The USD is currently the weakest performing G10 currency year-to-date, while the EUR has also struggled, ranking as the second worst. Since early February, the EUR/USD has had difficulty maintaining prices above the 1.05 level.

Although the USD’s decline is attributed to shifting views on inflation and growth risks, the EUR faces ongoing structural challenges in the Eurozone affecting growth, alongside emerging concerns over European defence. Predictions suggest that the EUR/USD may continue to weaken into mid-year.

Additionally, there is a target identified for EUR/JPY at the 155 level over the next one to three months.

The fact that the US dollar is at the bottom of the G10 currencies so far this year points to a broader shift in sentiment. Traders appear to be reassessing expectations for inflation and economic expansion in the United States, which has weighed on the currency. Meanwhile, the euro has had its own set of hurdles, performing only slightly better than the dollar but still lagging behind its peers.

One of the sticking points for the euro has been structural strains within the Eurozone, which have cast doubt on its ability to sustain steady growth. On top of that, fresh worries around European defence policy have added to the uncertainty, further dampening confidence in the common currency. With both of these factors in play, it is hardly surprising that EUR/USD has struggled to hold above the 1.05 threshold since early February.

Looking ahead, the expectation remains that EUR/USD could weaken further as we move towards the middle of the year. Traders should be factoring in the possibility that these downward pressures are not going away anytime soon. If recent trends persist, there may be further dips that could present opportunities for those positioned correctly.

Meanwhile, in the case of EUR/JPY, a target around the 155 mark has been highlighted for the next one to three months. This suggests that the yen is facing its own pressures, potentially creating scope for the euro to gain ground against it. Investors watching this pair closely may need to consider how broader economic conditions impact both currencies.

With these market dynamics in motion, traders should stay alert to any updates that might shift sentiment further. The next few weeks could be particularly lively, and small shifts in expectations could have outsized effects on price action.

Comments from ECB’s Schnabel indicate a shift in the economic landscape. Current financing conditions are less likely to impede consumption and investment activities.

Additionally, the inflation process appears to have undergone a lasting change. The natural rate of interest in the eurozone has notably risen over the past two years.

These statements mark the second round of similar comments from Schnabel, which may provide a boost for the euro.

Isabel’s remarks suggest borrowing costs might not be as restrictive as they seemed just months ago. Lending conditions, once expected to squeeze household spending and business expansion, appear less of an obstacle. If true, this could lead to steadier growth than previously thought.

Inflation trends may also no longer resemble past patterns. The estimated neutral interest rate—the level at which monetary policy neither stimulates nor restrains—has climbed in the euro area. This shift implies central bankers may tolerate higher borrowing costs than before without undermining economic momentum.

With this being the second instance Isabel has voiced such a perspective, these comments are not isolated. The euro could find support as market participants reassess expectations around how far policymakers might adjust rates.

Market moves tend to follow clear signals, and this development is no exception. If expectations about future policy rates shift, traders may recalibrate positioning accordingly. When a key figure at a central bank reinforces a particular narrative, financial instruments linked to interest rate differentials are often the first to respond.

The New Zealand Dollar (NZD) is experiencing slight downward pressure against the US Dollar (USD), with forecasts suggesting it could drop but unlikely to fall below the 0.5715 support level. A breach of this level may indicate that the target of 0.5790 is out of reach.

In a 24-hour view, the NZD fluctuated between 0.5735 and 0.5770, closing marginally lower at 0.5733. Downward momentum has slightly increased, with the potential for the NZD to continue edging lower, remaining below minor resistance at 0.5760.

In the medium term, the NZD had previously shown sharp upward movement but faced decline after reaching 0.5770. Continued holding above 0.5715, deemed strong support, would be key to maintaining upward momentum.

From what we see, the New Zealand Dollar is under mild pressure, struggling to maintain its footing against the US Dollar. The recent movement suggests a test of support around 0.5715, and should this level break, it would indicate weakness beyond what was previously expected. If that happens, any near-term rebound to 0.5790 looks increasingly unlikely.

Over the past day, the NZD has varied within a narrow range, drifting lower by the close. The current downward push is still modest but does leave room for more weakness, provided resistance at 0.5760 isn’t convincingly breached. Traders positioning for a short-term move should keep that in mind.

