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Forex Stock Exchange Forum  » Forex and Stock Trading English Forum » Technical and Fundamental Analysis-Trading Signals » Daily Market Analysis from NordFX

Daily Market Analysis from NordFX

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1attention Re: Daily Market Analysis from NordFX Sun Sep 25, 2022 9:47 am

Stan NordFX



Forex and Cryptocurrencies Forecast for September 26 - 30, 2022



EUR/USD: In Search of a New Bottom

Last week, all the attention of the markets was focused on the FOMC meeting of the US Federal Reserve, which took place on September 21. The probability of another rate hike by 75 basis points (bp) had been estimated at 74%, and by 100 bps at 26%. The first forecast turned out to be correct: the rate was increased from 2.50% to 3.25%. But this was enough for the DXY dollar index to fly up and exceed 113.00 points, updating another 20-year high. Accordingly, as expected by the majority (75%) of experts, EUR/USD has renewed another 20-year low, reaching the bottom at 0.9667.

Russian President Vladimir Putin contributed to the weakening of the euro and the fall of the pair, announcing the mobilization of part of the military reserve to reinforce the Russian troops that invaded Ukraine. Mr. Putin also repeated the threat to use nuclear weapons, which further increased tension in the region. In addition, the heating season begins in Europe, and Russia continues to put pressure on it, using problems with energy supplies as a "weapon".

At the last meeting, the Fed gave the markets a clear hawkish signal about its next steps. It will continue its quantitative tightening (QT) policy, including reducing its balance sheet, and the interest rate will remain high in 2023. As for the current year, 2022, according to CME Group estimates, the probability that it will exceed 4.00% by the end of Q4 is almost 60%.

According to US Central bank officials, defeating inflation is now a priority. To implement it, the regulator is ready to accept the threat of a recession, including a drop in production and consumption, as well as problems in the labor market.

Investors fleeing risks on side with the dollar as a safe haven. US stock indices have been going down for the second week in a row. The S&P500 fell below its July lows, and the Dow Jones reached its June lowest values.

The last chord of the week for EUR/USD sounded at 0.9693. At the time of writing the review, Friday evening, September 23, the votes of the experts are distributed as follows. 55% of analysts say that the pair will continue to move south in the near future, while the remaining 45% expect a correction to the north. As for the trend indicators on D1, 100% is colored red, the picture is the same among the oscillators, while 25% signal that the pair is oversold.

The pair's immediate support is the September 23 low at 0.9667, with bears targeting 0.9500. The resistance levels and targets of the bulls look like this: 0.9700-0.9735, 0.9800-0.9825, 0.9900, the immediate task is to return to the range of 0.9950-1.0020, the next target area is 1.0130-1.0200.

We are in for a lot of macro-economic statistics this week. The week will be opened by data on GDP (Q3) and IFO business climate in Germany, which will be released on Monday September 26. Data from the US consumer market will be received the next day, and the US GDP (Q2) will become known on Thursday, September 29. Statistics on sales and the labor market in Germany, as well as on the consumer markets of the Eurozone (CPI) and the United States, will be published in turn on the last day of the five-day period and the month, September 30. In addition, ECB President Christine Lagarde will deliver a speech this week on September 26, and Federal Reserve Chairman Jerome Powell will speak on September 27.

GBP/USD: Back to the Past: Return to 1985

The Bank of England raised the pound rate by 50 bp up to 2.25% the day after the Fed meeting, on Thursday September 22. However, as expected, this did not help the British currency much. More precisely, given the current macroeconomic situation, it did not help at all. In just 10 days, from September 13 to 23, GBP/USD flew about 900 points, falling to its lowest level in 37 years. The bottom was found on Friday at 1.0838, which was in line with 1985 levels.

Disappointing economic data from the United Kingdom continues to weigh heavily on the pound. Business activity in the private sector continued to fall. The Preliminary Composite PMI, with a forecast of 49.0 points, actually fell from 49.6 to 48.4 over the month. In addition, a survey by the Confederation of British Industry (CBI), which speaks on behalf of 190,000 businesses, showed that the balance of retail sales fell to -20 in September from +37 in August.

According to the Bank of England's own forecasts, the country is close to a deep recession. And according to the estimates of the British Chamber of Commerce (BCC), the recession is already in full swing, and inflation will reach 14% by the end of the year. Next year also does not bode well: according to strategists at Goldman Sachs, inflation could reach 22% by the end of 2023.

To combat it, the Bank of England has moved to more aggressive rate hikes. But the tightening of monetary policy takes place simultaneously with an increase in budget spending. Moreover, the government will most likely not have enough of its own funds to pay businesses and households the announced partial compensation of electricity bills. Therefore, it will have to take large loans, which will not benefit the national currency either. (We have already reported that British energy regulator Ofgem announced that average annual bills will rise by 80% from October, and the number of households in fuel poverty could reach 12 million people in January).

The pair closed last week at 1.0867. But the range 1.0800-1.0838 is unlikely to become a strong enough support. Having broken it, the bears will rush to the historical low of 1985 of 1.0520, to which there are only about 300 points left. Given the pace of the fall of the pair, it can reach this goal in one to two weeks. Of course, a correction is not ruled out due to the oversold pound. If the pair turns north, it will meet resistance in the zones and at the levels of 1.1000-1.1020, 1.1100, 1.1215, 1.1350, 1.1475, 1.1535, 1.1600, 1.1650, 1.1710-1.1740. The return of the pair to the heights around 1.1800-1.2000 seems unlikely in the coming weeks.

Experts' forecast for the coming week looks quite unique: all 100% side with the British currency. As for the indicators on D1, all 100% point exactly in the opposite direction. However, 50% of the oscillators are in the deep oversold zone, which confirms experts' expectations regarding a correction to the north.

The event calendar can mark Friday, September 30, when UK GDP (Q2) data will be released.

USD/JPY: Miracle from the Ministry of Finance and the Bank of Japan

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As we predicted, the Bank of Japan (BOJ) remained true to itself at its meeting on September 22 and kept its interest rate at a negative, ultra-dove level of -0.1%. However, we still have to admit our mistake. We wrote last week that the Japanese financial authorities should not expect a miracle. But a miracle did happen. As USD/JPY crept up to 146.00, the Treasury's seemingly steely nerves snapped and it ordered the BOJ to intervene in support of the yen.

As a result, the pair avalanched 550 pips, showing the most volatility since the start of the COVID-19 pandemic in March 2020. Then the shock passed, the situation calmed down a bit, and the pair returned to the values of the beginning of the working week, ending it at the level of 143.30.

This pullback confirms some analysts' view that the yen's strength is unlikely to be long-term and that USD/JPY will return to storm the 146.00 high again. “In the absence of major changes in fundamentals or (unlikely) concerted action against the US dollar, the chances of a sustained rebound in the Japanese yen are limited,” Scotiabank macro strategists say. “The key issue here, of course, is the divergence in monetary policy settings between the US and Japan, which has caused the Japanese yen to plummet since the Fed first began raising interest rates in earnest in the spring.”

Scotiabank believes that markets are likely to retest the 146.00 level to test the resolve of the Bank of Japan. And the Japanese Central Bank will have to spend billions of USD to protect this level. Moreover, it may even ask the ECB, the Bank of England and the Fed to act as their agent outside of business hours in Tokyo. However, it is likely that the Bank of Japan will try to fight off the strong dollar alone.

Experts' median forecast for the near future is as follows. 45% of experts side with the bulls, 45% have taken the opposite position, the remaining 10% remain neutral. Oscillators on D1 have 40% on the green side, 10% on the red side, and 50% are colored neutral gray. Among the trend indicators, the ratio is 9 to 1 in favor of the green ones.

The nearest resistance for the pair, as in the last two weeks, is 143.75. The objectives of bulls No. 1 and No. 2 are to gain a foothold above 145.00 and then storm the height of 146.00. This is followed by 146.78, the level reached before the joint actions of Japan and the US to support the yen in 1998. Supports for the pair are located at the levels and in the zones 143.00, 142.60, 142.00-142.20, 140.60, 140.00, 138.35-139.05, 137.50, 135.60-136.00, 134.40, 132.80, 131.70.

No important statistics on the state of the Japanese economy are expected to be released this week. However, there are two events that are of particular interest in the light of the decision to intervene. A press conference by BOJ Chairman Haruhiko Kuroda is scheduled for Monday, September 26, and the report on the last meeting of the Bank of Japan's Monetary Policy Committee will be published on Wednesday, September 28. In both cases, the market will try to understand how serious the regulator is about supporting its national currency.

CRYPTOCURRENCIES: Bearish Sentiment Persists

So is bitcoin digital gold after all? According to a survey conducted by Paxos among regular buyers of physical gold, almost a third of respondents consider BTC as the best alternative to the precious metal. However, judging by how both of these assets have been behaving lately, the best alternative for both of them is the US dollar. Physical gold peaked at $2,070 on March 08, 2022, after which it went down, having lost about 20% of its value so far. As for its digital counterpart, the all-time high of $67,273 occurred on November 10, 2021, and the loss is now approximately 71%. If we compare these figures, it turns out that XAU/USD was falling by 0.10% daily, while BTC/USD was falling twice as fast, by 0.22% per day. Draw your own conclusions. We only note that it is not gold and bitcoin that are to blame for what is happening, but the gaining strength of the dollar, which is growing along with the increase in the interest rate of the US Federal Reserve. So, another rate hike led to a fall in cryptocurrency quotes last week. Gold, on the other hand, although made a couple of jumps, returned to its previous price this time. After all, unlike BTC, it is a protective asset, not a risky one. Although, it is also receding step by step under the pressure of the American currency.

When it comes to precious metals, few people use derogatory epithets. Even though their price is falling as well. But in relation to cryptocurrencies, as much as you like. So, for example, the philosopher and author of the cult work "The Black Swan" Nassim Taleb called bitcoin a "tumor" that appeared due to the wrong policy of the Fed. “I believe we had 15 years […] of Disneyland which basically destroyed the economic structure. The Fed missed the mark by cutting interest rates too much. Zero interest for a long period of time damages the economy, bubbles are created, tumors like bitcoin are created,” he said, calling for a return to “normal economic life.”

Well-known bitcoin investor and analyst Willy Woo agrees that it is the US government that is now running the “ship”. True, on the contrary, he would like this “tumor” to be larger, but its growth is held back for political reasons. As he noted, it is currently theoretically possible to sell unlimited amounts of BTC due to futures contracts, although in reality the offer is limited to 21 million coins. “Futures markets can control the BTC rate,” the investor says. “CME (Chicago Mercantile Exchange) has set up a kind of bitcoin casino where you can play in US dollars. Wall Street hedge funds loved it. What are the current restrictions on the sale of bitcoin? None, because fiat has no restrictions.”

Willy Woo believes that due to the structure of the futures market, major players can suppress BTC by exerting pressure in the form of selling an asset: “Bitcoin should not be killed. Just the ability to short BTC is enough to suppress the exchange rate. Bitcoin will not be able to make a global impact without a high price. The SEC's policy is now aimed at increasing liquidity and the predominance of futures by approving futures ETFs, while spot ETFs are being rejected. Everything has turned into a political game now,” the investor sighs sadly.

DataDash analyst and founder Nicholas Merten expects the US Central bank to continue raising interest rates until it achieves a solid victory over inflation. And this, in turn, will push the quotes of digital assets further down. According to Merten, this is influenced not only by macroeconomic, but also by technical factors.

Thus, BTC's 200-week moving average (WMA) has become a resistance level, not a support level. Bitcoin has almost always remained above this indicator throughout its existence, with rare breakdowns to the downside, marking the bottom of the cycle. Currently, the 200-week WMA is around $23,250, and bitcoin is failing to rise above this level.

Merten concluded that BTC's recent exchange rate movement could signal the end of a 10-year bull market, and it can no longer be a leading asset compared to other commodities and stocks. According to the analyst, the next bottom of BTC could be around $14,000, which would mean an 80% correction from the all-time high, as in the case of previous bear markets. “$14,000 is a potential low at the moment. However, investors should consider an even sharper fall to $10,000.”

An analyst with the nickname DonAlt agrees with Merten, he believes that BTC will update the 2022 lows amid weak stock market performance. DonAlt predicts the coin will fall below the $18,000-20,000 range and form a new cycle low. “It often happens with such ranges that after it is broken, an increase occurs. And now there is a good chance to break through the $18,000-20,000 range and then form a bullish momentum. The only question is how low bitcoin can go because it can easily go all the way to $15,000.” “My forecast is based on the S&P 500 and looks terrible,” DonAlt writes. “It looks like this index is in for a big drop.”

We paid a lot of attention to the main competitor of bitcoin, ethereum, in the previous review. This was due to a very important event: the global update The Merge took place in the ETH network on September 15, including the transition of the altcoin from the Proof-of-Work protocol to Proof-of-Stake (PoS). Ethereum has fallen by about 20% since then. And we have repeatedly warned about this possibility, citing the opinions of various experts.

The coin’s price had roughly doubled from its yearly lows in June, by far outpacing bitcoin’s rise, ahead of the network upgrade. And Vijay Ayyar, vice president of the Luno crypto exchange, believes that the Merger had already been “factored into the price” of ETH, and “the actual event has become a “news selling” situation. According to Ayyar, traders are now moving investments from ethereum and other altcoins back to bitcoin, Ayyar said, “as bitcoin is expected to do better in a few months.” At the same time, the specialist believes that any “change in the macroeconomic environment in terms of inflation or unexpected interest rates” could lead BTC to fall below $18,000, and the coin will test levels up to $14,000.

However, inflation and rising rates are not the only factors that may affect the quotes of digital assets. So now investors are wondering if ethereum's regulatory status could change after the Merge. The reason for concern was the words of Gary Gensler, Chairman of the US Securities and Exchange Commission. This official said last week that cryptocurrencies operating under the Proof-of-Stake model that applies to ETH can be classified as securities. Thus, these assets fall under the competence of the regulatory authorities. Gensler did not specifically name ethereum, but it is clear that in this case the coin will attract the close attention of the SEC, and it is unknown how this may end. For example, DataDash's Nicholas Merten expects the asset to retest the $800-$1,000 range, although he doesn't rule out a move lower.

At the time of this writing (Friday evening, September 23), bitcoin and ethereum have partially recouped the fall caused by the Fed's decision. BTC/USDis trading at $18,900 ( ETH/USD is $1,320). The total capitalization of the crypto market is $0.929 trillion ($0.959 trillion a week ago). Like seven days ago, Crypto Fear & Greed Index is 20 points and is still in the Extreme Fear zone.


NordFX Analytical Group


Notice: These materials should not be deemed a recommendation for investment or guidance for working on financial markets: they are for informative purposes only. Trading on financial markets is risky and can lead to a loss of money deposited.

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https://nordfx.com/

2attention Re: Daily Market Analysis from NordFX Sat Sep 17, 2022 4:37 pm

Stan NordFX



Forex and Cryptocurrencies Forecast for September 19 - 23, 2022



EUR/USD: Ahead of the US Federal Reserve FOMC Meeting

The World Bank said last week that risks of a recession in 2023 are growing amid simultaneous tightening of monetary policy by the world's leading Central banks and the energy crisis in Europe. According to Citigroup strategists, the dollar remains the only safe haven for investors to hedge against the risk of drawdown in investment portfolios.

Global stock markets have lost $23 trillion since the early 2022, and bond prices have also declined. As for the US currency, it continues to grow, unlike stocks and other risky assets. According to experts' forecasts, the DXY Dollar Index may come close to 112.00 points over the next three months, renewing a 20-year high. Investors' belief that the US economy will cope better with the impending global recession than the economies of other countries and regions strengthens the dollar as well.

Markets are now focused on the next FOMC meeting of the US Federal Reserve, which will be held on Wednesday, September 21. The key parameters that determine the monetary policy of the Central Bank at the present stage are inflation and the state of the labor market. Important statistics were released last week, including retail sales and unemployment claims in the US. This data strengthened investors in the opinion that the Fed will continue the policy of quantitative tightening (QT). According to the CME Group, the probability of another rate increase by 75 basis points (bp) is estimated at 74%, and by 100 bps at 26%. In addition, Wells Fargo analysts believe that the rate hike will be supplemented by an acceleration in the rate of balance sheet reduction.

The Fed's forecast for a neutral level of interest rates will be updated at this meeting as well. The median forecast for the federal funds rate in 2022 is expected to be revised to 3.875%, up from 3.375% in the June forecast.

All of the above steps may lead to further strengthening of the dollar and the fall of the stock market. The reverse scenario will be possible only if the announced plans are suddenly abandoned. However, this can only happen with a sharp decline in GDP, rising unemployment and a convincing victory over inflation. Neither one, nor the other, nor the third has yet been observed in the United States.

The Consumer Price Index (CPI), published on September 13, fell from 8.5% to 8.3% over the month. However, the forecast assumed a stronger fall, to 8.1%. An additional negative was the rise in core inflation to 6.3% y/y, which is the highest since March and more than three times higher than the Central Bank's target of 2%. But the labor market, on the contrary, is doing quite well, which supports forecasts for a rise in interest rates. Employment growth over the past two months has been robust, averaging 421K new jobs.

As for the Eurozone, inflation accelerated to 9.1% in August. Based on this, some analysts believe that the ECB may also continue to raise the rate in 0.75% increments. However, the next meeting of this regulator is not yet soon, on October 27. So it lags far behind in tightening (QT) from its overseas counterpart. At the same time, according to Rabobank strategists, the unstable situation in the region may mean that “raising rates will not significantly strengthen the euro.” Given the strength of the US dollar, experts believe that the EUR/USD pair may fall to 0.9500 in the coming weeks.

The EUR/USD ended the week at 1.0013. At the time of writing this review, on the evening of Friday, September 16, the votes of the experts are distributed as follows. 75% of analysts say that the pair will continue moving south in the near future, another 25% vote for the continuation of the side trend along Pivot Point 1.0000. There is not a single vote on the side of the bulls.

Among the trend indicators on D1, 65% are red, 35% are green. Among the oscillators, 25% are on the green side, the same 25% on the red side, and 50% are colored neutral gray.

The pair has been moving along the parity line for the past four weeks. The main trading range was within 0.9900-1.0050. Taking into account breakdowns in both directions, it is somewhat wider: 0.9863-1.0197. The next strong support after the 0.9860 zone is located around 0.9685, the bears' target, as mentioned above, is 0.9500. The resistance levels and targets of the bulls look like this: 1.0050, 1.0080, 1.0130, then 1.0200 and 1.0254, the next target area is 1.0370-1.0470.

In addition to the FOMC (Federal Open Market Committee) meeting and subsequent forecasts and comments, we expect fresh data on unemployment in the US next week. It will be published on Thursday September 23. And business activity indicators (PMI) in Germany and in the Eurozone as a whole will become known at the end of the working week, on Friday, September 23.

GBP/USD: Ahead of the Bank of England Meeting

The British currency has set another anti-record. Having risen to 1.1737 at the beginning of the week, GBP/USD then turned around and flew down rapidly. Wednesday brought a little respite, and then the flight continued. The landing occurred on Friday 16 September at 1.1350. The pair was this low 37 years ago, in 1985. The last chord of the week sounded 75 points higher, at 1.1425.

Apart from the strengthening of the dollar on expectations of a rate hike by the Fed, additional pressure on the British currency was exerted by a drop in retail sales in the United Kingdom. They fell 1.6% m/m in August, more than three times the 0.5% forecast.

According to analysts, a strong technical correction can stop the collapse. And that's only for a while. Strategists from MUFG Bank believe that the downtrend of GBP/USD may continue to a historic low of 1.0520. “With the UK budget and current account deficits combined to reach an impressive 15% of GDP, downward pressure on the GBP will continue,” they write.

The Bank of England will also announce its interest rate decision the next day after the FOMC meeting, on Thursday, September 22. The main forecast suggests that it may rise by 50 bp, from 1.75% to 2.25%. However, it is possible that the regulator will immediately raise the rate to 2.50%, which will support the British currency for some time.

However, this is a double-edged sword. If the rate increase forecast comes true, this will create an even greater burden on the country's economy, whose health is already causing serious concern. We previously wrote that, according to the estimates of the British Chamber of Commerce (BCC), the UK is already in the midst of a recession, and inflation will reach 14% this year. And according to Goldman Sachs, it could reach 22% by the end of 2023, which will provoke a protracted economic downturn and a contraction of the economy by more than 3.5%. British energy regulator Ofgem has already announced that average annual electricity bills for UK households will rise by 80% from October. And according to the Financial Times, the number of fuel-poor households will more than double in January to 12 million.

Ahead of the Fed and Bank of England meetings, the median outlook for next week looks neutral. A third of the analysts side with the dollar, another third - with the pound, and another third have taken a neutral position. The readings of the indicators on D1 are almost all red again. These are 100% among the trend indicators. For oscillators, 85% point south and 15% point east. No oscillators are pointing north.

As for the bulls, they will meet resistance in the zones and at the levels of 1.1475, 1.1535, 1.1600, 1.1650, 1.1710-1.1740, 1.1800, 1.1865-1.1900, 1.2000. The nearest support is in the 1.1400-1.1415 zone, followed by the September 16 low at 1.1350. One can only guess to what levels, given the increased volatility, the pair may fall further. Let us only repeat that the 1985 historical low is at 1.0520.

Among the events of the coming week, except for the Bank of England meeting, the calendar includes Friday, September 23, when data on business activity (PMI) in the UK will be published. It should also be noted that the country has a bank holiday on Monday, September 19.

USD/JPY: Ahead of the Bank of Japan Meeting

In addition to the Fed and Bank of England meetings, the Bank of Japan (BOJ) will also meet next week. According to forecasts, the Japanese regulator will continue to adhere to the ultra-soft monetary policy and keep the negative interest rate (-0.1%) unchanged.

A miracle can happen of course, but its probability is close to 0. At the same time, the BOJ's unilateral actions, according to economists from Societe Generale, will only be enough to stop the weakening of the yen. But they will not be enough to reverse the USD/JPY downtrend. Societe Generale calls a recession in the US, which will lead to a drop in the yield of US Treasury obligations, as another prerequisite.

USD/JPY ended the trading session last week at 142.90, failing to reach the 145.00 high. However, according to Bank of America analysts, the pair's bullish sentiment remains, and it is still aimed at moving towards 150.00. At the same time, bank specialists note the following three levels: Fibo 38.2% correction (head and shoulders) at 145.18, the peak of 1999 at 147.00, and the target A=C at 149.53.

The closest resistance for the pair, just like a week ago, is 143.75. The bulls' task No. 1 is to gain a foothold above 145.00. Back in the spring, when analyzing the rate of the pair's rise, we made a forecast according to which it could reach a peak of 150.00 in September. And it may come true against the background of a rise in the Fed's interest rate. Supports for the pair are located at the levels and in the zones 142.00-142.20, 140.60, 140.00, 138.35-139.05, 137.50, 135.60-136.00, 134.40, 132.80, 131.70.

The opinion of Bank of America analysts is supported by 65% of experts, 25% have taken the opposite position, the remaining 10% remain neutral. Oscillators on D1 are 100% on the green side, although 10% of them signal being overbought. Among trend indicators, 75% are green and ­25% are red.

With the exception of the BOJ meeting, no important macro data on the Japanese economy is expected to be released this week. Traders should also note that Monday, September 19 and Friday, September 23 are non-working days in Japan.

CRYPTOCURRENCIES: ETH After the Merge: Fall Instead of Growth

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We usually start our review with the main cryptocurrency, bitcoin. But this time, let's deviate from the rules and give the palm to the main altcoin, Ethereum. This is due to an event that may become the most important for the crypto industry in 2022. On September 15, the ETH network hosted the global update The Merge, which involves the transition of the altcoin from the Proof-of-Work protocol to Proof-of-Stake (PoS). This means that now the security of the blockchain will be ensured not by miners, but by validators: users who have deposited and blocked their share of coins (staking).

Now, instead of running large networks of computers, validators will use their Ethereum cache as a means of validating transactions and mining new tokens. This should improve the speed and efficiency of the network so that it can process more transactions and solve the problem of user growth. The developers claim that the update will make the network that hosts the ecosystem of cryptocurrency exchanges, lending companies, non-playable token (NFT) markets and other applications more secure and scalable. In addition, cryptocurrencies have been constantly criticized for their huge energy consumption. Ethereum will now consume 99.9% less of it.

Enthusiasts believe that this merge will revolutionize the industry and allow Ethereum to overtake bitcoin in capitalization and value. However, many authoritative voices sound much calmer. For example, Bank of America (BofA) believes that this hard fork will not solve the problem of scalability or high fees but may lead to wider institutional adoption. The notable decrease in power consumption after The Merge will allow some investors to purchase this altcoin for the first time. “The ability to place ETH and generate higher quality returns (lower credit and liquidity risk) as a validator or through staking could also drive institutional adoption,” BofA admitted.

CoinShares Chief Strategy Officer Meltem Demirors looks more pessimistic. He believes that investors are ignoring the overall market situation in the hype around the Merge. And it’s not certain that this event will attract significant investment capital: “The reality is more prosaic,” says the CoinShares strategist. “At the global level, investors are concerned about rates and macro indicators. And I don't believe that significant amounts of new capital are likely to enter ETH.”

Time will tell how the market will eventually react to the Merge. In the meantime, instead of growth, there has been a fall. The trigger was the collapse of stock indices (S&P500, Dow Jones and Nasdaq), which was provoked by US inflation data for August. Market participants decided that in such a situation the Fed would tighten its monetary policy more actively and raise interest rates. It is expected that the rate will rise by another 0.75% or even 1.0% next week. As a result, the dollar began to rise sharply, while risky assets, including bitcoin and Ethereum, fell. BTC fell to $19,341 by Friday evening, having lost 15% of its value over the week, ETH fell to $1,403, “shrinking” by 20%.

According to many experts, due to the hawkish position of the Fed and the ECB, the dynamics of the crypto market will remain negative at least until the end of the year. Against the backdrop of a reduction in market risk appetite, it will be difficult for bitcoin to stay above not only the psychologically important level of $20,000, but also above the June 18 low of $17,600. The latter threatens a further collapse.

A trader and analyst under the nickname filbfilb allowed in an interview with Cointelegraph the bitcoin to fall from current levels to $10,000-11,000. According to the specialist, bitcoin has become highly correlated with the US stock market, which is under enormous pressure due to the Fed's policies. The first cryptocurrency behaves as a risky asset, not as inflation insurance.

The expert noted that the upcoming winter will be a serious test for residents and politicians of the European Union, the consequences of which will have a negative impact on hodlers. The important thing will be how the countries of the Old World will cope with the energy crisis. According to him, everything is in the hands of diplomats who are able to prevent an emergency. Otherwise, risky assets will face a difficult future. "The dialogue between Russia and NATO is important: the sooner it starts, the higher the bitcoin low will be", filbfilb emphasized.

It should be noted here that the dependence of BTC on the US stock market weakened sharply in August and was at the annual low. However, it has begun to grow again and, according to the TradingView service, the correlation between bitcoin and the S&P 500 index has reached 0.59. The situation is similar with the Nasdaq. The correlation with it fell to 0.31 in August, and it rose to 0.62 in September. Analysts remind that the dependence of the crypto sphere on the stock market becomes strong after the correlation index rises above 0.5. When 0.7 is reached, the dependence becomes ideal.

However, despite the negative sentiments, there is still hope to see light at the end of the tunnel. The aforementioned filbfilb called bitcoin's Q1 2023 rally "obvious". The expert sees two reasons for this. The first is the seasonal factor. Downtrends end 1000 days after the halving (which will be early next year. The second is a change in sentiments to positive ones, based on game theory. With a probability of 2/3, the expert suggested that Europe will survive the coming winter. But if things go badly, it will increase the likelihood of a dialogue with Russia that will bring stability in the short term.

Cryptocurrency analyst with the nickname Rager does not believe in the decline of BTC to $12,000. He agreed that there are no guarantees when dealing with bitcoin. But, in his opinion, it is very likely that the asset is forming a bear market bottom above $19,000. Another analyst and trader with the nickname Rekt Capital believes that everything is moving towards the final phase of bitcoin's decline. “A significant part of the BTC bear market is behind us, and the entire bull market is ahead. The bottom of the bear market will be in November, December or the beginning of the Q1 2023.”

Rekt Capital noted that the data signal a possible rise in BTC by 200%, but there is one caveat: Bitcoin could fall even more before it goes up. “Of course, in the short term, the BTC price could fall by 5%-10%,” Rekt Capital writes. “But in the long term, a rally of more than 200% is very likely.”

Despite the depreciation of BTC, Michael Saylor, the founder of MicroStrategy, hopes for the best. His company intends to proceed with the acquisition of this asset. It will reportedly sell $500 million worth of its own shares. The proceeds from these sales will be used, among other things, to replenish the cryptocurrency stocks. Note that MicroStrategy is the largest corporate bitcoin holder. It owns 129,699 coins purchased at an average exchange rate of $30,664. The last purchase (480 BTC) was made in June.

At the time of writing (Friday evening, September 16), this MicroStrategy investment is deeply unprofitable, as BTC/USD is trading at $19,730 (ETH/USD - $1,435). The total capitalization of the crypto market has again fallen below the psychologically important level of $1 trillion and is $0.959 trillion ($1.042 trillion a week ago). The Crypto Fear & Greed Index fell 2 points in seven days from 22 to 20 and is still in the Extreme Fear zone.


NordFX Analytical Group


Notice: These materials should not be deemed a recommendation for investment or guidance for working on financial markets: they are for informative purposes only. Trading on financial markets is risky and can lead to a loss of money deposited.

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3attention Re: Daily Market Analysis from NordFX Sun Sep 11, 2022 4:49 pm

Stan NordFX



Forex and Cryptocurrencies Forecast for September 12 - 16, 2022



EUR/USD: Two Events of the Week

The past week was marked by two significant events. First, the EUR/USD pair updated its 20-year low on Tuesday, September 06 once again, falling to 0.9863. And then the European Central Bank raised its key interest rate for the first time in its history by 75 basis points (bp) to 1.25% on Thursday, September 08, accompanying this act with very hawkish comments.

We must say that both events did not come as a surprise to the market and, on the whole, were in line with the forecasts that we voiced in the previous review. The pair's rebound to the upside following the ECB's decision was not surprising either. Having risen by about 250 points, it peaked at 1.0113 on September 9. This was followed by a correction to the north, and the pair finished at 1.0045

Despite such a hawkish move, the ECB is still far from the US Fed: the current rate on the dollar is 2.50%, which is exactly twice as high as on the euro. But this is not all. If the September meeting of the European regulator has already passed, its American counterpart still has it ahead. And if the Fed's FOMC (Federal Open Market Committee) raises the rate on September 21 once again, the dollar will go even further into the lead. And the probability of such a step is close to 100%.

It is still difficult to predict what both Central Banks will do next month, October. But there is a feeling that the ECB may, at least for a while, lower its hawkish attitude to understand how the rate hike has affected inflation and the state of the economy. The factor of the energy crisis in Europe, caused by anti-Russian sanctions, is still playing against the euro. However, the leadership of the European Union is taking active steps to reduce energy dependence on Russia on the eve of winter. And judging by the fact that the Eurozone GDP growth published on September 7 turned out to be higher than both the previous value and the forecast (4.1% versus 3.9%), stagflation may be avoided. 

At the time of writing this review, on the evening of Friday, September 09, the votes of the experts are distributed as follows. 55% of analysts stand for the fact that EUR/USD will continue to move south in the near future, 30% vote for its growth and the strengthening of the euro, the remaining 15% predict a side trend along Pivot Point 1.0000. The readings of indicators on D1 do not give any certainty. Among trend indicators, the ratio of forces is 50% to 50%. Among the oscillators, there is a slight advantage on the green side, 50%, 35% are on the red side, and 15% are colored in neutral gray.

The main trading range of the last three weeks was within 0.9900-1.0050. Taking into account breakdowns in both directions, it is somewhat wider, 0.9863-1.0113. The next strong support after the 0.9860 zone is located around 0.9685. The resistance levels and targets of the bulls look like this: 1.0130, then 1.0254, the next target area is 1.0370-1.0470.

There will be quite a lot of important events in the coming week. Consumer Price Indices (CPI) in Germany and the US will be published on Tuesday, September 13. CPI is an indicator of consumer inflation and reflects changes in the level of prices for groups of goods and services in August. The September ZEW Economic Sentiment Index in Germany will be released the same day. Another batch of economic statistics will arrive on Wednesday, September 14 and Thursday, September 15 in the form of the Producer Price Index (PPI) and data on retail sales and unemployment in the US. We are waiting for the publication of the Eurozone CPI, as well as the US University of Michigan Consumer Confidence Index, at the end of the working week, on Friday, September 16.

GBP/USD: British Pound's Anti Record

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We titled our previous review of GBP/USD "On the Way to a 37-Year Low". Recall that the lows of March 2020 (1.1409-1.1415) were at the same time the lows for the last 37 years. And now, this offensive forecast for the British currency came true: the pair reached a local bottom at around 1.1404 on September 07, breaking the 2020 anti-record. Then the euro, strengthening against the dollar, pulled up other currencies, including the pound. As a result, GBP/USD rose to 1.1647, and the five-day period closed at 1.1585.

An important event on August 7 was the hearing of the UK Inflation Report and the speeches by members of the Monetary Policy Committee, headed by the head of the Bank of England, Andrew Bailey. As predicted, officials reaffirmed their commitment to tightening monetary policy (QT). Their statements strengthened the market's expectations that the regulator could raise the rate from 1.75% to 2.50% at its September meeting. This meeting was originally scheduled for next Thursday. However, due to mourning for Queen Elizabeth II, it was postponed for a week and will take place on September 22, after the US Federal Reserve makes its decision on the rate.

