The Hang Seng Index (HSI) has rallied since mid-2025. However, the move is slowing as the index approaches overhead resistance along a multi-year trendline. Over the past five years, Chinese New Year (CNY) has come before a pivot in the HSI every time. In 4 out of 5 cases, the CNY period marked the start of that pivot. Ahead of CNY 2026, the setup looks similar. Momentum is still positive, but there is less room for mistakes. The key is to watch the weekly candles during CNY week and the week after. A bearish candle in that window has been linked with a higher chance of a bearish reversal.

Trading Implications For Cny 2026

One downside level to watch is 21,417 HKD. This lines up with the Value Area Low from the volume profile since 2018 and with anchored vWAP support from February 2024. The article also compares the HSI with the S&P 500 (SPX). It argues that the SPX response depends on whether China-related pressure stays local or turns global. In 2021 and 2024, HSI pivots were not followed by SPX declines. In 2022 and 2025, both markets weakened around CNY as broader macro or trade pressures increased. For CNY 2026, the HSI looks stretched while the SPX is near its highs. Current China risk is described as more local than systemic. After the strong rally in the Hang Seng Index since mid-2025, the focus is now on a possible reversal around Chinese New Year. This holiday has often marked an important turning point for the index, with pivots in four of the last five years. Today’s setup feels familiar because the index is pressing into long-term resistance.

Key Confirmation Signals

Recent data supports a more cautious view. China’s Caixin Manufacturing PMI for January 2026 came in at 50.1. That is only slightly above contraction and also missed expectations. Early reports on holiday travel and spending have been decent, but not strong, which may suggest consumer enthusiasm is leveling off. This soft backdrop adds to the case for a market pause or reassessment. For traders, this may be a good time to consider protective put options or bearish put spreads on the Hang Seng Index. The 21,417 HKD level provides a clear area to structure trades, because it could act as a realistic downside target if the seasonal pattern repeats. Implied volatility on HSI options has also risen to a three-month high near 28%, which suggests growing concern. The post-CNY reversal in 2025 was sharp and was driven by renewed global trade frictions that surprised many traders. It was a reminder that sentiment can shift quickly during this seasonal window. While this year’s risks seem more local, the recent example of a fast drop is still relevant. At the same time, a large spillover into the S&P 500 may be less likely right now. Historically, the SPX usually ignores HSI-specific volatility unless China’s problems connect to global macro stress, as they did in 2022. The current risk profile looks more contained, closer to the policy-driven moves seen in 2021 and 2024. This creates a possible relative value setup: bearish HSI exposure while staying neutral or cautiously bullish on the S&P 500. The difference is also visible in volatility markets. The VIX remains low, near 14, which suggests US markets are not pricing in major contagion risk from a potential China slowdown. The main trigger to watch is the HSI weekly price action during the holiday week and the week after. A bearish candlestick—especially a weekly close below the prior week’s low—would be a strong confirmation signal. That would suggest the uptrend has failed and a deeper correction may be starting. Create your live VT Markets account and start trading now.

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Oil prices first fell after indirect US–Iran talks in Oman eased fears of a US strike on Iran. That reduced the geopolitical risk premium. Prices later rebounded as traders shifted their focus back to supply risks. Kazakhstan may export 35% less oil than planned this month if output at the Tengiz field recovers slowly. Reuters said daily exports through the CPC pipeline and its Black Sea terminal could average about 1.1 million barrels per day, down from the planned 1.7 million.

Supply Risks Take Center Stage

Prices are also getting support from the possibility that India could cut oil imports from Russia as part of a bilateral trade deal with the US. In December, India imported about 1.1–1.2 million barrels per day from Russia. If those barrels disappear, India would need to replace them elsewhere. If India buys less, Russia may have to offer deeper discounts and depend more on ships from its shadow fleet. The European Commission also plans to ban the transport of Russian oil on tankers from EU countries as part of its 20th sanctions package. The article was produced using an AI tool and checked by an editor. The market’s initial relief after the US–Iran talks now looks temporary. The geopolitical risk premium has faded, but supply fundamentals are taking over. With WTI recently moving above $88 per barrel, attention has shifted from the risk of conflict to real barrels being removed from the market.

