Daily Forex News By XtreamForex

XtreamForex

NZD/USD Goes Down Toward 0.5700 While Breaking the Short-term Barrier

On the last Wednesday in November, the NZD/USD gained momentum, going up more than 1%, sitting near 0.5690 in Asia’s session. This time, it climbed past the nine-day EMA, hinting at fresh short-term power. But let’s be real—the bigger trend still points down. The daily chart makes that obvious, so investors aren’t exactly piling in right now.

A bit of calm shows up in the short-term signals; however, the 50-day EMA still hangs above, holding back buyers. The nine-day EMA now acts as a support zone. For real change, buyers need to break past that 50-day level; without it, slipping back remains likely, particularly if NZD/USD fails to hold recent gains.

Support Levels Hold as Buyers Test the Waters

The RSI (Relative Strength Index) holds near 52 – steady and it’s climbing slowly, hinting at gains if demand stays strong. Should momentum fade, watch 0.5650 as a support level, along with the nine-day EMA  at about 0.5640. If those give way, sellers could push harder toward the support at 0.5550. A breakdown past that opens room for another leg down to April’s bottom around 0.5485. The multi-year low in April, which is close to 0.5485, may be revisited by traders.

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GBP/USD Rises Once More as Dollar Expectations of a Rate Cut

GBP/USD climbed higher this week, hitting above 1.3250 on Thursday—marking six days straight of upward moves. What’s driving it? Well, the dollar’s getting weaker because more traders now expect a rate cut from the Fed come December. Despite the recent mixed bag of US economic data, most people continue to hold a more dovish view, which keeps the dollar on its back foot.

Take a look at the CME Fed Watch Tool—markets now give an 84% chance the Fed will cut rates by 25 basis points, way up from last week. Not even stronger US Durable Goods Orders or fewer Initial Jobless Claims could shake this outlook. Investors seem pretty convinced that easing inflation and political pressure will push the Fed to loosen policy soon.

Dollar Drops Even as Data Beats Expectations

Recent US numbers showed Initial Jobless Claims dropping to 216,000, beating forecasts and pointing to a solid labor market. Normally, you’d expect that to help the Dollar, but right now everyone’s focused on what the Fed does next. There’s also talk that the White House is eyeing new Fed chair candidates who favor lower rates, which just adds to the Dollar’s struggles.

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USD/CAD Is Above 1.4000 While Markets Await Crucial Information

USD/CAD is firm and holding onto mild gains this Friday in the Asia Market. It is holding near 1.4030. The US Dollar’s getting a little lift, but not much—everyone’s still betting on a Federal Reserve rate cut in December. All eyes are also on Canada’s Q3 GDP numbers, set to drop later today. That release could shake things up for the pair.

Fed’s Dovish Comments Fuel Rate-Cut Bets

Lately, top Fed officials have made it pretty clear they’re leaning toward easing. San Francisco Fed President Mary Daly openly backed a rate cut, citing a soft labor market. Christopher Waller, the governor of the Fed, agreed, stating that a 25 basis point cut is warranted due to the poor state of the labor market. Of course, they’ll still watch the data. But the market’s already made up its mind. The CME FedWatch Tool shows traders are pricing in an 87% chance of a December rate cut—way up from just 39% last week. That keeps the US Dollar afloat, but it’s not enough to push it much higher.

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EUR/JPY Pair Nears 180.70; Market Banks on Eurozone HICP Data

EUR/JPY rises near 180.70 as traders snap up the pair after three straight days of losses. Buyers stepped in once the price bounced off the 180.00 level, and now everyone’s watching for the latest Eurozone inflation numbers (HICP) to set the tone.

The Expectation is that the ECB Will Keep Rates Steady 

Right now, the Euro’s got some support. People expect the ECB to keep rates steady for a while, especially with the flash HICP release just around the corner. Forecasts put headline inflation at 2.1% year-on-year for November and core inflation at 2.5%. Recent numbers out of France, Spain, and Italy didn’t show much price pressure, but Germany’s data came in a bit hotter than expected. All this mixed data adds up to one thing: the ECB probably won’t cut rates anytime soon. That’s giving the Euro some momentum and keeping EUR/JPY on firmer ground.

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Wall Street Rebounds as Fed Rate-Cut Expectations Strengthen

Wall Street came roaring back on Tuesday. Traders suddenly seemed a lot more confident that the Fed’s going to cut rates soon, and you could feel that energy everywhere. People started shifting their positions ahead of this week’s big inflation data. Treasury yields calmed down, companies sounded a little more hopeful, and the main stock indices just took off right from the opening bell. 

Indices Rise Ahead of Key PCE Inflation Report 

By the time morning rolled around, the S&P 500 had climbed half a percent. The Dow was up 0.4%, and the Nasdaq stole the show with a solid 1% jump. At the open, the Dow shot up 127 points. S&P and Nasdaq both started strong too, rising 0.27% and 0.45%. All eyes are on Friday’s Personal Consumption Expenditures (PCE) Price Index—that’s the inflation number the Fed actually cares about. The results from that report will probably set the tone for what happens with rates this December. Folks investing in bonds maintained their composure, but they were very confident. The 10-year Treasury rate moved higher, climbing to 4.11% from 4.09% earlier, while the 2-year declined little, to 3.52%. Nothing unusual transpired; instead, there was a peaceful hope in the air

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GBP/USD Drops Below 1.3350 as the USD Accelerates

Early on Thursday, GBP/USD is trading around 1.3330, retreating from its recent two-month high. The main story? The US Dollar bounced back, even though American economic data has been underwhelming. People are keeping an eye on the calendar—big US numbers are on the way, especially the Weekly Initial Jobless Claims Report. Right now, there’s caution in the air, but with everyone talking about a possible Fed rate cut next week, the Pound isn’t falling too far.

Fed Rate Cut Hopes and the Kevin Hassett Factor

Soft US numbers, like the latest Manufacturing PMI and ADP jobs data, have traders doubling down on a December Fed rate cut. FedWatch odds are now near 90% for a 25-basis-point cut, and markets expect more easing in 2025. That takes some pressure off the Dollar, which gives GBP/USD a bit of breathing room for now.

But there’s another angle: possible changes at the Fed. Trump says he’ll announce his pick for the next Fed Chair early next year, and Kevin Hassett—known for pushing aggressive rate cuts—is in the running. If Hassett gets the job, expect a more dovish Fed, and that could pull the Dollar down over time.