If the forecast for a growth in the interest rate on the pound comes true, this will create an even greater burden on the UK economy, which already causes serious concerns. The UK is already amid a recession and inflation will hit 14% this year, according to the British Chamber of Commerce (BCC). And according to Goldman Sachs, it could reach 22% by the end of 2023, which will provoke a protracted economic downturn and a contraction of the economy by more than 3.5%. British energy regulator Ofgem has already announced that average annual electricity bills for UK households will rise by 80% from October. And according to the Financial Times, the number of fuel-poor households will more than double in January to 12 million.

Of course, investors are very worried about whether the new prime minister, Liz Truss, will be able to cope with the deplorable situation in which the country's economy has found itself. Having failed to fully recover from Brexit and the COVID-19 pandemic, the United Kingdom has faced unprecedented inflation, a decline in the population's ability to pay and a catastrophic collapse of the national currency.

The median forecast for the coming week looks fairly neutral. A third of analysts side with the bulls, another third side with the bears, and another third have taken a neutral position. The indicator readings on D1 are mostly colored red. Among the trend indicators, the ratio is 70% to 30% in favor of the red ones. For oscillators, 65% point south and 35% point east. No oscillators are pointing north.

As for the bulls, they will meet resistance in the zones and at the levels of 1.1600, 1.1650, 1.1720, 1.1800, 1.1865-1.1900, 1.2000, 1.2050-1.2075, 1.2160-1.2200. The nearest support, apart from the 1.1475-1.1510 zone, is the September 07 low 1.1404. One can only guess to what levels the pair can fall further. Given the increased volatility, it is probably not worth focusing on either round values, or Fibonacci levels, or any figures of graphical analysis.

With regard to the economic statistics of the United Kingdom, data on GDP and output should arrive on Monday, September 12, that on the level of wages and unemployment in the country will be published on Tuesday, September 13. The Consumer Price Index (CPI) will be published on Wednesday, September 14, and retail sales in the UK will be known on Friday, September 16. The source of all this data is the Office for National Statistics, so the schedule for their publication is subject to change due to mourning for Elizabeth II.

USD/JPY: Astronaut Pair

USD/JPY rose to a high of 140.79 on September 2, thus reaching a 24-year high. Most analysts were waiting for another rise and taking new heights from the past week. This is exactly what happened: the pair soared to the level of 144.985 on Wednesday, September 07. The last chord of the week sounded a bit lower, at 142.65.

Describing the cause of what happened is quite simple using Copy Paste on the keyboard, it is enough to take any of our reviews over the past couple of years. That's what we're doing right now. So, the reason is the same: the divergence between the monetary policies of the Bank of Japan (BOJ) and other major Central Banks, primarily the US Federal Reserve. Unlike the American hawks, the Japanese regulator still intends to pursue an ultra-soft policy, which is aimed at stimulating the national economy through quantitative easing (QE) and a negative interest rate (-0.1%). This divergence is a key factor for the further weakening of the yen and the growth of USD/JPY. And the situation will not change until BOJ raises the rate.

And why should the Japanese Central Bank raise it? The published data on the country's GDP (Q2) look quite good: the indicator rose from 0.5% to 0.9%, while the forecast was 0.7%. Of course, inflation in Japan has exceeded the 2% target, which is bad. But this is almost nothing compared to inflation in the US, the Eurozone or the UK. So there is no need to worry too much here. So Japanese Finance Minister Shunichi Suzuki said that price increases will be extinguished not by tightening monetary policy, but, on the contrary, by injecting 5.5 billion yen from the budget reserve. In addition, the minister said that he is "closely monitoring the movement of the exchange rate", that "it is important that it moves steadily" and that "abrupt movements of the currency are undesirable."

Haruhiko Kuroda, Governor of the Bank of Japan, said almost the same thing, word for word, on Friday, September 09, after his meeting with Prime Minister Fumio Kishida. His main theses are as follows: "I discussed the foreign exchange market with Kishida", "Fast movements in the exchange rate are undesirable", "We will closely monitor the movement of exchange rates."

We do not know what is so positive in the words of these high officials, but, as the media write, thanks to them the yen received support, and now 45% of experts vote for its further strengthening. Another 45% remain neutral, and only 10% are waiting for further growth of USD/JPY. The indicators on D1 have an absolute advantage on the side of the greens. Among oscillators there are 100% of them, among trend indicators - 90%, and only 10%­ on the side of the reds.

The nearest resistance is 143.75. The bulls' task No.1 is to renew the high of September 07 and gain a foothold above 145.00. Back in the spring, when analyzing the rate of the pair's rise, we made a forecast according to which it could reach a peak of 150.00 in September. And it looks like it's starting to come true. Supports for the pair are located at the levels and in the zones 142.00, 140.60, 140.00, 138.35-139.05, 137.50, 135.60-136.00, 134.40, 132.80, 131.70.

No important events in the economic life of Japan are expected this week.

CRYPTOCURRENCIES: Main Week of the Calendar

Last week was marked by another wave of sales. The bitcoin rate approached the June 19 low ($17,600), falling to $18,543 on September 7. At the same time, Ethereum fell below $1,500, an important support/resistance level, and recorded a local bottom at $1,488. This dynamic is primarily due to the hawkish rhetoric of the Fed and, as a result, the strengthening of the US currency. However, later, against the background of the ECB meeting, both coins won back their losses in full, and even seriously increased in quotes. At the time of writing this review, on Friday evening, September 9, they are trading as follows: BTC/USD at $21.275, ETH/USD at $1,715. The total capitalization of the crypto market has risen slightly above the psychologically important level of $1 trillion and is $1.042 trillion ($0.976 trillion a week ago). The Crypto Fear & Greed Index has fallen by another 3 points in seven days from 25 to 22 and is in the Extreme Fear zone.

According to the TradingView service, the ratio of ethereum to bitcoin has grown to its highest values for 2022. It was fixed at 0.0843 in the afternoon of September 06. The last time such a level was noted was in December 2021. 1 BTC is worth about 12.4 ETH at current values.

The ETH community has linked the growth of this indicator to the upcoming network merger. Many users have been talking for almost a year now that a revolution will happen in this tandem sooner or later. Then ethereum will overtake bitcoin in terms of capitalization and value. Recall that the update of the ethereum network is scheduled for the period from September 13 to 20. This merge is likely to be the most important event of 2022 in the cryptocurrency industry. This is because it will bring several key changes to how the network works. The main ones are a 99.99% reduction in energy consumption and a decrease in the emission of the ETH coin.

According to a number of experts, if the transition to the Ethereum 2.0 network and the implementation of the Proof-of-Stake mechanism go as planned, this altcoin can rise sharply in price and pull the entire market up with it, primarily its main competitor, bitcoin. But that's if everything goes smoothly and according to plan. Or maybe not. So, it became known on Wednesday, September 07 that the ethereum network encountered a problem after the Bellatrix update. The blockchain is seeing a noticeable spike in “number of missed blocks,” the frequency with which the network fails to process blocks of transactions scheduled for validation. This figure has increased by about 1700%. Before the update, it was about 0.5%, and after the Bellatrix it rose to 9%.

CoinShares Chief Strategy Officer Meltem Demirors believes that investors are ignoring the general situation in the market, amid the hype around the transition of ETH to the PoS mechanism. And that, despite the benefits of the merger for the ethereum network itself, it is not certain that this event will attract significant investment capital: “While there is significant enthusiasm in the crypto community for a merger that can rapidly reduce supply and increase demand, the reality is more prosaic: investors are concerned about rates and macro indicators. I believe that significant amounts of new capital are unlikely to enter ETH. There are certain risks that need to be played out in the market because the merger has been used as an excuse to buy on the rumor and sell on the news. How will these risks be played out? Most likely on the institutional side or through trading, but through options rather than outright purchases of the asset.”

Experts of u.today portal also remind about macro statistics. They note that September 13 could be an important date, not only because of the merger of the ethereum networks. There is one more factor. As we wrote above, fresh data from the US Consumer Price Index (CPI) will be published on the same day. According to analysts, this information will help investors understand what is happening with the inflation rate in the country and will directly affect the financial markets, including cryptocurrency. If the network update does not cause problems with volatility, liquidity and security, and the CPI shows a decrease in inflation, then a bullish momentum can be predicted, otherwise the crypto market will continue to fall.

Glassnode allowed BTC to fall further to support around $17,000. The specialists do not rule out such a wave of capitulation due to an increase in the proportion of "unprofitable" coins at the disposal of speculators (who traded in the previous 155 days). It rose to 96% (3.11 million BTC out of 3.24 million BTC). The situation was aggravated by the suspension of the bearish rally from June 19 to August 15. The rise in the price to $25,000 and its subsequent fall in just a few days transferred half of the speculators' coin reserves to the category of “unprofitable”.

In the short term, it is the stress testing of speculators that will determine the disposition in the market, since most of the on-chain activity was carried out by them. Three such episodes in the current downtrend had led earlier to sales with a short planning horizon and the subsequent formation of a local bottom.

Analyst Kevin Swenson agrees with Glassnode's alarming outlook. He issued a warning about a possible downward movement of bitcoin as well. The US dollar soared to its highest level in 20 years, while bitcoin fell below the diagonal support that kept the asset afloat from its June lows of $17,600, Swanson said. Swanson admits further bearish scenario for bitcoin as the DXY dollar index is still in a strong uptrend.

Another expert, Naeem Aslam, believes that the fall will not be to the level of $18,000 or $15,000, but much lower, to about $12,000.

Cryptoanalyst Nicholas Merten does not rule out either that bitcoin will soon collapse to a strong support level in the range of $12,000-14,000. He made this forecast based on the net unrealized profit and loss (NUPL), which shows the state of the positions of BTC holders. (When NUPL is above 0, most investors are in the black. If below 0, then more investors suffer losses).

At the same time, Merten believes that the BTC movement can be unpredictable since the asset has never been traded during a period of tightening monetary policy and raising interest rates. He also doubts the imminent return to quantitative easing (QE) by the US Federal Reserve, as it was in the past. “I would like to note,” the expert writes, “that there has never been a 50% recession, almost depressive correction or a bearish stock market in all 10 years during which BTC has been liquidly traded on exchanges, . There were typical bear markets around 20%, and then the Fed came to the rescue and saved the day. But the Fed cannot do the same now. If you print money and try to save the day, you can seriously exacerbate the problem of inflation.”

And some positive at the end of the review. Despite the fall in the capitalization of the crypto market and the bankruptcy of a number of large projects, the bitcoin hash rate is close to its historical maximum. The situation seems inconsistent with the fall of the main cryptocurrency by more than 70% from the maximum, and the collapse of the shares of public mining companies. However, miners continue to introduce new capacities. Analysts attribute this to the optimism of some companies and the readiness for market turbulence of others. If we add to this the Glassnode data, which observes an increase in the number of coins at the disposal of hodlers, then we can hope that the crypto winter will still be followed by spring.


NordFX Analytical Group


Notice: These materials should not be deemed a recommendation for investment or guidance for working on financial markets: they are for informative purposes only. Trading on financial markets is risky and can lead to a loss of money deposited.

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https://nordfx.com/

4attention Re: Daily Market Analysis from NordFX Thu Sep 08, 2022 4:20 pm

Stan NordFX



New NordFX Super Lottery: 202 Prizes in 2022 The Next Draw Is on October 6. Grab Your Chance!

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The NordFX brokerage company started a new super lottery, which will give away 200 cash prizes of 250, 500 and 1,250 USD, as well as 2 two super prizes of 10,000 USD each. The total prize fund will be 100,000 USD. Draws will take place on October 06, 2022, and January 04, 2023.

It is very easy to take part in the lottery and get a chance to win one or even several of these prizes. It is enough to have a Pro account in NordFX (and for those who do not have it - register and open a new one), top it up with $200 and... just trade.

Having made a trading turnover of only 2 lots in Forex currency pairs or gold (or 4 lots in silver), the trader will automatically receive a virtual lottery ticket. The number of such lottery tickets for one participant is not limited. The more deposits and the greater the turnover, the more lottery tickets the participant will have, and the greater their chances of becoming a winner.

Another advantage is that lottery winners receive their winnings not as bonuses, but as real money, which, if they wish, can be either used in further trading or withdrawn without any restrictions.

Visit the NordFX website for more details. You can become a participant of the Super Lottery 2022 and start receiving lottery tickets right now.

Notice: These materials are not investment recommendations or guidelines for working in financial markets and are intended for informational purposes only. Trading in financial markets is risky and can result in a complete loss of deposited funds. 


Notice: These materials should not be deemed a recommendation for investment or guidance for working on financial markets: they are for informative purposes only. Trading on financial markets is risky and can lead to a loss of money deposited.

[You must be registered and logged in to see this link.]

https://nordfx.com/

5attention Re: Daily Market Analysis from NordFX Wed Sep 07, 2022 6:00 pm

Stan NordFX



CryptoNews of the Week

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- The bitcoin rate approached the June 19 low ($17,600), falling to $18,500 on September 7. Glassnode allowed BTC to fall further to support around $17,000. The specialists do not rule out such a wave of capitulation due to an increase in the proportion of "unprofitable" coins at the disposal of speculators (who traded in the previous 155 days). It rose to 96% (3.11 million BTC out of 3.24 million BTC). The situation was aggravated by the suspension of the bearish rally from June 19 to August 15. The rise in the price to $25,000 and its subsequent fall in just a few days transferred half of the speculators' coin reserves to the category of “unprofitable”.
In the short term, it is the stress testing of speculators that will determine the disposition in the market, since most of the on-chain activity was carried out by them. Three such episodes in the current downtrend had led earlier to sales with a short planning horizon and the subsequent formation of a local bottom. The long-term prospects of the first cryptocurrency, according to Glassnode analysts, remain constructive. This is confirmed by the increase in the number of coins at the disposal of hodlers.

- Analyst Kevin Swanson agrees with Glassnode's alarming prediction. He issued a warning about a possible downward movement of bitcoin as well. The US dollar soared to its highest level in 20 years, while bitcoin fell below the diagonal support that kept the asset afloat from its June lows of $17,600, Swanson said. Swanson admits further bearish scenario for bitcoin as the DXY dollar index is still in a strong uptrend.
Another expert, Naeem Aslam, believes that the fall will not be to the level of $18,000 or $15,000, but much lower, to about $12,000.

- Cryptoanalyst Nicholas Merten does not rule out either that bitcoin will soon collapse to a strong support level in the range of $12,000-14,000. He made this forecast based on the net unrealized profit and loss (NUPL), which shows the state of the positions of BTC holders. (When NUPL is above 0, most investors are in the black, if below 0, then more investors are in losses).
At the same time, Merten believes that the BTC movement can be unpredictable, since the asset has never been traded during a period of tightening monetary policy and raising interest rates. He also doubts the imminent return to quantitative easing (QE) by the US Federal Reserve, as it was in the past. “I would like to note,” the expert writes, “that there has never been a 50% recession, almost depressive correction or a bearish stock market in all 10 years during which BTC has been liquidly traded on exchanges, . There were typical bear markets around 20%, and then the Fed came to the rescue and saved the day. But the Fed cannot do the same now. If you print money and try to save the day, you can seriously exacerbate the problem of inflation.”

- A popular Twitter expert known as FatManTerra came up with a fake investment scheme as part of an experiment and raised more than $100,000 in bitcoins. On September 5, he tweeted about allegedly gaining access to a “highly profitable bitcoin farm” from an unnamed fund, and invited subscribers to join the farming. FatManTerra did not deliberately disclose additional details of the investment scheme, however, even without this information, he managed to collect this substantial amount in just a couple of hours.
“I want to send a clear message to everyone in the crypto world,” he wrote after the experiment, “anyone who offers you easy money is lying. Influencers who sell fast trading training or offer great investment opportunities are cheating on you.”
FatManTerra announced that he had returned all the money to users, and added that he had been inspired for the experiment by the Lady of Crypto account, which was accused of promoting dubious investment schemes among 257,500 subscribers.

- Ethereum co-founder Vitalik Buterin was sure that the previous cryptocurrency bull market would end sooner or later. “I'm actually surprised that the collapse didn't happen sooner. Crypto bubbles usually last about 6-9 months after breaking the previous peak. This is followed by a rapid fall quite quickly. This time, the bull market lasted almost a year and a half,” Buterin said.
According to him, this is a reflection of the “cyclical dynamics” inherent in cryptocurrencies. “When prices go up, a lot of people say that this is the new paradigm and the future, and when they go down, people start saying it’s doomed, and they are fundamentally wrong.” According to Buterin, periodic price downturns help to “identify clearly” the problems in the industry and as well as unstable business models. The latter thrive during the boom in the market due to the influx of new money, but their model stops working during the downturn. He cited the recent collapse of the Terra project and the BitConnect investment scam that collapsed in 2017 as examples.
Buterin acknowledged that bearish phases have a negative impact on the design and development of protocols, as it is difficult to support sprawling teams financially. “But I don’t claim to [have invented] a cure for these dynamics,” he concluded.

- Hackers stole 119.2 ETH (about $185,000) from the crypto wallet of famous actor Bill Murray. The funds had been received for the sale at a charity auction of the NFT “Beer with Bill Murray”, which gives the right to drink beer with the actor. The proceeds were to be donated to a non-profit organization helping veterans and rescuers.
Murray's team was partially successful in thwarting the break-in and protecting about 800 NFTs in the actor's collection and is now working with police and analytics firm Chainalysis to track down the intruders.

- According to the TradingView service, the ratio of ethereum to bitcoin has grown to its highest values for 2022. It was fixed at 0.0843 in the afternoon of September 06. The last time such a level was noted was in December 2021. 1 BTC is worth about 12.4 ETH at current values.
The ETH community has linked the growth of this indicator to the upcoming network merger. Many users have been talking for almost a year now that  a revolution will happen in this tandem sooner or later. Then ethereum will overtake bitcoin in terms of capitalization and value. The Merge procedure is scheduled for the period between September 13 and 15, 2022, however, the preparatory part of the event will take place on September 07.
This merge is likely to be the most important event of 2022 in the cryptocurrency industry. This is because it will bring several key changes to how the network works. The main ones are a 99.99% reduction in energy consumption and a decrease in the emission of the ETH coin.

- Experts of the u.today portal noted that September 13, 2022 will be a key date for the cryptocurrency market, not only due to the merge of Ethereum (ETH) networks. There is one more factor. Fresh data from the US Consumer Price Index (CPI) will be published on the same day. According to analysts, this information will help investors understand what is happening with the inflation rate in the country and will directly affect the financial markets, including cryptocurrency.
U.today suggested that if the Merge update does not cause problems with volatility, liquidity and security, and the CPI shows a decrease in inflation, a bullish momentum can be predicted, otherwise the crypto market will continue to fall.


Notice: These materials are not investment recommendations or guidelines for working in financial markets and are intended for informational purposes only. Trading in financial markets is risky and can result in a complete loss of deposited funds.

[You must be registered and logged in to see this link.]

https://nordfx.com/

6attention Re: Daily Market Analysis from NordFX Sun Sep 04, 2022 1:47 pm

Stan NordFX



Forex and Cryptocurrencies Forecast for September 05 - 09, 2022



EUR/USD: Rather Boring Week

The past week was, boring, so to say. The macro statistics released from August 30 to September 2, although versatile, turned out to be quite close to market expectations. For example, the harmonized consumer price index in Germany, was 8.8%, with the forecast of 8.8%. The consumer price index in the Eurozone amounted to 9.1% instead of the expected 9.0%. The index of business activity in the US manufacturing sector (PMI) did not change at all over the month and amounted to 52.8 (forecast 52.0), and the number of new jobs created outside the American agricultural sector (NFP) did not go far from the expected either, 315K against 300K. As a result, EUR/USD was moving along the parity line of 1.0000 all five days, fluctuating in the range of 0.9910-1.0078, and completed the five-day period at the level of 0.9955.

Market participants are likely to be much more active next week. The key day will certainly be Thursday September 08, when the ECB will decide on the deposit rate and make a statement and comments on its monetary policy. Inflation in the Eurozone rose even more in August: from 8.9% to 9.1%. Therefore, many experts, such as the strategists of the international financial group Nordea, believe that the European regulator will raise the rate by 75 basis points at once.

“Considering that the rate increase by 75 b.p. is not fully priced in financial markets and that the tone of the press conference is likely to be hawkish,” Nordea economists write, “we expect the first reaction from markets to be higher yields, wider bond spreads and a stronger euro.”

If we talk about the average forecast, it looks as follows at the time of writing the review, on the evening of Friday, September 02. 50% of experts vote for the fact that EUR/USDwill move south in the near future, 35% vote for its growth, the remaining 15% are waiting for the side trend to continue. The readings of the indicators on D1 give much more definite signals. Both among trend indicators and among oscillators, all 100% side with the bears. However, 10% among the latter give signals that the pair is oversold.

The nearest bearish target for EUR/USD is the 0.9900-0.9910 zone. Note that the 0.9900-0.9930 area is also a strong 2002 support/resistance zone. Apart from the parity level of 1.0000, if the euro strengthens, the first priority for the bulls will be to rise above the resistance of 1.0030. After that, it will be necessary to overcome the level of 1.0080 and consolidate in the zone of 1.0100-1.0280, the next target area is 1.0370-1.0470.

Among the upcoming week's events, apart from the ECB meeting, we can single out the publication of data on retail sales in the Eurozone on Monday, September 05. Monday is a holiday in the United States, the country celebrates Labor Day. We are waiting for data on business activity (ISM) in the US services sector on Tuesday, September 06, and GDP indicators in Germany and the Eurozone will be published on Wednesday. Fed Chairman Jerome Powell is scheduled to speak and data on unemployment in the United States will be published on the same day.

GBP/USD: On the Way to a 37-Year Low

We titled our review of the GBP/USD pair "Gloomy Forecasts for the Pound Continue to Come True" two weeks ago. The past headline sounded like "Very Terrible Long-Term Outlook" We can not say anything cheerful this week either: the pound is still one of the weakest G10 currencies, which is affected by the worsening prospects for the UK economy.

The British Chamber of Commerce (BCC) estimates that the UK is already in the midst of a recession and inflation will hit 14% this year. And according to Goldman Sachs, it could reach 22% by the end of 2023. According to the Financial Times, the number of British households living in fuel poverty will more than double in January to reach 12 million people. And the new prime minister will have to take urgent action to avoid an economic disaster. Just what action? It seems that no one knows yet.

In such a situation, the anxiety of market participants about the candidacy of the next prime minister, whose name will be announced on Monday, September 05, is quite understandable. Recall that the current Prime Minister Boris Johnson has resigned after a sex scandal involving one of his cabinet members.

Against this gloomy background, the pound has been falling since August 01. Having broken through support at 1.1500, it set two-year lows (1.1495) last week. As for the final chord of the five-day period, it sounded a little higher, at around 1.1510. Most experts (55%) believe that GBP/USD will continue to fall in the coming weeks. And it will not stop even if the Bank of England raises interest rates by 75 bp on September 15. 30% hope for a correction and 15% have taken a neutral position.

According to currency strategists at UOB Group, the next significant support level after 1.1500 is in the March 2020 lows. “However,” the specialists note, “short-term conditions are deeply oversold, and it is not yet clear if this major support will be within reach this time.” As for a possible correction to the north, the UOB believes that only a break above 1.1635 will indicate that the British currency is not ready to fall further.

Note that the March 2020 lows (1.1409-1.1415) are at the same time the lows for the last 37 (!) years. The GBP/USD pair fell lower to 1.0800, only in 1985. As for the bulls, they will meet resistance in the zones and at the levels of 1.1585-1.1625, 1.1700, 1.1750, 1.1800-1.1825, 1.1900 and 1.2000. The readings of the indicators on D1 are similar to the readings for the EUR/USD pair: all 100% are colored red. However, here a third of the oscillators signal that the pair is oversold, which often indicates a possible correction.

The United Kingdom's economic calendar can mark Monday 05 and Tuesday 06 September when the UK Services and Manufacturing PMIs and the Composite Index (PMI) will be released. A hearing on the inflation report will take place on Wednesday, September 07, but it will be more informative, and no important decisions will be made that day.

USD/JPY: Higher, Higher and Higher

Most analysts (60%) had been expecting a new test of the July 14 high and taking the 139.40 high last week. This is exactly what happened. USD/JPY rose to the height of 140.79, thus reaching a 24-year high. The weekly trading session finished at 140.20.

The reason for another record is still the same: the divergence between the monetary policy of the Bank of Japan (BOJ) and other major central banks, primarily the US Federal Reserve. Unlike the American hawks, the Japanese regulator still intends to pursue an ultra-soft policy, which is aimed at stimulating the national economy through quantitative easing (QE) and a negative interest rate (-0.1%). This divergence is a key factor for the further weakening of the yen and the growth of USD/JPY.

Bank of America Global Research economists expect USD/JPY to remain at high levels until a major correction in Q4 2022. Moreover, such a correction is possible only if inflation in the US shows a steady slowdown. “We expect USD/JPY to end 2022 at 127,” these analysts say. "However, the structural weakness of the Japanese yen should resurface in the longer term."

At the moment, the majority of analysts (50%) believe that USD/JPY will continue its movement to the north. Fortunately, it still has room to grow: it was worth more than 350 yen for 1 dollar back in 1971. 30% of experts expect the bulls to take a break in the area of the highs reached, and another 20% are counting on a corrective moving to the south.

For indicators on D1, the readings mirror the readings for the previous pair: 100% of them point north, while a third of the oscillators are in the overbought zone. The primary task of the bulls is to update the high of September 02 and rise above 140.80. The next goal is 142.00. Supports for the pair are located at the levels and in the zones 140.00, 138.35-139.05, 137.70, 136.70-137.00, 136.15-136.30, 135.50, 134.70, 134.00-134.25.

As for the economic events of the coming week, we can highlight the release of data on Japan's GDP on Thursday, September 08.

CRYPTOCURRENCIES: All Hope for Ethereum

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The BTC/USD pair was moving in a narrow range along the $21.330 horizon for a week before Jerome Powell's speech on August 26. The speech of the head of the Fed collapsed risky assets, the stock and crypto markets flew down. However, if the S&P500, Dow Jones and Nasdaq stock indices continued to fall throughout the past week, bitcoin was able to stay in the $20,000 ($19,518-20,550) region, and ethereum even grew in anticipation of the transition to the PoS mechanism.

As a result, instead of the usual correlation of BTC/USDwith technology stocks, we could observe its correlation with the main major forex pair, EUR/USD these days, which moved sideways along the parity line of 1.0000. A slight recovery on Friday, September 2 was caused by the publication of data on unemployment in the US. But the pair did not go beyond the weekly trading range and bitcoin is trading at $19,930 at the time of writing the review. The total capitalization of the crypto market has fallen below the psychologically important level of $1 trillion and stands at $0.976 trillion ($0.991 trillion a week ago). The Crypto Fear & Greed Index has fallen by another 2 points in seven days, from 27 to 25, and is in the Extreme Fear zone.

Over the past 10 years, it was only in 2018 that investors suffered more serious losses. And the pressure on the crypto market continues to persist, primarily due to the tightening of the monetary policy of the US Central Bank. According to CoinShares, the turnover of cryptocurrency investment products fell in the last decade of August to the lowest level since October 2020, and the outflow of funds continued for the third week in a row. “Although […] part of this dynamic is due to seasonal effects,” the specialists explain, “we also see continued apathy after the recent price decline. We think the caution is due to the Fed's hawkish rhetoric." In addition to speculators and casual "tourists", medium-term BTC holders (with a coin history of more than 5 months) began to leave the market.

The ranks of crypto enthusiasts are rapidly thinning out. Bitcoin is “a purely speculative asset with no utility,” due to the lack of technological progress. This was stated by Justin Bons, the founder and chief investment officer of the Cyber Capital fund. He used to be a vigorous advocate for bitcoin, but changed his point of view, calling it “one of the worst cryptocurrencies”. “The world has moved forward. It used to be said that digital gold would simply embrace the best technology. This thesis, obviously, has not been fully confirmed. Bitcoin doesn’t have smart contracts, privacy technologies, or scaling breakthroughs,” Bons explained.

“The economic properties of bitcoin are incredibly weak as well. It competes with cryptocurrencies that can achieve negative inflation, high storage capacity and utility, such as post-merger ETH.” “People, for the most part, invest in the first cryptocurrency only because they believe in the price increase. They act on the same principle as participants in Ponzi schemes,” the founder of Cyber Capital believes.

Umar Farooq, the head of Onyx's blockchain division, which is part of the JPMorgan conglomerate, also voiced a lot of criticism against the crypto market. In his opinion, most of the crypto assets on the market are “junk”, and the lack of full regulation of the industry deters many traditional financial institutions from participating in the market. In addition, the technologies and practical applications of digital currencies are not well developed. Because of this, for example, they cannot be used as products such as tokenized bank deposits.

Investor and broadcaster Kevin O'Leary also believes that the price of bitcoin is stagnating due to lack of regulation. As a result, institutionalists cannot invest in this sector. “You need to use the trillions of dollars that sovereign wealth manages, but they are not going to buy bitcoin because there is no regulation,” says O'Leary. “People forget that 70% of the world's wealth is in pension and sovereign wealth funds. Accordingly, if they are not allowed to buy this asset class, they do not bet on it.”

However, the investor believes that regulation will still appear within the next two to three years. In the meantime, without a regulatory framework, cryptocurrency cannot be considered a full-fledged asset class, and bitcoin is unlikely to rise above $25,000.

Analyst Justin Bennett's forecast looks much bleaker. According to him, the recent sell-off in the stock market will inevitably lead to a fall in the bitcoin rate: “The stock sale that has taken place confirms a major bull trap and is likely to cause prolonged decline. That is, the S&P500 will fall by about 16%, and BTC by 30%-40%, to the level of $12,000.”

“BTC is testing the 2015 trend line again,” the analyst writes. -"Do not believe those who consider it a healthy phenomenon. The two long bottom wicks of 2015 and 2020 indicating strong demand are worth looking out for. This time we are seeing exactly the opposite.” According to Bennett, the main target for the bears is the pre-COVID-19 high of $3,400.

Regarding ethereum, Bennett believes that the asset is forming the top of the “head and shoulders” pattern on the chart with a downward target near $1,000: “The right shoulder of this pattern is starting to form and ETH’s drop below $1,500 is the confirmation.”

A similar scenario is given by Bloomberg analysts. They are also predicting ETH to fall below $1,000 despite its recent comeback from the August 29 lows. This is largely due to the volatility of the ethereum price in bearish market conditions. “Technical indicators of momentum and price trends show that the token’s decline from a peak near $2,000 in mid-August to the current zone near $1,500 is likely to continue,” Bloomberg said in their report.

Sentiment in the ETH community has remained optimistic lately due to the upcoming merger. However, this has not provided the asset with any immunity to the latest unfavorable macroeconomic conditions, Bloomberg analysts write. Ethereum has established promising support on its 50-day moving average. However, after the market fell on August 25-26, the asset has been below this support, which indicates the risks of a further collapse and a retest of support around $1,000.

And some optimism at the end of the review. According to a number of experts, if the transition to the Ethereum 2.0 network and the implementation of the Proof-of-Stake mechanism go as planned, this altcoin can rise sharply in price and pull the entire market up with it, primarily its main competitor, bitcoin. Recall that the update of the ethereum network is scheduled for the period from September 15 to 20. So we will find out soon which of the predictions will be correct.


NordFX Analytical Group


Notice: These materials should not be deemed a recommendation for investment or guidance for working on financial markets: they are for informative purposes only. Trading on financial markets is risky and can lead to a loss of money deposited.

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https://nordfx.com/

7attention Re: Daily Market Analysis from NordFX Fri Sep 02, 2022 4:27 pm

Stan NordFX



August 2022 Results: Gold Trading Brings Gold Medal to NordFX Trader


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NordFX Brokerage company has summed up the performance of its clients' trade transactions in August 2022. The services of social trading, PAMM and CopyTrading, as well as the profit received by the company's IB-partners have also been assessed.

A client from Southeast Asia, account No. 1634XXX, rose to the top, “gold” step of the podium in August, earning 32,118 USD on transactions with gold (XAU/USD).
The second place was taken by their compatriot, account No. 1623XXX, who made transactions on a variety of pairs, including EUR/USD, GBP/CAD, GBP/USD, and earned 24,858 USD.

A trader from East Asia closes the TOP-3 with a result of 16,257 USD. This solid result was achieved thanks to operations with the XAU/USD, GBP/USD and EUR/USD pairs.

The situation in NordFX's passive investment services is as follows:

In CopyTrading, the “veteran” signals KennyFXPRO - Journey of $205 to $5,000 and KennyFXPRO - Prismo 2K continue to move profits up, slowly, but confidently. The first of them brought the profit to 401% in 545 days (374% a month ago), the second one reached 192% profit in 485 days (178% a month ago). Recall that the maximum drawdown for these signals was 67% and 45%, respectively, and occurred quite a long time ago, in mid-October 2021. After that, such unpleasant "surprises" were not observed. But the third signal from the same family, KennyFxPro - The Cannon Ball increased its drawdown from 7% to 30%, its profit for the month rose from 33% to 38%.

As for the BSTAR signal (profit 48%/max drawdown 14%/195 days of life), which we also mentioned in the previous review, there were no trades on it in August. Perhaps its author took a break during the summer holidays.

As for startups, as usual, there are quite a lot of them. Of these, we note the signals JANUNGFX (98%/29%/37), Andy EU250 (54%/25%/38), NORD GOLDEN_DUCK (50%/30%/48) and PT_Bot Scalping (48%/30%/61). Once again, we would like to remind you that rather aggressive trading and a short lifespan of signals are additional risk factors and require special caution when subscribing.

In the PAMM service, the TOP-3, or rather TOP-4, has not changed over the past month. The leader is still the same manager under the nickname KennyFXPRO. The capital on on his KennyFXPRO-The Multi 3000 EA account has been increased by 134% in 584 days. Also among the leaders were: TranquilityFX-The Genesis v3 account, which showed a profit of 97% in 515 days, NKFX-Ninja 136 account, which since June 11, 2021. brought a return of 88%, and COEX.Investment - Treis with a profit of 45% in 304 days.  
All these accounts have a very moderate maximum drawdown, about 20%. Another account attracted attention, KennyFxPro - The Multi 3000 v2, which showed a yield of 16% in 66 days of life with a drawdown of less than 5%.

