AUDUSD is experiencing a decline as risk-off sentiment impacts trading, following a drop in U.S. stocks. On Friday, the pair reached a high of 0.6407 but reversed direction due to falling equities.

The NASDAQ initially rose by 120 points but later fell, recording a session low of -248 points. This volatility contributed to pushing AUDUSD lower, leading it to test the 200-hour moving average support at 0.6346, where buyers managed to hold this level.

The 100-hour moving average at 0.6367 now serves as resistance. Traders are likely to keep an eye on stock market trends for further guidance.

With markets showing hesitation, the Australian dollar’s downturn reflects broader caution among traders. A brief surge last Friday saw the pair testing 0.6407, but this rally was cut short as selling pressure built up amid a worsening sentiment tied to U.S. equities. The Nasdaq’s fluctuations played a central role, with an initial gain of 120 points quickly unraveling into a 248-point decline by the end of the session. This reversal fuelled further weakness in AUDUSD, driving it towards 0.6346, where buying interest re-emerged near the 200-hour moving average.

Now, with 0.6367 acting as an overhead barrier, traders will need to assess whether buyers have the strength to reclaim higher ground. For now, the short-term focus remains on stock market performance. A stabilisation in equities could ease some of the downward pressure, but any further sell-offs in risk assets may keep the pair under strain.

As we navigate the days ahead, attention shifts to upcoming economic data and broader sentiment across financial markets. U.S. economic indicators will be watched closely, as they could influence expectations around monetary policy. Meanwhile, shifts in bond yields may also feed into currency movements, particularly if investors continue adjusting their outlook. Should sellers maintain control, another test of recent lows could be on the cards, but any reversal in risk appetite may invite renewed buying interest.

The US Dollar (USD) remains stable in a quiet trading environment. The Euro (EUR) gained ground following the expected results of Germany’s federal election, while the Japanese Yen (JPY) kept the USD below the 150 mark, and the British Pound (GBP) steadied in the low 1.26s.

US equity futures are positive, recovering from previous losses, although US markets have lagged behind due to uncertainty regarding tariff policies. This allows foreign markets, particularly in Europe, to advance, potentially impacting demand for the USD.

Upcoming data reports will likely focus on Friday’s Personal Income and Spending, along with the PCE deflator for January. Expectations indicate a core PCE rise of 0.3% for the month and 2.6% for the year, a slight decrease from December’s 2.8%.

Gradual progress in price stability may reinforce the Federal Reserve’s cautious stance. Unexpectedly high core PCE figures could lead to increased scrutiny regarding the duration of the Fed’s pause in monetary policy adjustments.

With the US Dollar holding steady in subdued trading and the Euro gaining as expected after Germany’s election results, we see a familiar pattern in the currency markets. The Yen is applying pressure, keeping movements below the 150 level, while the British Pound hovers in the low 1.26 range without much movement.

On the equities front, US stock futures are on the mend, reversing earlier losses, yet US markets remain sluggish, largely because of concerns over tariffs. This slower pace stateside gives European indices room to push ahead, which, if extended, could mean reduced demand for the Dollar. That potential shift should not be overlooked when weighing currency positions for the short term.

The data to watch this week lands on Friday, with Personal Income and Spending figures alongside the PCE deflator for January. A month-on-month core PCE increase of 0.3% is expected, bringing the year-on-year rate to 2.6%, a touch lower than December’s 2.8%. That small step towards stabilising prices might serve to justify the Federal Reserve’s wait-and-see approach. However, any surprises in the data—particularly if inflation remains stubborn—may force a reassessment of how long the current policy holds. A higher-than-expected core PCE would draw attention to the Fed’s timeline, possibly influencing rate expectations and shifting market sentiment quickly.

For traders in derivatives markets, this means watching how the data shapes rate speculation and market dynamics. If inflation slows as projected, that could ease some pressure on yields and influence the Dollar’s broader movement. If not, volatility could pick up, with traders adjusting to a shifting outlook for interest rates.

The Dallas Fed manufacturing index dropped to -8.3 in February, compared to 14.1 the previous month. This marks the lowest level since September 2024, when it stood at -9.0.

The output index decreased to -9.1 from 12.2 in January, while the new orders index plummeted by 11 points to -3.5. Capacity utilization fell 14 points to -8.7, though the shipments index remained positive at 5.6.

