USD/JPY Price Analysis – Feb 27, 2025
Daily Price Outlook
During the European trading session, the USD/JPY currency pair extended its upward momentum, remaining well bid around the 149.97 level.
This rise in the pair comes as the Japanese Yen remains under pressure, allowing the USD/JPY pair to maintain its position.
However, the combination of factors, including remarks from Bank of Japan (BoJ) Governor Kazuo Ueda, US economic developments, and a risk-on market sentiment, has contributed to the yen's weakening and the USD/JPY's rise.
Bank of Japan’s Position and US Treasury Yields Weigh on the Yen
BoJ Governor Kazuo Ueda’s recent comments have added to the bearish outlook for the Japanese yen. He mentioned that the central bank is ready to buy more government bonds if long-term interest rates rise too quickly, indicating that the BoJ wants to keep rates low.
This has put pressure on the yen, especially as the 10-year Japanese government bond yield dropped to its lowest since February 12, which boosted the USD/JPY.
Meanwhile, the US Treasury bond yield ticked up slightly, giving more strength to the US Dollar and leading to more people moving their money away from the low-yielding yen. This combination has supported the rising trend in USD/JPY.
Risk-On Sentiment and US Tariff Concerns
Apart from this, the positive risk sentiment in the market has also played a major role in the upward movement of USD/JPY. Despite ongoing trade tensions, including concerns about US President Donald Trump's potential tariffs on imports from the European Union and other countries, the broader market sentiment remains risk-on, supporting demand for higher-yielding currencies like the USD.
On the US front, Federal Reserve officials, including Atlanta Fed President Raphael Bostic, have indicated that progress has been made on inflation, though concerns about the cooling economy continue.
Market participants have increased their expectations for rate cuts, despite the Fed's cautious stance, which has kept the USD on the defensive at times. Nonetheless, the USD remains resilient, supported by strong US economic fundamentals and higher yields.
Looking ahead, market participants are awaiting several key economic reports from Japan, including industrial production, retail sales, and Tokyo inflation data, which could provide further insights into the BoJ’s policy direction.
Besides this, the upcoming release of the US Personal Consumption Expenditure (PCE) Price Index could provide fresh impetus for USD/JPY and influence market sentiment.
USD/JPY – Technical Analysis
USD/JPY is trading at 149.343, up 0.01%, maintaining a bullish stance just below the Pivot Point at 149.656. The pair is showing resilience above the 50-day Exponential Moving Average (EMA) at 149.489, indicating that buyers are still in control.
Immediate resistance is seen at 150.708, with stronger barriers at 151.483 and 152.318. A break above 149.656 could trigger bullish momentum, targeting these resistance levels.
On the downside, support is located at 149.551, with deeper cushions at 147.700 and 146.865. A dip below 149.551 could invite selling pressure, potentially leading to a retest of the support at 147.700.
If the price continues to decline, the major support at 146.865 could serve as a crucial area for buyers to defend.
The technical setup favors a bullish trend as long as USD/JPY stays above the 50 EMA at 149.489. The 4-hour chart reveals a pattern of higher lows, reflecting upward momentum.
The Pivot Point at 149.656 is a key level to watch; a break above this could solidify the bullish outlook, pushing the pair toward 150.708. Conversely, a decline below 149.551 would challenge the bullish bias, targeting 147.700.
For traders, the strategy is to Buy Above 149.893 with a Take Profit at 150.961 and a Stop Loss at 148.921.
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AUD/USD Price Analysis – Feb 27, 2025
Daily Price Outlook
During the European trading session, the AUD/USD currency pair failed to stop its bearish trend and remained under pressure around the 0.6285 level.
However, the declines were weighed down by disappointing economic data and a stronger US Dollar (USD). This marks the fifth consecutive day of losses for the Australian currency, following a series of disappointing economic data releases from Australia.
Weaker Australian Economic Data and Inflation Figures Weigh on AUD
On the data front, the Australian Private Capital Expenditure (CapEx) data for Q4 2024 revealed a contraction of 0.2% quarter-on-quarter, significantly below market expectations of a 0.8% increase. This unexpected decline follows a revised 1.6% growth in the previous quarter.
However, the weaker-than-anticipated business investment figures have raised concerns about the strength of the Australian economy, contributing to the bearish sentiment surrounding the AUD.
The decline in CapEx has added to worries about future economic growth, weighing on investor confidence and further pressuring the Australian dollar.
Moreover, Australia's monthly Consumer Price Index (CPI) for January showed a 2.5% year-over-year increase, falling short of market expectations of a 2.6% rise, signaling weaker inflation momentum.
Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser also expressed cautious optimism, stating that inflation may improve but emphasizing the need for concrete results, especially given the tightness in the Australian labor market, which continues to pose challenges to controlling inflation.
