The EUR/USD pair is trading under pressure as the US dollar finds support from strong macroeconomic data and easing geopolitical tensions. Meanwhile, the euro has no growth drivers of its own as investors await key decisions from major central banks.
Possible technical scenarios:
As evidenced by the daily chart, EUR/USD has declined toward the 1.1788 support level. If it holds, the price could recover toward 1.1898. Alternatively, the next bearish targets will be 1.1682 and 1.1494.
Fundamental drivers of volatility:
Strong US stats have emerged as a primary factor favoring the dollar. The ISM Manufacturing PMI surged to 52.6 in January, up from 47.9 a month earlier, marking its highest reading in over three years. Aside from that, the S&P Global Manufacturing PMI was revised upward to 52.4. These figures confirmed the resilience of the US economy and eased concerns regarding a sharp slowdown in industrial activity.
The geopolitical landscape has also shifted in favor of the US currency. The announcement of a US-India trade agreement featuring a reduction in tariffs to 18%, alongside signals regarding the start of nuclear negotiations between Washington and Tehran, has mitigated global risks, dampened demand for safe-haven assets, and supported the dollar.
The impact of the US government shutdown has temporarily lost its edge following the Senate's approval of a spending bill, although the publication of several key labor market reports, including Nonfarm Payrolls, remains delayed. In the absence of significant news from the Eurozone, the euro remains hinged on the external environment and shifting expectations for Fed and ECB monetary policy.
Intraday technical picture:
As we can see on the 4H chart, the 1.1788 mirror level is once again being tested, this time as support. The price remains at a crossroads, and its next direction will depend on whether this boundary holds.
The GBP/USD pair is trading under pressure from a strong dollar as the market awaits the Bank of England's upcoming interest rate decision and comments from the regulator regarding the monetary policy outlook.
Possible technical scenarios:
Judging from the look of things on the daily chart, GBP/USD has corrected towards the 1.3630 support level. If this level holds, a recovery toward 1.3752 and 1.3914 is plausible. Otherwise, the decline may extend toward 1.3436.
Fundamental drivers of volatility:
Monetary policy expectations remain the primary driver for the pound. The regulator is expected to keep the interest rate at 3.75% with a 7–2 vote split, following a 0.25% cut in December and the confirmation of a "gradual downward trajectory." It is crucial for the market that the Bank of England is not signaling any rush to ease further, which is limiting pressure on the GBP.
Investors will also keep a close watch on the press conference by BoE Governor Andrew Bailey. During the previous meeting, officials stated that inflation is expected to converge toward the 2% target by Q2 2026. Any updated assessments regarding the labor market or price dynamics could adjust expectations for the timing of subsequent rate cuts.
On the US side, strong industrial data (ISM Manufacturing PMI rising to 52.6 in January from 47.9) and expectations for the release of ADP and ISM Services statistics are contributing to the US dollar's strength.
Intraday technical picture:
The 4H chart shows that the prevailing downtrend does not rule out a breakout of the 1.3630 support. If successful, the next downside target will be the local dotted level at 1.3533.
The USD/JPY pair is recovering amid US dollar strength, as favorable factors for the Yen remain insufficient to drive the Japanese currency higher.
Possible technical scenarios:
USD/JPY has consolidated above the 155.03 level, providing enough momentum to reach the nearest resistance at 156.71.
Fundamental drivers of volatility:
On one hand, the Yen is supported by discussions regarding potential coordinated actions between Japan and the US in the forex market. Statements from Japanese Finance Minister Satsuki Katayama about a readiness to engage with US authorities have heightened intervention expectations. On top of that, the minutes from the Bank of Japan's January meeting revealed the regulator's concern over inflationary pressure caused by the weak Yen, confirming a relatively hawkish stance from the central bank.
On the flip side, the Yen's appreciation is being hampered by domestic fiscal and political risks. Prime Minister Sanae Takaichi’s promise to suspend the food tax for two years if she wins the early elections on February 8 has fueled concerns over the sustainability of public finances. Political uncertainty and a positive global risk sentiment are dampening demand for the Yen as a safe-haven asset.
In the meantime, the rise in USD/JPY is driven by the resilience of the US dollar. The nomination of Kevin Warsh as a candidate for Fed Chair has boosted confidence in the regulator's independence and the stability of monetary policy. Furthermore, strong US industrial data—ISM Manufacturing PMI rising to 52.6 in January from 47.9—helped the dollar maintain its recent gains.
Intraday technical picture:
The technical setup on the 4H chart for USD/JPY confirms the likelihood of price growth within the 155.03-156.71 range.
The USD/CAD pair rose amid US dollar strength and persistent uncertainty surrounding the partial US government shutdown. The Canadian dollar is trading under pressure due to domestic economic weakness and declining oil prices.
