Daily FX Analysis
Introduction
Major currency pairs trade cautiously as investors digest mixed economic signals and await key central bank cues. EUR/USD, GBP/USD, NZD/USD, and USD/CAD remain sensitive to shifting rate expectations, labour and inflation data, and near-term policy guidance from the Federal Reserve and other major central banks.
Markets In Focus Today – EUR/USD
EUR/USD continues to trade under pressure below the mid-1.1800s, though further downside appears constrained.
EUR/USD extends its pullback for a second straight session on Tuesday, with prices lingering below the mid-1.1800s in subdued Asian trading. Even so, the wider macro backdrop urges caution for bearish traders considering a more pronounced downside move. The US Dollar Index (DXY) retains its modest overnight gains and stays above the 97.00 level, weighing on the pair. At the same time, the euro remains under pressure as markets increasingly price in the possibility of an interest-rate cut by the European Central Bank, reinforced by Eurozone inflation slipping to its lowest level since September 2024. That said, the dollar’s upside may be limited amid dovish expectations surrounding the Federal Reserve. Following softer US consumer inflation data released last Friday, traders have stepped up bets on a June rate cut. In addition, concerns over the Fed’s independence could discourage aggressive USD positioning, helping to cushion the downside in EUR/USD. Risk-on sentiment may further restrain demand for the safe-haven dollar, while investors are likely to wait for clearer signals on the Fed’s easing trajectory before committing to fresh directional trades. As a result, attention turns to the FOMC minutes due Wednesday. Later in the week, the advance US Q4 GDP release, the US PCE Price Index, and global flash PMI data are expected to provide additional market direction.
Technical Overview With Chart :
Moving Averages :
Exponential :
- MA 10 : 1.1852 | Negative Crossover | Bearish
- MA 20 : 1.1831 | Positive Crossover | Bullish
- MA 50 : 1.1772 | Positive Crossover | Bullish
Simple :
- MA 10 : 1.1850 | Negative Crossover | Bearish
- MA 20 : 1.1853 | Negative Crossover | Bearish
- MA 50 : 1.1768 | Positive Crossover | Bullish
RSI (Relative Strength Index) : 52.0361 | Buy Zone | Bullish
Stochastic Oscillator : 30.5879 | Sell Zone | Neutral
Resistance And Support Levels :
- R1 : 1.2030 R2 : 1.2150
- S1 : 1.1640 S2 : 1.1520
Overall Sentiment : Neutral Market Direction : Buy
Trade Suggestion : Limit Buy : 1.1821 | Take Profit : 1.1931 | Stop Loss : 1.1765
GBP/USD
GBP/USD deepens its decline, slipping below 1.3600 after weaker-than-expected UK labour market data dampens sentiment.
The British Pound stepped up its pullback against the US Dollar on Tuesday, sliding below the 1.3600 handle and touching session lows near 1.3570 at the time of writing. Fresh UK labour market figures showed an unexpected rise in unemployment in December, increasing pressure on the Bank of England to continue easing policy. The ILO Unemployment Rate climbed to 5.2% in the three months to January, the highest level in almost five years, compared with expectations for an unchanged 5.1%. Meanwhile, the Claimant Count jumped to 28.6K in January from 2.7K previously, and employment growth slowed sharply to 52K from 82K in the prior month. Wage growth also cooled, with Average Earnings excluding bonuses easing to 4.2% year-on-year over the final three months of 2025, down from 4.6% previously and below forecasts for a steady reading. These softer labour figures follow last week’s weak UK GDP data, raising further concerns about the strength of the economy and reinforcing expectations of additional monetary easing by the Bank of England at its March policy meeting. As a result, the pound is likely to remain under pressure against its major counterparts in the near term.
Technical Overview With Chart :
Moving Averages :
Exponential :
- MA 10 : 1.3622 | Negative Crossover | Bearish
- MA 20 : 1.3609 | Negative Crossover | Bearish
- MA 50 : 1.3528 | Positive Crossover | Bullish
Simple :
- MA 10 : 1.3620 | Negative Crossover | Bearish
- MA 20 : 1.3646 | Negative Crossover | Bearish
- MA 50 : 1.3522 | Positive Crossover | Bullish
RSI (Relative Strength Index) : 47.3780 | Neutral Zone | Neutral
Stochastic Oscillator : 29.3179 | Sell Zone | Neutral
Resistance And Support Levels :
- R1 : 1.3832 R2 : 1.3956
- S1 : 1.3432 S2 : 1.3308
Overall Sentiment : Bearish Market Direction : Sell
Trade Suggestion : Limit Sell : 1.3609 | Take Profit : 1.3460 | Stop Loss : 1.3708
NZD/USD
NZD/USD stays capped below 0.6050 as markets anticipate the Reserve Bank of New Zealand to leave interest rates unchanged.
