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EUR/USD continues to knock on the door of the 1.0500 level this week. A weaker dollar after the softer US consumer confidence data yesterday helped to underpin the pair but I wouldn’t say buyers have done enough just yet. The close yesterday was at 1.0512 but it’s not all too convincing of a breakout for now.

As mentioned earlier in the week, the 100-day moving average (red line) – now seen at 1.0537 – remains another key technical level to watch in all this.

It means buyers have very little breathing room on clearing the 1.0500 mark. They will have to also break above the 100-day moving average at the same time, to really convince of a stronger push higher from here.

There won’t be much catalysts today, so it’ll be more about the ebb and flow of things.

The larger option expiries in the pair dictates that we should see price action contained below the 1.0500-30 region before getting to US trading. Later on, risk flows will be one to watch with month-end flows also a major consideration over the next two to three days too.

With the latter being one of the more difficult ones to eyeball, the technicals are always the best in helping with that. And that brings us to the key levels seen in the chart above in identifying what to look out for in terms of the bias for EUR/USD this week.

This article was written by Justin Low at www.forexlive.com.

• Eurostoxx +0.6%
• Germany DAX +0.8%
• France CAC 40 +0.7%
• UK FTSE +0.6%
• Spain IBEX +0.4%
• Italy FTSE MIB +0.4%

After the setback last week, European indices are poised for a rebound this week. French stocks are still lower on the week though but it’s been a great February run for regional equities as a whole regardless. For today, US futures are also sitting higher so that is helping with the mood. S&P 500 futures are up 0.4% as tech shares lead the way with eyes on Nvidia’s earnings after the close. US indices are still down on the week but keep an eye out for the S&P 500 as it is holding off a test of its 100-day moving average of 5,946.

This article was written by Justin Low at www.forexlive.com.

• Eurostoxx +0.6%
• Germany DAX +0.8%
• France CAC 40 +0.7%
• UK FTSE +0.6%
• Spain IBEX +0.4%
• Italy FTSE MIB +0.4%

After the setback last week, European indices are poised for a rebound this week. French stocks are still lower on the week though but it’s been a great February run for regional equities as a whole regardless. For today, US futures are also sitting higher so that is helping with the mood. S&P 500 futures are up 0.4% as tech shares lead the way with eyes on Nvidia’s earnings after the close. US indices are still down on the week but keep an eye out for the S&P 500 as it is holding off a test of its 100-day moving average of 5,946.

This article was written by Justin Low at www.forexlive.com.

• Prior 92

That’s the highest reading since October as consumer morale continues to pick up since the turn of the year. That said, it’s still on the weaker side and holding below the long-term average of 100. Of note, there was an uptick in unemployment prospects with the index rising to 55 – its highest since April 2021.

This article was written by Justin Low at www.forexlive.com.

• German DAX futures +0.2%
• UK FTSE futures +0.3%

This comes with US futures also eyeing a minor bounce with S&P 500 futures up 0.4% currently. That said, it’s all still early in the day and Wall Street might have some other ideas later on. The softer US consumer confidence data yesterday proved to be a drag for risk, so keep an eye out for any follow throughs going into month-end. Besides that, Nvidia earnings will be the key event to watch after the close later today.

This article was written by Justin Low at www.forexlive.com.

• Prior -22.4; revised to -22.6

German consumer sentiment worsened going into March with income expectations being a drag, falling to a 13-month low. That once again reaffirms the weight of higher prices alongside political uncertainty and the ongoing recession in the manufacturing sector. Adding to that, households’ willingness to buy also fell to its lowest since June last year. Pain.

This article was written by Justin Low at www.forexlive.com.