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GBP/USD Holds Steady at 1.3330 While Traders Wait for US PCE Data

GBP/USD isn’t really going anywhere right now, hovering near 1.3330 in Friday’s Asian hours. Everyone’s just waiting for the US PCE inflation numbers—the data got delayed, so traders are playing it safe until they see what the Fed might do next. Nobody wants to make big bets on the Pound or the Dollar before getting a clearer signal on interest rates.

Fed Rate Cut Bets Lift GBP/USD—But BoE Expectations Limit Gains

The US Dollar’s feeling a bit soft as talk of a Fed rate cut grows louder. The CME FedWatch Tool puts odds of a quarter-point cut next week at almost 89%, and that’s helping support GBP/USD for now. Still, there’s a ceiling. Worries about the UK economy and chatter about the Bank of England also cutting rates—maybe as soon as December—are holding the Pound back. Markets are giving a 90% chance of a BoE cut, so any serious push higher for GBP/USD keeps running into resistance.

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AUD/JPY Weakens Following RBA’s Decision to Maintain Rates Above 3.6%

AUD/JPY in the early Asian hours on Tuesday floated near 103.20 levels, after the Reserve Bank of Australia (RBA) kept its Official Cash Rate at 3.6%. The cut had been widely anticipated by markets; however, the more dovish tone from officials helped keep mild pressure on the Aussie, dragging it through 103.50.

RBA Cautious on Inflation Outlook

In its statement, the Australian central bank indicated that recent inflation pressures may also partially stem from temporary factors, though broadening price growth still needs to be closely watched. And policymakers said they will remain cautious and monitor the economic outlook as new data is released. The decision reinforced perceptions that the RBA is set to stay on the sidelines for now, keeping a lid on AUD gains across the board.

Worries Over Earthquakes May Affect BoJ Outlook

In the meantime, investors are also keeping an eye on Japan after Learning of a powerful earthquake. Analysts said that, depending on the extent of the damage the world’s third-largest economy sustained, the Bank of Japan (BoJ) could postpone a widely expected rate hike next week. The bank’s forthcoming meeting, on December 18–19, is now the subject of extra uncertainty, which could in turn weigh on the Yen in the sessions ahead.

Also in the market spotlight will be any comments from BoJ Governor Kazuo Ueda later in the day, which may provide clues on whether plans for policy normalization will proceed or be put on hold until further notice. AUD/JPY is under mild selling pressure for now; geopolitical and central bank expectations are expected to influence short-term movements.  For now, the Aussie dollar remains in demand as the Yen takes lower ground on risk sentiment.

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EUR/USD stays calm near 1.1625 as traders await Fed outcome

EUR/USD remains muted around 1.1625 as buyers exercise caution while trading ahead of the US Federal Reserve interest rate announcement. The pair maintained its low intensity tone through the early European session and struggled to capitalize on the overnight recovery move from over one-month lows. Investors are sitting on their hands before a US Federal Reserve interest rate decision, with markets expecting another 25 basis-point cut. With the Fed scheduled to run a play that would make it three cuts in a row, interest rates will be cut to 3.50%–3.75%, their lowest level in nearly three years.

Investors will closely watch the press conference from Fed Chair Jerome Powell, including his remarks on rate expectations for next year. And if Powell does sound more hawkish on inflation or the cuts in 2025 may be smaller, the US Dollar could rise—and hence pressure the EUR/USD pair in the short term.

Us Inflation Worries Hold Back Long-term Rate Cut Hopes

Fresh data out of the US boosts the Dollar. The most recent JOLTS report announced a stronger-than-expected 7.67 million job openings, easily beating estimates. That is an indication that the US labor market is still healthy, which suggests it will be increasingly difficult for the Fed to follow up with an extensive range of rate cuts over a longer period. Some analysts now think rate cuts in 2026 may not be quite as steep.

ECB Pauses Cuts—Giving Modest Support to Euro

By contrast, the European Central Bank is more cautious. The ECB is not threatening further cuts at this point, which could provide some mild underpinning for the Euro. Inflation in the Eurozone has moved closer to the European Central Bank’s 2% target, as ECB President Christine Lagarde recently stated. She said the next direction for interest rates would instead be determined by incoming economic data, not a preset schedule. This wait-and-see approach may also help stall the Euro’s decline against the US Dollar in the short run.

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EUR/USD Keeps The Lower Bound Of Range Post-Fed Cut, Market Awaits Jobless Claims

The EUR/USD was trading around 1.1690 in the early European session on Thursday, touching lower with no clear direction. In the aftermath of the Federal Reserve’s latest rate cut, the market’s reaction was muted — more a polite nod than an emphatic leap. And market veterans often refer to such pauses as the market “taking stock”, in a neutral, battery-recharging mode rather than necessarily signalling a new trend.

Not Just the Cut, Powell’s Tone Sets Expectations

The Fed lowered its benchmark rate to a range of 3.50%–3.75%, though the focus was on Chair Jerome Powell’s cautious words. Officials signalled openness to waiting and reassessment, and that tone seems to matter more for traders than the 0.25-point move itself. That new recalibration was apparent in price action: Fed policy tools are now showing a higher probability that the next interest rate move will be a hold. In other words, the market responded to nuance — to the hint that the cut was not the start of a series of them — rather than to the cut itself.

CB’s Calm Keeps a Floor Under the Euro

The ECB in Europe remains a picture of stability. “Appropriate” has been the word from President Christine Lagarde and other policymakers so far, and those sorts of steady terms offer little support for the Euro. The cross (cross-currency pair) may hold back until it receives a clearer signal, with US Initial Jobless Claims as the next spark. The dollar would be likely to catch a bid if claims are below 1.3 million, while  EUR/USD is expected to attempt a break higher toward the key 1.1700 level.

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US Dollar Index Slips Near 98 as Markets Bet on Bigger 2026 Rate Cuts Than the Fed

The US Dollar Index just can’t seem to catch a break, as on Thursday, it hovered nervously above 98, barely holding on after dropping to a new seven-week low at 98.13. Traders are increasingly leaning toward the view that the Fed will have to cut rates much deeper by 2026 than officials are willing to admit. That’s left the dollar looking weak and heavy, a mood that’s lingered ever since the Fed’s meeting on Wednesday.

