On Tuesday, affected by a light economic data calendar, the pound remained steady. Ahead of the Bank of England's interest rate decision on Thursday, market sentiment turned cautious, with overall stability prevailing. So far this year, supported by several stronger-than-expected economic data releases, the pound has gained about 1.4% against the dollar. The market widely expects the BoE to keep its benchmark interest rate unchanged at 3.75% at Thursday's policy meeting, with one or two rate cuts possible later in the year. Although UK inflation unexpectedly rose to 3.4% in December — exceeding market expectations and making the UK the G7 economy with the highest inflation — the Bank of England forecasts inflation will fall back into the 2% target range around mid-year. Lee Hardman, senior currency analyst at MUFG Bank in Japan, noted that current market views suggest the BoE may delay further rate cuts until its May policy meeting. This postponement of rate-cut expectations is considered one of the key factors supporting pound strength. Before the release of key UK growth, employment, and inflation data in mid-to-late February, there are no major economic data releases scheduled. Recent data have been encouraging, including stronger-than-expected GDP for November, a rebound in December retail sales, and a pickup in January business activity — all providing solid support for the pound's relative strength against the dollar so far this year.

On Tuesday, two Federal Reserve officials offered differing takes on monetary policy while emphasizing the need to bring inflation back to target. Richmond Fed President Tom Barkin said the Fed's rate cuts since autumn 2024 have supported the labor market, but the policy focus remains on working to complete the "last mile" to bring inflation back to target. He pointed out that current inflation is still about 1 percentage point above target and has remained above target since 2021, which deserves close attention because current inflation data significantly influence future expectations. Barkin expects inflation to decline in the coming months and is optimistic about the economy's resilience in 2026, believing that deregulation, tax cuts, and productivity gains will support the economy and curb inflation. Barkin does not have a vote on the FOMC this year, and his remarks align with the Fed's current stance of pausing rate cuts and awaiting more data to confirm inflation trends. On the same day, Fed Governor Stephen Miran defended the view that significant rate cuts should occur this year. He argued that current monetary policy is overly restrictive for the economy and expects "more than a point of interest rate cuts over the course of the year." Miran noted that although inflation remains above target, underlying price pressures are moderate, and reduced regulatory burdens are boosting growth, allowing the Fed to lower rates without reigniting inflation. Miran's governorship ended at the end of January, but he remains in office until his successor is confirmed. These comments come as the Fed undergoes a leadership transition — last Friday, President Trump nominated former Governor Kevin Warsh as Fed chair. Beijing time, Wednesday (February 4th), market focus centers on the 21:15 release of the U.S. January ADP Employment Change and the 23:00 release of the U.S. January ISM Non-Manufacturing PMI.

Based on the 1H chart, GBP/USD has rebounded above the EMA12 and is running along the Bollinger Upper Band, indicating a short-term upward trend. The Bollinger Bands are widening upward, and moving averages are diverging higher, suggesting the market remains in a bullish trend. After the MACD golden cross, downward momentum has gradually weakened, with the MACD and signal lines returning above the zero axis, placing the pair in a short-term bullish zone. RSI stands at 60, reflecting predominantly buying interest among investors. Meanwhile, the 4H chart indicates that the Bollinger Bands are narrowing, moving averages are flattening, and the price is pressured near the middle band. If price can hold above the middle band, it is likely to rise toward the upper band and recent highs near 1.3800 and 1.3870; if it fails to hold, another downward move could occur. RSI is at 53, indicating a wait-and-see market. MACD fast and slow lines hover near the zero line, signaling potential for a trend reversal. Therefore, the tactical approach is sell now and buy later.

Trading Recommendations:

Trading direction: Sell

Entry Price: 1.371

Target Price: 1.3

Stop Loss: 1.4

Support: 1.34/1.3/1.28

Resistance: 1.38/1.4/1.41

Investor attention is currently centered on the preliminary January Harmonized Index of Consumer Prices (HICP) data, scheduled for release this Wednesday. Market forecasts suggest a deceleration in headline inflation to 1.7% year-over-year, down from December’s 1.9%. Conversely, core inflation—which strips out volatile components—is projected to remain largely stable at approximately 2.3%. These figures align with a cautious stance from the European Central Bank (ECB), offering little incentive for an imminent shift in monetary policy guidance.

Simultaneously, Martin Kocher, Governor of the Austrian Central Bank and ECB Governing Council member, cautioned that a sustained appreciation of the Euro could eventually necessitate a policy response. Kocher clarified that such a reaction would focus on mitigating indirect effects rather than direct currency intervention, as a stronger Euro exerts downward pressure on inflation—a critical variable in the ECB’s decision-making framework. Following these remarks, the Overnight Index Swaps (OIS) market reflected a slight uptick in easing expectations, with the probability of a September rate cut rising to 26% from a previous 16%. Despite this shift, the consensus remains that the ECB will hold its current posture at the February 4–5 meeting.

