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EUR/USD: The Fed Doesn't Hinder the US Economy

January data released on Tuesday, February 14 showed that the US Federal Reserve's victory over inflation is still very, very far away. The core Consumer Price Index (CPI) remained unchanged on a monthly basis at +0.4%. At the same time, although the annual data were slightly lower than the previous value: +6.4% against +6.5%, they exceeded the forecast of +6.2%. Another portion of American statistics came out the next day, February 15.  After two months of decline, retail sales in the US showed the highest growth rate in almost 2 years, jumping from -1.1% in December to +3.0% in January (against the forecast of +1.8%).

The initial reaction to this was the strengthening of the dollar (the DXY index reached 104.1 points, the maximum since January 09), and a sharp drop in stock indices. Market participants decided that such macro statistics will force the Fed to further tighten monetary policy actively. If the peak value of the interest rate was predicted at 4.9% in early February with a subsequent decrease by 50 basis points (bp) by the end of the year, the peak is seen now at 5.25%, and a possible decrease only by 25 b.p. in 2023. At the same time, the probability that the rate will be increased three more times, in March, May and June, is 50%.

As already mentioned, the strengthening of the dollar and the sharp fall in stock indices was the first reaction of the market. But then there was an equally sharp reversal and the return of investor risk appetite. Stock indices went up. The market decided that if the US economy coped with the most aggressive interest rate hike in decades quite easily, it would cope with it in the future. Not only retail sales, but also other economic indicators show a convincing rise at the moment. Thus, employment grew by an impressive 517K new jobs, and the country's GDP, according to the leading indicator from the Atlanta Fed, may grow not by 2.2%, but by 2.4% in Q1 2023.

Then the market sentiment changed again. Another piece of statistics showed that the number of Americans who filed new applications for unemployment benefits fell unexpectedly, while producer prices (PPI) rose to a 7-month high in January. In this situation, market expectations regarding the further cycle of monetary restriction have again increased. S&P500, Dow Jones, and Nasdaq headed south together, while DXY headed north to a six-week high of 104.58. After that, on the eve of a long weekend in the US, the Dollar Index fell again to 103.85 points.

EUR/USD reacted accordingly to the volatile DXY fluctuations. As a result, having started last week at 1.0679, it ended it at 1.0694, that is, with almost zero results. At the time of writing the review (evening of February 17), 80% of analysts expect further strengthening of the dollar, 10% expect the strengthening of the euro, and the remaining 10% have taken a neutral position.

This time, the readings of the oscillators on D1 coincide with the opinion of analysts almost completely. 80% of them are colored red (20% signal that the pair is oversold), the remaining 20% are colored gray neutral. Among trend indicators, 60% recommend selling, 40% - buying. The nearest support for the pair is located in the zone 1.0600-1.0620, then there are levels and zones, 1.0560, 1.0500, 1.0440 and 1.0370-1.0400. The bulls will meet resistance in the area of 1.0700-1.0710, 1.0745-1.0760, 1.0800, 1.0865, 1.0895-1.0925, 1.0985-1.1030, 1.1110, after which they will try to gain a foothold in the 1.1260-1.1360 echelon.

The events of the coming week include the publication of business activity indicators (PMI) in Germany and the Eurozone on Tuesday, February 21. The value of the German Harmonized Consumer Price Index (CPI) will become known on Wednesday, February 22. Also on this day, the minutes of the last FOMC (Federal Open Market Committee) meeting will be published late in the evening. Volatility will be provided by data on inflation (CPI) of the Eurozone, as well as on unemployment and US GDP, on Thursday, February 23. We will find out German GDP indicators and statistics on consumer spending by American citizens at the very end of the working week, on Friday, February 24. Traders also need to keep in mind that Monday, February 20 is a day off in the US: the country celebrates President's Day.   

GBP/USD: BoE Could Crash the Pound

The pound tried to win back part of its losses at the beginning of last week. GBP/USD, having bounced off the level of 1.2030 on February 13, reached a two-week high of 1.2270 the next day. Then, along with other currencies included in the DXY Index, the pound began to retreat against the dollar. As a result, the local minimum was fixed at 1.1915. This was followed by a return to the initial positions and GBP/USD ended the week at 1.2040.

Neither Inflation data nor data on unemployment in the UK helped the British currency (CPI fell to +10.1% in January against the forecast of +10.3% and +10.5% in December). The market also ignored retail sales statistics, although they rose by +0.5% in January against the forecast of -0.3% and the previous result of -1.2%. The news that the UK and the EU have achieved good results in the protracted Brexit negotiations did not have a noticeable effect on the dynamics of the pound either.

Much more important for the quotes of the British currency was macro statistics from the US, as well as expectations that the Bank of England (BoE) may soon reach the end of the rate hike cycle. “The Bank of England is clearly concerned that a significant rate hike could slow down the economy too much,” Commerzbank economists wrote, explaining their bearish view of GBP's prospects, and colleagues from Singapore's United Overseas Bank agreed, according to them GBP/USD may retest the 1.1900 level in the near future.

If we talk about the median forecast of experts, 70% of them vote for the further weakening of the pound, 10% prefer to refrain from forecasts. Only 20% of analysts vote for the strengthening of the pound and the growth of the pair. Among the trend indicators on D1, the balance of power is 85% to 15% in favor of the reds. Reds have a 100% advantage among oscillators. Support levels and zones for the pair are 1.1990-1.2025, 1.1960, 1.1900-1.1915, 1.1840, 1.1800, 1.1720 and 1.1600. When the pair moves north, it will face resistance at the levels 1.2085, 1.2145, 1.2185-1.2210, 1.2270, 1.2335, 1.2390-1.2400, 1.2430-1.2450, 1.2510, 1.2575-1.2610, 1.2700, 1.2750 and 1.2940.

As far as the UK economy is concerned, Tuesday February 21 is of interest on the calendar for the upcoming week, when the country's business activity statistics (PMI) are released.