Market Positioning For Higher Prices

Disruption in Kazakhstan is a major factor. Reports now show that January exports through the CPC pipeline were down by nearly 500,000 barrels per day, tightening supplies of light sweet crude. This does not look like a quick fix. The slow recovery at Tengiz suggests the issue could last into the first quarter. Trade flows are also shifting as India starts to reduce its reliance on Russian oil. Tanker tracking data shows India’s imports from Russia fell below 900,000 barrels per day last month, down from an average near 1.2 million barrels per day across much of 2025. That forces India to compete for barrels from other suppliers, which adds upward pressure to global benchmark prices. With supply tightening, volatility is likely to rise in the weeks ahead as the market prices in these constraints. The latest EIA report supports this view, forecasting a global supply deficit of more than 400,000 barrels per day this quarter. In this setting, buying call options or using bull call spreads on April or May contracts could be a sensible way to position for further price gains. Create your live VT Markets account and start trading now.

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Nomura Research now expects Norges Bank to deliver one more policy rate cut in December 2026, taking the rate to 3.75%. This follows Norway’s higher-than-expected January inflation and stronger wage growth. In January, CPI-ATE inflation rose by 0.3pp to 3.4% year-on-year. That was higher than the 2.9% forecasts from both Nomura and Norges Bank, and above the 3.0% consensus. CPI inflation rose by 0.4pp to 3.6% year-on-year, versus 3.2% (Nomura), 2.7% (Norges Bank), and 3.0% (consensus). Nomura expects wage growth to keep inflation sticky into 2026, even if wage growth slows over time. On this view, a 3.75% policy rate would still sit above Norges Bank’s long-run neutral range of 2.25% to 3.50%. One risk is the Norwegian krone’s recent strength against the US dollar and the euro, which could reduce imported inflation. Nomura says it has already built in slower goods price growth and still expects inflation to ease gradually, leaving room for one remaining cut. Given January 2026’s inflation surprise, we need to adjust our strategy for the weeks ahead. Underlying inflation came in at 3.4% and headline inflation at 3.6%, both well above our forecast and Norges Bank’s. This suggests price pressures are not easing as expected, and it calls for a rethink of the likely rate path. Sticky inflation is also backed by strong wage growth. In 2025, wage settlements averaged above 5%, and that strength appears to be carrying into 2026. This points to inflation staying higher for longer than we previously assumed. As a result, the market should not expect several rate cuts. Instead, it should prepare for one cut, pushed back to around December 2026. For interest rate traders, this implies that products pricing cuts in summer or autumn 2026 no longer fit the data. Consider paying fixed in Norwegian interest rate swaps, or selling forward rate agreements for the second half of the year. The 2-year Norwegian government bond yield, now around 4.1%, is likely to face upward pressure as markets reprice toward a more hawkish outlook. In FX, this supports a bullish view on the Norwegian krone. If Norges Bank holds rates at 4.0% for most of the year while other central banks (such as the ECB) are cutting, the NOK’s carry appeal improves. Further NOK strength looks possible, especially in EUR/NOK, which has already fallen from above 12.00 in mid-2025 to around 11.25 today. For equity derivatives, higher-for-longer rates are a headwind for the Oslo Børs OBX Index. Higher borrowing costs can squeeze margins, which can make bearish positions more attractive. Consider buying OBX put options either as a hedge or as a directional trade if the market reacts to tighter-for-longer policy. The main risk to this view is the krone’s own strength. A stronger NOK can lower inflation by making imports cheaper. While NOK has recently gained against the dollar and the euro, this disinflationary effect may not be strong enough to offset domestic drivers in the near term. We should track import price data closely, but keep the base case that rates stay high.

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The US Dollar fell against the Japanese Yen for a second straight day on Tuesday. USD/JPY traded near one-week lows, just above 155.00, after hitting 157.66 on Monday. Traders were waiting for the US Retail Sales report for December. Weak US employment data last week, plus comments from White House adviser Kevin Hassett about slower job growth in the coming months, increased expectations of Federal Reserve rate cuts in 2026. This put more pressure on the Dollar.

Dollar Under Pressure

Hassett’s comments also lowered expectations for the January Nonfarm Payrolls report. The NFP release was delayed until Wednesday because of last week’s partial government shutdown. US Retail Sales data due later on Tuesday is expected to show a small slowdown in December. This release, along with Friday’s US Consumer Price Index report, could shift expectations for US monetary policy and drive near-term moves in the Dollar. The Yen stayed firm after Prime Minister Sanae Takaichi won last weekend’s election. Her fiscal policy is expected to remain loose. However, plans to fund tax cuts without issuing new debt shaped market reactions. Japan’s Finance Minister Satsuki Katayama and currency diplomat Atsushi Mimura warned on Monday that they could act quickly if speculation puts pressure on the Yen. These comments supported the JPY.

