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The Japanese yen (JPY) is declining during the Asian session on Friday amid some repositioning ahead of the expected Bank of Japan (BoJ) decision. However, the yen's decline seems tempered amid growing expectations that the BoJ will raise interest rates amid signs that inflationary pressures in Japan are intensifying. In fact, government data released today showed that Japan's core consumer prices rose at the fastest pace in 16 months. Moreover, the core rate, which excludes fresh food and energy prices, remained above the Bank of Japan's 2% annualised target for the fourth consecutive month.

Meanwhile, the prospect of further BOJ policy tightening and bets that the Federal Reserve (Fed) will cut interest rates twice this year could narrow the rate differential between the U.S. and Japan. Additionally, concerns over US President Donald Trump's trade policies should continue to serve as a tailwind for the Yen. The US Dollar (USD), on the other hand, is languishing near one-month lows amid concerns over the interest rate implications of the Fed and Trump's policy clash. This, in turn, favours the USD bears and may help contain a significant rise in the USD/JPY pair.

Trade recommendation: Trading mainly with Sell orders from the current price level.

GBP/USD declines as markets move into mid-week actionInvestors are awaiting Friday's twin PMIs from the UK and the US.

The GBP/USD pair experienced a weakening on Wednesday, retreating by one-fifth of a percent as markets await a decisive push that will shift risk appetite in one direction or the other. Markets have been subdued during the slow interval between key mid-week data releases, with Purchasing Managers' Index (PMI) data being the light at the end of the tunnel this week.

Traders will be focused on Friday's S&P Global PMI data, which will be released on both sides of the Atlantic. This week, the UK and US PMI business activity survey results for January are expected to be mixed, with a contraction in services and a recovery, albeit small, in manufacturing. While PMI data typically exerts minimal influence unless it deviates from forecasts, the number of respondents in the survey is generally limited, necessitating a cautious interpretation of the overall figures.

Trading recommendation: We follow the level of 1.2300, if we consolidate above it we consider Buy positions, if we rebound we consider Sell positions.

Economic data from Europe and the US remains sparse this week, with investor sentiment entirely dependent on new US President Donald Trump's trade war rhetoric, which has been tweeted from one moment to the next.

During the current trading week, Donald Trump has been wavering on his campaign promises to impose uniform tariffs on all US trading partners on the day he takes office. He has brushed off his own statements and switched to threats of new tariffs on Mexico, Canada and China ranging from 10% to 25%, which could be imposed as early as 1 February within 48 hours. President Trump's fury over alleged trade violations led to Europe falling off his list of retaliation tariffs, leaving the Euro bogged down near familiar technical levels.

The euro's rising interest rate differential against the US dollar has left the euro in a technically weak position, while a steady stream of mixed messages from the European Central Bank's (ECB) parade of speakers has dampened investor interest in further policy makers' talking points. ECB President Christine Lagarde is due to make another public statement on Wednesday, but nothing noteworthy is likely to follow.

Friday will see the release of fresh Purchasing Managers' Index (PMI) data for both the EU and the US. Both indicators are expected to be mixed.

Trade recommendation: Watch the level of 1.0380, when fixing below consider Sell positions, when rebounding consider Buy positions.

The Japanese yen (JPY) is retreating sharply after hitting a five-week high against its US counterpart during Tuesday's Asian session. The Dollar-Yen pair has bounced more than 100 pips in the past hour from levels below the psychological 155.00 mark. US President Donald Trump's statements on tariffs triggered a sharp recovery in the US dollar from the two-week low reached on Monday and proved to be the key driver of the yen's intraday fall. Nevertheless, changing global risk sentiment is providing some support to the safe-haven yen.

In addition, rising expectations that the Bank of Japan (BoJ) will raise interest rates at its monetary policy meeting later this week are helping to limit the yen's significant decline. Meanwhile, rising bets that the Federal Reserve (Fed) will lower borrowing costs twice this year have led to a recent decline in US Treasury yields. As a result, the narrowing rate differential between the US and Japan has kept traders from aggressive bearish bets on the yen and contained the USD/JPY pair's intraday positive movement.