USD/JPY: Hopes for QT Remain

“The Japanese government has chosen Academician Kazuo Ueda as the new head of the Central Bank based on expectations of a stable inflation target along with a structural increase in wages,” said Finance Minister Shunichi Suzuki. And it doesn't seem that this choice went in favor of the Japanese currency. Having started the week at 131.39, USD/JPY fixed a local high at 135.15, and set the last chord of the five-day period at 134.17.

Recall that 71-year-old Kazuo Ueda, a former professor at the University of Tokyo, joined the board of governors of BOJ a quarter of a century ago, in April 1998, and remained there until April 2005. Back in 2000, Ueda spoke out against the Central Bank's abandonment of the zero-rate policy. It seems that even now he will not rush to curtail the ultra-soft monetary policy. This is confirmed by Ueda himself, who stated on February 10 that the current policy of the regulator is adequate, and that it is necessary to continue to adhere to it.

Despite such statements, the question of what this policy will be like under the new leader remains open at the moment. The majority of experts (60%) have taken a wait-and-see attitude.  15% are counting on the growth of USD/JPY in the near future, and 25% expect it to fall.  If we talk about a three-month perspective, only 10% of analysts talk about a further weakening of the Japanese currency, 25% are still neutral, but 65% are waiting for tightening monetary policy (QT) and strengthening the yen, contrary to the statements of Kazuo Ueda.

For example, Danske Bank economists predict that the USD/JPY rate will fall and reach 125.00 in three months. A similar position is shared by strategists at BNP Paribas Research. “We expect the strength of the US dollar to end up short-lived,” they say. “We believe that the US dollar has entered a multi-year bearish trend, and portfolio flows are becoming increasingly negative for the currency.” BNP Paribas predicts that positive yields in Japan could encourage the repatriation of funds by local investors, as a result of which USD/JPY will fall to 121.00 by the end of 2023.

Among the oscillators on D1, 100% points north (15% of them are in the overbought zone). For trend indicators, 75% look north, and 25% look in the opposite direction. The nearest level of support is located in zone 134.00, followed by levels and zones 133.60, 132.80-133.20, 131.85-132.00, 131.25 130.50, 129.70-130.00, 128.90-129.00, 128.50, 127.75-128.10, 127.00-127.25 and 125.00. Levels and resistance zones are 134.40, 134.75-135.10, 135.60, 136.00, 137.50, 139.35, 140.60, 143.75.

No important macro data on the state of the Japanese economy is expected this week. In addition, it must be borne in mind that Thursday, February 23, is a day off in Japan, the country celebrates the Emperor's Birthday.

CRYPTOCURRENCIES: Five Reasons for BTC's Growth


The topic of regulating the cryptocurrency market has been getting louder and louder since last spring. Many influencers argue that one can count on a massive influx of funds from institutional investors only if a clear regulatory framework is in place. Here is just one of the latest statements by MicroStrategy co-founder Michael Saylor. “What is really needed,” he said, “is oversight. [...] Clear guidance from Congress is needed. We need clear rules of conduct from the SEC (Securities and Exchange Commission) of the United States.” And it must be said that such calls from representatives of big capital respond to the minds and actions of government officials.  For example, Senator Elizabeth Warren is already actively recruiting conservative Republicans in the US Senate to support her bills, which significantly tighten the regulation of the crypto industry.

We note that the tragic events of 2022, caused by the collapse of a number of leading representatives of the industry, caused a sharp surge in the activity of US supervisory authorities. And the regulators began to work with redoubled energy this year. To begin with, they attacked the Kraken crypto exchange, which was actually banned from providing staking services. But the truck did not stop there and ran into the infrastructure company Paxos, which is responsible for issuing USDP, PAXG and Binance BUSD stablecoin. This is an investigation launched by the New York State Department of Financial Services (NYDFS) against this company. The regulator later ordered the firm to stop issuing the BUSD stablecoin. The SEC also announced its readiness to sue Paxos.

This situation led to a massive outflow of funds from the stablecoin. Many users have started exchanging BUSD for USDT. But it's still half the trouble. Some frightened users simply decided to leave Binance. On February 14 alone, the net outflow of funds from this exchange amounted to $831 million, a record since the collapse of FTX.

Binance CEO Changpeng Zhao responded to pressure from the US authorities by calling on industry participants to consider moving to another country. He considers Dubai (UAE), Bahrain and France to be jurisdictions with favorable regulation. The CEO of Binance was supported by Uniswap founder Hayden Adams. “It's a shame to watch the US efforts in the cryptosphere,” he wrote. “Innovative companies get an additional incentive to go abroad. It’s as if the government banned the development of the Internet 30 years ago.”

Surprisingly, against this frankly negative background, the price of bitcoin went up, reaching $25.241 on February 16. The last time BTC/USD climbed this high was in mid-August 2022. There have been several reasons for the current rally.

The first of these, paradoxically, is the mentioned attack by the NYFDS and SEC on Kraken and Paxos. US regulators treat PoS coins as toxic assets due to passive income from staking (expectation of profit). Based on this, such coins can receive the status of a security, with all the ensuing legal consequences. Bitcoin, on the other hand, is still the result of the work of miners, which allows it to avoid (at least for now) a similar fate. The network hashrate continues to set records.

Another driver for the growth (and subsequent fall) of digital “gold” quotes is its correlation with the stock market ( S&P500, Dow Jones and Nasdaq).

The third reason is that the main cryptocurrency was oversold in 2022, which caused the average production cost to fall below the market price. And most of the miners were forced to sell off BTC stocks in order to cover operating costs and ensure payments on accounts payable.

The next reason is the Ordinals protocol launched at the end of January, which allows not only to conduct financial transactions in the bitcoin network, but also to transfer any digital objects, including images, audio and video files. The launch of this protocol also resulted in an increase in network activity. The number of non-zero wallets set a new record, and miners received $876,000 in additional income in the form of commissions in less than a month.

The beginning of the BTC rally forced short-term speculators to close short positions, which further stimulated the growth of bitcoin. And that was reason number five.