Business conditions have worsened as the general business activity index fell by 22 points to -8.3. The company outlook index decreased by 24 points to -5.2, and the outlook uncertainty index reached 29.2, the highest in seven months.

The labor market shows signs of weakness with the employment index near zero, indicating equal hiring and layoffs. The hours worked index dropped to -14.2, the lowest since mid-2020.

Cost pressures are evident; the raw materials prices index increased to 35.0, a multiyear high, while finished goods prices inched up to 7.8. The wages and benefits index eased slightly from 20.9 to 16.7.

Looking ahead, the future production index fell to 28.3 from 44.8, and the future general business activity index decreased to 7.7 from 35.5. Other future manufacturing activity metrics showed positive but declining figures.

US stock indices faced challenges, with the S&P down 0.38%, the NASDAQ down 1.0%, and the Dow marginally up by 0.02%. The small-cap Russell 2000 declined by 0.86%.

Yields on government bonds have also decreased, with the two-year yield at 4.191% and the ten-year yield at 4.409%.

A steep decline in Texas factory activity suggests that industrial output is losing steam. A drop from 14.1 to -8.3 in just a month is not a minor shift; it signals broader weakness in economic momentum. Production is falling, new orders are shrinking, and capacity usage is sliding—indications that manufacturing firms are facing mounting challenges.

Demand deterioration is evident. A double-digit decline in new orders means companies are securing fewer contracts, a sign consumers and businesses are pulling back. Shipments remain in positive territory, which suggests some companies are still delivering past commitments. But shrinking backlogs may mean those deliveries could slow in the near-term.

Business sentiment has worsened. A 22-point decline in general business activity is far from normal month-over-month fluctuation. Lowered expectations, reflected in the company outlook index, reinforce the idea that firms see tougher conditions ahead. Confidence is taking hits, and rising uncertainty—now at its highest in months—shows decision-makers are struggling with unpredictability.

Labour market cracks are appearing. Firms are neither expanding nor shrinking payrolls overall, yet a decline in hours worked to levels not seen since 2020 is concerning. When companies cut hours instead of jobs, it often means demand is not strong enough to justify more shifts. It also tends to precede larger employment adjustments if weak conditions persist.

Costs are a growing concern. Input prices jumped, suggesting businesses are paying more for materials. While final goods prices rose at a slower rate, persistent cost pressure will test how much firms can absorb and how much they pass to consumers. Wages have decelerated slightly, but they remain elevated, maintaining operational cost burdens.

Forward-looking indicators are worsening. Future production expectations have weakened, falling sharply in a month. Optimism about broader business activity dropped even more, meaning companies see conditions deteriorating rather than improving. Though still in positive territory, every major future indicator is slipping, a sign that momentum could continue declining.

Markets have reacted. Stocks struggled, weighed down by tech-heavy names, while the Dow held steady with near-flat movement. Small caps pulled back more sharply, which often happens when growth expectations weaken.

Bond yields declined. The two-year dipped, suggesting shifting rate expectations, while the ten-year remains elevated, indicating cautious longer-term sentiment. Investors appear to be adjusting their positioning, albeit without sharp dislocations.

All of this points to expectations adjusting to weaker business conditions. Manufacturing is showing clear loss of strength, and markets are reflecting those shifts—pricing in lower growth, adjusting risk, and reassessing the path ahead.

In February, Mexico’s core inflation for the first half of the month was reported at 0.27%, a slight decrease from the previous figure of 0.28%.

No further information or data is provided regarding economic forecasts or trends beyond this inflation rate.

Additional details on financial markets and trends in various instruments are also included, but these do not directly relate to the core inflation figure mentioned.

The article presents several updates regarding different currency pairs, commodities, and market dynamics, highlighting recent movements in prices and investor sentiment.

A decrease, albeit small, in Mexico’s core inflation rate down to 0.27% from 0.28% may seem inconsequential at first glance, but it does leave room for thought. This reduction suggests either stabilisation or a potential shift in trend, making it essential to consider the broader implications. If inflationary pressures are indeed easing, central bank policy may soften in the future, influencing the expectations surrounding interest rate adjustments.

Such movements impact currency valuations, especially for those involved in foreign exchange positions. If inflation continues moderating, expectations of tighter monetary policy may lessen, which, in turn, could undermine prior strength in the peso or alter flows into emerging markets. Understanding where price pressures are heading allows traders to anticipate movements, rather than react to them long after markets have priced them in.