Therefore, the weaker-than-expected economic data and inflation figures have increased bearish sentiment around the AUD, contributing to downward pressure on the AUD/USD pair, potentially leading to further declines.
US Dollar Strengthens Amid Strong Economic Data and Geopolitical Risks
On the other side, the US Dollar remained bullish, buoyed by stronger-than-expected US economic data and geopolitical factors.
The US Dollar Index (DXY) strengthened, reaching near 106.50, as traders assessed the strength of the US economy and the prospects of continued Federal Reserve policy tightening.
Federal Reserve officials, including Raphael Bostic, have reiterated that interest rates should remain at current levels to continue exerting downward pressure on inflation.
Furthermore, US President Donald Trump’s statements regarding tariffs on imports from Canada and Mexico, coupled with tightening controls on chip exports to China, added fuel to concerns over a potential trade war.
These geopolitical risks boosted the demand for the US Dollar as a safe haven, further weighing on the AUD/USD currency pair.
PBOC Actions and US-China Trade Tensions Add to Pressure
Apart from this, the Australian Dollar also faced pressure from developments in China, Australia’s largest trading partner. The People’s Bank of China (PBOC) took steps to support its banking sector by issuing special treasury bonds to strengthen the capital of state-owned banks.
Despite this action help stabilize China’s economy and potentially boost demand for Australian exports, the ongoing trade tensions between the US and China continue to heighten market uncertainty, which could still weigh on the AUD.
AUD/USD – Technical Analysis
AUD/USD is trading at $0.62940, down 0.01%, showing some hesitation below the Pivot Point at $0.62854. The pair is struggling to gain momentum as it remains under the 50-day Exponential Moving Average (EMA) at $0.63443, suggesting a bearish bias in the short term.
Immediate resistance is seen at $0.63271, with stronger hurdles at $0.63560 and $0.63921. A break above $0.62854 could trigger buying interest, pushing the pair towards these resistance levels.
On the downside, support is located at $0.62544, followed by more substantial floors at $0.62163 and $0.61848. A break below $0.62544 would reinforce the bearish outlook, likely leading to a test of the next support at $0.62163.
Should prices continue to fall, the key support at $0.61848 could act as a crucial area for potential buyers to step in.
The technical setup favors a bearish trend as long as AUD/USD trades below the 50 EMA at $0.63443. The 4-hour chart shows a pattern of lower highs and lower lows, highlighting the downward momentum.
The Pivot Point at $0.62854 is a critical level to watch; a break above this could invalidate the bearish bias, leading to a potential recovery towards $0.63271. Conversely, a drop below $0.62544 would confirm the bearish trend, targeting $0.62163.
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EUR/USD Price Analysis – Feb 26, 2025
Daily Price Outlook
EUR/USD continues to face selling pressure above 1.0490 in Wednesday’s European session. However, the currency pair is falling due to a strong recovery in the US Dollar (USD).
The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, rebounded sharply to near 106.50 after dipping to an 11-week low of 106.10 earlier in the day.
US Dollar Gains on Rising Treasury Yields and PCE Inflation Data
On the US front, the broad-based US dollar recovered due to the strong recovery in US bond yields, which had been declining for almost a month. The 10-year US Treasury yields surged to near 4.33% after hitting a fresh 13-week low of around 4.28% earlier in the day.
The House approved Donald Trump's $4.5 trillion tax cut plan, causing traders to sell US government bonds. They expect lower taxes to boost spending, leading to higher inflation.
This could force the Federal Reserve to keep interest rates high for longer, strengthening the US dollar and putting pressure on the EUR/USD pair.
Investors await the US Personal Consumption Expenditures Price Index (PCE) data for January, scheduled for release on Friday, to gain fresh insights into inflation trends.
Meanwhile, the core PCE inflation data, the Fed’s preferred measure as it excludes volatile food and energy prices, is estimated to have slowed to 2.6% year-over-year from 2.8% in December. Softer inflation data could weigh on expectations that the Fed will delay rate cuts.
Euro Struggles Amid ECB Policy Outlook
On the other hand, the EUR/USD is under pressure as investors favor the US Dollar over the Euro (EUR). However, the shared currency is outperforming as traders shift focus to the upcoming European Central Bank (ECB) policy meeting next week.
It should be noted that the ECB is widely expected to cut its Deposit Facility rate by 25 basis points (bps) to 2.5%. Investors will closely monitor the ECB’s monetary policy guidance.
Several ECB officials have indicated that the central bank should continue reducing interest rates, given expectations that inflation will sustainably return to the 2% target.
Moreover, the Soft Eurozone Q4 Negotiated Wage Rate data, a key wage growth measure, has reinforced expectations of ECB rate cuts. On Tuesday, the ECB reported that the wage growth measure increased at a slower pace of 4.12%, compared to a 5.43% rise in the previous quarter.