TOP 3 IB partners of NordFX received the following rewards in August:
- the largest commission, 11,265 USD, was accrued to a partner from East Asia, account No. 1259XXX;
- the second, as in July, is a partner from South Asia, account No. 1507ХХХ, who received 7,248 USD;
- and finally, a partner from South America, account No. 1274XXX, closes the TOP-3, who received 6,313 USD as a reward.


Notice: These materials should not be deemed a recommendation for investment or guidance for working on financial markets: they are for informative purposes only. Trading on financial markets is risky and can lead to a loss of money deposited.

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8attention Re: Daily Market Analysis from NordFX Mon Aug 29, 2022 8:34 am

Stan NordFX



Forex and Cryptocurrency Forecast for August 29 - September 02, 2022



EUR/USD: The Global Economy Is in Danger Again

So, EUR/USD broke through the key support level formed in 2016. It fixed a low at 0.9899 on Tuesday, August 23, the low the pair traded 20 years ago, in November-December 2002. The euro lost about 485 points to the dollar lover the past year alone.

Although not officially recognized, in fact the US economy has already plunged into recession, GDP continues to fall, although this movement has slowed down a bit: -0.9% in Q1 2022 and -0.6% in Q2. Quantitative tightening (QT) by the Fed and macroeconomic factors increase the chances of strengthening this process. Thus, JP Morgan CEO Jamie Dimon has warned that the country's economy could expect "something worse than a recession", and the probability of this event occurring is 20-30%.

The situation in the Eurozone is even worse, and macroeconomic conditions still do not bode well. According to forecasts, due to the energy crisis caused by anti-Russian sanctions, Europe, and especially Germany, will face a very difficult winter.

“The world economy is in danger again,” said World Bank President David Malpass. “It is facing high inflation and slow growth at the same time. Even if a global recession is averted, the pain of stagflation could linger for several years.” This situation fuels the demand for safe-haven assets, and the US currency is traditionally one of them. The dollar index (DXY) is holding positions near multi-year highs around 108 points and, according to experts, may rise to 110 points.

The key event of the past week was the annual economic symposium in Jackson Hole on August 25-27, which brought together almost the entire US financial elite. The key event at the symposium was to be the speech of Fed Chairman Jerome Powell, from whom market participants hoped to receive signals regarding the regulator's future plans. But he did not say anything new and significant, Powell's statements were a little more "hawkish" than before, but generally coincided with market expectations. Perhaps the head of the US Central Bank did not want to shock the markets in any of the directions. He did not name a specific figure by which the FOMC (Federal Open Market Committee) can raise the interest rate on September 21. Moreover, this decision may still be influenced by the forthcoming September reports on the labor market and consumer price dynamics.

The likelihood of a 50 basis point (bp) or 75 bp rate hike in September is about the same. Recall that the rate is at the level of 2.5% at the moment and the next increase will send it to the maximum level since 2008. And there is no doubt that it will happen, even though the CPI showed signs of slowing in July, falling to 8.5%, and inflation, as measured by the Core Price Index for Personal Consumption Expenditures (PCE), fell from 0.6% to 0.1% in a month.

At the same time, the ECB may also raise borrowing costs by 50 bp at its meeting on September 8. The minutes of the last, July, meeting of the regulator showed that a very large number of members of the Board of Governors agreed on the advisability of raising the key rate from 0.5% to 1.0%. Moreover, according to Reuters, some ECB leaders, due to the deterioration of the inflation forecast, want to discuss the issue of raising the rate immediately by 0.75%. However, the decrease in the difference between the rates of the Fed and the ECB, although it may slightly support the euro, will not change the situation fundamentally, since the difference between the rates will still remain in favor of the dollar. As a result, the US currency will continue to strengthen, and, according to Wells Fargo analysts, it may peak in Q4 2022. Economists from Nordea expect that EUR/USD may fall to 0.9700 by the end of the year, a number of experts call 0.9600 as well.

Jerome Powell's speech took place on the evening of Friday, August 26, in the middle of the US trading session, when the Asian and European currency markets had already closed. Therefore, the final reaction to the words of the head of the Fed will become clear only on Monday, August 29. As for the last week, although its performance caused some volatility, the pair placed the last chord within the weekly range, slightly below its center at 0.9966.

60% of experts support the fact that it will continue to move south in the near future, while the remaining 40% indicate the opposite direction to it. The readings of the indicators on D1 give much more definite signals. 100% side with the bears both among trend indicators and among oscillators. However, a quarter gives signals of it being oversold among the latter. The nearest bearish targets for EUR/USD are the July 14 low at 0.9950 and August 23 low at 0.9899. Note that the 0.9900-0.9930 area is also a strong 2002 support/resistance zone. For the bulls, the first priority is to rise above the 1.0000 parity level, after which it will be necessary to overcome the resistance of 1.0030, then 1.0090-1.0100, followed by the levels and zones of 1.0120, 1.0150-1.0180, 1.0200 and 1.0250-1.0270.

Statistics on the US consumer market will be released on Tuesday, August 30. We will have a whole series of data from the US labor market on the same day, as well as on Wednesday, August 31, Thursday, September 01 and Friday, September 02, including such important indicators as the unemployment rate and the number of new jobs created outside the agricultural sector (NFP). As for the European economy, data on unemployment in Germany and the consumer market of the Eurozone (CPI) will be received on Wednesday, August 31, and the value of the Business Activity Index in the manufacturing sector (PMI) and retail sales in Germany will become known on September 01.

GBP/USD: Very "Terrible Long-Term Outlook"

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We titled the review for GBP/USD “Gloomy Forecasts for the Pound Continue to Come True” a week ago. But it turns out that the situation does not just look gloomy but inspires real horror for some experts. “The long-term chart of the pair,” economists at Citi Bank believe, “is looking really terrible right now. It can be viewed as a large double top forming as a continuation pattern, which promises a price drawdown to parity and possibly below it. […] There is no significant support now (beyond the March 2020 peak low just above 1.14) until the major lows set in 1985 at 1.0520. […] This month's close below 1.1760, if any, would be a bearish external month.”

GBP/USD closed last week at 1.1736. The pound continues to be pressured by the resignation of Prime Minister Boris Johnson, accompanied by a sex scandal, and rising inflation. British energy regulator Ofgem has announced that average annual household electricity bills will rise by 80% from October and that the new Prime minister will need to take urgent action to deal with such skyrocketing prices.

The median forecast for the coming week looks fairly neutral. 45% of analysts side with the bulls, and 55% support the bearish scenario. The indicator readings on D1 look exactly the same as those of the EUR/USD pair: all 100% are colored red, while 25% of the oscillators signal that the pair is oversold. Immediate support is the August 23 low at 1.1716, followed by 1.1650, 1.1535 and the March 2020 lows in the zone 1.1400-1.1450. As for the bulls, they will meet resistance in the zones and at the levels of 1.1755, 1.1800, 1.1865-1.1900, 1.2000, 1.2050-1.2075, 1.2160-1.2200, 1.2275-1.2325 and 1.2400-1.2430.

With regard to the economic statistics of the United Kingdom, traders should take into account that there is a bank holiday in the country on Monday, August 29. Among the important events, we can note Thursday, September 01, when the August value of the UK Manufacturing PMI will be known.

USD/JPY: BOJ Policy Will Remain the Same

The USD/JPY pair has been moving in the sideways corridor 135.80-137.70 throughout the week. And if we talk about the results of the five-day period, the bulls won with a slight advantage: having started the week at 136.81, the pair ended it at 137.45. So, the neutral forecast was fully justified. Recall that the majority of experts voted for the movement of the pair to the east last time.

The latest survey of economists conducted by Bloomberg showed that inflation, which reached 3%, is unlikely to force the head of the Bank of Japan (BOJ) Haruhiko Kuroda to tighten monetary policy. While 3% is the highest level since 1991 (excluding years of tax hikes), it is still well below the 8.5% inflation rate in the US. Moreover, according to forecasts, inflation may reach 2.5% in the last three months of 2022, and be at the level of 1% at the end of next year.

As for a possible change in the monetary policy of the BOJ after the expiration of the term of Haruhiko Kuroda in April 2023, one cannot really count on this. And even more so, one should not expect an increase in interest rates at the next meeting of the Japanese regulator on September 22.

Based on the above, the majority of analysts (60%) believe that USD/JPY will again aim to test the July 14 high and take the height of 139.40. 30% of experts expect the yen to strengthen and a downtrend, and 10% give a neutral forecast. The indicators on D1 mirror the readings of the previous pairs: 100% of them point north, while 25% of the oscillators are in the overbought zone. Supports for the pair are located at the levels and in the zones 137.00, 136.70, 136.15-136.30, 135.50, 134.70, 134.00-134.25, 132.85-133.00, 131.75-132.00, 131.00. Resistances are 137.70, 138.40, 138.50-139.00, and finally the July 14 high at 139.38. Bulls' next targets­ are 140.00 and 142.00.

No significant statistics on the Japanese economy are expected to be released this week.

CRYPTOCURRENCIES: Dark Gray is the Colour

As of last week, BTC/USD was trading in a tight $20,900-$21,800 range most of the time ahead of Jerome Powell's speech at Jackson Hole. It is in this zone that the cumulative average break-even of all bitcoin holders is located. But risky assets: stock indices (S&P500, Dow Jones, Nasdaq) and quotes of digital currencies flew down on the evening of August 26. At the time of writing, the main cryptocurrency has already begun to react to the hawkish mood of the head of the Fed and recorded a weekly low at $20,534. The total capitalization of the crypto market has fallen below the psychologically important level of $1 trillion and stands at $0.991 trillion ($1.028 trillion a week ago). The Crypto Fear & Greed Index has dropped 6 points in seven days from 33 to 27 and is in the Extreme Fear zone. It is possible that these figures will become even worse on Saturday and Sunday, August 27-28.

The overall picture at the end of summer looks like this. In July, whales (with assets of over 10,000 BTC) and shrimps (less than 1 BTC) have been the main investment force driving bitcoin up. It is known that institutional investors play a leading role in the whale population, highly dependent on what is happening on Wall Street. Institutional operations with digital assets are carried out through cryptocurrency funds. And, judging by the statistics, the inflow of investments into these funds stopped at the beginning of August, and the whales returned to selling their BTC coins in the second week of the month: the outflow amounted to about $21 million.

However, according to Bakkt crypto platform CEO Gavin Michael, despite what is happening, bitcoin will show significant growth in the coming years. Bakkt provides digital assets and futures trading services for institutional investors and, according to Michael, they are closely watching what is happening and their interest in the market is constantly growing.

One of the key signs of future price growth is the increase in network activity and the emergence of new addresses. Bitcoin activity is now at the same level as it was at the end of the 2018-2019 bearish market, according to analytics firm Glassnode. However, despite the signs of the end of the “crypto winter”, network indicators still do not signal a reversal of the macroeconomic trend. The researchers note that the bitcoin network still does not record the presence of demand for cryptocurrency from investors, which is essential for a sustainable uptrend. “Recent price increases failed to attract a significant wave of new active users, which is especially noticeable among retail investors and speculators,” Glassnode notes. The lack of hype is also indicated by the falling fees in the bitcoin network. As noted, its size has fallen below $1. Currently, the average cost of BTC transactions is around $0.825, which is the lowest level since June 13, 2020. Despite this, Glassnode believes that it is at current price levels that bitcoin can try to form a solid foundation for future growth.

CoinShares Chief Strategy Officer Meltem Demirors believes that “BTC does not see catalysts that could contribute to growth until the end of Q3.” But despite this, “we saw a lot of buying on drawdowns in relation to BTC” in summer, which, in her opinion, indicates the presence of capital willing to accumulate this asset.

If Meltem Demirors is cautiously optimistic, analyst Justin Bennett is quite pessimistic and believes that BTC may face another sell-off. Bitcoin has gone below the diagonal support that has kept the bullish vibe for the past few months. According to Bennett, the coin's rate fell by more than 30% the last two times in such situations.

Although the analyst is bearish, he predicts a small short-term rise in BTC to $23,000, which should be retested as resistance. Then a decline to $19,000 is expected. Bitcoin’s reaction at this level should, according to Bennett, determine its behavior until the end of the year: “The question will be whether we see a rebound and higher lows, or get lower lows for the rest of the year.”

As for ethereum, Meltem Demirors believes that investors are ignoring the general situation in the market, amid the hype around the transition of ETH to the PoS mechanism. And that, despite the benefits of the merger for the ethereum network itself, it is not certain that this event will attract significant investment capital: “While there is significant enthusiasm in the crypto community for a merger that can rapidly reduce supply and increase demand, the reality is more prosaic: investors are concerned about rates and macro indicators. I believe that significant amounts of new capital are unlikely to enter ETH. There are certain risks that need to be played out in the market because the merger has been used as an excuse to buy on the rumor and sell on the news. How will these risks be played out? Most likely on the institutional side or through trading, but through options rather than outright purchases of the asset.”

Another well-known strategist, Benjamin Cowen, spoke out about the ethereum. In his opinion, if the most negative scenario is implemented, the logarithmic regression band indicates a possible fall in the ETH/USD pair to the ­$400-$800 area. Cowen calls such a drop an excellent opportunity to replenish Ethereum reserves. At the same time, he does not exclude the possibility of the altcoin moving up: “ETH can demonstrate a rally if the transition to PoS goes without significant problems (you need to be aware that some software updates do not always go smoothly) and the Fed changes its monetary policy.” (As a reminder, the ethereum network upgrade is scheduled for September 15-20. So, it won't take long to wait.).


NordFX Analytical Group


Notice: These materials should not be deemed a recommendation for investment or guidance for working on financial markets: they are for informative purposes only. Trading on financial markets is risky and can lead to a loss of money deposited.

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https://nordfx.com/

9attention Re: Daily Market Analysis from NordFX Sun Aug 21, 2022 11:06 am

Stan NordFX



Forex and Cryptocurrencies Forecast for August 22 - 26, 2022



EUR/USD: Back to 1:1 Parity

EUR/USD has been moving sideways in the 1.0100-1.0270 channel for more than three weeks. All attempts to break through its upper or lower border ended in failure. This movement continued until August 10, when, after the publication of data on inflation in the US, the pair went up sharply, turning the level of 1.0270 from resistance into support. However, the bulls' joy was short-lived. Just two days later, the pair returned to the channel, broke through its lower border on Thursday, August 18, and ended the week at 1.0039.

So, as most experts expected, the dollar and the euro approached the parity of 1.0000 again. There are two main reasons explaining the next reversal of the pair to the south. The first is the drop in the market's risk appetites. Inflation and the energy crisis in Europe are on the rise. The consumer price index (CPI) rose there in annual terms from 8.6% to 8.9% in July. So far, there is no way out of the energy crisis caused by the sanctions imposed on Russia because of its invasion of Ukraine. The Chinese economy is not encouraging either: the volume of industrial production (y/y) fell from 3.9% to 3.8% over the month, which is much lower than the forecasted 4.6%. The volume of retail sales fell from 3.1% to 2.7% as well (against the forecast of 5.0%). Against this background, the People's Bank of China lowered the base lending rate on the yuan sharply, from 3.70% to 2.75%.

The second reason lies in the positive macroeconomic statistics from the US and investors' confidence in the strength of the country's economy. It is known that the main "whales" that now determine the Fed's monetary policy are the state of the labor market and inflation. Unemployment in the US has been holding at 3.6% since March, which is a very good indicator. And it became even lower in July, 3.5%. And such an important indicator as NFP, the number of new jobs created outside the agricultural sector, with a forecast of 250K, actually reached 528K. And this despite the fact that it was 372K a month earlier. As for inflation, the figures look quite good here as well. The consumer price index (CPI) with a forecast of 0.2% in July turned out to be at the level of 0.0% (1.3% a month earlier). It decreased from 9.1% to 8.5% (forecast 8.7%) on an annualized basis. Instead of the expected 0.5%, the base CPI grew by only 0.3% in July (0.7% a month earlier).

All these figures indicate clearly that inflation, the war against which the Fed launched, is declining. Of course, this is not a final victory, but the success of the American Central Bank is obvious. Therefore, it may soften its monetary policy somewhat and not raise interest rates as aggressively as it has done in the past two months. It was this logic that played against the dollar, pushing EUR/USD up to 1.0368 on August 10. However, everything returned to normal soon. Fed chief Jerome Powell assured everyone that the regulator remains hawkish. The markets made the same conclusion from the minutes of the July meeting of the FOMC (Federal Open Market Committee) published on Wednesday, August 17.

It is expected that the American Central Bank may raise the rate from the current 2.5% to 4.0% by the end of 2022 - the beginning of 2023, and possibly to 5.0%, after which it will hold it in order to bring inflation down to the target level of 2%. This means that the dollar will be strong enough for a long time to come. This forecast pushed up the USD DXY Index again. Following this, the yield of US government bonds and securities of other developed countries began to grow, and stock indices (S & P500, Dow Jones and Nasdaq), cryptocurrencies and other risky assets rushed south. Having believed in the rate hike and the prospects for the dollar, investors even began to get rid of such a protective asset as gold: the quotes of XAU/USD were falling throughout the past week.

As for the near future of the EUR/USD pair, at the time of writing the review, on the evening of August 19, only 15% of experts speak in favor of its growth, a little more indicate the way for it to the south - 25%, the remaining 60% refrain from forecasts. The readings of the indicators on D1 give much more definite signals. 100% side with the bears both among trend indicators and among oscillators. However, a third gives signals of it being oversold among the latter.

Apart from the support at 1.0030, the immediate target for the EUR/USD pair is, of course, the 1.0000 level. After it is broken, the bears will target the July 14 low at 0.9950, even lower is the strong 2002 support/resistance zone 0.9900-0.9930. The immediate target for the bulls is a return to the zone 1.0070-1.0100, then resistance and zones 1.0120, 1.0150-1.0180, 1.0200 and 1.0250-1.0270 follow. More distant targets are located in the zones 1.0400-1.0450, 1.0520-1.0600 and 1.0650-1.0750.

Upcoming events include the release of the German and Eurozone Manufacturing PMIs on Tuesday, August 23. The volume of orders for capital goods and durable goods in the US will be known the next day. There will be a whole series of events on Thursday, August 25. Firstly, this is the publication of data on German GDP for Q2. Then, the publication of the minutes of the ECB meeting on monetary policy. And finally, four important events in the US that could seriously affect the current trend of the dollar. Data on GDP for Q2 and on unemployment will be published on August 25, and the Personal Consumption Expenditure Index (PCE), which is called "the Fed's favorite inflation indicator," will become known on August 26. The release of all these statistics will coincide with the annual economics symposium in Jackson Hole on August 25-27. The US financial authorities discuss the most important economic issues there, and these indicators are sure to influence their decisions.

GBP/USD: Gloomy Forecasts for the Pound Continue to Come True

GBP/USD rushed down again after US Federal Reserve officials pointed to a further sharp increase in interest rates. It was further accelerated by speeches by a number of Fed officials, including the head of the Federal Reserve Bank of St. Louis James Bullard and his colleague from the Federal Reserve Bank of San Francisco Mary Daley. One can conclude from their hawkish attitude that the dollar interest rate will probably be increased by 75 basis points (bp) in September for the third time in a row. At the same time, the head of the Kansas City Fed, Esther George, said that the regulator would tighten monetary policy until it was completely sure that inflation was on the decline.

Statements by US officials caused GBP/USD to drop 344 points in five days from 1.2135 to 1.1791 from 1.2135 and end the week slightly higher at 1.1830. The pound was not helped even by the unexpected growth of retail sales in the UK in July by 0.3%. UK shoppers spent more than expected thanks to online sales promotions. The rest of the macro statistics came out ambiguous. The average wage rate, with a forecast of 4.5%, was 5.1%, and the number of applications for unemployment benefits fell from 28.8K to 10.5K over the month. However, despite some improvements in the labor market, inflation in the UK exceeded the expected 9.8% and reached 10.1% (against 9.4% a month earlier). According to the forecast of the Bank of England, the recession in the country will probably begin in Q4 and may last more than a year.

GBP/USD fell to its lowest level in the last 5 weeks and, according to 30% of analysts, may continue to fall. Corrections to the north are also expected by 30%, the remaining 40% of experts remain neutral. The indicator readings on D1 look exactly the same as those of the EUR/USD pair: all 100% are colored red, while 30% of the oscillators signal that the pair is oversold. Immediate support is at 1.1800, followed by July 14 low at 1.1759, followed by 1.1650, 1.1535 and March 2020 lows in the zone 1.1400-1.1450. As for the bulls, they will meet resistance in the zones and at the levels of 1.1875-1.1925, 1.2000, 1.2050-1.2075, 1.2160-1.2200, 1.2275-1.2325 and 1.2400-1.2430.

With regard to the economic statistics of the United Kingdom, there will be data on business activity in various sectors of the country's economy on Tuesday, August 23. The values of the Business Activity Index in the manufacturing sector, the service sector, as well as the Composite Index (PMI), which reflects the level of activity of purchasing managers in both sectors of the UK economy, will become known.

USD/JPY: Japan's GDP Grows, Yen Rate Falls

The growth of the DXY Index, which shows the ratio of the US dollar to a basket of six other major foreign currencies, as well as the growth of US Treasury yields, has evidently affected the dynamics of USD/JPY. The pair, starting from 133.45, rose to the height of 137.22 during the weekly trading session, and set the last chord at 136.81.

The data released on Monday, August 15, made the prospects for monetary tightening by the Bank of Japan even more uncertain. If this world's third largest economy fell by 0.1% in Q1, it showed a steady growth of 0.5% in Q2 (slightly less than the expected 0.6%). On an annualized basis, the Japanese economy, with a forecast of +2.5%, actually grew by 2.2% (there was a contraction of -0.5% in the previous quarter).

GDP is the main macroeconomic indicator of market activity that assesses the rate of growth or decline of a country's economy. Usually its growth is positive bullish, factor for the national currency. Usually, but not in these times, when the attractiveness of a particular currency is determined by the size of interest rates. And according to this parameter, the yen is far behind the US dollar.

According to economists from the international financial group Nordea, “The continuation of the Fed's policy of tightening monetary policy, along with most other G10 central banks, will keep pressure on the Japanese yen. […] Without any change in monetary policy from the BOJ, which we do not expect for the foreseeable future, the door will be open for the Japanese yen to hit 140 against the dollar again.” At the same time, according to the strategists of another bank, the Australian Westpac, the pair may drop to 123.00 in the longer term, by the end of 2023.

If we move on to the median forecast for the near term, it looks like this: 20% of analysts expect the pair to rise, 35% hope for the yen to strengthen and return to the downtrend, the remaining 45% talk about a side corridor. Trend indicators on D1 have 100% pointing north. As for oscillators, 90% are looking in the same direction, while 25% are in the overbought zone. The remaining 10% of the oscillators point east. Supports for the pair are located at the levels and in the zones 135.55-136.00, 134.00-134.25, 132.85-133.00, 131.75-132.00, 131.00. Resistances are 137.45, 137.90-138.40, 138.50-139.00, and finally the July 14 high at 139.38. Bulls' next targets­ are 140.00 and 142.00.

No significant statistics on the Japanese economy are expected to be released this week.

CRYPTOCURRENCIES: Bugatti Sports Car for 1 BTC: a Pipe Dream or Reality?

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Among the many questions that concern the crypto community, two main ones can probably be distinguished: 1) Who is Satoshi Nakamoto? and 2) How much will bitcoin be worth? The first of them will be answered by White Paper Films, which announced the start of work on a documentary film dedicated to the personality and mysterious disappearance of the creator of the first cryptocurrency. (By the way, you can find a lot of interesting information on this subject on the NordFX broker website). As for the second question, as usual, we will look for answers to it in this weekly review.

First, there is good news for those who are waiting for the major cryptocurrency to surge upwards. A new study by Glassnode has shown that despite the fall in the crypto market, the use of the bitcoin network continues to grow: the number of unique addresses has now peaked at over 1 billion. (For comparison: the main competitor of BTC, ethereum with 158 million addresses is far behind on this indicator).

Good news No.2. According to Arcane Research, miners sold 6,500 BTC in July. This is 60% less than in June, when 14,600 coins were sold. The fall of the crypto market has created a lot of serious problems for public mining companies that have increased their production capacity with borrowed funds. Faced with the crisis, they are forced to dump the mined coins at low prices in order to pay off their debt obligations. Some, in the end, had enough margin of safety and managed to survive, while others turned out to be bankrupt.

The July data gives a timid hope that the industry is recovering, the pressure of miners is weakening. They hold onto their coins in the hope that they will rise. However, Arcane Research notes that 6,500 bitcoins is still more than in May, when miners shocked the market by selling more coins than they mined.

Good news No.3. A number of technical indicators signal the increasing likelihood of bitcoin reversing towards sustainable growth. Thus, the Spent Output Profit Ratio (SOPR) indicator recorded a minimum on June 18, 2022. This indicator had lower values only in December 2018 and March 2020. Another indicator, RHODL indicates a significant predominance of long-term investors on the market over short-term ones. This means that the holders do not plan to sell their coins and are guided by the growth of the market in the future.

This is the end of the good news this week. Recall that the price of bitcoin fell to $17,597 on June 18, in line with December 2020 levels and almost 75% below its all-time high of $68,918. If we measure from the beginning of 2022, the main cryptocurrency started at $47,572 on January 01, and its fall was 63% by June 18. However, as the chart shows, bearish resistance sharply increased above $24,000 and the upward momentum began to fade rapidly. So, the weekly high was at a height of $24,264 on July 20, $24,435 on July 29, $24,891 on August 11, and, finally,  $25,195 on August 15. That is, the uptrend seems to have continued, but the increase in highs was less than 4% over the past 4 weeks. And the past week has generally brought investors a complete disappointment. 

As of this writing, Friday evening, August 19, the total crypto market capitalization is $1.028 trillion ($1.155 trillion a week ago). The Crypto Fear & Greed Index fell 9 points in seven days from 42 to 33 and came close to the Extreme Fear zone. BTC/USD has gone down sharply again and is trading at $21.095. There are several reasons for this fall. First, the intention of the Fed to continue raising rates, which became clear from the minutes of its last meeting. Secondly, there is strong downward pressure from the fever in the stablecoin market. First, aUSD was compromised, and HUSD, the token of the Huobi crypto exchange, lost its peg to the dollar last week. If we add to this the bankruptcy of a number of cryptocurrency funds, the pessimism that reigns in the market becomes clear.

Well-known analyst and DataDash founder Nicholas Merten noted that bitcoin and ethereum are showing signs of weakness despite their rising prices in recent weeks. According to Merten, the fact that the recovery of the stock market is ahead of the recovery of crypto assets suggests that the latter may not have much strength left to continue the rally. If cryptocurrencies sell out faster than stocks during a downtrend, then they should have recovered faster. But there is no such recovery at the moment.

Another crypto strategist, nicknamed Capo, believes that “there is a chance to see another attempt by the main cryptocurrency to storm the $25,400-$25,500 range.” However, according to his colleagues at Norhstar & Badcharts, there is a possibility that bitcoin could start to drop sharply to $10,000-$12,000. They explained their assumption in an interview with Kitco News as follows: “According to the chart, the price of bitcoin is in an inverted arc, opposite to the Cup pattern… There are a number of technical analysis methods that increase to 70-80% the probability that the price of bitcoin will make new lows of $10,000 -$12,000 and there's about a 20% to 30% chance it will go up." In the event that the bitcoin rate goes up, according to Norhstar & Badcharts, it could reach $29,000-$30,000. According to them, this is the maximum level that the value of BTC can rise to before it starts to fall. “We are either already at local peaks or very close to them,” Norhstar & Badcharts says.

As usual, influencers who have invested heavily in bitcoin are trying to knock down the wave of pessimism. They continue to convince everyone and everywhere of the fantastic prospects of the flagship cryptocurrency. For example, Anthony Scaramucci, former director of communications at the White House and now head of the investment company SkyBridge Capital, recalled in an interview with CNBC the limited issue of bitcoin of 21 million coins, which will lead to “shock demand with little supply.” Scaramucci believes that the first cryptocurrency can show unprecedented growth within six years. “If we're right, if bitcoin goes to $300,000 it won't matter if you bought it at $20,000 or $60,000. The future is ours. And it will happen sooner than I thought,” he says.

The former director of the White House is echoed by the former head of MicroStrategy Michael Saylor. Recall that this company acquired 129,698 BTC under his management. Despite the current unrealized huge losses on these trades, Michael Saylor is confident that the purchase of bitcoin as a reserve asset was justified, and the asset will prove to be reliable in the future. “We […] got into the lifeboat of the first cryptocurrency with the understanding that we would be tossed in the ocean, but we would not drown and would appreciate this step over time,” said Saylor. According to him, the volatility of cryptocurrencies will only affect short-term investors and public companies, so bitcoin is not for everyone. “The investment should be for a period of at least four years. Ideally, this is the transfer of wealth from generation to generation. The metric that confirms this is the four-year moving average,” he explains.

And at the end of the review, here is the statement of another bitcoin maximalist. “I still hope to buy a Bugatti for 1 BTC,” said Jesse Powell, CEO of the Kraken crypto exchange. Given that the cost of one Bugatti sports car can exceed $5 million, it takes very little to fulfill this dream: “just” to wait for bitcoin to rise in price by 250 times.


NordFX Analytical Group


Notice: These materials should not be deemed a recommendation for investment or guidance for working on financial markets: they are for informative purposes only. Trading on financial markets is risky and can lead to a loss of money deposited.

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10attention Re: Daily Market Analysis from NordFX Sat Aug 13, 2022 2:45 pm

Stan NordFX



Forex and Cryptocurrencies Forecast for August 15 - 19, 2022



EUR/USD: Weak Inflation Weakens Dollar

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EUR/USD has been moving sideways in the 1.0100-1.0270 channel for more than three weeks. Attempts to break through its upper or lower border ended in failure each time. Even very strong data on the US labor market, which came out in the first week of August, did not help the dollar. Recall that unemployment in the US has remained at 3.6% since March, which is a very good indicator. And it became even lower in July, 3.5%. And such an important indicator as NFP, the number of new jobs created outside the agricultural sector, with a forecast of 250K, actually reached 528K. And this despite the fact that it was 372K a month earlier.

The sideways movement continued until Wednesday, August 10, when the pair moved sharply higher, turning the 1.0270 level from resistance to support. And the point here is not the strengthening of the euro, but the weakening of the dollar. The position of the American currency deteriorated after the release of the US inflation report. The consumer price index (CPI) with a forecast of 0.2% in July turned out to be at the level of 0.0% (1.3% a month earlier). It decreased from 9.1% to 8.5% (forecast 8.7%) on an annualized basis. Instead of the expected 0.5%, the base CPI grew by only 0.3% in July (0.7% a month earlier).

All these figures indicate clearly that inflation, the war against which the Fed launched, is declining. Of course, this is not a final victory, but the success of the American Central Bank is obvious. Therefore, it may soften its monetary policy somewhat and not raise interest rates as aggressively as it has done in the past two months.

Speaking at the end of the July meeting of the FOMC (Federal Open Market Committee), Fed Chairman Jerome Powell tried to convince everyone that the regulator is still hawkish. And that, if necessary, the Fed is ready to accelerate the pace of rate hikes. However, even then the markets did not believe Powell and reacted by turning towards the stock market. And now the inflation data has become another argument in favor of the fact that the FOMC may raise the rate not by 0.75%, but only by 0.50% in September, stop raising rates altogether in November, and return to the quantitative easing program altogether in 2023.

Of course, this is just a forecast so far. More precisely, not even a forecast, but just expectations. But it was them that continued to push stock indices S&P500, Dow Jones, Nasdaq up, and did not allow the EUR/USD pair to fall again to the parity of 1.0000. Not yet.

EUR/USD ended the past week at 1.0260, returning to the medium-term sideways channel of 1.0100-1.0270. 45% of experts vote for the fact that it will go further down, and maybe even break through the lower border of the channel. 35% show it the way to the north and 20% - to the east. As for the oscillators on D1, 40% are colored red, 40% are green, and 20% are neutral gray. There is complete balance among the trend indicators: 50% look south and 50% look north.

The nearest support for the pair is the level 1.0220, then there are zones 1.01500-1.0200 and 1.0095-1.0120. The bears' main target is, of course, 1.0000. If this key level is broken, the bears will target the July 14 low at 0.9950, even lower is the strong 2002 support/resistance zone of 0.9900-0.9930. The next serious task of the bulls will be a breakout of the upper border of the channel 1.0270, then there is a high of the past week in the area of 1.0364-1.0368, the next target is a return to the zone 1.0400-1.0450, then there are zones 1.0520-1.0600 and 1.0650-1.0750.

The coming week will be full of all sorts of economic statistics. Thus, the ZEW Economic Sentiment Index in Germany will be published on Tuesday, August 16. there will be preliminary data on Eurozone GDP (Q2) on Wednesday, August 17, as well as data on retail sales in the US. The minutes of the last FOMC meeting will be published on the same day. We are waiting for data on European inflation (CPI) on Thursday, August 18, as well as on the labor market, home sales and manufacturing activity in the United States.

GBP/USD: GDP Falls, Forecasts Remain Gloomy

GBP/USD reacted to the US inflation data released on Wednesday, August 10, with a jump north by almost 200 points to the height of 1.2276. True, it failed to stay there, and the last chord sounded at around 1.2135. Even the global rise in risk sentiment did not help the pound. The main reason is the gloomy economic prospects for the UK economy and no less gloomy forecasts of the Bank of England.