According to Glassnode specialists, the current fair value of the flagship cryptocurrency is $33,000. This is the figure bitcoin should aim for. A similar figure of $30,000 is cited by Kaleo, a popular analyst with 563,000 Twitter followers. His forecast for the leading altcoin was also quite optimistic. According to Kaleo calculations, the target level for ETH/USD is located in the $3,000 area. Former Goldman Sachs CEO Raoul Pal also gave his forecast for ethereum, setting a target price of this coin around $10,000. Although, such growth will take more time of course.

If we talk about a three-year horizon, according to well-known analyst Willy Woo, the number of users of the first cryptocurrency will grow from the current over 300 million to 1 billion during this time. This will approximately correspond to 12% of the world's population. Willy Woo recalled that it took six months for bitcoin to form an audience of the first 1,000 users. It took five years for that number to rise to 1 million. The network achieved its current figures of more than 300 million, 13.8 years after the formation of the genesis block.

SkyBridge Capital hedge fund founder Anthony Scaramucci called 2023 a “recovery year” for bitcoin. However, his forecast looks rather modest. In his opinion, the value of BTC may “only” double over the next two to three years, up to $50,000.

As for another influencer, best-selling author of Rich Dad Poor Dad, Robert Kiyosaki, he claims that bitcoin will rise to a fantastic $500,000 by 2025. “A giant crash is coming. Depression is possible. The Fed has been forced to print billions in counterfeit money. Gold will be at $5,000, silver at $500, and bitcoin at $500,000 by 2025,” Kiyosaki wrote. And he added that gold and silver are the money of the gods, and bitcoin is like a dollar for ordinary people.

Risky assets sank sharply down in the last days of the past week. Following the stock indices, the quotes of crypto-currencies also fell, but then recovered quite quickly. At the time of writing this review (Friday evening, February 16), BTC/USD is trading in the $24,600 zone. The total capitalization of the crypto market is $1.106 trillion ($1.010 trillion a week ago). The Crypto Fear & Greed Index rose from 48 to 61 points in a week and moved from the Neutral zone to the Greed 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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CryptoNews of the Week


- Cryptocurrency entrepreneurs should consider moving to a country with favorable regulation of the bitcoin industry. This was stated by Binance CEO Changpeng Zhao. He considers Dubai (UAE), Bahrain and France to be such jurisdictions. Zhao added that newcomers to the industry will definitely need legal advice in order to "not cross any of the red lines" set by regulators.
This advice came against the background of tightening regulation of the industry by the US authorities. In particular, we are talking about an investigation launched by the New York State Department of Financial Services against infrastructure company Paxos. The regulator later ordered the firm to stop issuing the Binance USD (BUSD) stablecoin. The SEC (US Securities and Exchange Commission) also announced its readiness to sue Paxos.
The CEO of Binance was supported by Uniswap founder Hayden Adams. “It is a shame to watch the US efforts in the cryptosphere. Innovative companies get an additional incentive to go abroad. It's like if the government banned the development of the Internet 30 years ago,” he wrote.

- According to Politico, Senator Elizabeth Warren has begun building a coalition against cryptocurrencies and is actively recruiting conservative Republicans in the US Senate. By doing so, she wants to support her bills, which could have serious consequences for the crypto industry, and which imply tighter restrictions in the fight against money laundering, including additional requirements for verifying the identity of consumers. Warren positions herself as a leading digital asset legislator and enjoys the backing of the banking lobby.
The US Department of the Treasury is currently actively monitoring cases of illegal funding using cryptocurrencies. The Warren bill will extend these obligations to other agencies and entities, including service providers in the digital asset segment.

- Ethereum co-founder Vitalik Buterin sent 99 ETH (~$155,000 at the time of writing) to Ahbap, a non-profit organization that raises money to help earthquake victims in Turkey and Syria. According to Ahbap's official website, the organization has already raised over $4.2 million in cryptocurrencies.
According to the latest data, the disaster has claimed the lives of more than 25,000 people. More than 80,000 people have been injured in Turkey alone. The series of earthquakes has become the largest since 2010 in terms of the number of victims.

- Investor and star of the TV show Shark Tank, Kevin O'Leary, said on The Wolf of All Streets podcast that most of the 10,000 digital assets are worthless. “They will eventually fall to zero due to the lack of volatility and [trading] volume. They are not needed,” he announced his verdict. O'Leary also talked about losing all of his crypto investments after the FTX crash in November 2022. However, after that, he has already opened new positions in bitcoin, ethereum and 5 other assets (previously his portfolio included 32 positions).

- The South Korean authorities have included in the sanctions list a number of North Korean hacker groups and individuals associated with cyber attacks and cryptocurrency theft. This was reported by the Ministry of Foreign Affairs of Seoul. The sanctions came just hours after South Korea and the United States announced a cybersecurity joint venture.
In particular, hackers working in the information technology sector at the North Korean company Chosun Expo Joint Venture were blacklisted. It is alleged to be a shell company associated with the Lazarus Group. North Korean hackers have stolen more than $1.2 billion worth of virtual assets since 2017, including $626 million in 2022, according to information provided by the Foreign Ministry.

- Former Goldman Sachs CEO Raoul Pal believes Ethereum is destined to reach a five-digit price in the next bull market. The macro expert has set a target price for ethereum around $10,000, primarily due to the good potential of the token. However, he believes that some of the main competitors will surpass him. “ETH is the money of the internet. And I do not think that it will lose this status, but this does not mean that this is the best player, - said the financier. - Solana, I think, aims for the widest possible adoption, making it convenient for the consumer. […] However, ETH is the easiest way because it probably has the least risk.”

- According to technical analysis by CryptoQuant expert Grizzly, BTC/USD has formed a unique pattern that has previously been observed at market lows. The specialist added the 200-day SMA and the realized price to the long-term chart and concluded that this could be a sign of a long-term uptrend. According to his observations, this was especially evident in 2019, 2015 and 2012.
At the same time, Grizzly noted that macroeconomic factors that put pressure on high-risk asset markets should not be overlooked. It is not known whether bitcoin will be able to “separate” from assets such as stocks and demonstrate “decent behavior” as a reliable hedge against inflation. According to the expert, only time will tell if the largest cryptocurrency maintains its upward trajectory.

