DXY (US Dollar Index):

Potential Direction: Bullish
Overall momentum of the chart: Bullish 

Price could potentially make a bullish bounce off the pivot and rise toward the 1st resistance 

Pivot: 107.92

Supporting reasons: Identified as a pullback support that aligns close to the 61.8% Fibonacci retracement, indicating a potential area where buying interests could pick up to stage a rebound. 

1st support: 107.14
Supporting reasons: Identified as an overlap support, indicating a potential level where price could find support once more.

1st resistance: 108.91
Supporting reasons: Identified as a pullback resistance, indicating a potential area that could halt any further upward movement.

EUR/USD:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price could potentially make a bearish reversal off the pivot and fall toward the 1st support

Pivot: 1.0388

Supporting reasons: Identified as a pullback resistance that aligns with the 61.8% Fibonacci retracement, indicating a potential area where selling pressures could intensify.

1st support: 1.0252

Supporting reasons: Identified as a pullback support, indicating a potential level where price could find support once again.

1st resistance: 1.0461
Supporting reasons:  Identified as an overlap resistance, indicating a potential area that could halt any further upward movement. 

EUR/JPY:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price could potentially make a bearish reversal off the pivot and drop toward the 1st support

Pivot: 161.17

Supporting reasons: Identified as an overlap resistance that aligns close to the 61.8% Fibonacci retracement, indicating a potential area where selling pressures could intensify. 

1st support: 158.36 

Supporting reasons: Identified as an overlap support, indicating a potential level where price could find support once more.

1st resistance: 164.03
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

EUR/GBP:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price could potentially make a bearish reversal off the pivot and drop toward the 1st support

Pivot: 0.8356

Supporting reasons: Identified as a pullback resistance that aligns close to the 38.2% Fibonacci retracement, indicating a potential area where selling pressures could intensify. 

1st support: 0.8272

Supporting reasons: Identified as a swing-low support that aligns close to the 78.6% Fibonacci retracement, indicating a potential level where price could find support once again.

1st resistance: 0.8406
Supporting reasons: Identified as an overlap resistance that aligns close to the 61.8% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

GBP/USD:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price could potentially make a bearish continuation toward the 1st support

Pivot: 1.2484

Supporting reasons: Identified as an overlap resistance, indicating a potential area where selling pressures could intensify. 

1st support: 1.2245

Supporting reasons: Identified as an overlap support that aligns close to the 61.8% Fibonacci retracement, indicating a potential level where price could stabilize once more.

1st resistance: 1.2609
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

GBP/JPY:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price could potentially make a bearish continuation toward the 1st support

Pivot: 193.18

Supporting reasons: Identified as an overlap resistance  that aligns close to the 61.8% Fibonacci retracement, indicating a potential area where selling pressures could intensify

1st support: 190.56
Supporting reasons: Identified as an overlap support, indicating a potential level where price could find support once again.

1st resistance: 194.60
Supporting reasons: Identified as an overlap resistance that aligns close to the 61.8% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

USD/CHF:

Potential Direction: Bullish

Overall momentum of the chart: Bullish

Price could potentially make a bullish bounce off the pivot and rise toward the 1st resistance.

Pivot: 0.9026

Supporting reasons: Identified as an overlap support that aligns close to the 61.8% Fibonacci retracement, indicating a potential area where buying interests could pick up to stage a rebound.

1st support: 0.8974
Supporting reasons: Identified as an overlap support, indicating a potential level where price could find support once again.

1st resistance: 0.9179
Supporting reasons: Identified as a multi-swing high resistance, indicating a potential area that could halt any further upward movement.

USD/JPY:

Potential Direction: Bullish

Overall momentum of the chart: Bearish

Price could potentially make a bullish bounce off the pivot and rise toward the 1st resistance 

Pivot: 152.69

Supporting reasons: Identified as a pullback support that aligns close to the 61.8% Fibonacci retracement and the 161.8% Fibonacci extension, indicating a potential area where buying interests could pick up to stage a rebound. 

1st support: 151.11
Supporting reasons: Identified as a pullback support that aligns close to the 78.6% Fibonacci retracement, indicating a potential level where price could find support once more.