Beyond inflation data, financial markets have seen fluctuations in multiple instruments, ranging from currency pairs to commodities. These shifts are driven by investor sentiment, economic expectations, and external global factors. Exchange rates have moved in response to market positioning, while commodities reflect both supply constraints and shifting demand trends.

With recent price changes already influencing market structures, positioning at this stage requires careful analysis. A reactionary mindset brings risks, as does ignoring incoming data that could shift broader forecasts. Preparing for what the data suggests rather than responding to what has already happened remains an approach worth noting.

Ukrainian President Zelenskiy stated that his discussions with G7 leaders were productive and that Ukraine is nearing a deal with the US regarding economic cooperation. He expressed optimism about signing an agreement soon in Washington.

Zelenskiy rejected former President Trump’s claim of $500 billion restitution for US defence support, asserting he would not relinquish Ukraine’s natural resources. He emphasised he would not agree to terms that burden future generations.

Negotiations about a minerals deal are reportedly in the final stages, with Ukraine offering to return two dollars for every dollar of US aid. Additionally, sources indicate potential restrictions on Ukraine’s access to Starlink internet services related to the minerals agreement.

Zelenskiy’s comments suggest that discussions with world leaders are moving towards more structured economic arrangements. The way he described the negotiations implies that both sides are actively working on terms they find mutually beneficial. Given the pace at which these talks are progressing, an official announcement could come sooner rather than later. However, as is often the case with such agreements, unforeseen delays could arise.

Donald’s remarks about financial restitution stand in stark contrast to what Zelenskiy has outlined. The former US leader’s suggestion that Ukraine should compensate Washington for military assistance is not something Kyiv appears willing to entertain. Instead, Zelenskiy has drawn a clear line, indicating that any economic arrangement must not come at an unsustainable cost for Ukraine’s future. His response also reaffirmed that strategic assets would not be used as leverage. That stance, if maintained, sets the framework for how he intends to manage Kyiv’s external partnerships.

The mineral discussions are reaching a decisive point. From what has been revealed, the proposed structure would see Ukraine reimbursing aid at a fixed rate, which would create a framework for long-term obligations between Kyiv and Washington. This type of deal would embed Ukraine’s economic future further within existing alliances. While the mechanics of these repayments are not fully outlined, even the basic structure suggests a commitment to deeper financial entanglement between the two governments.

On a different note, reports indicate restrictions may be placed on Ukraine’s access to Starlink services. These limitations, supposedly linked to the mineral discussions, would mark a shift in how critical infrastructure is provided to Kyiv. Starlink has played an instrumental role in maintaining communications, and any change in access could have widespread effects. The extent of these reported restrictions remains to be seen, but if enforced, they could introduce new logistical considerations.

Mexico’s first half-month inflation for February decreased to 0.15%, down from the previous 0.2%. This change reflects ongoing trends in the country’s economic conditions.

Further assessments of the inflation data may provide more insights into future economic policies and their effects on the market. Investors and analysts are monitoring the data closely for any potential impacts on broader economic indicators.

The drop in inflation to 0.15% suggests a slowdown in rising prices, which could point to easing pressure on consumers and businesses. This is particularly relevant in assessing the central bank’s next steps, as policymakers will weigh whether current monetary measures are having the intended effect. A softer inflation reading may strengthen the argument for keeping interest rates steady or even adjusting them in the months ahead.

For those trading derivatives, this slight cooling in prices can influence expectations around future rate moves. If inflation continues to moderate, it could reinforce the case for a less aggressive monetary stance. On the other hand, a temporary dip might not be enough to shift policy direction, leading to little change in market sentiment.

Looking deeper, markets are also considering how this adjustment fits within broader economic trends. The fall in inflation aligns with what some had predicted, given recent shifts in consumer demand and external price pressures. However, future readings will be key in determining whether this decrease is part of a sustained pattern or merely a short-term fluctuation.

While analysts are digesting these figures, it remains important to track additional data releases that might offer more clarity. Labour market strength, consumer confidence, and global commodity movements will all feed into the larger picture. The latest inflation figures are just one part of this equation, and markets will likely remain sensitive to any fresh signals that could confirm—or challenge—current assumptions.

For now, traders should stay alert to any policy commentary from decision-makers, as even subtle shifts in rhetoric could drive volatility. If central bank officials acknowledge this lower inflation print as a cause for policy adjustment, it could reshape short-term market expectations. If they dismiss it as inconclusive, then positioning might remain relatively unchanged until the next batch of data provides a clearer signal.

