Forex Signals Brief Feb 19: RBNZ Cuts Rates by 50 bps, UK Inflation and FOMC Minutes to Come
Today the RBNZ delivered another 50 bps rate cut, so we’re keeping a bearish bias for NZD pairs, while later we have the US inflation and FOM meeting minutes.
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Yesterday the day started with a hawkish rate cut by the RBA, which lowered interest rates by 0.25%, leaving the AUD little changed, while other major currencies lost ground against the USD. Even GBP/USD ended up slightly lower, despite the lower UK unemployment rate and the increase in average earnings. The German ZEW economic sentiment showed an improvement, but EUR/USD slipped lower nonetheless.
In the stock markets, the sentiment was mildly positive, as the German index Dax 40 and S&P 500 printed new record highs, despite most tech stocks ending up lower, particularly Meta which lost around 4%. Intel stock surged another 16% today, with a 40% increase since last Monday, as news of a breakup among prominent tech companies excited traders and investors.
GOLD resumed the upside momentum once again, increasing around $40 and eying the $3,000 for the third time, and in fact XAU might reach that level this time. In Canada inflation came as expected, so the CAD was little changed, despite WTI crude oil gaining $1 and approaching $72.
Today’s Market Expectations
Today started with the Reserve Bank of New Zealand meeting, which delivered another 50 bps rate cut.
The UK’s annual Consumer Price Index (CPI) is expected to rise to 2.8%, up from 2.5% the previous year, while the monthly figure is projected to decline to -0.3% from the previous 0.3%. Core CPI is forecasted to increase to 3.6% year-over-year, compared to 3.2% previously, and the Services CPI is expected to climb to 5.2% from 4.4%.
These figures are concerning for the Bank of England, which has struggled to control inflation as effectively as other central banks. Markets are currently pricing in 55 basis points of rate cuts by the end of the year. However, if inflation remains stubbornly high in the coming months, expectations for monetary easing may have to be adjusted.
Yesterday the was volatility was low in forex, with the USD pushing higher slowly. Stock markets remained slightly bullish, so we also remained long on stocks, while our sell signal in crude Oil remained opened after fluctuations in price. Cryptocurrencies slipped lower, with BTC breaking below $95K, wile XRP fell below $2.50.
Gold Returns to All-time highs Pretty Fast
Meanwhile, financial markets remained cautious despite President Donald Trump’s decision to postpone tariffs, leading to increased demand for safe-haven assets such as gold. On Tuesday, gold experienced a sharp pullback but found support below the 50-day SMA on the H4 chart. By Wednesday, prices had rebounded above the 20-day SMA. However, bullish momentum stalled around $2,900, with profit-taking and improving risk appetite pushing gold lower. Despite reaching a new high of $2,942 on Tuesday and retesting $2,940 on Friday, gold ultimately dipped below the 50-day SMA and $2,900 before buyers stepped back in, driving prices higher once more.
XAU/USD – H4 Chart
USD/JPY Still Remain Bullish on the Weekly Chart
In the UK labor market, recent data came in stronger than expected. The unemployment rate dropped to 4.4%, while wage growth continued to rise. Despite this, GBP/USD has weakened, slipping below 1.26 after showing resilience last week. Buyers struggled to sustain gains above 1.26, and as risk appetite improved, the pair moved lower.
USD/JPY – Daily Chart
Cryptocurrency Update
Bitcoin Continues to Remain Between MAs
Bitcoin also saw major price swings, surging toward the end of 2024 to an all-time high of approximately $100,000. The rally extended into January, peaking at $109,867 around Trump’s inauguration on January 20. However, sustaining these elevated levels proved challenging. Following Trump’s tariff announcement in early February, BTC/USD briefly dropped below $90,000 before rebounding above $100,000, only to lose momentum again. Currently, Bitcoin is fluctuating between the 100-day SMA (support) and the 50-day SMA (resistance), with a decisive move above $100,000 needed to revisit January’s highs.
BTC/USD – Daily chart
Ethereum Starts to Reverse Higher
Ethereum, in contrast, has faced heavy selling pressure since surpassing $4,000 in late 2024. A flash crash on Monday wiped out nearly 50% of its value, sending ETH down to $2,000 before staging a partial recovery. While bearish sentiment remains, Ethereum could regain upward traction if the $2,000 support level holds and overall market sentiment improves.
ETH/USD – Daily Chart
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