Washington kept the pressure up, too. White House spokeswoman Karoline Leavitt said President Trump wants even lower borrowing costs. This came right after the Fed’s modest quarter-point cut. It’s another sign that political voices could keep pushing the Fed to loosen things up. Still, if you look at the Fed’s own projections, they’re only projecting one cut next year. So the gap between what traders expect and what the Fed’s saying is still very real.

Dollar Struggles, With Most Majors Pairs Outperforming

Currencies this week told the same story: the dollar lost ground against nearly all its major rivals. The Swiss franc led the pack, but the dollar also slipped against the euro, pound, Aussie, and kiwi. Only the yen came off worse. The mix isn’t exactly disastrous, but it does show a currency drifting—mostly edging lower, with no real direction.

Meanwhile, the CME FedWatch tool says traders haven’t waited for the Fed to spell things out. The odds of at least two cuts by October 2026 have jumped to about 58%. On top of that, weaker US economic data earlier in the week made people even more convinced the Fed will give in to market pressure, whether they like it or not.

Eyes on Jobs and Retail Data for the Next Move

Now, everyone’s waiting for the next big data drops. The November US jobs report lands Tuesday, and that one always stirs up talk about where rates are headed. Retail sales and early December PMI numbers are coming too, tossing a few more wild cards into the deck.

The labour market is in the spotlight. If job numbers come in soft, it’ll only add fuel to the talk that rate cuts are coming sooner—or in bigger chunks—than the Fed is willing to say out loud. But until those numbers hit, the dollar’s likely to keep wandering in the fog of rate-cut speculation.

XtreamForex

USD/CAD Steady Near 1.3770 as Markets Wait for US Jobs Data

USD/CAD today, during the Asian session, is trading flat at around 1.3770. This steady movement indicates that traders are awaiting an important update from the United States. Attention now turns to the NFP (Nonfarm Payrolls) –  because it reflects labour market statistics for both October and November. Traders have been looking to stay alert and cautious until that report is released, and, henceforth, we’ve seen range-bound conditions in the pair.

Why the U.S. Jobs Numbers Matter

 The US NFP report provides a glimpse of how well or how poorly the job market is in the US. This information is worth tracking, as it could sway the future direction of US Federal Reserve interest rate policy. The Fed has already reduced interest rates by 75 basis points this year, primarily in response to signs of a slowing job market. As per predictions, the Unemployment Rate of the USA remained steady at 4.4% during November. The data isn’t providing a positive bias for the greenback, say more losses ahead.

Traders are also waiting for the US Retail Sales and business activity figures to be released along with NFP. Retail Sales should tick up 0.2%, which would point to unchanged consumer spending.

Canadian Dollar Remains Stable

 Meanwhile, the Canadian Dollar, on the other hand,, is doing little in response to the latest inflation numbers. Canada’s Consumer Price Index increased by 2.2% on an annual basis, missing expectations slightly. The so-called core inflation, which excludes volatile items, was 2.9%. The Bank of Canada has said that inflation is near its 2 per cent target and is expected to continue to be well-behaved.

All in all, USD/CAD is trading within a well-defined range while markets wait for fresh clues from US data.

XtreamForex

AUD/JPY Technical Analysis: Softens below 104.00 but Uptrend Remains Firm

AUD/JPY tried to push higher early in the European session but ran out of steam just before hitting 104.00. After bouncing from the ¥101 area, the pair hit some resistance that kept it in check. Most of that weakness came after Japanese officials surprised the market by warning they might step in if the Yen moved too quickly. The finance ministry repeated its usual message: they’re ready to act if things get out of hand.

On top of that, senior currency officials spoke up, calling the Yen’s recent swings “excessive. Traders took notice and pulled back on bets against the Yen, which gave it a quick boost and dragged AUD/JPY a bit lower. Even so, the drop didn’t go far—there wasn’t much real selling pressure behind it.

RBA Technicals and Outlook Favour the Pair

Meanwhile, Australia’s side of the story is still solid. The Reserve Bank of Australia’s December meeting minutes showed the board is getting more worried about stubborn inflation. They even talked about hiking rates again next year if inflation doesn’t cool down. That kind of talk usually keeps the Aussie dollar supported.

Key Support and Resistance Extends Broader Trend High

Looking at the charts, the uptrend is still in place. AUD/JPY is trading well above its rising 100-day exponential moving average, which sits near 99.64. The Relative Strength Index is above 50, so momentum is still with the bulls even if things have faded from the highs.

If the pair can take out resistance at 104.74, then it’s just another shot at that high 105.00 level. On the downside, if support shows up near 102.82 and AUD/JPY holds above it, the bigger uptrend looks safe—even if there are a few dips along the way.

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EUR/USD Keeps Above 1.1800 As It Retraces From Three-Month Peak

EUR/USD remains in a holding pattern—likely to continue. For the most part, the EUR/USD has wasted the recovery effort since bottoming at 1.1168 (three-month low) by inching closer to 1.1808 last week but so far failing short of reaching that high again for a second day. But narrow that gap, buyers have not let off the hook yet as price is still trading higher for a third straight day.

On the daily chart, the uptrend is intact. An upward movement is usually open when price action remains with an ascending channel. Momentum seems a little hot, though. The 14-day RSI at 71 is deep into overbought territory. That doesn’t scream “reversal,” but it does indicate the market might struggle a bit or drift sideways for some time before resuming off to the races.

When things run up this quickly, traders get a little jumpy. So, it wouldn’t shock anyone to see some sideways action or consolidation right around these levels.

Technical Structure Continues to Favor Buyers
From a technical standpoint, the bias stays bullish. The nine-day EMA has crossed above the 50-day EMA, and the price has remained above both. That shows buyers are still driving the trend, and demand isn’t drying up.

Traders Watching Support and Resistance: Important Levels Coming Up

The important level to keep an eye on is 1.1800. The pair may attract new buyers and move towards the top of the channel at 1.1880. The next real target for EUR/USD is 1.1918, a level we haven’t seen since the middle of 2021, if it can successfully break past 1.1808.

If the pair slips, first support comes in at the nine-day EMA near 1.1745, which lines up with the bottom of the channel. A break there could take some wind out of the bulls’ sails and put 1.1660 in play, with stronger support waiting near 1.1589.

