As we head into Tuesday, February 25, 2025, global markets are bracing for a session that could see notable volatility, driven by key economic releases. The U.S. dollar remains at the center of market attention as traders assess the impact of recent PCE inflation data and prepare for upcoming U.S. consumer confidence and home sales figures. Meanwhile, central bank rhetoric from the ECB and BoE will also be in focus, alongside risk sentiment in global markets.
In the currency markets, the EUR/USD pair exhibited fluctuations as traders reacted to U.S. inflationary pressures and mixed Eurozone economic data. The euro faced some downward pressure but managed to recover slightly as risk sentiment improved.
Meanwhile, USD/CAD saw renewed movement amid shifting oil prices and upcoming Canadian wholesale sales data, while AUD/USD remained volatile as traders responded to global risk sentiment and positioning ahead of Australian economic indicators.
EUR/USD
Technicals in Focus
The EUR/USD pair experienced a choppy session, trading near the 1.0483 level after initial volatility. The pair’s price action reflected investor caution amid PCE inflation data, which reaffirmed the Fed’s stance on monetary policy.
On the technical front, the MACD is showing signs of a potential shift, hovering near the zero line, indicating a lack of strong momentum in either direction. The Stochastic Oscillator is moving toward overbought territory, hinting at possible exhaustion for further upside. The 14-day RSI is neutral, reflecting the pair’s range-bound behavior.
Trading Strategy: Neutral to Buy
- Buy above 1.0485–1.0500 with targets at 1.0520–1.0550 and 1.0580, with a stop loss below 1.0450.
- Alternatively, consider selling below 1.0450 with targets at 1.0420–1.0400, with a stop above 1.0485.
USD/CAD
Technicals in Focus
The USD/CAD pair saw increased movement, hovering around the 1.4213 level after fluctuations driven by oil prices and mixed U.S. data. The pair initially spiked higher but later retraced as crude oil found some support.
On the technical side, the MACD indicates a loss of momentum, suggesting a potential corrective move. The Stochastic Oscillator is hovering in overbought territory, pointing to a possible pullback. The 14-day RSI is neutral, showing balanced conditions between buyers and sellers.
Trading Strategy: Neutral to Sell
- Sell below 1.4200–1.4175 with targets at 1.4140–1.4120 and 1.4100, with a stop loss above 1.4230.
- Alternatively, consider buying above 1.4230 with targets at 1.4260–1.4300, with a stop below 1.4200.
AUD/USD
Technicals in Focus
The AUD/USD pair saw notable volatility, trading near 0.6362 after recovering from recent declines. The pair’s movements were largely dictated by shifting risk sentiment and expectations surrounding U.S. economic releases.
On the technical front, the MACD remains below the zero line, signaling continued downside momentum. The Stochastic Oscillator has moved into oversold territory, suggesting the possibility of a short-term rebound. The 14-day RSI remains weak, reflecting ongoing bearish pressure.
Trading Strategy: Neutral to Buy
- Buy above 0.6370–0.6400 with targets at 0.6430–0.6460, with a stop loss below 0.6340.
- Alternatively, consider selling below 0.6340 with targets at 0.6300–0.6280, with stops above 0.6370.
Market Outlook
Looking ahead, traders will closely monitor the upcoming U.S. consumer confidence data, which could provide further insight into consumer sentiment and spending trends. Additionally, wholesale sales data from Canada and ECB commentary will be in focus, offering potential catalysts for short-term price action.
- For EUR/USD, the focus remains on Eurozone inflation expectations and the Federal Reserve’s inflation outlook.
- For USD/CAD, oil prices and Canadian economic indicators will play a significant role in the pair’s direction.
- For AUD/USD, global risk sentiment and potential shifts in U.S. bond yields will be key to determining near-term price action.
Overall, volatility is expected to persist as traders navigate economic releases and central bank narratives, making risk management crucial in the current market environment.