1st resistance: 154.12
Supporting reasons: Identified as a pullback resistance, indicating a potential area that could halt any further upward movement.

USD/CAD:

Potential Direction: Bullish

Overall momentum of the chart: Bearish

Price is falling towards the pivot and could potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 1.4299
Supporting reasons: Identified as a multi-swing-low support that aligns close to a 38.2% Fibonacci retracement, indicating a potential area where buying interests could pick up to stage a rebound.

1st support: 1.4178
Supporting reasons: Identified as a pullback support, indicating a key level where the price could stabilize.

1st resistance: 1.4404
Supporting reasons: Identified as an overlap resistance that aligns with a 23.6% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

AUD/USD:

Potential Direction: Bearish
Overall momentum of the chart: Neutral

Price is rising towards the pivot and could potentially make a bearish reversal off this level to fall towards the 1st support.

Pivot: 0.6255

Supporting reasons: Identified as an overlap resistance, indicating a potential level where selling pressures could intensify.

1st support: 0.6177

Supporting reasons: Identified as a pullback support, suggesting a potential area where the price could stabilize once again.

1st resistance: 0.6323
Supporting reasons: Identified as a swing-high resistance, indicating a potential area that could halt any further upward movement.

NZD/USD

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price is rising towards the pivot and could potentially make a bearish reversal off this level to fall towards the 1st support.

Pivot: 0.5679

Supporting reasons: Identified as an overlap resistance that aligns with a 78.6% Fibonacci retracement, indicating a potential level where selling pressures could intensify.

1st support: 0.5580

Supporting reasons: Identified as an overlap support, suggesting a potential area where the price could stabilize once more.

1st resistance: 0.5716

Supporting reasons: Identified as a swing-high resistance, indicating a potential area that could halt any further upward movement.

US30 (DJIA):

Potential Direction: Bullish
Overall momentum of the chart: Neutral

Price could fall towards the pivot and potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 43,819.77

Supporting reasons: Identified as a multi-swing-low support that aligns close to a 38.2% Fibonacci retracement, indicating a potential level where buying interests could pick up to stage a rebound.

1st support: 43,241.57

Supporting reasons: Identified as an overlap support that aligns close to a 50% Fibonacci retracement, indicating a potential level where the price could stabilize once again.

1st resistance: 45,060.27

Supporting reasons: Identified as a multi-swing-high resistance that aligns close to the all-time high, indicating a potential area that could halt any further upward movement.

DE40 (DAX):

Potential Direction: Bearish
Overall momentum of the chart: Neutral

Price has made a bearish reversal off the pivot and could potentially pull back towards the 1st support.

Pivot: 21,525.30

Supporting reasons: Identified as an overlap resistance that aligns with a 61.8% Fibonacci retracement, indicating a potential level where selling pressures could intensify.

1st support: 21,114.40

Supporting reasons: Identified as a multi-swing-low support, indicating a key level where the price could stabilize once more.

1st resistance: 21,774.50
Supporting reasons: Identified as a swing-high resistance that aligns close to the all-time high, indicating a potential area that could halt any further upward movement.

US500 (S&P 500): 

Potential Direction: Bearish
Overall momentum of the chart: Neutral

Price has made a bearish reversal off the pivot and could potentially fall towards the 1st support.

Pivot: 6,039.40

Supporting reasons: Identified as an overlap resistance that aligns with a 61.8% Fibonacci retracement, indicating a potential level where selling pressures could intensify.

1st support: 5,923.40

Supporting reasons: Identified as a multi-swing-low support that aligns close to a 61.8% Fibonacci retracement, indicating a potential level where the price could stabilize once again.

1st resistance: 6,123.30

Supporting reasons: Identified as a swing-high resistance that aligns close to the all-time high, indicating a potential area that could halt any further upward movement.

BTC/USD (Bitcoin):

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price is rising towards the pivot and could potentially make a bearish reversal off this level to fall towards the 1st support.

Pivot: 98,903.64

Supporting reasons: Identified as an overlap resistance that aligns close to a 50% Fibonacci retracement, indicating a potential level where selling pressures could intensify.

