Softer Inflation Shifts Market Focus (07.02.2026)

Global markets remained cautious on Thursday as investors balanced softer inflation signals in Europe with shifting expectations for U.S. monetary policy. 

The euro stayed under pressure near a one-year low despite easing Eurozone inflation, while gold and silver rebounded after Federal Reserve Chair Kevin Warsh suggested there was no immediate need for another rate hike. The Japanese yen remained pinned near four-decade lows amid intervention speculation, and sterling continued to trade near multi-month lows as traders awaited key economic data and policy signals.

Euro Edges Toward Annual Low

The euro slid below $1.14, moving closer to a one-year low after losing 2% against the dollar in June. Markets digested softer Eurozone inflation data, with the flash CPI report showing headline inflation slowing to 2.8% and the core rate down to 2.4%, offering the European Central Bank minor breathing room.

The first resistance is positioned at 1.1430 while the support starts from 1.1360.

Gold Rebounds Above $4,000

Gold climbed back above $4,000 per ounce on Thursday, recovering from an eight-month low hit earlier this week. The metal found support following remarks from Federal Reserve Chair Kevin Warsh, who observed that inflation expectations had moderated over the past month and indicated there is no immediate urgency to hike interest rates.

First resistance is seen at $4088, with initial support near $3950.

Yen Stuck at Four-Decade Low

The yen hovered near 162.5 per dollar on Thursday, remaining at a forty-year low. Traders stay highly alert for potential intervention by Japanese officials, particularly ahead of the U.S. holiday, when diminished trading volumes could amplify the impact of any market moves.

Initial resistance stands at 163.00, while the first support is at 161.70.

Pound Keeps Steady Near Lows

The British pound stabilized just above $1.32, remaining near seven-month lows after declining 1.4% against the dollar in June. The currency continues to face downward pressure from domestic political uncertainty, a resilient dollar, and the Bank of England's cautious monetary policy stance.

From a technical view, resistance stands near 1.3350, with support around 1.3150.

Silver Rebounds Past $59

Silver climbed back above $59 per ounce on Thursday, recovering from recent seven-month lows. The metal was supported by comments from Fed Chair Kevin Warsh, who noted that inflation expectations had softened over the past month, indicating no immediate pressure to hike interest rates.

From a technical view, resistance stands near $60.40, while support is located around $56.50.