Global Markets:

•  Asian Stock Markets : Nikkei down 0.58%, Shanghai Composite up 0.70%, Hang Seng up 3.14% ASX down 0.18%
• Commodities : Gold at $2931.35 (0.33%), Silver at $32.15 (1.08%), Brent Oil at $72.7 (0.5%), WTI Oil at $69.18 (0.38%)
• Rates : US 10-year yield at 4.327, UK 10-year yield at 4.5090, Germany 10-year yield at 2.4510

News & Data:

• (USD) CB Consumer Confidence 98.3  to 102.7 expected
• (USD) Richmond Manufacturing Index 6  to -3 expected

Markets Update:

Asia-Pacific markets had a mixed performance on Wednesday after key U.S. benchmarks fell overnight due to weaker-than-expected consumer confidence data. Hong Kong’s Hang Seng Index surged 2.38%, led by consumer and technology stocks, following the city’s announcement of a 1 billion Hong Kong dollar investment in AI research and development. The Hang Seng Tech Index jumped 3.63%, with JD.com, Xpeng, Alibaba, and Meituan posting significant gains.

Japan’s Nikkei 225 and Topix fell for the second consecutive day, losing 1.11% and 1.06%, respectively. South Korea’s Kospi remained flat, while the small-cap Kosdaq edged up 0.23%. In mainland China, the CSI300 index rose 0.37%. Meanwhile, Australia’s S&P/ASX 200 declined 0.32%, extending its losses. The country’s consumer price index increased by 2.5% year over year in January, in line with expectations.

In the U.S., investor concerns over economic growth and global trade weighed on markets. The S&P 500 slipped 0.47%, marking its fourth consecutive decline and closing at 5,955.25. The Nasdaq Composite dropped 1.35% to 19,026.39, led by a 2.8% fall in Nvidia’s shares. However, the Dow Jones Industrial Average bucked the trend, rising 0.37% or 159.95 points to close at 43,621.16.

With market uncertainty rising, investors sought safety in U.S. bonds. The benchmark 10-year Treasury yield fell below 4.3%, hitting its lowest level since December, reflecting cautious sentiment in the financial markets.

Upcoming Events: 

• 03:00 PM GMT – USD New Home Sales
• 03:30 PM GMT – USD Crude Oil Inventories

The post Wednesday 26th February 2025: Asia-Pacific Mixed as U.S. Stocks Slide first appeared on IC Markets | Official Blog.

IC Markets Europe Fundamental Forecast | 26 February 2025

What happened in the Asia session?

After accelerating from October’s low of 2.1% to as high as 2.5% in December, inflationary pressures in Australia appear to be moderating – the monthly CPI indicator remained unchanged at an annual rate of 2.5% in January. However, food prices increased the most in three months while housing inflation notched a five-month peak. The Aussie was hovering around 0.6320 by midday in Asia.

The Bank of Japan (BoJ) released its core CPI data for January where this metric is anticipated to accelerate for the third month in a row. After easing to an annual rate of 1.5% in October, the BoJ core CPI surged from 1.9% in the previous month to 2.2%, exceeding market forecasts of a 2.0% increase. Mounting inflationary pressures are likely to reinforce this central bank’s hawkish stance and raise the probability of another rate hike in March.

What does it mean for the Europe & US sessions?

Looking at U.S. oil stocks once again, the EIA inventories have experienced four successive weeks of higher-than-anticipated builds, averaging 5.2M barrels of crude per week. Should the latest report point to another week of increasing inventories, it could function as a near-term bearish catalyst for crude oil later today.

The Dollar Index (DXY)

Key news events today

New Home Sales (3:00 pm GMT)

What can we expect from DXY today?

Sales of new single-family homes rose by 3.6% MoM in December to a seasonally adjusted annualized rate of 698k, the most since September and firmly above market expectations of 670k. This upward momentum in home sales could continue in January as benchmark mortgage rates have eased from January’s high of 7.04% for the 30-year fixed-rate mortgage, potentially nudging would-be buyers from the sidelines. Stronger-than-expected sales could provide a much-needed lift for the dollar.