Trading recommendation: Watch the level of 155.00, if consolidated below consider Sell positions, if rebounded consider Buy positions.

The GBP/USD pair has started the new week on a slightly positive note, partially recovering from Friday's decline, although this rise is inconsistent and lacks bullish confidence. Spot prices are currently trading around 1.2180, up less than 0.10% on the day, and remain near the lowest level since November 2023, which was reached last week.

The US Dollar (USD) is attempting to capitalise on Friday's positive movement amid expectations that the Federal Reserve (Fed) is not ruling out the possibility of a rate cut before the end of this year.Additionally, the overall positive risk-off tone is undermining demand for the safe-haven greenback, which provides some support to the GBP/USD pair. However, this combination of factors could potentially exert a negative influence on spot prices, thus necessitating a degree of caution from bullish traders.Investors appear convinced that the protectionist policies of the recently elected US President, Donald Trump, could potentially lead to higher inflation, thereby compelling the Fed to adopt a more hawkish stance.In addition, the Fed is expected to pause its rate-cutting cycle later this month, a development that should limit any losses suffered by the dollar. Additionally, the risk of stagflation, along with concerns regarding the UK's financial stability, may deter traders from making bullish bets on the British pound, thereby limiting the upside potential of GBP/USD.Furthermore, the recent release of mixed UK macroeconomic data has increased the likelihood of a 25 basis points rate cut by the Bank of England (BoE) at its next meeting on 6 February. Therefore, it would be prudent to wait for strong follow-through buying before confirming that the GBP/USD pair has formed a short-term bottom and positioning for any meaningful strengthening move in the absence of any market-critical economic data on Monday.

Trading recommendation: We follow the level of 1.2200, if we consolidate above it we consider Buy positions, if we rebound we consider Sell positions.

Germany's Harmonised Index of Consumer Prices (HICP) was released on Thursday, aligning with market expectations. This outcome was anticipated, as it was not preliminary data and typically remains stable unless there is a significant economic downturn.In December, retail sales data showed a slowdown, leading to a 0.4% contraction for the month. Markets had predicted a decline to 0.6%, down from a revised 0.8% in the previous month. Core retail sales, excluding auto spending, rose to 0.4% m/m from 0.2%, meeting analysts' average forecasts.The mixed data did not cause significant changes in investor sentiment.

There will be few important data releases this coming Friday, with HICP inflation data for the broad pan-European economic area expected to confirm a small rise to 2.8% y/y from 2.7%. In the US, data on construction starts, building permits and industrial production for December are expected, which will be relatively close to the previous figures and are unlikely to cause significant market volatility on their own.

Trading recommendation: We follow the level of 1.0350, if it is fixed above we consider Buy positions, if it bounces back we consider Sell positions.

The Japanese Yen (JPY) attracted buyers for the second consecutive day on Thursday amid comments from Bank of Japan Governor Kazuo Ueda signalling a possible rate hike next week. In addition, signs of intensifying inflationary pressures in Japan are supporting the prospects of further BOJ policy tightening, sending Japanese government bond (JGBs) yields to multi-year highs. In contrast, US Treasury yields fell sharply on Wednesday in response to favourable US inflation data. The narrowing yield differential between the US and Japan is seen as another factor undermining the yen.

Meanwhile, lower-than-expected US inflation has raised the possibility that the Federal Reserve may cut interest rates twice this year. This makes the US Dollar (USD) bulls defensive and drives the USD/JPY pair to a new four-week low around 155.20 during the Asian session on Thursday. Nevertheless, the risk-on sentiment may keep traders from placing new bullish bets on the safe-haven Yen and provide some support to the currency pair. Investors are currently turning their attention to the US economic plan, which will see the release of monthly retail sales data and weekly initial jobless claims data, in search of short-term opportunities.

Trade recommendation: Trading mainly with Sell orders from the current price level.

