Holiday-thinned trading lifts the US dollar, pressuring gold and leaving XAU/USD down 2.5% near two-week lows
Gold (XAU/USD) fell to about $4,863 on Tuesday, down 2.50% and near a two-week low. Thin holiday trading kept prices below $5,000. Lunar New Year closures have reduced liquidity. Chinese markets reopen next Tuesday, and US volumes should improve after Presidents’ Day.
The US Dollar strengthened and Treasury yields rose, which pushed gold lower. The US Dollar Index was near 97.44, up about 0.37%.
Rabobank’s Jane Foley says Norway’s CPI surprise may disrupt Norges Bank easing, prompting markets to expect a pause
Norway’s CPI was higher than expected. This pushed markets to shift their view of Norges Bank policy from “more rate cuts” to “a longer pause.” Market‑implied policy rates are now broadly flat for the rest of this year. Before, markets were pricing further cuts starting in early 2026.
The Norwegian krone (NOK) is the best‑performing G10 currency so far in 2026, with the Australian dollar (AUD) next. Rabobank now expects EUR/NOK to reach 11.00 over a 12‑month horizon, and has brought that target forward in its forecast path.
Norges Bank Signals Patience
In January, Norges Bank said that “the outlook is uncertain,” after more dovish signals in December. It kept the guidance that the policy rate will be reduced further this year if the economy develops as expected. Governor Wolden Bache also said the bank is not in a hurry to cut, because inflation is still too high. The recent inflation surprise has reshaped the outlook for Norwegian rates. January CPI came in at 4.2%, well above the 3.7% forecast. This forced markets to rethink the likely path for Norges Bank. Expectations have moved away from near‑term cuts and toward the policy rate staying at 4.50% for longer. This shift has helped make the krone the strongest G10 currency so far this year. It also supports the view that EUR/NOK can keep trending lower from around 11.25. Forecasts have been updated to match this change, with a new target of 11.00 over the next twelve months. The krone’s strength is largely driven by the central bank’s more hawkish tone. Compared with late 2025, this is a major change. At that time, markets were confidently pricing at least two rate cuts for this year. The new view is backed by economic data: mainland GDP rose 0.8% in Q4 2025, which reduces the pressure on Norges Bank to ease quickly. Recent statements also suggest policymakers are in no rush to cut rates.Derivative Strategy Implications
For derivatives traders, this points to positioning for further krone strength versus the euro in the coming weeks. Buying EUR/NOK put options is a straightforward way to express a move toward 11.00 with defined risk. The trade benefits if NOK strengthens while Norges Bank keeps policy tight. The inflation surprise initially lifted implied volatility. That may now create an opening. If the market settles into an “extended pause” view, selling option premium could appeal to traders who think the new direction is established. Traders should also review any interest‑rate swap positions that were based on falling Norwegian rates. Create your live VT Markets account and start trading now.In February, the US NAHB housing market index fell to 36, below the 38 forecast
The NAHB Housing Market Index in the United States came in at 36 in February. This was below the expected level of 38.
A reading of 36 shows builder confidence is still weak. It remains well below the neutral level of 50. This adds to other recent signs that the housing sector is cooling.
Housing Market Weakness Signals
This weaker-than-expected result supports a pattern of softer economic data seen in recent weeks. It follows January’s jobs report, which showed hiring slowing to 145,000. It also comes as the 30-year mortgage rate has moved back above 6%. Together, these signals suggest the housing market is more fragile than many expected at the start of the year. Weakness in a sector that is highly sensitive to interest rates also increases pressure on the Federal Reserve to consider rate cuts sooner than expected. With January’s core inflation steady at 2.7%, this housing data may add weight to a more dovish view in upcoming meetings. Because of that, we are looking at trades that could benefit if rates fall, such as buying SOFR futures contracts. For equity derivatives traders, this is a reason to stay cautious on cyclical sectors linked to housing. We are considering buying put options on homebuilder ETFs such as XHB, as well as on major building materials suppliers. This setup is similar to the brief housing slowdown in mid-2025, which created good conditions for bearish option strategies in the sector.Broader Market Hedging Considerations
This data may also be a headwind for the broader S&P 500. Protective puts on the index may be a sensible way to hedge long portfolios. In addition, a more dovish Fed could weaken the U.S. dollar. That makes us look at options strategies that could benefit if the euro or yen rises against the dollar in the coming months. Create your live VT Markets account and start trading now.Johnson Controls is expected to rise toward 151.50, then correct, as it delivers building systems worldwide
Johnson Controls International plc (JCI) designs, makes, installs, and upgrades building products and systems. The stock trades on the NYSE as “JCI” in the Industrials sector. The company reports four segments: Building Solutions North America, Building Solutions EMEA/LA, Building Solutions Asia-Pacific, and Global Products.
