Potential Bullish Continuation From This Support in EUR/AUD

Forex

Political

Summary:

The presence of a strong bullish divergence between price action and RSI further suggests that downward momentum could be fading.

BUY EURAUD

Close Time

CLOSED

1.64522

Entry Price

1.67700

1.62400

1.64597 +0.00566 +0.35%

89.5

Pips

Profit

1.62400

1.65417

Exit Price

1.64522

Entry Price

1.67700

European Central Bank (ECB) President Christine Lagarde addressed EU lawmakers yesterday, providing an update on the central bank's inflation outlook. Lagarde noted that inflationary pressures across the Eurozone have been easing and reaffirmed the ECB’s expectation of reaching its 2% inflation target within this year. This statement aligns with market forecasts, reinforcing the view that the ECB is likely to continue its current policy trajectory.

However, Lagarde also warned that escalating trade tensions pose a significant risk to the economic outlook. In light of these concerns, markets are increasingly pricing in further policy easing from the ECB, with expectations currently pointing to at least another 75 basis points of rate cuts before the end of the year. If trade frictions continue to escalate over the coming months, speculation around additional monetary easing could intensify, placing the euro under further pressure and keeping it on the defensive against major counterparts.

One of the key areas of concern for European policymakers is the potential for new tariffs on additional industries, with the automotive sector emerging as a particular point of focus. The European Union maintains relatively low tariff barriers overall, making broad retaliatory trade measures against the region difficult to justify. However, European officials remain wary of the possibility that the U.S. may introduce expanded tariff policies in April, following the release of a report from the U.S. Commerce Department analyzing the country’s persistent trade deficits.

From an economic data standpoint, this week’s releases from the Eurozone are unlikely to generate significant volatility. On Thursday, Germany’s final Harmonized Index of Consumer Prices (HICP) for January will be published, followed by the Eurozone’s fourth-quarter Gross Domestic Product (GDP) report on Friday. Since these figures are not preliminary and tend to be well-anticipated by markets, their impact on price action is expected to be relatively muted unless the data reveals unexpected discrepancies.

Beyond Europe, trade tensions are also escalating between the United States and Australia. On Tuesday, White House trade advisor Peter Navarro stated that Australia was "disrupting the aluminum market," a remark that came just one day after President Donald Trump signed executive orders imposing new tariffs on metal imports. The new policy will enforce a 25% tariff on steel and aluminum shipments entering the U.S., effective from March 12.

In response, Australian officials are actively seeking exemptions from these tariffs, aiming to mitigate potential economic repercussions. Given Australia's role as a key exporter of these materials, any prolonged trade conflict could introduce additional uncertainty into the country's economic outlook.

Meanwhile, domestic sentiment indicators from Australia suggest a mixed picture. The Westpac-Melbourne Institute Consumer Sentiment Index remained largely unchanged in February, printing at 92.2. While the headline figure remains below the long-term average of 100.5, there were modest improvements in subindices measuring consumer expectations. However, inflation trends remain subdued, particularly in the fourth quarter, reinforcing market expectations that the Reserve Bank of Australia (RBA) could soon begin easing monetary policy. Currently, markets are pricing in a 90% probability that the RBA will implement a rate cut at its upcoming meeting on February 18. Potential Bullish Continuation From This Support in EUR/AUD_1

Potential Bullish Continuation From This Support in EUR/AUD_1

Technical Analysis

EUR/AUD has recently tested a critical support level near the lower boundary of an ascending channel on the 12-hour chart. The pair’s pullback has brought it back into alignment with the 200-period moving average, which has historically acted as a dynamic level of support. If the 1.6390 zone holds firm, there is a strong possibility of a renewed bullish push toward the upper boundary of the channel.