UK GDP data for both June and Q2 were released on Friday, August 12. The June contraction turned out to be less than expected: -0.6%, while the forecast was -1.2%. The fall in GDP in April-June amounted to -0.1% against the expected -0.2% and +0.8% in Q1. Accordingly, the annual figure was 2.9% against the forecasted 2.8% and 8.7% in Q1. All these data turned out to be slightly better than expected. But, despite this, the slide of the economy into recession is an obvious fact, and the only question that remains is the depth and duration of such a fall.

According to 55% of analysts, the last week did not bring anything good to the pound, and therefore the pair will continue its fall. The opposite point of view is also held by only 15% of experts, the remaining 30% remain neutral. The readings of the indicators on D1 are as follows. As for the trend indicators, the ratio is 85% to 15% in favor of the red ones. Only 25% of the oscillators side with the bears, 35% indicate growth, 40% have taken a neutral position.

The nearest support is located at 1.2100, followed by zones and levels 1.2045-1.2065, 1.2000, 1.1875-1.1925 and 1.1800. Below is July 14 low of 1.1759, then 1.1650, 1.1535 and March 2020 lows in the zone 1.1400-1.1450. As for the bulls, they will meet resistance in the zones and at the levels 1.2160-1.2200, 1.2275-1.2325 and 1.2400-1.2430.

The main event of the coming week is likely to be the release of UK inflation data (CPI) on Wednesday August 17. Also noteworthy on the calendar is Tuesday August 16, when UK labor market data comes in, and Friday August 19, when July retail sales in the country become known.

USD/JPY: Yen: Hope for Better but a Very Distant Future

The dynamics of USD/JPY last week was similar to the dynamics of EUR/USD reversed. (This is logical, since here the dollar moves from the position of the base currency to the position of the quote currency). Having started on Monday, August 8 from 135.00, the pair went down sharply on Wednesday, August 10 on the basis of US inflation data, reached the local bottom at 131.72 on August 11, then reversed and finished at 133.45. 

Those who are ready to open long-term positions will probably be interested in the forecast of analysts from Westpac, one of the largest banks in Australia, one of the Big Four, and the second largest bank in New Zealand. They believe that the current level of USD/JPY can be justified. Japan is favored by economic growth in Asia and the continuing downward trend in energy prices. And given the possible easing of the monetary policy of the US Federal Reserve, according to Westpac strategists, the pair may fall to 123.00 by the end of 2023.

The end of 2023 is quite far away, more than 16 months. As for the forecast for the near future, the opinions of experts are divided as follows. 45% of analysts expect the pair to rise, another 25% hope for the strengthening of the yen and the continuation of the downtrend, the remaining 30% speak of a side corridor. The readings of indicators on D1 give a bit different picture. Trend indicators have a ratio of 65% to 35% in favor of the red ones. Oscillators are 15% north, 40% south, and the remaining 45% east.

Supports for the pair are located at the levels and in the zones 133.00, 132.50-132.85, 131.75-132.00, 131.00, 130.40, 128.60 and 126.35-127.00. Resistances are 134.00, 134.40-134.60, 135.30-135.60, 136.35-137.00, 137.45, 137.90-138.40, 138.50-139.00, and finally the July 14 high at 139.38.

As for the events of the upcoming week, it is worth paying attention to Monday, August 15, when the preliminary volume of Japan's GDP for Q2 2022 will be known. According to forecasts, it may grow from negative -0.1% to +0.6%. This is the main macroeconomic indicator of market activity, which assesses the rate of growth or decline of the country's economy. Its growth is usually a positive, bullish, factor for the national currency.

CRYPTOCURRENCIES: August 26: a Terrible Day on the Calendar

The crypto community continues to wonder if the crypto market has bottomed out or if a new price collapse awaits us. Before moving on to the next batch of forecasts, let's start with some statistics. 

So, the price of bitcoin fell to $17,597 on June 18, which is in line with the level of December 2020 and almost 75% below the all-time high of $68,918. If we measure from the beginning of 2022, the main cryptocurrency started at $47,572 on January 01, and its fall was 63% by June 18. After that, BTC/USD crept up slowly, demonstrating a series of rising lows and highs over 8 weeks. However, as the chart shows, bearish resistance sharply increased above $24,000 and the upward momentum began to fade rapidly. So, the weekly maximum was at a height of $24.264 on July 20, $24.435 on July 29, and, finally, $24.891 on August 11. That is, growth was only about 2.5% over the past 3 weeks.  

At the time of this writing, Friday evening, August 12, the total capitalization of the crypto market is $1.155 trillion ($1.089 trillion a week ago), and the Crypto Fear & Greed Index is still in the fear zone, at a level of 42 points (31 weeks ago).  BTC/USD is trading at $24,100, about 50% lower than at the beginning of the year.

Despite this price reduction, the number of addresses with a balance of 1 BTC has grown by 9.4% since the beginning of 2022. The indicator reached a historical high of 891.009 at the end of July. The situation is even more pronounced with addresses with a balance of more than 1 ETH, the number of which has grown by 15.7% over seven months. This trend indicates the desire of investors to accumulate. For example, according to the analytical resource The Balance, 39% of US investors began to invest more in cryptocurrencies, wanting to keep their savings.

Is it worth buying the flagship cryptocurrency now? Bloomberg Intelligence Senior Strategist Mike McGlone believes bitcoin is currently trading at a significant discount in a sustained bull market. “The first cryptocurrency hit an all-time low in July compared to its 100-week moving average,” the expert explained.

Mark Yusko, managing partner of Morgan Creek Digital, also says that the current price of the first cryptocurrency is unfair, and should be around $30,000. And according to Anthony Scaramucci, CEO of SkyBridge Capital, the “fair value” of BTC should now be around $40,000. PlanB, the creator of the once-popular Stock-to-Flow model, has the bar even higher at $55,000. 

All these influencers have their own models and their own justifications. However, one must keep in mind that “fair price” is a rather relative concept. And perhaps the fairest is the current market value. That is, how much sellers are ready to sell now, and buyers are ready to buy a particular asset for.

Some on-chain indicators signaled the passing of the capitulation period and an improvement in investor sentiment in July. This is stated in an analytical report by ForkLog. Against the background of consolidation and the subsequent smooth recovery of the price of bitcoin, the Puell Multiple indicator began to exit the deep oversold zone. The Net Unrealized Profit/Loss (NUPL) metric has moved into the hope/fear zone and is heading towards optimism. The MVRV Z-Score crossed the upper boundary of the deep oversold zone at 0.1 on July 28. This is another signal about the passage of the "bottom" of the market cycle.

According to Sam Bankman-Fried, CEO of the FTX crypto exchange, crypto winter is probably coming to an end, and spring is just around the corner. “I think we've seen the worst already,” said the multi-billionaire, better known as SBF. “Some bitcoin miners might have some more problems, but I think we are talking about a few hundred million dollars in total pain, not billions.”

However, SBF’s crypto spring forecast was not without a “but”: “If Nasdaq is left to fall another 25%, and if Fed interest rates do rise to 7%, and if we are in recession for two and a half years […] , bitcoin could fall to $15,000 or $10,000,” said the CEO of FTX.

Mike McGlone of Bloomberg Intelligence also looks cautiously towards the US Central Bank. The analyst emphasizes the key role of the US Federal Reserve, which is pursuing aggressive rate hikes in 2022. This could potentially create barriers to risky assets, including cryptocurrencies and stocks. At the same time, Mike McGlone urges not to try to fight the Fed.

Risky assets will have to pass the next serious test at the end of August. An analyst with the nickname Guy noted that the release of economic data expected this month could have a significant impact on the crypto markets. According to him, 3 important factors can interrupt the current uptrend. The first is the US Personal Consumption Expenditure Index (PCE). “PCE data for July will be released on August 26. Given that PCE is the Fed's favorite inflation indicator, a high value could lead to markets collapse in anticipation of an aggressive rate hike."

The second factor is the US gross domestic product for the second quarter: “Revised GDP data for the second quarter will also be published on August 26. Pay attention to them. If these figures are revised upwards, that is, in fact, the US will no longer be in a technical recession, this may push the Fed to raise interest rates even more.”

And finally, the third factor is the annual economic symposium in Jackson Hole, where US financial authorities discuss global economic problems. The symposium will take place from August 25 to 27, which coincides with the release dates of the two above-mentioned statistics.

These factors could influence the decisions of Fed Chairman Jerome Powell, which will have a cascading effect on the crypto market. “If the statistics turn out to be unimportant, and Powell is not in the best mood, then the crypto market will have a bad time. Although there are chances that he will keep his thoughts to himself long enough for the cryptocurrency market to continue its recovery rally.”

A recent Cumberland Institutional Investor Survey found that the majority of respondents expect bitcoin to rise to $32,000 by the end of the year. Mike Novogratz, CEO of Galaxy Digital investment company, named a slightly smaller figure. In his opinion, the coin is unlikely to rise above the $30,000 level in the near future. The billionaire himself “would be happy” if BTC stopped for a while in the range of $20,000 to $30,000.

The most optimistic forecast this time was given by a popular analyst under the nickname InvestAnswers. The American cryptocurrency exchange Coinbase and the largest investment company BlackRock entered into a partnership agreement last week. BlackRock manages over $10 trillion in assets at the moment. Based on this, InvestAnswers believes that the influx of funds in cryptocurrencies from BlackRock clients could push the BTC price to $773,000.

“If BlackRock places 0.5% of its assets in BTC, then, taking into account the leverage, the capitalization of bitcoin will increase by $1.05 trillion, which means the price will rise to $75,000. And this, I think, is very likely. If BlackRock clients stake 1% of their holdings, then the capitalization will increase by $2.1 trillion, and bitcoin will reach $173,000. And if BlackRock places 5% of its assets, the bitcoin rate will reach $773,000. Although I think this is too aggressive, it may be possible within 3-5 years,” the analyst wrote. (It should be noted here that InvestAnswers calculations are correct only for investments with a leverage of 1:21 or more).

And in conclusion of the review, a few words about the main altcoin, ethereum, which is recovering much faster than bitcoin. The BTC/USD pair has risen by about 40% over the past eight weeks, while ETH/ USD has grown by almost 120%. Most experts attribute this bull rally to the upcoming change in the consensus algorithm from Proof-of-Work (PoW) to Proof-of-Stake (PoS), which is expected at the end of September. The head of Galaxy Digital, Mike Novogratz, believes that the altcoin can reach the $2,200 mark even before this event. But according to ethereum co-founder Vitalik Buterin, the best is yet to come, after the network transitions to Proof-of-Stake. “Once the merger actually happens, I expect investor sentiment to improve,” he said. “In my opinion, […] the main impact on the ETH rate will be provided after the completion of the merger process.”


NordFX Analytical Group


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11attention Re: Daily Market Analysis from NordFX Sun Aug 07, 2022 7:57 am

Stan NordFX



Forex and Cryptocurrencies Forecast for August 08 - 12, 2022



EUR/USD: Unexpected Positive News from the US

EUR/USD has been moving sideways in the 1.0100-1.0270 channel for almost three weeks. Timid attempts to break through the upper or lower border of the channel have ended in failure each time. Could it be the summer holiday season to blame? Most likely, the reason is the unexpected economic statistics from the US and the vague prospects that have caused the market confusion.

The US Manufacturing Business Activity Index (ISM) published on Monday, August 01 turned out unexpectedly to be higher than the forecast, 52.8 against 52.0. The index of business activity in the services sector from Markit, which became known on Wednesday, August 03, showed an increase to 47.3 against 47.0 points. The same indicator, but from the US official departments (ISM) also showed an increase to 56.7 points (55.3 a month ago, forecast 53.5). Does it turn out that not everything is so bad in the US economy, it has a serious margin of safety, even despite high energy prices and an aggressive rate hike by the Fed?

Recall that the FOMC (Federal Open Market Committee) meeting of the US Federal Reserve took place on July 27, at which the key interest rate was raised by another 75 basis points (bp). Fed Chairman Jerome Powell, speaking at the end of the meeting, tried to convince everyone that the regulator still retains a hawkish attitude. And that the Fed is ready to accelerate the pace of interest rate hikes if necessary. However, the markets did not believe Powell and reacted to the results of the FOMC meeting with a turn towards the stock market.

Some experts do not rule out that the peak of inflation in the US has already passed. The main driver of its growth was high energy prices as noted above. However, the Core Consumer Price Index, although it is at high levels, has already decreased by 0.6% since March.

The labor market is also doing well. Unemployment in the US has been holding at 3.6% since March, which is a very good indicator. And it became even less in July, 3.5%. And such an important indicator as NFP, the number of new jobs outside the US agricultural sector, which was published on Friday, August 5, with a forecast of 250K, actually reached 528K. And this despite the fact that it was 372K a month earlier.

Jerome Powell said that he did not believe in a recession, as the labor market and a number of sectors of the economy are quite strong. And that the risk of continued high inflation is more significant than the risk of a recession. However, if inflation goes down, and the country's GDP does not show convincing positive dynamics, the scale may tilt towards easing the Fed's monetary policy. It was previously predicted that the key rate could reach 3.4% as a result of monetary restriction, by the end of this year, and rise even higher, up to 3.8% by the end of 2023. The market is currently preparing for the fact that the FOMC may raise the rate not by 0.75%, but by only 0.50% in September, it will stop raising rates altogether in November, and it will return to the quantitative easing (QE) program altogether in 2023.

While the economic situation in the US looks better than expected, according to the latest data, it has definitely worsened in Europe. Retail sales in Germany fell to minus 8.8% on an annualized basis, while they showed an increase to +1.1% a month ago. On the whole, the picture in the Eurozone is just as gloomy: the same indicator fell from +0.4% to -3.7% (against the forecast of -1.7%). This is due to the fact that the population lacks an understanding of what awaits them in the near future. People are afraid of further price increases, primarily because of problems with the supply of energy from Russia. And the possibility of an escalation of the Russian-Ukrainian armed conflict into the EU does not inspire optimism. There is no need to talk about the fear of Russia's use of nuclear weapons.

After the publication of positive data from the US labor market on Friday, August 05, the dollar strengthened somewhat, and the EUR/USD pair closed the five-day period at 1.0180.  Like a week ago, 45% of experts vote for the fact that it will still break through the lower border of the channel 1.0100-1.0270, 45% show it the way to the north and 10% - further to the east. As for the oscillators on D1, 25% side with the bears, 60% side with the bulls, and 15% have taken a neutral position. The signals are clearer among trend indicators: 90% look south and only 10% look north.

The nearest support for the EUR/USD pair is the 1.01500 zone, then 1.0100-1.0120, then, of course, there is the 1.0000 level. After it is broken, the bears will target the July 14 low at 0.9950, even lower is the strong 2002 support/resistance zone. 0.9900-0.9930. The next serious task for the bulls will be to break through the 1.0200 resistance, after which they need to rise to the 1.0250-1.0270 zone. The next target is a return to the 1.0400-1.0450 zone, followed by the 1.0520-1.0600 and 1.0650-1.0750 zones.

As for the forthcoming events, the publication of data on the US consumer market (CPI) on Wednesday, August 10 should be noted. This package will be supplemented on Thursday and Friday: August 11 - Producer Price Index (PPI) and August 12 - Consumer Confidence Index of the University of Michigan in the USA. As for the news from Europe, the value of the Harmonized Consumer Price Index in Germany will become known on August 10.

GBP/USD: Bank of England: No Sensation Happened

The main event of the week could have certainly been the meeting of the Bank of England (BOE) on Thursday August 04. It could have been, but it wasn't. Some investors had hoped that the regulator would take a desperate step and raise the rate by 150 bp at once. In this case, it would overtake the current dollar rate (2.50%), which would be a weighty argument in favor of strengthening the British currency. However, the sensation did not happen. The Bank of England raised the rate by 50 bp, bringing it to 1.75%, which had been previously taken into account by the market in quotes.

The minutes of the Monetary Policy Committee (MPC) meeting of the Bank of England turned out to be quite boring as well. If any of its 9 members wanted to raise the rate by 75 bp, it would be taken as a positive development for the pound. And vice versa: the desire to raise the rate by only 25 bp. would put additional pressure on the British currency. But, as is clear from the minutes, all 9 members of the Committee voted unanimously for raising the rate exactly by 50 bp.

The revised economic forecasts turned out to be quite gloomy, and BOE management's post-meeting statements were hazy dovish. According to the head of the Bank of England Andrew Bailey, the current rate hike by 50 bp does not mean that the bank will do the same at each subsequent meeting. “Interest rates will not go back to where they were before the financial crisis,” said Andrew Bailey vaguely. “And we don’t know what normal interest rates will be in the future.” BOE chief economist Hugh Pill added to the haze saying that "the equilibrium level of interest rates is very uncertain."

As a result of the absence of any benchmarks, the GBP/USD pair, having fluctuated between the levels of 1.2064 and 1.2214, returned to the center of this range on Thursday, August 04. On Friday, on the news from the US labor market, it fell to a strong support of 1.2000, and finished at 1.2070. 

According to a third of analysts, the past week did not bring anything good to the pound, and therefore the pair will continue its fall. The opposite point of view is also held by a third of the experts, another third remains neutral. The readings of the indicators on D1 are as follows. Among the trend indicators, the ratio is 90% to 10% in favor of the red ones. Among the oscillators, only 35% side with the bears, 25% indicate growth, 40% have taken a neutral position.

The nearest support is located at the level of 1.2000-1.2025, followed by the zone 1.1875-1.1925. Below is the level of 1.1800, the low of July 14 is 1.1759, then 1.1650, 1.1535 and the lows of March 2020. in the zone 1.1400-1.1450. As for the bulls, they will meet resistance in the zones and at the levels of 1.2100-1.2130, 1.2170-1.2215, 1.2245, 1.2280-1.2325 and 1.2400-1.2430.

In terms of macro news coming out of the UK, Friday 12 August could be marked next week. Data on the country's GDP and production in the UK manufacturing industry will be published on this day.

USD/JPY: High Volatility, Neutral Outlook

Looking at the chart, the 134.60-137.00 range is quite attractive for both bulls and bears on the USD/JPY pair. It traded in it from mid-June to early July, and it returned to it at the end of last week. Having started on Monday August 01 from the level of 133.31, the pair reached the local bottom at the level of 130.37 the next day. This was followed by a reversal and the dollar began to actively win back losses. As a result, the last chord sounded at a height of 135.00.

As for the prospects of the Japanese currency, the experts' forecast looks quite neutral, as in the cases of previous pairs. 45% of them are waiting for a new breakthrough of the pair to the north, another 45% hope for a continuation of the downtrend, the remaining 10% talk about a side corridor. The picture is somewhat different in the readings of indicators on D1 and is rather multidirectional. Trend indicators have a ratio of 85% to 15% in favor of green ones. Oscillators have the opposite: 60% look to the north, 40% to the east, while the number of supporters of the downtrend is 0%. 

The values of possible slippage and ranges of support/resistance zones have sharply increased due to the ultra-high volatility of the pair. Supports are located at the levels and in the zones 134.75, 134.25, 132.60-133.15, 131.50, 130.40, 128.60 and 126.35-127.00. Resistances are 136.35-137.00, 137.45, 137.90-138.40, 138.50-139.00, followed by the July 14 high of 139.38 and round bull targets¬ of 140.00 and 142.00.

No major events regarding the Japanese economy are expected this week. The only thing to keep in mind is the public holiday on Thursday August 11, when Japan celebrates Mountain Day. This is the youngest public holiday; it was established in 2014 at the initiative of environmental and tourism organizations in order to support the citizens' love for the nature of their country and give the Japanese "the opportunity to get to know the mountains and feel the grace emanating from them."
 
CRYPTOCURRENCIES: Influencers Talk about a Very Long Crypto Spring

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The price of bitcoin fell to $17,597 on June 18, in line with December 2020 levels and almost 75% below its all-time high of $68,918. The BTC/USD pair slowly crept up from that moment on, demonstrating a series of rising lows and highs over 7 weeks. Moreover, the volatility of the pair gradually increased: if it was about $3,150 at the beginning, it exceeded $4,000 by the end of July.

Disputes have not subsided about what happened on June 18 over the past month and a half: did bitcoin find the bottom? Or is it just the middle of the crypto-winter, and the real frosts are yet to come?

At the time of writing, Friday evening, August 05, the total capitalization of the crypto market is $1.089 trillion ($1.098 trillion a week ago), and the Crypto Fear & Greed Index is still in the fear zone, at a level of 31 points (39 a week ago). The BTC/USD pair is trading in the $22,900 zone.

According to Arcane Research analysts, if bitcoin holds the $20,700 level, the price will soon be in the $27,000-$28,000 range. But “if bitcoin falls below $20,700, it will mark a falling low. This is a bearish signal in the context of technical analysis.” Arcane Research emphasized that much depends on the dynamics of the US stock market, with which the price of bitcoin is closely correlated. The dynamics of the Fed's key rate also plays an important role. “Rising interest rates increase the cost of capital and thus cause stock prices to fall. Tech stocks are declining the most. As the degree of institutionalization has increased, bitcoin has become closely associated with traditional financial markets,” the researchers explained. According to them, if the stock market continues to fall, the downtrend of digital gold will continue. (Note that the S&P500 is currently trading around the important support/resistance zone of 4.100-4.150. But according to Goldman Sachs, the US stock market is headed for another big sell-off.)

Glassnode is also unsure about the continuation of bitcoin's recovery momentum. The rise in prices of BTC and Ethereum in recent days has not been accompanied by a fundamental improvement in the readings of on-chain indicators. And this does not give confidence in a fundamental change in the market situation, the company's analysts believe.

The number of active bitcoin addresses remains within the downtrend channel. With the exception of brief bursts during periods of capitulation, network activity remains subdued. This indicates a small influx of new demand. Similar trends are observed in the Ethereum blockchain. Despite the recent powerful price movement, the network load in terms of the number of transactions has been systematically decreasing since May 2021 to the lowest levels since the summer of 2020.

There has been a surge in activity in recent weeks, which analysts have associated with the consolidation of coins in wallets. They explained that they would change their mind if this trend proved sustainable. Glassnode experts had previously warned that it might take additional time to form a solid foundation. This is evidenced by long-term indicators such as URPD. To increase the chances of a market reversal, it is important to see the transition of speculative coins into the category of “held by long-term investors” (in other words, the “age” of coins from the moment of purchase must exceed 155 days).

Bank of America estimated the volume of withdrawn bitcoins from cryptocurrency platforms to cold wallets at ~$508 million, Ethereum at ~$381 million (data from July 2 to August 1). The first asset has risen in price by 19% over this period, the latter - by 56%. However, the conclusions of the bank's specialists look more optimistic than those of their colleagues from Glassnode. So, in their opinion, the increase in the outflow of cryptocurrencies from exchanges and the growth in net inflows into stablecoins signal a bullish market momentum. At the same time, Bank of America noted the “easing of pressure from sellers” and the transition of the initiative to buyers of digital assets. Experts also pointed to the sustainability of the trend, even despite the fact that the Fed raised key rates by 0.75% on July 27.

Trader and investor Bob Loukas, like many other members of the crypto community, agrees that halvings are driving market trends. The next one is expected in 2024 at block number 840,000. And after bitcoin hits a new all-time high, the digital asset market, according to Bob Lucas, may plunge into a “real crypto winter” in 2026.

According to his model, bitcoin market movements can be measured in cycles of 16 years, consisting of four micro cycles of 4 years each. In this case, the cycles must be counted from one local low to another. “Although it’s hard to believe, in theory, bitcoin’s 2026 lows could form below the 2022 lows,” the investor said.

Mark Yusko, managing partner at Morgan Creek Digital, agrees with the narrative that the main cryptocurrency goes through speculative cycles. In his opinion, BTC is now in the "spring" part of the cycle and forms the basis for the next "summer" bull run, which should occur shortly before the 2024 halving. “In my opinion, the crypto spring has begun,” Yusko writes. "If we look at the last two cycles, we will see the same number of days in the cycle where spring began, and winter ended. The crypto spring can last for months, and we don't need a bull market right now. When we get to the crypto summer, we will see the next bull run and it should happen in anticipation of the next halving in 2024.”

According to Morgan Creek Digital CEO, the current structure of the bitcoin market points to the process of reaching the bottom. “I am not ready to say unequivocally so far whether the bottom has been reached,” the investor said. “But if you look back, you can see that bitcoin has made several higher lows and highs. […] This is a pretty good bullish trend, and a crypto spring is possible.”

Mark Yusko also believes that the current price of the first cryptocurrency is unfair. In his opinion, despite the forecasts of experts about a possible fall below $18,000, the "fair value" of the coin should be about $30,000 at the moment, and it could soar to $250,000 by 2026.

Anthony Scaramucci, founder and managing partner of SkyBridge Capital, like Mark Yusko, thinks that after the collapse caused by the bankruptcy of Three Arrows, Celsius and Voyager, the worst of the “bearish” moments for the crypto sector is over. And he also points to 2026, warning that the term of investments in digital assets should be at least 4 or 5 years. As for the “fair value” of bitcoin, it, in his opinion, should now be in the region of $40,000.

Another top manager, Pantera Capital's CEO, Dan Morehead, shares a similar opinion. Like his colleagues, he believes that the digital asset market has almost bottomed out. There are still companies that are in the process of liquidation in bankruptcy court. However, the largest defaults have already occurred in May and June, when the pressure on the industry reached its peak. “I think we are really close to the end of the market crisis. The market has been falling for eight months now. We observed the most severe manifestations of the crisis in November, May and June. It seems that we have seen everything that we should have,” said the CEO of Pantera Capital.


NordFX Analytical Group


Notice: These materials should not be deemed a recommendation for investment or guidance for working on financial markets: they are for informative purposes only. Trading on financial markets is risky and can lead to a loss of money deposited.

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https://nordfx.com/

12attention Re: Daily Market Analysis from NordFX Wed Aug 03, 2022 9:39 am

Stan NordFX



July 2022: TOP 3 NordFX Traders Earn Over $105,000


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NordFX Brokerage company has summed up the performance of its clients' trade transactions in July 2022. The services of social trading, PAMM and CopyTrading, as well as the profit received by the company's IB-partners have also been assessed.

The maximum profit in July was received by a client from Southeast Asia, account No. 1627XXX. This trader managed to earn 47,976 USD on transactions on the GBP/JPY currency pair.

The second line in the rating of the most successful traders was taken by his compatriot, account No. 1633XXX, who earned 31,652 USD. This solid result was achieved thanks to trades in gold (XAU/USD).

The third step on the July podium also went to the representative of Southeast Asia (Account No. 1397XXX), whose result was 25,652 USD. In addition to transactions with bitcoin (BTC/USD) and gold (XAU/USD), transactions with ethereum (ETH/USD) appeared in the TOP-3 for the first time.

The situation in NordFX's passive investment services is as follows:

In CopyTrading, the “veteran” signal KennyFXPRO once again attracts attention: Journey of $205 to $5,000, which has shown a profit of 374% for the period from March 2021 with a maximum drawdown of about 67%. At the same time, it should be noted that this drawdown occurred quite a long time ago, in mid-October 2021, and the trader had to raise the leverage to 1:337 to get out of it. After that, nothing similar was observed, and the leverage has not exceeded 1:40.

If you decide to subscribe to this signal, we strongly advise you to read the recommendations given in the description by its author. It contains a lot of interesting information and gives an explanation of the name of the signal "of $205 to $5,000".

Other signals from this provider include KennyFXPRO - Prismo 2K (the profit on it has been 178% for 453 days of its life with a drawdown of a little more than 45%, which happened at the same time, in October 2021). And the third signal of the same author, KennyFXPRO - The Cannon Ball appeared on the CopyTrading showcase 121 days ago, the profit on it is moderate, about 33%, but the drawdown is less than 7%.

It is for the second month in a row that we also mark the BSTAR signal in the CopyTrading service (profit 48% / max. drawdown 14% / days of life 163). As for startups, there have been quite a few of them lately. We note only one: PT_Bot Scalping (26%/3%/29).

The TOP-3 in thePAMM service has not changed over the past month. The leader is still the same manager under the nickname KennyFXPRO . The capital on on his KennyFXPRO-The Multi 3000 EA account has been increased by 127% in 552 days. The top three also includes: the account TranquilityFX-The Genesis v3, which showed a profit of 96% in 483 days, and the account NKFX-Ninja 136 , which has brought in an income of 82% since June 11, 2021. All these three signals have a very moderate maximum drawdown of about 21%. There is another interesting account, COEX.Investment - Treis, with a profit of 47% for 272 days with a drawdown of less than 20%.

The commissions of TOP 3 NordFX IB Partners in July were as follows:
- the largest commission, 10,388 USD, was credited to a partner from Southeast Asia, account No.1371ХXХ;
- next is the partner from South Asia, account No. 1507XXX, who received 8,953 USD;
- and, finally, another partner from Southeast Asia closes the TOP-3, account No. 1630ХХХ, which received 4,057 USD as a reward.


Notice: These materials should not be deemed a recommendation for investment or guidance for working on financial markets: they are for informative purposes only. Trading on financial markets is risky and can lead to a loss of money deposited.

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https://nordfx.com/

13attention Re: Daily Market Analysis from NordFX Sun Jul 31, 2022 5:07 pm

Stan NordFX



Forex and Cryptocurrencies Forecast for August 01-05, 2022



EUR/USD: FOMC Meeting Results: Why the Dollar Is Falling and Stocks Are Rising

So, the meeting of the FOMC (Federal Open Market Committee) of the US Federal Reserve took place on Wednesday, July 27. There were no doubts that the key interest rate would be raised. But how much? By 100 basis points (bp), which has not happened since 1981, or by 75? It seems that the markets were counting on the first option, but the Fed went for the second, softer one. As a result, instead of a new assault on the 1.0000 horizon by the EUR/USD pair, it went up and returned to the 1.0150-1.0270 channel, where it had been moving since July 19. This was followed by an unsuccessful attempt by the bears to break through the lower border of the channel (the reasons are explained below, in the review for the GBP/USD pair) and the finish, which took place at the level of 1.0221.

Speaking at the end of the meeting, Fed Chairman Jerome Powell tried to convince everyone that the regulator is still hawkish. He stated that he does not believe in a recession as the labor market and some sectors are still strong. And that the risk of continued high inflation is more significant than the risk of a recession. And that, if necessary, the Fed is ready to accelerate the pace of interest rate hikes.

However, the markets did not believe Powell and reacted to the results of the FOMC meeting with a turn towards the stock market. The DXY dollar index fell by 0.7%, but stock indices went up: S&P500 rose by 2.6%, Dow Jones - by 1.4%, NASDAQ - by 4.1%. Oil futures also increased by 3.4%.

It was previously predicted that as a result of monetary restriction, the key rate could reach 3.4% by the end of this year, and it could rise even higher to 3.8% by the end of 2023. Rumors have spread around the market now that the US Central Bank may completely stop raising rates in November, and it will return to the quantitative easing (QE) program in 2023. The main reason is that fighting inflation by raising rates and reducing the budget deficit, despite Powell's soothing assurances, has a negative impact on GDP. And this, in turn, can lead to a deterioration in the situation on the labor market.

What has just been said was confirmed by the macro statistics released on Thursday, July 28. The preliminary estimate of US GDP for the Q2 2022 was minus 0.9% against forecasts from +0.3% to +0.5%.

Thus, the decline in GDP plays against the dollar, as it may push the Fed to a more careful rate hike, much less than its 75 bp increase. at every meeting. According to the FedWatch tool from CME Group, the probability that the regulator will raise the discount rate by only 50 bp in September is almost 80%. The steady decline in the yield of ten-year US government bonds is also playing against the American currency: it fell from 3.4% to 2.68% in just a month. This gives market participants reason to think that inflation is under control and the program of quantitative tightening (QT) can be completed ahead of schedule.

On the other hand, things are not going smoothly in Europe either. Ongoing problems and interruptions in the supply of natural energy resources from Russia are playing against the euro. In response to energy blackmail from the Kremlin, the head of the European Commission Ursula von der Leyen called on the EU countries to prepare for a complete cessation of Russian gas supplies. In her opinion, it is necessary to save resources even in those countries where dependence on Russian energy carriers is small in order to avoid a full-scale collapse.

Klaus Müller, head of Germany's energy regulator (Bundesnetzagentur), believes that the threat of gas shortages will hang over the country for the next two winters, and electricity prices will rise again in August.

Speaking of the Eurozone, it should be noted that the economic data published on Friday, July 29, do not look so intimidating. On the one hand, inflation continues to grow: the consumer price index (CPI), with the previous value of 8.6% and the same forecast, rose actually to 8.9% in July. On the other hand, GDP (y/y, Q2) of the Eurozone, fell to 4.0% instead of the expected fall from 5.4% to 3.4%. The situation with the labor market in Germany also looks good, the number of unemployed fell from 132K to 48K over the month.

As for the near future of the EUR/USD pair, at the time of writing the review, on the evening of July 29, 45% of experts supported its growth, 45% showed it the way to the south and 10% to the east. Indicator readings on D1 do not give definite signals either. As for trend indicators, 50% look south, 50% look north. Oscillators have 35% on the side of the bears, 65% side with the bulls, of which 25% signal the pair is overbought.

With the exception of 1.0200, the closest support for the EUR/USD pair is the 1.0150-1.0180 zone, then 1.0100 and, of course, the 1.0000 level. After it is broken, the bears will target the July 14 low at 0.9950, even lower is the strong 2002 support/resistance zone of 0.9900-0.9930. The next serious task for the bulls will be to break through the resistance at 1.0250-1.0270 and return to the 1.0400-1.0450 zone, followed by the 1.0520-1.0600 and 1.0650-1.0750 zones.

Upcoming events include the publication of business activity indices (ISM) in the manufacturing sectors of Germany and the United States on Monday, August 01. The volume of retail sales in Germany will become known the same day. Data on retail sales in the Eurozone, as well as on business activity (ISM) in the US services sector, will be published on Wednesday, August 3. Ф portion of data from the US labor market will arrive at the very end of the working week, on Friday, August 05, including the unemployment rate and such an important indicator as NFP, the number of new jobs outside the US agricultural sector.