Looking beyond the immediate picture, there was a strong push higher before a pullback set in at 0.5770. If the currency manages to hold firmly above 0.5715, it keeps hopes alive for some stability. A break below, however, could mean adjusting expectations in the medium term.

For those trading derivatives, the message is clear. If the established support remains intact, there may still be buying interest limiting further declines. However, a slip below this level shifts the focus. We must be aware of how price action develops near this zone, as it will determine whether momentum favours continued consolidation or a more pronounced move downward.

USD/JPY recovered recently, reaching 149.77, following a rise in the USD. Factors influencing this movement include US policies on Chinese investments and trade agreements with Canada and Mexico.

Current daily momentum suggests a bearish trend, but with some potential for short-term rebounds. Support levels are identified at 149.20, 148.80, and 147, while resistance points lie at 150.50 and 151.50.

Further narrowing of UST-JGB yield differentials may influence downward movement. Bank of Japan Governor Ueda indicated that yields correspond to economic recovery, suggesting a potential rate increase if conditions improve.

This recent rebound to 149.77 signals that the dollar has found enough buyers to slow down any deeper pullback, at least for now. The strength of the currency appears to be tied to decisions coming from Washington, particularly those affecting China and trade relationships closer to home. Given the way things are unfolding, it’s becoming increasingly clear that political shifts are setting the tone for the market’s direction.

Despite regaining some ground, the broader downtrend remains visible on daily charts. There are signs of short-lived recoveries, but momentum still leans towards sellers. This suggests that while price spikes are possible, they might not hold for long. The levels marking potential areas of support sit at 149.20, 148.80, and 147. If prices slip lower, these are the points to watch for a possible pause or bounce. On the other side, resistance remains firm at 150.50 and 151.50, meaning any upswing will need strong momentum to break through.

Shifts in bond yields could also come into play. If US Treasury yields lose their advantage over Japanese government bonds, downward movement may pick up. Governor Kazuo spoke on this recently, pointing out that yield levels align with economic progress. His words leave room for the possibility that an interest rate hike could be on the table should conditions justify it. For traders mapping out the weeks ahead, attention to these shifts will be necessary.

The NZDUSD pair is nearing a key support zone as the market seeks new catalysts. Recent data has shown the USD gaining strength against other major currencies due to a risk-off mood triggered by poor US economic indicators.

The weak US Flash Services PMI and rising long-term inflation expectations have heightened concerns over the Federal Reserve’s response to a possible economic slowdown. This backdrop is pertinent as the Non-Farm Payroll and Consumer Price Index reports approach ahead of the March FOMC meeting.

On the daily chart, NZDUSD is approaching the 0.57 support level, which may attract buyers for a potential rally towards 0.5850. Conversely, sellers may target a move below 0.55.

The 4-hour chart indicates bullish momentum defined by an upward trendline, with a pullback potentially allowing buyers to target 0.5850. Sellers will be looking for a break below this trendline to increase their positions towards the 0.55 target.

The 1-hour chart reveals minor resistance at 0.5735, where a pullback could attract sellers. A breach of this resistance may encourage buyers to aim for higher values.

Upcoming US data, including the Consumer Confidence report, Jobless Claims on Thursday, and PCE data on Friday, is likely to influence market direction.

With markets reacting sharply to shifting sentiment, every data point holds more weight—especially with traders scrutinising how Jerome and his colleagues at the Federal Reserve might adjust policy. Last week’s weaker-than-expected US Flash Services PMI reminded us that parts of the economy may not be as resilient as previously thought. That, coupled with higher long-term inflation expectations, has created an uneasy environment ahead of the key reports scheduled over the coming days. The job market, inflation, and consumer confidence data will all feed directly into expectations for the next FOMC meeting.

NZDUSD is now hovering near an area that has historically attracted buying interest. On a daily timeframe, the 0.57 support level has caught attention, with past price action suggesting buyers could step in here. If demand re-emerges, a move up towards 0.5850 wouldn’t be surprising. However, if sentiment worsens or the US dollar gains further strength, those betting against the kiwi may attempt to drive prices beneath 0.55. Such a move would reinforce the broader bearish trend seen over the past few months.