On the weekly chart, the share price is in a bullish Elliott Wave pattern. Further gains are expected as long as pullbacks stay above the 1/06/2026 low. A move toward $151.52 is projected before a later correction.
The wave levels are as follows: wave I of (III) ended at $81.77, and wave II ended at $45.52 in July 2022. Within wave III, ((1)) ended at $69.60 in January 2023 and ((2)) ended at $47.90 in October 2023. Price is now moving through (5) of ((3)).
Within ((3)), (1) reached $91.14, (2) dropped to $68.03, (3) rose to $123.78, and (4) pulled back to $108.41. The current (5) has already hit a minimum extension at $134.03, and $151.52 remains a possible next target.
A pullback labeled ((4)) is expected in 3, 7, or 11 swings. Confirmation would come from a break of the trendline drawn through (2) and (4). If price falls below the 1/06/2026 low, then ((3)) is considered complete at the most recent peak.
With the bullish structure still in place, the near-term plan is to stay with the current momentum. The stock appears to be in its final leg higher, with a potential target near $151.50. Traders may look to hold or open bullish positions—such as buying call options or using bull call spreads—to benefit from a likely final push upward.
The chart strength also lines up with supportive fundamentals. U.S. Commerce Department data showed non-residential construction spending rose 1.2% in January 2026, above expectations. That trend supports JCI’s core business. It also follows a strong Q4 2025 earnings report, where demand for JCI’s smart building technology came in above analyst forecasts.
The main level to watch over the next few weeks is the January 6, 2026 low. As long as price stays above that point, the bullish view remains valid, and short positions are not favored. Small pullbacks should be treated as pauses, not trend changes.
The bigger setup is the correction labeled wave ((4)), expected after the current rally tops out. The plan is not to sell into strength, but to wait for signs that the up move is fading. That decline could create a better buying window for a longer-term trade.
To get ready, the focus is on a completed rally followed by a break of the support trendline built from the October 2023 low and the mid-2025 low. Once the correction starts, tactics like selling cash-secured puts near defined support areas can help enter a new long position at a lower price. This can also generate premium income while waiting for the preferred entry zone.
After softer Canadian inflation, the Canadian dollar slips as USD/CAD rises for a fifth straight session
USD/CAD rose for a fifth straight day and traded near 1.3676. The pair moved higher after softer Canadian inflation data weakened the Canadian Dollar. Canada’s CPI was 0.0% month-on-month in January versus a 0.1% forecast, and 2.3% year-on-year versus 2.4% expected.
BoC Core CPI rose 0.2% MoM in January after falling 0.4% in December. The annual core rate eased to 2.6% from 2.8%. The Bank of Canada targets 2% inflation and uses a 1–3% control band. It now expects CPI to average 2.0% in 2026 (previously 2.1%) and 2.1% in 2027.
Canadian Inflation And Oil Weigh On The Loonie
Oil prices also pressured the currency because Canada is a major crude exporter. WTI traded near $62.35, down about 1.95%, after a second round of US-Iran nuclear talks in Geneva. The US Dollar also strengthened. The DXY traded near 97.34, up about 0.25%. US data showed the Empire State Manufacturing Index at 7.1 in February (forecast 6; prior 7.7) and the ADP Employment Change four-week average at 10.3K (revised prior 7.8K). Markets are watching the FOMC minutes on Wednesday. On Friday, the focus turns to Core PCE inflation and the advance Q4 GDP estimate. A year ago, in early 2025, the Canadian dollar was weakening amid soft inflation and falling oil prices. At the time, Canadian CPI was only 2.3% year-over-year. That gave the Bank of Canada room to stay on hold. Today, the picture is very different. Over the past twelve months, conditions have shifted sharply. The January 2026 data shows Canadian inflation has risen to 2.9%. That surprised many investors and increased pressure on the Bank of Canada to keep policy restrictive. This is a clear break from the disinflation trend seen at this time last year.Shifting Policy Divergence And Volatility Outlook
Oil, a key driver of the loonie, has also strengthened. WTI now trades above $80 a barrel, far above the $62 level seen in February 2025, when the possibility of a US-Iran deal weighed on prices. Higher energy prices now support the Canadian dollar in a way they did not a year ago. On the other side, the US dollar remains strong. The DXY is near 104.5, well above the 97 level from last year. US inflation has also stayed firm, with January 2026 reading 3.1%. As a result, markets have pushed back expectations for Federal Reserve rate cuts. This creates a complicated setup: the Fed is still hawkish, while the BoC faces renewed inflation pressure. With these forces pulling in different directions, volatility in USD/CAD may rise in the coming weeks. Strong Canadian inflation and high oil prices point to a lower USD/CAD, but broad US dollar strength remains a major offset. Derivatives traders may want to consider strategies that benefit from larger price swings, such as long-volatility options positions. Create your live VT Markets account and start trading now.On Tuesday, XAG/USD slides near $73.70 as rate-cut optimism fades, pressured by geopolitical worries and inflation data
Silver (XAG/USD) fell to around $73.70 on Tuesday, down 3.50% on the day. The drop came as traders kept expectations for near-term Federal Reserve rate cuts low, even after softer US inflation data.