GBP/USD: BOE Decision Threatens to Become a Sensation

Cautious decisions by the Fed, careful comments by Jerome Powell and disappointing Q2 US economic growth data fueled the GBP/USD rally last week. As a result, the bulls managed to raise the pair to a monthly high of 1.2245 on July 29. The pair briefly went south to 1.2062 in the afternoon of the same day. The dollar was strengthened by the data on the Personal Consumption Expenditures (PCE) index in the USA. The growth of this inflation indicator in monthly terms amounted to 0.6% (twice higher than the previous value of 0.3% and higher than the forecast of 0.5%). This influenced market sentiment and helped the US currency to start recovering. In addition, July 29 is the last working day of the month, and many investors decided to take profits after the growth of the pound. However, the growth of the dollar did not last long and the last chord of the week sounded at 1.2176.

As for macroeconomic news coming from the United Kingdom next week, we can note the publication of the composite PMI index and the index of business activity in the UK services sector on Wednesday August 3. But the main event of the week will certainly be the meeting of the Bank of England (BOE) on Thursday August 4.

This regulator raised the interest rate from 1.00% to 1.25% at its previous meeting on June 16. It would seem that 25 basis points is only a third of the 75 bps by which the Fed raises the rate, but the pound then flew up sharply. The British currency strengthened by 365 points in just a few hours and the GBP/USD pair fixed a local high at 1.2405.

Let's see what happens this time and if it can return to this height. Or is it likely to exceed it? After all, according to forecasts, the BOE may decide to take a desperate step, raising the rate by 150 bps at once, in which case it will be 2.75% and will be higher than the current dollar rate of 2.50%, which will be a significant argument in favor of strengthening the British currency.

At the moment, 35% of experts believe that the British currency will continue to lose ground, 35% on the contrary expect a rebound upwards, and 30% remain neutral. The readings of the indicators on D1 are as follows. Among trend indicators, the parity is 50% to 50%. Among the oscillators, only 10% side with the bears, 90% indicate growth, of which 15% are in the overbought zone.

Immediate support is at 1.2045, followed by 1.2000 and 1.1875-1.1915 zone. Below is the level of 1.1800, the July 14 low of 1.1759, then 1.1650, 1.1535 and the lows of March 2020 in the zone 1.1400-1.1450. As for the bulls, they will meet resistance in the zones and at the levels of 1.2200-1.2245, 1.2300-1.2325 and 1.2400-1.2430.

USD/JPY: Record 500 Pips Down

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All the same reasons mentioned above contributed to the strengthening of the Japanese currency. On the eve of the US Federal Reserve meeting on July 27, the USD/JPY pair was at a height of 137.45, and having flown by almost 500 points, it already fixed a six-week low at around 132.49 less than two days later. It is possible that such a sharp drop was facilitated by the oversold yen, which updated a 24-year low on July 14.

The publication of the US Personal Consumption Expenditures followed at the very end of the week, on Friday, July 29, causing a temporary rebound of the USD/JPY pair to the height of 134.58, after which the downtrend resumed, and the pair completed the five-day working period at 133.31.

As for the prospects of the Japanese currency, the experts' forecast looks quite neutral, as in the cases of previous pairs. 45% of them are waiting for a new breakthrough of the pair to the north, another 45% hope for a continuation of the downtrend, the remaining 10% talk about a side corridor. The picture is somewhat different in the readings of indicators on D1: trend indicators have a ratio of 65% to 35% in favor of red ones, 25% of oscillators look north, 75% look south, but a third of them give signals that the pair is oversold.

The values of possible slippage and ranges of support/resistance zones have sharply increased due to the ultra-high volatility of the pair. Supports are located at the levels and in the zones 132.50-133.00, 131.40, 128.60 and 126.35-127.00. Resistances are 134.20-134.60, 135.00-135.55, 136.30-137.45, 137.90-138.40, 138.50-139.00, followed by July 14 high 139.38 and round bull targets­ of 140.00 and 142.00.

CRYPTOCURRENCIES: Bitcoin May Rise. But not soon.

The fact that the US Federal Reserve raised the rate not by 1.0%, but by 0.75% at its meeting on July 27 provided strong support for risky assets, primarily the stock market. Some of the most radical analysts said that the regulator might stop raising rates as early as November, and it would return to the quantitative easing (QE) program in 2023 and start buying assets and building up the balance sheet again, flooding the market with new flows of cheap dollars. The S&P500, Dow Jones and Nasdaq stock indices went further up on such joyful expectations for investors, and the quotes of such risky assets as bitcoin and other cryptocurrencies followed them.

The price of bitcoin has been holding above the $20,000 level for two weeks now, which has concentrated the greatest attraction of speculators. According to Glassnode experts, this happened as a result of the transfer of coins from surrendered hodlers to "new" optimistic buyers. The specialists emphasize that there was also demand from speculators earlier at the levels of $30,000 and $40,000.

According to a number of analysts, those whales (investors with a balance of 1000+ and 10000+ BTC) who maintain hodle moods and continue to buy bitcoins on exchange rate drawdowns, also contributed to this. The activity of owners of small BTC balances is also noted. For example, the number of addresses with a balance of 0.01+ BTC reached an all-time high of 10,543,548.

Glassnode warns that it may take additional time to form a solid foundation. This is evidenced by such long-term indicators as URPD. To increase the chances of a market reversal, it is important to see the transition of speculative coins into the category of “held by long-term investors” (in other words, the “age” of coins from the moment of purchase must exceed 155 days).

Crypto analyst Nicholas Merten believes that an unexpected market jump is possible in the current situation, which will be a big surprise for the bears. “Bitcoin skyrocketed from $29,000 to $53,000 last July, up 80% within a month. I suppose that the market can grow up again now and retest the previous consolidation area around $30,000. There are no major resistance zones ahead and the moving averages are leading right into this point, giving bitcoin a great upside opportunity. Most people do not believe in this possibility, but the rally can surprise you with its scale in a market with excessive volumes of derivatives.”

Note that although Merten does not rule out BTC rising in the short term, he doubts that the asset has already hit the bottom: “Many people believe that the bottom was reached on June 18. Yes, we saw a huge sell-off and a good rebound. The market also got rid of significant amounts of borrowed funds used for crypto speculation. But one cannot discount the reality of the continued impact of the macro market, which will continue to limit long-term investment in cryptocurrencies.”

A similar thought was expressed by analyst Aaron Chomsky. He believes that the exit of the BTC/USD pair from the side channel through the upper border can only become a trigger for a further fall in prices. He expects a reversal and a breakdown of the lower border of the channel with the target of $17,500. At the same time, Aaron Chomsky believes that the goal of $10,000 is also quite realistic. “Apparently, we are in for a long period of crypto winter,” the expert writes. “Bitcoin is targeting $5-7k, while any delay, like what we are seeing now, forces us to revise the final targets down.”

And the “lower side,” according to Jim Rogers, co-founder of Quantum Fund and Soros Fund Management, could be a drop in the price of bitcoin to zero. This major American investor said that you need to get the support of governments regarding this sector before considering cryptocurrency as a safe investment. BTC is only a gambling tool, not real money. Bitcoin is well suited for speculation but will eventually fail as a currency.

Jim Rogers emphasized that he would consider buying BTC if the European Union accepted it as the official currency and introduced it into the region's payment system. However, his statement can only be taken as a sarcastic joke, since the EU is unlikely to take such a step in the next decade.

Of course, in contrast to the skeptics who are ready to bury the crypto market, there are always optimists who predict a bright future for bitcoin. For example, Real Vision Group co-founder and former Goldman Sachs CEO Raoul Pal believes that the cryptocurrency markets are preparing for a major positive trend reversal. The markets are mainly driven by liquidity, which comes from the M2 money supply, he said. This money supply correlates with the total amount of currency in circulation, plus it is highly liquid non-cash assets that can be easily converted into cash.

Most crypto investors believe that miner reward cuts at the next halving, which is scheduled for May 2024, will drive the price up. However, Pal argues that the role of M2 is greater than that of halving: “Cryptocurrency is not driven by the business cycle, but by global liquidity. So the main indicator of the growth of bitcoin is the rate of change of M2. Every time there was an increase in the money supply, there was always a reversal, the specialist says.

It is appropriate to recall what we talked about at the very beginning of the review. If the Fed actually returns from quantitative tightening (QT) to quantitative easing (QE), and there is extra money in the market, investor appetite for risky assets will definitely go up.

Raoul Pal is also right that many investors expect the next big rise in cryptocurrency prices to occur before the next halving. Moreover, such expectations are based on quite convincing historical data. One of the proponents of this scenario is financial analyst Florian Grummes, managing director of investment firm Midas Touch Consulting. In his opinion, despite the current rise, the cryptocurrency winter is far from over. The rise to $35,000, in his opinion, will occur only in 6-12 months. And this will be a so-called "auxiliary rally" that may precede larger rally in the future.

In the long term, Grummes is confidently optimistic, but warns that since the crypto market is directly correlated with the stock market, one must be prepared for deviations not only upwards, but also downwards at the current stage.

The biggest optimist last week was the well- known analyst under the nickname PlanB, the creator of the Stock-to-Flow model. He predicted the day when both US stocks and bitcoin would reach new all-time highs. “Some people are afraid of macroeconomics, bitcoin's relationship with the stock market, etc.,” he tweeted. “My opinion is that the S&P 500 will be in the range of $5,000-$6,000 over the next 5 years, and bitcoin will be between $100,000 and $1 million.

The prospects are wonderful of course. But both PlanB and Florian Grummes have already been wrong in their predictions. Therefore, their forecasts, as well as all other ones, should be treated with sufficient caution now as well. The only thing that persists is that at the time of writing this review (Friday evening July 28), bitcoin is trading around $23,900. The total capitalization of the crypto market is $1.098 trillion ($1.026 trillion a week ago), and the Crypto Fear & Greed Index is still in the Fear zone at 39 points (33 points a week ago).


NordFX Analytical Group


Notice: These materials should not be deemed a recommendation for investment or guidance for working on financial markets: they are for informative purposes only. Trading on financial markets is risky and can lead to a loss of money deposited.

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14attention Re: Daily Market Analysis from NordFX Sat Jul 23, 2022 1:13 pm

Stan NordFX



Forex and Cryptocurrencies Forecast for July 25 - 29, 2022



EUR/USD: The ECB's Monetary Experiment: Crossing a Hawk with a Dove

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The single European currency showed slight growth at the beginning of last week, fixing a local high at 1.0272. There are three reasons for this. The first and most banal one is a corrective rebound after the EUR/USD pair, having broken through the parity level of 1.0000, found the bottom at 0.9951 on July 14. The second one is the resumption of Russian gas supplies to the EU via the Nord Stream pipeline. And finally, the third and most important one is the expectation of a rise in the euro interest rate. Moreover, the market expected that the rate would be raised by 50 basis points (bp) at once, and not by 25, as announced by the ECB itself at its previous meeting. This is what happened in reality. For the first time in 13 years, the European regulator raised the lending rate from 0 to 0.5% on Thursday, July 21, and brought the deposit rate out of the negative zone, raising it from -0.5% to 0%.

The ECB explained in its press release that it felt appropriate to take a larger first step towards rate normalization for two reasons. The first is obvious and consists of an updated assessment of inflation growth. As a second reason, the ECB announced the launch of a new instrument, the Transmission Protection Instrument (TPI), which should allow, despite the increase in the rate, not to increase the cost of borrowing too aggressively in the vulnerable economies of the Eurozone. The TPI description explains that this tool was introduced to counter the unreasonable erratic market movements that took place in mid-June. 

In short, the essence of TPI is that the ECB will be able to buy back securities issued in those EU countries where there is a destabilization of financial conditions unjustified by fundamental factors, on the secondary market. The volume of purchases is not limited by anything and will depend on the severity of the risks. In other words, the regulator will try to cross a hawk with a dove­: on the one hand, by raising the rate (QT), and on the other hand, by continuing potentially unlimited quantitative easing (QE). The market reaction to this monetary experiment turned out to be appropriate and predictable: the EUR/USD pair fell to 1.0152. After that, it went up again and completed the five-day period at the level of 1.0210.

There will be a meeting of the FOMC (Federal Open Market Committee) of the US Federal Reserve next week, on Wednesday, July 27. Almost no one doubts that the key interest rate will be raised there. But how much? By 100 bp, which hasn't happened since 1981, or by 75 bp? If the FOMC chooses the first option, the rate will reach 2.75%. It is this growth that the markets put into their quotes, expecting a new assault on the 1.0000 horizon by the EUR/USD pair. However, if the Fed abandons this idea and the rise is more modest, then a further rebound of the pair to the north is not ruled out. 

At the time of writing this review, on the evening of July 22, 25% of experts supported the growth of the pair. The remaining 75% showed it the way to the south. The oscillator readings on D1 give a slightly different signal: 60% are colored red, 25% are green and 15% are neutral grey.  As for the trend indicators, 65% look south, the remaining 35% have taken the opposite position. The immediate support for the EUR/USD pair is the 1.0150-1.0200 zone, then, of course, comes the 1.0000 level. After it is broken, the bears will target the July 14 low at 0.9950, even lower is the strong 2002 support/resistance zone. 0.9900-0.9930. The next serious task for the bulls will be to break through the resistance at 1.0270 and return to the 1.0400-1.0450 zone, followed by the 1.0520-1.0600 and 1.0650-1.0750 zones.

As already mentioned, the most important event of the upcoming week will be the FOMC meeting of the US Federal Reserve and its decision on the interest rate. The volume of US orders for capital goods and durable goods will become known on the same day, Wednesday, July 27. Data (CPI) on consumer markets in Germany and the Eurozone will arrive on Thursday, July 28 and Friday, July 29, respectively. The preliminary size of the US GDP (Q2) will be known on July 28, and the GDP of Germany and the Eurozone on July 29.

GBP/USD: The Battle for 1.2000 Continues

Last week was quite busy for the pound as for the publication of important macro-statistics on the UK. And although it turned out to be rather ambiguous, there were distinct positive notes in it, especially where it concerned the labor market. The number of applications for unemployment benefits in the country for the month decreased from 34.7K to 20.0K, and this is against the forecast of 41.2K.

Unlike EUR/USD, thanks to such statistics, the GBP/USD pair showed more confident growth and managed to return to where it was trading two and five weeks ago, putting the final chord at around 1.2000. And now the question arises: will this level turn into strong resistance or support?

At the moment, 75% of experts believe that the British currency will continue to lose ground, 25%, on the contrary, expect a rebound upwards. The readings of the indicators on D1 are as follows. Among the trend indicators, the balance of power is 65-35% in favor of the reds. Among the oscillators, the advantage of the bears is much less: 35% indicate a fall, 25% indicate an increase, the remaining 40% remain neutral. The closest support is located in the 1.1875-1.1915 zone. Below is the level of 1.1800, the low of July 14 of 1.1759, then 1.1650, 1.1535 and the lows of March 2020 in the zone 1.1400-1.1450. As for the bulls, they will meet resistance in the zones and at the levels of 1.2100, 1.2160-1.2175, 1.2200-1.2235, 1.2300-1.2325 and 1.2400-1.2430.

The macroeconomic calendar does not include major news from the United Kingdom itself. The determining factor for the dynamics of the GBP/USD pair, of course, will be the meeting of the US Federal Reserve on Wednesday, July 27. Recall that the interest rate on the pound is 1.25% at the moment , and the next meeting of the Bank of England (BOE) is scheduled for August 04, 2022.

USD/JPY: Correction or Trend Change?

What most experts dreamed about for so long has come true. The USD/JPY pair did not renew the 24-year high again, and did not even take a break, but literally collapsed down. And this despite the fact that the Bank of Japan (BOJ) once again left the interest rate unchanged at a negative level of -0.1% on Thursday, July 21. The management of the regulator did not even hint of tightening monetary policy. On the contrary, it was stated that the Japanese Central Bank will not hesitate to take additional easing measures (QE) if necessary, and also expects short-term and long-term interest rates to remain at the current or even lower (!) levels. 

Although inflation in Japan tends to rise, it is still below 2%, which is many times lower than in the US and Europe. Thus, given the dynamics of domestic demand and weak wage growth, there is still little incentive for the BOJ to change its ultra-dove tack. So the current strengthening of the yen and the fall of the pair USD/JPY from 139.38 to 135.56 is due, with a high degree of probability, to its being strong overbought.

This time, 70% of experts are waiting for a new push of the pair to the height of 142.00. 15% hope for a continuation of the downtrend, the remaining 15% speak of a side corridor. The picture is vaguer in the readings of indicators on D1: trend indicators have a parity of 50% to 50%, 25% of oscillators look to the north, 40% to the south and 35% to the east. Supports are located at the levels and in the zones 135.55, 134.75, 134.00, 133.50, 133.00 and 131.40. Resistances are 136.35-137.00, 137.90-138.40, 138.50-1.139.00, followed by the July 14 high at 139.38 and round bull targets­ of 140.00 and 142.00.

No major events are expected in Japan this week. Of course, we can note the publication on Monday, July 26 of the report on the latest meeting of the Monetary Policy Committee of the Bank of Japan, however, it is unlikely that it will cause not only a tsunami, but even a small wave in the market. So the focus of attention, as for other currency pairs, will be on the meeting of the US Federal Reserve on Wednesday, July 27.   

CRYPTOCURRENCIES: A Little Patience, Ladies and Gentlemen!

For the first time since June 13, BTC/USD rose above $23,000 and even hit $24,263 last week. What is this, a long-awaited change in trend? Or a brief thaw in the middle of a crypto winter? Or maybe another insidious trap arranged by bears for gullible investors? Let's figure it out.

We have repeatedly written that a popular marker among crypto-analysts is the 200-week moving average (SMA200), which has been referred to more and more often lately. The reason is that it used to be the main support for the BTC/USD pair. But it is not at all certain that what happened before will be repeated in the future. And the proof of this is the recent breakdown of this very SMA200. However, this technical analysis indicator is still one of the most used in making forecasts.

So, bitcoin managed to rise above the 200-week moving average last week. The reason for this, of course, is not that the flagship cryptocurrency has become stronger, but that the US dollar has weakened a little. Against this background, the US stock indices, S&P500, Dow Jones and Nasdaq went up, and after them the quotes of such risky assets as cryptocurrencies followed.

At the time of writing this review (Friday evening, July 22), bitcoin is trading around $22,670. The total capitalization of the crypto market is $1.026 trillion ($0.945 trillion a week ago). The Crypto Fear & Greed Index rose from 15 to 33 points in a week, and finally got out of the Extreme Fear zone into the Fear zone.

Thus, bitcoin is up about 20% from the July 13 low ($18.886) and is just above the 200-week moving average ($22.565). According to analysts at the Binance crypto exchange, such a close of the week gives hope for the restoration of strong support in the form of SMA200, which is typical for bitcoin bear cycles.

Bitcoin’s break above the 200-week SMA caused a surge of enthusiasm among investors. Amsterdam Stock Exchange trader Michael van de Poppe first tweeted out a graphical forecast anticipating a cryptocurrency rally to $28,000 and then compared the current market situation to the recovery from the memorable collapse triggered by the announcement of the coronavirus pandemic in March 2020. At that time, bitcoin collapsed to $3,782, but then rose by 1.600% over the next 13 months (to $64,853 in April 2021).

Analysts of the Kraken cryptocurrency exchange are equally optimistic, who also use the 200-week moving average as the main indicator. In particular, they drew attention to the multipliers with which BTC traded in the past relative to its 200-week SMA. Thus, having rebounded from the SMA200, bitcoin grew 15.2 times in December 2017. The growth was 13.2 times in November 2013. At the moment, BTC is trading close to its 200-week moving average. If the coin shows a multiplier in the range of 13x - 15x again, it may rise to about $300,000.

Of course, the multiplier for BTC was not always 10x when touching the SMA200. Growth peaked at 5.8x in March 2021 before the crypto market began to decline noticeably. However, even with this value of the multiplier, bitcoin can rise to $130,000. But when will this happen? The patience of many market participants has already run out.

We have already written that, according to Glassnode data, bitcoin's record price decline in June almost took the rest of the “market tourists” out of the game, leaving only hodlers “at the front”. In the context of monthly dynamics, the situation was worse only in 2011. The largest outflow was recorded among institutional investors (companies with investments from $1 million), public miners (expanding production on credit), as well as speculators and casual players.

Assuming the market cycle repeats, the bearish phase of bitcoin will end in the first half of autumn. Such a conclusion can be drawn from the historical data provided by the analysts at Grayscale Investments. It took bitcoin 1,290 and 1,257 days to form a full cycle in 2012 and 2016, respectively. It took 391 and 364 days to fall from the peak by 73% in 2012 and by 84% in 2016. The duration of the current cycle, which began in 2020, has reached 1206 days (as of July 20, 2022). In other words, it may take another two to three months before reaching the bottom.

A crypto strategist with the nickname Rekt Capital came to similar conclusions. In his opinion, despite the oversold signals, the downward exchange rate movement may continue for quite a long time. The analyst noted that the Relative Strength Index (RSI) on the BTC monthly timeframe is now below the lowest levels of the bear markets of 2015 and 2018, which could become new resistance levels for bitcoin.

According to Rekt Capital, the short-term prospects of the coin do not look very good, and the bottom can be reached only in a few months: “Bitcoin has about 650 days before the next halving (April 2024). Historically, it bottomed around 517-547 days before its halving. In the event of a repeat of history, bitcoin will need another 100-150 days before reaching the bottom, which will form in the fourth quarter of 2022.”

American businessman Thomas Peterffy, whose capital is estimated at $18.4 billion, is ready to buy bitcoins when the value of the cryptocurrency drops to $12,000. This chairman of Interactive Brokers admitted in a recent interview with Forbes that he does not intend to buy cryptocurrency at the current, in his opinion, high price, as he believes that in the future, bitcoin is very likely to depreciate or be banned in the United States.

Most traders from China are in solidarity with Thomas Peterffi. A poll on the social network Weibo with the participation of more than 2,200 people showed that Chinese traders are waiting for further decline in the price of bitcoin. 8% of respondents said they would buy BTC at $18,000 per coin. 26% of respondents will start purchases at $15,000. But if the bitcoin rate falls to $10,000, 40% of respondents will buy the first cryptocurrency.

It can be seen from all of the above that, despite the prospects for BTC to rise to the cosmic $300,000, there are no clear signals for investing in this coin yet. The US Federal Reserve will make a decision on the interest rate on Wednesday, July 27. And, most likely, the prospects for the BTC/USD pair will become more distinct after that. A sharp increase in the rate will lead to an increase in the DXY dollar index and a further drop in investor risk appetite. And then the chances of seeing bitcoin at $10,000 will increase dramatically. Otherwise, we'll see it aim for $30,000. It won't take long to find out which of these scenarios will come true. So, dear traders and investors, let's be patient.


NordFX Analytical Group


Notice: These materials should not be deemed a recommendation for investment or guidance for working on financial markets: they are for informative purposes only. Trading on financial markets is risky and can lead to a loss of money deposited.

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15attention Re: Daily Market Analysis from NordFX Sat Jul 16, 2022 2:51 pm

Stan NordFX



Forex and Cryptocurrencies Forecast for July 18 - 22, 2022



EUR/USD: Parity 1:1 Achieved

What we've been talking about over the last few months has come true: the EUR/USD hit 1.0000 on Tuesday, July 12. The local bottom was fixed on Thursday July 14 at 0.9951. The last time the pair was so low was in December 2002. Note that the dollar strengthened not only against the euro, but also against other leading world currencies. The DXY index is also in the zone of 20-year highs, having approached the height of 108.99 on July 14. 

The greenback's rally was spurred on by recent US inflation data. The consumer price index (CPI) reached 9.1% in June, exceeding the forecast of 8.8%. Note that this was observed only 12 times in 110 years, and the last time inflation rose above 9% was in 1981. This record (rather an anti-record) strengthened market expectations regarding the pace of tightening monetary policy (QT) by the US Central Bank. If earlier it was assumed that the rate would be increased by 50-75 basis points at the next meeting of the FOMC (Federal Open Market Committee) on July 27, there is talk now that federal funds costs may increase immediately by 100 bp. The probability of such a move is estimated by analysts at 82%, and the probability that the rate will be raised by a total of 175 basis points at the two upcoming meetings is 75%, according to CME Group FedWatch.

Atlanta Federal Reserve Bank (FRB) President Rafael Bostic dismissed the possibility, adding that inflation could rise even further by the end of the year, requiring the Fed to act even more decisively. According to experts, the desire of the US Central Bank to stop inflation at any cost may lead to the fact that the rate will eventually reach 4.00% (it is 1.75% at the moment). And this will be done even though the country's economy may fall into the deepest recession. 

What is good for the dollar is bad for the stock market. Flight from risky assets intensified amid market fears about a prolonged economic downturn. S&P500, Dow Jones and Nasdaq fell down, while DXY flew up. Data on retail sales in the US, which were released on Friday evening, July 15, slowed down the flight. With a previous reading of -0.1% and a forecast of 0.8%, this figure reached 1.0% in June, which pushed the EUR/USD pair up and finished at 1.0082.

It should be noted that the tightening of the Fed's monetary policy creates problems not only for the US economy, but also for the entire global economy. The share of the US dollar in international reserves was 59% at the end of 2020, and the share in international settlements as of February 2022 reached 39%. Thus, the dollar is both the main reserve currency and the main means of payment in the world. With its strengthening, the burden increases primarily on emerging market economies that have received large loans from the IMF. Debt service difficulties have already led to a default in Sri Lanka, problems await El Salvador, Tunisia, Egypt, Pakistan, and Ghana.

The popularity of the dollar as a defensive asset will continue to grow with the approach of a recession and thanks to the policy of the US Federal Reserve. At the time of writing the review, on the evening of July 15, this forecast is supported by 60% of experts. Further correction to the north is expected by 30%, and 10% of analysts have given a neutral forecast. The oscillator readings on D1 give a completely unambiguous signal: all 100% are colored red. There are 85% of those among the trend indicators, the remaining 15% have taken the opposite position.

The closest strong support for the EUR/USD pair is the 1.0040-1.0050 zone, followed by the 1.0000 level. After it is broken, the bears will target the July 14 low at 0.9950, even lower is the strong 2002 support/resistance zone. 0.9900-0.9930. The nearest serious target of the bulls is a return to the zone 1.0350-1.0450, then there are zones 1.0450-1.0600 and 1.0625-1.0770. There are several levels on the way to 1.0350, which the pair broke very easily during the fall, so it is still difficult to determine which of them can become a serious obstacle when moving up.

The highlight of the coming week will undoubtedly be the ECB meeting on Thursday July 21. It is expected that the regulator will raise the interest rate from 0.0% to 0.25%. Such a move could support the euro a little, although it looks rather timid against the backdrop of the Fed's hawkish policy. Of undoubted interest are the subsequent press conference and comments of the ECB management, which should give the market an idea about the future plans of this regulator.

Other events include the publication on Tuesday, July 19 of the Consumer Price Index (CPI) and the report on bank lending in the Eurozone. Data on the labor market and manufacturing activity in the US will be released on Thursday, July 21, and the value of the PMI (Purchasing Managers Index) in the manufacturing sector in Germany will become known the next day. In addition, we advise you to pay attention to the decision of the People's Bank of China on the interest rate on July 20. This decision is especially interesting, since China's GDP in the Q2 2022. decreased by 2.6% against the forecast of a decrease by 1.5%, which indicates the approach of the country's economy to a recession.

GBP/USD: The Battle for 1.2000 Is Lost, But It's Not Over Yet

The GBP/USD pair, unlike the EUR/USD, has not yet broken a multi-year record, but is already close to it. The local bottom was fixed at 1.1759 last week, and the last chord of the five-day period was set at 1.1865. Below are two serious targets: 1.1409, the collapse point caused by the start of the COVID-19 pandemic in March 2020, and the December 1984 low of 1.0757. We think it's too early to talk about the parity of the pound with the dollar 1:1.

The macro data released on Wednesday July 13 turned out to be unexpectedly green. Thus, the UK GDP (yoy) with a forecast of 2.7% in reality amounted to 3.5%, while the June GDP, with the previous value of -0.2% and the forecast of 0.1%, rose to 0.5%. Despite this positive, the factors of pressure on the country's economy have not gone away. Among them are problems related to Brexit and the customs conflict between Britain and Northern Ireland. Inflation remains the highest in 40 years, and it is possible that it could exceed 11% by November, pushing the economy into a deep recession. We must add the government crisis that caused the resignation of Prime Minister Boris Johnson to all this, as well as the difficulties associated with sanctions against Russia due to its armed invasion of Ukraine.

Despite statements from BoE officials that they are ready to accept a faster pace of monetary tightening, in reality the regulator is acting more cautiously than the market expected. The current interest rate is 1.25%, which is lower than the corresponding Fed rate (1.75%), and the next BOE meeting will take place only on August 04, 2022. And this cannot but exert downward pressure on the GBP/USD pair.

At the moment, 50% of experts believe that the British currency will continue to lose ground, 25% on the contrary expect a rebound upwards, and 25% have taken a neutral position. The readings of the indicators on D1 are as follows. Among the trend indicators on D1, the power ratio is 100:0% in favor of the reds. Among the oscillators, the advantage of the bears is slightly less: 90% indicate a fall, the remaining 10% have turned their eyes to the north.

The nearest support is at 1.1800, followed by the July 14 low of 1.1759. Further, 1.1650, 1.1535 and March 2020 lows in the 1.1400-1.1450 zone. The immediate task of the bulls is to rise to the 1.1875-1.1915 zone, and then a new stage of the battle for 1.2000, which they ingloriously lost last week. In case of victory, the pair will meet resistance in the zones and at the levels of 1.2100, 1.2160-1.2175, 1.2200-1.2235, 1.2300-1.2325 and 1.2400-1.2430.

As for the macroeconomic calendar for the United Kingdom, we advise you to pay attention to Tuesday July 19, when data from the UK labor market arrives. The speech of the head of the Bank of England Andrew Bailey is scheduled on the same day. The value of the Consumer Price Index (CPI) will become known on Wednesday, July 20, and a whole package of data regarding the state of the British economy will be received on Friday. It will include retail sales data for June, as well as data on business activity (PMI) both in individual sectors and in the country as a whole.

USD/JPY: The Storm After the Calm

We called the previous review “The Calm Before the Storm” as USD/JPY did not renew its 24-year high for the first time in five weeks and took a breather. But since a storm was promised, it must break out. A new high at 139.38 was recorded on July 14, and the pair met the end of the trading session at 138.50.

The reason for the new weakening of the yen is the same: the difference between the hawkish monetary policy of the US Federal Reserve and the ultra-dove one of the Bank of Japan (BOJ). By the way, the next meeting of the Japanese Central Bank is to be held next week, on Thursday, July 21, at which it is likely to once again leave the interest rate unchanged at the negative level of -0.1%. 

If we usually talk about the fight between bulls and bears, then regarding the future of the yen, the fight is between… analysts and BOJ. The former, for the most part, are waiting for the Central Bank to finally change its policy, and therefore stubbornly vote for the strengthening of the yen. The latter, no less stubbornly, leaves this policy unchanged, and the USD/JPY pair stubbornly moves up.

This time, only 40% of experts speak about the pair's movement to the height of 142.00. The remaining 60% hope for a downward trend reversal. There are no such disagreements in the readings of indicators on D1: all 100% of trend indicators and oscillators are looking north, although 20% of the latter are in the overbought zone. Supports are located at the levels and in the zones 137.65, 137.00, 136.60 135.50-135.70, 134.00, 133.50 and 133.00. The bulls' targets ¬are 140.00 and 142.00. And if the pair's growth rates remain the same as in recent months, it will be able to reach the 150.00 zone in late August - early September

Apart from the meeting of the Japanese Central Bank and the subsequent press conference of its management, there are no other significant events expected in Japan this week.

CRYPTOCURRENCIES: The Beginning of the End of the Bear Phase

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The previous review drew attention to an anomaly when both the dollar and the US stock indices - S&P500, Dow Jones and Nasdaq were growing at the same time. Things fell into place last week: the US currency continued to grow, and the indices fell down. It should be noted to bitcoin's credit that, despite another wave of investor flight from risks, it managed to stay in the $20,000 zone. Now, how long will it last?  

CEO of Rockefeller International, who previously held the post of chief strategist at Morgan Stanley, Ruchir Sharma, recalled that a bearish trend usually lasts about a year in the stock market, and stock exchanges indices are falling by 35%. At the moment, the market has decreased by only 20%. So we can expect a further drop in demand for risky assets including bitcoin in the next six months.

“I would not say that we are already at the bottom,” Sharma said, adding that bitcoin will return to growth and reach new highs after the end of the bear cycle. The financier recalled the situation with Amazon in the early 2000s, during the dot-com bubble, when the retailer's share price collapsed by 90%. However, stocks then bounced back, and rose another 300 times over the next 20 years.

If you look at the BTC/USD chart, it's easy to see that the flagship currency has been clinging to round levels lately. So, bulls and bears fought for $40,000 from April 11 to May 5. The front line was at $30,000 from May 10 to June 10. The battle has been taking place in the $20,000 zone since mid-June. At the moment, 60% of investors surveyed by Bloomberg consider another decline in the price of bitcoin more likely, this time to $10,000. The remaining 40% are waiting for a recovery to $30,000. The study involved 950 respondents. Compared to institutions, there were more skeptics among retail investors. Almost every fourth called the first cryptocurrency “garbage” (18% of professional market participants).

Galaxy Digital CEO Mike Novogratz said in an interview with CNBC that he does not believe in the possibility of reducing the price of the first cryptocurrency to $13,000. “There is a feeling that we are 90% over this deleveraging. […] The problem is that further growth requires more faith and new capital,” he said. According to Novogratz, the sideways trend of digital assets will last until the US Federal Reserve stops raising the base rate, which will take about 18 months.