Further supporting the case for a potential rebound is the behavior of the Relative Strength Index (RSI). A few days ago, the RSI dipped to 27, signaling oversold conditions. This marks one of the lowest RSI readings since the significant price low recorded on November 22. The presence of a strong bullish divergence between price action and RSI further suggests that downward momentum could be fading. If buying pressure starts to build, EUR/AUD may soon regain bullish traction, potentially triggering a reversal from its current levels.

Trading Recommendations

Trading direction: Buy

Entry price: 1.6452

Target price: 1.6770

Stop loss: 1.6240

Validity: Feb 21, 2025 15:00:00

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

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Eva Chen

Forex

Central Bank

Summary:

Following remarks from BOE officials, investors scaled back their expectations for interest rate cuts, thereby bolstering the British pound.

BUY GBPUSD

EXP

PENDING

1.22500

Entry Price

1.27390

1.20710

1.26344 -0.00336 -0.27%

Pips

PENDING

1.20710

Exit Price

1.22500

Entry Price

1.27390

Fundamentals

Following remarks by Bank of England (BOE) Monetary Policy Committee member Catherine Mann, who emphasized the need for restrictive monetary policy to combat inflation, investors slightly tempered their expectations for a March interest rate cut by the BOE. However, last week, Mann was one of only two policymakers among the nine BOE decision-makers who unexpectedly voted to lower interest rates by 50 basis points instead of 25.

Speaking at Leeds Beckett University, she stated, "The key risk is that rising inflation in essential goods like food and fuel could lead to a second-round inflationary effect domestically."

According to LSEG Refinitiv data, the market's expectation for a March rate cut by the BOE fell to 27% following Mann's speech, down from 29% previously.

MARKET WATCH: The outlook for the British pound remains relatively positive, as the BOE is likely to proceed cautiously with interest rate cuts. The BOE reduced rates by 25 basis points last week and signaled concerns about the economic outlook while significantly lowering its 2025 growth forecast. However, we believe that persistent inflation and wage increases could limit the extent of future rate cuts. We think the market may have overestimated the BOE's capacity to cut rates this year, as the Monetary Policy Committee itself has emphasized that the future direction remains one of gradual easing.

The pound could benefit because the BOE may maintain a gradual pace of rate cuts in the near term. However, these forecasts imply a considerable degree of inflation persistence. In the short term, the market's pricing of the BOE's interest rates should still be higher than other central banks. Finally, the UK also appears less likely to be impacted by trade tensions with the U.S. We recommend buying the GBPUSD, with a target price of 1.2700.

Technical Analysis

The GBPUSD's intraday movement remains neutral, with the outlook unchanged. While the corrective rebound from 1.2099 may persist, the upside should be capped by the 38.2% retracement of 1.3433 to 1.2099 at 1.2609.

On the downside, a break below the 1.2248 support level will retest the 1.2099 low. Holding this level would resume the decline from 1.3433.

However, a decisive break above 1.2609 would increase the possibility of a short-term reversal, targeting the 61.8% retracement at 1.2923.

Trading Recommendations

Trading Direction: Buy

Entry Price: 1.2250

Target Price: 1.2739

Stop Loss: 1.2071

Valid Until: February 26, 2025 23:55:00

Support: 1.2251, 1.2191, 1.2099

Resistance: 1.2492, 1.2550, 1.2612

Risk Warnings and Disclaimers

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Manuel

Economic

Central Bank

Summary:

Traders will be closely monitoring price action around these resistance levels, as a rejection from the trendline could present an opportunity for short positions.

SELL EURUSD

Close Time

CLOSED

1.03700

Entry Price

1.02500

1.04250

1.04634 -0.00372 -0.35%

55.0

Pips

Loss

1.02500

1.04250

Exit Price

1.03700

Entry Price

1.04250

The Chairman of the U.S. Federal Reserve, Jerome Powell, maintained a firm stance on monetary policy this Tuesday, signaling that there is no urgency to continue cutting interest rates despite public pressure from President Donald Trump.

