YoY in Q4. In case of a stronger-than-expected outcome, this could lift the Euro (EUR) against the GBP in the near term. 

• The US Dollar Index depreciated following Trump's decision to delay the implementation of reciprocal tariffs.
• US Retail Sales are forecasted to contract by 0.1% MoM in January, following a previous increase of 0.4%.
• The Greenback may gain ground as US Core PPI inflation has increased the odds of the Fed delaying rate cuts.

The US Dollar Index (DXY), which tracks the US Dollar's (USD) performance against six major currencies, remains stable after losses in the previous session. At the time of writing, the DXY hovers around 107.00, while yields on 2-year and 10-year US Treasury bonds stand at 4.31% and 4.53%, respectively.

The US Dollar faces pressure following President Donald Trump's decision to delay the implementation of reciprocal tariffs. Additionally, declining US Treasury yields weigh on the Greenback, despite ongoing concerns about a global trade war.

Investor attention now shifts to the upcoming US Retail Sales report, the last key economic release of the week. Markets anticipate a slight monthly decline of 0.1% in January, following a 0.4% increase in the previous period.

Core PPI inflation in the United States (US) rose to 3.6% YoY in January, exceeding the expected 3.3% but slightly below the revised 3.7% (previously reported as 3.5%). This has reinforced expectations that the Federal Reserve (Fed) will delay rate cuts until the second half of the year. Additionally, persistently strong inflation could further support the outlook for the Fed to keep interest rates at 4.25%-4.50% for an extended period.

In his semi-annual address to Congress, Fed Chair Jerome Powell stated that policymakers “do not need to be in a hurry” to cut interest rates, citing a strong labor market and robust economic growth. He also warned that President Trump’s tariff policies could drive prices higher, complicating the Fed’s ability to lower rates.

A Reuters poll of economists now suggests the Fed will delay interest rate cuts until the next quarter due to rising inflation concerns. Many analysts who had previously anticipated a March rate cut have revised their forecasts, with the majority of respondents (surveyed between February 4-10) now expecting at least one rate cut by June, though opinions on the exact timing remain divided.

FX option expiries for Feb 14 NY cut at 10:00 Eastern Time via DTCC can be found below.

EUR/USD: EUR amounts

• 1.0300 3.4b
• 1.0310 1.4b
• 1.0325 2.1b
• 1.0350 1.1b
• 1.0385 1.7b
• 1.0400 5.2b
• 1.0435 1.2b
• 1.0450 1.4b
• 1.0475 1.8b
• 1.0500 3.4b
• 1.0525 1.4b

GBP/USD: GBP amounts     

• 1.2380 911m
• 1.2400 437m
• 1.2500 844m

USD/JPY: USD amounts                                 

• 151.00 1.2b
• 152.00 3.1b
• 154.00 1.5b
• 155.00 1.1b
• 155.50 1.8b
• 156.00 2b

USD/CHF: USD amounts     

• 0.9000 502m

AUD/USD: AUD amounts

• 0.6200 1.7b
• 0.6300 1.2b
• 0.6350 728m

USD/CAD: USD amounts       

• 1.4195 901m
• 1.4200 1.8b
• 1.4255 948m
• 1.4330 938m
• 1.4365 1b

EUR/GBP: EUR amounts        

• 0.8400 482m
• 0.8420 498m
• 0.8430 718m

• EUR/JPY loses ground as the Japanese Yen advances amid the increased likelihood of further BoJ’s rate hikes.
• Japanese Minister Ryosei Akazawa stated that authorities will take appropriate action regarding US reciprocal tariffs.
• Eurozone GDP may remain consistent at 0.9% growth YoY in Q4, as expected.

EUR/JPY continues to lose ground for the second successive session, trading around 159.60 during the Asian hours on Friday. The currency cross depreciates as the Japanese Yen (JPY) continues to gain support following Thursday’s release of stronger-than-expected Producer Price Index (PPI) data from Japan, reinforcing expectations of further rate hikes by the Bank of Japan (BoJ).