Macroeconomics expert Lyn Alden made a similar point. She believes that although there are no clear bullish signals in the crypto market, the time for global capitulation has already passed. In her opinion, the worst part of the bearish trend ended along with the unstable first half of 2022. The macro strategist believes that bitcoin can recover as the massive BTC sell-off has stopped.

However, Alden warns that bitcoin could still go down one step. “Macroeconomically, there are still not many bullish catalysts at the moment, and I would not rule out further price movement down.” “We have seen that, for the most part, bitcoin is very strongly correlated with the growth of the money supply, especially in dollars. So, when we have had a huge increase in the money supply around the world over the past couple of years, bitcoin has also done very well,” explained Alden. 1Now the reverse is happening as the US Federal Reserve and other central banks try to tamp down inflation. This, accordingly, affects the price of the cryptocurrency. In other words, now that the flow of cheap liquidity has dried up and interest rates are rising, investors prefer not to get involved in risky assets. 

Some experts prefer to call what is happening in the crypto market not a collapse, but simply another deep correction. In addition, referring to historical data, they declare entering the final phase of a bear market. So, at the end of 2018, the total drop was 84% from the previous historical maximum. The BTC/USD pair has currently fallen from the November 11, 2021 high by only 71%. Thus, if we follow this model, we can expect the completion of the correction in the region of $10,000-11,000, and the subsequent consolidation may last about a year or more.

According to Glassnode, market shrinkage has virtually eliminated the rest of the "market tourists" from the game, leaving only hodlers "at the front". On average, unrealized losses of each of them are now 33%. This is not the worst indicator in history, which also suggests that the final bearish phase has just begun.

The start of the final phase is also signaled by the capitulation of the miners, which has a high correlation with the bottoming of bitcoin. Most of the public mining companies used to expand their production with loans. Now their earnings have dropped to 50%, forcing them to sell off their coin holdings to cover operating and borrowing costs. Glassnode estimates that miner inventories are now around 70,000 BTC worth about $1.3 billion. And in the event of a prolonged consolidation, they will also be forced to put them on sale, which will put additional pressure on the market.

Please note that in this case, we are talking only about the beginning, and not about the end of the final phase of the bearish trend. Thus, the surrender of miners in 2018-19 lasted four months, while the current cycle lasts a little more than a month.

As for Ethereum, the dynamics of the ETH/USD pair quotes almost repeats the dynamics of BTC/USD. Some experts do not exclude its temporary rise to $1,280, however, they believe that this will be another trap for the bulls. And the pair will return to the $1,000 zone after its triggering. The next target of the bears is $500.

Returning to the Bloomberg survey, most of the 950 investors surveyed expressed confidence in the strong position of bitcoin and ethereum over the next five years. In their opinion, developments in the crypto market will prompt regulators to tighten supervision over the industry. This can increase trust and lead to further popularization of digital assets. Ruchir Sharma of Rockefeller International also believes that  top cryptocurrencies will become much more stable within three to five years, which will allow them to seriously push the US dollar.

As of this writing (Friday evening, July 15), bitcoin is trading in the $20,900 zone. The total capitalization of the crypto market is $0.945 trillion ($0.966 trillion a week ago). The Crypto Fear & Greed Index has dropped 5 points over the week from 20 to 15 points and is still in the Extreme Fear zone.


NordFX Analytical Group


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16attention Re: Daily Market Analysis from NordFX Fri Jul 15, 2022 11:40 am

Stan NordFX



NordFX Copy Trading





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17attention Re: Daily Market Analysis from NordFX Sat Jul 09, 2022 7:44 pm

Stan NordFX



Forex and Cryptocurrencies Forecast for July 11 - 15, 2022



EUR/USD: One Step to 1.0000

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We have repeatedly written about the dollar's desire to achieve parity with the euro 1:1. But we did not expect that this could happen so quickly: the EUR/USD pair found a local bottom at the level of 1.0071 on Friday, July 08. Only 71 points remained until 1.0000. The last time it was so low was in December 2002.

The week's high was recorded at 1.0462. Thus, the US currency squeezed out the European currency by almost 400 points from July 04 to July 8. And there are two reasons for this.

The first is the general strengthening of the dollar, whose DXY index has renewed 20-year highs and reached a height of 107.77 on July 08. As before, the main reason for such dynamics lies in the tightening of the monetary policy (QT) of the US Central Bank. The minutes of the June meeting of the FOMC (Federal Open Market Committee) published on Wednesday, July 06 confirmed once again the regulator's desire to curb inflation at any cost. The main tool here should be a sharp increase in the refinancing rate for federal funds. Recall that the rate was raised immediately by 0.75% in June, for the first time since 1994. As follows from the FOMC minutes, the members of the Committee believe that the rate will be increased by another 50-75 basis points at the next meeting on July 27.

Recall that the head of the Fed, Jerome Powell, who participated in the ECB forum in the Portuguese city of Sintra, assured the audience that the US economy is well positioned to cope with the active tightening of monetary policy, which is being implemented by his department.

It should be noted here that there is a rather rare situation in the markets when US stock indices also grow along with the growth of the dollar. Thus, the S&P500 grew by 7.5% (from 3635.60 to 3910.60) since June 17, and the Dow Jones - by 6.1% (29646.60 to 31463.00). The reason for this, most likely, is that investors invest part of the dollars received from the sale of the euro, other currencies, as well as risky assets of other countries, in shares of American companies. And this is despite the fact that Jerome Powell made it clear at the press conference in Sintra that a recession in the US economy is inevitable, and the Federal Reserve Bank of Atlanta announced that US GDP could decline by 2.1% in the current quarter. But, apparently, the situation in other countries is even worse, so investors have very limited choice.

The second factor putting pressure on the EUR/USD pair is the problems of the European economy related to the sanctions imposed on Russia because of its armed invasion of Ukraine, which threaten the EU with a protracted energy crisis.

ECB President Christine Lagarde said a week ago that “inflation expectations in the Eurozone are much higher than before”, that “we are unlikely to return to conditions of low inflation soon”, and that the regulator “will go as far as necessary to reduce inflation to the target of 2%”. But less than a few days later, Bundesbank chief Joachim Nagel urged the ECB to be extremely cautious in terms of tightening monetary policy, as raising interest rates would push the eurozone's weakest economies to the brink of bankruptcy. As a result, the market decided that the regulator would raise the key rate very slowly and responded to the words of Joachim Nagel with an even more active sale of the euro.

It should be noted that the release of macro statistics has recently become just an excuse for a correction or, conversely, for a return to the general bearish trend: in total, the pair has lost about 2,200 points since January 2021, and the fall has been more than 5,800 points since July 2008. After a small correction, the last chord sounded at the level of 1.0177 last week. At the time of writing the review, on the evening of July 08, the voices of experts are divided as follows: 65% of experts expect the resumption of movement to the south, 15% side with the bulls and 20% cannot decide on the forecast. The indicator readings on D1 give a completely unambiguous signal: all 100% of oscillators and trend indicators are colored red. The only thing worth noting is that 15% of the oscillators are in the oversold zone.

With the exception of support at 1.0160 and last week's low at 1.0071, bears' task No.1 is to celebrate the victory by hitting 1.0000. With a certain degree of probability, due to inertia, the pair may fall even lower, to a strong support/resistance zone of 200, 0.9900-0.9930. In this case, the level of 1.0000 will have to be attacked not by bears, but by bulls. Although this may not happen. Suffice it to recall 2017, when, having fallen to 1.0340, the EUR/USD pair reversed and soared to 1.2555. The immediate target of the bulls is a return to the zone 1.0350-1.0450, then there are zones 1.0450-1.0600 and 1.0625-1.0760. If successful, the bulls will try to rise to the 1.0750-1.0770 zone, the next target is 1.0800.

As for the economic calendar for the coming week, Wednesday 13 July can be highlighted, when data from the consumer markets in Germany and the US will arrive. Another portion of macro statistics can be expected on Friday, July 15, when retail sales and the US University of Michigan Consumer Confidence Index become known.

GBP/USD: Battle for 1.2000

Unlike the collapsed euro, the GBP/USD managed to cling to the 1.2000 level. Having started the week at 1.2095, it first rose to 1.2164, then fell to 1.1875, but eventually managed to complete the five-day period at 1.2030. This is despite the political crisis in the UK and the statement of a number of ministers, including Prime Minister Boris Johnson himself, about their resignation.

Other factors, including economic ones, logically, should also put downward pressure on the pound. Problems related to Brexit are among them.  Recall that there is a bill in the country's Parliament that allows to unilaterally change the customs procedures between Britain and Northern Ireland, which had been agreed as part of the deal to exit the EU. In response, the outraged foreign ministers of Germany and Ireland have already accused the United Kingdom of violating international agreements and predicted the severing of most trade ties between the countries.

The highest inflation in 40 years is also depressing. And although the UK is much less dependent on Russian energy supplies than the EU, this does not exclude the possibility that inflation in the country by November could exceed 11%, pushing the economy into a deep recession.

However, this threat may have served as support for the pound, as it pushes the Bank of England (BOE) to tighten monetary policy more quickly. Thus, the hawkish statements of the leadership of the British regulator, made on Thursday, July 07, stopped the fall of the GBP/USD pair and even managed to reverse it to the north.

First, a member of the Monetary Policy Committee (MPC) Katherine Mann said that the uncertainty about the inflationary process strengthens the arguments in favor of an outstripping increase in interest rates. And soon the Chief Economist of the Bank of England, Hugh Pill, announced that, if necessary, he was ready to accept a faster pace of tightening the policy of the Central Bank.

At the moment, 60% of experts believe that the GBP/USD pair will continue to decline in the near future, 15%, on the contrary, expect a rebound upwards, and 25% have taken a neutral position.

The readings of the indicators on D1 are as follows. Among the trend indicators on D1, the ratio of forces is 85:15% in favor of the reds. Among the oscillators, the advantage of the bears is slightly less: 75% indicate a fall, the remaining 25% have turned their eyes to the north. The nearest support is at 1.2000, followed by the 1.1875-1.1930 zone. The mid-term target for the bears could be the March 2020 low of 1.1409.  In case of growth, the pair will meet resistance in the zones and at the levels of 1.2100, 1.2160-1.2175, 1.2200-1.2235, 1.2300-1.2325, 1.2400-1.2430, 1.2460, then the targets in the area of 1.2500 and 1.2600 follow.

As for the macroeconomic calendar for the UK, we advise you to pay attention to Tuesday, July 12, when the speech of the head of the Bank of England Andrew Bailey is expected. Data on manufacturing production and GDP of the UK will be published the next day, Wednesday, on July 13.

USD/JPY: The Calm Before the Storm?

USD/JPY did not renew its 24-year high for the first time in five weeks. As we predicted, it took a breather, spent five days in the trading range 134.77-136.55 and ended it at 136.06.

Recall that the bulls failed to take the height of 137.00 on June 29, stopping just one step away from it: at the level of 136.99. Will they go on a new assault? The number of supporters of such a scenario among the surveyed experts turned out to be... 5%. 35% are waiting for the side trend to continue. The majority of analysts (60%) are still counting on a decisive downward movement of the pair: what if, finally, the long-awaited dream of Japanese importers and housewives finally comes true, and the yen goes on the offensive, regaining the status of a sought-after safe-haven currency?

For indicators on D1, the picture is very different from the opinion of experts. For oscillators, 65% are green, 10% are red, and the remaining 25% are neutral. For trend indicators, 100% point north.

The nearest support is at 135.50, the next one is at 134.75, followed by zones and levels at 134.00, 133.50, 133.00, 132.30, 131.50, 129.70-130.30, 128.60 and 128.00. Apart from overcoming the immediate resistance at 136.35 and taking the height of 137.00, it is difficult to determine further targets for the bulls. Most often, such round levels as 137.00, 140.00 and 150.00 appear in the forecasts. And if the pair's growth rates remain the same as in the last 3 months, it will be able to reach the 150.00 zone in late August or early September.

No important events, be it the release of macroeconomic statistics or political factors, are expected in Japan this week. The only thing to note is the speech by the head of the Bank of Japan, Haruhiko Kuroda, on Monday, July 11. However, one should not expect any sensational statements from him.

CRYPTOCURRENCIES: Run or Wait?

Fight for $20,000 does not subside for more than three weeks. At times, it seemed that a catastrophe was imminent, and the BTC/USD pair would fly further into the abyss in a moment. Moreover, some analysts predicted that it would lose another 50-80% of the current value. And Robert Kiyosaki, author of the bestselling book Rich Dad Poor Dad, predicted an even more powerful collapse, by 95%, to $1,100. But the bulls have managed to hold this front line so far.

We already wrote that $20,000 is historically the most important level for the main cryptocurrency. Suffice it to recall the disaster of December 2017, when bitcoin approached this mark, reaching a height of $19,270, and then collapsed by 84%. True, the attack on $20,000 came from the south then, and it is from the north now.

Some crypto enthusiasts are still trying to insist on the independence of the digital asset market. They believe that the reason for the large-scale sale of coins and the collapse of the market three times was the collapse of a number of projects. But, in our opinion, the causal relationship is violated in this statement. In fact, global risk aversion is at the heart of all the problems. Frightened by the expectation of a global recession and a sharp tightening of the US Federal Reserve's monetary policy, they are actively getting rid of all risky assets. Global stock markets are under pressure from sellers, which is clearly seen on the charts of such stock indices as S&P500, Dow Jones and Nasdaq Composite, with which BTC is in direct correlation. Where they go, bitcoin goes, and there has long been no talk of any independence of it. It was these global problems of the world economy that led to the collapse of a number of important crypto projects, which, in turn, only increased panic among digital asset holders.

Analyzing the situation, Former hedge fund manager Cramer & Co and host of CNBC's Mad Money show Jim Cramer announced the US Fed has won a "remarkable victory" in the fight against cryptocurrencies. “There is a front in the war against inflation with the Fed's outstanding victory: it's a battle against financial speculation. [...] The work on destroying cryptocurrencies is almost complete, but they don't seem to know about it yet,” he said.

According to Glassnode, bitcoin's record price decline in June almost took the rest of the “market tourists” out of the game, leaving only hodlers “at the front”. In the context of monthly dynamics, the situation was worse only in 2011. The number of daily active addresses has dropped from over 1 million in November to the current 870,000. The growth rate of the number of participants decreased to the anti-records of 2018-19. and do not currently exceed 7,000 new users per day.

The largest outflow is recorded among institutional investors (companies with investments from $1 million), public miners (expanding production on credit), as well as speculators and casual players. Institutions withdrew a record $188 million from crypto funds in June, and the volume of “illiquid supply” rose to the highest level since July 2017 at 223,000 BTC.

Thanks to a correction in the US stock market, bitcoin managed to rise above $20,000 last week. At the time of writing this review (Friday evening, July 08), the coin is trading in the $21,800 zone. The total capitalization of the crypto market is $0.966 trillion ($0.876 trillion a week ago). The Crypto Fear & Greed Index has slightly improved over the week, rising from 11 to 20 points, but is still in the Extreme Fear zone.

What is the future of the main cryptocurrency? According to Timothy Peterson, investment manager at Cane Island Alternative Advisors, the price of bitcoin will continue to fall in the coming months under the pressure of the American factor. According to the expert’s calculations, the probability of a recession in the United States has increased to 70%, respectively, capital will continue to leave risky assets, and the BTC price may collapse by 20% or even 40% by the end of summer. Recall that, according to Arcane Research researchers, the potential for a decrease in the price of bitcoin remains until the level of $10,350.

The financier Michael Burry, who predicted the 2007 mortgage crisis, also admits that the current market situation is only the middle of a bearish cycle. This investor, who became the prototype of the hero of the movie "The Big Short", believes that the first cryptocurrency can continue to fall. «Adjusted for inflation, 2022 first half S&P500 down 25-26%, and Nasdaq down 34-35%, Bitcoin down 64-65%. That was multiple compression. Next up, earnings compression. So, maybe halfway there,” wrote Burry.

Deutsche Bank specialists believe that the price of bitcoin may rise to the level of $28,000 only by the end of 2022. And they also attribute this growth with the growth of the US stock market. In their opinion, the Nasdaq-100 and S&P500 indices will be able to recover to January levels by the end of the year and pull bitcoin with them.

The forecast of Nikolaos Panigirtsoglou, a representative of another bank, JPMorgan strategist, looks quite accurate. He admits that the worst of the bear market may be over now, as the strong players in the crypto industry “rescue” the weak ones to contain the “infection”. The specialist could have in mind the interest of the FTX cryptocurrency exchange in buying the BlockFi landing platform. The media also mentioned the online broker Robinhood as a target for the takeover. Previously, the FTX exchange supported the cryptocurrency broker Voyager Digital. Panigirtzoglou also added that "the echoes of the deleveraging process will continue for some time yet," citing the default of hedge fund Three Arrows Capital.

Crypto trader Rekt Capital is waiting for the market to run out of sellers at some point, and long-term investors will be able to buy BTC in a price range that offers the maximum reward. “Historically, the 200-week moving average has been considered a bottom indicator for BTC. Things may be a little different in the current cycle. Instead of bottoming out at the SMA200, bitcoin could form a macro range below it. In fact, anything below will represent a peak buying opportunity,” wrote Rekt Capital.

The trader noted that while bitcoin remains in a strong downtrend, the prerequisites for a new bull cycle will eventually open up: “Bitcoin may still be in the acceleration phase downtrend, and it will precede the stage of multi-month consolidation, followed by the stage of a new upward macro trend.”

All of the above forecasts indicate that it will take at least several months to wait for a new bullish rally. But former stockbroker Jordan Belfort advises to be patient not for months, but for years. “If you look beyond the 24-month horizon, you can definitely make money if you're lucky. If you take a three- or five-year period, I will be shocked if you do not make money, because the basic principles of bitcoin are unshakable,” he said, explaining that the supply of the first cryptocurrency is limited to 21 million digital coins, and inflation in the world continues to grow.

Recall that earlier Jordan Belfort was convicted of fraud related to the securities market. His memoir inspired director Martin Scorsese to create the famous film The Wolf of Wall Street. But if earlier this broker violated the law, now he actively advocates for a clear regulation of crypto assets.

Charlie Erith, CEO of investment firm ByteTree, shared a view similar to Belfort’s. Like The Wolf of Wall Street, he looked far into the future, identifying bitcoin and gold as important components of long-term investment portfolios. Not because they are guaranteed to increase in price, but because they work as insurance against mistakes in an era of inflation. However, according to the financier, much will depend on the policy of the US Federal Reserve and other central banks.


NordFX Analytical Group


Notice: These materials should not be deemed a recommendation for investment or guidance for working on financial markets: they are for informative purposes only. Trading on financial markets is risky and can lead to a loss of money deposited.

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18attention Re: Daily Market Analysis from NordFX Mon Jul 04, 2022 5:51 pm

Stan NordFX



NordFX Super Lottery: First 54 Prizes Worth $20,000 Drawn


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The first draw of the Super Lottery by brokerage NordFX took place on July 4, 2022. It was online, and anyone could follow the prize draw on the Internet. The video of the draw has been posted on the company's official YouTube channel.

Draw No. 1 included tickets credited to NordFX clients from March 01 to June 30, 2022. There were 54 prizes for a total of $20,000.

According to the rules, the prize funds can be used by the lottery winner in trading or withdrawn from the account at any time by any of the available methods and without any restrictions.

The next draws will take place on October 06, 2022 (tickets accrued from March 01 to September 30, 2022, prize fund $20,000), and on January 04, 2023 (tickets accrued from March 01 to December 31, 2022, the prize fund $60,000).

You can enter the lottery and get a chance to win one or even several cash prizes, including two super prizes of $10,000 each, at any time. It is enough to have a Pro account at NordFX (and for those who do not have it - register and open a new one), top it up with $200 and... just trade.

Having made a trading turnover of only 2 lots in Forex currency pairs or gold (or 4 lots in silver), the trader will automatically receive a virtual lottery ticket. The number of such lottery tickets for one participant is not limited. The more deposits and the greater the turnover, the more lottery tickets the participant will have, and the greater the chances of becoming a winner.  Terms of participation are available on the NordFX website.


Notice: These materials should not be deemed a recommendation for investment or guidance for working on financial markets: they are for informative purposes only. Trading on financial markets is risky and can lead to a loss of money deposited.

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https://nordfx.com/

19attention Re: Daily Market Analysis from NordFX Sun Jul 03, 2022 6:41 pm

Stan NordFX



Forex and Cryptocurrencies Forecast for July 04 - 08, 2022



EUR/USD: The Dollar Is Gaining Strength Again

The EUR/USD pair moved in a sideways channel of 1.0500-1.0600 for a week and a half. However, it is clear that neither investors nor speculators are interested in such stagnation. But some kind of trigger is needed to break out of it.

The last meeting of the G7 leaders and the NATO summit did not have any particularly loud statements. At both events, a desire was expressed to continue helping Ukraine in its military confrontation with Russia, and the NATO bloc was replenished with two new members, Sweden and Finland. But these results were not enough to somehow influence the quotes of the dollar and the euro.

The trigger for the strengthening of the dollar, which forced the EUR/USD pair to go south on Tuesday, June 28 and break through the lower limit of the channel the next day, was the growth in demand for protective assets amid concerns about the prospects for the world economy. And taking into account the fact that the American currency has recently acted as a protective asset, the scales have tilted in its direction.

Speaking at the annual forum of the European Central Bank in Sintra, Portugal, ECB President Christine Lagarde said that “inflation expectations in the Eurozone are much higher than before”, that “we are unlikely to return to conditions of low inflation soon”, and that the regulator “will go as far as necessary to reduce inflation to the target of 2%”. Christine Lagarde confirmed that the ECB intends to raise its key interest rate by 0.25% at its meeting on July 21 in order to achieve this goal. However, according to market participants, such a modest step is unlikely to have any serious effect. And the next meeting of the Bank will take place only in autumn, on September 08. So, most likely, inflation will continue to grow during this period.

The speech of US Federal Reserve Chairman Jerome Powell, who participated in the ECB forum as a colleague and guest of honor, was quite different in tone from the words of Christine Lagarde. The American assured the audience that the US economy is in a good position to cope with the active tightening of monetary policy, which is being implemented by his department.

The divergence between the ECB's careful monetary policy and the hawkish Fed has always been interpreted by the market in favor of the dollar. The same happened this time as well, and the EUR/USD pair continued its fall.

The European currency was slightly helped by weak macro data from the US in the second half of June 30. The impetus for a temporary rise in the pair was the release of data on GDP, which turned out to be less than expected, falling by 1.6% instead of the expected 1.5%. In addition, statistics showed a slowdown in economic growth rates from 5.5% to 3.5%. Data on basic spending on personal consumption in the United States did not live up to expectations either. Data on applications for unemployment benefits in the United States turned out to be noticeably worse than expected. Thus, the number of initial requests should have been reduced from 233K to 218K. However, their number decreased to only 231 thousand. The situation is similar with repeated requests, which decreased from 1.331K to just 1.328K.

However, all of the above negative factors provided only temporary support to the European currency. Fixing quarterly profit on the dollar did not help it much, and it went on the offensive again on Friday. The publication of data on inflation in the Eurozone, which accelerated from 8.1% to 8.6%, only speeded up the flight of investors to safe assets. As a result, the pair fixed a local bottom at 1.0364 and ended the five-day period at 1.0425.

The votes of experts at the time of writing the review, on the evening of July 01, are divided as follows: 35% side with the bulls, 50% - with the bears, and 15% are neutral. Among the oscillators on D1, 75% are red, 10% are green, and 15% are neutral gray. Trend indicators have 100% on the red side. The nearest resistance is located in the zone 1.0470-1.0500, then the zone 1.0600-1.0615 follows, in case of success the bulls will try to rise to the zone 1.0750-1.0770, the next target is 1.0800. Except for 1.0400, the bears' task number 1 is to break through the support zone 1.0350-1.0364, formed by the lows of May 13 and July 01. If successful, they will move on to storm the 2017 low of 1.0340, below is only 20-year-old support and the cherished goal, 1:1 parity.

This coming week, July 04 is a public holiday in the USA: the country celebrates Independence Day.  Statistics on retail sales in the Eurozone will be released on Wednesday, July 06. The publication on the same day of the ISM index of business activity in the US services sector and the minutes of the June meeting of the FOMC (Federal Open Market Committee) are also noteworthy. A similar minute of the ECB meeting and the ADP report on the level of employment in the US private and non-farm sectors and the number of initial applications for unemployment benefits will be published on Thursday, July 07. And another portion of data from the US labor market will arrive on Friday, October 08, including such important indicators as the unemployment rate and the number of new jobs created outside the agricultural sector (NFP).

GBP/USD: Similarities and Differences with EUR/USD

GBP /USD showed similar dynamics to EUR/USD last week. The reasons for the ups and downs of quotes are also similar. Therefore, it makes no sense to list them again. The pair moved clamped in the side channel 1.2165-1.2325 for a week and a half, and then flew down on June 28. A breakdown of support at 1.2100 increased bearish pressure, and it recorded a two-week low at 1.1975. This was followed by a correction to the north, and the pair finished at 1.2095;

Despite the fact that the euro and the pound behaved similarly against the dollar, there are still differences between them. The position of the Eurozone economy is complicated by a heavy dependence on Russian natural energy, the supply of which is limited due to sanctions imposed on Russia after its invasion of Ukraine. The situation is gradually improving: it became known that the United States bypassed Russia in gas supplies to Europe in June, for the first time. However, the final solution of the energy problem is still far away.

Unlike the EU, the UK's dependence on Russian energy is minimal. However, the strengthening of the British currency is hampered by political instability. Prime Minister Boris Johnson already survived a vote of no confidence in June, with several lawmakers from his own Conservative Party voting against him. In addition, after the by-elections, the party lost two seats in the UK Parliament. Problems associated with Brexit also add nervousness.  The British pound came under additional pressure after MPs approved a bill allowing ministers to cancel part of the Northern Ireland protocol.

As for the country's economy, according to some experts, inflation in the United Kingdom will continue to grow and may exceed 11% by November.

At the moment, 60% of experts believe that the pair GBP/USD will try to consistently test the support of 1.1975 and 1.1932 in the near future. 40%, on the contrary, are waiting for a breakdown of the resistance at 1.2100 and further to the north. Among the trend indicators on D1, the power ratio is 100:0% in favor of the reds. Among the oscillators, the advantage of the bears is slightly less: 75% indicate a fall, the remaining 25% have turned their eyes to the east. Strong support lies at 1.2000, followed by lows of July 01 at 1.1975 and of June 14 at 1.1932. The bears' medium-term target may be the March 2020 low of 1.1409.  In case of growth, the pair will meet resistance in the zones and at the levels of 1.2100, 1.2160-1.2175, 1.2200-1.2235, 1.2300-1.2325, 1.2400-1.2430, 1.2460, then the targets in the area of 1.2500 and 1.2600 follow.

As for the macroeconomic calendar for the UK, we advise you to pay attention to Tuesday, July 05, when the speech of the head of the Bank of England Andrew Bailey is expected. The composite PMI index and the index of business activity in the UK services sector will be published on the same day, and the index of business activity in the construction sector of this country a day later.

USD/JPY: Just a Breather or a Change in Trend?

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USD/JPY hit a new 24-year high last week once again, climbing to a high of 136.99 on Wednesday June 29. However, the difference from the previous high of June 22 is less than 30 points, and the two-week chart already looks more like a sideways channel than an uptrend. Perhaps the strength of the bulls has dried up and they, at least, need a break.

And perhaps, finally, the long-awaited dream of Japanese importers and housewives will come true, and the yen will go on the offensive, regaining the status of a popular safe-haven currency? It's possible. But not guaranteed. The difference between the super-dove monetary policy of the Central Bank of Japan and the distinctly hawkish monetary policy of the US Central Bank is too great.

Most analysts (50%) still expect the pair to move down at least to the 129.50-131.00 zone. 30% of experts vote for the fact that the pair will once again try to renew the maximum and rise above 137.00, and 20% believe that the pair will take a breather, moving in the side channel 134.50-137.00.  For indicators on D1, the picture is very different from the opinion of experts. For oscillators, 65% are colored green (of which 10% are in the overbought zone), the remaining 35% have taken a neutral position. For trend indicators, 65% point north as well, and only 35% point south. The nearest support is located at 134.50-134.75, followed by zones and levels at 134.00, 133.50, 133.00, 132.30, 131.50, 129.70-130.30, 128.60 and 128.00. Apart from overcoming the immediate resistance at 136.00-136.35 and taking the height of 137.00, it is difficult to determine further targets for the bulls. Most often, such round levels as 137.00, 140.00 and 150.00 appear in the forecasts. And if the pair's growth rates remain the same as in the last 3 months, it will be able to reach the 150.00 zone in late August or early September.

No important events, be it the release of macroeconomic statistics or political factors, are expected in Japan this week.

CRYPTOCURRENCIES: Will Bitcoin Drop to $1,100? We look at the US Federal Reserve.

The battle for $20,000 continued throughout the second half of June. The BTC/USD pair fell to $17,940, then rose to $21,940. It should be noted that $20,000 is historically the most important level for the main cryptocurrency. Suffice it to recall the catastrophic crash of December 2017, when bitcoin approached this mark, reaching a height of $19,270, and then collapsed by 84%. Many experts expect something similar now, predicting a further fall of another 50-80% for the BTC/USD pair. And Robert Kiyosaki, author of the bestselling book Rich Dad Poor Dad, predicts an even more powerful collapse of bitcoin, by 95%, to $1,100.

In the meantime (Friday evening, July 01), the coin is trading in the $19,440 zone. The total capitalization of the crypto market at this moment is $0.876 trillion ($0.960 trillion a week ago). The Crypto Fear & Greed Index, like a week ago, is in the Extreme Fear zone at around 11 points out of 100 possible.

If you look at the charts, you can see that the bears had a clear advantage over the past week. And, in fairness, we note that bitcoin itself is not really to blame for this. It's all about the strengthening of the dollar, which is growing due to the rise in rates and the tightening of the monetary policy of the US Central Bank. In such a situation, investors prefer to get rid of risky assets by purchasing US currency. Global stock markets are under pressure from sellers, the MSCI World and MSCI EM indices are going down, showing the situation in developed and emerging markets, respectively. Among the developed markets, the main pressure fell on the European sites, but did not bypass he US either: the S&P500, Dow Jones and Nasdaq Composite, with which BTC is in direct correlation, are also moving south.

Additional downward pressure on the quotes of the first cryptocurrency is exerted by mining companies in need of liquidity. According to JPMorgan bank strategist Nikolaos Panigirtzoglou, this situation will continue in Q3 of 2022. According to the expert's calculations, public mining companies account for about 20% of the hash rate. Many of them sold bitcoins to cover operating expenses and service loans. Due to the more limited access to capital, private miners took similar steps as well. “Unloading will continue in Q3, if the profitability of production does not improve. This was already evident in May and June. There is a risk that the process will continue,” the JPMorgan strategist believes.

According to Bloomberg, the cost of mining 1 BTC from $18,000-$20,000 at the beginning of the year dropped to about $15,000 in June due to the introduction of more energy-efficient equipment. However, it is not yet clear whether this will be enough for the stable functioning of the miners.

The recession in the cryptocurrency market will last for about 18 more months, and the industry will see the first signs of recovery after the easing of the Fed’s monetary policy. This was stated by the head and founder of the Galaxy Digital crypto bank Mike Novogratz in an interview with New York Magazine. “I hope we have already seen the worst. I would be more confident about this if I knew what inflation would be like in the next two quarters. [...] I think the Fed will have to abandon the rate hike by the fall, and I believe that will make people calm down and start building again,” said the head of Galaxy Digital.

According to Novogratz, the crisis has changed people's attitudes towards high-risk assets like cryptocurrencies. He noted that the past few months have shown the industry's dependence on leverage, which no one knew about. And it will take time now for the bankruptcy of weak players and the sale of collapsed assets. According to the head of Galaxy Digital, the situation is similar to the global financial crisis of 2008, followed by a wave of consolidation in the investment and banking industries.

Crypto analyst Benjamin Cowen doubts that the forecasts for a high BTC rate for 2023 can come true. In particular, he spoke about the forecast of venture capital investor Tim Draper, according to which the price of bitcoin could grow by more than 1000% from current levels and reach $250,000.

“I used to believe that BTC would be above $100,000 by 2023, but now I am skeptical about this idea. Especially after the Fed's policy has changed so much over the past six months,” Cowen wrote. "I also look at other things, like social media statistics, and I see that the number of people interested in cryptocurrencies is in a downtrend. If it is difficult for people to buy gasoline, it will be even more difficult to buy bitcoin.”

Instead of a huge rally, Cowen predicts an uninteresting BTC market over the next two years: “I think the bear market will end this year, and then the accumulation phase will begin, as in 2015 and 2019. Then there will be slow preparations for the next bitcoin halving, and the Fed may lower interest rates due to the victory over inflation during this period.”

It is clear that many forecasts depend on the models, indicators and other analysis tools used. For example, we wrote a week ago how the creator of The Daily Gwei, Anthony Sassano, and the co-founder of Ethereum, Vitalik Buterin, criticized the Stock-to-Flow (S2F) model, on the basis of which a popular analyst aka PlanB issued his forecasts. Following criticism, PlanB has unveiled a chart of not one, but five different forecasting models. Indeed, S2F showed an overly optimistic view. The most accurate picture was given by estimates based on the complexity and costs of mining the first cryptocurrency.

Another analyst named Dave the Wave uses a logarithmic growth curve (LGC) model and believes that BTC can grow by 1100% within 4 years and reach $260,000. In the short term, Dave the Wave predicts the possibility of bitcoin rising to $25,000.

According to the cryptanalytic platform CryptoQuant, most cyclical indicators (Bitcoin Puell Multiple, MVRV, SOPR and the MPI BTC Miner Position Index) indicate that bitcoin is close to the bottom. The readings of these indicators are based on a historical pattern that has preceded an uptrend several times. Indicators also suggest that bitcoin is currently undervalued, signaling an imminent rally. A significant amount of unrealized losses confirms this forecast.