The NASDAQ index initially rose, reaching 19,644.23 before declining to 19,423, down 100 points or 0.52%. This downturn occurred after failing to surpass the broken 200-hour moving average at 19,661.80.

Currently, the low from last week at 19,415.48 is being tested. If this level is breached, there could be additional downward momentum.

The trading range spanning back to November 21 has a low of 18,831 and a high of 20,204.58, representing a potential 6.74% decline from December’s all-time high.

Nvidia will announce earnings after the close on Wednesday, with shares up 0.24%. Conversely, Palantir shares are down 9.19%, currently testing the 200-hour moving average.

The drop in the NASDAQ index highlights a shift in momentum, with a retreat from earlier gains as selling pressure picked up near the 200-hour moving average. The attempt to reclaim that level at 19,661.80 was short-lived, creating a point of resistance that traders should now factor into their decisions. With the index already testing last week’s low, any decisive break lower could lead to an extended decline.

Looking at the broader range established since late November, the potential downside remains measurable. A full retracement to November’s lows would represent a loss exceeding 800 points from current levels. While such a move wouldn’t erase the longer-term uptrend, it would reinforce the idea that upward momentum is becoming increasingly difficult to sustain without clearer catalysts.

Market participants are keeping an eye on Nvidia’s earnings, given its influence on sentiment, particularly within the technology sector. The stock’s modest rise ahead of results suggests tempered expectations. Any surprise in revenue or outlook could have a ripple effect, influencing broader sentiment beyond just semiconductors.

Meanwhile, Palantir’s decline brings it close to technical support at the 200-hour moving average. The reaction around this level will be worth following, as a sustained drop below could invite additional selling. The speed of this pullback raises the question of whether recent gains were overextended, making the stock susceptible to further volatility.

This week’s price action underscores the importance of identifying critical thresholds. Rejections at resistance, coupled with declines toward key support levels, suggest that markets are in a phase where both buyers and sellers are testing conviction. Momentum traders, in particular, should remain mindful of whether price movements are sustaining follow-through or stalling near well-watched levels.

Beyond just index movements, the reactions to earnings reports in the coming sessions may provide further clarity. Nvidia’s results could either alleviate concerns or add to the downside risks that have emerged over the past few days. At the same time, stocks already under pressure, such as Palantir, will need to show stability at technical levels to avoid further selling pressure.

PepsiCo, headquartered in New York and founded in 1965, operates in over 200 countries with a diverse brand portfolio including Pepsi and Tropicana. Despite a stock sell-off in May 2023, the company remains in a bullish cycle, with anticipated patterns suggesting support levels between 142.13 and 116.60.

The stock found support at the expected levels, showing a bounce from 142.13. Projections indicate a further rally towards 162.53, where traders should consider taking profits while maintaining a stop at 116. Overall, the outlook for PepsiCo appears positive in both the short and long term.

PepsiCo’s movements over the past year have followed the patterns we expected. The dip to the support range between 142.13 and 116.60 played out almost exactly to plan, with the stock reversing at the upper bound of that zone and beginning its climb. What this tells us is that market participants recognised value in those levels, which could mean they will serve as a foundation for future price action.

With the stock showing a clear recovery from that support area, the next target remains 162.53. If momentum holds steady, that level could be reached sooner rather than later. Traders managing risk should be attentive near that price, since it represents an area where profit-taking could introduce volatility. Taking partial profits while the price approaches 162.53 is a reasonable approach, while keeping stop-loss levels in place helps protect against any unexpected reversals.

Given the stability of PepsiCo’s broader trend, short-term fluctuations do not change the bigger picture. As long as prices remain comfortably above 116, the bullish case is intact. The reaction around 162.53 will be telling—whether price consolidates, pulls back, or pushes through will dictate the next moves for those holding positions. For now, maintaining a positive stance while monitoring these levels is the strategy we favour.

US stocks are expected to open higher, with futures indicating gains of 207 points for the Dow industrial average, 27 points for the S&P index, and 92 points for the NASDAQ.

Starbucks plans to lay off 1,100 corporate employees globally as part of an effort to streamline operations. The layoffs will not affect baristas or warehouse staff, while shares rose 0.49% in premarket trading.

Microsoft has refuted claims of scaling back its U.S. data centre leases, with shares up 0.32%. Additionally, Apple announced a $500 billion U.S. investment over four years, though its shares fell 0.64%.