However, ECB board member Isabel Schnabel criticized dovish bets, arguing that Eurozone economic weakness is “not due to overly high borrowing costs” but rather to “structural factors.” She suggested that the current 2.75% rate may no longer be restrictive for the eurozone economy.
Looking ahead, investors will monitor the German flash Harmonized Index of Consumer Prices (HICP) data for February, set for release on Friday, for further cues on inflation and ECB policy direction.
EUR/USD – Technical Analysis
EUR/USD is trading at $1.04972, down 0.01%, reflecting cautious sentiment as it hovers just above the pivot point at $1.04780. The pair is trading above the 50 EMA at $1.04709, signaling short-term bullish momentum.
If the price holds above this pivot, the next target is immediate resistance at $1.05290. A break above this level could push prices towards $1.05673, with a more ambitious move towards $1.06076 if buying pressure continues.
On the downside, if EUR/USD breaks below the pivot at $1.04780, it would shift sentiment to bearish, targeting immediate support at $1.04505.
A further decline could see the pair testing $1.04075, with a deeper drop towards $1.03556 if selling intensifies. The 50 EMA at $1.04709 acts as dynamic support, and a break below this level would confirm a bearish reversal.
The technical outlook suggests a cautious buy above the pivot at $1.04785, targeting $1.05475 with a stop loss at $1.04402.
This setup aligns with the short-term bullish bias while maintaining a favorable risk-reward ratio. Traders should watch for volume confirmation and price action around the $1.05290 resistance to validate the bullish momentum.
Conversely, a break below $1.04780 would invalidate the bullish setup and shift sentiment to bearish, likely driving prices towards $1.04505 and beyond.
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GBP/USD Price Analysis – Feb 26, 2025
Daily Price Outlook
During the European trading session, the GBP/USD pair extended its losses and hovered near 1.2640 as the US Dollar strengthened.
The US Dollar Index (DXY) rebounded strongly from an 11-week low of 106.10, regaining momentum and exerting pressure on the British Pound.
Dovish BoE Comments Weigh on GBP
The British Pound faced selling pressure after dovish remarks from Bank of England (BoE) Monetary Policy Committee (MPC) member Swati Dhingra. Speaking at Birkbeck on Monday, Dhingra expressed concerns about "weakness in consumption" and advocated for aggressive monetary policy easing.
While markets have priced in two rate cuts by the BoE this year, Dhingra suggested that more than four cuts might be necessary to avoid an excessively restrictive stance.
Earlier this month, the BoE lowered borrowing rates by 25 basis points (bps) to 4.5% and guided a gradual easing approach.
However, the central bank also halved its GDP forecast for the year to 0.75% and warned of a potential temporary rise in inflation during Q3 due to higher energy costs.
The uncertain UK economic outlook, coupled with potential US tariffs from former President Donald Trump, further dampened investor confidence in the Pound.
US Dollar Strengthens on Rising Yields and Fiscal Developments
On the US front, the US dollar rebounded as US Treasury yields recovered from a five-day losing streak. The 10-year US Treasury yield climbed to 4.33% after hitting a fresh two-month low of 4.28% earlier in the Asian session.
The rise in yields was supported by the House of Representatives advancing a $4.5 trillion tax cut plan, which includes provisions for border security, energy deregulation, and increased military spending.
The injection of significant liquidity into the economy raised inflation concerns, prompting speculation that the Federal Reserve may keep interest rates elevated for longer.
Meanwhile, weak US S&P Global PMI data for February heightened expectations of Fed rate cuts. The latest flash PMI report showed that the US service sector contracted for the first time in over two years.
As a result, traders increased their bets on a Fed rate cut in June, with the probability rising to 65% from 47% a week ago, according to the CME FedWatch tool. However, markets remain convinced that the Fed will maintain its current borrowing rate of 4.25%-4.50% through the March and May meetings.
Key Data Releases Ahead
Looking ahead, investors will closely watch the upcoming US Durable Goods Orders data on Thursday and the Personal Consumption Expenditures (PCE) Price Index report on Friday.
The PCE inflation data will be a crucial factor in shaping market expectations for the Fed’s monetary policy outlook, potentially influencing the GBP/USD pair's movement in the coming sessions.
GBP/USD – Technical Analysis
GBP/USD is trading at $1.26528, down 0.01%, reflecting a cautious sentiment as it hovers above the pivot point at $1.26211. The pair is trading slightly above the 50 EMA at $1.26219, signaling short-term bullish momentum.
If the price maintains its position above the pivot, the next target is immediate resistance at $1.26896. A break above this level could push prices towards $1.27569, with a further move towards $1.28233 if bullish momentum continues.