Japan's Producer Price Index climbed 4.2% year-over-year in January 2025, up from a revised 3.9% in December and exceeding market forecasts of 4.0%. This marks the 47th consecutive month of producer inflation and the highest level since May 2023. The data underscores growing inflationary pressures in Japan, reinforced by recent wage growth figures, bolstering the case for further Bank of Japan rate hikes.

Additionally, the hawkish stance on the Bank of Japan’s (BoJ) monetary policy also continued to support the JPY. While there is uncertainty regarding whether the BoJ will raise interest rates again in March, the central bank is widely expected to implement further rate hikes later this year.

On Friday, Japan's Economy Minister Ryosei Akazawa stated that the authorities will respond appropriately to US reciprocal tariffs. Akazawa further stated that the weak Japanese Yen (JPY) has a variety of impacts on Japan's real economy.

The Euro could face potential headwinds as European Central Bank (ECB) policymaker Boris Vujčić indicated on Thursday that markets are pricing in three rate cuts this year, a forecast he described as reasonable, according to Reuters. Vujčić also suggested that the ECB could remove its reference to a "restrictive policy" in the March statement, citing expectations of a swift decline in services inflation in the coming months.

• USD/CHF drifts higher to near 0.9045 in Friday’s early European session. 
• US PPI inflation dampens Fed rate cut odds. 
• Israel said Hamas must release three hostages on Saturday, or war will resume. 

The USD/CHF pair gains ground to around 0.9045 during the early European session on Friday. The renewed US Dollar (USD) demand provides some support to the pair. However, the safe-haven flows amid the uncertainty and geopolitical risks might cap the upside of USD/CHF. 

The hotter-than-expected US Producer Price Index (PPI) reinforced expectations that the US Federal Reserve (Fed) will keep interest rates for an extended period. Additionally, Fed Chair Jerome Powell highlighted that the Fed is in no rush to cut interest rates due to continued strength in the labor market and solid economic growth.

BMO’s Scott Anderson emphasized the Fed’s growing caution regarding future rate cuts, noting that “higher-for-longer interest rates is becoming the mantra again. Traders will keep an eye on the release of US Retail Sales for January, which is due later on Friday. In case of a hotter outcome, this could further lift the USD against the Swiss Franc (CHF). 

Data released by the Swiss Federal Statistical Office on Thursday showed that Switzerland's Consumer Price Index (CPI) inflation eased to 0.4% YoY in January from 0.6% in December. This figure came in line with market expectations and registered the lowest level since April 2021. On a monthly basis, the CPI declined by 0.1%, maintaining the same pace as the previous period.

Meanwhile, the uncertainty and geopolitical concerns are likely to boost the traditional safe-haven currency like the Swiss Franc (CHF). The Israeli government stated that it plans to stick to the hostage-release timeline agreed upon in the cease-fire agreement with Hamas, but has warned that if the expected three hostages are not released on Saturday, it would return to war.

• USD/CAD may test immediate support at the lower threshold of the falling wedge at 1.4160.
• The daily chart technical analysis shows a falling wedge pattern, signaling a potential upward correction.
• The primary resistance appears at the nine-day EMA of 1.4278.

The USD/CAD pair continues its losing streak for the fourth successive session, trading around 1.4190 during the Asian hours on Friday. The daily chart's technical analysis shows a falling wedge pattern, which is a bullish chart pattern that signals a potential breakout to the upside.

Additionally, the 14-day Relative Strength Index (RSI) is approaching the 30 level, reinforcing the prevailing bearish outlook. However, a drop below 30 would indicate an oversold condition for the USD/CAD pair, potentially signaling an upcoming upward correction.

However, the USD/CAD pair continues to trade below the nine- and 14-day Exponential Moving Averages (EMAs), highlighting persistent bearish sentiment and weak short-term price action. This positioning still suggests sustained selling pressure.

On the downside, the USD/CAD pair could find its immediate support at the lower threshold of the falling wedge at 1.4160, followed by the psychological level of 1.4100.