Central Bank Notes:

• The Board of Governors of the Federal Reserve System voted unanimously to maintain the Federal Funds Rate in a target range of 4.25 to 4.50% on 29 January.
• The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run and judges that the risks to achieving its employment and inflation goals are roughly in balance. The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate.
• Recent indicators suggest that economic activity has continued to expand at a solid pace while the unemployment rate has stabilized at a low level in recent months, and labour market conditions remain solid. However, inflation remains somewhat elevated.
• December’s Summary of Economic Projections (SEP) now indicates just two rate cuts in 2025 totalling 50 bps, compared to the full percentage point of reductions projected in the previous quarter.
• GDP growth forecasts were revised upward for 2024 (2.5% vs. 2% in the September projection) and 2025 (2.1% vs. 2%), while remaining steady at 2% for 2026. Similarly, PCE inflation projections have been adjusted higher for 2024 (2.4% vs. 2.3%), 2025 (2.5% vs. 2.1%), and 2026 (2.1% vs. 2%).
• In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook and would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals.
• The Committee will roll over at auction the amount of principal payments from the Federal Reserve’s holdings of Treasury securities maturing in each calendar month that exceeds a cap of $25 billion per month and redeem Treasury coupon securities up to this monthly cap and Treasury bills to the extent that coupon principal payments are less than the monthly cap.
• In addition, the Committee will reinvest the amount of principal payments from the Federal Reserve’s holdings of agency debt and agency mortgage-backed securities (MBS) received in each calendar month that exceeds a cap of $35 billion per month into Treasury securities to roughly match the maturity composition of Treasury securities outstanding.
• The next meeting runs from 18 to 19 March 2025.

Next 24 Hours Bias

Medium Bearish

Gold (XAU)

Key news events today

New Home Sales (3:00 pm GMT)

What can we expect from Gold today?

Sales of new single-family homes rose by 3.6% MoM in December to a seasonally adjusted annualized rate of 698k, the most since September and firmly above market expectations of 670k. This upward momentum in home sales could continue in January as benchmark mortgage rates have eased from January’s high of 7.04% for the 30-year fixed-rate mortgage, potentially nudging would-be buyers from the sidelines. Stronger-than-expected sales could provide a much-needed lift for the dollar and potentially place gold prices under pressure.

Next 24 Hours Bias

Medium Bullish

The Australian Dollar (AUD)

Key news events today

CPI (12:30 am GMT)

What can we expect from AUD today?

After accelerating from October’s low of 2.1% to as high as 2.5% in December, inflationary pressures in Australia appear to be moderating – the monthly CPI indicator remained unchanged at an annual rate of 2.5% in January. However, food prices increased the most in three months while housing inflation notched a five-month peak. The Aussie was hovering around 0.6320 by midday in Asia.

Central Bank Notes:

• The RBA reduced the cash rate by 25 basis points to bring it down to 4.10% on 18 January, marking the first rate cut since November 2020.
• Financial conditions are restrictive, which is weighing on demand and is helping to bring down underlying inflation; growth in private demand has been subdued.
• Underlying inflation has moderated over the past three quarters with trimmed mean inflation easing to 3.2% over 2024 and it is expected to reach the 2–3% target range in early 2025, which is sooner than expected at the time of the November Statement.
• The unemployment rate declined a little in late 2024 to 4% with much of the strength in the labour market underpinned by strong employment growth, which has also bolstered household incomes.
• The announcement of tariffs between the United States and other major economies poses challenges to the global outlook but the scale and incidence of the tariffs and their effects remain highly uncertain – which may itself delay some investment until the outlook becomes clearer.
• Economic activity strengthened in China but growth there is still facing structural headwinds while domestic economic growth is forecast to pick up and the labour market is forecast to remain tight.
• If the cash rate follows the market path, underlying inflation is projected to be a little above 2.5% over most of the forecast period. The anticipated recovery of GDP growth and lingering tightness in labour market conditions are expected to sustain some upward pressure on inflation.
• Sustainably returning inflation to target within a reasonable timeframe remains the Board’s highest priority. This is consistent with the RBA’s mandate for price stability and full employment.
• The Board will continue to rely upon the data and the evolving assessment of risks to guide its decisions, paying close attention to developments in the global economy and financial markets, trends in domestic demand, and the outlook for inflation and the labour market.
• The next meeting is on 1 April 2025.