On the downside, if GBP/USD breaks below the pivot at $1.26211, it would shift sentiment to bearish, targeting immediate support at $1.25660.
A deeper decline could see the pair testing $1.25087, with a more substantial floor at $1.24528 if selling pressure intensifies. The 50 EMA at $1.26219 acts as dynamic support, and a break below this level would confirm a bearish reversal.
The technical outlook suggests a cautious buy above the pivot at $1.26218, targeting $1.27126 with a stop loss at $1.25869.
This setup aligns with the short-term bullish bias while maintaining a favorable risk-reward ratio. Traders should watch for volume confirmation and price action around the $1.26896 resistance to validate the bullish momentum.
Conversely, a break below $1.26211 would invalidate the bullish setup and shift sentiment to bearish, likely driving prices towards $1.25660 and beyond.
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- GOLD Price Analysis – Feb 26, 2025
GOLD Price Analysis – Feb 26, 2025
Daily Price Outlook
Gold price (XAU/USD) climbed to around $2,930 as investors turned to safe-haven assets amid increasing economic uncertainty in the US.
This is because Former President Donald Trump’s push for higher tariffs has raised fears of inflation, driving gold demand. On the flip side, the analysts warn that persistent inflation concerns may force the US Federal Reserve (Fed) to keep interest rates higher, limiting gold's upside.
Traders are closely monitoring key economic data, including the US New Home Sales report for January, which could provide insights into the housing market.
Moreover, the speeches from Fed officials Raphael Bostic and Thomas Barkin could signal future monetary policy shifts. On Friday, the US Personal Consumption Expenditures (PCE) Price Index for January, the Fed’s preferred inflation measure, is expected to influence gold price trends.
US Dollar Weakens Amid Trade Policies, Fed’s Cautious Stance, and Economic Uncertainty
On the US front, the broad-based US dollar faced mild bearish pressure due to evolving trade policies and economic concerns.
Notably, Trump confirmed that tariffs on Canadian and Mexican imports would proceed as planned, despite both countries enhancing border security efforts ahead of the March 4 deadline.
Meanwhile, the weak US consumer confidence data added to the dollar’s woes, with February’s reading dropping from 105.3 to 98.3, marking the steepest decline since August 2021.
Thus, the declining consumer confidence indicates increased economic caution among Americans, further supporting gold’s safe-haven appeal.
On the other hand, the global market sentiment remains sluggish as the Fed maintains a cautious stance on monetary policy.
Richmond Fed President Thomas Barkin highlighted a "wait-and-see" approach, signaling that interest rate cuts are unlikely until inflation is firmly under control.
Whereas, Dallas Fed President Lorie Logan suggested the Fed might shift towards shorter-term securities in its bond-buying strategy, potentially impacting Treasury yields and gold prices.
Hence, the ongoing trade tensions, inflation worries, and economic uncertainties also keeping the gold in demand.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) is trading at $2,911.71, down 0.01%, reflecting cautious sentiment as it hovers below the pivot point at $2,925.36. The price is also trading under the 50 EMA at $2,925.93, reinforcing short-term bearish momentum.
If the price remains below this pivot, the next target is immediate support at $2,888.73, with a deeper decline towards $2,864.18. A further drop could test $2,834.62, signaling a continuation of the bearish trend.
On the upside, a break above the pivot at $2,925.36 would shift sentiment to bullish, targeting immediate resistance at $2,955.49.
A stronger breakout could push prices towards $2,980.42, with an extended rally reaching $3,005.91 if buying momentum sustains. However, given the current bearish bias and downward pressure from the 50 EMA, the path of least resistance remains to the downside.
The technical outlook suggests a cautious sell below the pivot of $2,925, with an entry targeting $2,888 and a stop loss at $2,947. This setup offers a favorable risk-reward ratio, aligning with the short-term bearish sentiment.
Traders should watch for volume confirmation and price action around the pivot point to validate the bearish momentum before committing to short positions.
Conversely, if the price breaks above $2,925.36 with significant buying volume, it would invalidate the bearish setup and open the path for a potential bullish reversal.
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AUD/USD Price Analysis – Feb 25, 2025
Daily Price Outlook
During the European trading session, the AUD/USD currency pair struggled to maintain its upward momentum and reversed direction around the 0.6340 level, hitting an intra-day low of 0.6334 level.
However, the initial weakness in the US Dollar failed to sustain, as the dollar later recovered, contributing to the bearish move in the AUD/USD pair.
Investors are closely awaiting Australia's monthly inflation report, scheduled for release on Wednesday, which is expected to provide critical insights into the Reserve Bank of Australia's (RBA) future monetary policy.
This comes after the RBA’s recent hawkish rate cut, making the report even more significant for market participants.