The USD/CAD pair may find immediate resistance around the nine-day EMA at 1.4278, followed by the 14-day EMA at 1.4307. A breakout above these levels may strengthen short-term momentum and support the pair to test the upper boundary of the falling wedge at the 1.4330 level.

USD/CAD: Daily Chart

Swiss National Bank (SNB) Petra Tschudin commented on the policy outlook on Friday.

She said that “policy choices include FX intervention and negative rates.”

Market reaction

USD/CHF was seen trading 0.14% higher on the day at 0.9045. 

• Silver price extends its upside to around $32.45 in Friday’s Asian session. 
• Steady concerns over a global trade war support the Silver price. 
• US PPI inflation was higher in January. 

Silver price (XAG/USD) trades in positive territory for the third consecutive day near $32.50 during the Asian session on Friday. The growing concerns about US President Donald Trump's tariff policies continue to underpin the white metal. Traders brace for the US Retail Sales for January, which are due later on Friday. 

US President Donald Trump promised to target countries that charge tax on US imports by matching them with a reciprocal tariff. Late Thursday, Trump ordered his administration to start study duties by early April, prompting fears of a global trade war, boosting the safe-haven asset like Silver. 

Data released by the US Bureau of Labor Statistics on Thursday showed that Producer Price Index (PPI) rose 3.5% YoY in January, compared to a 3.3% increase seen in December. This figure came in above the market expectation of 3.2%. Meanwhile, the annual core PPI rose 3.6% YoY in January versus 3.7% (revised from 3.5%) prior, beating the estimation of 3.3%. 

The report strengthened financial market views that the Federal Reserve (Fed) would not be cutting interest rates before the second half of the year. This, in turn, could support the Greenback and weigh on the USD-denominated commodity price. 

Gold prices remained broadly unchanged in India on Friday, according to data compiled by FXStreet.

The price for Gold stood at 8,169.59 Indian Rupees (INR) per gram, broadly stable compared with the INR 8,175.81 it cost on Thursday.

The price for Gold was broadly steady at INR 95,286.45 per tola from INR 95,361.08 per tola a day earlier.

FXStreet calculates Gold prices in India by adapting international prices (USD/INR) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.

(An automation tool was used in creating this post.)

• EUR/USD moves little as traders adopt caution ahead of Eurozone GDP and US Retail Sales data due on Friday.
• Eurozone GDP may remain consistent at 0.9% growth YoY in Q4, as expected.
• US Retail Sales are forecasted to contract by 0.1% MoM in January, following a previous increase of 0.4%.

EUR/USD holds steady around 1.0460 during Asian trading hours on Friday, following three consecutive sessions of gains. The pair strengthened after US President Donald Trump delayed the implementation of reciprocal tariffs. Meanwhile, the US Dollar (USD) weakens amid declining US Treasury yields, despite ongoing concerns over a global trade war.

Investors now turn their focus to the upcoming US Retail Sales report, the final key economic release of the week. Markets expect a slight monthly contraction of 0.1% in January, following a 0.4% increase in the previous period.

The US Dollar Index (DXY), which tracks the USD against six major currencies, extends its losses for a fourth straight session, trading around 107.00. At the time of writing, US Treasury bond yields stand at 4.31% for the 2-year note and 4.53% for the 10-year note.

In the US, Core PPI inflation rose to 3.6% YoY in January, surpassing the expected 3.3% but slightly below the revised 3.7% (previously reported as 3.5%). This has reinforced expectations that the Federal Reserve (Fed) will postpone rate cuts until the second half of the year. Persistently high inflation may also support the Fed’s stance of maintaining interest rates at 4.25%-4.50% for an extended period.

The Euro could face potential headwinds as European Central Bank (ECB) policymaker Boris Vujčić indicated on Thursday that markets are pricing in three rate cuts this year, a forecast he described as reasonable, according to Reuters. Vujčić also suggested that the ECB could remove its reference to a "restrictive policy" in the March statement, citing expectations of a swift decline in services inflation in the coming months.

• GBP/USD advanced as US Dollar weakened amid lower US yields.
• US Core PPI inflation rose to 3.6% YoY in January, exceeding the expected 3.3% but slightly below the revised 3.7%.
• The UK GDP expanded by 1.4% year-on-year in Q4 2024, surpassing market expectations of 1.1%.