NZD/USD trades on a soft note during Tuesday’s European session, hovering near 0.6030 at the time of writing. The pair edges lower as the New Zealand Dollar remains under pressure after Statistics New Zealand reported a 2.5% month-on-month jump in the Food Price Index for January—the sharpest increase in four years. Annual food inflation also accelerated to 4.6% from 4.0% in December, with all components posting gains. Market participants are staying cautious ahead of Wednesday’s policy decision by the Reserve Bank of New Zealand. While the cash rate is broadly expected to remain unchanged at 2.25%, some traders continue to price in the possibility of rate increases later in the year, potentially around September or October. Additional pressure on NZD/USD comes from a firmer US Dollar, which has risen for a second straight session. That said, upside momentum in the greenback could be limited after softer US CPI data for January strengthened expectations that the Federal Reserve may start easing policy later this year. Investors now look ahead to the Fed’s meeting minutes, Q4 GDP figures, and the core PCE Price Index for further guidance. At the same time, January’s US Nonfarm Payrolls delivered the strongest job growth in over a year, while the unemployment rate unexpectedly fell, pointing to a stabilising labour market. Even so, sentiment remains cautious as the Fed’s preferred inflation gauge, the PCE Price Index, continues to sit closer to 3% than its 2% target, with the pace of disinflation remaining uneven since mid-2025.
Technical Overview With Chart :
Moving Averages :
Exponential :
- MA 10 : 0.6023 | Positive Crossover | Bullish
- MA 20 : 0.5987 | Positive Crossover | Bullish
- MA 50 : 0.5901 | Positive Crossover | Bullish
Simple :
- MA 10 : 0.6023 | Positive Crossover | Bullish
- MA 20 : 0.6007 | Positive Crossover | Bullish
- MA 50 : 0.5871 | Positive Crossover | Bullish
RSI (Relative Strength Index) : 60.1517 | Buy Zone | Bullish
Stochastic Oscillator : 63.0625 | Buy Zone | Neutral
Resistance And Support Levels :
- R1 : 0.6086 R2 : 0.6176
- S1 : 0.5795 S2 : 0.5705
Overall Sentiment : Bullish Market Direction : Buy
Trade Suggestion : Limit Buy : 0.5977 | Take Profit : 0.6089 | Stop Loss : 0.5919
USD/CAD
The Canadian Dollar slides to its weakest level in more than a week against the US Dollar as markets await key Canadian inflation data.
USD/CAD extends its recovery from the 1.3500 psychological level, rising to a more than one-week high during Tuesday’s European session. The pair is currently trading just below the mid-1.3600s, although upside momentum appears tentative as traders prefer to wait for the release of Canada’s latest inflation data. Headline Canadian CPI is expected to stay above the Bank of Canada’s target and remain unchanged at 2.4% year-on-year in January. The outcome will be crucial for shaping expectations around the BoC’s policy path, which in turn could have a meaningful impact on the Canadian Dollar and provide fresh direction for USD/CAD. In the meantime, the BoC’s neutral policy stance is being overshadowed by softer crude oil prices, weighing on the commodity-linked Loonie. The US Dollar, meanwhile, holds on to modest gains from the previous session, lending support to the pair. That said, upside in the greenback appears limited as markets continue to price in a dovish outlook for the Federal Reserve. Furthermore, a generally positive risk tone is helping to cap demand for the safe-haven USD ahead of the release of the FOMC minutes scheduled for Wednesday.
Technical Overview With Chart :
Moving Averages :
Exponential :
- MA 10 : 1.3626 | Positive Crossover | Bullish
- MA 20 : 1.3654 | Negative Crossover | Bearish
- MA 50 : 1.3731 | Negative Crossover | Bearish
Simple :
- MA 10 : 1.3622 | Positive Crossover | Bullish
- MA 20 : 1.3639 | Positive Crossover | Bullish
- MA 50 : 1.3727 | Negative Crossover | Bearish
RSI (Relative Strength Index) : 47.2216 | Neutral Zone | Neutral
Stochastic Oscillator : 61.2107 | Buy Zone | Neutral
Resistance And Support Levels :
- R1 : 1.3845 R2 : 1.3950
- S1 : 1.3503 S2 : 1.3398
Overall Sentiment : Neutral Market Direction : Buy
Trade Suggestion : Limit Buy : 1.3625 | Take Profit : 1.3724 | Stop Loss : 1.3584
Elsewhere In The Forex Market
USD/JPY down 0.28% to 153.09, The AUD/USD down 0.15% to 0.7062. The EUR/GBP up 0.37% at 0.8726. EUR/AUD down 0.05% at 1.6747. AUD/NZD up 0.01% at 1.1718. The USD/CNY down 0.01% at 6.9097, AUD/SEK up 0.22% at 6.3326 at the time of writing.
Key Economic Events & Data Release Today:
(EUR) German CPI (MoM) (Jan) Forecast 0.1%, Previous 0.0% at 12:30.