February Policy Outlook

Now that we are in February 2026, pressure on the US Dollar has increased. The weak employment reports from late January were followed by a December 2025 Retail Sales reading of -0.3%. This confirmed softer consumer spending. Taken together, the data supports the view that the US economy is cooling faster than expected. The delayed January Nonfarm Payrolls report, released last Wednesday, added to that view. It showed 155,000 new jobs versus forecasts of 190,000. The miss has pushed markets to expect easier Fed policy. In derivatives markets, the probability of a Fed rate cut at the March 2026 meeting has risen to over 75%, up sharply from a month ago. In Japan, Prime Minister Takaichi’s fiscal plans remain in focus. The Bank of Japan has stayed quiet and kept a cautious tone. Still, the main driver is the expected Fed pivot, which is shrinking the rate gap that previously favored the Dollar. That makes the Yen more attractive even if the BoJ does not change policy. For traders, this points to a bearish outlook for USD/JPY, which is now testing support near 152.50. Buying put options with strike prices near 152.00 or 150.00 could be one way to benefit if the pair keeps falling in the weeks ahead. These levels may be reachable if upcoming US inflation data also cools. Because of the recent sharp swings, implied volatility in USD/JPY options has started to rise. Traders may want to use strategies such as bear put spreads to reduce the cost of buying options while keeping downside exposure. It is also important to watch for more verbal intervention from Japanese officials, as it could briefly slow the decline. Create your live VT Markets account and start trading now.

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EUR/CHF dropped to a new post-2015 low of 0.91237 per euro in early trading. The Swiss franc strengthened even though markets were in a risk-on mood. Traders linked the move to the Swiss franc funding market, not to broad risk sentiment. One factor was Alphabet’s five-part bond deal in Swiss francs, which can increase demand for the currency. EUR/CHF also fell after sell calls, including one that targeted 0.87 per euro. The Swiss National Bank (SNB) was described as steady. It sees inflation as on target over the next two years. SNB president Martin Schlegel said the bank could return to negative rates if needed, but the bar is high given the current inflation outlook. At the SNB’s December meeting, when EUR/CHF was 0.9328, the bank said it was confident inflation would stay on target for the next two years. The article noted it was produced with help from an AI tool and reviewed by an editor. The Swiss franc remains very strong, pushing EUR/CHF to new lows near 0.9123—levels not seen since the 2015 policy shift. This looks driven by specific market events, such as Alphabet’s large bond issue, rather than a change in the economic backdrop. With Swiss inflation at a mild 1.6% in January 2026, the central bank is not under pressure to push back against franc strength. The SNB looks likely to stay on the sidelines, which leaves room for more franc gains. At its December 2025 meeting, it said inflation is on target, and the president repeated that negative rates are a last resort. This suggests the bank will accept a stronger currency for now. That removes a key risk for traders positioning for EUR/CHF to fall further. Over the next few weeks, derivatives traders could consider buying EUR/CHF put options to benefit from the downtrend. This keeps risk limited to the premium paid, while offering upside if EUR/CHF falls toward the 0.87 level that some analysts have flagged. Similar periods of franc strength in the past have shown that fighting the trend can be expensive. Because policy can change quickly, traders could also consider selling out-of-the-money EUR/CHF call spreads. One-month implied volatility is around 6.5%, which may offer decent premium for trades that assume EUR/CHF will not rebound sharply. This strategy can profit if the pair moves lower or stays range-bound, helped by time decay as well as direction.

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Silver (XAG/USD) fell on Tuesday, according to FXStreet data. It traded at $82.63 per troy ounce, down 1.49% from $83.88 on Monday. Since the start of the year, silver is up 16.24%. The price was $2.66 per gram.

Gold Silver Ratio Update

The gold/silver ratio was 61.16 on Tuesday, up from 60.56 on Monday. The ratio shows how many ounces of silver equal the value of one ounce of gold. Silver is a precious metal used as a store of value and a medium of exchange. Investors can buy it as coins or bars, or trade it through products such as exchange-traded funds (ETFs) that track its price. Many factors can move silver prices. These include geopolitical events, recession concerns, and changes in interest rates. The US dollar also matters because silver is priced in dollars. Supply, recycling, and overall demand can also shift prices. Industrial demand can be a major driver. Use in electronics and solar energy can push prices up or down, and economic conditions in the US, China, and India can add to volatility. Silver often moves with gold, and traders use the ratio to compare their relative value.

