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Outgoing Atlanta Fed President Raphael Bostic told said the rapid adoption of artificial intelligence may push the US into a period of structurally higher unemployment. In an interview with Reuters, he suggested that firms may simply need fewer workers, raising the level of joblessness considered consistent with full employment.

Rather than attempting to artificially suppress unemployment with rate cuts, Bostic argued policymakers should recognize structural shifts and set rates accordingly. “This is a very hard time to be a central banker,” he said, noting that the same economic indicators may now carry different implications as technological change reshapes the labor market.

With inflation still above target, Bostic warned that easing policy to counter structural forces could lead to both higher inflation and misaligned employment signals. "To address short-run issues that are structural in nature could put us at risk of a much more difficult situation, where both of our mandate measures seem to be moving in the wrong direction," Bostic said.

He steps down as president of the Federal Reserve Bank of Atlanta at the end of his term on February 28.

USD/JPY rose to 154.91 on Tuesday. The yen surrendered the previous session's gains, while the dollar found support despite uncertainty over US trade policy.

Over the weekend, President Donald Trump announced his intention to raise global tariffs from 10% to 15%, following a Supreme Court decision that overturned his "reciprocal" duties. He also warned of tougher measures against countries that "play games" with existing trade agreements.

Tokyo urged Washington to ensure that the court's decision does not harm Japanese companies and reaffirmed its commitment to the existing trade agreement with the US.

At the same time, Japanese media reported that US authorities held consultations last month on exchange rate policy to support the yen and are prepared to coordinate possible intervention at Japan's request. The initiative was overseen by US Treasury Secretary Scott Bessent amid concerns that political uncertainty ahead of Japan's general election could heighten market volatility.

Technical Analysis

On the H4 USD/JPY chart, the pair has formed a consolidation range around 154.00. It has now broken out to the upside, opening the way for a move towards 155.75. After reaching this level, a decline towards 151.80 is likely. Technically, this scenario is confirmed by the MACD indicator, with its signal line holding above the zero level while turning clearly downward.

On the H1 USD/JPY chart, the pair has broken above 154.80 and is forming an upward wave structure targeting 155.75. Thereafter, a pullback to 154.70 cannot be ruled out. This scenario is confirmed by the Stochastic oscillator, with its signal line positioned above the 80 level and continuing to point firmly upward.

Conclusion

In summary, USD/JPY has resumed its upward momentum, breaking above recent consolidation as the dollar finds support despite escalating trade policy uncertainty. The market is weighing Trump's aggressive tariff stance against signals that US authorities stand ready to support the yen if necessary.

Technically, the pair has cleared near-term resistance and is targeting 155.75, with indicators suggesting further short-term upside potential. However, the broader outlook remains clouded by geopolitical risks and the possibility of coordinated intervention should the yen weaken excessively. A sustained move above 155.75 would open the way towards 157.00, while a reversal below 154.70 could signal a return to range-bound trading.

WTI oil keeps firm tone and holding near new multi-month high ($67.27), with limited negative impact from Monday’s daily candle with long upper shadow, which was created on spike to new high and subsequent quick pullback.

Near-term price action is moving around cracked pivotal barrier at $66.30 (50% retracement of $77.73/$54.87 bear-leg), as fading bullish momentum and overbought stochastic on daily chart, so far sour bullish sentiment and limit gains, although overall picture remains very bullish (DMA’s in full bullish configuration with several bull crosses being formed recently.

Geopolitics, however, remain oil’s key driver nowadays, with growing fears that conflict between the US and Iran can escalate at any time, fueling market anticipation of stronger supply disruption and keeping oil price well supported for now.

Sustained break of $66.30 to open way for renewed attack at weekly cloud top ($67.23) violation of which to generate initial signal of bullish continuation and expose next targets at $69.09 (Fibo 61.8%) and $70 (psychological).

Monday’s low ($65.38) offers solid support), ahead of converged and ascending 10/20 DMAs ($64.70 and $64.38).

Res: 67.23; 68.00; 69.09; 70.00.
Sup: 66.00; 65.38; 64.70; 64.38.

Market Overview

The crypto market cap continues to decline, losing nearly 5.5% over the past 24 hours to $2.19 trillion, practically repeating the extremes of early February. The last time the market was consistently lower was in September 2024. If there is a rebound by the end of the day, we can talk about the formation of a double bottom, which will give hope for a rebound of about 10%. However, a failure to rebound will signal the end of the recovery, opening the potential for a further 25% decline to the 2023 consolidation range.