- Another popular Twitter analyst, Kaleo, with 563,000 followers, also shared his prediction about the near future of bitcoin and ethereum. The analyst believes that a price of $30,000 is still possible for bitcoin. Ethereum, in his opinion, will repeat the movement of 2018-2020. The price of this altcoin rose from $80 to $480 then. At the time of writing the review, the ETH exchange rate is $1,580. According to Kaleo's calculations, the target level is located almost twice as high: around $3,000.

- The number of users of the first cryptocurrency will grow from the current over 300 million to 1 billion in the next three years. This would be riughly 12% of the world's population. This forecast was given by well-known analyst Willy Woo. He recalled that it took six months for bitcoin to form an audience of the first 1,000 users. It took five years for that number to rise to 1 million. The network achieved its current figures of more than 300 million, 13.8 years after the formation of the genesis block. For comparison, Woo cited the audience of PayPal (430 million people) and Twitter (400 million, most of which, he believes, are bots).

- Robert Kiyosaki, author of the bestselling book Rich Dad Poor Dad, stated that the price of bitcoin will rise to $500,000 by 2025. “A giant crash is coming. Depression is possible. The Fed has been forced to print billions in counterfeit money. Gold at $5,000, silver at $500, and bitcoin at $500,000 by 2025,” he wrote. And he added that gold and silver are the money of the gods, and bitcoin is like a dollar for ordinary people.
Prior to this, Anthony Scaramucci, founder of the hedge fund SkyBridge Capital, said that the value of one bitcoin on the exchange could double to $50,000 over the next two to three years. Scaramucci called 2023 a “recovery year” for bitcoin.


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.

#eurusd #gbpusd #usdjpy #btcusd #ethusd #ltcusd #xrpusd #forex #forex_example #signals #forex #cryptocurrencies #bitcoin #stock_market

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EUR/USD: The Fed's Doves Have Turned into Hawks Again

After the US Federal Reserve and ECB meetings, the DXY Dollar Index fell to a new 9-month low of 100.80 on February 02. This happened after the dovish hints of the head of the Fed, Jerome Powell, who, during a press conference following the meeting, admitted for the first time that "the deflationary process has begun." The market has decided that this is the beginning of the end, and that the end of the bullish wave is near.

But hints aren't specific promises. Especially from the heads of the US Central Bank. And now, speaking at the Washington Economic Club, Jerome Powell is saying that interest rates must continue to rise in order to control inflation. And he makes a hawkish hint that the peak rates may be higher than the markets expect. And even higher than the Fed's own forecasts, announced in December.

Powell's hawkish attitude was supported by New York Federal Reserve Bank (FRB) President John Williams, Fed Board of Governors Christopher Waller, and Minneapolis Fed Chairman Neil Kashkari. The latter said that the Fed still has a lot of work to do to curb inflation. This could mean that the interest rate could be raised from the current 4.75% all the way up to 5.40% or higher and stay at that high for quite some time.

This time, the market decided that it was not worth waiting for an early easing of monetary policy, and the dollar began to gain strength. The DXY index reached a five-week high at 103.96 points on Tuesday, February 07. However, it could not rise higher, as it met several fairly strong resistance levels at once: 1) the 50-day SMA, 2) the former trend line from 2021, 3) the upper limit of the descending channel, which began in November 2022, as well as horizontal resistance in the 104.00 zone.

The past five days were stingy with macro statistics, but rich in statements by both American and European officials (the EU leaders summit took place on February 09-10). The next week promises to be richer in economic data. January data on US consumer inflation (CPI) will be published on Tuesday, February 14. The forecast assumes that prices rose by 0.4-0.5% in January (0.1% in December). At the same time, annual data may turn out to be lower than the previous value (6.2% vs. 6.5%). If the CPI shows that inflation is stable, this will confirm the latest hawkish statements by Fed officials and support the dollar. (Scotiabank economists believe that EUR/USD may fall to 1.0500-1.0600). If there is a steady decline in inflation, the US currency will be under serious pressure.

Having reached a high of 1.1032 on February 02 (the highest since April 2022), EUR/USD reversed and ended the week at 1.0679. 35% of analysts expect a further strengthening of the dollar at the time of writing the review (on the evening of February 10), 20% expect the euro to strengthen, and the remaining 45% have taken a neutral position. The picture is different among the indicators on D1. 85% of the oscillators are colored red (a third are in the oversold zone), while the remaining 15% are green. Among trend indicators, 40% recommend buying, 60% - selling. The nearest support for the pair is in the zone 1.0670, then there are levels and zones 1.0620, 1.0560, 1.0500, 1.0440 and 1.0370-1.0400. The bulls will meet resistance in the area of 1.0700-1.0710, 1.0745-1.0760, 1.0800, 1.0865, 1.0895-1.0925, 1.0985-1.1030, 1.1110, after which they will try to gain a foothold in the 1.1260-1.1360 echelon.

Among the events of the upcoming week, in addition to the release of the inflation data mentioned above, we can note the publication of preliminary data on Eurozone GDP on Tuesday, February 14. (And of course, we must not forget that February 14 is St. Valentine's Day, the most romantic holiday celebrated in most countries of the world. People confess their love to each other on this day, for more than one and a half thousand years). Retail sales in the US will become known on Wednesday, February 15, and data on US unemployment will come on Thursday, February 16. The January US Producer Price Index (PPI) will also be released on February 16.

GBP/USD: Coming Week: Volatility Guaranteed

The pound tried to win back part of its losses last week. GBP/USD, having rebounded on February 07 from the level of 1.1961 (the lowest level since January 06), reached a weekly high of 1.2193 on February 09. Then, the pound began to gradually retreat against the dollar along with other currencies included in the DXY Index. As a result, GBP/USD ended the week at 1.2055, that is, almost where it started (1.2050).

The news background still looks vague and uncertain. Economic problems continue to put pressure on the British currency. Recall that in the fight against inflation, the Bank of England (BoE) raised the key rate by 50 bp on February 2 to 4.00%, but at the same time softened its message noticeably. This pushed the British currency down from its highest values since mid-June 2022 (1.2450) by more than 250 points.