GBP/USD remains steady around 1.2560 during the Asian hours on Friday following gains in the previous session. The pair appreciated as US President Donald Trump delayed the implementation of reciprocal tariffs. Additionally, the US Dollar (USD) weakens amid falling US yields across the curve, despite ongoing concerns about a global trade war.

The US Dollar Index (DXY), which measures the US Dollar’s value against six major currencies, extends its losses for the fourth successive session. The DXY trades around 107.00 with 2-year and 10-year yields on US Treasury bonds standing at 4.31% and 4.53%, respectively, at the time of writing.

Core PPI inflation in the United States (US) rose to 3.6% YoY in January, exceeding the expected 3.3% but slightly below the revised 3.7% (previously reported as 3.5%). This has reinforced expectations that the Federal Reserve (Fed) will delay rate cuts until the second half of the year. Additionally, persistently strong inflation could further support the outlook for the Fed to keep interest rates at 4.25%-4.50% for an extended period.

Investors now turn their attention to the upcoming US Retail Sales data, the final major economic release of the week. Markets anticipate a slight contraction of -0.1% in monthly Retail Sales, following the previous 0.4% increase.

In the United Kingdom (UK), the data showed on Thursday that the economy grew by 1.4% year-on-year in Q4 2024, accelerating from an upwardly revised 1.0% in the previous quarter and exceeding market expectations of 1.1%, according to preliminary estimates. This marks the fastest GDP growth since Q4 2022. For the full year 2024, the British economy expanded by 0.9%, up from 0.4% in 2023, driven by a 1.3% increase in the services sector, compared to 0.4% growth the previous year.

• USD/JPY struggled after President Trump's delay of reciprocal tariffs.
• The US Dollar weakens as US yields decline across the curve.
• Japan's Economy Minister Ryosei Akazawa stated that authorities will take appropriate action regarding US reciprocal tariffs.

USD/JPY remains steady after registering losses in the previous session, trading around 152.60 during the Asian hours on Friday. The pair faced challenges following US President Donald Trump’s decision to postpone the implementation of reciprocal tariffs. Additionally, the US Dollar (USD) weakens amid falling US yields across the curve, despite ongoing concerns about a global trade war. Investors now await the release of US Retail Sales data later in the day.

The US Dollar Index (DXY), which measures the US Dollar’s value against six major currencies, extends its losses for the fourth successive session. The DXY trades around 107.00 with 2-year and 10-year yields on US Treasury bonds standing at 4.31% and 4.53%, respectively, at the time of writing.

Core PPI inflation in the United States (US) rose to 3.6% YoY in January, exceeding the expected 3.3% but slightly below the revised 3.7% (previously reported as 3.5%). This has reinforced expectations that the Federal Reserve (Fed) will delay rate cuts until the second half of the year. Additionally, persistently strong inflation could further support the outlook for the Fed to keep interest rates at 4.25%-4.50% for an extended period.

On Friday, Japan's Economy Minister Ryosei Akazawa stated that the authorities will respond appropriately to US reciprocal tariffs. Akazawa further stated that the weak Japanese Yen (JPY) has a variety of impacts on Japan's real economy.

The Japanese Yen (JPY) gained support following Thursday’s release of stronger-than-expected Producer Price Index (PPI) data from Japan, reinforcing expectations of further rate hikes by the Bank of Japan (BoJ). The data highlights expanding inflationary pressures in Japan, further supported by recent wage growth figures, strengthening the case for additional BoJ rate hikes.

• USD/INR trades firmer to near 86.70 in Friday’s Asian session. 
• Trump and Modi aim to cut the US trade gap with India amid global tariff concerns. 
• The RBI intervention might help limit the INR’s losses. 

The USD/INR pair trades in positive territory around 86.70 during the Asian trading hours on Friday. The renewed US Dollar (USD) demand from importers underpins the pair. Investors await India’s Wholesale Price Index (WPI) inflation and US Retail Sales for January later on Friday for fresh impetus. 