XtreamForex

USD/CAD Holds Near Five-Month Lows as BoC–Fed Policy Gap Lifts Loonie

Forex markets were closed on December 25, and the USD/CAD ratio hardly changed from its five-month low on December 24. Markets were quiet due to holiday trading, and by December 25, when most major exchanges were closed, the pair was at its lowest level since late July, hovering around 1.3675. Due to differing interest rate outlooks between the two nations, the Canadian dollar managed to slightly increase while the US dollar remained stable overall.

Light Activity Pins USD/CAD in Place

Most traders checked out for the holidays, so market activity was sparse. Nobody expected big moves in USD/CAD, even with mixed economic data on the table. Canada’s GDP slipped 0.3% in October, perfectly matching forecasts and erasing September’s small gain. Meanwhile, the US economy flexed, with Q3 GDP jumping to an annualised 4.3%. That beat both previous estimates and market expectations. Still, with so few players around, none of this really moved the needle.

BoC’s Steady Hand Keeps Loonie Supported

The policy gap between the Bank of Canada and the U.S. Federal Reserve remains supportive of the Canadian dollar. BoC held rates at 2.25% last month with the removal of the downward bias in favour of maintaining a target range for inflation. This was because the Bank of Canada had already slashed 100 basis points in interest rates earlier this year and markets read this as the end of the cycle. The majority of experts are predicting interest rates of 2.25% to stand ever-proud through until 2026, with a slim chance of an increase towards the end of that year.

Fed Moves Slower, Keeps Pressure on USD/CAD

The Fed’s expected to take its time easing. After cutting rates by 75 basis points this year, most traders think the Fed will sit tight in January. According to CME FedWatch, there’s just a 13% chance of another cut then. But looking further ahead, the market expects two more cuts in 2025. All of this keeps the pressure on USD/CAD and gives the Loonie a leg up—at least for now.

XtreamForex

The Australian Dollar Near a 14-month High as the RBA Maintains Its Hawkish Tone

The Australian Dollar kept its gains and momentum against the U.S. Dollar on Monday, hitting a 14-month high at 0.6727. Following the release of the Reserve Bank of Australia’s minutes from its December meeting, this rally began. The message was very clear: if inflation doesn’t decline, the RBA is prepared to raise rates once more because they don’t think the current rates are doing enough to control it.

Inflation is still running hot in Australia. In October 2025, headline inflation bumped up to 3.8%, a jump from 3.6% the month before and still above the RBA’s 2–3% comfort zone. That’s got analysts betting on another rate hike as soon as February 2026, with big banks like Commonwealth Bank of Australia and NAB calling for rates to rise to 3.85%. Meanwhile, consumer inflation expectations are climbing, too—hitting 4.7% in December. That only adds fuel to the RBA’s hawkish fire.

China News and Regional Tensions Grab Attention

On top of that, the Australian Dollar is getting a boost from headlines out of China. Australia’s economic fortunes are tightly linked to Chinese trade, so whenever Beijing signals more investment—like this week’s news about a push for advanced manufacturing and innovation—it gives the AUD extra momentum. But it’s not all smooth sailing. Tensions in the South China Sea have certainly escalated since China began its military drills, dubbed ‘Justice Mission 2025,’ off the coast of Taiwan. Actions like these underline Asia’s shipping and trade routes, and may lead to currency swings globally.

US Dollar Waits for Fed Clarity

Shifting focus to US data, Dollar Index is holding steady near 98.10. Traders are in a holding pattern as they wait for the Federal Reserve’s December meeting minutes to get a sense of what policy will be like through 2026. The Fed lowered rates by 25 basis points just last month, and the market is still pricing in two more cuts next year.

Not quite yet, if the most recent U.S. data are any guide. With GDP growth of 4.3% in the Q3, well ahead of expectations, and the number of unemployed people falling to 214k, it’s a strong labour market. But the Fed is expected to keep its foot on the brake for now because of both weaker inflation and sluggish hiring.

AUD/USD is holding above the nine-day EMA and trading just beyond 0.6720 at present. For now, that keeps the bulls in control. The duo could escalate towards 0.6830 on rising beyond 0.6727, though a downside below 0.6680 may indicate a short-term drop.

XtreamForex

EUR/JPY pair sticks close to 183.50 as the euro hangs in there

The EUR/JPY pair nudged a bit higher in Asian trading on Tuesday, staying right around 183.50 after slipping for two days. The euro’s getting a little help from steadier market nerves—tensions between the US and Venezuela cooled off, and that’s taken some pressure off riskier currencies like the euro. Traders feel more relaxed now, but they’re still careful. That’s helped the euro steady up against the yen.

Now, everyone’s watching Europe’s upcoming economic numbers. In the day ahead, attention will turn on Germany and the release of its latest inflation data for December, which includes the CPI and HICP. These figures are important. They contribute to setting the tone for potential future interest rate actions by the European Central Bank.

All eyes on German inflation

As stated, the focus will be on Germany, as it is the dominant force in the Eurozone. Most people believe interest rates won’t drop anytime soon and will rise if inflation continues to decline. The ECB left rates unchanged in December 2025 and gave no hints about rushing into anything new. President Christine Lagarde basically said things are too uncertain to make any promises about what comes next.

Along with inflation data, traders are keeping tabs on PMI reports from Germany and the Eurozone. These business activity numbers give an early read on the economy and how much demand is out there.

Yen could get a boost if BoJ hikes rates

Even with the euro holding steady for now, EUR/JPY might not run much higher. The yen could start pushing back if more people bet on the Bank of Japan raising rates this year. BoJ Governor Kazuo Ueda said future moves depend on how Japan’s economy and inflation play out, but he sounded pretty upbeat—he thinks Japan will keep seeing steady wage and price growth.

If investors get more sure about the BoJ tightening, expect more demand for the yen. That could keep EUR/JPY stuck in a narrow range, with traders weighing what’s happening in Europe against whatever the BoJ does next.

XtreamForex

EUR/GBP rebounds toward 0.8680 as markets look past softer Eurozone inflation

The EUR/GBP pair trims its early losses and edges higher toward the 0.8680 mark during late Asian trading on Thursday. The modest rebound comes as investors largely shrug off weaker-than-expected preliminary Eurozone inflation figures for December.

Data released by Eurostat on Wednesday showed headline Harmonized Index of Consumer Prices (HICP) rising 2.0% year over year, in line with forecasts but slightly below November’s 2.1%. Core HICP—which excludes volatile components such as food, energy, alcohol, and tobacco—slowed to 2.3%, missing expectations and easing from the previous 2.4%.