Shorter-term price action reflects the ongoing push and pull. The 4-hour chart shows a rising trendline supporting the recovery, with buyers defending this structure. If the exchange rate stays above this dynamic support, upward movement towards 0.5850 remains possible. But a close beneath the trendline would likely encourage sellers to extend their positions, reinforcing the broader downtrend.

Even tighter timeframes expose near-term hurdles. Market participants are eyeing 0.5735, a level that has already slowed upward momentum. Should prices fail to breach this barrier, it may set the stage for another bout of selling pressure. Conversely, if the pair clears resistance, it could attract fresh buyers expecting further upside.

This week’s scheduled events could add fuel to volatility. Consumer confidence figures may offer insights into how households are weighing inflationary pressures against economic resilience. Thursday’s jobless claims will provide another snapshot of labour market conditions, a key factor influencing monetary policy outlooks. Then there’s the Core PCE price index on Friday—the Federal Reserve’s preferred inflation gauge. With uncertainty swirling around rate cuts, any surprise here may lead to repositioning by traders looking to stay ahead of the next big move.

Silver prices have dropped to approximately $32.00, marking a third consecutive day of decline. This movement occurs despite the confirmation from US President Trump regarding the implementation of a 25% tariff on Canada and Mexico.

The US Dollar has stabilized following weak US flash S&P Global Services PMI data for February, which showed a contraction in the services sector for the first time in 25 months. This steadiness in the Dollar has indirectly impacted Silver prices.

Ongoing geopolitical tensions, particularly surrounding peace talks related to the war in Ukraine, continue to influence the safe-haven demand for Silver. Recent discussions between French President Macron and Trump aim to secure military guarantees for Ukraine.

The Silver price retraced after failing to surpass a high of $33.40 earlier this month. The 50-day Exponential Moving Average indicates a bullish outlook, with key support around $30.00 from an upward trendline.

Market dynamics play a crucial role in Silver pricing, including geopolitical instability and industrial demand. Silver’s connection to Gold prices often dictates its movements, with the Gold/Silver ratio offering insights into relative valuations.

Silver’s recent downturn to around $32.00 is its third successive daily slide, suggesting that resistance remains firm at higher levels. This decline comes despite Donald Trump’s confirmation of fresh tariffs on Canadian and Mexican imports, a move that typically would have spurred safe-haven demand. The market reaction instead suggests that tariffs were already priced in, or that broader forces, such as currency movements, exerted greater influence.

The stabilisation of the US Dollar adds further pressure. February’s flash S&P Global Services PMI exposed a deterioration in the services sector—the first contraction in over two years. Although this pointed to potential economic weakening, the Greenback held steady. A firm Dollar tends to weigh on commodities priced in it, including Silver, making its downturn unsurprising given the prevailing conditions.

Meanwhile, developments surrounding Ukraine continue to play a role in shaping investor sentiment. Emmanuel Macron’s engagement with Trump to push for NATO security assurances for Ukraine adds another layer of geopolitical uncertainty. Historically, heightened tensions have reinforced Silver’s appeal, yet markets appear more focused on external drivers at the moment.

Technically, Silver struggled to maintain momentum beyond $33.40, leading to a pullback. The 50-day Exponential Moving Average still points to an underlying upward trend, with $30.00 acting as an essential support level. Unless that floor gives way, the broader bullish structure remains intact.

Market participants must also monitor the broader industrial demand for Silver, as shifts in manufacturing and green energy developments can alter the metal’s outlook. Its relationship with Gold remains relevant, particularly through the Gold/Silver ratio. A widening ratio often signals that Silver is lagging behind and could be undervalued in comparison.

These factors mean traders need to remain attentive to currency movements, geopolitical updates, and technical indicators in the weeks ahead.

Joachim Nagel of the ECB emphasises the importance of taking a cautious approach regarding rate cuts. He mentions that the inflation outlook appears encouraging, although persistent core and services inflation requires careful consideration.

