Recent technical indicators suggest a bearish trend for the USD against the CAD, with notable ‘engulfing’ patterns observed on daily and weekly charts. A key reversal week further supports this assessment, indicating the potential peak of the USD at 1.4795.

Despite these signals, residual bullish momentum may limit the CAD’s recovery potential. Technical resistance levels are identified at 1.4250/60 and 1.4465/00, while support is found at 1.4095/00 and 1.40, marking critical Fibonacci retracement levels.

We have observed clear directional signals that suggest downward pressure on the USD against the CAD. The presence of strong bearish engulfing patterns on both daily and weekly charts indicates a shift in sentiment. More telling is the key reversal week, reinforcing the argument that 1.4795 could mark a peak. Historically, such signals have aligned with periods of momentum exhaustion, making further upside less likely without a change in fundamental conditions.

That said, the market rarely moves in a straight line. Some strength remains in the previous USD rally, which may slow the CAD’s path to recovery. Traders should be mindful that technical resistance is clustered around 1.4250/60 and 1.4465/00. These levels previously acted as barriers to further gains and may continue to do so. On the downside, immediate support is noted at 1.4095/00, with another layer appearing around 1.40. These areas coincide with Fibonacci retracement levels, often used to gauge the depth of a correction.

What does this mean for traders? The current technical setup suggests a preference for fading rallies rather than chasing short-term strength in the USD. If price action remains below resistance, a test of lower support zones becomes increasingly probable. However, any break back above resistance could prompt a rethink. Price movements in the short term will likely be driven by shifts in sentiment rather than structural changes.

In the coming weeks, patience will be required. Trends can take time to fully develop, and false breaks are always a risk. Those looking for opportunities might focus on confirmation signals before committing to a position, keeping a close eye on whether downside momentum sustains or if dip buyers emerge to challenge it.

A potential agreement between the US and Ukraine is nearing finalisation, estimated to be worth hundreds of billions of dollars. This deal focuses on economic investment and aims to bolster Ukraine’s sovereignty.

The Trump administration views the deal as a means to recover US investments in Ukraine. In contrast, Ukrainian officials aim to stabilise relations with the US and secure long-term support.

The Reconstruction Investment Fund will be co-managed by both countries, targeting investments in infrastructure, mining, and ports. This will enable the US to recuperate its expenditures linked to Ukraine’s defence and recovery efforts.

Ukrainian President Zelensky previously rejected a US demand for $500 billion worth of minerals, asserting that aid should not equate to debt. He also seeks to include military support in the agreement.

Financial terms stipulate that Ukraine must contribute double the amount of US investment to the fund. Furthermore, 50% of revenues from extractable resources will be directed to this fund.

Notably, the draft of the agreement does not define any US military commitment to Ukraine’s defence.

This proposed arrangement revolves around funding Ukraine’s reconstruction while ensuring a return on investment for the US. It sets out a framework where both nations collaborate on infrastructure, natural resources, and port operations, with financial returns structured in a way that obligates Ukraine to contribute twice as much as the US.

Donald and his administration are approaching this as a financial and strategic move, ensuring that prior expenditures on Ukraine eventually yield economic advantages for the US. On the other hand, Volodymyr is prioritising stability and ongoing diplomatic support, aiming for assurances that extend beyond raw economic transactions. His rejection of previous mineral-related demands indicates a reluctance to frame American assistance as something that must be repaid directly. Instead, he seeks a structure where economic cooperation leads to sustainable growth, while also continuing to push for military aid, even as the current terms omit any such commitment.

An essential point here is the management of revenue from resource extraction. Half of what is earned from mining activities will flow back into the agreed fund, reinforcing this as a mechanism for continued investment rather than a one-off arrangement. This ensures a recurring stream of funds but also places long-term obligations on Ukraine’s resource output. The absence of a concrete US military commitment in this draft sets boundaries on Washington’s direct involvement, at least in terms of defence measures.

For those evaluating short-term financial movements, this type of deal can lead to clear expectations regarding infrastructure and commodity investments. With both countries engaged in revenue distribution, resource sectors could experience shifts based on how official negotiations unfold. If adjustments to the financial terms arise or political stances shift unexpectedly, reactions in related markets could be swift. Anticipation of formal approval may influence activities well before the finalisation, with attention already turning towards direct investment streams and projected yields.

The recent German federal election resulted in a shift towards the right, with the conservative CDU/CSU emerging as the winners alongside gains made by the far-right AfD. However, the CDU did not secure a majority and will require a coalition, likely involving the outgoing Social-Democrats and smaller parties.

Coalition talks are expected to take several weeks. The EURUSD briefly rallied to the low 1.05 range but faced resistance around 1.0530, which restricted further gains and maintained a flat near-term outlook for the currency.

With Germany’s leadership structure now in flux, the euro’s reaction has been measured. The brief rally to 1.05 against the dollar showed some optimism, but resistance at 1.0530 kept upward momentum in check. Markets are watching how coalition negotiations unfold, as any prolonged uncertainty could stoke volatility.

For now, the currency pair remains rangebound, and traders seem to be waiting for further direction. If coalition talks drag on or if any unexpected hurdles emerge, the euro may struggle to hold its recent gains. Alternatively, a quicker-than-expected agreement could provide a short-term lift.

Beyond currency moves, rate expectations have also been steady. The European Central Bank has not suggested any sudden shifts in policy, and with inflation proving stickier than anticipated, there is little room for surprise rate cuts in the near future. Given that, interest rate differentials between the euro and the dollar remain an important focus.

In terms of equity markets, we noticed some hesitation in German stocks. Investors appear wary of the incoming government’s fiscal stance and policy outlook. Should coalition talks lead to proposals favouring increased spending, debt issuance concerns may weigh on bond markets.

Across the Atlantic, US data remains a key factor. Inflation figures due next week could steer market sentiment, impacting expectations on Federal Reserve policy. If inflation readings come in above estimates, Treasury yields may rise further, placing renewed pressure on riskier assets, including European equities.

As traders gauge the next steps for rates, bonds, and currencies, technical levels remain decisive. Support for EURUSD appears in the 1.0450 region, while breaking above recent highs near 1.0530 could provide an opportunity for further upside. With multiple macroeconomic events lined up, staying attentive to signals from policymakers and central banks is essential.

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.