Anthony Scaramucci, the founder of SkyBridge Capital investment fund, also said that the first cryptocurrency is “technically oversold”. He made this conclusion by analyzing the current BTC price in the context of an exponential growth in wallet activity and an increase in the number of use cases. At the same time, the hedge fund manager advised investors to evaluate bitcoin in retrospect. With this approach, the asset will turn out to be "very cheap due to excess leverage, which is worth taking advantage of."

We talked at the end of the previous review about another “forecasting model” presented by the President of El Salvador, Nayib Bukele. “My advice is to stop looking at charts and enjoy your life. If you have invested in BTC, your investment is safe, its value will rise immeasurably after the end of the bear market. The main thing is patience,” the head of state wrote.

And now Yifan He, CEO of Chinese blockchain company Red Date Technology, has responded to this advice. He compared cryptocurrencies to financial pyramids and stated that the authorities of El Salvador and the Central African Republic (CAR), who decided to legalize bitcoin, are in serious need of basic education in finance. According to He, the leaders of these states put entire countries at risk, unless their original intention was to fraud their own citizens. It is not yet known whether Naib Bukele was offended by such words. We will follow the news.


NordFX Analytical Group


Notice: These materials should not be deemed a recommendation for investment or guidance for working on financial markets: they are for informative purposes only. Trading on financial markets is risky and can lead to a loss of money deposited.

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20attention Re: Daily Market Analysis from NordFX Fri Jul 01, 2022 5:20 pm

Stan NordFX



June Results: NordFX's Most Prolific Trader and Partner Earned 24,000 USD Each


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NordFX Brokerage company has summed up the performance of its clients' trade transactions in June 2022. The services of social trading, PAMM and CopyTrading, as well as the profit received by the company's IB-partners have also been assessed.

The highest profit in June was received by a client from Southeast Asia, account No. 1620XXX, whose profit amounted to 24,665 USD. This solid result was achieved thanks to trades in gold (XAU/USD).

The second place in the rating of the most successful traders of the month was occupied by their compatriot, account No. 1552XXX, who earned 11,405 USD on transactions in the USD/JPY currency pair.

The third place on the June podium went to the representative of East Asia (account No. 1440XXX), whose result of 10,904 USD was also achieved through transactions with gold (XAU/USD).

The situation in NordFX passive investment services is as follows:

- in CopyTrading, the “veteran” KennyFXPRO - Journey of $205 to $5,000 signal is again noticeable, which has shown a profit of 345% over the period since March 2021 with a maximum drawdown of about 67%. At the same time, it should be noted that this drawdown occurred quite a long time ago, in mid-October 2021. Other signals from this provider include KennyFXPRO - Prismo 2K (for 422 days of its life, the profit on it was 157% with a drawdown of just over 45%) and KennyFXPRO - The Cannon Ball. This signal appeared on the CopyTrading showcase 90 days ago, the trading style is non-aggressive, the profit is moderate, about 25%, but the drawdown is less than 7%. Favorite pairs are still the same: AUD/NZD (58%), NZD/CAD (36%) and AUD/CAD (16%).
Quite a few interesting signals have recently appeared among startups. Here are just a few of them: TraderViet9999 (profit 39% / max drawdown 7% / life days15), Ăn ít no lâu dài (34%/11%/49), BSTAR (46%/14%/132), Tịnh Tâm -CN88 (65%/20%/10). JFX TRADING - GOLD SIGNAL (76%/23%/16), Tịnh Tâm- CN88 (64%/20%/10). These signals have quite impressive results. However, it should be understood that they have been achieved thanks to very aggressive trading. Therefore, if someone decides to subscribe, be sure to take the risk factors into account. One of the main factors in this case is a very short lifetime of these signals.

- The TOP-3 in the PAMM service has not changed over the past month. The leader is still the same manager under the nickname KennyFXPRO. In 521 days on his KennyFXPRO-The Multi 3000 EA account, they increased their capital by 118%. Also, in the top three remain: the account TranquilityFX-The Genesis v3, which has shown a profit of 89% in 453 days, and the account NKFX-Ninja 136, which has generated a 76% return since June 11, 2021.
There are two more accounts that we have paid attention to. The first one, COEX.Investment – Treis, has shown a profit of 39% from October 31, 2021. The second one, Ultimate.Duo-Safe Haven, has started relatively recently, at the end of February. It has made a profit of about 29% during this time. The maximum drawdown on all five listed accounts is quite moderate, about 20%.

Among the IB partners, NordFX TOP-3 is as follows:
- the largest commission amount, 24,700 USD, was credited in June to a partner from Southeast Asia, account No. 1371XXX;
- next is a partner from South Asia, account No.1259XXX, who received 4,981 USD;
- and, finally, a partner from South Asia, account No. 1565ХХХ, who received 4,930 USD as a reward, closes the top three.


Notice: These materials should not be deemed a recommendation for investment or guidance for working on financial markets: they are for informative purposes only. Trading on financial markets is risky and can lead to a loss of money deposited.

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https://nordfx.com/

21attention Re: Daily Market Analysis from NordFX Sat Jun 25, 2022 1:34 pm

Stan NordFX



Forex and Cryptocurrency Forecast for June 27 - July 1, 2022



EUR/USD: Just a Calm Week

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The last week was quite calm for the EUR/USD pair. It moved along the Pivot Point 1.0500, and the maximum range of fluctuations was less than 140 points (1.0468-1.0605), which is quite small for today.

President Joe Biden's appeal to the US Congress, with the exception of a proposal to introduce a tax holiday on fuel for 3 months, was, in fact, about nothing. And the federal tax on gasoline is only 18 cents per gallon, which is less than 4%. So, in such a short period of time, this measure will not have any effect on the economy, much less tame inflation.

As for the Fed, its head Jerome Powell, speaking in Congress, did not say anything new either. He only confirmed that, despite the threat of a recession, his organization will continue to fight inflation by tightening monetary policy. These intentions were also confirmed by Powell's colleague Michelle Bowman, a member of the Fed's Board of Governors, who stated that raising the key rate by 0.75% in July and by at least 0.50% at the next few meetings of the FOMC (Federal Open Market Committee) is not only appropriate, but also necessary.

There were no surprises in the words of both officials, and the markets, apparently, have already included this increase in their quotes for a long time. However, the yield on 10-year US bonds corrected against this backdrop to the lowest level in the last two weeks, falling from 3.5% to 3%. Stock Markets (S&P500, Dow Jones and Nasdaq), as well as other risky assets, on the contrary, grew slightly. This was facilitated by the absence of any significant events on the Ukrainian-Russian front and the associated decline in prices for natural energy resources. So, for example, the cost of oil has decreased by about 10-13% over the past 10 days.

The macro statistics released on Thursday, June 23, although caused an increase in volatility initially, eventually returned the EUR/USD pair to the equilibrium point like a swing. The reason is that business activity in both the EU and the US turned out to be noticeably worse than expected. In the Eurozone, the index of business activity in the manufacturing sector, according to the forecast, should have decreased from 54.6 to 54.0, but actually fell to 52.0 points. The index of business activity in the services sector has similar indicators: it fell from 56.1 to 52.8 instead of the expected 55.8 points. Thus, the composite index Markit lost 2.9 points instead of 0.6, falling from 54.8 to 51.9 (forecast 54.2).

Following the European one, the similar American statistics came out, which turned out to be no less disappointing. Thus, the index of business activity in the manufacturing sector fell by as much as 4.6 points to 52.4 (previous value 57.0, forecast 56.0). A similar indicator in the service sector turned out to be slightly better: a drop from 53.4 to 51.6 points (forecast 53.0). As a result, the composite index of business activity decreased from 53.6 to 51.2 points, instead of the forecasted 52.8 points.

EUR/USD ended the trading session at 1.0555. At the time of writing the review, on the evening of June 24, the votes of experts are divided as follows: 35% side with the bulls, 55% - with the bears, and 10% cannot decide on the forecast. The readings of the indicators on D1 look quite chaotic. Among the oscillators, 35% are colored red, 25% are green and 40% are neutral gray. Among the trend indicators, 60% are red and 40% are green. The nearest strong resistance is located in the 1.0600 zone, if successful, the bulls will try to break through the 1.0640 resistance and rise to the 1.0750-1.0770 zone, the next target is 1.0800. Apart from 1.0500, the number 1 task for the bears is to break through the support around 1.0470, and then update the May 13 low at 1.0350. If successful, they will move on to storm the 2017 low of 1.0340, there is only support from 20 years ago below.

As for the upcoming week, data on the US consumer market will be released on Monday June 27, the German consumer market data on June 29 and 30, and Eurozone consumer prices (CPI) on Friday July 01. The value of the US Manufacturing PMI will be published on July 01 as well. In addition, it is worth paying attention to the data on US GDP (Q1), which will become known on June 29. In addition, a whole series of speeches by the head of the ECB, Christine Lagarde, is scheduled for the week: she will speak on June 27, 28 and 29. There will also be a performance by her overseas colleague Jerome Powell, but only one, on Wednesday, June 29.

GBP/USD: Looking for Drivers

Having started the five-day period at 1.2216, the GBP/USD pair ends it at 1.2280. And if in the period from June 13 to June 17, the maximum range of fluctuations exceeded 470 points, it was 3 times less last week, keeping within just 160 points. This lull was caused largely by the absence of high-profile macroeconomic events. However, it also suggests that the market cannot decide what to do with the pound, and is looking for drivers that can move the pair in one direction or another.

According to some analysts, the strengthening of the British currency is hindered by political instability. Prime Minister Boris Johnson already survived a vote of no confidence in June, with several lawmakers from his own Conservative Party voting against him. In addition, after the by-elections, the party lost two seats in the UK Parliament.

In terms of the national economy, retail sales fell 0.5% m/m in May according to the Office for National Statistics. This turned out to be slightly better than market expectations, which predicted a decline of 0.7%. But it did not help the British currency much, as the annual figure reached 9.1%, updating the 40-year high. The main contribution to the growth of inflation was made by the increase in prices for fuel and food products.

According to some experts, inflation in the United Kingdom will continue to grow and may exceed 11% by November. It is clear that this causes discontent among the population, as it reduces the level of income, depreciates savings, and also undermines the current purchasing power. To combat this evil, the Bank of England (BOE) raised its key rate from 1.00% to 1.25% on June 16. As a result, the British currency gained 365 points in just a few hours. But can the regulator, just like the US Federal Reserve, not be afraid of the economy slipping into recession and continue to regularly increase the cost of borrowing? Many traders and investors doubt this.

At the moment, 40% of experts believe that the GBP/USD pair will try to test the resistance of 1.2400 again in the near future, 25%, on the contrary, are waiting for a support test in the 1.2170-1.2200 area, the remaining 35% of analysts have taken a neutral position.

Among the trend indicators on D1, the balance of power is 75-25% in favor of the reds. There is no such clear advantage among oscillators: only 45% are pointing to a fall, 25% are looking in the opposite direction, and the remaining 30% are looking east. Supports are located at levels 1.2170-1.2200, then 1.2075 and 1.2040. The pair's strong foothold lies at the psychologically important 1.2000 level, followed by the June 14 low at 1.1932. In case of growth, the pair will meet resistance in the zones and at the levels of 1.2300-1.2325, 1.2400-1.2430, 1.2460, then the targets in the area of 1.2500 and 1.2600 follow.

As for the macroeconomic events of the coming week regarding the United Kingdom, we can highlight the publication of data on the country's GDP for the Q1 2022 on Thursday, June 30. The speech of the Governor of the Bank of England Andrew Bailey, which will take place the day before, on Wednesday, June 29, may also be of interest. And the business activity index (PMI) in the UK manufacturing sector will be published at the very end of the working week, on Friday, July 01.

USD/JPY: "Head" and "Shoulders" Are Visible. What's next?

The USD/JPY formed a classic technical analysis head and shoulders pattern over the past week. Starting from 134.95, it rose to the height of 136.70, then rolled back to the local low of 134.25, and finished at 135.20.

The divergence between the monetary policies of the Bank of Japan and the US Federal Reserve helped to update the 24-year high once again, having risen to 136.70 on Wednesday, June 22. We have already written about this many times. As for the subsequent rollback down, the reason is most likely the June decline in world prices for mineral fuels, on which the country's economy is highly dependent, as well as the fall in the yield of 10-year US Treasuries.

It is common knowledge that there is a direct correlation between 10-year US Treasury bills and the USD/JPY currency pair. And if the yield of these securities falls, the yen shows growth against the dollar, and the USD/JPY pair forms a downtrend. This is what we observed in the second half of the week, when the yield on government bonds fell to 3%.

Reuters reported that Japan's annual core consumer inflation in May exceeded the central bank's target of 2% in May for the second consecutive month. Which is a signal of increasing pressure on the fragile Japanese economy due to rising world prices for raw materials.

A number of experts believe that the forecast of the Bank of Japan (BOJ) about the temporary nature of price growth is incorrect. Hence, the “super-dove” monetary policy of the regulator is wrong. Rising fuel and food prices driven by Russia's invasion of Ukraine and a weak yen that pushes up the cost of imports could keep inflation above the Bank of Japan's target for much of 2022, these analysts said.

Japanese officials do not deny this problem. Thus, the Government and the Bank of Japan issued a joint statement on June 17 stating that they are concerned about the sharp fall in the national currency. Seiji Kihara, Deputy Chief Cabinet Secretary of Japan, also said that the impact of inflation on consumer sentiment will be closely monitored. However, according to Masayoshi Amamiya, Deputy Governor of the Japanese Central Bank, the country's economy is gaining momentum, so the BOJ will continue to adhere to a relaxed monetary credit policy.

Considering the above, the general fundamental background remains on the side of the USD/JPY bulls, and its current decline can be regarded as a correction from the previous multi-year highs, which was caused by lower fuel prices and a drop in Treasury yields.

Most analysts (50%) expect the correction to continue at least to the level of 133.00-133.50. 30% of experts have voted for the fact that the pair will once again try to renew the high and rise above 137.00, and 20% believe that the pair will take a breather, moving in a sideways trend. For indicators on D1, the picture is very different from the opinion of experts. 85% of the oscillators are colored green (of which 10% are in the overbought zone), the remaining 15% have taken a neutral position. For trend indicators, 85% point north and only 15% look south. The nearest support is located at 134.40, followed by zones and levels at 134.00, 133.50, 133.00, 132.30, 131.50, 129.70-130.30, 128.60 and 128.00. Apart from breaking the immediate resistance at 135.40 and the June 22 high at 136.70, further targets for the bulls are difficult to determine. Most often, such round levels as 137.00, 140.00 and 150.00 appear in the forecasts. And if the pair's growth rates remain the same as in the last 3 months, it will be able to reach the 150.00 zone in late August or early September.

As for the calendar for the coming week, we can mark Friday, July 01, when Tankan (Q2) sentiment indexes of large manufacturers and large non-manufacturing companies in Japan will be published.

CRYPTOCURRENCIES: BTC Forecast from the President of El Salvador

We called the last review "Bloodbath or $20,000 Battle". As for the past week, there was not much blood this time, but the battle for $20,000, as predicted, did not subside. The week's low was fixed at $17,597, the maximum at $21,667, and the BTC/USD pair met Saturday, June 25, at $21,350. At this point, the total crypto market capitalization was $0.960 trillion ($0.895 trillion a week ago). The Crypto Fear & Greed Index is still not going to leave the Extreme Fear zone and is at around 11 points out of 100 possible (7 points a week ago).

The general mood of the market is fully consistent with this Extreme Fear. The Internet is talking again about the death of bitcoin. According to Google Trends, the number of search queries on this topic has returned to its maximum levels, close to December 2017. Recall that at that moment, approaching the coveted $20,000, the main cryptocurrency turned around and flew down, losing more than 40% of its value in a few days. The only difference with that long-standing situation is that bitcoin was approaching the $20,000 level from below then, and it is from above now. And the market was looking for a top then, and for a bottom now. Moreover, according to a number of influencers, it is not at all necessary that the bottom is at this particular mark.

So, according to Peter Schiff, Euro Pacific Capital President, a well-known cryptocurrency critic, “so far, there are no signs of surrender, which usually forms the bottom of the bearish market”. According to this gold supporter, the $20,000 mark will be the same “bull trap” as the $30,000 level was before. “Nothing falls in a straight line. It's actually a very ordered crash in slow motion," Schiff said. Recall that he predicted back in May that bitcoin would test $8,000. And he suggested in mid-June that the minimum could be even lower, around $5,000.

According to the president of Euro Pacific Capital, the collapse of the cryptocurrency market will be good for the economy. Kevin O'Leary, co-host of the business TV show Shark Tank, made a similar point. He believes that one should not be afraid of the bankruptcy of large companies during the crypto winter. “This is good for all other companies as they will learn from this. I think we will soon see a wave of bankruptcies in the cryptocurrency market. I don't know who it will be. Later you will recognize those who have taken a high-risk position. But I assure you I have seen this before. They have been destroyed, and that's good,” said the millionaire.

The InvestAnswers crypto channel, in turn, named 3 possible catalysts for a further market collapse. The BTC price may fall even more if MicroStrategy CEO Michael Saylor decides to sell the bitcoins in the company's reserves. In addition, the potential collapse of the stablecoin Tether (USDT) and the problems of the cryptocurrency hedge fund Three Arrows Capital may also contribute to further capitulation of BTC. According to InvestAnswers, we should not forget about the possible sale of crypto assets by Tesla.

MicroStrategy reported a $1.2 billion loss last week due to the fall of bitcoin. As for the Three Arrows Capital fund, it now has about $2.4 billion left in assets out of $18 billion.

Big problems are experienced not only by investors, but also by miners. Due to the fall in the price of BTC and the increase in computational complexity, the total return from mining is now 65% lower than the average for the year. At the same time, the efficiency of the Antminer S19 ASIC from Bitmain is 80% worse than the level of November 2021, and the popular S9 model has lost profitability altogether. This situation has led to the fact that mining companies are forced to sell their BTC holdings in order to pay off loans and cover current operating costs, which puts pressure on the market. Their remaining reserves are estimated at 46,000 coins (about $920 million). In the event that these bitcoins are also thrown into sale, quotes will certainly fall further down.

An analyst aka Capo, who had correctly predicted the collapse of the cryptocurrency market this year, updated his forecast. In his opinion, BTC expects a decline to $16,200, and ETH to $750. According to Capo, investors are fooling themselves into believing that a short-term rally means bitcoin is bottoming the cycle: “Bull trap. Funds from altcoins flow into BTC, which will also be sold, but a little later. There is no bottom yet,” he said.

According to another specialist, crypto strategist Kevin Svenson, bitcoin has a chance to bottom in the $17,000-18,000 range, after which a short-term rally to above $30,000 may occur. At the same time, although Svenson expects this short-term growth, he does not see the prerequisites for launching a new bull market in the near future: “Overcoming the main downward resistance is the main obstacle and the process may last until the end of the year.” According to the strategist, after the breakthrough of the diagonal resistance, bitcoin can trade in a narrow range for several months and start a new uptrend only by 2024 year.

Despite the low current rate of bitcoin, many participants in the crypto industry believe in its future growth. For example, there is a belief that BTC could reach $100,000 by 2025. One of those who supported such optimism was an analyst called PlanB, who built his forecasts based on the Stock-to-Flow (S2F) model. This model worked well for three years until March 2022, after which it failed.

The Daily Gwei creator Anthony Sassano and Ethereum co-founder Vitalik Buterin have recently criticized S2F, advising PlanB to delete their account.

The analyst reacted to criticism with restraint. He said that in the aftermath of the crash, many are looking for scapegoats, including leaders. PlanB then presented a graph of five different BTC price prediction models. According to the illustration, the most accurate picture is given by estimates based on the complexity and cost of mining the first cryptocurrency. The S2F model, in turn, offers an overly optimistic view.

Another expert, Benjamin Cowen, proposed his bitcoin bottoming model. He believes that the bottom can be predicted based on the correlation of inflation, the S&P 500 stock index and the BTC price. The analyst argues that the S&P 500 index does not historically sink to the very bottom until inflation peaks and reverses. Accordingly, BTC cannot reach the bottom for the same reason. “Macroeconomic indicators look incredibly bleak at the moment. If you go back to the 1970s, you'll see a very similar type of move where the S&P bottomed just as inflation hit its first peak. By this point, the S&P was down about 50%,” writes Cowen.

And to conclude the review, one more “prediction model”, which we put in our humorous crypto life hacks section. It was presented by the President of El Salvador, Nayib Bukele. “My advice is to stop looking at charts and enjoy your life. If you have invested in BTC, your investment is safe, its value will rise immeasurably after the end of the bear market. The main thing is patience,” he wrote. For reference, there are 2,301 BTC in El Salvador's public bitcoin fund, purchased at an average price of $43,900. Thus, at the moment, the loss on them is about 55%. But, according to the "model" of Nayiba Bukele, this "trifle" should not be paid attention to. The main thing is to get the most out of life!


NordFX Analytical Group


Notice: These materials should not be deemed a recommendation for investment or guidance for working on financial markets: they are for informative purposes only. Trading on financial markets is risky and can lead to a loss of money deposited.

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https://nordfx.com/

22attention Re: Daily Market Analysis from NordFX Sun Jun 19, 2022 12:36 pm

Stan NordFX



Forex and Cryptocurrency Forecast for June 20 - 24, 2022



EUR/USD: Fed FOMC Meeting Results

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Last week's events were based on Friday, June 10, when US inflation statistics were released, which amounted to 8.6% against the expected 8.3%. Having learned these disturbing data, market participants began to include in dollar quotes the possibility of raising the interest rate by 0.75% instead of the previously predicted 0.5%. Some hotheads even talked about its increase by 1.0% straight away. As a result, the FOMC (Federal Open Market Committee) at its meeting on Wednesday, June 15, raised the key rate to 1.75%, that is, by 0.75%.

According to Fed Chairman Jerome Powell, this was the most aggressive round of monetary tightening since 1994. Moreover, the US Central Bank, despite the threat of a recession, intends to follow the chosen course further, raising the rate by another 50 or 75 basis points at the next meeting.

Following the FOMC meeting, the inflation estimates for 2022 were revised from 3.4% to 5.2%, and the forecast for the key rate was raised from 1.9% to 3.4%. At the same time, Jerome Powell hopes that this will not be a shock to the economy, given the strength of the consumer sector and the US labor market. True, despite the optimism of the head of the Fed, the expected rate of economic growth for 2022 was reduced from 2.8% to 1.7%, and the forecast for the unemployment rate, on the contrary, was raised from 3.5% to 3.7%.

In general, Jerome Powell's comments on the regulator's plans turned out to be rather vague, and the market did not understand how strong quantitative tightening (QT) would be and what the prospect of raising the federal funds rate to 4.0% was. As the head of the Fed said, "a rate hike of 75 basis points is unusually large," so he does not think "such hikes will happen often."

As a result, the DXY dollar index reached its maximum (105.47), and the EUR/USD pair reached its minimum (1.0358) not following the FOMC meeting, but directly during it. The reason for the rapid strengthening of the dollar at the beginning of the week was not only the expectations of an unprecedented rate hike, but also poor macroeconomic statistics from Europe. The rate of decline in industrial production in the Eurozone accelerated from -0.5% to -2.0%, although it had been expected that they would slow down on the contrary. The main reason is still the energy crisis caused by anti-Russian sanctions due to Russia's military invasion of Ukraine.

The dollar seemed to have exhausted its upside potential on the evening of June 15, resulting in a rapid bounce on June 16, sending EUR/USD soaring to 1.0600. As for the last day of the working week, the trend changed again after the ECB promised new support to contain the cost of borrowing among the southern countries of the Eurozone. The pair placed the final chord of the five-day period in the zone of 1.0500, at the level of 1.0495.

Many analysts believe that the US and European currencies will reach 1:1 parity by the end of the year (or maybe even earlier). In the meantime, the votes of experts are divided as follows on the evening of June 17: 30% side with the bulls, 20% - with the bears, and 50% cannot decide on the forecast. The indicators on D1 give quite unambiguous signals. Among oscillators, 100% are colored red, among trend indicators, 90% are red and 10% are green. Except for 1.0500, the nearest strong resistance is located in the 1.0600 zone, if successful, the bulls will try to break through the 1.0640 resistance and rise to the 1.0750-1.0760 zone, the next target is 1.0800. For the bears, task number 1 is to break through the support in the 1.0460-1.0480 area, and then update the May 13 low at 1.0350. If successful, they will move on to storm the 2017 low of 1.0340, there is only support from 20 years ago below.

As for the events of the upcoming week, Monday, June 20 is a public holiday in the US, the country celebrates Juneteenth. Data from the housing market will come on Tuesday, June 21 and Friday, June 24, and from the US labor market on Thursday. In addition, we will have two speeches by Fed Chairman Jerome Powell in Congress on June 22 and 23. Also we recommend paying attention to the publication of data on business activity in Germany and the Eurozone as a whole on June 23.

GBP/USD: A Pleasant Surprise from BoE

Ahead of the US Fed meeting, the dollar appreciated against the pound by 585 points in just 3 business days, from June 10 to 14, and the GBP/USD pair fell to 1.1932, the lowest level since March 2020. But then the regulator of the United Kingdom stepped in.

At its meeting on Thursday, June 16, the Bank of England (BoE) raised its key rate from 1.00% to 1.25%. It would seem that 25 basis points is only a third of the 75 bp that the Fed raised the rate the day before, but the pound flew up and the pair fixed a local high at 1.2405. The British currency strengthened by 365 points in just a few hours.

The reason for this rally, as often happens, is expectations. First, 3 out of 9 members of the Bank's Management Board supported an increase in the refinancing rate not by 25, but by 50 basis points at once. And secondly, the comments published after the meeting clearly indicated the possibility of accelerating the pace of tightening of monetary policy, starting from the next meeting of the regulator. That is, the rate may reach 1.75%, as early as August 4, which is significantly higher than market forecasts. In addition, the Bank of England intends not to stop there and raise interest rates further.

In contrast to the Fed's vague comments, the BoE was clear enough about its monetary policy that made a positive impression on investors. Analysts also noted that, unlike their colleagues on the other side of the Atlantic, the Bank of England leaders did not shift all the blame for rising inflation to China and Russia.

The pound retreated from the gained positions at the end of the week, and the pair ended the trading session at the level of 1.2215. At the moment, 50% of experts believe that in the near future the pair will try to test the resistance at 1.2400 again, 10%, on the contrary, are waiting for a test of support around 1.2040, the remaining 40% of analysts have taken a neutral position.

Both among trend indicators and among oscillators, 90% indicate a fall, while the remaining 10% look in the opposite direction. Supports are located at the levels 1.2155-1.2170, then 1.2075 and 1.2040. The pair's strong foothold lies at the psychologically important 1.2000 level, followed by the June 14 low at 1.1932. In case of growth, the pair will meet resistance in the zones and at the levels of 1.2255, 1.2300-1.2325, 1.2400-1.2430, 1.2460, then the targets in the area of 1.2500 and 1.2600 follow.

Among the macroeconomic events of the upcoming week concerning the United Kingdom, we can highlight the publication of the May value of the Consumer Price Index (CPI) on Wednesday, June 22, and of a whole package of PMI Indices, reflecting business activity in individual sectors and in the economy of the country generally the next day, on June 23. Retail sales in the UK for May will be announced on Friday, June 24.

USD/JPY: No Surprises from the Bank of Japan

Rising dollar pushes USD/JPY again and again to fresh 20-year highs. Last week, having reached the height of 135.58, it broke the January 01, 2002 record of 135.19. This was followed by a powerful pullback to the level of 131.48 and a no less powerful new upswing, after which the pair finished near the level of 135.00, at around 134.95.

A weak yen, especially in the face of high inflation, is a big problem not only for households, but for the entire Japanese economy, as it increases the cost of raw materials and natural energy imported into the country. However, the Bank of Japan is stubborn to maintain its ultra-soft monetary policy, in contrast to the sharp tightening by the Central banks of other countries. After the US Federal Reserve, the Swiss National Bank and the Bank of England raised interest rates last week, the Japanese Central Bank left its rate at the previous negative level - minus 0.1% at its meeting on Friday June 17, while promising to maintain the yield of 10-year government bonds at around 0%. There have been several attempts to test the 0.25% yield on government debt over the past weeks, but aggressive buybacks of these securities immediately followed in response.

Japanese officials tried to give some support to the yen on the morning of June 17. The government and the Bank of Japan issued a joint (rarely seen) statement that they were concerned about the sharp fall in the national currency. These words were supposed to indicate to investors that the possibility of adjusting monetary policy is not ruled out at some point. But there was not a word in the statement about when and how this could happen, so the market reaction to it was close to zero.

A number of specialists, such as, for example, strategists at the largest banking group in the Netherlands ING, believe that there is still “an increased risk that USD/JPY will significantly exceed 135.00 in the coming days if the Japanese authorities do not step up and carry out currency intervention”.

Most analysts (55%) have long been waiting for the intervention of the authorities, or at least a revival of interest in the yen as a safe-haven currency. However, this forecast has not come true for several weeks. Although it is possible that a strong correction will be repeated, as happened on June 15-16, when the pair fell by 410 points. 35% of experts are counting on updating the high at 135.58, and 10% believe that the pair will take a breather, moving in a sideways trend. For indicators on D1, the picture is very different from the opinion of experts. For trend indicators, all 100% are colored green, for oscillators, 90% of them are, 10% of which are in the overbought zone, and another 10% vote for the red. The nearest support is located at 134.50, followed by zones and levels at 134.00, 133.50, 133.00, 132.30, 131.50, 129.70-130.30, 128.60 and 128.00. It is difficult to determine the further targets of the bulls after the new update of the January 01, 2002 high. Most often, such round levels as 136.00, 137.00, 140.00 and 150.00 appear in the forecasts. And if the pair's growth rates remain the same as in the last 3 months, it will be able to reach the 150.00 zone in late August or early September.

With the exception of the release of the Bank of Japan Monetary Policy Committee meeting report on Wednesday, June 22, no other major events are expected this week.

CRYPTOCURRENCIES: Bloodbath or the Battle for $20,000

Anthony Scaramucci, founder of $3.5 billion investment fund SkyBridge Capital, called it a "bloodbath." And it's hard to disagree with him.

In total, bitcoin lost 70% between November 11, 2021 and June 15, 2022. It has lost about a third of its value in the past week alone. According to some experts, the trigger this time was the announcement of the crypto-lending platform Celsius Network to suspend the withdrawal of funds, their exchange and transfer between accounts “due to extreme market conditions.” (As of May, the platform managed $11 billion in user assets.)

However, the general negative macroeconomic background is most likely to blame. This opinion was expressed by industry participants in a survey conducted by The Block. Many experts believe that the crypto markets “would have fallen regardless of Celsius.” Bloomberg notes that the market has entered "a period of selling everything except the dollar." Traders are leaving for a "safe harbor" due to more aggressive tightening of the monetary policy of the US Federal Reserve (QT), caused by rising inflation. The market is actively getting rid of risky assets, the S&P500, Dow Jones and Nasdaq stock indices are falling, and bitcoin and other cryptocurrencies along with them.

The price of BTC fell to almost $20,000 on Wednesday June 15, ethereum quotes fell to $1,000, and the capitalization of the crypto market fell to $0.86 trillion. Recall that it had reached $2.97 trillion 7 months ago, in November 2021.

The bear market upsets all investors. But the two largest institutional bitcoin holders have been particularly distinguished. They lost a total of about $1.4 billion on this asset. According to the analytical resource Bitcointreasuries.net, almost 130,000 bitcoins owned by Microstrategy and 43,200 bitcoins owned by Tesla made their owners significantly poorer (we are talking about an unrealized loss yet).

MicroStrategy CEO Michael Saylor spent almost $4 billion ($3,965,863,658) on 129,218 BTC, which is approximately 0.615% of the total issuance of the first cryptocurrency. The fall in the price of bitcoin depreciated the company's investment to $3.1 billion, thus the loss amounted to $900 million. Apart from this, Microstrategy shares also fell to their lowest levels in recent months.

The investment of Elon Mask, whose car company Tesla bought more than 40,000 bitcoins during the 2021 bull market, has also taken a big hit. He lost about $500 million on his investments.

Of course, Michael Saylor and Elon Musk aren't the only ones struggling. The fall of the crypto market hit the largest US crypto exchange as well. Coinbase Global announced the layoff of 1,100 employees (approximately 18% of the entire staff). Shares of Coinbase itself fell in price by 26% over the past week, and its capitalization decreased to $11.5 billion. Director and co-founder of the company Brian Armstrong said that “a recession can cause a new crypto winter that will last for a long time.”

Stablecoins also add cold to investors' hearts. The passions for UST (Terra) have not subsided yet, as the USDD of the Tron network has faced a systemic crisis. USDD lost touch with the dollar on June 13, and TRX fell by 22%.

As of this writing, the BTC/USD bull/bear fight is for the 200-week moving average (200WMA). This WMA used to serve as strong support in all previous bear market phases. Until now, bitcoin has never managed to gain a foothold below this line, and we will find out on Monday June 20 if it managed to do so this time. (By "gaining a foothold" traders mean the closing of a candle below a certain level).

Arcane Research believes that the $20,000 level is critical for bitcoin in the context of technical analysis. “Therefore, a possible visit below this level could lead to the capitulation of many hodlers and deleverages.” There is also significant open interest in bitcoin options around the $20,000 mark. This is a factor of additional pressure on the spot market if the above level does not withstand the onslaught of bears.

Renowned trader and analyst Tone Vays cites the Bitcoin Momentum Reversal Indicator (MRI), which predicts the life cycles of a trend. At the moment, MRI points to a few more days (4-5) of falling, after which a market reversal may occur.