“We do not need to rush to adjust our policy,” Powell stated before the Senate Banking Committee during his semiannual monetary policy report.

Powell emphasized that lowering interest rates too quickly or by too much could hinder inflation progress, while moving too slowly or by too little could unnecessarily weaken economic activity and employment.

The Federal Open Market Committee (FOMC) halted its rate-cutting cycle on January 29, keeping rates steady within the 4.25%–4.5% range, after a series of reductions that began in September.

Meanwhile, market participants remain cautious following Trump’s latest executive orders, which impose a 25% tariff on steel and aluminum imports from all countries, set to take effect on March 12. Additionally, the U.S. president announced upcoming reciprocal tariffs against nations engaged in what he deems unfair trade practices. Trump’s agenda aims to boost domestic production and reduce dependence on foreign metals.

Investors are increasingly concerned that these trade policies could escalate into a global trade war, further fueling inflationary pressures in the U.S. economy.

On the other side of the Atlantic, European Central Bank (ECB) President Christine Lagarde addressed EU lawmakers, noting that inflationary pressures in the Eurozone were easing and that the ECB remained on track to reach its 2% inflation target this year.

However, Lagarde cautioned that heightened trade tensions pose a downside risk to economic growth. Shaun Osborne, Chief FX Strategist at Scotiabank, noted that markets are currently pricing in at least 75 basis points of additional ECB rate cuts by year-end. Any further escalation in trade disputes could reinforce expectations of further monetary easing, keeping the euro in a vulnerable position.

From a monetary policy perspective, the euro remains susceptible to further downside risks due to the widening rate differential between the ECB and the Fed. Market participants have fully priced in three ECB rate cuts, expected to begin by the summer, underpinned by expectations that inflationary pressures will sustainably return to the central bank’s 2% target. New Selling Opportunity if the Bearish Structure Remains Intact_1

New Selling Opportunity if the Bearish Structure Remains Intact_1

Technical Analysis

EUR/USD has recovered from its early-week losses, rebounding from 1.0286 to its current level of 1.0350 amid heightened geopolitical tensions. The pair is now approaching key technical levels, with the 200-period moving average acting as immediate resistance, closely followed by the 100-period moving average. The next upside target is seen at 1.0370, a level that, if defended by sellers, could trigger a bearish reaction.

The Relative Strength Index (RSI) currently sits at 52, indicating neutral momentum. However, a closer look at the price action reveals a developing triangle pattern. If this formation holds, selling pressure could emerge as the price nears the upper boundary of the descending trendline. On the other hand, a decisive breakout above this level could pave the way for further bullish continuation.

Traders will be closely monitoring price action around these resistance levels, as a rejection from the trendline could present an opportunity for short positions, while a breakout could shift sentiment toward further upside potential.

Trading Recommendations

Trading direction: Buy

Entry price: 1.0370

Target price: 1.0250

Stop loss: 1.0425

Validity: Feb 21, 2025 15:00:00

Risk Warnings and Disclaimers

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Eva Chen

Cryptocurrency

Summary:

Despite escalating trade tensions, cryptocurrencies have continued their uptrend.

BUY BTC-USDT

Close Time

CLOSED

96294.4

Entry Price

104587.0

92000.0

95329.3 -2780.7 -2.83%

607.6

Pips

Profit

92000.0

96902.0

Exit Price

96294.4

Entry Price

104587.0

Fundamentals

Despite the volatility stemming from escalating trade tensions that have roiled global market sentiment, cryptocurrencies have continued their upward trajectory over the past 24 hours. The latest tariff measures from the Trump administration, imposing a 25% tariff on steel and aluminum imports effective March 4th, are a key development.

Why do increased tariffs matter for the crypto market? Inflationary trade tariffs can lead to inflation, potentially pushing the Federal Reserve's 2% inflation target further out of reach.

The Federal Reserve held interest rates steady in January, maintaining the range of 4.25%-4.5%. Fed Chairman Powell indicated the Fed is in no rush to cut rates unless data necessitates it.