US President Donald Trump said on Thursday that Indian Prime Minister Narendra Modi offered to talk about easing tariffs and importing more US oil and gas to shrink the trade deficit between the two countries. Market players will closely monitor the development surrounding tariff policies between the US and India. Any signs of escalating trade tensions could support the Greenback, the safe-haven currency. 

Foreign institutional investors (FIIs) continue to hold approximately $800 billion worth of Indian equities, but their ongoing selling remains a risk for the Indian stock market. This, in turn, could drag the local currency lower and act as a tailwind for USD/INR.

On the other hand, the upside for the pair might be capped amid the intervention by the Reserve Bank of India (RBI). Since Monday, when the INR reached a record low of 88 against the Greenback, the Indian central bank has intensified its intervention by selling the USD in both the spot and forward markets. 

• Gold price edges higher in Friday’s Asian session. 
• Trade war fears and lower US bond yields support the precious metal. 
• Investors brace for the US January Retail Sales data, which is due later on Friday. 

Gold price (XAU/USD) extends its upside during the Asian trading hours on Friday. The growing concerns about US President Donald Trump's tariff plans provide some support to the precious metal. Additionally, a decline in US bond yields across the curve contributes to the yellow metal’s upside. 

However, the expectation that the US Federal Reserve (Fed) will stick to its hawkish stance and hold the interest rate higher for longer could drag the non-yielding yellow metal lower. Traders will keep an eye on the release of US Retail Sales for January, which is due later on Friday. 

Gold price drifts higher amid fears of a global trade war

• Trump unveiled a roadmap on Thursday for charging reciprocal tariffs against every country that imposes duties on US imports. 
• However, commerce and economics officials need to study reciprocal tariffs against countries that place tariffs on US goods, and it will not be due until April 1.
• The US Producer Price Index (PPI) rose 3.5% YoY in January, followed by the 3.3% increase seen in December, according to the US Bureau of Labor Statistics on Thursday. This reading came in above the market expectation of 3.2%.
• The annual core PPI rose 3.6% YoY in January, compared to 3.7% (revised from 3.5%) prior, beating the estimation of 3.3%. 
• The US Initial Jobless Claims for the week ending February 8 fell to 213K, compared to the previous week of 220K (revised from 219K), below the market consensus of 215K.  

Gold price’s broader trend remains constructive, but overbought RSI warrants caution for bulls

Technically, the gold price maintains a strong uptrend on the daily timeframe as the price holds above the key 100-day Exponential Moving Average (EMA). However, the 14-day Relative Strength Index (RSI) remains in the overbought territory exceeding 70.0 and warrants some caution before positioning for any further gains. 

The first upside barrier for the yellow metal emerges at the $2,942-$2,943 zone, representing the all-time peak touched on Tuesday. Extended gains could see a rally to $2,955, the upper boundary of the Bollinger Band. A decisive break above this level could pave the way to the $3,000 psychological level. 

On the flip side, the initial support level is seen at $2,864, the low of February 12. Further south, the additional downside filter to watch is $2,744, the low of January 29. The crucial support level is located in the $2,680-2685 region, representing the lower limit of the Bollinger Band and the 100-day EMA. 

• The Australian Dollar appreciates as Trump postpones the implementation of reciprocal tariffs.
• The AUD may face headwinds as the RBA maintains its rate-cut stance following a fresh inflation outlook.
• The US Dollar weakens amid declining US yields, despite persistent concerns over a global trade war.

The Australian Dollar (AUD) strengthens for the second consecutive day on Friday, driven by US President Donald Trump’s decision to postpone the implementation of reciprocal tariffs. Additionally, the AUD/USD pair appreciates as the US Dollar (USD) weakens amid falling US yields across the curve, despite ongoing concerns about a global trade war. Investors now await the release of US Retail Sales data later in the day.