Nagel states that there is little benefit in speculating publicly about future rate paths. Despite this, a rate cut is anticipated for March, which could influence future communications from the ECB.

Nagel’s comments suggest that those expecting rapid rate reductions may need to temper their outlook. While inflation expectations appear to be moving in the right direction, ongoing pressure from core and services inflation means decisions will not be rushed. Price stability remains a priority, and that makes policymakers wary of acting too soon.

A cut in March seems widely expected, but that does not mean further reductions will quickly follow. If inflation readings do not ease at the desired pace, hesitation from officials could increase. That would affect how markets interpret forward guidance, especially as expectations have already shifted multiple times in recent months.

Elsewhere, Christine emphasised patience, reinforcing the idea that rate-setting decisions will be based on data rather than market demands. She acknowledged that inflation has receded, but warned that risks remain. Wage growth, in particular, remains a factor that could complicate forecasting, adding another reason why adjustments to policy will be gradual.

Meanwhile, recent economic data has painted a mixed picture. Growth indicators suggest momentum remains weak, yet inflation figures have not softened quite enough to remove all concerns. This means that even if borrowing costs are lowered, officials may stress that they are not embarking on a swift easing cycle. That could create moments of unpredictability, as past meetings have shown how messaging can subtly shift within a short period.

Financial conditions remain a focus, with market movements being monitored closely. If expectations become misaligned with what officials prefer, then future statements could be crafted to steer sentiment back in line. Reactions to upcoming inflation reports will therefore play a role in shaping short-term positioning, as any deviation from expected trends could prompt sharper responses from those trying to anticipate the next move.

For now, rate expectations remain anchored around adjustments beginning in the first part of the year, but certain voices within the ECB continue to suggest that caution is needed. Joachim and Christine have both pointed to risks that could justify a measured approach, meaning those looking ahead must remain aware that recent trends could still prompt shifts.

Martins Kazaks, a policymaker at the European Central Bank (ECB), discussed the need for ongoing interest rate cuts. He emphasised a cautious approach as the bank nears the terminal rate, suggesting that cuts should be implemented step by step.

In other recent news, the ECB reported that negotiated wages in the Euro area advanced by 4.12% year-on-year in Q4 2024, compared to 5.43% in Q3. Additionally, the EUR/USD exchange rate appears to be facing resistance at the 100-day moving average.

Kazaks has made it clear that while rate cuts are expected to continue, they will not be rushed. Instead, adjustments will be made gradually as the central bank approaches what it sees as an appropriate level for rates. This suggests that officials remain watchful of inflation trends and broader economic conditions. If data shows that price pressures remain sticky, we could see more hesitation before adjustments are made.

On the wage front, the ECB’s latest data points to a slowdown in the growth of negotiated wages. This is something we will need to keep an eye on, as it plays a central role in inflation expectations. A deceleration here indicates that inflationary pressures from wages may be softening, which could make policymakers more comfortable with additional cuts. However, wage growth is still relatively high compared to pre-pandemic levels, meaning that cost pressures remain in the system.

In the foreign exchange market, the euro is showing signs of restraint against the dollar, with the 100-day moving average acting as a barrier. Traders watching this level should take note – if the EUR/USD fails to break through, this could reinforce a bearish outlook for the pair. On the other hand, if the currency manages a move beyond this resistance, we could see momentum shift in the short term. Given that central banks on both sides of the Atlantic are adjusting their policies, keeping a close watch on rate expectations will be necessary.

For those involved in derivatives trading, keeping an eye on how these factors play out in the coming weeks will be key. The adjustment in rate expectations, combined with movements in wage data and technical resistance in FX markets, provides multiple angles for positioning. If rate cuts proceed steadily and wage growth continues to ease, we might see a shift in sentiment that could open new opportunities. The relationship between these elements will be central to anticipating market moves and adjusting strategies accordingly.

The USDJPY pair is declining due to risk-off sentiment and falling Treasury yields. Since Friday, the US dollar has shown relative strength against major currencies following disappointing US data, including a weak Flash Services PMI and rising long-term inflation expectations.

This shift in sentiment has raised concerns about potential economic slowdown and the Federal Reserve’s response on interest rates. Upcoming reports, such as Non-Farm Payrolls and Consumer Price Index, may influence market movements ahead of the March FOMC decision.