Bitcoin fell below $63K at the start of the day, going below the previous day’s lows after the recovery rebound stalled. BTCUSD slipped below $60K in early February, but there was a steady tug-of-war near current levels, drawing attention to the outcome of the local battle between bulls and bears. The outcome will determine whether we see a recovery rebound or a new downward momentum. In our view, the market has not yet bottomed out in the bear market, and the real capitulation is still ahead.

News Background

According to CoinShares, global investment in crypto funds fell by $288 million last week, with net outflows observed over the past five weeks. Investments in Bitcoin fell by $215 million, and in Ethereum by $37 million. Investments in XRP rose by $4 million, in Solana by $3 million, and in Chainlink by $1 million.

Large investors who bought Bitcoin in the last six months have accumulated unrealised losses of about $26 billion, according to CryptoQuant. The level of unrealised losses among whales is becoming increasingly alarming.

According to Lookonchain, Ethereum co-founder Vitalik Buterin is once again selling the second-largest cryptocurrency. Over the past two days, he has sold 1,869 ETH worth $3.67 million.

Bitcoin will fall below $55K, according to 75% of users on the Polymarket prediction platform. Bets on a drop below $50K and $45K are supported by 62% and 47% of traders, respectively.

Bitcoin is experiencing a ‘crisis of confidence’ after falling nearly 50% from its all-time high, according to analysts surveyed by Bloomberg. They estimate that the market sees no new catalysts for growth.

Strategy bought 592 BTC ($39.8 million) last week at an average price of $67,286. Strategy now owns 717,722 BTC, purchased for $54.56 billion at an average price of $76,020.

BitMine acquired 51,162 ETH over the past week. The company already owns 4.42 million coins and has fulfilled 73% of its plan to accumulate 5% of all Ether.

• The market is assessing the impact of tariffs.
• Gold risks entering a consolidation.

The US dollar rode a roller coaster as the Supreme Court cancelled old tariffs and the White House introduced new import duties. Investors are assessing the consequences of these steps for the currency market. MUFG believes that the failure of Donald Trump’s policy will prompt the US administration to weaken the greenback to aggressively boost exports. At the same time, lowering the average tariff rate from 16% to 13.7% will slow inflation and allow the Fed to resume its cycle of rate cuts.

Forex seems to disagree with the bank’s view. EURUSD quotes are falling as the cancellation of tariffs may revive the debate over American exceptionalism. For most of 2025, the US economy grew thanks to investments in artificial intelligence and the associated rise in productivity. Import duties held back this expansion, as American companies and households mostly paid them.

The removal of tariffs could be a form of fiscal stimulus and signal a return to American exceptionalism. This is good news for the US dollar. The White House may have introduced new import duties, but they could also be overturned just like the previous ones.

Support for the bears on EURUSD comes from Christopher Waller’s willingness to join the majority of FOMC officials who support a prolonged pause in the monetary expansion cycle. According to the governor, who voted for rate cuts at the last four Fed meetings, only a significant slowdown in employment in February would cause him to maintain a dovish stance in March.

The Fed’s passivity, coupled with expectations of positive developments in the US economy, provides grounds for EURUSD to continue its peak in the coming weeks. However, the medium-term outlook for the pair looks bullish. Derivatives indicate a 44% probability of three rate cuts by the Fed in 2026.

The strengthening of the US dollar caused gold to retreat after a four-day rally. The precious metal failed to hold the $5,200 per ounce mark as speculators took profits on long positions. The risks of Gold consolidation are growing amid still-high Treasury yields and a strong greenback on the one hand, and high uncertainty on the other.

Yen tumbled broadly after reports that Japanese Prime Minister Sanae Takaichi expressed reluctance to raise interest rates further during her February 16 meeting with BoJ Governor Kazuo Ueda. The report, carried by Mainichi Shimbun and citing multiple unnamed sources, suggested a firmer stance against tightening than previously seen.

According to the report, Takaichi emphasized that monetary policy must not “extinguish the fire” of economic recovery supported by her administration’s stimulus measures. Her position was described as stricter than at the prior November 2025 meeting.

