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The AUD/USD pair fell to 0.6257 on Tuesday, marking its second consecutive session of losses. The Australian dollar remains under pressure due to external factors, including a strengthening US dollar and growing global risks.

Key drivers behind the AUD decline

The US dollar has gained strength following renewed threats from US President Donald Trump to impose trade duties. Trump announced plans to levy tariffs on imported chips, pharmaceutical products, and raw materials such as aluminium, copper, and steel, aiming to stimulate domestic production. These developments have heightened market uncertainty and weighed on risk-sensitive currencies like the Australian dollar.

In addition, global markets are jittery due to a sharp sell-off in the US stock market. The sell-off was driven by concerns over the open-source AI model DeepSeek which poses a potential challenge to the dominance of US companies in the artificial intelligence sector. This risk-off sentiment has further pressured the aussie.

On the domestic front, Australia reported an improvement in business activity metrics for December. However, the focus is now on the upcoming inflation data, which will provide critical insights ahead of the Reserve Bank of Australia's (RBA) February meeting to review interest rate policy.

AUD/USD technical analysis

On the H4 chart, AUD/USD has executed a downward wave to 0.6245. A correction towards 0.6290 is expected today. Subsequently, another downward wave targeting 0.6250 may develop, with the potential for a consolidation range forming around this level. If the pair breaks upwards from the consolidation, a further correction towards 0.6290 is possible. Conversely, a downward breakout would open the potential for a deeper decline to 0.6190, which serves as a local target. The MACD indicator confirms this scenario, with its signal line above the zero mark but pointing decisively downwards, indicating continued bearish momentum.

On the H1 chart, AUD/USD formed a consolidation range around 0.6290 before breaking downwards to 0.6245. The market is now consolidating at the current lows. An upward breakout could lead to a correction back to 0.6290 (as a test from below). However, a downward breakout would signal a continuation of the decline towards 0.6204, with the trend potentially extending to 0.6190. The Stochastic oscillator supports this outlook, with its signal line below the 20 mark but pointing upwards towards 80, suggesting a possible short-term correction before further declines.

Conclusion

The Australian dollar remains under pressure due to external uncertainties, including US trade policy developments and global risk aversion. While technical analysis suggests potential for a short-term correction, the broader trend remains bearish, with targets at 0.6204 and 0.6190. Upcoming Australian inflation data will play a key role in determining the currency’s near-term trajectory, particularly as the RBA’s February policy meeting approaches.

Germany’s economic challenges were laid bare today as BDI President Peter Leibinger warned of a "deep economic crisis" during the annual press conference.

The country's economic output is expected to shrink slightly this year, with Leibinger emphasizing that the situation reflects more than just short-term shocks like the pandemic or the war in Ukraine.

Instead, he highlighted long-term "structural" weaknesses that have plagued Germany as a business hub, particularly over the past six years.

Leibinger pointed to the "structural break" in industrial growth, with empty order books, idle machinery, and a marked decline in domestic investments.

His remark, "I cannot remember such a bad mood in industrial companies," underscores the deep malaise gripping the sector.

German industry is not only struggling to compete globally against powers like the US and China but is also falling behind within the European Union.

Full release of Germany's BDI here.

The Australian dollar is in negative territory on Tuesday. In the North American session, AUD/USD is trading at 0.6252, down 0.62%.

Australian CPI expected to ease to 2.5%

Investors are keeping a closer eye on the third-quarter inflation report, which will be released early on Wednesday. CPI is expected to ease to 2.5% from 2.8%. This is the final tier-1 event prior to the Reserve Bank of Australia’s rate meeting on Feb. 18 and could be the determining factor as to whether the RBA finally lowers interest rates. The markets have priced in about an 80% chance of a quarter-point cut at the February meeting. The RBA has maintained the cash rate at 4.35% since Nov. 2023 and has been an outlier among other major central banks, most of which have entered an easing cycle.

The US dollar is showing broad strength today, after US President Trump said on Monday that he would impose tariffs on steel, aluminum and copper imported to the U.S. Trump reiterated that he plans to levy a baseline universal tariff on all imports. Trump’s tariff plans would likely raise inflation and could destabilize the financial markets, which displayed strong swings during Trump’s first week in office.