The Pound-Dollar pair is attracting some sellers during Wednesday's Asian session, although it lacks support and remains within the previous day's wider trading range. Spot prices are currently trading near 1.2200, down 0.20% for the day, as investors look ahead to the release of important Consumer Price Index (CPI) data from the UK and the US before starting to position for the next leg of directional movement.

The crucial CPI report will impact the Bank of England (BoE) and Federal Reserve (Fed) interest rate outlook, which in turn will play a key role in determining the next leg of directional movement for the GBP/USD pair. Ahead of key data releases, the risk of stagflation - a combination of high inflation and weak economic growth - and concerns over the UK's fiscal situation are undermining the British Pound (GBP).

In addition, the recent jump in UK borrowing costs is contributing to the deterioration in sentiment around the British Pound and is a key factor weighing on the GBP/USD pair. The US Dollar (USD), on the other hand, is languishing near the weekly low reached in response to the release of lower US producer prices on Tuesday and is helping to limit the decline in spot prices. At the same time, the Fed's hawkish attitude acts as a tailwind for the USD.

Trade recommendation: Trade mainly with Sell orders from the current price level.

EUR/USD continued to explore the bearish side of the charts on Monday, falling towards 1.0200 for the first time since late 2022 and recording a fresh 26-month low before half recovering during the day.

European economic data remained weak throughout the trading week. The European Central Bank (ECB) will continue to cut interest rates, further widening the Euro's interest rate differential against the US Dollar. The final EU and German inflation data released mid-week is not expected to deviate much from the preliminary data.

The US Producer Price Index (PPI), which is expected to rise to 3.7% y/y in December from the previous reading of 3.4%, will start the week with the release of important data on Tuesday. US CPI inflation, also released on Wednesday, is forecast to rise to 2.8% from 2.7%, while US retail sales data is expected on Thursday.

Trade recommendation: Watching the level of 1.0200, trading mainly with Sell orders

The Japanese yen (JPY) rose against its US counterpart for the third consecutive day on Monday and is moving away from the multi-month low reached last week. The risk-off impulse, reflected in weakening sentiment in stock markets, is a key factor supporting the safe-haven Japanese Yen. However, doubts over the Bank of Japan's rate hike plans should limit the yen's upside.

Rising inflationary pressures in Japan leave the door open for another BoJ rate hike in January or March. Nevertheless, some investors believe that the BoJ may wait until April for confirmation that the strong pace of wage growth will continue into the spring talks. In addition, the recent widening of the yield differential between the US and Japan may also contribute to the depreciation of the Japanese Yen.

In addition, bullish sentiment around the US Dollar (USD), fuelled by expectations that the Federal Reserve (Fed) will pause its rate cut cycle, should serve as a tailwind for USD/JPY. In the absence of any significant economic releases, the mixed fundamental backdrop calls for caution before positioning for further JPY strength.

Trade recommendation: Watch the level of 158.80, when fixing above consider Buy positions, when rebounding consider Sell positions.

Gas panic in Europe: reserves depleting at record paceEurope is facing unprecedented depletion of gas reserves due to cold weather and technical challenges. According to EU gas storage data, storage levels have fallen to 70%, significantly lower than last year’s 86%. Analysts note that this situation is unique in the last seven years.

Adding to the strain, Norway’s Hammerfest plant, which supplies liquefied natural gas (LNG), has halted operations due to compressor issues. This suspension intensifies pressure on the gas market, especially in light of the cessation of Russian gas transit through Ukraine.

The European gas market is set for potential price increases in the coming months. Current storage challenges and reduced supply volumes heighten the likelihood of price hikes, particularly if the cold weather persists. Additionally, the reduction in Russian gas supplies forces the EU to compete more aggressively for LNG on the global market.