The BoJ is widely viewed as recognizing the need for further tightening to normalize the financial system and address persistent Yen weakness. Yet with Takaichi strengthened politically after a landslide lower house victory, the balance between monetary independence and political priorities is under scrutiny.

The timing of the leak is notable. With Japan’s annual Shunto wage negotiations due in March, markets have been pricing a high probability of the next rate hike in Q2, particularly April. The deliberate nature of the Mainichi report suggests an attempt by the administration to cap rate expectations ahead of wage outcomes.

March has already been seen as too early for a move, as policymakers would prefer to assess wage negotiation results first. But if Takaichi’s reluctance proves durable, June may become the more realistic window for any additional tightening.

This creates an inherent policy tension. Takaichi seeks to avoid choking off recovery through higher rates, yet Japan also faces pressure from a weakening Yen. Balancing lower borrowing costs with currency stability presents a narrowing path.

Some analysts speculate that if rate hikes are delayed, authorities may lean more heavily on FX intervention should USD/JPY approach the 160 level, the line in the sand for Takaichi.

Technically, USD/JPY’s sharp jump reinforces the view that recent price action from 159.44 represents a near term sideway consolidation pattern only. The broader uptrend from the 139.87 low in 2025 remains intact, suggesting eventual resumption toward and potentially beyond 159.44 . But then risk of intervention will surge as USD/JPY marches on.

As the AUD/USD chart shows, the Australian dollar posted strong performance in January and February. Since the start of the year, the “Aussie” has gained nearly 6% against the US dollar.

Among the bullish drivers:

• → The policy stance of the Reserve Bank of Australia (RBA), which raised its cash rate to 3.85% in February 2026, while many other central banks are considering rate cuts.
• → A resilient labour market. Australia’s unemployment rate remains at 4.1%, giving the RBA room to keep interest rates elevated.
• → Commodity markets. High prices for gold, iron ore and energy exports continue to support Australia’s trade balance.

However, an important CPI report is due tomorrow. Inflation data could inject additional volatility into the market and test the strength of the Australian dollar.

Technical Analysis of the AUD/USD Chart

In early January, we identified an ascending channel that remained valid through February 2026, as bulls managed to break above resistance line R. Note that:

• → The upper boundary of the channel acted as resistance (resulting in the formation of peaks A–B).
• → The median line served as support.

An important observation is that after forming peak B, the market quickly fell back below the level of peak A. This suggests insufficient buying pressure to sustain the advance.

At the same time, the recent candlestick with a long upper wick — a potential bull trap and a bearish signal — may indicate that the AUD/USD reaction to the CPI report could be negative.

In that case, a break below the channel’s median line cannot be ruled out, opening the way for a test of the psychological 0.7000 level.

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Markets

Markets had to navigate US presidents Trumps’ reaction to the Supreme Court ruling rejecting the IEEPA (reciprocal) tariffs yesterday. For now, the IEEPA tariffs are replaced by a 10% ‘temporary’ (max 150 days) global levy as the US administration develops more in depth investigations on security and trade topics that over time might result in a new tariff architecture. The US administration indicates that it is still working on an order to raise the 10% levy to 15% as President Trump announced this weekend. The new U-turn in US trade policy is causing uncertainty among trading partners on the impact on negotiated trade deals. In this respect, the EU Parliament already suspended the approval procedure for the EU-US trade deal that included a 15% tariff ceiling for most EU goods. However, as was often the case of late, this (trade) uncertainty in the first place caused some kind of market paralysis rather than an aggressive risk-off repositioning. Initial moves in core (US & EMU) yields and European equities were very modest. A weaker USD opening was also gradually reversed throughout the European session. Early in US dealings, the market focus shifted back to the lingering market theme of the potential AI disruption to other sectors as highlighted in a much-talked about new research report (Citrini Research; The 2028 global intelligence crisis). US equities finally tumbled between 1.66% (Dow) and 1.04% (S&P 500) lower. Even as the link between these potential AI-driven disruptions and monetary policy is far from clear, core bonds (and especially US Treasuries) captured a safe have bid. US yields finally declined between 6.4 bps (5-y) and 2.2 bps (30-y), the belly of the curve outperforming. The US 10-y yield (4.04%) now again nears the 4% barrier, to be compared with levels near 4.3% early February. The picture at the short end of the curve is less outspoken (2-y 3.45%) but key support (3.40% also comes within reach). German yields declined between 1.9 bps (30-y) and 3 bps (5-y). The dollar showed no unequivocal pattern. DXY closed marginally lower at 97.35. EUR/USD finished little changed near 1.1785.