Next 24 Hours Bias

Weak Bullish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

With no major data releases in New Zealand, the Kiwi will likely take cue from its Pacific neighbour following the release of January’s consumer inflation in Australia. This currency pair was floating around 0.5720 as Asian markets came online.

Central Bank Notes:

• The Monetary Policy Committee (MPC) agreed to reduce the Official Cash Rate (OCR) by 50 basis points bringing it down to 3.75% on 19 February, marking the fourth consecutive rate cut.
• The Committee assessed that annual consumer price inflation remains near the midpoint of the MPC’s 1 to 3% target band; inflation expectations are at target and core inflation continues to fall towards the target mid-point.
• Economic activity in New Zealand remains subdued and with spare productive capacity, domestic inflation pressures continue to ease. Price and wage-setting behaviours are adapting to a low-inflation environment while the price of imports has fallen, also contributing to lower headline inflation.
• Economic growth is expected to recover during 2025 as lower interest rates will encourage spending, although elevated global economic uncertainty is expected to weigh on business investment decisions. Higher prices for some key commodities and a lower exchange rate will increase export revenues and employment growth is expected to pick up in the second half of the year as the domestic economy recovers.
• Global economic growth is expected to remain subdued in the near term as geopolitics, including uncertainty about trade barriers, is likely to weaken global growth. Global economic activity is also likely to remain fragile over the medium term given increasing geoeconomic fragmentation.
• Consumer price inflation is expected to be volatile in the near term, due to a lower exchange rate and higher petrol prices. Nevertheless, the Committee is well placed to maintain price stability over the medium term.
• The economic outlook remains consistent with inflation remaining in the band over the medium term, giving the Committee confidence to continue lowering the OCR. If economic conditions continue to evolve as projected, the Committee has scope to lower the OCR further through 2025.
• The next meeting is on 9 April 2025.

Next 24 Hours Bias

Weak Bullish

The Japanese Yen (JPY)

Key news events today

BoJ Core CPI (5:00 am GMT)

What can we expect from JPY today?

The Bank of Japan (BoJ) released its core CPI data for January where this metric is anticipated to accelerate for the third month in a row. After easing to an annual rate of 1.5% in October, the BoJ core CPI surged from 1.9% in the previous month to 2.2%, exceeding market forecasts of a 2.0% increase. Mounting inflationary pressures are likely to reinforce this central bank’s hawkish stance and raise the probability of another rate hike in March.

Central Bank Notes:

• The Policy Board of the Bank of Japan decided on 24 January, by an 8-1 majority vote, to set the following guidelines for money market operations for the inter-meeting period:
  1. The Bank will encourage the uncollateralized overnight call rate to remain at around 0.5%.
  2. The Bank will embark on a plan to reduce the amount of its monthly outright purchases of JGBs so that it will be about 3 trillion yen in January-March 2026; the amount will be cut down by about 400 billion yen each calendar quarter in principle.
• Japan’s economy has recovered moderately, although some weakness has been seen in part. Exports and industrial production have been more or less flat while corporate profits have been on an improving trend and business sentiment has stayed at a favourable level.
• The employment and income situation has improved moderately while private consumption has been on a moderately increasing trend despite the impact of price rises and other factors.
• On the price front, the year-on-year rate of increase in the consumer price index (CPI, all items less fresh food) has been at around 3% recently, as services prices have continued to rise moderately, reflecting factors such as wage increases, although the effects of a pass-through to consumer prices of cost increases led by the past rise in import prices have waned.
• Inflation expectations have risen moderately while underlying CPI inflation has been increasing gradually toward the price stability target of 2%. With wages continuing to rise, there has been an increase in moves to reflect higher costs, such as increased personnel expenses and distribution costs, in selling prices.
• Japan’s economy is likely to keep growing at a pace above its potential growth rate, with overseas economies continuing to grow moderately and as a virtuous cycle from income to spending gradually intensifies against the background of factors such as accommodative financial conditions.
• The next meeting is on 19 March 2025.

