Morning Note: Trump's Crypto Boost, Euro Inflation Watch, and US Manufacturing Data

Trump’s Crypto Reserve Plan Boosts Bitcoin Price

In a social media post that U.S. President Donald Trump made known, the inclusion of five digital assets in a proposed U.S. strategic cryptocurrency reserve resulted in their market values skyrocketing. Trump wrote in a Truth Social post that his January executive order, the issuance of the digital assets stockpile covering Bitcoin, Ether, XRP, Solana, and Cardano, would be created. Following the announcement, Bitcoin, the most valuable cryptocurrency in the world by market value, surged by 11% to $94,164.

(Bitcoin Daily Price Chart, Source: Trading View)

From a technical analysis perspective, Bitcoin's price broke through the descending channel at the beginning of November 2024, surging sharply upward. After that, it was rejected by the resistance zone twice, forming a significant double-top candlestick pattern at the end of January 2025. As a result, bearish momentum regained control, pushing the price downward.

Recently, it filled the previous gap area of 76,900 – 79,700 and rebounded with significant bullish momentum after a major liquidity sweep. Currently, it is moving between the support zone of 89,600 – 91,800 and the swap zone of 98,400 – 100,000. The key focus is on which zone will be retested first, as a breakout in that direction will largely determine the next market trend.

Eurozone Flash Inflation Report Under Spotlight

The Eurozone's flash inflation report for February is about to be unveiled at 10:00 GMT. The annual inflation rate is expected to stay at around 2.4%, slightly lower than January’s data of 2.5%. The price level is also expected to increase by 0.5% in February, which will lead to a return to the positive trend, while it was a -0.3% fall in the previous month. The temporary price rise in the monthly inflation rate can be attributed to seasonal factors and more intensive consumer spending.

(EUR/USD Daily Chart, Source: Trading View)

From a technical analysis perspective, the EUR/USD currency pair has been in a bearish trend since the end of September 2024, as indicated by the formation of lower highs and lower lows. However, it found strong support at the beginning of January 2025. Recently, the price was rejected at the resistance zone of 1.0500 – 1.0530 and is currently retesting the swap zone of 1.0400 – 1.0430. If the price closes below the swap zone, it is highly likely that the bearish momentum will continue, pushing the price further downward.

Investors Await U.S. ISM Manufacturing PMI Data

In January, the U.S. ISM Manufacturing PMI reached 50.9 and is expected to rise to 51. While this data will be released at 15:00 GMT, the possible minor increase in the PMI represents a moderate manufacturing activity upturn caused by the improvement of supply chains, a steady pattern of demand, and a kind of cautious positive approach of firms. Moreover, the forecast for a small increase in the PMI while economic uncertainties prevail is supported by the expectations of core stable consumption and solid business investments.

(U.S Dollar Index Daily Chart, Source: Trading View)

From a technical analysis perspective, the overall trend of the U.S. Dollar Index has been bullish since the end of September 2024, as indicated by the formation of higher highs and higher lows. However, the index began to decline in early February 2025, marked by a significant double-top candlestick pattern. Recently, the index has broken above the swap zone at 106.60 – 107.00, suggesting a high probability of bullish trend continuation, potentially further retesting the resistance zone at 107.90 – 108.20.

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Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice. Trading cryptocurrency CFDs and spread bets is restricted for all UK retail clients.