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Market Picture

The crypto market lost ground late in the day on Tuesday, falling to $3.08 trillion, but managed to recoup the losses and get back to $3.15, where we saw it 24 hours ago. The market has traded mostly in the $3.10-3.30 range for the past two weeks. This sluggish trading pattern has had a negative impact on trading volumes and can be frustrating for cryptocurrency speculators in general.

The Crypto Market Sentiment Index has fallen from 47 to 44 (Fear), its lowest level in the past 10 days. This is an indirect sign that even the market’s relative stability is dampening sentiment. Most worryingly, at current sentiment and capitalization levels, the markets have yet to attract sell-off hunters and counter-trend traders.

Bitcoin plunged towards 93,000 on Tuesday night but quickly returned to familiar levels above 95,000. Notably, it is off its highs and even below its 50-day moving average, while U.S. stock indices have already returned to renew their rallies.

Litecoin is up about 10% in 24 hours, crossing the $135 level and returning to the area of active resistance since December. The dynamics in early February showed that this altcoin is still interesting to buy on dips, which increases its chances of storming the recent highs. Its upside potential is quite extensive: at the highs in 2017 and 2021, this old altcoin was above $350.

News Background

Bitcoin’s dominance has risen to 60% from 55% in early December, driven by institutional investors and low confidence in the rest of the cryptocurrencies.

Standard Chartered expects more sovereign wealth funds to start investing in Bitcoin. The Abu Dhabi sovereign fund’s investment in BlackRock’s Spot Bitcoin ETF is one of the first signals of the new trend. The bank’s forecast for BTC is still the same—$500,000 by 2028.

According to Santiment, the amount of available Ethereum supply on centralized crypto exchanges has fallen to a historic low of 6.38%, which usually shows that investors prefer a hold strategy and avoid a large-scale sell-off soon.

Jeffrey Kendrick, head of digital asset research at Standard Chartered, says government interest in cryptocurrency is becoming more visible. He says the Abu Dhabi sovereign wealth fund’s investment in BlackRock’s Spot Bitcoin ETF is one of the first signals of the new trend.

Binance CEO Richard Teng reported a “new scam” aimed at stealing users’ cryptocurrency. Attackers send fake wallet compromise notifications. The message suggests “securing” funds by transferring them to another wallet they control.

Former customers of the bankrupt FTX platform with assets of up to $50,000 have begun receiving their first payouts on the Kraken exchange and through the BitGo service at November 2022 rates. Many market participants may reinvest the funds received, affecting market liquidity and prices.

The XNG/USD chart today shows that natural gas prices have surpassed the December 2024 peak, breaking through the key psychological level of $4.000/MMBtu. Since early February, prices have surged by over 20%.

Why Is Natural Gas Price Rising?

According to The Wall Street Journal, the bullish sentiment is driven by:

→ Weather models confirming forecasts of a significant cold spell.

→ LNG exports remaining at record highs.

Additionally, US gas exports may increase further after President Trump lifted the pause imposed by the Biden administration on new LNG export projects. Bloomberg reports that Trump’s administration is close to approving its first LNG export project.

Technical Analysis of XNG/USD

The price movements are forming an upward channel (marked in blue) on the chart:

→ Prices are currently near the upper boundary of this channel.

→ The RSI indicator is in the overbought zone.

→ The price briefly exceeded the $4.000/MMBtu psychological level.

→ Buyers may look to secure profits after the recent sharp gains.

Given these factors, traders may anticipate a potential pullback, which—if it occurs—could bring natural gas prices back towards the channel’s median level.

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Italian ECB Governing Council member Fabio Panetta acknowledged that economic weakness in the Eurozone is proving “more persistent than we expected”, as the long-anticipated consumption-driven recovery has yet to materialize.

After two consecutive quarters of stagnation, he noted that "tensions in the manufacturing sector, employment is giving signs of weakening"

Panetta also highlighted the downside risks to inflation stemming from weak growth. However, he also noted that upside inflation risks remain, primarily from energy costs.