1st support: 92,857.02
Supporting reasons: Identified as a swing-low support, indicating a potential level where the price could stabilize once more.

1st resistance: 101,963.41
Supporting reasons: Identified as a swing-high resistance, indicating a potential area that could halt any further upward movement.

ETH/USD (Ethereum):

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price is rising towards the pivot and could potentially make a bearish reversal off this level to fall towards the 1st support.

Pivot: 2,901.68

Supporting reasons: Identified as an overlap resistance that aligns with a 61.8% Fibonacci retracement, indicating a potential level where selling pressures could intensify.

1st support: 2,472.17
Supporting reasons: Identified as a swing-low support that aligns close to a 50% Fibonacci retracement, indicating a potential level where the price could stabilize once again.

1st resistance: 3,431.60
Supporting reasons: Identified as a multi-swing-high resistance, indicating a potential area that could halt any further upward movement.

WTI/USD (Oil):

Potential Direction: Bullish
Overall momentum of the chart: Bearish

Price has made a bullish bounce off the pivot and could potentially rise towards the 1st resistance.

Pivot: 71.58
Supporting reasons: Identified as an overlap support that aligns close to a 61.8% Fibonacci retracement, indicating a potential area where buying interests could pick up to stage a rebound.

1st support: 69.17
Supporting reasons: Identified as an overlap support, indicating a key level where the price could stabilize once more.

1st resistance: 75.96
Supporting reasons: Identified as a pullback resistance that aligns close to a 50% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

XAU/USD (GOLD):

Potential Direction: Bearishh

Overall momentum of the chart: Bullish

Price could potentially make a bearish reversal off the pivot and drop toward the 1st support

Pivot: 2846

Supporting reasons: Identified as a swing high resistance that aligns close to the 78.6% Fibonacci projection and the 161.8% Fibonacci extension, indicating a potential area where selling pressures could intensify. 

1st support: 2813.38

Supporting reasons: Identified as an overlap support, indicating a potential level where price could find support once again.

1st resistance: 2864.64

Supporting reasons: Identified as a resistance that aligns with the 100% Fibonacci projection, indicating a potential area that could halt any further upward movement.

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The post Wednesday 5th February 2025: Technical Outlook and Review first appeared on IC Markets | Official Blog.

IC Markets Asia Fundamental Forecast | 5 February 2025

What happened in the U.S. session?

The JOLTS job openings showed vacancies declining much more than anticipated with only 7.6M listings available in December, falling sharply from 8.16M in the previous month. Notable decreases were seen in sectors such as professional and business services; health care and social assistance; and finance and insurance. This was the lowest figure in three months, missing market forecasts of 8.01M openings. Demand for the dollar had already waned earlier on Tuesday and the latest JOLTS figures drove the dollar index (DXY) even lower as it tumbled under 108 by the end of this session.

What does it mean for the Asia Session?

New Zealand’s Labour Force survey showed employment change declining for the second successive quarter while the unemployment rate increased for the seventh quarter as it rose from 4.8% to 5.1% in the final quarter of 2024. Employment change fell 0.6% QoQ in the third quarter before declining 0.1% QoQ in the latest reading. Despite continued weakness in the labour market, the Kiwi held up well as dollar fragility overrode the deteriorating labour market conditions – this currency pair was hovering around 0.5650 during this session.

The Dollar Index (DXY)

Key news events today

ADP Employment Report (1:15 pm GMT)

ISM Services PMI (3:00 pm GMT)

What can we expect from DXY today?

The pace of growth in private payrolls slowed noticeably in November and December as only 122K jobs were added in the final month of 2024 as reported by the ADP, significantly lower than the 12-month average of 152K. The forecast of 148K for January points to a decent rebound in job growth but this figure remains under this average. Meanwhile, services activity as tracked by the Institute for Supply Management (ISM) is anticipated to remain robust with a reading of 54.2 in January. The results of the above macroeconomic data will likely inject higher volatility into the financial markets during the U.S. session.

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

ADP Employment Report (1:15 pm GMT)

ISM Services PMI (3:00 pm GMT)

What can we expect from Gold today?