According to Vays, most likely, the BTC rate will not fall below $19,000. But a further fall is not ruled out: “Is it possible to reach $17,180? I think so. But if the downward movement continues, the next level could be around $14,000. However, in my opinion, bitcoin will not fall so much, and the level of $19,000 will be the lowest mark,” the expert said.

This forecast can be considered optimistic. For example, the president of the brokerage company Euro Pacific Capital, Peter Schiff, predicted a fall to $8,000 a month ago. And the American economist and Nobel Prize winner Paul Krugman called cryptocurrencies a fraud and a bubble that will soon burst.

As of Friday evening, June 17, the total crypto market capitalization is at $0.895 trillion ($1.192 trillion a week ago). The BTC/USD pair is trading at $20,500. Bitcoin's Crypto Fear & Greed Index is firmly entrenched in the Extreme Fear zone and was falling to 7 points out of 100 possible (13 weeks ago). This value is comparable to March 2020 values. Then the price of bitcoin bottomed out at $3,800. According to Arcane Research analysts, the index has been in the Fear zone since April 12, which is a duration record. “Market participants are undoubtedly tired of this, many capitulate. Historically, buying has been a profitable strategy in times of fear. However, it is not easy to catch a falling knife,” the researchers shared their thoughts.

And finally, a bit of optimism from the founder of SkyBridge Capital, Anthony Scaramucci, with whose words we began this review. In an interview with CNBC, the former politician and White House director of communications not only called what was happening a “bloodbath,” but also added that he had survived seven bear markets and he hopes that he will be able to “crawl out” of the eighth.

“All crypto assets have a long-term perspective, as long as they do not face short-term losses,” the financier said. “Then investors start tearing their hair out and hitting the wall. It is better to buy a quality crypto asset without being distracted by others and maintain discipline without looking back at the bear markets that sometimes happen. If you remain calm during these periods, you will get rich,” Scaramucci encouraged investors.


NordFX Analytical Group


Notice: These materials should not be deemed a recommendation for investment or guidance for working on financial markets: they are for informative purposes only. Trading on financial markets is risky and can lead to a loss of money deposited.

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https://nordfx.com/

23attention Re: Daily Market Analysis from NordFX Mon Jun 13, 2022 9:54 am

Stan NordFX



Forex and Cryptocurrency Forecast for June 13 - 17, 2022



EUR/USD: We Are Waiting for the Fed Meeting

The movement of the EUR/USD pair from May 23 to June 09 can be considered as sideways in the range of 1.0640-1.0760 (several false breakdowns in both directions do not count). However, this relative calm ended after the meeting of the Board of the European Central Bank on Thursday June 09. The markets woke up, the pair flew down, and having dropped by more than 200 points by mid-Friday, it froze in anticipation of US inflation data.

The ECB meeting was, without a doubt, the main event not only of the last, but also of the previous few weeks. Investors had assumed that the key interest rate would remain unchanged in June at 0% (which happened). But they had hoped that the head of the Central Bank, Christine Lagarde, would announce a 0.50% rate hike in July, especially since inflation reached a record 8.1% in May, and forecasts for its growth for the next three years were greatly increased. But it turned out that the regulator is not ready for such a decisive step, and the rate will be raised by only 0.25%. As for another increase of 0.25%, the ECB will consider such a possibility as early as in September.

The regulator fears that a sharp increase in rates could adversely affect the state of the Eurozone economy, which is already having a hard time due to rising energy prices, supply disruptions and other problems caused by Russia's armed invasion of Ukraine.

The results of Thursday, June 09, showed that the ECB's position now seems to be no longer dovish, but still far from being hawkish like that of the Fed. And that inflation will be higher than expected, while rates, on the contrary, will be lower. This situation had a negative impact on market sentiment and led to the fall of the common European currency.

Another important event of the week was the publication of data on the US consumer market (CPI). Inflation, together with the state of the labor market, are now the most significant indicators that determine the policy of the Fed. Therefore, what happens to consumer prices matters a lot. If prices stop rising and inflation remains at the same level of 8.3%, this is a confirmation of the correctness of the monetary policy of the US Central Bank, especially against the background of a sharp increase in the inflation forecast in the Eurozone.

So, according to the data released on June 10, the Consumer Price Index, excluding food and energy prices (CPI m/m), remained unchanged at 0.6% in May (although this is higher than the forecast of 0.5%), and CPI (g /d) decreased from 6.2% to 6.0% with the forecast of 5.9%. The market considered this a good signal for the dollar, and the EUR/USD pair went further down, ending the week at 1.0520.

Next week, on Wednesday June 15, we are expecting an event, perhaps even more important than the ECB meeting. This is a meeting of the FOMC (Federal Open Market Committee) of the US Federal Reserve, at which a decision will be made on the next increase in the federal funds rate. We have already written that the regulator intends to raise the rate by another 0.5%, and this is most likely already included in the dollar quotes by the market. However, following the meeting, we are waiting for a comment and a press conference by the Fed management, during which investors can learn something new regarding the future plans of the US Central Bank. In general, the intrigue remains.

In the meantime, the voices of experts are divided equally on the evening of June 10: 50% side with the bulls, 50% - with the bears. In the readings of indicators on D1, the red ones dominate completely. These are 100% among the trend indicators. There are the same number of oscillators, but 25% of them are already giving oversold signals. The nearest strong resistance is located in the 1.0600 zone, if successful, the bulls will try to break through the 1.0640 resistance and rise to the 1.0750-1.0760 zone, the next target is 1.0800. For the bears, task number 1 is to break through the support in the 1.0500 area, then 1.0460-1.0480, and then update the May 13 low at 1.0350. If successful, they will move on to assault the low of, 2017 at 1.0340, below there are only the goals of 20 years ago.

As for economic developments in the coming week, in addition to the Fed's FOMC meeting, we recommend paying attention to the publication of the CPI and the ZEW Economic Sentiment Index in Germany on Tuesday, June 14, as well as the Producer Price Index in the US. Data on retail sales will be released on Wednesday, June 15, and on manufacturing activity in the United States the next day. And finally, the value of the Consumer Price Index in the Eurozone will become known at the end of the working week, on Friday, June 17.

GBP/USD: We Are Waiting for the Meeting of the Bank of England

The past week confirmed the positive correlation of the pound against the euro against the dollar. The European currency, which fell on Thursday, June 09, pulled the British currency with it. Both pairs, EUR/USD and GBP/USD, went south. And data on consumer prices in the US gave an additional impetus to their fall on Friday. As a result, the last chord for the pair sounded at around 1.2311.

There will also be a meeting of the Bank of England the day after the Fed meeting, on Thursday June 16. It is possible that their decision on the interest rate will be made with an eye to what their colleagues will decide the day before. In addition, the growth of inflationary expectations may push the regulator to tighten monetary policy (QT, as opposed to quantitative easing QE). The Bank of England/Ipsos inflation forecast for the next 12 months was 4.6% against 4.3% previously.

In anticipation of the meetings of the two Central Banks, the US and England, the forecasts for the pound look very uncertain. Will it continue to fall? 40% of experts have answered this question positively, 50% have answered negatively, and another 10% have simply shrugged. As for the indicators on D1, the absolute majority is on the side of the bears as in the case of EUR/USD. Among trend indicators, 100% indicate a fall, among oscillators a little less: only 90% look south, although a quarter of them are in the oversold zone, the remaining 10% are painted in neutral gray. Supports are located at levels 1.2290-1.2300, 1.2200, then 1.2154-1.2164 and 1.2075. A strong point of support for the pair is at the psychologically important level of 1.2000. In case of growth, the pair will have to overcome the resistance 1.2400-1.2430, 1.2460, 1.2500, 1.2600, and then 1.2640-1.2665, 1.2700-1.2750, 1.2800-1.2835 and 1.2975-1.3000.

In addition to the Bank of England meeting, next week's events for the UK economy include the release of GDP data on Monday June 13 and UK wage and unemployment data on Tuesday June 14.

USD/JPY: Looking Forward to the Bank of Japan Meeting

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Although one probably doesn't have to wait for it. It is highly likely that the Bank of Japan will once again leave its ultra-soft monetary policy unchanged at its regular meeting on Friday, June 17, and the interest rate at the negative level of minus 0.1%. But if, at a subsequent press conference, the regulator at least hints at its possible tightening in the foreseeable future, this could have the effect of a bombshell and seriously strengthen the yen.

But, as already mentioned, the chances of this are few. And the rising dollar is again pushing the USD/JPY pair to the next update of 20-year highs. The peak was recorded at a height of 134.55 last week, and the pair finished a little lower, at around 134.37.

At the moment, only 15% of analysts have voted for the pair to rise above 135.00, 35% have accepted neutrality, while the majority (50%) expect the pair to correct south. (However, given the strength of the upward momentum of the pair, the moment of such a correction may be postponed indefinitely). For indicators on D1, the picture is very different from the opinion of experts. For both trend indicators and oscillators, all 100% are colored green. True, among the latter, quite a lot, 40%, are in the overbought zone. The nearest support is located at 134.00, followed by zones and levels 133.00-133.35, 132.25-132.50, 130.45-131.00, 129.70-130.20, 128.60, 128.00, 127.50, 127.00, 126.00-126.35 and 125.00. The target of the bulls is to renew the June 09 high at 134.55. The next target is the January 01, 2002 high of 135.19, to which there is very little left. (Back at the end of April, focusing on the growth rate of the pair, we wrote that the assault on this height could take place in a month and a half. Now we see that this calculation turned out to be 100% correct).

CRYPTOCURRENCIES: Bitcoin in Search of a Bottom

Bulls on the S&P500, Dow Jones and Nasdaq successfully repelled the attacks of the bears for two weeks, until June 09. However, the strengthening dollar and the flight of investors from inflationary risks became the reason for active profit-taking on speculative long positions in stocks. And the quotes fell down.

Fights between bulls and bears on the BTC/USD front line, which runs along the $30,000 horizon, have not ceased for almost five weeks. And to the credit of the bitcoin defenders, despite the stock market crash, they still (Friday evening, June 10) continue to hold the line, only retreating slightly to the south. In such a flat situation, long-term investors can only wait and hope for the pair to grow. As for Intraday traders, transactions during a side trend in a narrow corridor can bring good profits to them. This will require certain skills though.

In our opinion, everyone is free to use the trading strategy that suits them best. Different people have different experiences, different psychological states, different financial possibilities, different time frames that they can devote to trading. In general, everything is individual. For example, MicroStrategy CEO Michael Saylor believes that you should not get carried away with short-term goals. According to him, people who pay too much attention to the charts, "guess on coffee grounds." “If you don’t plan to hold it [Bitcoin] for four years, you are not an investor at all, you are a trader, and my advice to traders is: don’t trade it, invest in it,” Saylor told The Block.

Recall that as of April 14, 2022, MicroStrategy remains the largest bitcoin holder among public companies. Together with its affiliates, it owns 129,218 BTC purchased for $3.97 billion at an average price of around $30,700. So the current situation for MicroStrategy and personally for Michael Saylor is critical. The company will be at a fairly disadvantageous position if the price of the main cryptocurrency does not go up. And according to a number of experts, it may well go the other way.

So, cryptanalyst Justin Bennett, giving a forecast for the coming weeks, hinted at a repetition of the June 2021 chart. According to him, the nearest line of defense for the bulls is at $28,600. If the asset goes below this level, it risks revisiting the May lows at $26,580-26,910.

According to the analyst, if bitcoin follows the June 2021 scenario, it will form new lows for the current year: “In the event of a sell-off, the downward movement could go to the $24,000-25,000 range. But I do not think that this will be the minimum of the current cycle.”

After the formation of a new annual low, Bennett predicts some growth for bitcoin. “Most likely it will be a short-term rally to a lower macro high.” According to his calculations, the BTC price in July could rise to $35,000 during this short-term growth.

But Katie Wood, the founder and CEO of the investment company ARK Invest with assets of $60 billion, believes that BTC is already forming a bottom based on the network's performance. According to her, “short-term holders have capitulated, and this is great news in terms of hitting the bottom. The share of long-term holders is at an all-time high: 65.7% (they hold BTC for at least a year). Although there is still a possibility of capitulation of some of them to mark the bottom.

In addition to network indicators, Wood is watching the bitcoin futures market, hinting at a period of increased volatility for the asset. “It is still difficult to say exactly which direction it will go, but we believe that there is a high probability of the next burst of volatility in the upward direction.”

Despite some optimism, one has to exercise caution after the collapse of Terra (LUNA). “At the same time, we are on the alert,” says the CEO of ARK Invest. “Terra’s collapse was a fiasco for cryptocurrencies, and regulators have more reason to impose tighter restrictions than anticipated.”

By the way, commenting on the collapse of Terra and the subsequent market correction, the aforementioned head of MicroStrategy doubted that what was happening was evidence of a bearish phase. “I don’t know if this is a bear market or not, but if it is, we have had three of them in the last 24 months,” Michael Saylor stressed.

As for long-term forecasts, they, as usual, look in different directions. American economist and Nobel Prize winner Paul Krugman called cryptocurrencies a scam, comparing them to the real estate crisis in 2008. In an interview with Fox News, he mentioned the movie The Big Short, which tells the story of the financial crisis of the 2000s, which resulted from the collapse of the real estate market. Real estate prices were extremely high, but this did not stop people. The same situation is happening in the cryptocurrency market, Krugman explained.

The economist criticized people who claim that crypto assets are the future of finance. According to Krugman, bitcoin, which appeared in 2009, has not yet found significant practical use over the years, except for use in illegal activities.

“Cryptocurrencies have become a large asset class, and their supporters are increasing their political influence. Therefore, it sounds implausible to many that cryptocurrencies have no real value. But this is only a house built on sand. I remember the housing bubble and the mortgage crisis, so I can say that we have gone from a big short game to a big scam,” said the Nobel laureate.

Unlike Paul Krugman, Bloomberg expert Mike McGlone believes that we, on the contrary, are in for a big game, but not going down, but going up. According to his forecast,  the highest in the last 40 years inflation is starting, which will cause the largest economic crisis, after which assets such as cryptocurrencies, US bonds and gold will show unprecedented growth. McGlone stated in an interview to Kitco News that "this may be reminiscent of the consequences of 1929. Although rather, it will be more like the aftermath of the 2008 crisis, or maybe the aftermath of the 1987 crash.”

Along with Mike McGlone, Katie Wood and Michael Saylor, American investment strategist Lyn Alden has also sided with the bulls. She does not expect inflation to ease any time soon as the US continues to print money to meet its financial obligations. That is why, in her opinion, bitcoin is now one of the most reliable assets, along with gold and real estate.

Our previous review named the target level for bitcoin, which InvestAnswers experts set by choosing the average value of a selection of forecasts from Fidelity, ARK Invest and other companies. Having combined some of the well-known crypto models, they came to the BTC rate by 2030 iaround $1,555,000 per 1 coin.

However, macro analyst and director of investment company Fidelity Jurrien Timmer has updated his long-term forecast, and it looks much more modest now. Jurrien Timmer refers to the once popular Stock-to-Flow (S2F) model of an analyst with the nickname PlanB, according to which the price of BTC was predicted based on supply shocks caused by asset halvings. However, the expert added to the S2F model two more models that track the rate of adoption of the Internet and mobile phones.

According to Timmer, based on the mobile phone adoption model, the price of bitcoin could rise sharply to $144,753 by 2025 (about a year after the next halving). But if BTC follows the pace of Internet adoption, then it turns out that the asset has already peaked and can trade at only $47,702 in 3 years. The average value obtained by Timmer based on his modified supply model is $63,778.

Time will tell which of the experts is right. In the meantime, at the time of writing the review, on the evening of Friday June 10, the total capitalization of the crypto market is at the level of $1.192 trillion ($1.225 trillion a week ago). The Crypto Fear & Greed Index is firmly entrenched in the Extreme Fear zone and is at around 13 points (10 a week ago). The BTC/USD pair is trading at $29.340.


NordFX Analytical Group


Notice: These materials should not be deemed a recommendation for investment or guidance for working on financial markets: they are for informative purposes only. Trading on financial markets is risky and can lead to a loss of money deposited.

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https://nordfx.com/

24attention Re: Daily Market Analysis from NordFX Sun Jun 05, 2022 8:24 am

Stan NordFX



Forex and Cryptocurrency Forecast for June 06 - 10, 2022



EUR/USD: Inflation and Labor Market Decide It All

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The total result of the week can be considered close to zero. If the EUR/USD pair completed the previous five-day period at 1.0730, the final chord sounded at 1.0720 this time. At the same time, we cannot say that the past week was very boring: the maximum volatility was 160 points, 1.0786 at the high and 1.0626 at the low.

The DXY dollar index fell to a 5-week low of 101.29 on Monday, May 30. The reason was the expectation that the Fed may suspend the cycle of raising interest rates after raising it in June and July. Of course, provided that inflation in the US goes down.

However, the trend reversed on Tuesday. There was data from the Eurozone, according to which inflation there soared to a record level. Bloomberg's consensus forecast assumed a 7.8% increase in consumer prices in May. However, according to the European Union Statistics Office, they rose by 8.1% in annual terms after rising by 7.4% in April, which was the highest figure in the history of calculations. Oil prices have also risen to their highs since the beginning of March. As a result, the yield on US 10-year bonds began to rise again, reaching its highest level since May 19, at 2.88%. Along with treasuries, the dollar began to strengthen, and the EUR/USD pair went south, reaching the local weekly bottom on June 01.

The trend changed once again on Thursday, June 02 after the release of data from the US labor market. Employment in the country was expected to grow by 300K. However, in reality, the growth was only 128K, which is clearly not enough to maintain stability in the labor market and threatens unemployment. The negative picture was somewhat corrected by the number of new jobs created outside the agricultural sector (NFP). This indicator was published at the very end of the working week and amounted to 390K with the forecast of 325K and the previous value of 436K. A little more than 200K new jobs need to be created each month to keep the US job market stable. So the NFP of 390K looks pretty positive. As for unemployment, it did not change over the month and remained at the level of 3.6% in May, which is lower than the forecast of 3.5%.

The EUR/USD pair is now trading close to the 2015-2016 lows, while the DXY index has caught up with the December 2016 high, which is the highest point in the last 20 years.

Some currency strategists, such as, for example, analysts at the Swiss holding UBS Wealth Management, believe that the growth of the dollar may stop. The market has already taken into account in quotations both the tightening of monetary policy by the US Central Bank and the rise in interest rates, and no new triggers for the next rally are expected. So, in their opinion, the rise of the EUR/USD pair in the last three weeks may turn out to be not just a technical correction, but a change in the medium-term trend.

65% of analysts agree that the pair will try to break through the 1.0800 resistance next week, 35% expect the pair to return to May lows and the remaining 10% are neutral. It should be noted that with the transition from a weekly to a monthly forecast, the number of bull supporters decreases to 50%, and their maximum target is the zone 1.0900-1.1000. As for oscillators on D1, 80% are colored green (a quarter of them are in the overbought zone), and 20% are neutral gray. There is parity among the trend indicators: 50% vote for the growth of the pair, 50%­ for its fall. The nearest resistance is located in zone 1.0750-1.0800. If successful, the bulls will try to break through the resistance of 1.0900-1.0945, then 1.1000 and 1.1050, after which they will meet resistance in the 1.1120-1.1137 zone. For the bears, task number 1 is to break through the support of 1.0625-1.0640, then 1.0480-1.0500, and then update the May 13 low at 1.0350. If successful, they will move on to assault the low of January 01, 2017, at 1.0340, below there are only the goals of 20 years ago.

Eurozone GDP data will be released on Wednesday, June 08. However, the key event of the upcoming week will certainly be the ECB meeting on Thursday June 09. Markets are waiting for the decision of the European regulator on the interest rate, which is currently 0%, as well as for the comments on further monetary policy. In addition, the number of initial jobless claims in the US will also become known on Thursday, and a whole package of data on the US consumer market will be published on Friday, June 10. 

GBP/USD: In Anticipation of Inflation Forecast

Great Britain celebrated the "platinum" anniversary of Elizabeth II on Thursday, June 02: the 70th anniversary of her accession to the throne of the United Kingdom of Great Britain and Northern Ireland (it happened in 1952). Bank holidays were announced in the country on this occasion, on June 02 and 03.

Other economic events of the week include the publication of the UK Manufacturing PMI, which was slightly lower in May than the April value: 54.6 against 55.8, but it exactly corresponded to the forecast, so the market reacted sluggishly to it. In general, the dynamics of the pair resembled the dynamics of EUR/USD, although the downward pressure in this case was stronger. Like a week earlier, the GBP/USD pair remained in the side corridor of 1.2460-1.2665 and ended the trading session at 1.2497.

Data on business activity in the UK construction and services sectors, as well as the Composite Business Activity Index (PMI), will be published on Tuesday, June 7 and Wednesday June 8. In addition, the Bank of England will publish its latest review of inflation expectations at the end of next week. According to forecasts, they will be significantly higher than the historical maximum (4.4% in 2008), and a jump to 5.0% and above will increase the likelihood of a further increase in the key interest rate on the British pound. A by-election should also take place at the end of June, which will be seen as a test of support for the policies of Prime Minister Boris Johnson and the Conservative Party.

In anticipation of these events, forecasts for the pound look very uncertain. At the moment, 40% have voted for its strengthening, 40% - for weakening and 20% - for the continuation of the sideways trend. Among the trend indicators on D1, only 10% indicate the growth of the pair, 90% indicate a fall. Among the oscillators, the ratio of forces is slightly different: 25% look to the south, 35% is neutral, 40% point to the north. Supports are located at 1.2460, 1.2400, 1.2370, 1.2300, 1.2200, then 1.2154-1.2164 and 1.2075. A strong point of support for the pair is at the psychologically important level of 1.2000. In case of growth, the pair will have to overcome the resistance of 1.2600, and then 1.2665, 1.2700-1.2750, 1.2800-1.2835 and 1.2975-1.3000.

USD/JPY: The Pair Is On the Way to 20-Year Highs

The rising dollar is also pushing the USD/JPY pair to update its 20-year highs. It reached a height of 130.97 last week, coming close to the May 09 high of 131.34.

Listing above the reasons for the strengthening of the American currency, we did not mention another one: the meeting of US President Joe Biden with Fed Chairman Jerome Powell on Tuesday, May 31. The central topic of discussion was inflationary pressure, causing discontent among all segments of the country's population. As a result, Joe Biden gave the head of the US Central Bank full independence in the fight against inflation and allowed the use of all the tools available to the regulator, including an aggressive increase in interest rates and a $9 trillion reduction in the balance sheet.

As for the Bank of Japan, it is still not ready to curtail its ultra-soft policy. According to this regulator, monetary stimulus should help the country's economy recover from the doldrums caused by the COVID-19 pandemic. Weak economic statistics played against the yen as well. The volume of industrial production in Japan in April fell by 1.3%, instead of the expected reduction by 0.2%. A new round of the coronavirus pandemic in China was named as the reason. 

At the moment, only 25% of experts vote for a new assault on the height of 131.34, 65% expect a rollback to the south, and the remaining 10% have taken a neutral position. Indicators have a completely different picture. Both for trend indicators on D1 and for oscillators, all 100% are colored green. True, as for the latter, 20% is in the overbought zone.

The nearest support is located at 129.70-130.20, followed by zones and levels 128.60, 128.00, 127.50, 127.00, 126.00-126.35 and 125.00. The target of the bulls is to renew the May 09 high at 131.34. As the ultimate goal, the January 01, 2002 high of 135.19 is seen.

Data on Japan's GDP for the Q1 of this year will be published next week, on Wednesday, June 08. This indicator is expected to be minus 0.3% (previous value was minus 0.2%). Such a fall will be another argument for the Bank of Japan in favor of maintaining monetary stimulus and negative interest rate.

CRYPTOCURRENCIES: From $8,000 to $1,555,000 per 1 BTC

Bitcoin's current small rally has been labeled by some analysts as a "typical bull trap". And if you look at the chart, we can only admit that they are right: a sharp rise to $32,490 at the beginning of the week and then an equally sharp fall and return to the Pivot Point of the last three weeks, the level of $30,000.

Also, if we compare the charts of BTC / USD and the S&P500, Dow Jones and Nasdaq stock indices, it becomes clear that the attempt of the main cryptocurrency to start living its own life has failed. And bitcoin is once again following the stock market, albeit with some delay.

At the time of writing this review, on the evening of Friday 03 June, the total capitalization of the crypto market is at the level of $1.225 trillion ($1.194 trillion a week ago). The Crypto Fear & Greed Index is firmly entrenched in the Extreme Fear zone and is at around 10 points (12 a week ago). The BTC/USD pair is trading at $29.770.

According to a report by analyst firm Glassnode, long-term BTC holders are the only ones who didn’t lose their heads in the bear market and continue to buy the asset around the $30,000 mark. The current accumulation process mainly involves wallet owners with balances of less than 100 BTC and more than 10,000 BTC. The volumes of the former have increased by 80,724 BTC, the latter - by 46.269 BTC. At the same time, the total number of wallets with non-zero balances indicates the absence of new buyers. A similar situation was observed after the May 2021 sale. Unlike the sales of March 2020 and November 2018, followed by a surge in online activity and new bull runs, the latest sale does not yet boast an influx of new users.

Moreover, leading mining companies are gradually leaving the ranks of holders. An analytical report by Compass Mining notes that the influx of coins from miners has reached its highest level since January. The fact is that the profitability of mining is falling due to halvings and increasing computational complexity. And it is necessary to pay off loans and other obligations and support operational activities. So mining companies have to part with their own BTC reserves.

As an example, let's take such a long-term holder as Marathon Digital. This company, like a number of others, has long been unprofitable, while it needs to raise about half a billion dollars until the end of 2022. Therefore, it is possible that Marathon Digital will be soon forced to sell some of its 10,000 BTC coins.

Analyst Capo, who previously predicted bitcoin to fall below $30,000, expects altcoins and bitcoin to fall further: “My opinion has not changed, and I expect altcoins to fall by 40-60%, and bitcoin by 25-30%. Then it will take 1 to 3 months to recover.” The analyst noted that the S&P500 index is now in the region of a strong resistance level (4,150-4,200), and this may cause a resumption of the bearish trend for both the stock and cryptocurrency markets.

Another crypto strategist and trader, Kevin Swanson, disagrees with Capo, he predicts bitcoin will rise to $37,000 in the coming weeks. True, this movement will alternate with sharp declines, such as on June 01. Swanson's take on bitcoin's upward bounce is based on his thesis that BTC made a temporary bottom around $26,700 on May 12. “Looking at the 2021 low [$29,000],” he writes, “one would think that bitcoin is unlikely to go lower. This makes me think that this bottom [$26,700] could act as a long-term support zone.”

Alex Mashinsky, CEO of Celsius crypto company, believes that the fall in the market has been too long and cryptocurrencies are waiting for a bullish trend with an eight-fold increase in bitcoin. In an interview with Kitco News, he stated that the cryptocurrency markets will recover and even inflation will not be a long-term problem for them. "You can push the spring as hard as you want, but the harder you push, the more it bounces."

The head of Celsius noted that even large investment bankers are increasingly involved in cryptocurrency. “Even JPMorgan, which usually doesn't talk about cryptocurrency, released a report the other day claiming that panic may be exaggerated and is expected to rebound to $38,000 from where we we are today.”

Scott Maynard, Chief Investment Officer at Guggenheim, opined at the Davos Forum that the "fundamental price of bitcoin" is in the $400,000 region. Such a high estimate is due to the effect of the "unrestrained printing of US dollars" by the US Federal Reserve. At the same time, he believes that the market may see a bottom for bitcoin in the $8,000 area.

Ki Young Ju, head of market data platform CryptoQuant, believes BTC will not fall below $20,000. This statement was supported by the expert with the remark that "support by institutional investors is at an unprecedented high level." Ju cited data on the work of the Coinbase Custody exchange. According to the charts, the volume of bitcoins under management has continuously increased for 5 quarters, from October 2020 to December 2021. The increase was 296% at the end of the period, reaching 2.2 million BTC.

Based on the data obtained, Ju concluded that in order to reduce the cost of BTC to the level of $20,000, it is necessary to sell off all the capital accumulated during the period of consolidation to the level of 500 thousand dollars. BTC.   According to the crypto analyst, institutions are not yet ready for this step. The expert added that the value of the coin is likely to have already reached the bottom of this decline cycle.

Venture capitalist Tim Draper confirmed his prediction that the price of bitcoin will exceed six figures in the coming months. He reiterated in a new interview that the coin will reach a price of $250,000 "by the end of this year or the beginning of next". Tim Draper believes that women will drive the adoption and growth of bitcoin, and the fact that they will increasingly use this cryptocurrency for purchases will be a catalyst.

“Recently we had 1 woman for 14 bitcoin holders, now it's something like 1 to 6. And I think there will be more eventually. What I mean is that women control about 80% of retail spending. If suddenly all women have crypto wallets and they buy things with bitcoins, everything will change. And you will see the price of the coin, which will surpass my estimate of $250,000,” the investor said.

According to a study by the largest US bank JPMorgan, the dynamics of the volatility of gold and bitcoin caught up and they began to move in unison. Moreover, the bank's experts do not exclude that in the future the capitalization of the two investment assets will be equal, since in the eyes of investors, bitcoin is more in line with the role of a hedge asset.

Analysts at the crypto channel InvestAnswers considered three options, according to which the capitalization of bitcoin can reach 40%, 60% or 100% of the capitalization of gold. In this case, the price of BTC could be around $515,000, $786,000 or $1,300,000, respectively, by 2030. If we take a combination of all 3 aforementioned rate benchmarks, the average expected target is around $867,000.

And another target level was determined by InvestAnswers experts by choosing the average value of a selection of forecasts from Fidelity, ARK Invest and other companies. By combining some of the well-known crypto models, they came to the BTC rate around $1,555,000 for 1 coin.


NordFX Analytical Group


Notice: These materials should not be deemed a recommendation for investment or guidance for working on financial markets: they are for informative purposes only. Trading on financial markets is risky and can lead to a loss of money deposited.

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https://nordfx.com/

25attention Re: Daily Market Analysis from NordFX Thu Jun 02, 2022 3:50 pm

Stan NordFX



May Results: Bitcoin and Gold Fall, NordFX Traders Earn


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NordFX Brokerage company has summed up the performance of its clients' trade transactions in May 2022. The services of social trading, PAMM and CopyTrading, as well as the profit received by the company's IB-partners have also been assessed.

According to the results of the month, the leader is a trader from Southeast Asia, account No. 1467XXX, whose profit amounted to 29,196 USD. This solid result was achieved mainly in gold (XAU/USD) and euro (EUR/USD) trades.

The second step of the podium with a result of 20,946 USD is taken by their countryman, account No. 1570XXX, who showed how to make money on a market collapse. Their profit came from bitcoin (BTC/USD), which fell by 30% in May, and gold (XAU/USD), which also went down in the first half of the month.
In third place is a trader from South Asia, account No. 1621XXX, who earned 18,355 USD in May on transactions with the British pound (GBP/USD). It should be noted that this trader was one step higher in the TOP-3 in April. At that time, the trader was able to earn 3.5 times more on the same currency pair: 64,004 USD. 

The situation in NordFX passive investment services is as follows:

- “startups” were noted in CopyTrading in May. We talked about the first of them last month, this is the Darto Capital signal. It showed a yield of 1,596% In just 48 days of its existence, this figure was 461% in May alone with a maximum drawdown of 25%. The main trading instruments here were the classic Forex pairs EUR/USD (87% of transactions) and GBP/USD (11%).

PPFx13k is on the second position among startups. The signal has been operating since April 21, 2022, and it has made a profit of 607% during these 40 days, although with a rather serious drawdown of 65%. Trading was conducted mostly in pairs GBP/USD (46%) and GBP/JPY (38%). And finally, the third signal from this group is JumboTPC$$. It showed an increase of 107% in just 15 days of life, with a maximum drawdown of 31%. The trading instruments used and their volumes, GBP/USD (36%) and GBP/JPY (40%), suggest that this signal comes from the same source as ppfx13K.

The results of this young trio are certainly impressive. However, it should be understood that they were achieved through very aggressive trading. Therefore, subscribers should be as careful as possible and not forget about risk management.

As for the veteran signal, KennyFXPRO - Journey of $205 to $5,000, it showed a profit of 308% since March 2021 with a maximum drawdown of about 67%. At the same time, it turned out that the supplier of this and a number of other signals under the KennyFxPro “brand” is no stranger to “startups” either. KennyFxPro - The Cannon Ball signal appeared on the CopyTrading showcase 61 days ago. The trading style is non-aggressive, the profit is moderate: about 16%, but the drawdown is less than 6%. The favorite pairs are still the same: AUD/NZD (38%), NZD/CAD (32%) and AUD/CAD (30%).

- In the PAMM service, the TOP-3, or rather TOP-4, has not changed over the past month. The leader is still the same manager under the nickname KennyFXPRO. They increased their capital on the KennyFXPro-the Multi 3000 EA account by 105% in 492 days with a fairly moderate drawdown of less than 21%. TranquilityFX-The Genesis v3 account, which showed a 78% profit in 424 days with a similar maximum drawdown of less than 21%, and NKFX-Ninja 136, which has generated 66% income since June 11, 2021, with the same drawdown of about 21%, are also in the first three. 

Another account that we paid attention to a month ago, Ultimate.Duo-Safe Haven, started relatively recently: at the end of February. It has brought not the biggest profit during this time: about 19%, but the maximum drawdown on it has not exceeded 20%. 

Among the IB partners, NordFX TOP-3 is as follows:
- the largest commission of the month amounting to 7,011 USD was accrued to a partner from Southeast Asia, account No.1371XXX;
- in second place is a partner from East Asia, account No. 1336XXX, who received 6,827 USD;
- and a partner from South Asia, account No. 1565XXX, who earned 6,612 USD in May, closes the top three.


Notice: These materials should not be deemed a recommendation for investment or guidance for working on financial markets: they are for informative purposes only. Trading on financial markets is risky and can lead to a loss of money deposited.

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https://nordfx.com/

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