On a monthly basis, both headline and core inflation rebounded, increasing by 0.2% and 0.3% respectively, after posting declines in November.

Despite the softer inflation print, the figures are not expected to significantly alter market expectations for near-term interest rate cuts from the European Central Bank, as inflation remains close to the ECB’s 2% target.

Later in the session, attention will turn to remarks from ECB Vice President Luis de Guindos, who is scheduled to speak at a fireside chat during Vicente’s second edition of Next Spain Global at 08:30 GMT.

Meanwhile, the Pound Sterling shows mixed performance against major peers amid a quiet UK economic calendar. In the absence of key data releases, GBP price action is being guided mainly by broader risk sentiment and expectations surrounding how the Bank of England’s monetary policy stance may evolve in the months ahead.

XtreamForex

USD/CAD holds near 1.3900 as solid US data underpins Fed pause outlook

USD/CAD remains modestly higher for a third consecutive session, trading close to the 1.3890 level during early Asian trading on Thursday. The pair continues to find support from a firmer US Dollar (USD), backed by stronger-than-expected US economic data. Market participants now turn their attention to the weekly US Initial Jobless Claims release later in the day, along with comments from Federal Reserve officials.

On Wednesday, the US Census Bureau reported that Retail Sales rose by 0.6% in November to $735.9 billion, rebounding from a 0.1% decline in October and surpassing market expectations of a 0.4% increase. In addition, November’s Producer Price Index (PPI) surprised to the upside, with both headline and core inflation accelerating to 3% year-over-year.

Combined with last week’s data showing the US Unemployment Rate easing to 4.4% in December, these figures strengthen the argument for the Federal Reserve to keep interest rates unchanged in the near term, providing ongoing support to the USD. Reflecting this shift, Morgan Stanley analysts have pushed back their expectations for rate cuts to June and September, from earlier projections of January and April, following the latest US jobs report.

However, gains in USD/CAD may be capped as the commodity-linked Canadian Dollar (CAD) draws support from firmer oil prices, given Canada’s role as a major crude exporter to the United States. At the time of writing, West Texas Intermediate (WTI) crude is trading around $60.20. Oil prices remain supported by persistent tensions in Iran, with traders closely watching geopolitical developments linked to ongoing civil unrest.

XtreamForex

GBP/JPY rises toward 212.40 ahead of key UK jobs data

The GBP/JPY pair trades slightly higher around 212.45 during the Asian session on Tuesday, supported by broad weakness in the Japanese Yen (JPY). The Yen came under pressure after Japan’s Prime Minister, Sanae Takaichi, announced plans for a snap general election on Monday.

PM Takaichi confirmed that the lower house of parliament will be dissolved on January 23, with elections scheduled for February 8. On the fiscal front, she pledged to move away from what she described as “excessively tight fiscal policy,” including a proposal to suspend the consumption tax for two years.

These policy signals are viewed as inflationary for Japan’s economy and could reinforce expectations for further interest rate increases by the Bank of Japan (BoJ). The central bank is set to deliver its first monetary policy decision of the year on Friday and is widely expected to keep rates unchanged at 0.75%, while maintaining a hawkish bias toward future tightening.

Meanwhile, the Pound Sterling (GBP) is posting modest gains against the Yen but remains broadly subdued ahead of the United Kingdom’s employment data for the three months ending in November. Market forecasts suggest the ILO unemployment rate eased to 5.0% from 5.1% in the prior period, marking a slight improvement from its highest level since October 2021.

Stronger labor market conditions could reduce expectations for near-term interest rate cuts by the Bank of England (BoE). Investors will also turn their focus to the UK Consumer Price Index (CPI) data for December, due for release on Wednesday, which may further influence the policy outlook.

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UK CPI forecast to tick higher in December, curbing expectations of BoE rate cuts

The UK Office for National Statistics (ONS) is set to publish the December Consumer Price Index (CPI) data on Wednesday at 07:00 GMT, a release closely watched by financial markets. Economists anticipate a mild pickup in inflation, suggesting price pressures may be regaining momentum.

Inflation remains a key input for the Bank of England (BoE) and a major driver of movements in the British Pound (GBP). With the next Monetary Policy Committee (MPC) meeting scheduled for February 5, markets largely expect policymakers to keep the Bank Rate unchanged at 3.75%. However, this week’s inflation data is likely to influence expectations around the future policy path.

What to expect from the December UK inflation data

Headline CPI is forecast to rise to 3.3% year-on-year in December, slightly above November’s 3.2%. On a monthly basis, consumer prices are expected to rebound by 0.4%, reversing the 0.2% contraction seen in the prior month.

Core CPI—which excludes volatile food and energy prices and is more closely monitored by the BoE—is expected to remain steady at 3.2% annually. Month-on-month, core inflation is projected to increase by 0.3%, following a 0.2% decline in November.

Potential impact on GBP/USD

At its December meeting, the BoE’s MPC voted narrowly (5–4) to cut the policy rate by 25 basis points to 3.75%, marking the fourth rate reduction of 2025. While policymakers acknowledged easing inflationary pressures and early signs of labour market cooling, they emphasized that any further easing would proceed cautiously.

The latest Decision Maker Panel (DMP) survey offered little to challenge the current outlook. Wage pressures remain persistent, limiting the scope for an earlier or more aggressive easing cycle. One-year-ahead wage expectations edged up to 3.7% from 3.6%, while realized wage growth continues to hover in the mid-4% range—levels still inconsistent with a sustained return of inflation to target.

Overall, the survey reinforces the view that the BoE is unlikely to accelerate rate cuts. Markets currently price in just over 42 basis points of easing this year, with no change expected at the February meeting.

Technical outlook for GBP/USD

From a technical perspective, XtremeMarkets Senior Analyst Frank notes that GBP/USD appears to be finding support near its year-to-date lows around 1.3340 (January 19). “A further downside move could open the door to the interim support at the 55-day SMA near 1.3309, ahead of the December low at 1.3179.

On the upside, a recovery could see the pair challenge the year-to-date high at 1.3567 (January 6). “Beyond that, resistance is limited until the September 2025 peak at 1.3726,” he adds.

Frank also highlights that momentum indicators remain constructive. The Relative Strength Index (RSI) has rebounded to around 54, while the Average Directional Index (ADX) near 20 points to a relatively stable underlying trend.