The risk is that U.S. economic exceptionalism, coupled with inflationary tariff measures, could mean the Fed doesn't cut rates at all this year, or even raises them (though this is not our base case). This represents a significant shift from the multiple rate cuts predicted last November. Bitcoin and other risk assets tend to perform better in a low-interest-rate environment due to increased liquidity. Therefore, a change in the Fed's outlook poses a headwind for Bitcoin.

Fed Chairman Powell is scheduled to testify before Congress today, which will provide further clues on the interest rate outlook, and his policy stance will be closely watched. Cautious remarks could provide upward pressure for Bitcoin. Furthermore, the U.S. CPI data will be released tomorrow, followed by Powell's second day of testimony before Congress, which will give the Fed Chairman an opportunity to react to the data.

Uptrend Is Expected to Persist Following the Downward Adjustment_1

Technical Analysis

Despite price volatility, large buyers appear to be buying the dips.

Another signal of Bitcoin's price increase in the current trading week is the rebound from the lower boundary of the bullish channel. The second signal is the rebound from the support line of the Relative Strength Index.

On the downside, the Bitcoin price increase scenario will be negated by a decline or a break below the 80,605 range. This will indicate that the market will open a downward trend, with a potential target below the 75,205 level.

On the upside, a breakout of the range resistance and a close above the US$110,505 level will confirm the development of a bullish move.

Trading Recommendations

Trading Direction: Buy

Entry Price: 96200

Target Price: 104587

Stop Loss: 92000

Valid Until: February 26, 2025 23:55:00

Support: 95905, 94715, 94233

Resistance: 98638, 100182, 100857

Risk Warnings and Disclaimers

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Warren Takunda

Commodity

Summary:

Gold prices surged to a fresh all-time high of $2,942, gaining over 11% in 2025, before retracting slightly.

BUY XAUUSD

Close Time

CLOSED

2905.00

Entry Price

3000.00

2840.00

2935.72 -3.54 -0.12%

105.5

Pips

Profit

2840.00

2915.55

Exit Price

2905.00

Entry Price

3000.00

Gold prices hit a new all-time high on Tuesday, peaking at $2,942 during early trading before pulling back slightly. This surge marks a significant milestone for the precious metal, adding to a remarkable 11% gain in 2025 alone. The rally, which initially caught many traders by surprise, comes at a time when the markets are reacting to heightened geopolitical risks and the prospect of further tightening in U.S. monetary policy.

The immediate catalyst for the spike in gold’s price is the growing tension between the United States and China over trade tariffs. On Monday, U.S. President Donald Trump made headlines with his announcement of a new round of tariffs set to take effect on March 12. These tariffs, imposing a 25% duty on steel and aluminum imports from all countries, are intended to bolster domestic production and job creation in the U.S. However, as is often the case with trade wars, retaliation was swift. China has already retaliated, imposing tariffs on select U.S. goods, though it has stopped short of unleashing the full force of its trade arsenal. As Bloomberg reports, China is currently exercising restraint, holding back from implementing the more severe tariffs President Trump had originally promised on Chinese products during his presidential campaign.

This tit-for-tat is driving uncertainty in the markets, creating a risk-off environment where investors are flocking to gold as a safe haven. As a result, gold has benefitted from a flight to safety, continuing its march toward the psychological $3,000 per ounce level, which seems increasingly likely in the near term, although risks persist.

Despite gold's impressive rally, concerns about the future trajectory of the market linger. A key risk factor for gold this week is the semiannual testimony of Federal Reserve Chairman Jerome Powell before U.S. lawmakers on Tuesday and Wednesday. The market is keenly watching for signals on the direction of U.S. monetary policy. Given the resilience of the U.S. economy, Powell is expected to reiterate that the Federal Reserve is in no rush to cut interest rates further. This dovish stance could put downward pressure on gold, as higher interest rates tend to make non-yielding assets like gold less attractive. In contrast, if Powell hints at potential rate hikes or a shift in policy, it could lead to a correction in gold prices.