China’s services and manufacturing sectors both decelerated in January and missed expectations. The non-manufacturing PMI fell to 50.2, down from 52.2 in December and shy of the forecast of 51.8. With the exception of November, service activity has been stagnant, with readings barely above the 50 level, which separates expansion from contraction. Domestic demand weakened and the uncertainty surrounding Donald Trump’s trade policies have dampened foreign sales.

The manufacturing sector is struggling and contracted in January, easing to 49.1, compared to 50.1 in December and missing the market estimate of 50.1. This was the first contraction since September 2024 and the sharpest decline in five months. Manufacturing output and foreign orders weakened in January and the weak global economy could mean further headwinds in 2025 for the manufacturing sector.

China’s government has implemented stimulus measures in order to boost the economy and GDP hit 5% in 2024. Still, deflation has persisted and consumer spending remains weak. The government will have to inject further stimulus in order to boost domestic consumption, a key engine of economic growth.

AUD/USD Technical

• AUD/USD is testing support at 0.6278. Below, there is support at 0.6225
• 0.6366 and 0.6419 are the next resistance lines

• GBPUSD breaks above bearish channel, faces rejection near 50-SMA.
• Caution persists among traders as they await a close above 1.2600.

GBPUSD stalled around the falling 50-day simple moving average (SMA) at 1.2525 soon after exiting the bearish channel on the upside.

Was this a false bullish breakout? No, not as long as the price continues to trade above the channel’s upper boundary seen near 1.2400. The area is currently under examination along with the 23.6% Fibonacci retracement of the latest downtrend. Hence, failure to pivot there could disappoint traders, bringing the 1.2300 round level next into view, while a deeper fall might aim for a bearish extension below the crucial support area of 1.2100-1.2160.

According to the technical indicators, downside risks are still alive. The falling 20- and 50-day SMAs have yet to show any signs of improvement, while the RSI is losing steam marginally above its 50 neutral mark and the stochastic oscillator is set for a negative reversal.

In the event the pair crosses above its 50-day SMA, the bulls must also jump the wall at 1.2580-1.2600, where the 38.2% Fibonacci mark and the broken support-turned-resistance trendline from March 2023 are sitting. A successful penetration higher could bolster buying appetite, lifting the price swiftly up to the 1.2700 number or even higher to the 50% Fibonacci of 1.2765 and the 200-day SMA at 1.2790.

All in all, GBPUSD moved out of a bearish formation, signaling a potential upward trend reversal. Despite this, the pair has yet to close above the wall of 1.2600, which might be a prerequisite for a major bullish wave.

Short Term Elliott Wave view in S&P 500 ( SPX) suggests that rally to new all time high on 12.16.2024 at $6099.97 ended wave ((3)). Pullback in wave ((4)) is proposed complete at $5773.20 as the 1 hour chart below shows. Internal subdivision of wave ((4)) unfolded as Elliott wave double three structure. Down from wave ((3)), wave (W) ended in lesser degree 3 swings at $5832.30. Wave (X) bounce ended in 3 swings at $6049.75 high. Then wave (Y) lower ended at $5773.20 low with another lesser degree 3 swings thus completed wave ((4)) pullback.

The Index has turned higher in wave ((5)) and managed to make a new high above previous wave ((3)) high of $6099.97 confirming the next extension higher. Up from wave ((4)), the rally took place as an impulse sequence where wave ((i)) ended at $5871.92 high. Wave ((ii)) pullback ended at $5805.42 low. Index nested higher in wave ((iii)) & ended at $5964.69 high. Then wave ((iv)) pullback ended at $5930.72 low. Above from there, wave ((v)) ended with extension at $6128.18 high & completed wave 1. Down from there, the index is doing a pullback in wave 2 against 1.13.2025 low. Therefore, pullback should hold in 3, 7 or 11 swings looking for more upside.

SPX 1-Hour Elliott Wave Chart From 1.28.2025

SPX Elliott Wave Video

https://www.youtube.com/watch?v=Z3ighVqtFz4

Market Picture

On Monday, the cryptocurrency market partially recovered from the initial decline, regaining about 2/3 of the lost value. As a result, the cryptocurrency market capitalisation increased by 4.3% from the previous day and, by the start of trading in Europe, stands at $3.52 trillion. This is still below the level of the previous weeks when capitalisation hovered around $3.6 trillion.