Next 24 Hours Bias

Weak Bullish

The Euro (EUR)

Key news events today

No major news events.

What can we expect from EUR today?

Despite Germany’s economy contracting by 0.2% QoQ in the second quarter of 2024 due primarily to declining exports and sluggish household consumption growth, the Euro remained well supported. The latest reading marked six consecutive quarters of contraction but the optimism brewing from the nation’s recent election results had overshadowed Tuesday’s poor GDP report. The Euro climbed above 1.0500 and it looks set to edge higher on Wednesday.

Central Bank Notes:

• The Governing Council reduced the three key ECB interest rates by 25 basis points on 30 January to mark the fourth successive rate cut.
• Accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be decreased to 2.90%, 3.15% and 2.75% respectively.
• The disinflation process is well on track and inflation is set to return to the Governing Council’s 2% medium-term target in the course of this year. Most measures of underlying inflation suggest that inflation will settle at around the target on a sustained basis.
• Staff see headline inflation averaging 2.4% in 2024, 2.1% in 2025, 1.9% in 2026 and 2.1% in 2027 when the expanded EU Emissions Trading System becomes operational. For inflation excluding energy and food, staff project an average of 2.9% in 2024, 2.3% in 2025 and 1.9% in both 2026 and 2027.
• Staff now expect a slower economic recovery than in the September projections. Although growth picked up in the third quarter of this year, survey indicators suggest it has slowed in the current quarter – the economy is expected to grow by 0.7% in 2024, 1.1% in 2025, 1.4% in 2026 and 1.3% in 2027.
• The asset purchase programme (APP) and pandemic emergency purchase programme (PEPP) portfolios are declining at a measured and predictable pace, as the Eurosystem no longer reinvests the principal payments from maturing securities.
• The Governing Council stands ready to adjust all of its instruments within its mandate to ensure that inflation stabilises sustainably at its 2% target over the medium term and to preserve the smooth functioning of monetary policy transmission.
• The next meeting is on 6 March 2025.

Next 24 Hours Bias

Medium Bullish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

The franc saw strong inflows on Tuesday as USD/CHF fell over 0.5%, slipping towards 0.8900, as new tariffs imposed by the U.S. on Canada and Mexico triggered a demand for this safe-haven currency. Overhead pressures are mounting for this currency pair and a break below 0.8900 is inevitable.

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 50 basis points, going from 1.00% to 0.50% on 12 December, marking the fourth consecutive reduction.
• Underlying inflationary pressure has decreased again this quarter.
• Inflation in the period since the last monetary policy assessment has again been lower than expected as it decreased from 1.1% in August to 0.7% in November; both goods and services contributed to this decline.
• In the shorter term, the new conditional inflation forecast is below that of September: 1.1% for 2024, 0.3% for 2025 and 0.8% for 2026, based on the assumption that the SNB policy rate is 0.5% over the entire forecast horizon.
• GDP growth in Switzerland was only modest in the third quarter of 2024 with growth in the services sector again somewhat stronger, while value added in manufacturing declined.
• There was a further slight increase in unemployment, and employment growth was subdued while the utilisation of overall production capacity was normal.
• The SNB anticipates GDP growth of around 1% this year while currently expecting growth of between 1.0% and 1.5% for 2025.
• The SNB will continue to monitor the situation closely and will adjust its monetary policy if necessary to ensure inflation remains within the range consistent with price stability over the medium term.
• The next meeting is on 20 March 2025.

Next 24 Hours Bias

Medium Bearish

The Pound (GBP)

Key news events today

No major news events.

What can we expect from GBP today?