Asian equities are hardly affected by the AI sell-off in the US this morning as investors focus more on chipmakers rather than companies that might by hurt by the AI-fall-out. US yields rise marginally after yesterday’s decline. The dollar is slightly firmer, with USD/JPY an outperformer (155.5). Later today, the eco calendar mostly contains second tier US data including the weekly ADP report, housing data, and consumer confidence. While interesting, they probably won’t profoundly change market expectations on Fed policy. Several Fed governors are scheduled to speak. The AI and trade themes will remain omnipresent. With respect to the latter, US president Trump’s State of the Union (Wednesday morning 03.00 CET) evidently contains the risk of some unexpected policy announcements. On US interest rate markets, we keep an eye at yields on several maturities (5-10-y) nearing YTD lows. At the same time the dollar is holding up well, with some first resistance levels still within reach (EUR/USD 1.175 area, DXY 98.1 area).

News & Views

New EU car registrations fell by 3.9% Y/Y in January. Apart from the traditional slumps in the month of August, the absolute levels of new car registrations fell below 800k for the first time in at least two years. Hybrid-electric car (HEV) registrations captured 38.6% of the market (up from 34.9%), remaining the preferred choice among consumers. Battery-electric cars (BEV) accounted for an 19.3% market share (up from 14.9% in Jan 2025). Together with plug-in EV’s, these three categories still showed Y/Y-increases. Combined market share of petrol and diesel cars fell to 30.1% (mainly petrol), from 39.5% a year ago. In Belgium petrol cars were the most popular (42.7% from 40.9%) followed by BEV’s (36.8% from 33.8%) and HEV’s (11.5%, stable). New Belgian car registrations fell 18.7% Y/Y.

Bloomberg reports that BusinessEurope, a powerful trade group that represents 42 national business federations, is drawing a report calling for reforms to the EU’s Emissions Trading System. The groupearlier warned that the risk of deindustrialization is high if the problem is not solved. He says that carbon costs are currently up to 30% of energy costs. At an industry summit in Antwerp earlier this month, German Chancellor Merz and several business CEO’s also called for ETS to be reformed. BusinessEurope calls amongst other for issuance of new allowances to be extended beyond the current implied 2039 cut-off date and more permits to be injected into the market via the Market Stability Reserve. The planned phase-out of free emissions allowances should be reconsidered, while finance raised through the ETS should be used to fund industrial decarbonization, rather than go into the EU budget.

Daily Pivots: (S1) 208.12; (P) 208.67; (R1) 209.21; More...

GBP/JPY's strong break of 209.68 minor resistance suggests that pullback from 214.98 has completed at 207.20 already. Intraday bias is back on the upside. Further rise should be seen to retest 214.98 first. Firm break there will resume larger up trend. For now, risk will stay on the upside as long as 207.20 holds, in case of retreat.

In the bigger picture, current development argues that price actions from 214.98 might be a near term consolidation pattern only. That is, larger up trend from 123.94 (2020 low) is still in progress. Firm break of 214.98 will target 61.8% projection of 148.93 (2022 low) to 208.09 (2024 high) from 184.35 at 220.90. On the downside, though, break of 207.20 will revive that case that it's already in a larger scale correction.

Daily Pivots: (S1) 181.91; (P) 182.36; (R1) 182.73; More...

EUR/JPY's rebound from 180.78 accelerates higher today and intraday bias remains on the upside. Current development solidifies the case that fall from 187.86 has completed as a correction, after hitting 38.2% retracement of 172.24 to 186.86 at 181.27. Further rally should be seen to retest 186.22/86 resistance zone. On the downside, below 181.96 minor support will turn intraday bias neutral again.

In the bigger picture, current development suggests that price actions from 186.86 are merely a near term corrective pattern. In other words, the long term up trend is still in progress. Firm break of 186.86 will pave the way to 78.6% projection of 124.37 (2022 low) to 175.41 (2025 high) from 154.77 at 194.88 next. This will now remain the favored case as long as 180.78 support holds.