The EUR/USD pair fell on Tuesday amid a stronger US dollar, driven by a global stock sell-off and increased demand for safe-haven assets.
Possible technical scenarios:
As we can see on the daily chart of EUR/USD, the pair failed to overcome the resistance at 1.0478. A decline from this level may continue toward the support at 1.0344.
Fundamental drivers of volatility:
The US dollar is strengthening due to risk aversion and stock market sell-offs, which are increasing demand for safe-haven assets. The dollar was further supported by the uncertainty surrounding a proposed universal US tariff plan, which includes gradual increases in tariffs, raising market concerns.
This week, the Fed is expected to keep interest rates unchanged on Wednesday, and investors will focus on a press conference by Jerome Powell. He is likely to emphasize that decisions will depend on economic data, which could introduce short-term volatility.
The European Central Bank is preparing to cut rates by 25 basis points on Thursday, reflecting the weak economic outlook for the eurozone. Traders will be paying close attention to Christine Lagarde's comments, which could influence long-term expectations for the euro amid mounting pressure from US trade tariffs.
Intraday technical picture:
Judging by the unfolding situation on the 4H chart of EUR/USD, the pair is currently in an uptrend but is correcting downwards from its resistance. If the channel support near 1.0396 holds, the price may reverse upwards. Otherwise, the quotes may fall further to the horizontal support at 1.0344.
A strong dollar, uncertainty over UK and US monetary policy, and weakening economic activity in the UK are hindering the recovery of the GBP/USD pair.
Possible technical scenarios:
The daily chart evidences that the GBP/USD pair reached a strong mirror resistance level at 1.2500 and retreated downwards. If the price fails to overcome this level and consolidate above it, the medium-term decline could continue toward the January lows and the support at 1.2068.
Fundamental drivers of volatility:
The weakness in GBP/USD persists amid the US dollar's strength as a safe-haven asset, driven by a flight from risk due to a global decline in tech stocks, triggered by the competitive challenge posed by Chinese company DeepSeek.
The US dollar also received additional support from concerns about a potential universal tariff plan proposed by the US Treasury Secretary and the anticipation of the Fed's decisions this week.
The pound sterling slightly reduced its losses this week following positive statements from UK Prime Minister Keir Starmer regarding economic growth prospects. However, weak labor market dynamics, due to an increase in national insurance premiums, and high inflation levels raise concerns about stagflation. This puts pressure on the Bank of England, which may cut rates by 25 basis points shortly.
Intraday technical picture:
According to the 4H chart of GBP/USD, the price is testing the strength of support at 1.2430. A consolidation below this level could open the way for the pair to move toward the next support at 1.2306.
The USD/JPY pair approached the 156.00 mark amid US threats to introduce new tariffs, which support the yield of American assets.
Possible technical scenarios:
On the daily chart of USD/JPY, the price has not yet managed to break out the support level of 154.83, and it now has the technical potential for recovery toward the target of 157.10, with the possibility of consolidation above this level.
Fundamental drivers of volatility:
The Japanese yen continues to weaken against the US dollar, driven by rising US bond yields and increasing demand for the dollar as a safe-haven asset.
However, actions from the Bank of Japan may limit further declines in the yen. Last week’s rate hike to 0.50%, the highest since 2008, along with plans to increase wages and liquidity support measures such as the purchase of commercial paper, show that the central bank is prepared for tighter monetary policy. These actions help the yen hold its ground despite external economic pressures.
In the meantime, markets are focused on the upcoming FOMC meeting, the results of which will be released on Wednesday, along with US macroeconomic data that may set the direction for USD/JPY in the near term.
Intraday technical picture:
Given the look of things on the 4H chart of USD/JPY, the pair’s growth is limited by local mirror resistance at 156.46 marked with a dotted line. If this level is not overcome, sideways movement within the range between 154.83 and 156.46 may continue for some time, with the possibility of a downward exit from this corridor.
The USD/CAD pair is strengthening amid the recovery of the US dollar and expectations of monetary policy easing by the Bank of Canada.
Possible technical scenarios:
On the daily chart, USD/CAD remains within the local range between 1.4297 and 1.4467, the two red dotted lines, recovering from its support level and maintaining a small room of movement toward 1.4467. If the pair exits upward from this range, it may continue rising toward the next level of 1.4556.
Fundamental drivers of volatility:
The anticipated rate cut by the Bank of Canada on Wednesday from 3.25% to 3.00% increases the divergence from the Federal Reserve’s monetary policy, which is expected to keep rates unchanged. This creates favorable conditions for further strengthening of the US dollar against the Canadian dollar.
The US dollar is also supported by the rise in Treasury yields, driven by concerns about inflation risks amid the Trump administration’s protectionist policies. However, the recovery of oil prices from a three-week low limits the Canadian dollar’s weakening, given its reliance on oil price fluctuations.
The further direction of USD/CAD will depend on the outcomes of both the Bank of Canada and Federal Reserve meetings on Wednesday, as well as US macroeconomic data. These events are key market triggers.
Intraday technical picture:
According to the 4H chart of USD/CAD, the pair is approaching the resistance within the sideways range between 1.4297 and 1.4467, the two red dotted lines. If its breakout and consolidation above do not occur, the price may reverse and head back toward the support at 1.4297.
Gold prices have stabilized after a sharp drop earlier in the week, triggered by sell-offs related to losses in stock markets, particularly in the technology sector.
Possible technical scenarios:
As we observe on the daily chart of XAU/USD, the price failed to consolidate above the 2762.44 level and has fallen below it. From here, the price could either continue to decline toward the support at 2708.36 or attempt to break out the 2762.44 resistance again.
Fundamental drivers of volatility:
The primary cause of yesterday's price decline was investors' need to cover losses from significant drops in technology stocks. Today, market focus is on the results of the Fed meeting, where interest rates are expected to remain unchanged. However, US President Donald Trump's comments regarding the need to reduce borrowing costs are raising doubts about the independence of the Fed's decisions.
In the short term, gold may remain stable due to high levels of market uncertainty. Trump's inflationary policies could also trigger increased demand for safe-haven assets like gold, especially if trade tensions escalate.
Intraday technical picture:
A head and shoulders reversal pattern has formed on the 4H gold chart, with the neckline at 2734.57 marked with a red dotted line. If this neckline holds, another shoulder may form, followed by a potential breakout of support at 2734.57, leading to a decline below this level.
181