The pace of growth in private payrolls slowed noticeably in November and December as only 122K jobs were added in the final month of 2024 as reported by the ADP, significantly lower than the 12-month average of 152K. The forecast of 148K for January points to a decent rebound in job growth but this figure remains under this average. Meanwhile, services activity as tracked by the Institute for Supply Management (ISM) is anticipated to remain robust with a reading of 54.2 in January. The results of the above macroeconomic data will likely inject higher volatility into the financial markets during the U.S. session.

Next 24 Hours Bias

Medium Bullish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

After tumbling as low as 0.6087 on Monday, the Aussie recovered strongly as it rose steadily towards 0.6250 on Tuesday. This currency pair was floating around this level as Asian markets came online and will likely remain elevated on Wednesday.

Central Bank Notes:

• The RBA kept the cash rate target unchanged at 4.35% on 10 December, marking the ninth consecutive pause.
• Inflation has fallen substantially since the peak in 2022, as higher interest rates have been working to bring aggregate demand and supply closer towards balance. However, measures of underlying inflation are around 3.5%, which is still some way from the 2.5% midpoint of the inflation target.
• The most recent forecasts published in the November Statement on Monetary Policy (SMP) do not see inflation returning sustainably to the midpoint of the target until 2026 but the Board is gaining some confidence that inflationary pressures are declining in line with these recent forecasts with risks remaining in place.
• Growth in output has been weak as the economy grew by only 0.8% in the September quarter over the past year. Outside of the COVID-19 pandemic, this was the slowest pace of growth since the early 1990s.
• A range of indicators suggest that labour market conditions remain tight; while those conditions have been easing gradually, some indicators have recently stabilised. The unemployment rate was 4.1 per cent in October, up from 3.5 per cent in late 2022.
• Wage pressures have eased more than expected in the November SMP. The rate of wage growth as measured by the Wage Price Index was 3.5% over the year to the September quarter, a step down from the previous quarter, but labour productivity growth remains weak.
• 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. To date, longer-term inflation expectations have been consistent with the inflation target and it is important that this remains the case.
• 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 18 February 2025.

Next 24 Hours Bias

Medium Bullish

The Kiwi Dollar (NZD)

Key news events today

Labour Force Report (9:45 pm GMT 4th February)

What can we expect from NZD today?

New Zealand’s Labour Force survey showed employment change declining for the second successive quarter while the unemployment rate increased for the seventh quarter as it rose from 4.8% to 5.1% in the final quarter of 2024. Employment change fell 0.6% QoQ in the third quarter before declining 0.1% QoQ in the latest reading. Despite continued weakness in the labour market, the Kiwi held up well as dollar fragility overrode the deteriorating labour market conditions – this currency pair was hovering around 0.5650 at the beginning of the Asia session.

Central Bank Notes:

• The Monetary Policy Committee (MPC) agreed to reduce the Official Cash Rate (OCR) by 50 basis points bringing it down to 4.25% on 27 November, marking the third consecutive rate cut.
• The Committee assessed that annual consumer price inflation has declined and is now close to the midpoint of the MPC’s 1 to 3% target band; inflation expectations are also close to target and core inflation is converging to the midpoint.
• Economic activity remains subdued and output continues to be below its potential. With excess productive capacity in the economy, inflation pressures have eased. If economic conditions continue to evolve as projected, the Committee expects to be able to lower the OCR further early next year.
• Domestic economic activity remains below trend, as a result of weakness in demand for durable goods consumption and investment. This has been reflected in falling activity in interest rate sensitive sectors such as construction, manufacturing, and retail trade. In contrast, some service sectors have continued to grow.
• Consistent with feedback from business visits, high-frequency indicators suggest that the economy has stabilised in recent months. Economic growth is expected to recover from the December quarter, in part due to lower interest rates, but there is uncertainty around the exact timing and speed of the recovery.
• Wage growth is slowing, consistent with inflation returning to the target midpoint while employment levels and job vacancies have declined, reflecting subdued economic activity; unemployment is expected to continue rising in the near term.
• Expectations of future inflation, the pricing intentions of firms, and spare productive capacity are consistent with the inflation target being sustainably achieved, providing the context and the confidence for the Committee to ease monetary policy restraint further.
• The next meeting is on 19 February 2025.