Possible technical scenarios:
Given the unfolding scenario on the daily chart, USD/CAD has recovered nearly all its losses within the 1.3503-1.3744 range, approaching its upper boundary. An upside breakout from this range would clear the path toward the 1.3861 level. If the 1.3744 resistance holds, a pullback within the current range is likely.
Fundamental drivers of volatility:
The US dollar received support from the nomination of Kevin Warsh for Fed Chair, which strengthened confidence in the regulator's independence and stability of the monetary policy. In the meantime, strong manufacturing readings favored the US currency: the ISM Manufacturing PMI rose to 52.6 in January from 47.9 in December, marking the strongest sector expansion since 2022 and significantly exceeding market expectations (48.5). This factor partially offsets the negative impact of the shutdown and limits the downside for USD/CAD.
The Canadian dollar remains under pressure due to weak domestic demand and slowing economic activity. The Bank of Canada kept its key rate at 2.25%, stating low GDP growth and a contraction in manufacturing output, which limits the CAD's recovery potential.
A drop in oil prices—Canada’s key export—following the easing of geopolitical risks involving the US and Iran, added upward pressure to the USD/CAD pair, ensuring a steady rise of the dollar against the loonie.
Intraday technical picture:
Based on the unfolding scenario on the 4H chart, after the price consolidated above the intermediate level of 1.3642, marked with a dotted line, there’s room for a move toward the 1.3744 resistance.
Gold has recovered dramatically following a deep correction, confirming that current movements are part of a broader bullish market rather than a reversal. Demand for the precious metal surged immediately following one of the steepest sell-offs in decades.
Possible technical scenarios:
Gold prices held above the 4635.63 support level and recovered toward the 4939.80 resistance. A breakout and consolidation above this point would allow the price to go back to the 5348.71 level. Otherwise, the price may remain in a 4635.63 - 4939.80 sideways range for some time.
Fundamental drivers of volatility:
The current recovery is largely driven by a technical bounce following an overextended sell-off, as market players closed short positions and rebuilt longs amid signs of oversold conditions. The spot price of gold rose by 5.8% to $4,935 per ounce after dropping to $4,403 on Monday, even as the market had pulled back from an all-time high of $5,594 just two sessions prior. In January, gold gained nearly 13%, marking its best monthly performance since 2009 and signaling continued medium-term upward momentum.
The previous sell-off was triggered by a strengthening dollar following the nomination of Kevin Warsh for Fed Chair, which the market interpreted as a signal for tighter monetary policy. Additional pressure came from an increase in CME margin requirements for precious metals futures, which accelerated forced closing and led to a sharp drop in gold and silver toward monthly lows.
Fundamental support for the metals is also provided by rising uncertainty surrounding US macroeconomic data. Due to the partial government shutdown, the January employment report will not be released, leaving the market without a key benchmark for the economy and Fed policy. Against this backdrop, a move toward new all-time highs later this year cannot be ruled out
Intraday technical picture:
As suggested by what we observe on the 4H gold chart, it is not yet clear whether the price will remain within the 4635.63-4939.80 range or attempt an upside breakout. The approach to the 4939.80 level with large bars makes a breakout difficult, so a reversal within the sideways range remains a possibility.
Brent crude prices dropped this week amid easing geopolitical risks and pressure from currency factors. The market is reacting to signals of potential de-escalation regarding Iran and increasing uncertainty around supply.
Possible technical scenarios:
On the daily chart, Brent prices rose last week, hitting $70 per barrel, before correcting towards the 65.02 support. Given that the current uptrend remains intact, a recovery from the 65.02 mirror level is possible.
Fundamental drivers of volatility:
The primary driver of the local price decline was the reduction of the geopolitical risk premium. Statements by Donald Trump suggesting that Iran is "seriously” negotiating with Washington, along with the confirmation of renewed nuclear talks in Turkey on Friday, have increased de-escalation expectations. The sharp decline of over 4% in quotes on Monday was driven by the market pricing in a lower risk of supply disruptions from Iran.
Additional pressure is coming from the strengthening of the US dollar. The Dollar Index is holding near its highest level in over a week, reducing demand for oil from foreign buyers. This currency factor is amplifying the downward move against a weakening news backdrop.
The market is also assessing the supply situation. According to Deputy Prime Minister Alexander Novak, Russia has sufficient fuel volumes and even a surplus. Meanwhile, the US-India agreement, which implies New Delhi’s refusal to purchase Russian oil, could increase Russian oil volumes being redirected to other markets.
Intraday technical picture:
Given the developments on the 4H chart, Brent is trading within an ascending channel, currently attempting an upward bounce from the third touch point of its support, at the intersection with the 65.02 horizontal level. From this point, a move toward previous highs in the $70 per barrel area within the current trend is possible.
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