Market participants believe that the BoE may be afraid of further sharp rate hikes. It is another question how its growth will affect inflation. But it may well provoke a crisis in the economy and, above all, in the construction sector. January data on the index of business activity in the construction sector of the country were published on Monday, January 06, having shown a drop in this indicator from 48.8 to 48.4 points. The Office for National Statistics of the United Kingdom reported on Friday, February 10 that the entire economy of the country in December, with a forecast of minus -0.3%, actually shrank by -0.5% (there was an increase of +0.1% in November). GDP stagnated at 0% in Q4, after falling by -0.2% a quarter earlier. GDP fell from +1.9% to +0.4% in annual terms.

Against this background, the triumphant reports and optimistic forecasts from the UK Treasury Secretary Jeremy Hunt sounded somewhat strange. The high official said that "the UK was the fastest growing economy in the G7 last year and avoided a recession as well". This shows that "the economy has proven to be more resilient than many feared." And “if we stick to our plan to cut inflation by half this year,” continued Jeremy Hunt, “we can be sure that we will have some of the best growth prospects of any country in Europe.”

Unlike Mr. Hunt, Commerzbank strategists believe that uncertainty about future inflation in the UK remains high. The dynamics and values of the Consumer Price Index, which will be published on Wednesday, February 15, can bring some clarity. It is the CPI that is the key indicator that determines the future monetary policy of the Bank of England. Of course, data on the state of the labor market, which will be released the day before, on Tuesday, February 14, and on retail sales in the UK, which will become known on February 17, will also be important.

All these macroeconomic statistics are sure to cause increased volatility in GBP/USD. In the meantime, 40% of analysts expect further weakening of the pound, the same number prefer to refrain from forecasts and wait for the release of specific indicators. Only 20% of experts vote for the strengthening of the pound and the growth of the pair. Among the trend indicators on D1, the balance of power is 75% to 25% in favor of the reds. Among the oscillators, the red ones have a 100% advantage, however, 10% of them give signals that the pair is oversold. Support levels and zones for the pair are 1.2025, 1.1960, 1.1900, 1.1800-1.1840. When the pair moves north, it will face resistance at the levels 1.2085, 1.2145, 1.2185-1.2210, 1.2270, 1.2335, 1.2390-1.2400, 1.2430-1.2450, 1.2510, 1.2575-1.2610, 1.2700, 1.2750 and 1.2940.

USD/JPY: The Head of BOJ Is New, the Policy Is Old.

The Japanese yen, like its DXY counterparts, reacted both to the hawkish statements of the US Federal Reserve and to fluctuations in US Treasury yields last week. However, the biggest surge in volatility was the news that the Cabinet of Ministers intends to nominate 71-year-old Kazuo Ueda as the new governor of the Bank of Japan (BOJ).

This former professor at the University of Tokyo is a well-known monetary policy expert. He joined the Board of Governors of BOJ a quarter of a century ago, in April 1998 and remained there until April 2005. Ueda spoke out against the Central Bank's abandonment of the policy of zero rates in 2000, and the choice of his candidacy was probably due to the desire of the authorities to see a person at the head of the Bank of Japan who would not rush to curtail the ultra-soft monetary policy. This is confirmed by Ueda himself, who stated on February 10 that the current policy of the regulator is adequate, and that it is necessary to continue to adhere to it.

USD/JPY ended last week at 131.39, where it has been many times since December 20, 2022. According to the majority of analysts (55%), the yen may strengthen somewhat in the three-month period, but the range of targets here is quite large. Some believe that the Fed will finally return to the doves' camp, and then USD/JPY will be able to reach the 120.00 zone, while others consider the range of 127.00-128.00 to be the limit of the fall.

As for the short term, only 20% of experts vote for the pair to go down, 30% vote for its growth, and 50% have decided not to make any predictions at all. Among the oscillators on D1, 80% point north, 10% look south, and 10% point east. For trend indicators, 40% look north, and 60% look in the opposite direction. The nearest support level is located at 131.25 zone, followed by levels and zones 130.50, 129.70-130.00, 128.90-129.00, 128.50, 127.75-128.10, 127.00-127.25 and 125.00. Levels and resistance zones are 131.85-132.00, 132.80-133.00, 133.60, 134.40 and then 137.50.

Japan's preliminary GDP data will be released next week, on Tuesday, February 14. It is expected that the country's economy will grow +0.5% in Q4 2022 (down -+0.2% a quarter earlier). The data already published also look positive. Bank lending in January was higher than expected (+2.6%) and actually increased by +3.1% (+2.7% in December). The Eco Watchers Current Situation Index also increased, rising from 47.9 to 48.5 points by the end of January.

CRYPTOCURRENCIES: Should Bitcoin “Take a Break”?


Bitcoin's correlation with the stock market (S&P500, Dow Jones, Nasdaq) and other risky assets is nothing new. But digital gold unexpectedly showed not an inverse, but a direct correlation with the US currency last week. This is clearly seen if we compare the BTC/USD and EUR/USD charts. Both assets were getting heavier or lighter, at the same time. Drawing an analogy with a balance scale, we observed a physical paradox where both bowls go up and fall down at the same time. It was only at the end of the working week that the laws of physics began to work again: the dollar strengthened a little, bitcoin weakened.

The upward momentum that raised the main cryptocurrency from a low of $16,272 in November 2022 to $24,244 in the first days of February 2023 has gradually faded away. BTC/USD has returned to where it was in the second half of January, and the result of the last three and a half weeks can be considered close to zero.

As noted by well-known trader and investor Tone Vays, bitcoin has “grown very fast and very high” and is now facing serious resistance as it approaches the $25,000 level. The specialist believes that the asset will eventually break through this resistance zone, but it probably "should take a break now." Vays clarified that he expects either the consolidation of the rate in a narrow range, or a small pullback.

This expert is not alone in his assessment. According to statistics, the media forecast of crypto community members accurately predicted the value of bitcoin by the end of each month, over the past six months with a probability of up to 75%. Finbold experts released the results of the latest survey of more than 15 thousand traders and predictions of machine learning algorithms. Real people expect BTC quotes to fall to $20,250 by February 28, 2023, artificial intelligence points to $24,342.

