The EUR/USD pair continues to move sideways, cautiously recovering in anticipation of the speech by Fed Chairman Jerome Powell.
Possible technical scenarios:
On the daily chart of EUR/USD, a symmetrical triangle has formed, and the price may trade within this range for some time before exiting this pattern in either direction. If the price can overcome the local resistance at 1.0344, growth toward the level of 1.0478 is possible.
Fundamental drivers of volatility:
This week, market attention is focused on the speech of Fed Chairman Jerome Powell. Investors are hoping to gain insights into the future monetary policy of the US and the timing for keeping rates within the range between 4.25% and 4.50% range.
Meanwhile, risks for the euro are increasing. The potential introduction of 25% tariffs on steel and aluminum imports to the US may trigger retaliatory measures from the European Union, putting pressure on the region’s economy. Investors are also factoring in expectations of three ECB rate cuts, which could weaken the euro.
The US dollar’s performance in the pair could also be influenced by US inflation data this week. Core CPI is expected to slow to 3.1%, while the overall figure is projected to remain at 2.9%. If inflation comes in lower than expected, this could increase the chances of a more dovish Fed policy, supporting EUR/USD. However, the difference in rates between the Fed and the ECB remains a key factor in putting pressure on the euro.
Intraday technical picture:
As we can see on the 4H chart of EUR/USD, the pair is trading below the resistance at 1.0344. If the price fails to consolidate above this level, it may retreat toward the lower boundary of the triangle, approaching the horizontal support at 1.0220.
Sterling retreated from recent highs against the US dollar ahead of speeches by the Fed and Bank of England chairs.
Possible technical scenarios:
Judging by the look of things on the daily chart, GBP/USD has formed a sideways range between 1.2306 and 1.2500, with a small margin of movement toward its support. If there is no significant increase in volatility, the price may reverse within this range and recover toward its resistance level.
Fundamental drivers of volatility:
Sterling remains under pressure after Bank of England member Catherine Mann expressed concerns about weak demand, which could further weaken the labor market. Mann supported a more aggressive rate cut of 50 basis points, citing deteriorating economic conditions in the UK.
The Bank of England recently reduced its key interest rate to 4.5%, adding further pressure on the pound.
Aside from that, the introduction of 25% tariffs on steel and aluminum imports by the US has created inflationary pressures on the economy, supporting the dollar and reducing the attractiveness of the British currency.
This week, investors will keep a close eye on inflation and retail sales reports from the US, as well as UK GDP data, which could influence future interest rate decisions. Speeches by the chairs of the Federal Reserve and the Bank of England are also expected to provide further guidance.
Intraday technical picture:
As we can see on the 4H chart of GBP/USD, the price has some potential for movement down to the support levels of 1.2306 and 1.2245 marked with a red dotted line.
USD/JPY is rising at the start of the week amid a stronger US dollar.
Possible technical scenarios:
The daily chart shows that USD/JPY has risen above the support at 151.71, with potential for further growth toward the targets at 153.09 and 153.91 marked with a dotted line.
Fundamental drivers of volatility:
The Japanese yen has received support due to growing concerns about the global trade war, particularly the introduction of new US tariffs, which strengthens demand for the yen as a safe-haven asset.
Meanwhile, the US dollar is supported by speculation that the Fed will delay rate cuts, contributing to the rise in USD/JPY. Markets are closely awaiting Fed Chairman Jerome Powell's testimony to Congress as well as US inflation data on Wednesday, both of which could influence the short-term outlook for USD/JPY.
The Bank of Japan's monetary policy will also be crucial, as inflation in Japan continues to exceed the target level, increasing the likelihood of further rate hikes in the country.
Intraday technical picture:
According to the 4H chart of USD/JPY, a new wide sideways trend has formed within the downward movement, between the support level of 151.71 and the dotted resistance at 153.91. A price recovery is possible within this range.
The USD/CAD pair continues to trade above 1.4300 amid expectations of a speech by Fed Chairman Jerome Powell.
Possible technical scenarios:
Given the unfolding situation on the daily chart, USD/CAD is trading in the lower part of the local range between 1.4297 and 1.4467 marked with two red dotted lines. After a reversal upwards from support, the price has enough room to move toward the 1.4467 level.
Fundamental drivers of volatility:
Investors are hoping to gain insights into the future direction of US monetary policy from the speech of Fed Chairman Jerome Powell this week. Powell will testify before Congress on Tuesday, and his comments could significantly impact the dollar's exchange rate.
The Fed kept rates unchanged in January, and rates are expected to remain in the 4.25%-4.50% range for the foreseeable future. Analysts predict the Fed will continue to hold rates at these levels, with no rate cuts expected in 2025.
Additionally, the Canadian economy faces risks due to US President Trump's executive order imposing 25% tariffs on steel and aluminum, which could lead to inflationary pressures and complicate Canada's economic situation. This uncertainty adds pressure to the USD/CAD rate, benefiting the US dollar.
Intraday technical picture:
On the 4H chart of USD/CAD, the price is consolidating in a narrow range between 1.4297 and 1.4349. Given that the support at 1.4297 has been holding the price since December, an upward erxit from this range seems likely.
Gold has reached a new historical high, gaining more than 11% in 2025, and is now approaching the $3,000 per ounce level.
Possible technical scenarios:
As evidenced by the daily chart, the price reached the resistance level of 2948.01 and retreated downwards. The price of the precious metal now has the potential for a correction toward the support level of 2816.78. An alternative scenario would be if it consolidates above 2948.01, leading to a potential rise toward the psychological $3,000 per ounce mark.
Fundamental drivers of volatility:
Geopolitical tensions, particularly the introduction of 25% tariffs on steel and aluminum by US President Donald Trump, are escalating global trade concerns, which support interest in gold as a safe-haven asset.
However, traders are awaiting the speech of Fed Chairman Jerome Powell before Congress. Market participants will closely watch his comments on monetary policy. If Powell emphasizes economic stability and signals that the Fed is not in a rush to cut rates, this could diminish gold's appeal and put downward pressure on its price.
Thus, while gold continues to rise amid trade risks, future movements will depend on the market’s response to political developments and US monetary policy. In the coming days, traders will focus on Powell’s statements and any potential changes in the economic landscape.
Intraday technical picture:
On the 4Р chart of XAU/USD, the nearest target for a corrective pullback may be the dotted support level at 2872.65. If this support fails to hold, the price may decline further to the horizontal support at 2816.78.
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