US inflation data overshadowed by trade wars

GBPUSD – technical overview

Signs have emerged of the market wanting to put in a longer-term base after collapsing to a record low in September 2022. The door is now open for the next major upside extension towards the 2018 high at 1.4377. Setbacks should be well supported above 1.2000 on a monthly close basis.

• R2 1.3048 – 6 November high – Strong
• R1 1.2990 – 12 March/2025 high – Medium
• S1 1.2800 –  Figure – Medium
• S2 1.2768 – 5 March low – Strong

GBPUSD – fundamental overview

The Pound has held up better than the Euro over the past 24 hours. A lot of this could be about the UK taking a less aggressive approach to US tariffs. The UK PM has said they would not respond to US tariffs, while the EU has headed in a more contentious direction with the announcement of its retaliatory package. Key standouts on Thursday’s calendar come from Eurozone industrial production, Canada building permits, US producer prices, initial jobless claims, and ECB speak.

USDJPY – technical overview

There are signs of a meaningful top in place after the market put in a multi-year high in 2024. At this point, the door is now open for a deeper setback towards the 140 area.

• R2 151.31 – 3 March high – Strong
• R1 150.00 –Psychological – Medium
• S1 146.54 – 11 March/2025 low – Medium
• S2 145.91 – 4 October low – Strong

USDJPY – fundamental overview

Odds for an earlier BOJ hike in May have moved up from a week ago as investors become increasingly convinced the BOJ's terminal rate may be a lot higher than previously expected. The Yen has since found a renewed wave of demand on the news. Key standouts on Thursday’s calendar come from Eurozone industrial production, Canada building permits, US producer prices, initial jobless claims, and ECB speak.

AUDUSD – technical overview

There are signs of the potential formation of a longer-term base with the market trading down into a meaningful longer-term support zone. Only a monthly close below 0.6000 would give reason for rethink. A monthly close back above 0.7000 will take the big picture pressure off the downside and strengthen case for a bottom.

• R1 0.6409 – 21 February/2025 high – Strong
• R2 0.6365 – 6 March high – Medium
• S1 0.6187 – 4 March low – Medium
• S2 0.6164 – 17 January low – Medium

AUDUSD – fundamental overview

All of this recent worry around the outlook for the US economy amidst escalating trade tension and an unpredictable set of US administration policies has opened some broad based US Dollar outflows. However, this latest run of intense risk off flow in global markets has been having a negative impact on the risk correlated Australian Dollar. Earlier today, Aussie improved from previous but came in as expected. Key standouts on Thursday’s calendar come from Eurozone industrial production, Canada building permits, US producer prices, initial jobless claims, and ECB speak.

USDCAD – technical overview

A sustained hold above 1.3000 over the past several months signals an end to a period of longer-term bearish consolidation and suggests the market is in the process of carving out a more significant longer-term base. Next key resistance now comes in at the 1.5000 psychological barrier. Setbacks should be very well supported ahead of 1.4000.

• R2 1.4595 – 30 January high – Strong
• R1 1.4544 – 4 March high – Medium
• S1 1.4239 – 6 March low – Medium
• S2 1.4151 – 14 February/2025 low – Strong

USDCAD – fundamental overview

The Canadian Dollar held up well on Wednesday in the aftermath of a dovish Bank of Canada decision in which the central bank cut rates another 25 basis points and highlighted the stress around trade wars with the US. It seems the softer US inflation data and a recovery in the price of oil were able to offset fallout from the policy decision.Key standouts on Thursday’s calendar come from Eurozone industrial production, Canada building permits, US producer prices, initial jobless claims, and ECB speak.

NZDUSD – technical overview

Overall pressure remains on the downside with the market continuing to stall out on runs up into the 0.6500 area. At the same time, there are some signs of the market wanting to put in a longer-term base. Ultimately, a break back above 0.6500 would be required to take the medium-term pressure off the downside and encourage this prospect. A monthly close below 0.5469 will intensify bearish price action.

• R2 0.5818 – 12 December high – Medium
• R1 0.5773 – 21 February/2025 high – Medium
• S1 0.5585 – 28 February low – Medium
• S2 0.5541 – 13 January low – Medium

NZDUSD – fundamental overview

All of this recent worry around the outlook for the US economy amidst escalating trade tension and an unpredictable set of US administration policies has opened some broad based US Dollar outflows. However, this latest run of intense risk off flow in global markets has been having a negative impact on the risk correlated New Zealand Dollar. New Zealand PM Luxon was out on the wires saying New Zealand was in the early stages of a cyclical recovery, with growth beginning to pick up and unemployment expected to peak around its current rate. Key standouts on Thursday’s calendar come from Eurozone industrial production, Canada building permits, US producer prices, initial jobless claims, and ECB speak.

US SPX 500 – technical overview

The longer term uptrend remains intact and dips continue to be exceptionally well supported. Critical support comes in at 5386, with only a weekly close back below this level to compromise the structure. Until then, the focus remains on the formation of the next major higher low.

• R2 5877 – 4 March high – Medium
• R1 5771 – 13 January low – Medium
• S1 5534 – 11 March/2025 low – Medium
• S2 5386 – 6 September low – Strong

US SPX 500 – fundamental overview

Going forward, it will be important to keep an eye on Trump trade policies, inflation, bigger picture economic data and the Fed policy outlook. Any of these variables are capable of easily ruffling some feathers and we've already seen a little of this as 2025 gets going.

GOLD (SPOT) – technical overview

The 2019 breakout above the 2016 high at 1375 was a significant development, opening the door for fresh record highs and this next major upside extension into the 3000 area. Setbacks should now be well supported above 2500 on a monthly close basis.

• R2 3000 – Psychological – Strong
• R1 2957 – 24 February/Record high – Medium
• S1 2833 – 28 February low – Medium
• S2 2730 – 27 January low – Strong

GOLD (SPOT) – fundamental overview

The yellow metal has pushed record highs in recent months with solid demand from medium and longer-term accounts. These players are more concerned about inflation, geopolitical risk and a less upbeat global growth outlook. All of this should keep the commodity well supported over the coming months.