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EUR/USD Price Forecast: Probes 1.1700 resistance after EMA bounce

EUR/USD ticks higher after posting mild losses in the prior session, hovering near the 1.1700 mark during early Asian trade on Thursday. From a technical standpoint, the daily chart still shows the pair trading within a descending channel, pointing to a prevailing bearish undertone.

The pair is holding marginally above the 50-day Exponential Moving Average (EMA), while the nine-day EMA has stabilised following recent weakness. The flattening of the medium-term average suggests consolidation rather than a renewed directional move. With the faster EMA still positioned below the 50-day, buyers require stronger follow-through to build upside momentum.

Momentum indicators offer cautious support. The 14-day Relative Strength Index (RSI) sits near 52 and is edging higher, reflecting a neutral but improving bias. A continued rise in the RSI would help validate any upside breakout, whereas a stall around the midpoint could keep prices confined to a range.

On the downside, a move back below the 50-day EMA at 1.1674 and the nine-day EMA at 1.1672 would shift focus toward the seven-week low at 1.1589, last seen on December 1, ahead of the lower boundary of the descending channel near 1.1570.

Conversely, sustained trading above both moving averages would keep the recovery scenario intact, opening the door toward the upper boundary of the descending channel around 1.1760. Beyond that, resistance stands at the three-month high of 1.1808, posted on December 24. A stronger extension could see EUR/USD target 1.1918, its highest level since June 2021.

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Japanese Yen hovers near one-week low against USD ahead of BoJ press conference

The Japanese Yen (JPY) remains under pressure near its weekly low versus the US Dollar following the Bank of Japan’s (BoJ) widely anticipated decision to keep short-term interest rates unchanged. Market participants remain cautious, refraining from fresh directional bets as they await guidance on the timing of any further policy tightening. In this context, comments from BoJ Governor Kazuo Ueda during the post-meeting press conference are expected to play a decisive role in shaping near-term JPY price action.

Meanwhile, domestic political uncertainty, concerns over Japan’s fiscal position, and an overall risk-positive market environment continue to weigh on the safe-haven Yen. A modest rebound in the US Dollar has also provided support to the USD/JPY pair. However, persistent speculation that Japanese authorities could step in to curb excessive currency weakness is prompting traders to remain cautious before positioning for further downside in the Yen.

Japanese Yen maintains bearish tone amid political and fiscal concerns

As widely expected, the Bank of Japan concluded its two-day policy meeting on Friday by maintaining the short-term interest rate at 0.75%. Attention now turns to Governor Ueda’s press briefing, which could offer fresh clues on the future policy path and influence the near-term direction of both the JPY and USD/JPY.

Earlier data showed that Japan’s National Consumer Price Index (CPI) eased to 2.1% year-on-year in December from 2.9% previously. Core CPI, which excludes fresh food, slowed to 2.4% from 3.0% in November. Meanwhile, CPI excluding both fresh food and energy dipped slightly to 2.9% from 3.0%, though it remains comfortably above the BoJ’s 2% target.

These inflation readings continue to support expectations that the BoJ may pursue further policy normalization. Adding to the optimism, a private-sector survey revealed that Japan’s manufacturing activity expanded in January for the first time in seven months. The S&P Global flash manufacturing PMI climbed to 51.5—its highest level since August 2024—while the services PMI improved to 52.8 from 51.1.

On the political front, Prime Minister Sanae Takaichi is set to dissolve parliament ahead of a snap election scheduled for February 8, aiming to secure a stronger mandate to advance fiscally expansionary reforms. However, investor confidence has been shaken by her proposal to temporarily cut the 8% food consumption tax, triggering a sharp sell-off in government bonds and adding further pressure on the Yen.

At the same time, easing geopolitical tensions—following US President Donald Trump’s announcement of a potential NATO-related deal involving Greenland—have reduced demand for traditional safe-haven assets, further undermining the JPY.

In contrast, expectations of a more hawkish BoJ stance stand in sharp divergence with growing market conviction that the US Federal Reserve will cut interest rates at least twice this year. Additionally, broader de-dollarization trends have offset strong US economic data, pulling the US Dollar back toward a two-week low and potentially limiting further upside in USD/JPY.

USD/JPY outlook: upside momentum may accelerate above channel resistance

From a technical perspective, USD/JPY remains supported above the rising 100-hour Simple Moving Average (SMA) at 158.16, preserving a bullish near-term bias. The Moving Average Convergence Divergence (MACD) indicator sits slightly below the Signal line near the zero level, while the contracting negative histogram suggests waning bearish momentum. Meanwhile, the Relative Strength Index (RSI) holds around 56, indicating steady buying interest.

Price action continues to respect the ascending channel originating from the 157.35 area, with immediate resistance seen near 158.91. A decisive break above this level could pave the way for an extension of the current upward move.

On the downside, initial support is located near the lower boundary of the ascending channel around 157.96. A sustained break below this level would weaken the bullish structure and shift focus toward increased downside risks.

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EUR/USD Price Forecast: Pair climbs toward four-year high near 1.1920

The EUR/USD pair advances around 0.36%, trading close to the 1.1900 level during Monday’s Asian session. The pair gains strength as the US Dollar continues to weaken, extending last week’s losses ahead of the Federal Reserve’s monetary policy decision scheduled for Wednesday.

At the time of writing, the US Dollar Index (DXY), which measures the Greenback against a basket of six major currencies, is down nearly 0.4% around the 97.00 mark, its lowest level in four months.

The US Dollar remains under strong selling pressure as investors stay concerned about the United States’ long-term trade relationships with key partners. These worries persist even after recent geopolitical frictions and trade tensions between Washington and several European Union members have eased.

Market expectations suggest the Federal Reserve will keep interest rates unchanged within the 3.50%–3.75% range on Wednesday, according to the CME Fed Watch tool. This would mark the Fed’s first pause following three consecutive rate cuts. The central bank lowered rates by a total of 75 basis points in late 2025 to support a weakening labor market.

Looking ahead, the Euro’s direction this week will largely depend on the release of preliminary Q4 Eurozone Gross Domestic Product (GDP) data and Germany’s Harmonized Index of Consumer Prices (HICP) figures for January.

EUR/USD Technical Outlook

EUR/USD trades near 1.1866 at the time of writing, holding comfortably above the 20-day Exponential Moving Average (EMA) at 1.1713. This setup reflects a bullish short-term bias, with the rising slope of the EMA confirming strengthening upside momentum.