• The S&P 500 reached new all-time highs, driven by a late-session rally in chipmakers, while the Dow Jones Industrial Average showed mixed movements.
• President Trump has proposed new tariffs, potentially targeting the Pharmaceuticals and Automobiles sectors with a 25% tariff rate.
• The Federal Open Market Committee (FOMC) minutes and S&P PMI data releases are upcoming and expected to provide further insights into the Fed’s monetary policy stance.

The three major Wall Street indices fluctuated throughout the US session, shifting between gains and losses. A rise in chipmakers propelled the S&P 500 to fresh all-time highs late in the session despite a drop in technology stocks.

The S&P 500 edged up by 0.2%, while the Nasdaq 100 also posted a 0.2% gain. The Dow Jones Industrial Average showed mixed movements throughout the session. Meanwhile, the chipmakers index surged by 1.7%.

SPX 500 Top Movers 

Source: TradingView

Intel’s stock climbed on rumors about a possible company breakup. Super Micro Computer saw a big jump thanks to a positive outlook. Walgreens Boots Alliance rose after CNBC reported that Sycamore Partners might still be planning a takeover. Meanwhile, Meta’s 20-day streak of gains came to an end.

More Tariffs Ahead?

Yesterday we heard more from President Trump on proposed tariffs that may be announced. President Trump said we should see some announcements in the coming week while once again lamenting that the EU has been an unfair trading partner.

The President touched on specific sectors with Pharmaceuticals and Automobiles both expected to get hit with tariffs of around 25%. Tuesday’s comments are his most detailed yet in specifying other sectors that would be hit with fresh barriers.

It will be interesting to see what effect such announcements may have on stock prices moving forward following what has been quite an impressive earning season for US companies.

FOMC Minute and PMI Data Ahead

It is fair to say that following last week’s uptick in US inflation and drop off in retail sales numbers, market participants are once more focused on the Fed’s next moves. The FOMC minutes will be released later today, these should provide further insights into how the Fed sees tariffs impacting their monetary policy course and objectives moving forward.

The week will wrap up with S&P PMI data which will give us another glimpse into the performance of the US economy from both a manufacturing and service perspective.

Technical Analysis

S&P 500

From a technical standpoint, the S&P has printed a fresh all-time high and could be due a pullback soon.

There was a triangle breakout which occurred as far back as September 19, with a target price of around 6170 which is now just 40 points away.

If we reach this level i do think we could be in for a short-term correction, however, i expect such a move to be met with buying pressure if the current status quo remains the same.

It is hard t find key levels as we continue to trade at fresh highs with no historical price action to serve as a guide.

However, immediate focus for me will be 6170 and 6200 on the upside.

If price pushes lower from here, support may be found at 6100, 6080 (20-day MA).

S&P 500 Daily Chart, February 19, 2025

Source: TradingView (click to enlarge) 

Support

• 6100
• 6080
• 6050

Resistance

• 6170
• 6200
• 6250

EUR/USD started a decent upward move above the 1.0460 resistance. USD/JPY declined below 153.00 and is currently consolidating losses.

Important Takeaways for EUR/USD and USD/JPY Analysis Today

• The Euro found support and started a recovery wave above the 1.0400 resistance zone.
• There is a connecting bearish trend line forming with resistance at 1.0460 on the hourly chart of EUR/USD at FXOpen.
• USD/JPY is trading in a bearish zone below the 153.00 and 152.50 levels.
• There is a short-term rising channel forming with support near 151.60 on the hourly chart at FXOpen.

EUR/USD Technical Analysis

On the hourly chart of EUR/USD at FXOpen, the pair started a fresh increase from the 1.0290 zone. The Euro climbed above the 1.0400 resistance zone against the US Dollar.

The pair even settled above the 1.0450 resistance and the 50-hour simple moving average. Finally, it tested the 1.0515 resistance. A high is formed near 1.0514 and the pair is now consolidating gains. There was a minor decline below the 23.6% Fib retracement level of the upward move from the 1.0292 swing low to the 1.0514 high.

Immediate support is near the 1.0445 level. The next major support is at 1.0400 and the 50% Fib retracement level of the upward move from the 1.0292 swing low to the 1.0514 high.

If there is a downside break below 1.0400, the pair could drop toward the 1.0375 support. The main support on the EUR/USD chart is near 1.0290, below which the pair could start a major decline.