Advantages of investing in #GAS in 2025:

   •Rising energy demand: Increased gas consumption during the winter and limited supply create conditions for sustained price growth. Investing in #GAS could yield high returns during the current energy crisis.
   •Global LNG competition: Europe and Asia are actively competing for access to LNG. This boosts market liquidity and enhances its appeal to traders and investors.
   •Inflation hedge: Energy resources, including gas, are a traditional way to protect investments from inflation risks.
   •Transition to LNG: As part of supply diversification, Europe is increasing the share of LNG in its energy mix, supporting demand for gas futures.
   •High volatility: Significant price fluctuations present possibilities for short-term profits, particularly amidst geopolitical instability and weather anomalies.
 

Analysts at FreshForex believe that 2025 is the ideal time to invest in #GAS! Limited reserves, high demand, and volatility create perfect conditions for substantial profits. Don’t miss the chance to capitalize on the year’s leading energy resource!

The GBP/USD pair hit a fresh 14-month low on Thursday as the pound continues to decline against the dollar. Markets, weakened by the holidays, are holding on to the US Dollar as investors await new US Non-Farm Payrolls (NFP) data on Friday.

UK Chief Finance Minister Darren Jones spoke on Thursday, noting that UK financial markets continue to function in ‘normal mode’. British financial markets reacted with a rapid sell-off in sterling and increased expectations of further rate cuts by the Bank of England (BoE) over the course of the year.

US markets were closed on Thursday for a day of mourning for the death of former President Jimmy Carter, who passed away in December at the age of 100. Maretk participants got a respite from this week's busy US data release schedule, but there is another round of Friday's NFP employment data ahead, which will further limit already tight market volumes. US job growth is expected to fall slightly in December, while wage growth is expected to remain flat or even decline on a month-on-month basis. Lower wage and job growth could wreak further havoc on the broad market's hopes for a rate cut in 2025, as strong wages keep inflation expectations high and still-strong employment data means the Federal Reserve (Fed) will have little reason to change rates.

Trading recommendation: Trade recommendation: Watch the level of 1.2275, when fixing below consider Sell positions, when rebounding consider Buy positions.

EUR/USD traded in negative territory for the third consecutive day around 1.0310 in the early European session on Thursday. Downbeat German factory orders data for November and expectations of aggressive rate cuts by the European Central Bank (ECB) this year are weighing on the euro (EUR) against the US dollar. Later on Thursday, Eurozone retail sales for November as well as the Fed's peak will be in focus.

Factory orders in Germany unexpectedly declined in November, with the figure falling 5.4% for the month compared to a 1.5% decline in the previous quarter, the German Federal Statistical Office said on Wednesday. The figure was weaker than the 0% drop expected. Weaker-than-expected economic data from Germany, the bloc's largest economy, put pressure on the common currency.

According to the minutes of the December 17-18 Fed meeting, U.S. Federal Reserve (Fed) officials noted the need for a cautious approach in the coming quarter, adding that President-elect Donald Trump's trade policies could make inflation data harder to read. The hawkish tones of the US central bank officials could lift the US Dollar and create a headwind for the pair in the near term.

Trading recommendation: Watch the level of 1.0300, if consolidated below consider Sell positions, if rebounded consider Buy positions.

The GBP/USD pair continued to rise for the second day in a row, starting the new trading week with a seven-tenths of a cent gain above 1.2500 after last week's bearish dip below 1.2400. Purchasing Managers' Index (PMI) data fell short of expectations in both the UK and the US. Nevertheless, the general atmosphere of rising risk held back safe-haven flows into the US Dollar.

UK PMI data for December completely failed, falling below Wall Street forecasts, declining but remaining above the 50.0 mark, signalling an expected contraction. In particular, the composite PMI fell to a 13-month low, dropping to 50.4 from an expected 50.5.

The final US PMI data from S&P Global on Monday fell slightly short of expectations, with the composite index and the services PMI for December rising, albeit less than analysts had expected. Both figures were revised slightly down from preliminary data, but still strengthened as the US economy continues to grow.