The broader macroeconomic landscape in Germany continues to signal weakness. The latest IFO Business Climate Index confirmed that economic sentiment remains stagnant at depressed levels, with a January reading of 87.6 missing the 88.1 forecast. This data underscores the fragile momentum within the Eurozone's largest economy, hampered by persistent structural headwinds. Similarly, the Eurozone Services PMI retreated to 51.9, reinforcing the perception of a vulnerable and moderate recovery.

In Switzerland, economic expectations reflected by the ZEW survey showed a marked deterioration at the start of the year. The indicator plummeted to -4.7 in January from 6.2 in December, exerting additional downward pressure on the Swiss Franc (CHF). This devaluation brings the Swiss National Bank (SNB) back into focus; an excessively strong currency poses significant challenges for an export-driven economy and complicates the SNB’s price stability mandate. With Switzerland already facing exceptionally low inflation, persistent Franc strength increases the risk of deflationary pressure, raising the probability of SNB intervention or a potential return to negative interest rates.

EUR/CHF has successfully defended the 0.9143 support level once again, staging a bullish rebound that suggests a potential bottoming structure is forming. This failed bearish breakout at a critical floor sets the stage for a corrective advance toward the primary resistance zone at 0.9234.

As price action progresses, the 100 and 200-period Moving Averages, situated at 0.9299 and 0.9313 respectively, serve as the primary targets for an extended recovery. However, the immediate challenge lies in a local descending trendline currently offering resistance near the 0.9200 psychological handle.

Our momentum analysis suggests that a decisive breakout above this trendline would provide the necessary technical confirmation for a sustained bullish impulse. Should this level be breached with high volume, we expect a continuation toward the next major resistance level at 0.9270, as the technical bias shifts in favor of the bulls, provided the 0.9143 floor remains intact.

Trading direction: Buy

Entry price: 0.9173

Target price: 0.9235

Stop loss: 0.9130

Validity: Feb 13, 2026 15:00:00

Geopolitical shifts continue to dictate market sentiment as U.S. President Donald Trump announced a significant trade agreement with India, slated to reduce tariffs on Indian goods to 18% from the current 50%. Simultaneously, Iranian President Masoud Pezeshkian signaled a willingness to commence nuclear negotiations with the U.S., a development that has marginally eased regional tensions and provided underlying support for the U.S. Dollar.

Despite this diplomatic opening, friction in the Middle East remains acute. The U.S. military recently intercepted an Iranian drone approaching the USS Abraham Lincoln in the Arabian Sea, an incident that comes as the Trump administration weighs potential military responses against Tehran. Diplomacy remains fragile, as Iran has requested that upcoming talks take place in Oman rather than Turkey, insisting on a strictly bilateral scope focused solely on nuclear issues. On the macroeconomic front, the Greenback found further support from a stronger-than-expected ISM Manufacturing PMI, which helped offset anxieties regarding a partial government shutdown that may delay Friday’s Nonfarm Payrolls (NFP) report.

Regarding U.S. monetary policy, the nomination of former Fed Governor Kevin Warsh as a potential future Chair has moderated concerns over central bank independence. Investors largely view Warsh as a seasoned institutional figure. However, a divide persists within the current Committee: Governor Christopher Waller recently advocated for a 25-basis point cut, arguing policy is overly restrictive, while Atlanta Fed President Raphael Bostic urged caution, demanding clearer evidence of inflation moving sustainably toward the 2% target.

Across the Atlantic, the European Central Bank (ECB) is widely expected to maintain the deposit facility rate at 2%. Eurozone inflation continues to hover near the institution's target, with a projected deceleration in headline figures largely attributed to transitory energy-related base effects. Market participants are now focused on Wednesday’s preliminary Harmonized Index of Consumer Prices (HICP) for January.

The consensus expects headline inflation to moderate to 1.7%, while core inflation is projected to remain stable at 2.3%. Furthermore, Martin Kocher, Governor of the Austrian Central Bank, recently noted that a persistently strong Euro could necessitate a monetary policy adjustment to counter its deflationary effects, a sentiment that has slightly increased the market's long-term easing expectations.

The EUR/USD pair has completed a technical correction, effectively closing the bullish gap formed on January 25th. The price is currently testing a major "Value Area" defined by the convergence of the 100 and 200-period Moving Averages on the 4-hour chart, situated at 1.1682 and 1.1706, respectively.