Market Outlook And Key Drivers

We view today’s 1.49% drop as a small pullback within a strong uptrend. Silver is still up more than 16% for the year, which points to solid momentum that we believe reflects broader economic trends. This modest dip may offer a buying opportunity for those who expect the uptrend to continue. The macro backdrop looks more supportive for precious metals. After the rate hikes seen through 2025, inflation has eased to 2.8%. This has led many to expect the Federal Reserve to keep rates unchanged. As a result, the US Dollar Index (DXY) has weakened to around 101.3, which can support dollar-priced assets such as silver. Industrial demand also helps support prices. Global manufacturing PMIs have improved, and a recent Silver Institute report forecasts a 15% year-over-year rise in demand from the solar panel industry in 2026. Strong industrial use, especially tied to green energy, may reduce some of the swings seen in assets driven mainly by investment flows. The gold/silver ratio is also important to watch. It rose to 61.16, but it spent much of 2025 above 75. That comparison suggests silver has still outperformed gold. If the ratio keeps rising, it may indicate silver is becoming undervalued again and could be setting up for another move higher. Create your live VT Markets account and start trading now.

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The US Dollar Index (DXY) fell, and FX options skew showed strong demand for Dollar puts across short-, medium-, and long-dated tenors. Attention is now turning to upcoming US data and other key catalysts. Upcoming releases include weekly ADP jobs data, the NFIB small business optimism index, and December retail sales. The retail sales control group is expected to rise 0.4% month-on-month. DXY is expected to trade in a 96.50–97.50 range over the next few days. Moves will likely depend on labour market data and US auction results. The article says it was produced with help from an artificial intelligence tool and reviewed by an editor. The dollar is under pressure and market sentiment looks weak. This is clear in the FX options market, where demand for dollar puts remains strong across short, medium, and long maturities. In other words, many traders are either positioning for a weaker dollar or hedging against one. This looks a lot like early 2025, when the dollar also traded in a tight range and reacted to each new data release. We appear to be back in a data-driven period, where economic surprises could quickly push the market out of its current pattern. Recent numbers support a cautious view. January Non-Farm Payrolls came in at 175,000, slightly below expectations, pointing to a cooler labour market. Core inflation has also eased to 3.7%, which reduces the case for more aggressive policy in the near term. The next major focus is retail sales, which should show whether the US consumer is still spending. Over the next few weeks, DXY is expected to trade in a new range of about 103.80–105.20. If volatility stays low, range-based strategies—such as selling out-of-the-money strangles on dollar-related ETFs—may work well. This can generate premium as long as the dollar does not break out sharply. Given the bearish tone, it may make sense to tilt any range strategy slightly lower. One way is to add cheap, far out-of-the-money puts as protection in case DXY breaks below support. For now, labour market data is likely to be the main driver of whether this range holds.

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Gold traded near $5,050 on Tuesday after bouncing back from a dip below $5,000. Still, buying interest in Europe was light. Lower political risk after Japan’s snap election on Sunday, plus easing tensions in the Middle East, lifted risk appetite and reduced demand for gold. Markets now expect at least two 25-basis-point US rate cuts in 2026. Traders also expect two cuts this year, with the first in June. At the same time, worries about the Federal Reserve’s independence kept the US dollar near its lowest level in more than a week. That supported gold, which does not pay interest. Indirect US–Iran talks ended on Friday after eight hours, with both sides agreeing to keep diplomacy open. Investors are now watching key US data: Retail Sales on Tuesday, Nonfarm Payrolls on Wednesday, and US inflation on Friday. China’s central bank bought gold for the 15th straight month in January. Technical indicators stayed mildly positive, but momentum is fading. The MACD histogram is still positive but smaller, and the RSI is near 55. Support sits at an uptrend line from $4,397.52, with another level near $4,819.19. Resistance is seen around $5,100. Gold is holding around $5,050 and is being pulled in two directions. On one side, expected Fed rate cuts and political pressure on the central bank are weakening the US dollar, which supports gold. On the other side, lower geopolitical risks in the Middle East and Japan are reducing safe-haven demand. This week’s main drivers are the US jobs report and inflation data, which may shape the Fed’s next step. Strong job growth in 2024 delayed rate cuts until late 2025. If Wednesday’s payrolls or Friday’s inflation come in weaker than expected, it would strengthen the case for a June cut and could lift gold. Because the market is waiting for these releases, price swings may increase. That could create opportunities for options traders who use strategies designed for a breakout in either direction. Futures traders may want to avoid taking large positions ahead of the data, since a clear catalyst is still missing. In the background, continued central bank buying is helping set a firm floor under prices. The World Gold Council reported record central bank purchases in 2024, and the trend continued through 2025 and into this year. This suggests a longer-term move away from US Treasuries. If upcoming data supports gold, a clean break above $5,100 could lead to a fast move higher.

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Japan’s policy stance has shifted after Prime Minister Sanae Takaichi won a supermajority. HSBC says this matters for the Japanese yen outlook and for USD/JPY. USD/JPY traded around 158–162 from April to July 2024. The key question now is whether Japan’s Ministry of Finance will increase verbal warnings, and whether coordinated action with US authorities comes back onto the agenda.

