EURUSD 17-21 Feb 2025 W8 - Weekly Analysis -EU ZEW - US FOMC/PMI

This is my Weekly analysis on EURUSD for 17-21 Feb 2025 W8 based on Smart Money Concept (SMC) which includes the following:

Market Sentiment Weekly Chart AnalysisDaily Chart Analysis4H Chart AnalysisEconomic Events for the WeekRelated PostsLatest Weekly Analysis

Market Sentiment

Inflation Data Mix

• U.S. CPI and PPI came in hotter than expected, signaling lingering inflation pressures.
  
• However, softer underlying PPI components linked to the Fed’s preferred PCE metric raised hopes for a moderation in inflation next week.
  

Fed Policy Expectations

• Investors are cautiously optimistic about potential Fed rate cuts later in 2025, despite the Fed’s current "wait-and-see" stance.
  
• A softer PCE report next week could solidify bets on easing monetary policy, supporting risk assets like the Euro.
  

Trump’s Tariff Strategy

• Markets dismissed Trump’s reciprocal tariff threats as negotiation tactics rather than a prelude to a trade war.
  
• Investors expect delays in implementation, reducing immediate fears of economic disruption.
  

Geopolitical Optimism

• Progress in Ukraine-Russia peace talks (e.g., territory swap discussions) eased global risk aversion, weakening the USD’s safe-haven appeal.
  
• Reduced geopolitical tensions benefit the Eurozone economy, indirectly lifting the Euro.
  

Central Bank Divergence

• The ECB may cut rates further in 2025, but improving Eurozone data and reduced trade-war risks provide short-term EUR support.
  
• The Fed’s cautious tone limits USD upside, creating a balanced tug-of-war.
  

Short-Term Bias

• Cautiously bullish for EUR/USD, driven by optimism over delayed tariffs, geopolitical progress, and hopes for softer inflation.
  

Key Risks:

• A hot PCE report reviving Fed hawkishness.
  
• Sudden tariff escalations or breakdowns in peace talks.
  

This balance of factors suggests choppy but upward-leaning trading for EUR/USD.


Weekly Chart Analysis


1️⃣
🔹Swing Bearish
🔹Internal Bearish
🔹In Swing Discount
🔹Swing Continuation Phase (Pro Swing + Pro Internal)

2️⃣
🔹INT structure continuing bearish with iBOS following the Bearish Swing. (End of 2023 till end of 2024 was a pullback phase after the first bearish iBOS)

3️⃣
🔹After the bearish iBOS we expect a pullback, price tapped into Monthly Demand and the liquidity below Nov 2022 which is above the weekly demand formed with the initiation of the bearish iBOS pullback phase.

🔹Price made a bullish CHoCH which indicated that the liquidity was enough as per previous weeks analysis to initiate a pullback phase for the bearish iBOS.

🔹Price pulled back after the Bullish CHoCH to the Weekly Demand formed and showed reaction after volatile week.

🔹With the previous week solid Bullish close, the Demand did hold and there is a high probability that price could continue Bullish to facilitate the INT structure pullback phase.

🔹If price to continue Bullish, price will be targeting the liquidity above Dec 2024, INT Structure EQ (50%) at 1.06933 to target the Weekly Supply in premium before continuing down to target the Weak INT Low.

🔹Expectations is for price to continue Bullish if it managed to break 1.05333 27 Jan High to facilitate the INT structure pullback.

Daily Chart Analysis


1️⃣
🔹Swing Bearish
🔹INT Bearish
🔹Swing Continuation Phase (Pro Swing + Pro Internal)

2️⃣
🔹Following the Bearish Swing BOS, INT Structure continuing bearish tapping the weekly demand zone.

3️⃣
🔹After the failure to close below the Weak INT Low, price continued bullish sweeping the liquidity above Dec 30 and mitigating a Daily supply zone within the INT Structure Premium Zone.

🔹With the mitigation of the Daily supply, price created a Bearish CHoCH signaling the end of the Pullback Phase of the INT structure and the start of the Bearish move targeting the Weak INT Low.

🔹Price failed for the 2nd time to close below the Weak INT Low after mitigating the Daily Demand formed from the failure to close below the Weak INT Low which triggered aggressive Bullish reaction and mitigating the Daily Supply Zone formed from the recent Bearish CHoCH.

🔹After Supply mitigation, price continued Bearish following the Bearish INT Structure continuation phase.

🔹Previous week I mentioned “if the Daily formed a Bullish CHoCH (Currently above the recent mitigated Supply) this will shift my outlook to the Weekly Scenario of a deep pullback of the Weekly INT Structure to at least the Structure EQ (50%). MTF required to shift Bullish to confirm”. And with that happened I’d shifted to Bullish expectation and there is expectations of a deep pullback within the Daily Bearish INT structure.

🔹The expected targets for the current bullish move is 1st to sweep the liquidity above the equal highs (17 Dec & 27 Jan) 2nd Break of the Strong INT High to facilitate the Daily Bearish Swing pullback and the Weekly Bearish INT pullback.

🔹Currently Supply is failing and Demand is holding confirms the short-term Bullish scenario and setting my expectations for continuing Bullish. Price could pullback to the recent Daily Demand before continuing Bullish.

4H Chart Analysis


1️⃣
🔹Swing Bullish
🔹INT Bearish
🔹Reached Swing Extreme Demand
🔹Swing Continuation

2️⃣
🔹With the deep pullback to the Bullish Swing extreme discount and mitigating the 4H/Daily demand zones, price turned Bullish forming a Bullish CHoCH.

🔹The current Bullish move from Swing extreme discount to current price level having 2 scenarios (Previously I’d the following 2 scenarios where now I favors the 2nd scenario due to the impulsive nature of the move):

Scenario 1: Pullback for Bearish INT Structure and with the recent Bearish CHoCK and Minor Demand zones are failing, I expect Bearish continuation to target the Weak INT Low which aligns with the Daily/Weekly Bearish Structure/Move. (Counter Swing – Pro Internal)

Scenario 2: Bullish Swing continuation to target the Weak Swing High. Which requires to have Demand holding and Supply failing. The first sign required to confirm this scenario will be the current Demand which price is currently at to hold and we form a Bullish CHoCH. (Pro Swing – Counter Internal)

🔹With the recent moves, Supply is failing and Demand is holding solidifying the scenario that the Bullish 4H Swing continuation in play.

🔹Price swept Liq. above 30 Jan on 4H and Daily where I’d noted in the previous days analysis which can provide a decent pullback. (Bearish CHoCH is required to confirm the Sweep of Liquidity. Otherwise, it’s not enough and price will continue from the recent 4H Demand formed).

3️⃣
🔹Expectations is set to continue Bullish to target the Weak 4H Swing High to facilitate to the Daily and Weekly expected Bullish move.

Economic Events for the Week