The AUD may face headwinds as expectations of a Reserve Bank of Australia (RBA) rate cut remain intact following fresh inflation outlook data. Consumer inflation expectations climbed to 4.6% in February from 4.0% in January, reaching their highest level since April 2024. This comes ahead of the RBA’s first monetary policy meeting of the year next week, with market odds indicating a 95% probability of a rate cut to 4.10%, as recent data suggests underlying inflation is cooling faster than anticipated.

The upside of the AUD/USD pair could be limited as strong US inflation data reinforces expectations of prolonged Federal Reserve (Fed) rate holds. Fed Chair Jerome Powell recently reiterated that the central bank is in no rush to cut rates further, citing a resilient economy and persistently high inflation.

Australian Dollar appreciates as US Dollar loses ground despite a hawkish Fed

• The US Dollar Index (DXY), which measures the US Dollar’s value against six major currencies, extends its losses and trades around 107.00 at the time of writing.
• US Consumer Price Index (CPI) rose 3.0% year-over-year in January, exceeding expectations of 2.9%. The core CPI, which excludes food and energy, increased to 3.3% from 3.2%, surpassing the forecast of 3.1%. On a monthly basis, headline inflation jumped to 0.5% in January from 0.4% in December, while core CPI rose to 0.4% from 0.2% over the same period.
• Stronger US inflation could strengthen expectations that the Federal Reserve (Fed) will maintain interest rates at 4.25%-4.50% for an extended period. According to the CME FedWatch Tool, the probability of a Fed rate cut in June has dropped to nearly 30% following the latest inflation data.
• In his semi-annual report to Congress, Fed’s Powell said the Fed officials “do not need to be in a hurry" to cut interest rates due to strength in the job market and solid economic growth. He added that US President Donald Trump's tariff policies could put more upward pressure on prices, making it harder for the central bank to lower rates.
• A Reuters poll of economists now suggests the Federal Reserve will delay cutting interest rates until next quarter amid rising inflation concerns. Many who had previously expected a March rate cut have revised their forecasts. The majority of economists surveyed between February 4-10 anticipate at least one rate cut by June, though opinions on the exact timing remain divided.
• The US Dollar receives support as the US Federal Reserve (Fed) is now expected to keep interest rates steady this year, following January’s jobs report released on Friday, which indicated slowing job growth but a lower Unemployment Rate.
• US President Donald Trump decided to expand steel and aluminum tariffs by 25% to include all imports, nullifying trade agreements with key US allies, including Australia. The White House confirmed that all import tax exclusions had been removed and indicated that further action on microchips and vehicles would be considered in the coming weeks.
• Federal Reserve Bank of Cleveland President Beth Hammack stated on Tuesday that keeping interest rates steady for an extended period will likely be appropriate. Hammack emphasized that a patient approach will allow the Fed to assess economic conditions and noted that the central bank is well-positioned to respond to any shifts in the economy, according to Reuters.

Technical Analysis: Australian Dollar rises above 0.6300 toward eight-week highs

The AUD/USD pair hovers near 0.6320 on Friday, rising above the nine- and 14-day Exponential Moving Averages (EMAs) on the daily chart. This suggests that short-term price momentum is strengthening. Additionally, the 14-day Relative Strength Index (RSI) maintains its position above the 50 mark, reinforcing a bullish bias.

On the upside, the AUD/USD pair may test the eight-week high of 0.6330, which was last reached on January 24. A break above this level could support the pair to approach a psychological level of 0.6400.

The AUD/USD pair could fall toward primary support at the nine-day EMA of 0.6290 level, followed by the 14-day EMA of 0.6279. A decisive break below these levels could weaken the short-term price momentum, potentially pushing the pair toward the psychological level of 0.6200.

AUD/USD: Daily Chart

 The People’s Bank of China (PBOC) set the USD/CNY central rate for the trading session ahead on Friday at 7.1706 as compared to the previous day's fix of 7.1719 and 7.2739 Reuters estimates.

• NZD/USD gains ground to near 0.5680 in Thursday’s early Asian session.
• US PPI inflation rose at a stronger pace than expected in January.
• The RBNZ is expected to cut its OCR by 50 bps to 3.75% next week. 

