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US PPI for final demand rose by 0.4% mom in January, exceeding market expectations of 0.2% mom.

Final demand services increased by 0.3% mom, while final demand goods rose by 0.6% mom. Core PPI measure, which strips out volatile food, energy, and trade services, climbed 0.3% mom.

On an annual basis, headline PPI accelerated to 3.5% yoy, surpassing forecasts of 3.2% yoy. Core PPI followed closely, advancing 3.4% yoy.

Full US PPI release here

Hello fellow traders,

In this technical article we’re going to take a look at the Elliott Wave charts charts of EURUSD forex pair published in members area of the website. As our members know, recently EURUSD made a 3-wave pullback that completed right at the equal legs level. In the following sections, we will analyze the charts and explain the Elliott Wave forecast.

EURUSD Elliott Wave 1 Hour Chart 02.07.2025

EURUSD ended cycle from the 1.0205 low as 5 waves structure- wave ((i)) black. The pair is currently giving us pull back against the 1.0205 low. Equal legs area is already reached at 1.0320-1.0262 area. We are aware that pull back can complete any moment. Although we expect to see rally from the marked area, we don’t recommend forcing the trades at this stage.

EURUSD Elliott Wave 1 Hour Chart 02.07.2025

The pair found buyers in the 1.0320-1.0262 area as expected and completed the correction at the 1.0286 low. We’d like to see a break of the ((i)) black peak to confirm further upward movement toward the 1.05129-1.05671 area.

The British pound has edged higher on Thursday. GBP/USD is trading at 1.2460, up 0.15% on the day.

UK GDP beats forecast

The UK economy ended 2024 on a high note, as GDP rose 0.4% m/m in December. This was the fastest pace of growth in nine months and blew past the market estimate of 01.%. The surprise gain was driven by increases in services and manufacturing activity. Annually, the economy expanded 1.5% in December, its best showing since Oct. 2022. This followed a revised 1.1% gain in November and beat the market estimate of 1%.

The surprise to the upside in GDP is welcome news but is tempered by the fact that much of the growth may have been due to government spending, as business investment decreased in the fourth quarter and consumer spending was flat. GDP quarterly growth was only 0.1%, an indication that the UK economy is still weak.

Fed’s Powell comments on higher-than-expected inflation report

Fed Chair Jerome Powell testified before the House Financial Services Committee on Wednesday, just after the release of January’s hot inflation report. Headline and core CPI were both higher than expected, with headline inflation accelerating for a fourth consecutive month. Powell told lawmakers that the Fed had made “great progress” on inflation, but acknowledged there was more work to do. Powell said that the Fed doesn’t “get excited about one or two bad readings” but there are concerns that inflation could be moving in the wrong direction, away from the Fed’s 2% target.

The Fed’s battle with inflation has also become more complicated with President Donald Trump’s promise to impose tariffs on US trading partners. Trump has called on the Fed to lower interest rates, raising fears that he is trying to dictate monetary policy to the Fed, which is suppose to act independent of political considerations.

GBP/USD Technical

• GBP/USD tested resistance at 1.2493 earlier. Above, there is support at 1.2541
• 1.2435 and 1.2387 are the next support levels

The New Zealand dollar is drifting on Thursday. NZD/USD is trading at 0.5639 in the European session, down 0.04% on the day.

NZ inflation expectations dip to 2.06% in Q1 2025

New Zealand business inflation expectations didn’t show much change in the first quarter. Two-year inflation expectations, which are closely monitored by the central bank, edged lower to 2.06%, compared to 2.12% in the fourth quarter of 2024 and higher than the forecast of 1.8%. The business sector expects inflation to remain subdued, which fits in nicely with the fact that actual inflation also remains low. In the fourth quarter, inflation was unchanged at 2.2% y/y, close to the Reserve Bank of New Zealand’s target of 2%.

The RBNZ meets on Feb. 19 and a rate cut is fully priced in, with the probability of a quarter-point or half-point cut at around 50/50. This could mean a live meeting with investors holding their breath as to the extent of the rate cut. The RBNZ has proven it can be aggressive, having chopped 125 basis points since starting the easing cycle last August. The cash rate is down to 4.25% but this is still too high, given the weak New Zealand economy.

The weak New Zealand dollar supports the case for the RBNZ to deliver a modest quarter-cut next week. The Federal Reserve is sounding more hawkish and is looking at only one or two rate cuts this year. If the RBNZ slices rates by a half-point next week it will significantly widen the New Zealand/US rate differential and put pressure on the kiwi, which has plummeted about 11% since Oct. 1.

Federal Reserve Chair Jerome Powell testified before the Senate Banking Committee on Wednesday and reiterated that the Fed is in no hurry to lower rates. The softer-than-expected inflation report, which came out just ahead of Powell’s testimony, will raise concerns that inflation is rebounding. If the next inflation release is also higher than expected, we could see calls for the Fed to consider raising rates.