Such a small (by bitcoin standards) range of fluctuations corresponds quite accurately to Vays’ prediction of a “breather”. The market situation is quite uncertain at the moment, and while short-term holders have returned to the profitable zone, long-term holders (holding for six months) still remain in the red zone. It took 291 days for all the metrics to turn green in the last bearish phase, only 268 have passed now.

Most investors went into the red at the end of last year. Thus, MicroStrategy recorded a balance sheet (unrealized) loss of $1.3 billion for 2022, due to its long-term investments in bitcoin. (As of December 31, 2022, MicroStrategy held a total of 132,500 BTC worth $1.84 billion). At the same time, the company's management does not plan to stop operations with a digital asset. Commenting on last year's turmoil, MicroStrategy co-founder Michael Saylor said he sees this as a kind of Darwinian theory: weak and bad players have left the market, and this should push the industry forward in the long run. At the same time, according to Saylor, cryptocurrencies need a clear regulatory framework for companies to comply with certain standards and protect customers. “What is really needed is supervision. Clear guidance from Congress is needed for the industry to have its own Goldman Sachs, Morgan Stanley and BlackRock. We need clear rules of conduct from the SEC (Securities and Exchange Commission) of the United States.”

However, David Marcus, former Meta blockchain executive and former PayPal president, for example, doubts that legislatures will be able to develop such rules anytime soon. Based on this, he believes that crypto companies will continue to operate in a "vacuum" in 2023, at their own peril and risk, and the crypto winter will end only by 2025, when the market recovers from last year's shocks.

Surprisingly, not only supporters of cryptocurrencies, but also their fierce opponents advocate increased regulatory pressure. Thus, Charlie Munger, an associate of Warren Buffett, vice president of the Berkshire Hathaway holding company, called on the US authorities to destroy bitcoin, which the billionaire compares investing in to gambling. He said in an interview with the Wall Street Journal that the cryptocurrency industry is undermining the stability of the global financial sector. And that BTC cannot be considered an asset class as it has no value.

Munger has been expressing this point of view over the past few years. And now he calls on the US authorities to deal a devastating blow to the crypto market. In his opinion, it is necessary to drive it into such a strict framework of regulation that will finally strangle this industry.

Note that Charlie Munger is 99 years old, which, perhaps, explains his radical conservatism. The younger generation of businessmen is more loyal to digital innovations. Suffice it to recall the results of a survey conducted by the financial consulting company deVere Group. They showed that despite the challenges of 2022, 82% of millionaires were considering investing in digital assets. According to Nigel Green, CEO of the deVere Group, the momentum for such interest will increase as conditions in the traditional financial system change.

Morgan Creek investment company CEO Mark W. Yusko believes that favorable macroeconomic conditions will lead to the fact that the next bull market could begin as early as Q2 2023. According to the top manager, the US Federal Reserve is unlikely to cut the key rate in the near future. However, even a slowdown or pause in this process will be perceived as a positive signal for risky assets, which include cryptocurrencies. The CEO of Morgan Creek pointed to the expectations of the next bitcoin halving, which will tentatively take place on April 19-21, 2024, as an additional reason for the growth of the crypto market. According to Yusko's calculations, the recovery of the digital asset market usually begins nine months before this event, which means that the rally will start at the end of the summer of 2023 this time.

Cathie Wood, the head of ARK Invest, is even more optimistic about the future, she still considers the first cryptocurrency to be the best form of protection against financial losses. In her opinion, all segments of the population, both the poor and the wealthy, will benefit from the use of digital gold. In confirmation of the words of their manager, Ark Invest analysts make just a cosmic forecast. Their pessimistic scenario assumes that the BTC price will rise to $259,000, and the optimistic one - up to $1.5 million per coin. (we wonder what Charlie Munger would say about this?)

At the time of writing this review (Friday evening, February 10), BTC/USD is trading in the $21,600 zone. The total capitalization of the crypto market is $1.010 trillion ($1.082 trillion a week ago). The Crypto Fear & Greed Index fell from 60 to 48 points over the week, and ended up in the Neutral zone, almost in the very center of the scale. The situation is uncertain, and perhaps traders, like bitcoin, “should take a break”?


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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CryptoNews of the Week


- North Korean hackers stole a record amount in cryptocurrencies in 2022 and targeted the networks of foreign aerospace and defense companies. This is reported by Reuters with reference to a UN report. Cybersecurity specialists estimate the damage at more than $1 billion. At the same time, Chainalysis analysts believe that the attacks have brought the DPRK about $1.7 billion in cryptocurrencies over the past year.
Most of the attacks were carried out by cybercriminals controlled by North Korea's Main Intelligence Bureau. These include Kimsuky, Lazarus Group and Andariel. They distributed malware in various ways, including phishing. “Initial contacts with individuals were made through LinkedIn, and once a level of trust with the targets was established, the malware was delivered via WhatsApp,” the UN notes, adding that the methods of hackers have become more sophisticated, making it more difficult to trace the stolen assets.

- Morgan Creek investment company CEO Mark W. Yusko, said in an interview with Cointelegraph that the next bull market could start as early as Q2 2023. This will be facilitated by favorable macroeconomic conditions and expectations of bitcoin halving.
According to the top manager, the US Federal Reserve is unlikely to cut the key rate in the near future. However, even a slowdown or pause in this process will be perceived as a positive signal for risky assets, which include cryptocurrencies.
The CEO of Morgan Creek indicated the expectations of the next bitcoin halving, which is expected to take place around April 19-21, 2024, as an additional reason for the bull market He believes that the recovery of the digital asset market usually begins nine months before this event, that is, it is the end of summer 2023 this time.

- Cathy Wood, the head of ARK Invest, still considers the first cryptocurrency the best form of protection against financial losses and an insurance policy for developing countries. “We're seeing hyperinflation around the world as fiat currencies crash. All segments of the population need a fallback, an insurance policy like bitcoin,” she said in an interview with Yahoo Finance.
According to Cathy Wood, all segments of the population, both the poor and the wealthy, will benefit from the use of digital gold. As for the latter, she pointed to bitcoin as a hedge against capital forfeiture in countries like China or Russia.