Nvidia is set to report earnings, with expected EPS of $0.84 and revenues of $38.08 billion, resulting in a 1.76% rise in shares. AMD is also exploring the sale of its data centre business, with shares up 0.73%.

Last week, the Dow industrial average fell by 2.51%, the S&P index by 1.66%, and the NASDAQ index by 2.51%, marking their worst performances since late 2024 and early 2024. The Russell 2000 declined by 3.71%, its weakest week since December 2022.

The upward momentum in futures trading suggests a rebound following last week’s downturn. A 207-point rise in the Dow industrial average, alongside gains of 27 points for the S&P index and 92 points for the NASDAQ, indicates a shift in sentiment. These movements highlight renewed confidence after widespread losses in the prior sessions.

Howard’s company is making workforce adjustments, cutting 1,100 corporate roles. Retail workers and warehouse employees remain unaffected, focusing the redundancies on administrative divisions. A 0.49% gain in premarket trading suggests the market views the restructuring as a step towards efficiency rather than a sign of distress. The impact of these changes on long-term growth will depend on how operational streamlining translates into cost savings and productivity improvements.

Satya’s team has denied speculation that it is scaling back data centre leases in the United States. A 0.32% rise in shares suggests the market is unfazed by these reports. Meanwhile, Tim’s company has revealed a $500 billion investment plan spread over four years. Despite the announcement, shares dipped 0.64% as investors likely weighed the balance between long-term strategy and immediate financial impact. Large capital commitments often prompt scrutiny over expected returns.

All eyes are on Jensen’s firm ahead of its latest earnings report. Expectations are set at $0.84 per share, with projected revenues of $38.08 billion. The anticipation has already pushed shares up by 1.76%. The outcome of this report could reinforce confidence in semiconductor demand or raise questions about sustained growth. At the same time, Lisa’s company is exploring the possibility of offloading its data centre business. A 0.73% gain in shares suggests a positive reaction, possibly due to investor confidence that refocusing the company’s portfolio could improve profitability.

The market’s recent pullback was pronounced. The Dow, the S&P, and the NASDAQ all saw declines exceeding 2.5%, their weakest showings since late last year and early this year. The Russell 2000 suffered a greater hit, dropping by 3.71%, its worst week in more than a year. These figures reflect widespread selling pressure, prompting keen attention to whether the fresh momentum in futures marks the start of a sustained recovery or merely a short-lived bounce.

BYD Company Limited, based in Shenzhen, China, transitioned from a battery manufacturer to the leading global producer of plug-in electric vehicles by 2022, with over 3 million new energy vehicles sold by 2023. The stock recently reached an all-time high, indicating growth within wave III of the Elliott Wave pattern.

The monthly Elliott Wave chart shows that after a rally from an all-time low, the stock progressed through five waves, peaking at 333 and pulling back to 161.7. Currently, it is expected to continue upward while maintaining support at the 161.7 low.

The daily Elliott Wave chart displays further positive movement in wave III after a pullback at 161.7. Anticipation remains for additional highs to complete wave (3), followed by expected corrections within the cycle.

BYD has transformed dramatically over the years, moving far beyond its original focus on batteries. Today, it stands as the world’s top producer of plug-in cars, having surpassed 3 million in cumulative sales by last year. The numbers speak for themselves, and so does the stock price, which climbed to its highest level on record.

A look at the monthly Elliott Wave structure tells us that this isn’t random movement. Instead, it’s part of a longer-term pattern—one that has already completed five waves, reaching a peak of 333 before a pullback brought it down to 161.7. What matters here is that 161.7 has held as a solid base, which suggests the uptrend remains intact. If this support continues to hold, the share price is expected to press higher as it moves through the later stages of wave III.

Shifting to the daily timeframe, we can see movement that reinforces this perspective. There was a necessary correction back to 161.7, but prices have since resumed their upward trajectory within wave III. Further gains are likely in order to finish wave (3), though traders should remain aware that even within a broader rally, temporary declines are normal. Pullbacks will come, corrections will occur, but as long as the structure remains in place, these should be viewed as part of the existing trend rather than a reversal.

For traders involved in derivatives, this setup offers both opportunities and risks. Momentum can provide openings for leveraged trades, but it also means greater swings that require careful positioning. We should keep an eye on short-term moves without losing sight of the bigger structure. While optimism surrounding BYD is understandable, disciplined execution will determine who benefits most from the unfolding waves.