On the upside, the pair is now facing resistance near 1.0460. There is also a connecting bearish trend line forming with resistance at 1.0460. The next major resistance is near the 1.0515 level. An upside break above 1.0515 could set the pace for another increase. In the stated case, the pair might rise toward 1.0550.

USD/JPY Technical Analysis

On the hourly chart of USD/JPY at FXOpen, the pair started a steady decline from well above the 154.00 zone. The US Dollar gained bearish momentum below the 153.00 support against the Japanese Yen.

The pair even settled below the 152.50 level and the 50-hour simple moving average. There was a spike below 151.50 and the pair traded as low as 151.23. It is now correcting losses and trading above the 50-hour simple moving average.

Immediate resistance on the USD/JPY chart is near the 23.6% Fib retracement level of the recent decline from the 154.80 swing high to the 151.23 low at 152.05.

The first major resistance is near the 153.00 zone and the 50% Fib retracement level of the recent decline from the 154.80 swing high to the 151.23 low. If there is a close above the 153.00 level and the hourly RSI moves above 60, the pair could rise toward 153.95.

The next major resistance is near 154.80, above which the pair could test 155.50 in the coming days. On the downside, the first major support is near 151.60. There is also a short-term rising channel forming with support near 151.60.

The next major support is near the 151.20 level. If there is a close below 151.20, the pair could decline steadily. In the stated case, the pair might drop toward the 150.00 support.

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Markets

The first high-level in-person talks between the US and Russia since the 2022 invasion in Riyadh went well according to the parties involved but offered nothing concrete. The talks were merely explanatory. The fact they happened without Ukraine and the EU sparked outcry from both and prompted a handful of EU leaders into a crisis meeting on Monday to discuss upgrading the European defense capacity. Polish PM Tusk said that (funding) measures would be presented in time for an upcoming March 20-21 summit. We wouldn’t be surprised if something came up sooner given the sense of urgency, provided German coalition building goes smoothly after this Sunday’s elections. French president Macron has called a second meeting for today, involving several EU and non-EU states. Negotiations center around having a UN-mandated “peace-keeping operation” in Ukraine to uphold any future ceasefire/peace deal. The war theme stays at the center of attention but markets are wary to frontrun on any outcome for the time being. Monday’s slide by European bonds in anticipation of significantly increased defense spending eased yesterday. German rates gapped higher at the open but pared gains afterwards to close virtually unchanged. UST’s caught up during their first trading day of the week by adding between 4.7-7.5 bps across the curve yesterday. The US dollar held the upper hand. EUR/USD fell to 1.0446, DXY bounced back to 107. Sterling appreciated on an across-the-board beat by the labour market report. EUR/GBP lost 0.83 and withstood overall USD strength (GBP/USD 1.261). Next up in the UK: CPI. Headline inflation only dropped 0.1% m/m, pushing up the yearly figure to a quicker-than-expected 3%. Core CPI jumped to 3.7% from 3.2% and services inflation to 5% from 4.4%. Bank of England governor Bailey flagged the inflation spike in a speech yesterday and warned not to read too much into it. It explains this morning’s muted GBP reaction. UK money market pricing barely changed and sticks to just two rate cuts for all of 2025.

Aside from the running war theme, Trump’s tariff policy comes back to front as well. The FX ex. USD market isn’t impressed by a renewed (car, pharma & chip) import tariff threat by Trump late-yesterday though. The president said an announcement could come April 2, offering time to hammer out a deal. The greenback trades on the backfoot against all G10 peers. The eco calendar further contains the January Fed meeting minutes. The slew of policymakers since that gathering that came to cement the long pause suggests a broad consensus and means the minutes probably have little surprising or new to offer. We assume technically inspired FX and FI trading.