Next 24 Hours Bias

Medium Bullish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

Increased volatility in the financial markets this week has driven appetite for the yen as demand for safe-haven assets increased sharply causing USD/JPY to dive under 153.50 as Asian markets came online. This currency pair will likely fall under 153 as the day progresses.

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

Medium Bearish

The Euro (EUR)

Key news events today

S&P Global Composite PMI (9:00 am GMT)

What can we expect from EUR today?

Composite PMI activity in the Euro Area contracted from October to December as deteriorating manufacturing output weighed significantly on the overall output. Despite the services sector showing steady expansion over this period, total output had slowed noticeably. However, Composite PMI activity is now expected to return to expansion in January, albeit with an expansionary reading of just 50.2. Regardless, the Euro could continue to climb 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?

After surging as high as 0.9196 on Monday, USD/CHF pulled back strongly as it tumbled under 0.9100 by Tuesday. This currency pair dipped under 0.9050 overnight and will likely slide lower as the day progresses.

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

Weak Bearish

The Pound (GBP)

Key news events today

S&P Global Composite PMI (9:30 am GMT)

What can we expect from GBP today?

Composite PMI activity in the U.K. had expanded strongly for most parts of 2024 before the pace of growth slowed drastically in the final two months. This slowdown was due to the manufacturing sector contracting from October through December. The final estimate for January is anticipated to show Composite PMI activity edging slightly higher to 50.9 from 50.4 in the previous month. However, the result may not be enough to lift the pound during the European trading hours.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 6 to 3 to maintain the Bank Rate at 4.75% on 19 December 2024 – three members preferred to reduce the Bank rate by 25 basis points, bringing it down to 4.50%.
• 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.
• Twelve-month CPI inflation had increased to 2.6% in November from 1.7% in September, slightly higher than previous expectations while services consumer price inflation had remained elevated, at 5.0%, while core goods price inflation had risen to 1.1%.
• Headline CPI inflation was slightly higher than previous expectations, owing in large part to stronger inflation in core goods and food, and is expected to continue to rise slightly in the near term.
• Most indicators of UK near-term activity have declined with Bank staff expecting GDP growth to be weaker at the end of the year than originally projected in the November Monetary Policy Report.
• Bank staff now expected zero GDP growth in 2024 Q4, weaker than the 0.3% that had been incorporated in the November Report, broadly consistent with the latest combined steer from business surveys and the available official data.
• The Committee now judges that the labour market is broadly in balance as annual private sector regular average weekly earnings growth picked up quite sharply in the three months to October but there remains significant uncertainty around developments in the labour market.
• Monetary policy has been guided by the need to squeeze remaining inflationary pressures out of the economy to achieve the 2% target both in a timely manner and on a lasting basis. Over recent quarters there has been progress in disinflation, particularly as previous external shocks have abated, although remaining domestic inflationary pressures are resolving more slowly.
• The Committee continues to monitor closely the risks of inflation persistence and will assess the extent to which the evolving evidence is consistent with more constrained supply, which could sustain inflationary pressures, or with weaker demand, which could lead to the emergence of spare capacity in the economy and push down inflation; a gradual approach to removing monetary policy restraint remains appropriate.
• 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 6 February 2025.

Next 24 Hours Bias

Weak Bullish

The Canadian Dollar (CAD)

Key news events today

No major news events.

What can we expect from CAD today?

The Loonie experienced wild swings over the first couple of trading days in February as it depreciated rapidly due to the announcement of tariffs on Canadian imports into the U.S. on Saturday. In a surprise twist, U.S. President Donald Trump suspended his threat of steep tariffs on Canada as he agreed to a 30-day suspension late on Monday in return for concessions on border and crime enforcement between the two neighbouring countries. USD/CAD had initially rallied as high as 1.4793 as markets opened on Monday before reversing sharply to dive under 1.4400 by Tuesday. This currency pair drifted towards 1.4300 at the beginning of Wednesday’s Asia session.