The key indicator of the week will be the ISM Services PMI for December. Average market forecasts expect the reading to rise to 53.0 from 52.1 in the previous month. Friday's Non-Farm Payrolls (NFP) data will set the tone for market dynamics this week as investors expect a ‘golden mean’ that will help push the Federal Reserve (Fed) to cut rates further, but not too weak or strong in either direction.

Trading recommendation: Watching the level of 1.2550, trading mainly with Buy orders.

The Euro-dollar pair is declining after rising in the previous session, trading near 1.0300 during Asian hours on Monday. Traders are expected to keep a close eye on the HCOB composite purchasing managers' index (PMI) for the Eurozone and preliminary consumer price index (CPI) data for Germany due later in the day.

EUR/USD faces headwinds as market analysts expect further declines, possibly to parity, due to divergent monetary policy outlooks from the Federal Reserve (Fed) and the European Central Bank (ECB).

In the Eurozone, ECB policymakers favor maintaining the current pace of monetary policy easing. Markets have already priced in a 113 basis point (bps) cut in ECB interest rates this year, implying at least four 25 bps rate cuts. This outlook reflects growing concerns that Eurozone inflation will not reach the ECB's 2% target.

On Thursday, ECB Governing Council member and Bank of Greece Governor Yannis Stournaras said in an interview with Skai radio that the central bank's benchmark interest rates should fall to “around 2%” by “this fall.” That suggests the ECB is likely to cut the deposit rate at each of its next four meetings.

Fed officials are also signaling a more cautious approach to rate cuts in 2025. On Friday, FRB Richmond President Thomas Barkin emphasized that the benchmark rate should remain restrictive until there is confidence that inflation will return to the 2% target. In addition, Fed Chair Adriana Kugler and San Francisco Fed President Mary Daly emphasized that U.S. central bankers will face the difficult task of reducing the pace of monetary policy easing this year.

Trade recommendation: Watch the level of 1.0300, if consolidated below consider Sell positions, if rebounded consider Buy positions.

The USD/JPY pair is down to 157.20 during Asian trading on Friday. Verbal intervention from the Japanese authorities is providing some support to the Japanese yen (JPY). However, uncertainty over the Bank of Japan's (BoJ) policy outlook could limit the yen's gains. Markets in Japan are closed for the rest of the week. Traders are awaiting the release of the ISM US Manufacturing PMI for December, which is due on Friday.

Traders will keep a close eye on possible currency intervention by Japanese officials to prevent the yen from falling. Japan's Finance Minister Katsunobu Kato last week reiterated his concern over the yen's fall, repeating his warning to take appropriate measures against excessive currency movements.

Next week, the Bank of Japan will release its quarterly report on the regional economy, which will likely include an assessment of whether wage increases are spreading across the country. This report may provide some insight into the BOJ's next policy decision on January 24.

On the other hand, speculation that the Federal Reserve (Fed) will cut interest rates less frequently in 2025 and optimism about the U.S. economy could help boost the dollar. The U.S. central bank has indicated that it will be more cautious in cutting rates as inflation continues to remain above its 2% annualized target and the economy remains strong. In addition, US President-elect Donald Trump's policies are expected to boost growth and potentially spark inflation, which could slow the pace of Fed rate cuts.

Trading recommendation: Watch the level of 157.00, if consolidated below consider Sell positions, if rebounded consider Buy positions.

The EUR/USD exchange rate has been declining for the past four consecutive days, trading near 1.0350 during Asian hours on Thursday. The euro is facing challenges as the European Central Bank (ECB) maintains its dovish interest rate policy guidance for the current year.

The ECB cut the deposit rate by 100 basis points (bps) to 3% in 2024 and is expected to cut it further to 2%, considered a neutral rate, by the end of June 2025. This suggests that the central bank is likely to cut key borrowing rates by 25 bps at each meeting in the first half of this year.

On Wednesday, ECB President Christine Lagarde stated that the central bank aims to meet its inflation target of 2 per cent by 2025, adding that significant progress has been made in reducing inflation and that the target is expected to be reached in 2025, as anticipated and in line with the strategy. She added: 'Of course, we will continue our efforts to ensure that inflation stabilises sustainably at our medium-term target of 2 per cent.'