The NZD/USD pair trades stronger to around 0.5680 during the early Asian session on Friday. The US Dollar (USD) weakens amid declining US yields across the curve and despite steady concerns over a global trade war. Later on Friday, the US Retail Sales will take center stage. 

The US Producer Price Index (PPI) increased in January, triggering the expectation that the US Federal Reserve (Fed) would not be cutting interest rates before the second half of the year. Financial markets have pushed back rate cut bets to September from June, though some economists believe the window for additional policy easing has closed due to solid domestic demand and a steady labor market.

"The Q1 RBNZ survey of inflation expectations leaves plenty of room for the RBNZ to deliver a 50bps cut to 3.75% next week. Firms’ inflation expectations ns 2, 5 and 10 years out all dipped closer to 2%,” said BBH's FX analysts. 

The Reserve Bank of New Zealand (RBNZ) is expected to cut interest rates by 50 basis points (bps) next week, bringing its Official Cash Rate (OCR) to 3.75%. The markets also anticipate a further 75 bps of reduction this year. The dovish expectation from the RBNZ might drag the Kiwi lower against the USD. 

• NZD/USD gains ground to near 0.5680 in Thursday’s early Asian session.
• US PPI inflation rose at a stronger pace than expected in January.
• The RBNZ is expected to cut its OCR by 50 bps to 3.75% next week. 

The NZD/USD pair trades stronger to around 0.5680 during the early Asian session on Friday. The US Dollar (USD) weakens amid declining US yields across the curve and despite steady concerns over a global trade war. Later on Friday, the US Retail Sales will take center stage. 

The US Producer Price Index (PPI) increased in January, triggering the expectation that the US Federal Reserve (Fed) would not be cutting interest rates before the second half of the year. Financial markets have pushed back rate cut bets to September from June, though some economists believe the window for additional policy easing has closed due to solid domestic demand and a steady labor market.

"The Q1 RBNZ survey of inflation expectations leaves plenty of room for the RBNZ to deliver a 50bps cut to 3.75% next week. Firms’ inflation expectations ns 2, 5 and 10 years out all dipped closer to 2%,” said BBH's FX analysts. 

The Reserve Bank of New Zealand (RBNZ) is expected to cut interest rates by 50 basis points (bps) next week, bringing its Official Cash Rate (OCR) to 3.75%. The markets also anticipate a further 75 bps of reduction this year. The dovish expectation from the RBNZ might drag the Kiwi lower against the USD. 

Japan's Economy Minister Ryosei Akazawa said on Friday that the authorities will respond appropriately to US reciprocal tariffs. Akazawa further stated that the weak Japanese Yen (JPY) has a variety of impacts on Japan's real economy

Market reaction  

At the press time, the USD/JPY pair is up 0.20% on the day to trade at 153.05. 

• WTI drifts higher to $71.30 in Friday’s early Asian session.
• Trump launches plan to target countries with new tariffs
• A potential Russia-Ukraine peace deal might cap the WTI’s upside. 

West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $71.30 during the early Asian session on Friday. The WTI price trades with mild gains as US tariff announcements by US President Donald Trump were delayed until at least April. 

Trump on Thursday ordered his administration to consider imposing reciprocal tariffs on numerous trading partners. However, commerce and economics officials need to study reciprocal tariffs against countries that place tariffs on US goods and it will not be due until April 1. The hope that the world could avoid a trade war and lift the WTI price. 

"We saw a big recovery in prices on tariffs not going into effect until April," said Phil Flynn, senior analyst with Price Futures Group. "That will allow time for negotiation.”

The US Energy Information Administration (EIA) weekly report showed crude oil stockpiles in the United States for the week ending February 7 climbed by 4.07 million barrels, compared to a rise of 8.664 million barrels in the previous week. The market consensus estimated that stocks would increase by 2.8 million barrels. 

Hopes of eased Russian sanctions following optimism over a potential Ukraine-Russia peace deal might cap the upside for the black gold. On Wednesday, Trump said Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskiy expressed a desire for peace in separate phone calls with him. Trump ordered U.S. officials to begin talks on ending the war in Ukraine.