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EUR/USD — Range Holds Ahead of GDP + CPI

Key Highlights

• EUR/USD stalls as traders wait for Eurozone GDP + US CPI
• Dollar stays resilient despite AI-driven equity stress
• Friday data could break the range decisively

Previous Session Overview

EUR/USD consolidated lower on Thursday, staying within prior ranges and trading around 1.1868.

Market Outlook

The Euro is holding near 1.1868, trading without conviction as positioning turns defensive ahead of Friday’s twin catalysts: Eurozone flash Q4 GDP and the delayed US CPI for January. With both releases landing in the same session, the market is clearly choosing patience over prediction.

The US Dollar Index is hovering around 97, showing resilience even as Wall Street sells off on renewed AI fears. Normally, heavy equity pressure supports safe-haven flows into USD, but the move has been contained—suggesting traders are saving risk capacity for CPI rather than chasing intraday headlines.

Beyond data, markets are also digesting the Bloomberg report suggesting Russia wants a pathway back into USD settlement systems—a politically complex topic tied to sanctions relief. Even if it remains hypothetical, it reinforces how “currency regime” narratives can re-enter markets quickly during periods of volatility.

US labor data has been mixed but not alarming in the very near term: initial jobless claims printed 227K, above estimates but down from the prior week. That keeps the “labor still holding” narrative alive after Wednesday’s NFP beat—yet the massive past revisions continue to blur what’s real versus what was previously overstated.

So direction likely comes from CPI. Softer inflation would pressure the Dollar and give EUR/USD room to press higher. Hot CPI would reinforce Fed hawkishness and likely push EUR/USD lower, particularly if Eurozone GDP disappoints at the same time.

Technical Outlook (H4)

• Stochastic is holding in the middle zone
• Price is consolidating around the 20-period moving average
• Classic equilibrium behavior ahead of major event risk

Key Levels to Watch

• Current Price: 1.1868
• Resistance: 1.1917 | 1.1964
• Support: 1.1809 | 1.1764

Conclusion

EUR/USD is effectively “coiled” at 1.1868, with the chart reflecting indecision ahead of Friday’s GDP + CPI double-hit. Upside is capped by 1.1917–1.1964, while downside risk increases sharply below 1.1809, exposing 1.1764. The cleanest scenario for Euro strength is soft US CPI + solid Eurozone GDP. The most bearish combination is hot CPI + weak GDP, which would likely force a breakdown through support as relative policy expectations swing back toward the Dollar.

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GOLD (XAU/USD) — Volatility, Deleveraging, and CPI Risk

Key Highlights

• Gold whipsaws as margin-call liquidation hits commodities
• NFP reduces urgency for Fed cuts, raising opportunity cost
• CPI remains the next “reset button” for rates and gold

Previous Session Overview

Gold dropped sharply on Thursday and is trading near 4975.48, after a violent risk-driven selloff.

Market Outlook

Gold is trading around $4,975, after a steep downdraft that looked more like forced liquidation than a calm, fundamentals-driven repricing. The story here is stress mechanics: when equities sell off hard, leverage unwinds, and traders sell what they can—not always what they want to.

That aligns with commentary pointing to margin calls and liquidity needs pushing metals lower. This type of selling can create temporary dislocations where gold falls even as the macro backdrop (uncertainty, instability, policy questions) would normally support it.

At the same time, Wednesday’s stronger US employment print reduced the urgency for near-term Fed easing. Even if the market still expects eventual cuts, “cuts later” increases the opportunity cost of holding non-yielding gold in the near term—especially when the Dollar stays firm.

Silver’s sharp plunge added fuel to the liquidation narrative across the metals complex, amplifying volatility and forcing risk reduction. In this environment, gold becomes a “macro asset” and a “portfolio funding source” simultaneously—so swings can be extreme.

Friday CPI is now the critical pivot:

• Soft CPI can trigger a relief bounce via lower real-rate expectations and short covering.
• Hot CPI risks extending the unwind as traders price a longer restrictive period.

Technical Outlook (H4)

• Stochastic is turning lower toward oversold territory
• Price is consolidating below the 20-period moving average
• Bearish bias, but volatility suggests bounce risk is rising

Key Levels to Watch

• Current Price: 4975.48
• Resistance: 5156.32 | 5311.58
• Support: 4788.03 | 4632.77

Conclusion

Gold is trying to stabilize near $4,975, but the structure remains fragile while below $5,156. Downside pressure focuses on $4,788 first; a break opens $4,633. Upside recovery requires reclaiming $5,156, with $5,312 as the larger ceiling. CPI is the deciding catalyst: soft inflation can spark a sharp bounce (short-covering + rates repricing), while hot inflation risks another liquidation wave.

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GBP/USD — Weak UK Growth Keeps Sterling Heavy

Key Highlights

• Sterling stabilizes but lacks bullish fuel after weak UK GDP
• BoE dovish split keeps cuts firmly priced
• CPI can move USD, but GBP may struggle to outperform

Previous Session Overview

GBP/USD consolidated on Thursday, holding near 1.3617.

Market Outlook

Cable is holding around 1.3617, showing mild resilience after recent volatility, but the UK side of the equation remains heavy. Weak growth data (Q4 GDP and December prints) reinforces the argument for BoE easing, especially after the narrow and dovish-leaning vote split.

That shifts the power balance: even if US CPI is soft and the Dollar weakens, GBP/USD may struggle to sustain rallies because Sterling’s own fundamentals do not provide a strong “buy and hold” case right now.

In short, GBP is trading like a currency that needs good news to rally, while USD only needs less-bad news to hold.

Technical Outlook (H4)

• Stochastic hovering near the lower zone
• Price sits slightly below the 20-period moving average
• Weak momentum; support levels are key

Key Levels to Watch

• Current Price: 1.3617
• Resistance: 1.3744 | 1.3847
• Support: 1.3529 | 1.3423

Conclusion

GBP/USD is stable at 1.3617, but structurally fragile. Holding 1.3529 is crucial; a break exposes 1.3423. Upside requires reclaiming 1.3744, but rallies may be capped without a meaningful shift in BoE expectations. CPI remains the key USD driver—yet Sterling’s ability to capitalize depends on whether markets believe UK growth can avoid deeper stagnation.