Technically, USDJPY is near the 148.60 level, where buyers may emerge, while sellers aim for a decline towards 140.00. On the 4-hour and 1-hour charts, a minor downward trendline and a broken counter-trendline indicate continuation of bearish momentum.

Key economic data is on the horizon, including the US Consumer Confidence report, Jobless Claims, Tokyo CPI, and US PCE data.

The retreat in USDJPY stems from a combination of falling Treasury yields and a preference for safer assets. Since the end of last week, the dollar has managed to retain strength against other major currencies despite weaker-than-expected economic data in the US. The Flash Services PMI revealed sluggish activity, adding to concerns about broader momentum in the economy. At the same time, long-term inflation expectations have inched upwards, bringing fresh questions about the Federal Reserve’s policy stance in the coming months.

Market participants are now weighing the potential for economic strain against the likelihood of rate decisions ahead. The Federal Reserve has repeatedly signalled that incoming data will dictate its approach, making upcoming reports especially important. The release of Non-Farm Payrolls and CPI figures will provide further insight into whether inflation is still running hotter than policymakers would prefer. These numbers stand to influence positioning well before the Federal Open Market Committee meets in March.

From a technical standpoint, the currency pair is hovering near 148.60, an area that has previously attracted buying interest. If price action finds support here, short-term traders may look for upward reactions. On the other hand, sellers remain active, keeping targets in sight as low as 140.00. Shorter-term charts continue to reinforce the prevailing downward bias—minor trendlines suggest momentum is leaning in favour of further declines, especially as any counter-trend reactions have struggled to hold.

Looking ahead, there are multiple data releases that could sway sentiment further. US Consumer Confidence figures will shed light on whether Americans remain optimistic in their spending outlook. Jobless Claims will provide a pulse check on the labour market’s stability. Meanwhile, inflation measures out of Tokyo will offer an early signal on price trends in Japan. Rounding out the week, the US PCE data—widely regarded as a key inflation gauge for the Fed—will be watched closely.

Taken together, recent trading activity points to one thing: sensitivity to economic updates. Movements in USDJPY are increasingly reactive to any shifts in the outlook for interest rates, both in the US and Japan. That means each of these releases has the potential to move the needle, even if only briefly. For now, short-term movements are favouring the path lower, but the weight of upcoming economic indicators could either reinforce or disrupt that direction.

Australia is set to release its January inflation data, with expected growth in headline CPI from 2.5% to 2.6%. Analysts will pay close attention to the trimmed mean and its implications following December’s decline to 2.7%.

The January report indicates that employment increased by 44,000, surpassing predictions and entirely driven by full-time positions. Despite potential risks to growth from US protectionism, expectations remain for three further rate cuts by the Reserve Bank of Australia this year.

Tonight’s CPI print may influence increases in the Australian dollar, although bearish trends against the US dollar are anticipated due to tariff risks.

The upcoming Australian inflation figures will be one to watch. With headline CPI possibly inching up from 2.5% to 2.6%, the focus isn’t just on that number alone. The trimmed mean, which excludes more volatile price changes, will be just as telling. After dropping to 2.7% in December, it could signal whether inflation is settling or if underlying pressures remain.

Jobs data provided a boost. A 44,000 jump in employment, entirely made up of full-time positions, shows the labour market remains resilient. This kind of strength could complicate the broader economic outlook, particularly for interest rate expectations. Strong hiring trends might make it harder to justify aggressive rate cuts even though markets still expect the Reserve Bank to ease policy three more times this year.

A major concern remains the risks to growth from US protectionism. Heightened tariffs could dampen global trade, affecting demand for Australian exports and weighing on sentiment. This uncertainty, combined with tonight’s inflation data, could stir movement in the Australian dollar. While a higher CPI print might provide some support, broader trade risks still lean towards weakness against the US dollar.

Trading conditions in the short term may see shifts based on these inputs. Inflation trends, central bank policy, and economic risks abroad could all play a role in market positioning. The interactions between these elements will offer opportunities, but also increase the need for precise timing and strategy adjustments.