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

Medium Bearish

Oil

Key news events today

Crude Oil Inventories (3:30 pm GMT)

What can we expect from Oil today?

The API stockpiles increased for the third consecutive week as 5M barrels of crude oil were added to U.S. inventories as reported on Tuesday, which was significantly higher than the forecast of 3.2M barrels – rising stock levels are a sign of weaker demand for crude oil. Should the EIA inventories register in a second consecutive week of higher builds, oil prices could come under further overhead pressures later today. WTI oil was floating around the $73 per barrel mark at the beginning of Wednesday’s Asia session.

Next 24 Hours Bias

Medium Bearish

The post IC Markets Asia Fundamental Forecast | 5 February 2025 first appeared on IC Markets | Official Blog.

The additional US tariffs of 10% will apply to Hong Kong as well as mainland China – US Customs and Border Protection notice says

**

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

Postal Service will temporarily suspend only international package acceptance of inbound parcels from China and Hong Kong Posts until further notice.

The flow of letters and flats from China and Hong Kong will not be impacted.

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

China January Caixin Services PMI drops to 51.0

• vs. 52.2 in December
• 25th consecutive month in expansion

Composite: 51.1

• prior 51.4

more to come

From the report commentary, in brief:

• Supply & Demand:

  • Growth in business activity and new orders continued but at the slowest pace in four months.
  • External demand rebounded after a brief decline in December, with new export orders expanding in 16 of the past 17 months.

• Employment Trends:

  • Employment declined for the second straight month.
  • Firms focused on reducing headcount for greater efficiency, bringing employment to its lowest level since April 2024.
  • Backlogs of work fell for the first time since July 2024, due to weaker demand and improved efficiency.

• Price Pressures:

  • Input costs and output prices rose modestly, driven by higher wages and raw material costs.
  • Firms passed some of these costs to customers through slight increases in selling prices.

• Business Sentiment:

  • Market optimism improved, with the business expectations index rising over 2 points from December.
  • Despite gains, sentiment remains below the historical average, with firms concerned about intense competition and global trade uncertainties.

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

Wall Street Journal (gated) report, in brief:

• The Central Intelligence Agency offered buyouts to its entire workforce on Yuesday
• officials said is a bid to bring the agency in line with President Trump’s priorities
• employees can quit their jobs and receive about eight months of pay and benefits as part of Trump’s push to downsize the federal government
• agency is also freezing the hiring for job seekers already given a conditional offer
• agency’s new goals include Trump’s trade war and undermining China

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

New Zealand data – the ANZ World Commodity Price Index for January 2025:

+1.8% m/m

• +0.1% prior

+14.6% y/y

• +15% prior

In NZD terms (the New Zealand dollar fell in January, pushing up the index in NZD terms)

+3.2% m/m

• prior +3.6%

+25.1% y/y

• prior +24.7%

***

As part of the report is ANZ’s look at shipping costs:

• Global shipping prices were mixed.
• The well-publicised but volatile Baltic Dry Index fell a whopping 31% during the month to its lowest level since early 2023.
• The China Containerized Index, which measures the cost of shipping into and out of China, was flat, as was the Harper Peterson Index.

***

Its been a busy day so far in New Zealand:

• New Zealand Q4 unemployment rate 5.1% (vs. 5.1% expected and 4.8% in Q3
• More on the New Zealand jobs data – unemployment hitting a 4 year high
• ANZ says NZ jobs data don’t stand in the way of RBNZ 50bp cut at meeting on 19 February

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

Japan January services PMI 53.0

• prior 50.9
• flash was 52.7
• grew for the third consecutive month

Composite PMI 51.1 in January

• flash 51.1
• strongest growth since September
• prior 50.5

• includes both manufacturing and services

Japan’s service sector grew, driven by strong Asian demand for exports, according to the Jibun Bank Service PMI.

Growth in the service sector helped support Japan’s overall private sector, with businesses optimistic about future prospects due to expected recoveries in manufacturing and the broader economy. New business increased for the seventh month in a row, supported by new clients and store openings. Export demand also rebounded, with new export business reaching its highest level since August.