On the other hand, the AUD/USD pair faces further challenges due to rising risk sentiment, particularly after US President Donald Trump’s comments on Monday regarding the imposition of sweeping tariffs on imports from Canada and Mexico.
However, losses in the AUD/USD pair could be limited as Australia’s key trading partner, China, released its 2025 annual policy statement on Sunday.
AUD/USD Under Pressure Amid Inflation Data, China’s Economic Moves, and US Tariff Risks
On the AUD front, the Australia’s monthly inflation report due on Wednesday is attracting investor attention. The report is expected to provide important insights into the future of monetary policy, especially after the Reserve Bank of Australia's (RBA) recent hawkish rate cut.
The data could give clues on whether the RBA will continue with its tightening measures or adjust its approach based on inflation trends.
Meanwhile, China, a key trading partner of Australia, is making moves in its economy. The People’s Bank of China (PBOC) injected CNY300 billion into the financial system via the one-year Medium-term Lending Facility (MLF), keeping the rate steady at 2%. In addition, they pumped CNY318.5 billion into the market through seven-day reverse repos at 1.50%.
On the other hand, the AUD/USD pair is facing some challenges due to rising risk sentiment. US President Donald Trump’s comments on Monday about moving forward with US tariffs on imports from Canada and Mexico have added to the uncertainty.
The tariffs, set to kick in next week, could affect global markets. However, the AUD is getting some support from China’s efforts to boost its economy, with policies aimed at rural reform and revitalizing the property market.
USD Weakens Amid Fed Uncertainty, Mixed Economic Data, and US-China Tensions
On the US front, the broad-based US Dollar is gaining strength, with the US Dollar Index (DXY) climbing near 106.50. At the same time, US Treasury bond yields are also rising, with the 2-year yield at 4.14% and the 10-year yield at 4.37%.
Investors are closely watching the Federal Reserve’s next move, especially after Chicago Fed President Austan Goolsbee said on Monday that the central bank needs more clarity before deciding on interest rate cuts. This cautious stance is supporting the USD, putting pressure on the AUD/USD pair.
On the data front, the US Composite PMI, which reflects overall economic activity, dropped to 50.4 in February from 52.7 in the previous month. The Services PMI declined to 49.7, falling short of expectations, while the Manufacturing PMI slightly improved to 51.6, beating forecasts.
Meanwhile, US jobless claims rose last week, with Initial Jobless Claims climbing to 219,000, higher than the expected 215,000. This suggests that the US job market is showing some weakness, which could weigh on the USD.
Furthermore, the former President Donald Trump signed a memorandum on Friday instructing US officials to limit Chinese investments in key industries. This move aims to protect national security but could escalate tensions between the US and China. Given China’s strong trade ties with Australia, any economic disruptions could impact the Australian Dollar.
AUD/USD – Technical Analysis
AUD/USD is trading at $0.63539, down 0.01%, reflecting cautious sentiment as the pair hovers near its pivot point of $0.63343.
This level is crucial as it acts as a tipping point between bullish and bearish momentum. Holding above the pivot keeps bullish hopes alive, with immediate resistance at $0.63716.
A breakout above this resistance could pave the way for gains towards $0.64057, followed by the next target at $0.64324 if bullish momentum sustains.
On the downside, immediate support lies at $0.63067, and a break below could trigger a decline towards $0.62703. If selling pressure intensifies, the next major support is at $0.62331, signaling potential for a deeper pullback.
The 50 EMA is currently at $0.63671, acting as dynamic resistance. The pair’s inability to close above this level indicates short-term bearishness amidst broader market uncertainty.
The technical outlook suggests a cautious buy above the pivot of $0.63343. An entry at this level, with a take profit at $0.63926 and a stop loss at $0.63058, offers a favorable risk-reward ratio.
However, traders should wait for confirmation in the form of volume spikes or candlestick patterns to validate the bullish bias.
Conversely, a break below $0.63343 would shift the sentiment to bearish, likely driving prices towards $0.63067 and potentially further to $0.62703.
The overall market sentiment remains mixed, influenced by global economic uncertainties and fluctuations in commodity prices.
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- GOLD Price Analysis – Feb 25, 2025
GOLD Price Analysis – Feb 25, 2025
Daily Price Outlook
Gold price (XAU/USD) extended its downward trend, struggling to gain momentum and hovering around the $2,935 level after hitting an intra-day low of $2,929. The decline is driven by a strengthening US Dollar (USD), which rebounded from its lowest level since December 10.
Although, gold continues to attract demand as a safe-haven asset amid ongoing economic uncertainty, particularly concerns over former President Trump's tariff plans. Furthermore, expectations of further interest rate cuts by the Federal Reserve this year help limit deeper losses in gold prices.