NZD/USD Technical

• NZD/USD is testing support at 0.5638. Below, there is support at 0.5604
• There is resistance at 0.5676 and 0.5710

Market Picture

The cryptocurrency market has been stabilising at a lower level since early February. The $3.3 trillion capitalisation mark is acting as resistance, causing the market to reverse downwards quite swiftly. In December, this level served as support.

The Cryptocurrency Fear and Greed Index has risen to 50, trying to push off the local bottom.

Bitcoin is trading near 96,000, with the 50-day moving average acting as impenetrable resistance, halting growth since early February. Technically, this signals a deeper correction pattern, potentially extending down to 93,000. However, the prolonged consolidation remains a cause for concern.

Ethereum is trading the area from $2,500-2,700 after a more than 20% failure in early February. The major altcoin is trading below its 50- and 200-day moving averages, with things heading for a death cross when the fast average dips below the long average. The impressive inflows into ETFs have so far failed to turn the coin’s momentum around. Deep declines are being bought out, but it is not possible to confidently move to growth, as crypto enthusiasts have other favourites in this market cycle.

News Background

The Hash Ribbons indicator, which evaluates the state of the Bitcoin mining ecosystem, has signalled miner capitulation. According to CryptoQuant, this is expected to drive short-term growth for the leading cryptocurrency.

Altcoins did not react to Fed Chairman Jerome Powell’s statements about the lack of rush to adjust rates. Some experts saw this as a sign that the sector had passed the bottom.

Despite Bitcoin’s sharp correction early last week, the bulls remain largely in control. For altcoins, however, the price collapse was likely a bear market event, according to Glassnode. Altcoins have suffered one of the steepest declines in history, with their capitalisation dropping by $234 billion over the past two weeks.

Solana, not Ethereum, will prove to be the winner of the ‘tokenisation race’, said Anthony Scaramucci, founder of SkyBridge Capital. He justified his opinion by the lower fees and faster transactions in Solana.

Eurozone industrial production fell by -1.1% mom in December, significantly worse than the market expectation of -0.6% mom. The decline was driven by sharp contractions in intermediate and capital goods, while non-durable consumer goods provided some offset.

Breaking down the data, intermediate goods production declined by -1.9% mom. The production of capital goods fell even further, down -2.6% mom. Durable consumer goods also posted a modest decline of -0.7% mom. On the other hand, energy production rose by 0.5% mom, and non-durable consumer goods surged by 5.1% mom.

At the broader EU level, industrial production contracted by -0.8% mom, with Belgium (-6.8%), Portugal (-4.4%), and Austria (-3.3%) suffering the steepest declines. Meanwhile, Ireland (+8.2%), Luxembourg (+6.7%), and Croatia (+6.3%) posted strong rebounds.

Full Eurozone industrial production release here.

Gold prices soared to 2,918 USD per troy ounce by Thursday, 13 February, marking an all-time high above 2,900 USD. The rally in Gold remains strong, with the potential for further price increases.

Key drivers behind Gold’s surge

 At least three major factors are supporting Gold's rapid ascent:

1. Geopolitical tensions – The ongoing deterioration in US-China relations, mainly due to the imposition of trade tariffs on Chinese imports, has heightened demand for safe-haven assets like Gold.
2. Global monetary policy expectations – Investors anticipate that the US Federal Reserve will cut interest rates, which weakens the US dollar and makes Gold more attractive as an alternative investment.
3. Central bank demand – Many global central banks, including China’s, are actively increasing their Gold reserves, providing strong demand support for the metal.

The ongoing weakness in the USD has further amplified Gold’s bullish momentum.

Technical analysis of XAU/USD

 On the H4 chart, XAU/USD found support at 2,865 USD and extended its growth wave to 2,909 USD. The market is now likely to consolidate around this level. A downward breakout from this range could trigger a corrective move back to 2,865 USD. However, if the price breaks upward, the growth wave could extend to 2,920 USD, with further potential to 2,960 USD. The MACD indicator confirms this scenario, with its signal line above zero and pointing sharply upwards, indicating strong bullish momentum.

On the H1 chart, XAU/USD corrected to 2,865 USD before finding support and forming a new uptrend towards 2,909 USD. The price is now consolidating around this level. The next target will be 2,920 USD if it breaks upwards, followed by a potential extension to 2,960 USD. A short-term decline to 2,909 USD is possible before another upward move. The Stochastic oscillator supports this view, with its signal line above 80, preparing for a minor correction towards 50 before the next leg higher.

Conclusion

Gold continues to benefit from geopolitical tensions, Fed rate cut expectations, and strong central bank demand. While minor pullbacks may occur, the overall trend remains bullish, with key upside targets at 2,920 USD and 2,960 USD. Investors will closely watch further developments in US-China trade relations and any signals from the Federal Reserve regarding monetary policy, as these will shape the next major move in Gold prices.

• The current bullish trend in the German stock market is supported by positive momentum, market breadth & intermarket dynamics.
• The DAX and Hang Seng Index (HSI) have a high direct correlation where a further bullish move in HSI may trigger a positive feedback loop into the DAX.
• Watch the 21,100 key medium-term pivotal support on the DAX.