Market participants are currently pricing in a 93.5% probability that the Federal Reserve will leave rates unchanged in March, according to the CME FedWatch tool, with only a slim 6.5% chance of a 25-basis-point rate cut. Therefore, traders will be on edge as they look for any hints of policy changes that could disrupt the gold market's upward momentum.

Technical Analysis

From a technical perspective, gold's price action on Tuesday has been notably volatile. After reaching as high as $2,940, it quickly retraced, falling back to around $2,905 by midday. Such fluctuations are typical in periods of high volatility, particularly when market participants are reacting to fast-moving developments like tariff announcements. However, technical analysts remain generally optimistic about the outlook for gold. According to analysts, while the market saw a short-term dip, the overall trend is still bullish. The resistance level at $2,940 is crucial, and should gold break through that level, it could trigger a rapid ascent toward $2,985-$3,000.

On the downside, the most recent support level for gold lies around $2,830. If the price were to dip below this threshold, it could signal a deeper correction. However, analysts note that gold has maintained positive support from the 50-day exponential moving average (EMA50), which continues to act as a safety net for prices. A failure to break below the $2,830 support could lead to renewed upward momentum in gold, reinforcing its position as a safe haven in times of geopolitical and economic uncertainty.

With the price of gold making steady gains and the U.S.-China trade war continuing to evolve, traders are carefully watching for any signs that would confirm or deny the continuation of the current trend. The $3,000 mark looms large, and while gold has not yet reached that threshold, the pace of its rally suggests it may not be far off.

TRADE RECOMMEDNATION

BUY GOLD

ENTRY PRICE: 2905

STOP LOSS: 2840

TAKE PROFIT: 3000

Risk Warnings and Disclaimers

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Warren Takunda

Economic

Summary:

EUR/JPY remains stable, hovering around 156.60 as investors weigh growing expectations of Bank of Japan rate hikes.

BUY EURJPY

Close Time

CLOSED

156.789

Entry Price

158.500

154.800

155.979 -1.140 -0.73%

83.2

Pips

Profit

154.800

157.621

Exit Price

156.789

Entry Price

158.500

EUR/JPY has shown resilience, maintaining its position after registering gains in the previous trading session. As of Tuesday morning in Asia, the currency pair was seen trading around 156.60. However, as the Japanese Yen (JPY) continues to strengthen, there are growing concerns that the EUR/JPY could face significant downside risks in the near term. These concerns are largely driven by expectations of further interest rate hikes by the Bank of Japan (BoJ) this year.

The Bank of Japan has recently hinted at the possibility of tightening monetary policy further if economic conditions and inflation align with their forecasts. Governor Kazuo Ueda and Deputy Governor Himino have been vocal about the central bank’s readiness to raise rates if the Japanese economy continues to show signs of recovery. Last week, BoJ board member Naoki Tamura reinforced this outlook by suggesting that the BoJ could raise the policy rate to at least 1% in the second half of fiscal year 2025. This hawkish shift is also supported by stronger-than-expected data on wages and household spending, which further fuel expectations that the BoJ may continue its tightening cycle.

On the other hand, the Eurozone economy continues to grapple with its own challenges. The Euro is under significant pressure due to rising concerns over potential deflationary forces in the region. With increasing fears that inflation will remain subdued, expectations have grown that the European Central Bank (ECB) may be forced to implement deeper rate cuts in an effort to stimulate the economy. As a result, markets have priced in a potential drop in the ECB’s deposit rate, which is now expected to fall to 1.87% by the end of this year.