Demand for the pound remained robust on Tuesday as Cable rose nearly 0.4%, gaining slightly more than 40 pips in the process. With no tariffs targeted towards the U.K. thus far, the pound will likely continue its upward ascent on Wednesday.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 7 to 2 to reduce the Bank Rate by 25 basis points (bps) to bring it down to 4.50% on 6 February 2025, while two members preferred to reduce it by 50 bps.
• The MPC also voted unanimously to reduce the stock of UK government bond purchases held for monetary policy purposes and financed by the issuance of central bank reserves, by £100B over the next 12 months to a total of £558B, starting in October 2024. On 18 December 2024, the stock of UK government bonds held for monetary policy purposes was £655B.
• CPI inflation was 2.5% in 2024 Q4 as domestic inflationary pressures moderated but remained somewhat elevated while some indicators eased more slowly than expected. Higher global energy costs and regulated price changes are expected to push up headline CPI inflation to 3.7% in 2025 Q3, even as underlying domestic inflationary pressures are expected to wane further.
• While CPI inflation is expected to fall back to around the 2% target thereafter, the Committee will pay close attention to any consequent signs of more lasting inflationary pressures.
• GDP growth has been weaker than expected at the time of the November Monetary Policy Report, and indicators of business and consumer confidence have declined – GDP growth is expected to pick up from the middle of this year.
• The labour market has continued to ease and is judged to be broadly in balance. Productivity growth has been weaker than previously estimated, and the Committee judges that growth in the supply capacity of the economy has weakened.
• Based on the Committee’s evolving view of the medium-term outlook for inflation, a gradual and careful approach to the further withdrawal of monetary policy restraint is appropriate and it will continue to monitor closely the risks of inflation persistence and what the evolving evidence may reveal about the balance between aggregate supply and demand in the economy.
• Monetary policy will need to continue to remain restrictive for sufficiently long until the risks to inflation returning sustainably to the 2% target in the medium term have dissipated further and the Committee will decide the appropriate degree of monetary policy restrictiveness at each meeting.
• The next meeting is on 8 May 2025.

Next 24 Hours Bias

Medium Bullish

The Canadian Dollar (CAD)

Key news events today

No major news events.

What can we expect from CAD today?

With U.S. President Donald Trump confirming that tariffs on imports from Canada and Mexico will proceed as planned, the Loonie has come under pressure providing a strong lift for USD/CAD. This currency pair has risen over the last three consecutive trading days as it hit an overnight high of 1.4317 and it should remain supported as the day progresses.

Central Bank Notes:

• The Bank of Canada reduced its target for the overnight rate by 25 basis points bringing it down to 3% on 29 January; this marked the sixth consecutive meeting where rates were reduced.
• The bank announced its plan to complete the normalization of its balance sheet, ending quantitative tightening, and will restart asset purchases in early March, beginning gradually so that its balance sheet stabilizes and then grows modestly, in line with growth in the economy.
• Past cuts to interest rates have started to boost the economy and the recent strengthening in both consumption and housing activity is expected to continue. However, business investment remains weak while the outlook for exports is being supported by new export capacity for oil and gas.
• The Bank forecasts GDP growth will strengthen in 2025 and now projects GDP will grow by 1.8% in both 2025 and 2026, somewhat higher than potential growth.
• The labour market remains soft, with the unemployment rate at 6.7% in December. Job growth has strengthened in recent months, after lagging growth in the labour force for more than a year. Wage pressures, which have proven sticky, are showing some signs of easing.
• CPI inflation remains close to 2%, with some volatility due to the temporary suspension of the GST/HST on some consumer products. Shelter price inflation is still elevated but it is easing gradually, as expected.
• A broad range of indicators, including surveys of inflation expectations and the distribution of price changes among components of the CPI, suggests that underlying inflation is close to 2% with forecasts that CPI inflation will be around the 2% target over the next two years.
• With inflation around 2%, the economy in excess supply, and recent indicators tilted towards softer growth than projected, the Governing Council decided to reduce the policy rate a further 25 basis points to support growth and keep inflation close to the middle of the 1-3% target range.
• The cumulative reduction in the policy rate since last June is substantial as lower interest rates are boosting household spending and the economy is expected to strengthen gradually and inflation to stay close to target. However, if broad-based and significant tariffs were imposed, the resilience of Canada’s economy would be tested.
• The Bank is committed to maintaining price stability for Canadians by keeping inflation close to the 2% target.
• The next meeting is on 12 March 2025.