- MicroStrategy, a developer of analytical software and one of the largest crypto investors, recorded a balance sheet loss for 2022 in the amount of $1.3 billion. This is due to its long-term investment in bitcoin. (As of December 31, 2022, MicroStrategy held a total of 132,500 BTC worth $1.84 billion).
At the same time, the company's management states that it does not plan to stop trading the digital asset. According to Michael Saylor, MicroStrategy co-founder Michael Saylor, it has “managed to surpass bitcoin as an index” since the company first announced its purchase of BTC in August 2020: its shares have risen by 117% during this time, while the value of bitcoin has increased by 98%.

- Commenting on the collapse of Alameda and FTX, Michael Saylor said that he sees this as a kind of manifestation of Darwin's theory: weak and bad players left the market, and this pushed the industry forward in the long run. At the same time, according to the co-founder of MicroStrategy, cryptocurrencies need a clear regulatory framework for companies to comply with certain standards and protect customers. “What is really needed is supervision. Clear guidance from Congress is needed for the industry to have its own Goldman Sachs, Morgan Stanley and BlackRock. We need clear rules of conduct from the SEC (Securities and Exchange Commission) of the United States.”

- David Marcus, former head of Meta's blockchain division and former PayPal president, suggested that crypto winter will only end by 2025, when the market recovers from last year's turmoil. He believes that the time will soon pass when you can create a token out of thin air and earn millions of dollars from it. Much more value will be given to decentralized applications that have practical value for the real world. Marcus expects big breakthroughs in payments, asset tokenization, and decentralized finance (DeFi). However, the specialist doubts that the legislature will be able to develop rules for regulating cryptocurrencies in the near future, therefore, crypto companies will continue to operate in a "vacuum" in 2023, at their own peril and risk.

- Charlie Munger, an associate of Warren Buffett, vice president of the Berkshire Hathaway holding company, called on the US authorities to destroy bitcoin, which the billionaire compares investing in to gambling. He said in an interview with the Wall Street Journal that the cryptocurrency industry is undermining the stability of the global financial sector. And that BTC cannot be considered an asset class as it has no value.
Munger has been expressing this point of view over the past few years. And now he calls on the US authorities to deal a devastating blow to the crypto market. In his opinion, it is necessary to push it into the strictest regulatory framework, as a result of which the industry will simply not withstand the pressure and die.

- Crypto trader and investor Tone Vays stated that bitcoin “has risen very fast and very high.” BTC rose from a low of $16,272 in November 2022 to $24,229 in early February 2023 and is now facing major resistance as it approaches the $25,000 level. The specialist believes that BTC will eventually break through the resistance zone, but the asset probably “should take a break” at the moment. Weiss clarified that he expects either consolidation of the rate in a narrow range, or a small pullback.
Many experts are also keeping a close eye on the $25,000 level. For example, analyst Benjamin Cowen believes that bitcoin is on the verge of a potential trend change that could lead to a rise in quotes, as it did in 2019. The legendary trader Peter Brandt predicted earlier that the exit from the “double bottom support” technical analysis pattern would lead the coin to rise above $25,000.

- According to statistics, the media forecast of crypto community members accurately predicted the value of bitcoin by the end of each month, over the past six months with a probability of up to 75%. Finbold experts note that the forecasts obtained from a survey of more than 15 thousand traders, and the predictions of machine learning algorithms, are seriously different at the moment. Real people expect BTC quotes to fall to $20,250 by February 28, 2023, while artificial intelligence points to $24,342.

- Swiss Rehabilitation Center The Balance has offered a course of treatment for addiction to crypto trading. According to some reports, about 1% of crypto traders have such a serious pathological addiction. The course is designed for a four-week stay in the center itself or in its branches in Mallorca, London or Zurich. The cost of treatment exceeds $75,000. Anna Lembke, professor of psychiatry at Stanford University, said the course is similar to treating a gambling addiction. At the same time, she called such a high cost of treatment unjustified.


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.

#eurusd #gbpusd #usdjpy #btcusd #ethusd #ltcusd #xrpusd #forex #forex_example #signals #forex #cryptocurrencies #bitcoin #stock_market

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EUR/USD: Three Weeks of Uncertainty

The meetings of the Central Banks were held strictly according to plan last week. As expected, the key rate was raised by 25 bps (basis points) at the US Federal Reserve meeting and reached 4.75%, and by 50 bps at the European Central Bank meeting, up to 3.00%. Since the decisions themselves did not bring surprises, market participants focused on the regulators' plans for the future.

The next meeting of the FOMC (Federal Open Market Committee) of the US Federal Reserve will not be held soon: on March 22, that is, in almost two months. Markets are likely to expect that it will announce another rate hike by 25 bps to 5.00%, after which it will hold it at this level.

The DXY Dollar Index fell to a new 9-month low of 100.80 on Thursday, February 02. This happened after the Federal Reserve made it clear that the end of the wave of rate hikes was near. Statistics show that the regulator's efforts to solve economic problems are yielding results: the inflation rate was 9.1% (the highest figure in 40 years) in June, and it fell to 6.5% in December. This makes it possible to put the brake on quantitative tightening (QT). Investors understood the dovish hints of the head of the Fed, Jerome Powell, who, during the press conference following the meeting, admitted for the first time that "the deflationary process has begun." He also assumed that the peak rate would not exceed 5.00% and reiterated that the US Central Bank can achieve a slowdown in inflation without causing significant damage to the economy.

As for the Eurozone, inflation, as shown by data for January, has been falling for the third month in a row. But the basic price increase remains at the same level, despite the fall in energy prices. According to forecasts, inflation in the Eurozone is expected to reach 5.9% in 2023, to fall to 2.7% in 2024, and to fall even lower to 2.1% in 2025. Unemployment growth is also projected to decline further, while GDP growth expectations remain at the same level. According to preliminary data published on Wednesday, February 01, the growth of the European economy will be 1.9% in 2022, which is lower than the previous value (2.3%), but higher than the forecast (1.8%).