News & Views

The Reserve Bank of New Zealand today reduced the policy rate further by 50 bps to 3.75%. The move was largely expected. CPI inflation remains near the midpoint of its 1-3% target band (0.5% Q/Q and 2.2% Y/Y in Q4). Firms’ inflation expectations are at target and core inflation continues to fall towards the target midpoint. The economic outlook remains consistent with inflation remaining in the band over the medium term. Economic activity remains subdued and spare productive capacity and domestic inflation pressures continue to ease. Price and wage setting is adapting to a low-inflation environment. The RBNZ expects economic activity and employment growth to recover this year, but there is a high degree of uncertainty, amongst others due to trade. The RBNZ governor indicated that the RBNZ might ease policy a bit faster than indicated earlier, with follow-up rate cuts (25 bps) in April and May. The Monetary policy report sees the policy rate on average near 3.1% in Q4. The NZ 3-y bond yield initially dropped after the decision but current trades little changed near 3.85%. The kiwi dollar made a similar move, reversing an earlier decline after governor Orr’s press conference, currently even trading slightly higher at NZD/USD 0.573.

BoJ Board member Takata in a speech today advocated that the bank should continue to consider gradual further rate hikes to contain upside inflation risks. With long-term inflation expectations rising and companies more actively passing on costs, conditions for further policy normalization are falling into place. Maintaining expectations for interest rates to stay low for a prolonged period of time might overheat the economy and financial activity. He indicated that it is difficult to estimate a neutral policy rate and finds it problematic for the Bank to announce a certain level of the neutral policy rate. It could be seen as pre-committing and would reduce the bank’s policy flexibility. At 1.435%, the 10-y Japanese government bond yield this morning touched the highest level since 2009.

UK headline CPI accelerated to 3.0% yoy in January, up from 2.5% yoy and exceeding market expectations of 2.8% yoy. This marks the highest inflation level since March 2024, reinforcing concerns that price pressures remain persistent.

Core inflation also surged, with CPI excluding energy, food, alcohol, and tobacco rising to 3.7% yoy, up from 3.2% yoy in December.

Meanwhile, CPI goods inflation edged higher from 0.7% yoy to 1.0% yoy, while CPI services inflation climbed from 4.4% yoy to 5.0% yoy.

Full UK CPI release here.

In focus today

In Sweden we get the results from the Inflation Expectation Survey conducted by the Origo Group (previously Prospera). The Riksbank emphasises the importance of having the long (5y) inflation expectations well anchored at the 2% inflation target, which has been the case since the start of 2024 (between 1.9% and 2.1%). We do not expect to see any large deviations this time either.

In the UK, focus turns to inflation data for January, where consensus expects a rise in both headline and core terms driven by fuel prices and education. Service inflation is expected to tick up to 5.1% compared to the BoE's expectation of 5.0%. This will be the final CPI release ahead of the March meeting, where markets price low likelihood of a cut. We see the bar as high for delivering a cut in March and expect the next cut in May.

This morning China releases new home prices, which is an important gauge of the state of the housing markets. Prices have declined at a slowing pace in recent months in line with other indicators suggesting moderate improvement in housing demand. We look for prices to be around flat in January compared to December marking a halt to the decline in home prices.

Economic and market news

What happened overnight

In the US, President Trump said he would impose tariffs starting at 25% on automobiles, pharmaceuticals and semiconductor chips. No date was announced, although he plans to increase the tariffs to force companies to invest in the US. At the same time, he announced a March 12 start date for the 25% tariffs on steel and aluminium. Markets will presumably attempt to evaluate the sincerity of the statements throughout today.

What happened yesterday

Regarding the war in Ukraine, officials from the US and Russia met in Saudi Arabia for a first meeting on ending the war in Ukraine - without Ukraine represented. Both sides agreed to "lay the groundwork for future co-operation" with US national security adviser Mike Waltz commenting that the war needs to be ended permanently, and a discussion of territory and security guarantees will take place. Yuri Ushakov, Putin's foreign policy adviser, said that the US and Russia are collaborating to set the stage for a meeting between Trump and Putin.

In Sweden, the detailed CPI report for January came in just below expectations at 0.9% y/y (cons: 1.0% y/y) and 0.0% m/m (cons: 0.0% m/m). CPIF ex. Energy matched the surprising flash reading at 2.7% y/y, which could be a worrying sign of a broader inflation pressure.