The ongoing global economic uncertainties are also exacerbating these challenges for the Euro. US trade policies, in particular, are increasing risk aversion in the market, which is supporting the JPY as a safe-haven currency. On Monday, US President Donald Trump imposed a 25% tariff on steel and aluminum imports, effectively removing all exemptions and nullifying previous trade agreements with key US allies. While the move aims to protect US domestic industries, it risks escalating trade tensions and could lead to a broader global trade conflict.

In response to these developments, German Chancellor Olaf Scholz warned that the European Union (EU) would act swiftly in retaliation if the US moves forward with these tariffs. Scholz indicated that the EU could impose countermeasures “within an hour,” signaling the potential for a significant escalation in trade tensions. Bernd Lange, the head of the European Parliament’s trade committee, also suggested that the EU might offer to lower its 10% import tax on vehicles, aligning it closer to the 2.5% tariff imposed by the US on car imports, in an attempt to avoid a full-blown trade war.

Given these complex dynamics, the Euro faces an uphill battle. The looming risk of a trade conflict with the US, coupled with concerns about the ECB’s policy trajectory, is casting a shadow over the single currency. The potential for deeper rate cuts by the ECB is likely to weigh heavily on the Euro in the coming months, particularly as the region faces deflationary pressures and weak economic growth.

Technical Analysis

From a technical perspective, the EUR/JPY pair recently ended its downtrend by holding above the key support level at 155.30. This stability has allowed the pair to mount a modest recovery, aided by the stochastic indicator signaling a potential reversal from oversold conditions. As a result, EUR/JPY has formed a bullish pattern, settling around 156.60 in the Asian session on Tuesday.

Looking ahead, the technical outlook for EUR/JPY appears mixed. The pair’s ability to hold above the 155.30 support level suggests that a corrective rally is possible. If the pair can overcome the 157.25 resistance level, it could see further upside, potentially targeting the next resistance zone at 158.50. However, if the pair fails to break above 157.25 and instead begins to slide below 155.30, it would confirm a resumption of the bearish trend. In such a scenario, the next major support level to watch would be 154.40, where the pair could find some relief.

For today, the expected trading range for EUR/JPY is seen between 155.80 and 157.25, with the risk skewed to the downside given the broader economic and geopolitical uncertainties. Market participants will be closely monitoring any developments from the BoJ, ECB, and US trade policies that could influence the direction of the pair in the short term.

TRADE RECOMMENDATION

BUY EURJPY

ENTRY PRICE: 156.800

STOP LOSS: 154.800

TAKE PROFIT: 158.50

Risk Warnings and Disclaimers

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Warren Takunda

Economic

Summary:

The Pound Sterling is under pressure as BoE's Catherine Mann signals concerns about weak demand and labor market challenges.

SELL GBPUSD

Close Time

CLOSED

1.23600

Entry Price

1.21500

1.25000

1.26344 -0.00336 -0.27%

140.0

Pips

Loss

1.21500

1.25000

Exit Price

1.23600

Entry Price

1.25000

The British Pound (GBP) faced renewed pressure on Tuesday as the currency weakened against its major peers, reflecting concerns about the UK economy's underlying health and external factors impacting the global trade landscape. The currency’s retreat comes on the back of dovish comments by Bank of England (BoE) Monetary Policy Committee (MPC) member Catherine Mann, whose shift in tone signaled that the central bank may take a more cautious approach moving forward.

Investors were closely watching comments from Mann after her recent vote in favor of a more aggressive 50 basis points (bps) rate cut during last week’s BoE meeting, a significant deviation from her previously hawkish stance. Speaking to the Financial Times, Mann explained that her decision to push for a larger-than-usual interest rate reduction stemmed from a clear assessment of weaker-than-expected demand conditions within the UK economy. In her interview, Mann acknowledged that the economic landscape had shifted, stating that “demand conditions are quite a bit weaker than has been the case,” and her call for a 50bps rate cut was an attempt to “communicate to traders about what we think are the appropriate financial conditions for the UK economy.”