US headline inflation eased to 2.4% year on year in January, down from 2.7% in December. Core CPI rose 2.5%, matching forecasts, after 2.6% previously.
Market Volatility Outlook
Volatility risk increased as US markets reopened after a long weekend. The next key event is the release of FOMC minutes from the January meeting on Wednesday. At that meeting, the Fed left rates unchanged at 3.50%–3.75%. Markets also watched talks between the US and Iran in Geneva, where Iran’s nuclear programme was expected to be discussed. On the daily chart, XAG/USD traded at $73.68. The 20-day EMA slipped to $83.30, while RSI (14) was 42.17 and below the midpoint. Price stayed below the 20-day EMA, which continued to limit near-term rebounds. A daily close above the EMA could reduce selling pressure. If not, the near-term bias remains lower.Derivative Strategy Considerations
A year ago, silver was also under pressure near $73, as markets debated the Fed’s next move. In early 2025, rates sat at 3.50%–3.75%, and traders expected more cuts than actually happened. Now, with rates still firm at 3.75%–4.00% and silver closer to $68, conditions remain tough for non-yielding assets. Inflation remains the main driver, just as it was then. The drop in headline inflation to 2.4% in January 2025 did not lead to the sharp dovish shift some traders expected. More recent January 2026 data showed inflation staying sticky at 2.8%. That supports the Fed’s cautious approach and continues to pressure silver. For derivatives traders, this points to strategies that benefit from range trading or further weakness. One approach is selling call options above key technical resistance near $70 to earn premium, since higher rates can limit strong rallies. In 2025, implied volatility in silver options often rose ahead of FOMC meetings, and that pattern may return. The technical setup also looks similar to last year’s weakness. Price is still struggling below its 20-day moving average, now acting as resistance near $70. That supports a short-term bearish trend. The RSI is near 38, showing downside momentum, with room to fall before the market looks oversold. While the specific US-Iran talks from 2025 have passed, broader geopolitical risk can still trigger brief, sharp rallies. Over the longer term, strong industrial demand may help support prices. In 2025, industrial use hit a record, with more than 630 million ounces consumed for solar and electronics. This physical demand is an important risk for traders holding only short positions. Create your live VT Markets account and start trading now.Amazon resumes its decline after completing a wave four rebound, entering wave five toward Fibonacci downside targets
Amazon (AMZN) has resumed its decline after a corrective bounce. The rebound formed a three-swing recovery in wave 4, following an earlier three-wave drop from the 247.77 peak.
The wave 4 bounce stayed corrective and did not change the downtrend. After wave 4 ended, price turned lower and began a new impulsive move.
The decline is now in wave 5 and is unfolding as a five-wave structure. This supports the idea that the broader down sequence is still in place.
The current leg down is projected to reach the 1.236 external retracement of wave 4 near 192.96. If the selloff extends, a further target sits near 187.17.
Any rallies are expected to be corrective and to stay below the wave 4 pivot. The short-term trend remains bearish as wave 5 continues.
Since Amazon appears to have finished its corrective bounce and is turning lower, consider strategies that benefit from a falling stock price. Buying puts or using bear call spreads are two ways to position for a continued move down. Any short-term strength may be better viewed as a selling opportunity, not a shift in the main trend.
This bearish technical view is also backed by recent economic data. The U.S. Census Bureau’s January 2026 report showed an unexpected 0.8% drop in retail sales. This suggests the consumer may be weakening after a strong 2025. That softness can pressure Amazon’s core e-commerce business and adds fundamental support to the technical downside case.
Options data also reflects this negative tone. AMZN’s 30-day put/call ratio has risen to 1.25, the highest since the October 2025 sell-off. This suggests more traders are betting on, or hedging against, further downside and aligns with the expectation that the decline may continue.
Concerns are also building in cloud computing, a major profit engine for Amazon. Industry analysis for Q4 2025 showed competitors such as Microsoft Azure gaining market share, which may weigh on AWS growth. This headwind could limit buying interest in the stock.
With this setup, a test of 192.96 looks likely in the coming weeks. If selling pressure increases—especially with weak consumer data—the next level to watch is 187.17. The high of the wave 4 bounce is a clear invalidation point for bearish positions.