Stronger US Dollar and Mixed Economic Data Weigh on Gold Prices
On the US front, the broad-based US Dollar gained traction as the US Dollar Index (DXY) rebounded near 106.57. However, the greenback strengthened after Federal Reserve Bank of Chicago President Austan Goolsbee stated that the central bank needs more clarity before considering interest rate cuts.
Meanwhile, former President Trump signed a memorandum instructing US authorities to restrict Chinese investments in key sectors, aiming to protect national security while still encouraging foreign investment. These developments boosted the USD, putting pressure on gold prices.
On the data front, the US Composite PMI dropped to 50.4 in February from 52.7, signaling slower economic activity. In the meantime, the Services PMI fell to 49.7, missing expectations, while Manufacturing PMI improved slightly to 51.6.
Moreover, US Initial Jobless Claims rose to 219,000, exceeding forecasts, but Continuing Jobless Claims remained close to expectations. The weaker services sector and rising jobless claims fuel speculation of future Fed rate cuts, which helps limit gold’s losses.
US Sanctions on Iran and Ukraine Peace Hopes Impact Gold Prices
On the geopolitical front, the US imposed new sanctions on over 30 brokers, tanker operators, and shipping companies involved in selling and transporting Iranian oil.
This marks the second round of sanctions as the US aims to cut Iran’s crude exports to zero, preventing the country from developing nuclear weapons. The stricter sanctions add to global economic uncertainty, which often boosts demand for safe-haven assets like gold.
At the same time, investors are closely watching developments in the Ukraine conflict as hopes for a peace deal are rising after French President Emmanuel Macron stated that a truce between Ukraine and Russia could be possible in the coming weeks.
He discussed this with former President Trump at the White House on the third anniversary of Russia’s invasion. If peace talks progress, sanctions on Russia may ease, potentially increasing its oil exports.
GOLD (XAU/USD) – Technical Analysis
Gold prices are showing cautious sentiment, trading at $2,939.55, down 0.02% for the session. The precious metal is currently hovering just above the pivotal level of $2,934.63, a critical threshold that could determine its next move.
Holding above this pivot keeps bullish hopes alive, with immediate resistance at $2,955.49. A break above this level could push prices towards $2,970.91, with the next target at $2,985.30 if bullish momentum sustains.
On the downside, immediate support is at $2,921.42, followed by a more substantial floor at $2,907.22. If bearish pressure intensifies, the next key support level lies at $2,892.63. The 50 EMA sits at $2,938.23, acting as a dynamic support, indicating short-term indecision amidst a broader bullish trend.
The technical outlook suggests a cautious buy above the pivot of $2,934. An entry at this level with a target of $2,955 and a stop loss at $2,925 offers a favorable risk-reward ratio. Traders should watch for volume confirmation and any potential breakout above the resistance to gauge momentum strength.
However, a break below the pivot would shift the sentiment to bearish, likely triggering a move towards the immediate support at $2,921.42.
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USD/CAD Price Analysis – Feb 25, 2025
Daily Price Outlook
During the European trading session, the USD/CAD pair struggles to maintain its recent gains and drifts lower after reaching the 1.4275-1.4280 region, marking a one-and-a-half-week high.
It is currently trading around the 1.4240 level, down nearly 0.15% for the day, amid renewed selling pressure on the US Dollar (USD).
The Greenback remains under pressure following weak US economic data, which has reinforced expectations of further interest rate cuts by the Federal Reserve (Fed) this year.
Weaker US Economic Data Weighs on the USD
On the US front, the broad-based US dollar is struggling to recover despite an overnight rebound from its lowest level since December 10.
Recent data showed that US business activity contracted, with flash PMIs released last Friday indicating a decline to a 17-month low in February. This has fueled speculation that the Fed will adopt a more dovish stance, further pressuring the USD.
On the other hand, the Canadian Dollar (CAD) finds support from a recovery in Crude Oil prices, which had hit a fresh year-to-date low on Monday.
The commodity-linked CAD benefits from higher oil prices, as Canada is a major oil exporter. The recent bounce in oil prices has helped the Loonie gain strength, putting downward pressure on the USD/CAD pair.
Adding to the CAD’s strength, Canadian consumer inflation has shown a slight acceleration, reducing expectations of a rate cut by the Bank of Canada (BoC) at its upcoming policy meeting on March 12. This shift in market sentiment has further bolstered the Canadian currency.
Although, the CAD faces risks due to possible economic problems from Trump’s trade tariffs. On Monday, Trump confirmed that tariffs on Canadian and Mexican imports will start on March 4, as planned, despite efforts to delay them. If these tariffs happen, they could hurt Canada’s economy and slow down the CAD’s growth.
Market Focus on US Economic Data and FOMC Speeches
Moving ahead, Traders now turn their attention to the upcoming US economic reports, including the Conference Board’s Consumer Confidence Index and the Richmond Manufacturing Index.