Employment rose for the 16th straight month, while rising wages and higher fuel and raw material costs pushed input prices up. As a result, companies raised prices to offset these costs, marking the highest price increases since last May.

Earlier:

• Japan Manufacturing PMI January (final) 48.7 (prior 49.6)

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

US Stocks Rally After Tariff Reprieve – Nasdaq Up 1.35%

US stock indices rallied in trading yesterday as President Trump granted both Mexico and Canada a one-month reprieve on a 25% tariff on imports. The Dow closed up 0.30%, while the more tech-oriented S&P and Nasdaq rose more strongly, finishing up 0.72% and 1.35%, respectively.

The dollar pulled back sharply, with the DXY closing down 0.62% at 107.99. US Treasury yields also retreated from Monday’s gains, with the two-year yield falling 3.7 basis points to 4.212%, and the benchmark 10-year dropping 4.4 basis points to 4.511%.

Oil prices had a mixed day, with Brent edging up 0.12% to $76.06, while WTI fell 0.64% to $72.69, further widening the gap between the two major contracts. Gold remained the standout performer, as continued market uncertainty led investors to seek the world’s favourite safe-haven asset. It reached another record high of $2,845.14 and remained close to that level at the New York close, trading at $2,841.14.

Data Moves into Investor Focus as the Week Progresses

As the week unfolds, investors are shifting their focus to economic data, adjusting to the recent tariff developments while seeking further direction from underlying fundamentals. Tariff news has significantly influenced market movements in recent days, and unless there are further developments on the US-China front—which remains a distinct possibility—upcoming US economic data is likely to play a more significant role in shaping market sentiment.

With the first week of the month underway, the primary focus is on US jobs data, culminating in Friday’s highly anticipated Non-Farm Payrolls (NFP) report. However, other employment figures, including last night’s JOLTS Job Openings, tonight’s ADP data, and Thursday’s unemployment claims, will also be closely watched. While it would take a major surprise to alter expectations of a Federal Reserve rate cut, if data consistently moves in one direction, coupled with confirmation on the trade front, it could influence the Fed’s policy decisions in the coming months.

Data Calendar Heats Up from Today

The macroeconomic calendar begins to pick up pace today in the US, leading into Friday’s key employment data release. Earlier in the Asian session, New Zealand’s employment data was published, with the unemployment rate rising to a four-year high of 5.1%, as expected.

There is little on the calendar for the remainder of the Asian and European sessions today, but key US data releases are scheduled once markets open. First up is the ADP Non-Farm Employment Change report, a traditional precursor to Friday’s NFP, with expectations for an additional 148,000 jobs to have been created last month. Later in the session, the ISM Services PMI data will be released, with market expectations pointing to a reading of 54.2. US oil inventory data is also due, and the session concludes with scheduled speeches from Federal Reserve officials Goolsbee and Bowman.

The post General Market Analysis – 05/02/25 first appeared on IC Markets | Official Blog.

Trump continuing

Earlier:

• Trump says US ‘will take over the Gaza Strip’

Trump:

• we are working hard to get all hostages released
• more hostages will be released tomorrow
• if we don’t, it will make us somewhat more violent

And:

• sees US having a “long-term ownership position” in Gaza
• “and I do see it bringing great stability to that part of the Middle East”
• “Everybody I’ve talked to loves the idea”

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

Trump comments:

• Fantastic talks with Netanyahu
• Many countries will soon be joining Abraham Accords
• In meeting with Netanyahu we discussed how to make sure Hamas is eliminated
• Gaza should not go through the process of rebuilding and occupation by the same people
• Instead we should build various domains to be lived in by Gazans
• It could be numerous sites
• Only reasons Gazans want to return is that they have no alternative
• U.S. will take over the Gaza Strip, we’ll own it
• We will level the site and create economic development
• We will create jobs and housing for people of the area
• I hope ceasefire will end bloodshed

We await China comments on tariffs today

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

Japan Overall Labour Cash Earnings for December 2024 have recorded a solid +4.8% y/y

• expected was +3.6%, prior +3.0%

Overtime Pay +1.3%y/y

• prior +1.4%

Wages adjusted for inflation are higher, +0.6% y/y, on bonus payments

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