Commerzbank’s Carsten Fritsch says oil prices are rising as US–Iran tensions increase and OPEC+ supply expectations shift
Oil prices have climbed as US–Iran nuclear talks continue and Iran holds military exercises. Markets are pricing in the risk of escalation. Even after a recent dip, oil is still about 10% higher than at the start of the year.
OPEC+ is weighing whether to restart production increases from April, as demand is expected to improve in the second quarter. Eight member countries will decide at a meeting on 1 March.
Opec Supply Limits
Even if OPEC+ raises targets, real output may rise by less than the headline numbers. Structural limits, outages, and sanctions-related disruptions can hold production back. An S&P Global Energy (Platts) survey found that in January, OPEC+ nations with targets produced only 1.6 million barrels per day more than in March 2025, before the expansion started. Russian exports are another constraint. Production could fall if Russia cannot find new buyers to replace weaker demand from India. Kpler data shows India is expected to import 1.16 million barrels per day of Russian oil in February, with volumes likely to drop in the months ahead. Geopolitical risk—especially around Iran—continues to support prices because supply disruptions remain possible. This uncertainty can make call options a practical way to prepare for sudden price spikes in the coming weeks. Tensions are helping create a price floor that the market cannot easily ignore. All eyes are on the OPEC+ meeting on March 1, when the group will decide whether to raise April production targets. Still, much of 2025 showed a clear pattern: actual output often missed stated quotas. That history suggests any announced increase may not fully turn into additional barrels in the market.Quota Compliance Gap
The gap between quotas and real production remains a key structural support for prices. Industry data for January 2026 shows participating OPEC+ countries underproduced their combined targets by almost 1.8 million barrels per day (bpd). Ongoing capacity limits and operational issues reduce the group’s ability to ease the market. Russia also faces growing pressure. Its ability to redirect barrels—especially those previously sold to India—is uncertain. While February imports by India were first projected at 1.16 million bpd, recent tanker tracking points to a sharp drop in loadings in the second half of the month. Flows now look closer to 850,000 bpd. That raises the risk Russia may be forced to cut production, tightening global supply further. Together, these supply limits make a sharp price drop less likely in the near term. For derivatives traders, this favors strategies that assume a steady or rising price floor. Selling put options to collect premium—based on the view that prices will not fall below a set level—may be a workable approach. Create your live VT Markets account and start trading now.Chicago Fed President Austan Goolsbee says services inflation remains high, but further 2026 interest-rate cuts are still possible
Austan Goolsbee, President of the Federal Reserve Bank of Chicago, said in a CNBC interview on Tuesday that services inflation is “not tame.” He also said there could be several more rate cuts in 2026.
He said the recent drop in headline inflation was partly due to base effects. He also said goods with higher tariff content have generally seen bigger price increases.
Policy Rate Outlook
Goolsbee said a 3% policy rate is a “loose” estimate of neutral. He said he wants to see clear evidence that inflation is moving back to 2% before rates continue to fall. He said he has known chair nominee Warsh for a long time. He added that he is a “big fan” of Warsh, based on their work together during the Great Financial Crisis. We think the Fed is signaling it wants more rate cuts this year. But the key message is the warning that services inflation is still not tame. The latest January 2026 CPI report backed this up, with core services inflation still high at 4.1% year over year. This means any path to the “several cuts” he mentioned depends on that number falling a lot. This puts major focus on the next inflation report for interest rate derivative trades. Traders may consider buying options on 3 Month SOFR futures to prepare for a large move without choosing a clear direction. If inflation comes in cooler than expected, these futures could rally as markets price in the cuts Goolsbee hinted at.Market Volatility Signals
In equity markets, this points to a higher chance of volatility around upcoming data releases. With the VIX index currently near a low 14, buying VIX calls ahead of the next CPI or employment report could be a sensible hedge. A surprise in the data could quickly move markets and push volatility higher. It is also worth remembering what happened in 2025, when the Fed began cutting rates but then paused after inflation rose again in the third quarter. That false start showed how fast the policy outlook can change. This history suggests long-term dovish bets are risky until the data shows a steady downward trend. For currency traders, this creates a difficult setup for the US dollar. The chance of several more cuts is negative for the dollar, but sticky inflation offers some support. This could keep major pairs like EUR USD trading in a range until the Fed’s path is clearer. Create your live VT Markets account and start trading now.Danske researchers say Sweden’s unemployment fell to 8.0%, lowering the odds of rate cuts and implying revisions
Sweden’s seasonally adjusted unemployment rate fell to 8.0%, versus a consensus forecast of 8.8%. Employment was unchanged and remains at a high level.
The December and January results suggest that both the unemployment and employment rates could be revised in a positive direction. This lowers the chance of a Riksbank rate cut in the first half of the year.