In the meantime, the speeches from key Federal Open Market Committee (FOMC) members could provide further insights into the Fed’s monetary policy direction. Any dovish remarks may extend USD weakness, while a more hawkish stance could help the Greenback recover some ground.
USD/CAD – Technical Analysis
USD/CAD is trading at $1.42491, showing no significant change for the session as traders remain cautious ahead of key economic data.
The pair is currently hovering below the pivotal level of $1.42817, which serves as a critical threshold for short-term market sentiment.
A sustained move below this pivot keeps the bearish outlook intact, with immediate support at $1.42084. If bearish momentum strengthens, the next support is at $1.41515, followed by a deeper safety net at $1.40999.
On the upside, immediate resistance is seen at $1.43425. A break above this level could trigger a rally towards $1.43805, with the next target at $1.44416 if bullish momentum accelerates.
The 50 EMA is positioned at $1.42076, acting as dynamic support. The pair’s ability to stay above this moving average indicates underlying bullish pressure despite short-term hesitation.
The technical outlook suggests a cautious sell below the pivot point of $1.42820, with an entry at this level targeting $1.42085 and a stop loss at $1.43354.
This setup offers a favorable risk-reward ratio, aligning with the current bearish bias. However, traders should look for volume confirmation to validate the downward momentum before committing to short positions.
Conversely, a break above $1.42817 would flip the sentiment to bullish, potentially driving prices towards $1.43425 and beyond.
Given the market's sensitivity to economic indicators and geopolitical tensions, volatility is likely to persist. Traders should remain vigilant for any macroeconomic surprises that could impact USD/CAD’s trajectory.
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EUR/USD Price Analysis – Feb 24, 2025
Daily Price Outlook
During the European trading session, the EUR/USD currency pair continued its upward trend and stayed strong around the 1.0471 level, reaching an intra-day high of 1.0528. This shows that the Euro was performing well earlier in the day, attracting buyers. However, as the session progressed, the pair lost some of its gains due to weakness in the Euro.
The Euro weakened following the German federal election results, where no single party secured a clear majority. This political uncertainty added pressure to the Euro, as it could slow down economic growth in Germany, which is the largest economy in the Eurozone. Investors became cautious, leading to a partial pullback in the EUR/USD pair.
Despite the Euro's weakness, the downside in the EUR/USD pair remained limited due to a weaker US Dollar. Investors overlooked disappointing US flash S&P Global PMI data for February, keeping the dollar under pressure. As a result, the EUR/USD pair maintained some of its earlier gains, preventing a sharper decline.
US Dollar Weakens on Soft PMI Data and Fed Rate Cut Bets, but Trade Risks Persist
On the US front, the broad-based US Dollar lost momentum as weak economic data raised expectations of Federal Reserve (Fed) rate cuts.
The latest S&P Global PMI report showed that private business activity in the US grew at a much slower pace in February.
The Composite PMI, which tracks both manufacturing and services, dropped to 50.4, the lowest level since September 2023. The decline was mainly driven by weaker services sector activity, which fell to 49.7 from 52.9 in January.
This drop was unexpected and was linked to political uncertainty over federal spending cuts and their potential impact on economic growth and inflation. However, the manufacturing sector performed better, with the Manufacturing PMI rising to 51.6, exceeding expectations.
The weak PMI data strengthened market bets that the Fed will cut interest rates in June, pushing the probability to 63.5% from 50% last week.
However, some support for the Dollar came from concerns over a global slowdown due to former US President Donald Trump's tariff threats. He has warned of imposing tariffs on products like lumber, semiconductors, pharmaceuticals, and automobiles, which could impact global trade.
Therefore, the weak US PMI data and rising Fed rate cut bets support the EUR/USD pair by weakening the Dollar. However, Trump's tariff threats limit gains, creating mixed sentiment and potential volatility in the pair.
EUR Weakens Amid German Election Uncertainty and ECB Rate Cut Signals
On the EUR front, the shared currency weakened following the German federal election, as no single party secured a clear majority. Friedrich Merz, leader of the Christian Democratic Union (CDU), is set to become Germany’s Chancellor but faces tough negotiations to form a coalition government, likely with the Social Democratic Party (SPD).
Analysts at ING believe the new government may only bring short-term economic benefits, such as minor tax cuts and small reforms. Adding to the Euro's weakness, the European Central Bank (ECB) remains focused on policy easing.
ECB policymaker François Villeroy de Galhau recently stated that the central bank could cut its deposit rate to 2% by summer, reinforcing expectations of lower interest rates.
EUR/USD – Technical Analysis
EUR/USD is trading at $1.04827, showing slight downward movement but maintaining support above the pivot point at $1.04553. This level is crucial as it aligns closely with the 50 EMA at $1.04518, providing a key support zone.