This moving average cluster sits just below a primary horizontal support level at 1.1769. This confluence of indicators is expected to serve as a powerful technical catalyst, potentially propelling the pair back toward the 1.1987 resistance target.

Our momentum analysis via the Relative Strength Index (RSI) reinforces this recovery thesis, as the indicator has descended to the 32 level, signaling deeply oversold conditions. Simultaneously, the MACD histogram is printing progressively smaller bearish bars, suggesting that the downward momentum is rapidly exhausting.

If the bullish bars begin to take control and the price defends this support cluster, we anticipate a decisive shift in direction. However, traders should remain vigilant: a forceful break below this support zone would invalidate the immediate bullish setup and open the door for a more significant structural correction.

Trading direction: Buy

Entry price: 1.1818

Target price: 1.1987

Stop loss: 1.1670

Validity: Feb 13, 2026 15:00:00

The AUD/JPY currency pair has recently been trading higher, supported by the Australian Dollar’s strength against the Japanese Yen, benefiting from relative monetary policy conditions and broader risk sentiment that favors higher-yielding currencies. Currently trading around 108.43, the pair shows positive performance over the past week and month, reflecting ongoing appetite for AUD amid improving macro conditions relative to JPY. Technical ratings from widely tracked chart platforms indicate active buy signals on multiple timeframes, suggesting persistent bullish pressure.

Sentiment for AUD/JPY remains broadly bullish according to several sources. Technical indicators like moving averages, RSI and MACD often used to gauge directional bias are showing buy signals, with the 14-day RSI at elevated readings that reflect strength but not extreme overbought conditions. This supports the idea that dips should attract buyers rather than sellers. While short-term corrections can occur, the longer-term trend remains upward until a clear breakdown below key support levels.

On the M15 timeframe, the AUD/JPY price structure shows the pair staying above rising dynamic support levels such as short-term moving averages and trading above recent pivot points. A strong buy signal is confirmed by several moving average crossovers and momentum indicators. Recent technical data also shows the price consuming resistance with steady upward slope, while pullbacks toward intraday support near lower moving averages have historically provided solid entries for buyers during this uptrend.

Entry: 109.30

Take Profit: 110.10

Stop Loss: 107.50

Gold prices recently experienced an extremely volatile move, including a historic swing where gold dropped over 13% in a two-day period before rebounding strongly with the largest gains seen in decades. This rush back from oversold levels reflects short covering and opportunistic buy orders rather than a confirmed return to bullish momentum. While longer-term outlooks from major houses like J.P. Morgan maintain a bullish medium-term view, short-term price action remains vulnerable to corrective pressure until clear upside breaks occur.

Sentiment across precious metals is currently mixed. Although dip buyers stepped in after the steep sell-off, near-term sentiment does not yet reflect a decisive shift back to bullish control. Indicators continue to point toward caution, as the recent bounce may be temporary relief rather than entry into a sustained uptrend. This environment favors tactical selling at higher levels rather than aggressively buying breakouts.

Current technical data shows that gold remains below its key resistance zones, struggling to sustain above prior pivot levels. Forecasts suggest that bearish pressure could persist and that near-term resistance around current ranges may cap high attempts, especially if the US dollar strengthens or other risk-off dynamics unwind. Although gold’s structure held support recently, the lack of a clear breakout above resistance suggests continuation of corrective bias before broader structural trends resume ascent.

Entry: 4960

Take Profit: 4780

Stop Loss: 5050

EUR/AUD has been under sustained downward pressure as macro drivers tilt the landscape in favour of the Australian dollar. Recent data show the RBA lifted rates and may signal further tightening, supporting AUD strength, while the ECB remains steady without aggressive tightening, weakening EUR relative to AUD. This monetary policy divergence has kept the cross in a broad downtrend that shows little sign of reversing on 3 February, with the pair positioned around the 1.68–1.69 zone on live charts.

Sentiment in EUR/AUD remains bearish as traders continue to favour AUD in the face of hawkish RBA expectations and subdued euro activity. Price action has already broken through recent temporary lows and technical studies from daily outlooks suggest downside continuation remains the primary scenario unless a significant reversal trigger emerges. Traders are thus inclined to add to or initiate short positions on rallies rather than look for long opportunities at these levels.

On the M15 chart, EUR/AUD’s structure shows lower highs and lower lows, reflecting sustained selling pressure. A key technical study indicates that the decline resumed after breaking below the 1.6892 intraday low, reinforcing bearish bias and paving the way for deeper declines toward next support targets if momentum persists. Overhead resistance near recent pivot highs remains intact, presenting ideal sell-on-strength entry zones.

Entry: 1.6850

Take Profit: 1.6700

Stop Loss: 1.6990