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EUR/USD — ECB Decision Looms

Key Highlights

• Euro drifts lower ahead of ECB decision
• Eurozone inflation undershoots expectations
• Dollar holds firm despite weak ADP jobs data
• Focus on Lagarde guidance and projections

Market Overview

EUR/USD continues to trade cautiously as markets position ahead of Thursday’s European Central Bank policy decision. The pair’s drift toward the 1.1794 area reflects hesitation rather than conviction, with traders reluctant to commit aggressively before receiving updated guidance from Frankfurt.

Eurozone inflation data surprised to the downside, with January HICP printing at 1.7% versus expectations of 1.9%. The softer reading potentially grants the ECB greater policy flexibility, but it also revives concerns that price pressures may be easing faster than desired amid still-fragile growth conditions.

The US Dollar has remained resilient despite mixed data. While ADP employment growth disappointed sharply, the ISM Services survey reinforced the view that US services activity remains firm and inflation pressures persistent. The resolution of the US government shutdown removed one layer of uncertainty, though the delay of official employment data continues to limit visibility.

Technical Outlook (H4)

• Stochastic moving lower toward oversold
• Price consolidating below the 20-period EMA
• Momentum weakening with downside vulnerability

Key Levels

• Resistance: 1.1870; 1.1940
• Support: 1.1741; 1.1669

Fremora Takeaway

EUR/USD remains technically fragile ahead of the ECB. As long as price holds below the 20 EMA, downside risks persist. Lagarde’s tone will be decisive in determining whether this consolidation resolves lower or stabilizes into a broader range.

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GOLD (XAU/USD) — Momentum Pauses Near $5,000

Key Highlights

• Gold pulls back from psychological $5,000 level
• Safe-haven demand eases after shutdown resolution
• Iran diplomacy remains unstable
• Mixed US data complicates policy outlook

Market Overview

Gold has eased back toward the 4,930 zone after failing to sustain a break above the $5,000 psychological level. The pullback follows the resolution of the US government shutdown, which reduced one source of uncertainty that had supported defensive positioning.

However, geopolitical risks remain fluid. The cancellation of scheduled US–Iran talks in Turkey, despite new discussions planned in Oman, has reintroduced uncertainty around the Middle East outlook. This instability has already revived risk premiums in oil markets and continues to limit downside pressure for gold.

US macro signals remain conflicting. Weak private employment growth contrasts with persistent services-sector inflation, creating uncertainty around the Federal Reserve’s ability to ease policy aggressively. This ambiguity continues to underpin gold’s medium-term appeal despite near-term consolidation.

Technical Outlook (H4)

• Stochastic stabilizing in the middle range
• Price consolidating around the 20-period EMA
• Directional bias remains unclear

Key Levels

• Resistance: 5177.98; 5423.51
• Support: 4658.04; 4405.30

Fremora Takeaway

Gold is transitioning from volatility to balance. Failure to hold above $5,000 highlights near-term resistance, but geopolitical uncertainty and policy ambiguity continue to provide structural support unless key supports are lost.

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GBP/USD — BoE Risk Weighs on Sterling

Key Highlights

• Sterling weakens ahead of BoE decision
• Dollar strength offsets weak US jobs data
• Services inflation remains elevated
• Geopolitical uncertainty adds pressure

Market Overview

GBP/USD has extended losses toward the 1.3633 area as traders reduce exposure ahead of Thursday’s Bank of England decision. The move reflects a combination of Dollar strength, profit-taking, and defensive positioning after Sterling’s recent rally to multi-year highs.

Despite disappointing ADP employment figures, the Dollar has found support from resilient services activity and elevated prices-paid readings, reinforcing concerns that inflation pressures remain sticky. This dynamic has kept the Greenback bid despite softer labor signals.

Geopolitical uncertainty surrounding US–Iran negotiations adds another layer of risk, potentially weighing on risk-sensitive currencies. Meanwhile, markets remain highly focused on Governor Bailey’s guidance, with Sterling vulnerable to any shift toward a more accommodative tone.

Technical Outlook (H4)

• Stochastic moving toward oversold
• Price trading below the 20-period EMA
• Bearish momentum building

Key Levels

• Resistance: 1.3756; 1.3869
• Support: 1.3514; 1.3402

Fremora Takeaway

GBP/USD is under pressure into the BoE. Below the 20 EMA, the bias remains cautious, with downside risks elevated if policy guidance disappoints. Sterling strength now depends more on central bank tone than macro resilience.