Mann’s comments sent a clear signal to markets that the BoE might be preparing for a more cautious approach to monetary policy, especially as the UK economy grapples with ongoing challenges in the labor market. She indicated that she expected inflation to fall in line with the BoE’s 2% target by later this year, but warned of a “non-linear” decline in employment, further underscoring concerns about labor market fragility. These remarks come amid a backdrop of weak economic performance and stubborn inflationary pressures, prompting analysts to reassess their expectations for future rate hikes or cuts.

Mann’s commentary followed last week’s BoE decision, where the central bank reduced its key borrowing rate by 25bps to 4.5%, in line with market expectations. The decision saw a unanimous 9-0 vote, with seven MPC members voting for the quarter-point rate cut. However, the surprise came when Mann joined fellow MPC member Swati Dhingra in calling for a larger 50bps reduction, signaling a shift in the BoE’s monetary policy stance.

With UK inflation pressures and demand concerns continuing to weigh on the economic outlook, all eyes will now be on BoE Governor Andrew Bailey’s speech at the University of Chicago Booth School of Business in London. Bailey is expected to provide additional insights into the BoE’s future policy direction and any potential adjustments to interest rates as the UK economy navigates through a period of uncertainty.

In addition to the internal pressures facing the UK economy, external factors have further complicated the outlook for the Pound. The US Dollar strengthened against the GBP on Tuesday after US President Donald Trump signed executive orders imposing 25% tariffs on all imports of steel and aluminum, set to take effect on March 12. Trump confirmed that no country would be exempt from these duties, escalating concerns about the global trade landscape and the potential inflationary impact of these measures.

Market participants are bracing for the ripple effects of the tariffs, with many fearing that higher metal prices will pass through to end consumers, driving inflationary pressures in the US. These developments raise the likelihood that the Federal Reserve will face additional challenges in its efforts to bring inflation down to target levels. With inflationary risks rising from the tariffs, the Fed may find it harder to resume its policy-easing cycle anytime soon, a cycle that was paused in January. The uncertainty surrounding these tariff measures, combined with the Fed's ongoing focus on labor market and inflation dynamics, continues to fuel volatility in currency markets, particularly in the GBP/USD pair.

Investors are now awaiting US Federal Reserve Chairman Jerome Powell’s testimony before Congress later today. Powell is expected to provide more clarity on the Fed’s outlook for monetary policy, with particular attention to his stance on inflation and labor market conditions. In January, Powell stated that the Fed would only make further adjustments to monetary policy once there is “real progress in inflation or at least some weakness in the labor market.” As such, his comments will likely provide important signals regarding the Fed's next steps in managing the US economy.

Adding to the anticipation, market participants will closely monitor the release of the US Consumer Price Index (CPI) data for January on Wednesday, which is expected to provide further insights into inflationary trends and influence expectations for future Fed actions.

Technical Analysis

From a technical standpoint, the Pound continued its downward trajectory against the US Dollar on Tuesday, marking its fourth consecutive day of losses. The GBP/USD pair dipped to a fresh weekly low near 1.2350, following a brief recovery towards the 50-day Exponential Moving Average (EMA) around 1.2484. The recent price action suggests that the bears remain in control, with the next key support level seen at 1.2150.

The 14-day Relative Strength Index (RSI) is oscillating within the 40.00-60.00 range, signaling that the market is in a neutral to slightly bearish phase, without any clear trend reversal in sight. As of now, the GBP/USD pair is testing its ability to maintain support around 1.2310, which could be a pivotal level for determining the next direction in the market. Should the price fail to hold above this support level, a further decline toward the next support area could be imminent. On the upside, resistance remains at 1.2415, with traders likely looking for a breakout above this level to confirm any potential upward momentum.

TRADE RECOMMENDATION

SELL GBPUSD

ENTRY PRICE: 1.2360

STOP LOSS: 1.2500

TAKE PROFIT: 1.2150

Risk Warnings and Disclaimers

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Risk Disclosure