Next 24 Hours Bias

Weak Bullish

Oil

Key news events today

EIA Crude Oil Inventories (3:30 pm GMT)

What can we expect from Oil today?

Despite the API report highlighting a surprise draw of 0.64M barrels of crude to buck a 5-week streak of higher inventories, it was insufficient to support oil prices on Tuesday as WTI oil dived 2.8% to hit an overnight low of $68.68 per barrel. With U.S. President Donald Trump confirming that tariffs on imports from Canada and Mexico would proceed as planned, it raised concerns about a potential trade war, which could lead to slower global growth and potentially dampen demand for crude oil. Looking at U.S. oil stocks once again, the EIA inventories have experienced four successive weeks of higher-than-anticipated builds, averaging 5.2M barrels of crude per week. Should the latest report point to another week of increasing inventories, it could function as a near-term bearish catalyst for this commodity later today.

Next 24 Hours Bias

Medium Bearish

The post IC Markets Europe Fundamental Forecast | 26 February 2025 first appeared on IC Markets | Official Blog.

Gold has been in hot form since the start of the year and racked up eight straight weeks of gains up until now. This is the first week where that win streak is now under threat, with gold now down 0.7% on the week. That owes to the drop yesterday and while gold is holding back above $2,900 for now, it’s crucial to take note of a shift in the technical lines.

The near-term chart shows how unrelenting the bullish momentum has been since the turn of the year. Price action has been running above both its 100-hour (red line) and 200-hour (blue line) moving averages for the past seven weeks. There have been a couple of tests of the key near-term levels but none were decisive breaks whatsoever.

That is up until what we saw with yesterday’s fall. Dip buyers did step back in quickly but the rebound was arrested by the 200-hour moving average itself.

What was a key near-term support level before has now turned to a key near-term resistance for gold. In other words, sellers are now defending that level in trying to keep the shift in the downside bias from yesterday.

This now puts gold in a rather interesting position on the week. It’s been a while since we saw the technical lines shift to the other side. So, will sellers capitalise to go in search of a stronger pullback? And for the bulls, is this going to see some added profit taking considering the change in the technical consideration?

The daily and weekly charts are still not showing much let up in the upside run though. But every retracement begins with small steps, and it’s important to take notice of this one in case it does begin to gather pace.

This article was written by Justin Low at www.forexlive.com.

• Coincident index 116.4
• Prior 115.4

The assessment of the coincident index is still seen as “halting to fall” and that hasn’t changed since May last year. The leading indicator index itself has been rather bumpy since the middle of last year, so there’s not too much to extrapolate from the data here.

This article was written by Justin Low at www.forexlive.com.

The Wall Street Journal (gated) report on likely ratchet higher in Middle East fighting to come:

• Hamas is regrouping its military forces for a potential return to fighting with Israel in Gaza
• mediators work to salvage the cease-fire that expires this weekend
• Hamas’ armed wing has appointed new commanders and begun mapping out where to position fighters in the event of a return to war, according to Arab officials who talk with Hamas
• has started repairing its underground tunnel network and has passed out leaflets to inexperienced new fighters on how to use weapons to mount a guerrilla war against Israel, these officials said

***

For markets, eyes will be on oil and potential a tick higher in price.

This article was written by Eamonn Sheridan at www.forexlive.com.

On Monday Trump was asked if hell be proceeding with tariffs on Canada and Mexico, currently paused until March 4:

• “The tariffs are going forward on time, on schedule”

On Tuesday The White house clarified that Trump was referring to a different plan for retaliatory tariffs on various countries that are moving ahead as scheduled.

The planned 25% tariffs on Mexico and Canada set for March 4 implementation have not yet been decided on.

More here.

This article was written by Eamonn Sheridan at www.forexlive.com.