The Federal Reserve may adopt a more cautious stance on further rate cuts in 2025, signalling a change in its monetary policy. This change reflects the uncertainty associated with potential policy adjustments in light of the perceived economic strategies of the incoming Trump administration.

Trading recommendation: We follow the level of 1.2550, when fixing above it we consider Buy positions, when rebounding we consider Sell positions.

The EUR/USD pair is strengthening on Tuesday, trading near 1.0410 during the Asian session after losses the previous day. The EUR/USD's recovery can be attributed to the weakening of the US dollar (USD) following the decline in Treasury yields.

The US Dollar Index (DXY), which tracks the USD against six major currencies, suffered minor losses near 108.00 as US Treasury yields fell about 2% on Monday. The 2-year and 10-year yields stood at 4.24% and 4.53%, respectively.

However, the risk-sensitive EUR/USD is facing challenges as the Federal Reserve (Fed) may take a more cautious stance on potential rate cuts in 2025, signaling a shift in its approach to monetary policy. This adjustment comes amid uncertainty surrounding economic policies expected under the Trump administration.

In addition, safe-haven outflows are weighing on the euro amid heightened geopolitical risks related to the protracted Russia-Ukraine conflict and ongoing tensions in the Middle East. On Monday, Israel's UN Ambassador Danny Danon issued a stern warning to Iran-backed Houthi militants in Yemen, urging them to stop rocket attacks on Israel, Reuters reported.

Trading recommendation: Watch the level of 1.0400, if consolidated below consider Sell positions, if rebounded consider Buy positions.

On Monday, the Japanese yen (JPY) continued to gain ground against the US dollar (USD). The USD/JPY pair has remained subdued as the Japanese yen strengthens in anticipation of the Bank of Japan (BoJ) raising interest rates in January, following the release of Consumer Price Index (CPI) inflation data in Tokyo last week.

Jibun Bank's Japan Manufacturing PMI reached 49.6 in December, slightly above the flash estimate of 49.5 and improving from 49.0 in November. While this figure was the highest since September, it still signalled the sixth consecutive month of declining factory activity.

The Nikkei 225 index experienced a decline to 39,950 on Monday, following two days of gains. This decline followed a modest decrease in U.S. futures after Friday's decline on Wall Street, driven by rising Treasury yields and indications of more measured interest rate cuts in 2025.

Trade recommendation: We follow the level of 158.00, if it is fixed above we consider Buy positions, if it bounces back we consider Sell positions.

The GBP/USD pair has remained low for the third consecutive day, trading around the 1.2520 mark during Asian hours on Friday.This decline is attributed to low trading activity after the Christmas break and a strengthening US Dollar, driven by growing expectations of a rate cut by the US Federal Reserve (Fed).

At its December meeting, the Fed cut interest rates by a quarter point and revised its 2025 forecast to include only two rate cuts, down from the previously projected four. However, the likelihood of additional rate cuts next year was tempered by moderate US PCE inflation data.

Dollar gains may be limited, however, as US Treasury yields remain at low levels on Friday. At the time of writing, 2-year and 10-year bond yields stand at 4.33% and 4.58% respectively.The Pound Sterling (GBP) has weakened against its major counterparts amid rising expectations that the Bank of England (BoE) will maintain a dovish policy next year. The UK central bank maintained its key interest rate at 4.75% in December, but a divided vote, with three policymakers in favour of a rate cut, suggested the possibility of a more pronounced easing in 2025.Market expectations for 2025 now include a rate cut of 53 basis points (bps), up from the previously expected 46 bps. This adjustment came after the Monetary Policy Committee (MPC) voted 6-3, with three of the nine members in favour of a 25 bps rate cut, which investors took as a clear signal that a dovish shift was on the horizon.

Trading recommendation: We follow the level of 1.2500, when fixing above it we consider Buy positions, when rebounding we consider Sell positions.