The cryptocurrency market sentiment index rose to 72 over the past day, showing a steady appetite for risk assets despite the recent sell-off.

By the end of Monday, bitcoin had recovered from its fall and was back above the $101K mark. On Tuesday morning, its price approached $103K, crossing the 50-day moving average.

XRP, after losing more than 15% during Monday’s day, ended trading above the important $3 level. The price is currently at $3.09, showing a full recovery from the slump and a demonstration of strength that many other altcoins lack.

News Background

After another recalculation, bitcoin’s mining difficulty fell 2.12% to 108.11T, the first decline since September 2024.

According to CoinShares data, global crypto fund investments totalled $1.858bn last week, up from $2.195bn a week earlier. This positive trend continued for the third week in a row, intensifying in the last two weeks. Bitcoin investments were up $1.591bn, Ethereum up $205m, XRP up $19m and Solana up $7m.

CoinShares suggests that the rise in investment in digital assets can be attributed to President Trump’s executive orders to create a strategic reserve asset in Bitcoin. Among smaller digital assets, Solana, Chainlink, and Polkadot received the largest investment inflows.

According to CryptoQuant data, the share of investors with a balance of at least 1,000 BTC who purchased coins in the last 155 days increased from 43% to 60%, reflecting the emergence of large players amid optimistic sentiment.

In our previous analysis of the BTC/USD chart, we highlighted the increasing volatility in the cryptocurrency market leading up to Trump’s inauguration.

Today, the BTC/USD chart shows that the presidential inauguration triggered a peak in the ATR indicator, reflecting heightened market activity amid the launch of $TRUMP and $MELANIA memecoins. Crypto enthusiasts closely followed mentions of cryptocurrencies in Trump’s speech.

The last time the market was this volatile was in May 2022, when Bitcoin's price plummeted following news of the collapse of the TerraUSD (UST) stablecoin and its associated LUNA token.

What could this current spike in activity signify?

Such an active and broad market creates opportunities for significant capital to adjust portfolios—perhaps locking in profits from long positions and opening short positions.

Technical analysis of the BTC/USD chart reveals that:

→ Bitcoin’s price movements since Trump’s victory in early November have established an upward trend, forming a channel (marked in blue on the chart).

→ As of today, the price has rebounded from the lower boundary of this channel, and the bearish break below the psychological $100k level proved to be false.

However, what if significant players have insights into upcoming events that could have a bearish impact on the Bitcoin market? If such events occur, they may drive the price below $100k and lead to an attempt to break the channel’s lower boundary.

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NZDUSD, H4

NZDUSD corrected after a rebounding from the 0.5720 resistance and faced the 0.5650 support at the 38.2 Fibonacci ratio.

• The Alligator’s lips cross the jaw line, while the Momentum oscillator crosses the 100 lines downwards, giving a potential trend reversal sign.
• Consider a short trade if the price breaks below the 0.5650 support with the target at 0.5610.

US30, Daily

In the Daily timeframe, US30 rose again after a small correction and almost reached the ATH. The price is preparing to test the critical level and the broken global trend line. However, the CCI is ready to come out of overbought, and the price crossed the upper Bollinger line.

• A break of the trendline above 45100 will open the way for a rise to 47200, corresponding to 161.8 Fibonacci;
• A bounce off the trendline will take US30 back to 43800;

Daily Pivots: (S1) 1.0453; (P) 1.0493; (R1) 1.0532; More...

Intraday bias in EUR/USD is turned neutral with current retreat. On the downside, break of 1.0371 support will indicate rejection by 38.2% retracement of 1.1213 to 1.0176 at 1.0572 and retain near term bearishness. Retest of 1.0176 low should be seen next. On the upside, though, decisive break of 1.0572 will raise the chance of bullish reversal, and target 61.8% retracement at 1.0817.

In the bigger picture, outlook is mixed as fall from 1.1274 (2023 high) could either be the second leg of the corrective pattern from 0.9534 (2022 low), or another down leg of the long term down trend. Strong support from 61.8 retracement of 0.9534 to 1.1274 at 1.0199 will favor the former case, and sustained break of 55 W EMA (now at 1.0722) will argue that the third leg might have started. However, sustained trading below 1.0199 will favor the latter case and bring retest of 0.9534 low.