The US Supreme Court’s decision on tariffs and the anticipated US strike on Iran were the two main themes of the last week. Cryptos remain on a corrective mood, while metals look healthier than one week before. On other news, we have interesting developments on natural gas and a potential surprise on Forex markets. Let’s unravel all of this.

In the last report, I expressed my disbelief of the alt coins mini-rally that occurred on 13-14/02 and considered it as a sign that the BTC bounce would fail to even reach the first target of $73,949. And I wrote:

And indeed most alts gave back most or even all their gains from 13-14/02. The positive stock markets reaction to the US Supreme Court’s decision (more on this later) regarding tariffs provided a short-lived relief to cryptos on Friday.

BTC remains on a tight range between $65,065-$72,254 and we are patiently waiting for it to break out. On the downside the next obvious level is $59,900, while on the upside, we observe various important levels:

Given the Iran situation (more on this later) I would expect to break down first. In this case, I would monitor price action for a potential SFP at the low of the mini range at $65,065, or at $59,900, which would trigger a long trade for me. Potential targets for this long would be the above 4 upside targets. And if the price reaches one of them I would monitor the price action for an SFP or a rejection that would trigger a short trade.

In the less probable case that the mini-range breaks first to the upside, I will abstain on the upside move and monitor price action on the above 4 levels for a potential SFP or rejection to trigger a short trade.

The US Supreme Court released its decision on tariffs on Friday. They decided with 6-3 votes that Trump does not have the right to impose tariffs to foreign countries without the congress approval, although they did not rule on if the state should refund the tariffs that were already collected. This causes chaos, as we now expect a new round of legal disputes by companies that paid the tariffs asking for a refund. Whatever the decision of lower courts, we should probably expect the dispute to be solved by the US Supreme Court once again. This adds a lot of uncertainty in my opinion. However, stock indices moved significantly higher on Friday, so let’s watch if this tendency persists.

You can listen to Trump’s reaction to the US Supreme Court’s decision. I can’t think of anything good for the markets that could follow after this, but let the market tell us how it wants to take it.

There are rumours about Trump having decided to attack Iran on Monday or Tuesday. I am bit sceptical about this. Normally, he strikes on Friday nights after the NYSE close in order to minimise the effect on traditional markets. Could he change this now? Let’s watch. The attack is anticipated, the only thing left open is the timing.

In the last report, I wrote:

The previous week’s price action provided more clarity. I think gold is heading up to break the $5,144 swing high, to where it is another question. Either to a lower high, maybe at the 75% of the 30/01 candle at $5,285 or maybe higher to a double top at $5,626, or even to new ATHs. My bias is we will not see new ATHs soon (for some months at least). Thinking reversely, if it makes a new ATH soon, it is a very bullish sign that deserves a long with a decent size. In any case, I expect the short term move in the next week to be to the upside and even the first target of $5,285 is 4% from here, a move that I do not intent to loose.

As a counter argument, one could notice the following twit, informing us that the Russian central bank used retail as exit liquidity to take profits on their gold position. It is a very small portion of their position, smaller than 1%, but it is worth noticing. However, I prefer to base my decisions on the price action.

If my bias for an upwards gold move of at least 4% turns out to be correct, I would expect silver and platinum to move up harder than gold. Both have good COT positioning, while palladium and copper are already heavily longed and therefore are harder to move a lot to the upside.

On Friday, silver was rejected on the level between $82-$86, that I have identified in previous reports as an important resistance. If gold is strong enough in the next week, silver could break this resistance and in this case the next targets are the 04/02 swing high of $92.015 and the upper bound of the fair value gap at $106.610. Silver managed to reclaim the daily 50MA on Friday, another sign pointing to the upside.

The platinum chart is weaker than silver’s, as it hasn’t reclaimed the daily 50MA yet and it has various resistance levels from heavier price action in the whole range from here at $2,176 to $2,584, but the COT positioning is equally favourable to silver for a nice squeeze to the upside.

In the last report, I identified the alignment of the daily 50MA with an ascending trend line connecting swing lows on the copper chart and wrote my intention to short it if these two levels are lost. They were tested but not lost during the last week. If gold moves up next week, copper will trade above these levels. So, I would probably not touch copper next week.

I am still in the long trade I mentioned in the last report. My position on the Friday close was 9% down, but I have received 6.4% in overnight swap fees, so I am 2.6% down. As I explained in the previous report the CFD on the cash contract was heavily shorted and therefore shorts pay huge overnight fees to longs just to keep their shorts open. I considered this as a cushion that would buy me time until a slightly less bearish weather forecast was released.

And indeed, such a forecast was released yesterday (21/02). Fingers crossed, nothing changes in the following hours until the futures markets open and I expect a nice gap up with a possible continuation in the next week days, if the Saturday weather forecast persists and many are forced to close their short positions.

The COT report released on Friday (20/02) and depicting the positioning at the end of Tuesday (17/02) is supporting, as speculators become even more heavily short than in the previous COT report, released on Friday (13/02) and depicting the positioning at the end of Tuesday (10/02).

Barron’s has been proven in the past a notorious counter indicator with surprising timing accuracy. When a price move reaches Barron’s cover, the move is already done and a reversal is close, in most cases imminent. This time Barron’s lets us know that USD is in decline…

This alone made me take directional bias (long USD) and search on the last COT report data (depicting market participants position on 17/02), to find which currencies are mostly longed against the USD. These are expected to provide more profits in a potential reversal, because of the huge long positions that would need to be covered.

CAD, AUD and EUR are the most longed against USD and I will look at low time frame opportunities to enter short positions during next week. In terms of price action, EUR looks to be the more constructive for a short trade and AUD is the less constructive, as it recently broke out from the critical $0.695 level. I will be monitoring all these three, but I will be more cautious with AUD.

I am still happy with my EUR/CHF short bias. I was in and out of this trade many times last week based on low time frame price action. I will keep doing this next week, as CHF is the currency with the less longs against USD. So, even if CHF/USD moves down on potential USD strength, I would expect EUR/USD to move down harder, therefore making EUR/CHF move down as well.

One more week of nothingness for the US stock indices, although Friday was a strong up day. Could they take the US Supreme Court’s decision on tariffs positively? Everything is possible, but let’s give them time to digest it. Obviously, the Iran situation will dictate the short term moves next week.