The technical outlook remains cautiously bullish above this level. If EUR/USD can break above the immediate resistance at $1.05290, it may target the next resistance at $1.05673, with a potential extension to $1.06076.
However, if prices fall below the pivot point, the first support is at $1.04075, followed by $1.03556 and $1.03157. A break below the 50 EMA could signal a bearish shift, increasing selling pressure. The overall outlook remains bullish as long as EUR/USD trades above $1.04553 and the 50 EMA, but a breakdown below these levels could signal a bearish reversal.
Traders should watch for a decisive breakout above $1.05290 for bullish continuation, while a drop below $1.04553 may indicate a bearish pullback.
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GBP/USD Price Analysis – Feb 24, 2025
Daily Price Outlook
During the European trading session, the GBP/USD currency pair gained strong upward momentum, reaching an intraday high of 1.2691 as the US Dollar weakened. The greenback’s decline gave the British Pound a boost, allowing it to extend its recent gains.
Meanwhile, uncertainty surrounds the Bank of England’s (BoE) monetary policy outlook. Although markets expect a gradual rate-cutting cycle this year, stronger-than-expected economic data has cast doubt on those projections.
As a result, the Pound continues to find support, with investors weighing the possibility of a more cautious approach from the BoE. If economic data remains robust, policymakers may delay aggressive easing, potentially providing further strength to GBP/USD.
On the flip side, uncertainty around US economic performance and Federal Reserve policy will continue to influence the pair’s direction in the coming sessions. Traders will keep a close eye on upcoming UK and US data releases for fresh cues.
Bank of England's Rate-Cutting Outlook and Economic Data Impact on GBP/USD
On the GBP front, the Bank of England (BoE) is expected to follow a moderate rate-cutting cycle this year. However, recent UK economic data has made traders rethink their expectations.
Strong Retail Sales, hotter-than-expected Consumer Price Index (CPI) data for January, and solid wage growth in the last three months of 2023 have led investors to reduce their bets on aggressive rate cuts.
Despite this, money markets still anticipate two more rate cuts this year after the BoE lowered its key interest rate by 25 basis points (bps) to 4.5% earlier this month.
Analysts at TD Securities, however, predict the BoE will cut rates four more times in 2024, citing risks such as potential trade tariffs if Donald Trump wins the U.S. election.
Yet, they have pushed their forecast for the next rate cut from March to May due to stronger-than-expected UK economic data. The uncertainty around monetary policy continues to impact the GBP/USD pair, as traders closely watch for signals from the central bank.
Looking ahead, speeches from BoE policymakers, including Clare Lombardelli, Swati Dhingra, and Deputy Governor Dave Ramsden on Monday, could provide fresh insights into the central bank’s stance.
US Dollar Weakens as Soft Services Data Fuels Fed Rate Cut Bets
On the US front, the broad-based US Dollar edged lower as weak services sector data raised expectations for an interest rate cut by the Federal Reserve (Fed) in June.
This decline was mainly triggered by the US preliminary S&P Global Purchasing Managers Index (PMI) for February, which showed a significant slowdown in business activity.
The Composite PMI rose at a slower pace, increasing only to 50.4 from 52.7 in January, with services sector activity unexpectedly contracting. The Services PMI fell to 49.7, dipping below the 50 mark for the first time in 25 months.
Economists had expected services to expand slightly. The report pointed to political uncertainty, including concerns over federal spending cuts and their potential impact on growth and inflation, as key factors behind the slowdown.
In contrast, the Manufacturing PMI showed positive signs, expanding to 51.6 in February from 51.2 in January, exceeding expectations. This growth in the manufacturing sector is seen as a result of US President Donald Trump’s tariff agenda, which aimed to boost local production.
Looking ahead, investors will focus on key data this week, including US Durable Goods Orders and the Personal Consumption Expenditures (PCE) Price Index, which could provide further clues on the Fed’s next move.
GBP/USD – Technical Analysis
GBP/USD is trading at $1.26401, showing a slight upward movement, maintaining support above the pivot point at $1.26211. This level is crucial as it is reinforced by the 50 EMA at $1.26244, which is acting as dynamic support.
The technical outlook remains bullish as long as GBP/USD stays above this level. A break above the immediate resistance at $1.26896 could propel the pair toward the next resistance at $1.27569, with a potential extension to $1.28233.
On the downside, if prices fall below the pivot point, immediate support is at $1.25660, followed by $1.25087 and $1.24528. A break below the 50 EMA would signal a bearish reversal, increasing selling pressure. However, the overall outlook remains bullish as long as GBP/USD trades above $1.26211 and the 50 EMA.
Traders should watch for a decisive breakout above $1.26896 for a bullish continuation, while a drop below $1.26211 may indicate a bearish pullback.
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