The latest key economic data for January such as manufacturing PMI and consumer confidence in the Eurozone and Germany, one of the anchor European economies are not rosy as they highlighted an increased risk of an impending recession in the Eurozone.

Also, these leading Eurozone economic indicators have yet to indicate any clear recovery from an economic slowdown in the past year where external factors such as impending trade tariffs on European manufactured motor vehicles from US President Trump may torpedo the Eurozone into a recession next year.

In contrast, the German stock market has ignored such fears. It has continued to march higher since November 2024 as the Germany DAX scales new fresh all-time highs and is on track to record its fourth consecutive positive monthly gain in February.

Outperformance of the Germany stock market

Fig 1: 1-month rolling performances of Germany 30 & US CFD stock indices as of 13 Feb 2025 (Source: TradingView, click to enlarge chart)

Interestingly, the Germany DAX and Hang Seng stock indices (a proxy for international investors and traders to get exposure to China equities) have tracked closely to one another and outperformed the major US stock indices on a one-month rolling basis at this time of the writing according to the prices of contract for difference (CFD) stock indices on these markets offered by OANDA.

Based on a one-month rolling performance basis, the Germany 30 CFD stock index (a representation of the DAX) has recorded a gain of 10.50%, almost two times more than the average return of 4.6% seen on major US CFD stock indices such as US Nasdaq100 and US SPX 500 (see Fig 1).

Improving market breadth

Fig 2: Percentage of DAX component stocks above 200-day moving average as of 7 Feb 2025 (Source: MacroMicro, click to enlarge chart)

The percentage number of DAX component stocks trading above their respective 200-day moving averages has increased significantly from 47% in mid-November 2024 to 65% as of 7 February 2025 (see Fig 2).

These observations suggest that market breadth has improved to increase the odds of a continuation of the ongoing medium-term uptrend phase of the DAX.

Bullish acceleration in DAX

Fig 3: Medium-term trend of Germany 30 CFD stock index as of 13 Feb 2025 (Source: TradingView, click to enlarge chart)

The price actions of the Germany 30 CFD stock index (a representation of the DAX) staged a breakout above the upper boundary of a major ascending channel on 17 January.

Thereafter, it continued to trade above its 20-day moving average without any bearish divergence conditions currently on its overbought daily RSI momentum indicator (see Fig 3).

In addition, the Germany 30 CFD stock index has a high positive correlation (20-day rolling correlation coefficient at 0.87) with the Hang Seng Index (a proxy of China’s stock market).

The Hang Seng Index may continue to see an extension of its impulsive bullish upmove sequence within an ongoing medium-term uptrend phase (click here for a recap of our recent analysis on the Hang Seng Index) which in turn may trigger a positive feedback loop back into the Germany 30 CFD stock index.

Watch the 21,100 key medium-term pivotal support to maintain the bullish bias for the next medium-term resistances to come in at 23,140 and 24,100.

However, a breakdown below 21,100 invalidates the bullish impulsive upmove sequence to kickstart a potential medium-term (multi-week) corrective decline to expose the next medium-term supports at 20,430 and 19,690.

According to the XBR/USD chart, the price of Brent crude oil fell by more than 2% in a single day. This decline followed an announcement by US President Trump that he had spoken with Russian President Putin, discussing various global issues, including the war in Ukraine.

As reported by Reuters, this has raised expectations that a potential peace agreement between Ukraine and Russia could involve lifting sanctions, which have disrupted global oil supply flows.

Technical Analysis of XBR/USD

On 7 February, we highlighted key support at $74. Since then, the price has risen (as indicated by the arrow) to $77, which has confirmed its role as resistance.

Brent crude price movements outline a descending channel (marked in blue), with:

→ Bullish perspective: The $74 level may still act as support.

→ Bearish perspective: The $75.50–$75.80 zone, where sellers have shown dominance, could challenge bulls attempting to push prices into the upper half of the channel.

Rising US oil inventories, the prospect of increased production under President Trump, and expectations of sanctions on Russia being lifted could all contribute to Brent crude revisiting its 2025 lows.

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Switzerland’s CPI declined by -0.1% mom in January, in line with market expectations. Core CPI, which excludes fresh and seasonal products, energy, and fuel, also dropped by -0.1% mom. While domestic product prices ticked up by 0.1% mom, the steep -0.7% mom decline in imported product prices suggests that external factors continue to exert deflationary pressure on the Swiss economy.

On a year-over-year basis, headline inflation eased from 0.6% yoy to 0.4% yoy, also matching expectations. However, core CPI edged higher to 0.9% yoy from 0.7% yoy. Domestic product inflation slowed from 1.5% yoy to 1.0% yoy, reflecting weaker demand and subdued price pressures in the local economy. Meanwhile, imported product prices remained in deflationary territory, improving slightly from -2.2% yoy to -1.5% yoy.

Full Swiss CPI release here