In the UK, the labour market report for December/January came in with data slightly stronger than expected. The unemployment rate remained steady at 4.4 % in December and payrolls likewise came in higher than expected in January with positive revisions for December, although this can be largely attributed to the public sector. Overall, yesterday's report highlights that the BoE will most likely continue to stick to its "careful and gradual" approach to easing monetary policy.

In Germany, the ZEW index rose more than expected in February. The assessment of the current economic situation increased to -88.5 (cons: -89.4, prior: -90.4), which is the highest level in four months, and expectations increased to 26.0 (cons: 20.0, prior: 10.3). The ZEW index suggests that the positive surprises in German indicators (ZEW, Ifo, PMI) we saw in January continued in February. The indicators remain at very low levels, and we expect the economy to continue stagnating in the near term, but the stabilisation is finally a non-negative signal for the German economy.

Equities: Equities continued higher, driven equally by Europe and US, despite US being closed for holiday on Monday. Interesting to see big tech lagging notably without killing the party. Small caps and equal weighted equity indexes fared better, with energy, metals and semiconductor companies among the stronger groups. European banks adding 2% aided by higher yields. Asian markets are strong this morning as well, with South Korea rising 2%. The buzz is centred on Europe, but Korea have also added a dazzling 10% YTD. US futures are higher this morning.

FI: European rates traded mostly sideways through the trading session amid little news. The lack of driver led to an outperformance by the usual low-volatility performing trades (carry trades), best captured by the BTPs-Bund spread, which is now just at 105bp, which is the tightest since 2021. Tonight, FOMC minutes are released from the January meeting.

FX: Yesterday was another relatively quiet session, with broad USD strength across the G10 space. EUR/USD remains rangebound in the mid-1.04 to 1.05 area, while USD/JPY continues to trade around the 152-mark. USD/CAD held steady near 1.42 after Canada's January CPI print aligned with consensus. EUR/GBP ended the day below 0.83 following a slightly stronger-than-expected UK labour market report for December/January. In the Scandies, EUR/SEK trended slightly lower to 11.20, while EUR/NOK edged higher to 11.65.

Short term Elliott Wave in S&P 500 (SPX) suggests that pullback to 5774.1 ended wave ((4)). The Index has resumed higher in wave ((5)) and broken above previous wave ((3)) peak. Wave ((5)) is in progress as a 5 waves impulse Elliott Wave structure. Up from wave ((4)), wave ((i)) ended at 5871.9 and pullback in wave ((ii)) ended at 5805.4. Wave ((iii)) higher ended at 5964.69 and pullback in wave ((iv)) ended at 5930.72. Final leg wave ((v)) ended at 6128.18 and this completed wave 1 in higher degree.

Pullback in wave 2 unfolded as a zigzag Elliott Wave structure. Down from wave 1, wave ((a)) ended at 5962.92 and rally in wave ((b)) ended at 6120.91. Wave ((c)) lower ended at 5923.9 which completed wave 2 in higher degree. The Index has resumed higher again in wave 3. Up from wave 2, wave ((i)) ended at 6101.28 and pullback in wave ((ii)) ended at 6003. Up from there, wave (i) should end soon, and the Index should pullback in wave (ii) to correct cycle from 2.12.2025 low before it resumes higher. Near term, as far as pivot at 5774.1 low stays intact, expect pullback to find buyers in 3, 7, or 11 swing for further upside.

S&P 500 (SPX) 60 Minutes Elliott Wave Chart

SPX Video

https://www.youtube.com/watch?v=1_SsYDsGGFc

Daily Pivots: (S1) 191.12; (P) 191.53; (R1) 192.22; More...

Intraday bias in GBP/JPY remains neutral for the moment. Outlook is unchanged that corrective pattern from 180.00 is extending, possibly with rebound from 187.04 as another upleg. Above 193.04 will target 194.73 resistance first. Firm break there will solidify this case and target 198.94 next.

In the bigger picture, price actions from 208.09 are seen as a correction to rally from 123.94 (2020 low). Strong support should be seen from 38.2% retracement of 123.94 to 208.09 at 175.94 to contain downside. However, sustained break of 152.11 will bring deeper fall to 100% projection of 208.09 to 180.00 from 199.79 at 171.70, even still as a correction.