The 14-day Relative Strength Index (RSI) stands at 69.49, hovering just below overbought territory and indicating strong buying interest.

With momentum remaining firm, the pair is likely to retest its four-year high at 1.1919 in the near term. A sustained daily close above this level could open the door for further gains. On the downside, the 20-day EMA is expected to act as a key support area for the pair.

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Japanese Yen eases from near three-month peak against USD; upside outlook remains intact

The Japanese Yen (JPY) trades modestly lower during the Asian session on Tuesday, snapping a two-day winning streak and pulling back from its strongest level since November 2025 against the US Dollar. The pullback comes as investors grow increasingly uneasy about Japan’s fiscal position following Prime Minister Sanae Takaichi’s expansive spending and proposed tax-cut measures. A generally positive risk mood further weighs on the safe-haven JPY, while domestic political uncertainty persists ahead of the snap election scheduled for February 8.

That said, downside momentum in the Yen appears limited. Speculation that Japanese authorities could step in to curb excessive currency weakness continues to deter aggressive bearish positioning, especially as the Bank of Japan (BoJ) maintains a hawkish policy bias. Meanwhile, the US Dollar remains pinned near a four-month low amid expectations that the Federal Reserve will deliver two additional rate cuts this year. This divergence keeps a lid on any meaningful USD/JPY recovery, with traders awaiting direction from the highly anticipated two-day FOMC meeting that begins later today.

Japanese Yen slips as fiscal concerns and political risks offset intervention fears

Japan’s fragile public finances have returned to the spotlight after Prime Minister Sanae Takaichi pledged to suspend sales tax on food items as part of her campaign strategy ahead of the February 8 lower-house election.

Worries over the country’s fiscal outlook have been a key driver behind the recent rise in long-dated Japanese government bond (JGB) yields, which threatens to increase debt-servicing costs and, in turn, limits further appreciation in the Yen.

On the data front, figures released earlier Tuesday showed a moderation in wholesale inflation. Japan’s Producer Price Index (PPI) rose 2.4% year-on-year in December, easing from the 2.7% increase recorded in November. Additionally, the Corporate Service Price Index advanced 2.6% YoY, slightly below the previous month’s 2.7% gain.

The data did little to challenge the Bank of Japan’s tightening outlook and had a limited impact on the JPY. Notably, the BoJ last Friday left short-term interest rates unchanged while upgrading its economic and inflation projections, reaffirming its readiness to continue gradually raising borrowing costs.

This policy stance contrasts sharply with the increasingly dovish outlook for the US Federal Reserve, keeping the US Dollar under pressure near multi-month lows and offering underlying support to the Yen amid persistent intervention risks. On Sunday, Prime Minister Takaichi reiterated that authorities stand ready to act against speculative and disorderly currency moves, following rate-check operations by Japan’s Ministry of Finance and the New York Fed late last week.

Even so, traders appear hesitant to take strong directional positions ahead of the outcome of the two-day FOMC meeting, which is expected to be the key driver of USD and USD/JPY price action in the near term.

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EUR/USD slips below 1.2000 as US Dollar rebounds, focus shifts to Fed decision

The EUR/USD pair moves lower toward the 1.1990 region during the early European session on Wednesday, ending a four-day winning streak. The pullback comes after the pair retreated from a fresh five-year high, driven by a modest rebound in the US Dollar (USD). Market attention now turns firmly to the US Federal Reserve’s interest rate decision later in the day.

On Tuesday, US President Donald Trump stated that he would soon announce his choice for the next Federal Reserve Chair, adding that interest rates would decline under the new leadership. These remarks have raised concerns among investors about the Fed’s independence if a Trump-backed candidate is appointed. Such uncertainty could limit upside potential for the USD and offer underlying support to EUR/USD.

Investors widely expect the Federal Reserve to keep interest rates unchanged within the 3.50%–3.75% range. However, traders will closely analyze the accompanying statement and press conference for signals on the timing and pace of potential rate cuts.

Investors widely expect the Federal Reserve to keep interest rates unchanged within the 3.50%–3.75% range. However, traders will closely analyze the accompanying statement and press conference for signals on the timing and pace of potential rate cuts.

Meanwhile, the Euro remains influenced by the European Central Bank’s cautious policy stance. ECB officials have signaled no urgency to adjust interest rates, with inflation hovering close to the target. Policymakers avoided discussions on rate changes at the December meeting, reiterating a data-dependent, meeting-by-meeting approach. As a result, expectations for additional rate cuts this year have largely faded amid mixed economic signals from the Eurozone.

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Japanese Yen remains under pressure after weak Tokyo CPI; USD/JPY rises toward 154.00

The Japanese Yen (JPY) continues to trade on the back foot during Friday’s Asian session. Modest US Dollar (USD) buying, combined with lingering yen weakness, keeps the USD/JPY pair supported near the 154.00 level. Softer Tokyo inflation data has cooled expectations for an early interest rate hike by the Bank of Japan (BoJ). At the same time, concerns over Japan’s fiscal position—amid Prime Minister Sanae Takaichi’s reflation-focused policies—and political uncertainty ahead of the February 8 snap election are weighing further on the JPY.

That said, speculation about potential coordinated intervention by US and Japanese authorities to support the yen may deter traders from taking aggressive bearish positions. In addition, global trade tensions sparked by US President Donald Trump’s tariff threats, along with broader geopolitical risks, could help limit downside for the safe-haven JPY. Meanwhile, the USD lacks strong upside momentum due to lingering concerns over Federal Reserve independence and expectations of lower US interest rates, warranting caution before betting on sustained USD/JPY gains.

Weak Tokyo CPI dampens BoJ rate hike expectations, keeping the Japanese Yen subdued

Official data released earlier on Friday showed that Tokyo’s headline Consumer Price Index (CPI) slowed to 1.5% in January from 2.0% previously, marking its lowest level since February 2022.

Core CPI, which excludes fresh food prices, also eased to 2.0% from 2.3% in December. Additionally, the index excluding both fresh food and energy slipped to 2.4% from 2.6% in the prior month.

These figures suggest cooling demand-driven inflation pressures and reduce the urgency for the BoJ to tighten monetary policy further, following its December rate hike that lifted the benchmark rate to a 30-year high of 0.75%.

Meanwhile, Prime Minister Sanae Takaichi has centered her snap election campaign on expanded fiscal stimulus, including a pledge to suspend consumption taxes on food—raising fresh concerns over Japan’s long-term fiscal sustainability.