Intervention Limits And Fiscal Concerns

Foreign exchange intervention does not solve concerns about Japan’s long-term fiscal health. Even so, it can push some traders to cut short-yen positions to reduce volatility risk. HSBC says intervention can buy time for other measures. These could include tax changes to Nippon individual savings accounts to encourage domestic investment, new rules or incentives for pension funds and insurers to increase FX hedging or shift into domestic assets, possible Bank of Japan rate hikes, and tighter fiscal policy. A durable yen rebound would likely require a more active Bank of Japan, clear fiscal discipline, and steps that improve capital flows. HSBC expects USD/JPY to remain volatile but high in the near term, then drift lower more steadily in 2H26. With Prime Minister Takaichi’s supermajority, the government has the power to pass major policy changes. Yet USD/JPY is still testing levels not seen since last year. With the pair trading near 157.80, markets are on alert. A strong US economy continues to support the dollar, reinforced by last week’s jobs report showing 215,000 new jobs in January 2026.

Trading And Hedging Around MoF Risk

We are nearing the 158–162 zone where the Ministry of Finance (MoF) intervened heavily in spring and summer 2024. Traders may consider buying short-dated, out-of-the-money USD/JPY puts as a lower-cost hedge against a sudden drop triggered by intervention. These moves can buy time, but they do not fix the underlying problem. That was clear through 2025, when the yen stayed weak despite small policy adjustments. Intervention is a risk, but the US–Japan interest-rate gap is still wide, which suggests any yen strength may be short-lived. One possible income strategy is selling downside puts with strikes below 155 to collect premium, based on the view that USD/JPY will stay elevated. This reflects the belief that strong fundamentals for the dollar will limit the size of any pullback. Because conditions are choppy, range-trading approaches like collars may also appeal. By buying a protective put and selling a call, traders can set a defined risk-reward for the next few weeks. This can fit a market that may swing sharply, but is still influenced by MoF sensitivity on the upside and strong US data limiting sustained downside. The key catalyst for a lasting yen recovery would be a more forceful Bank of Japan (BoJ). With Japan’s core inflation at 2.8% in January 2026, pressure is rising for the BoJ to go beyond the modest rate moves seen in 2025. Until there is a clear tightening path, the easiest direction for USD/JPY remains higher, though likely with significant volatility. Create your live VT Markets account and start trading now.

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EUR/GBP rose for a second day on Tuesday as the Pound softened, keeping the pair near 0.8700. It traded around 0.8712, still below resistance in the 0.8720 to 0.8745 zone. Sterling was one of the weakest major currencies this week after reports raised questions about links between the UK ambassador to the US, Lord Mandelson, and Jeffrey Epstein. This has increased political pressure on Prime Minister Keir Starmer. UK shares and government bonds also moved lower.

Technical Picture On EURGBP

On the daily chart, EUR/GBP is near the top of a descending channel that started after the mid-November highs. Momentum signals are slightly positive: the MACD histogram is growing, and the RSI is near 55. A break above 0.8720, followed by a move above the December 31 and January 21 highs near 0.8745, would suggest a shift in trend. If that happens, traders may focus next on the 0.8800 area, close to December’s peak. Key support sits at 0.8675, then 0.8612. The technical section was produced with help from an AI tool. The British Pound is under heavy pressure due to political uncertainty around the Labour cabinet and the Mandelson story. The UK 10-year Gilt yield has risen 15 basis points over the past week to 4.35%. This points to investor nerves and selling in UK government debt. That political risk premium is helping keep EUR/GBP firm, just below a key resistance area.

Options Strategy And Risk Management

For derivatives traders, one possible approach is buying short-dated EUR/GBP call options to position for a breakout. A strike just above 0.8750 could capture upside if the pair breaks through the descending channel highlighted in the technical section. Implied volatility has climbed to a three-month high of 8.2%, so entry timing matters when managing the cost of the option premium. At the same time, a political breakthrough could quickly lift Sterling and trigger a sharp pullback. During the UK’s 2022 “mini-budget” crisis, sentiment flipped fast after leadership or policy changes. To help manage this risk, traders could consider a hedge using protective GBP call / EUR put options with a strike near the 0.8650 support area. Sterling weakness is also affecting other pairs. GBP/USD has fallen below the key 1.2500 support level for the first time this year. Next week’s UK inflation report will be important. The January 2026 release showed core inflation still elevated at 3.5%. Any sign that inflation is not easing as expected could complicate the Bank of England outlook and add more uncertainty for the Pound. Create your live VT Markets account and start trading now.

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