Speculation surrounding a rare rate check by the New York Federal Reserve last Friday, following a similar move by Japan’s Ministry of Finance, has fueled talk of possible joint US-Japan intervention to curb excessive yen weakness.

On the geopolitical front, President Trump announced plans to decertify all Canada-manufactured aircraft and threatened to impose 50% tariffs unless US-made Gulfstream jets receive Canadian certification. This development marks a renewed escalation in US-Canada trade tensions.

Broader geopolitical risks—such as rising US-Iran tensions and the ongoing Russia-Ukraine conflict—could also help limit further losses in the yen. The US has continued deploying warships and fighter jets across the Middle East, with Secretary of War Pete Hegseth stating that the country stands ready to act decisively under President Trump’s directives.

Russia has once again invited Ukrainian President Volodymyr Zelensky to Moscow for peace talks, though significant differences between the two sides continue to hinder progress.

Meanwhile, the US Dollar finds modest support amid speculation that Kevin Warsh could be named the next Federal Reserve Chair. President Trump is expected to announce his pick on Friday morning, providing additional short-term direction for USD/JPY.

Looking ahead, traders will closely monitor the release of the US Producer Price Index (PPI) and upcoming Fed commentary, which could influence USD demand and shape USD/JPY price action heading into the weekend.

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Japanese Yen Holds Firm Against USD as Intervention Talk Counters Fiscal Worries

The Japanese Yen (JPY) maintains a modest upside bias against a slightly weaker US Dollar (USD) during Tuesday’s Asian session, supported by renewed speculation over possible joint currency intervention by Japan and the United States. Comments from Japan’s Finance Minister Satsuki Katayama reignited such concerns, while expectations of a more hawkish Bank of Japan (BoJ) further underpin the JPY. As a result, USD/JPY has retreated from the more-than-one-week high posted on Monday.

That said, the Yen’s upside remains limited amid domestic political uncertainty ahead of the February 8 snap election and lingering fiscal concerns linked to Prime Minister Sanae Takaichi’s reflationary agenda. In addition, a generally positive tone in global equity markets weighs on demand for the safe-haven JPY. Meanwhile, the nomination of Kevin Warsh as the next Federal Reserve Chair provides support to the USD, helping cap deeper losses in the USD/JPY pair.

Katayama’s remarks revive intervention concerns, supporting the Yen

Finance Minister Satsuki Katayama stated on Tuesday that Japan will continue to closely coordinate with US authorities when necessary, in line with a joint statement issued by both countries last September, and will respond appropriately to currency moves.

She also defended Prime Minister Takaichi’s earlier comments highlighting the broader economic benefits of a weaker Yen, clarifying that the remarks were made in general terms rather than as a policy signal.

Meanwhile, the Summary of Opinions from the BoJ’s January meeting revealed that policymakers discussed growing inflationary pressures stemming from Yen weakness, reflecting a relatively hawkish tone among board members.

On the political front, Prime Minister Takaichi has pledged to suspend the consumption tax on food for two years if her Liberal Democratic Party wins the upcoming snap election. This proposal has fueled concerns over Japan’s fiscal health and continues to limit aggressive Yen buying.

Globally, improved risk sentiment is also weighing on the JPY. US President Donald Trump announced that the US and India have reached a trade agreement and will move swiftly to reduce mutual tariffs, boosting investor confidence. In addition, signs of easing tensions between the US and Iran over Tehran’s nuclear program have reduced geopolitical risk premiums, further dampening demand for traditional safe-haven assets.

On the US side, Trump’s nomination of Kevin Warsh to replace Jerome Powell as Federal Reserve Chair in May, subject to Senate approval, has lent support to the USD. Warsh is widely viewed as an inflation hawk, suggesting a vigilant stance if price pressures re-emerge.

Adding to USD strength, the latest Institute for Supply Management data showed US manufacturing activity expanded for the first time in a year, with the Manufacturing PMI jumping to 52.6 in January from 47.9 previously. This sharp improvement has helped the US Dollar retain much of its recent rebound from last week’s four-year low, limiting downside pressure on USD/JPY.

With no major US economic releases scheduled for Tuesday, the pair is likely to take cues from broader risk sentiment and policy-related headlines. Given the mixed fundamental backdrop, traders may remain cautious before committing to fresh directional positions in USD/JPY.

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EUR/USD edges higher above 1.1800 ahead of Eurozone inflation data

The EUR/USD pair trades modestly higher around 1.1830 during early European trading on Wednesday. However, upside momentum may remain capped as investors stay cautious following the swift resolution of a partial US government shutdown. Market attention later in the session will turn to the preliminary Eurozone Harmonized Index of Consumer Prices (HICP) data, which could influence near-term price action.

According to reports, US President Donald Trump signed legislation on Tuesday to end the partial government shutdown that began over the weekend. The bill narrowly passed the House of Representatives with a 217–214 vote. This development, combined with Trump’s nomination of Kevin Warsh as the next Federal Reserve Chair, may lend support to the US Dollar by easing concerns surrounding fiscal uncertainty and central bank independence.

The EUR/USD pair trades modestly higher around 1.1830 during early European trading on Wednesday. However, upside momentum may remain capped as investors stay cautious following the swift resolution of a partial US government shutdown. Market attention later in the session will turn to the preliminary Eurozone Harmonized Index of Consumer Prices (HICP) data, which could influence near-term price action.

According to reports, US President Donald Trump signed legislation on Tuesday to end the partial government shutdown that began over the weekend. The bill narrowly passed the House of Representatives with a 217–214 vote. This development, combined with Trump’s nomination of Kevin Warsh as the next Federal Reserve Chair, may lend support to the US Dollar by easing concerns surrounding fiscal uncertainty and central bank independence.

Meanwhile, focus is shifting toward the European Central Bank’s (ECB) policy decision scheduled for Thursday. The ECB is widely expected to leave interest rates unchanged for the fifth straight meeting at its February policy gathering. Traders will closely follow ECB President Christine Lagarde’s press conference for guidance on the future rate outlook. Any hawkish signals could provide fresh support to the euro against the US Dollar.

“Lagarde is likely to emphasize that the euro-area economy remains on solid footing, though risks are still elevated,” said Swedbank economist Nerijus Maciulis. “The opening weeks of 2026 have clearly shown how fragile global trade agreements continue to be.”