Following the last meeting, ECB President Christine Lagarde said that the risks to both economic growth and inflation in the Eurozone have become more balanced. And that the ECB will assess economic development after the next rate hike in March. (It is also expected to be 50 bps). When asked about the possibility of further rate hikes after March 16, Ms Lagarde refrained from making any commitments. This put downward pressure on the euro, and EUR/USD turned around and went down without rising above 1.1031.

The dollar received an additional boost of strength after the publication of impressive data from the US labor market on Friday, February 03. Data released by the Bureau of Labor Statistics (BLS) showed that the country's unemployment rate, instead of the expected increase to 3.6%, fell from 3.5% to 3.4%, and the number of jobs created outside the agricultural sector (NFP) in January increased by 517K, which is 2.8 times higher than the 185K forecast, and almost twice higher than December's 260K growth.

As a result, EUR/USD finished at 1.0794. Recall that it ended the week at 1.0833 on Friday, January 13, at 1.0855 on January 20, and at 1.0875 on January 27. This proximity of all these values (within 100 points) suggests that the market has not received clear signals about where it should aim in the foreseeable future. Although, at the time of writing the review (Friday evening, February 03), the US currency has a certain advantage.

Economists at Singapore's financial UOB Group suggest that the euro is not yet ready to move towards the resistance of 1.1120, and the pair may trade in the range of 1.0820-1.1020 for the next 1-3 weeks. As for the median forecast, 45% of analysts expect further strengthening of the euro, the same number (45%) expect the dollar to strengthen, and the remaining 10% have taken a neutral position. The picture is different among the indicators on D1. 35% of the oscillators are colored red (one third of them are in the oversold zone), 25% are looking up and 40% are colored gray neutral. As for trend indicators, 50% recommend buying, 50% selling. The nearest support for the pair is in the zone 1.0740-1.0775, then there are levels and zones, 1.0700-1.0710, 1.0620-1.0680, 1.0560 and 1.0480-1.0500. The bulls will meet resistance at the levels of 1.0800, 1.0835-1.0850, 1.0895-1.0925, 1.0985-1.1030, 1.1120, after which they will try to gain a foothold in the 1.1260-1.1360 echelon.

Next week's calendar may mark Monday February 06, when preliminary data on consumer prices in Germany and final data on January retail sales in the Eurozone will be published. Fed Chairman Jerome Powell is expected to speak on Tuesday. The final data on inflation (CPI) in Germany and unemployment in the US will arrive on Thursday, February 09.  And the value of the Consumer Confidence Index from the University of Michigan USA will be known on Friday, February 10.

GBP/USD: Riddles from BoE

The famous London fog continues to haze the monetary policy of the Bank of England (BoE). Like the ECB, this regulator raised the key rate by 50 bp. to 4.00% on Thursday, February 02, but at the same time it softened its message noticeably. This pushed the British currency back from its highs since mid-June 2022. values (1.2450) down, to the level of 1.2100. At the week's low, after the publication of the US NFP, the GBP/USD pair traded even lower at 1.2046, and ended the five-day period almost there, at 1.2050.

As already mentioned, the future of the UK's finances is vague and uncertain. We have tried to make sense of what the chief economist said BoE Hugh Pill, giving an interview for Times Radio on Friday February 03. Here are just a few quotes. “We must admit that we have already achieved a lot” - “There are many more steps in the pipeline.” “A number of news stories have improved recently” - “We must be prepared for shocks.” "We have a fairly high degree of confidence that inflation will fall this year" - "The focus is on whether inflation will fall further." And like the icing on the cake, Hugh Pill's remark that it's important for the Bank of England not to do "too much" in monetary policy.

To be honest, we were unable to determine from this statement where the line between "little", "much" and "too much" is drawn. Therefore, here is the opinion of Commerzbank strategists. “It has become clear that the Bank of England is nearing the end of its rate hike cycle,” they conclude. And they continue: “While the Bank of England has left the door open for further rate hikes, a more assertive approach would be desirable from a currency market perspective due to high uncertainty. Against this background, it is not surprising that the sterling has weakened, and its further decline seems likely to us.”

This point of view of Commerzbank economists has been supported by 55% of analysts, who also "thought probable" a further fall in GBP/USD. The opposite view is held by 45% of experts. Among the trend indicators on D1, the balance of power is 75% to 25% in favor of the reds. Among the oscillators, the reds win as well: their advantage is 85% versus 15%. However, among the reds, 20% signals that the pair is oversold. Support levels and zones for the pair are 1.2025, 1.1960, 1.1900, 1.1800-1.1840. When the pair moves north, it will face resistance at the levels 1.2085, 1.2145, 1.2185-1.2210, 1.2270, 1.2335, 1.2390-1.2400, 1.2430-1.2450, 1.2510, 1.2575-1.2610, 1.2700, 1.2750 and 1.2940.

Among the developments regarding the UK economy in the coming week, Friday 10 February will attract attention with the release of UK GDP data for the past 2022. It is expected that, despite some growth in Q4 (from -0.3% to 0.0%), the annual rate will show a drop from 1.9% to 0.4%.

USD/JPY: Non-Farm Payrolls Knocks the Yen Down


In general, the Japanese yen moved in the same way as its counterparts against the dollar last week, the euro and the British pound. However, its volatility was practically not affected by the decisions of the ECB and the Bank of England. In this case, the determining factor was the difference between interest rates on the dollar (+4.75%) and the yen (-0.1%). As a result, having found a local bottom at 128.08, USD/JPY moved sideways after the Fed meeting, and data from the US labor market (NFP) sent it on a space flight on Friday, with a length of almost 300 points, to the height of 131.18. The flight of investors from the dollar to the safe haven of Japan has stopped, and they have again decided to choose the American currency as a safe haven. USD/JPY set the last chord of the week at the level of 131.12.

Markets will now wait for March 10 for the current Bank of Japan (BoJ) Governor Haruhiko Kuroda to hold his last meeting. His powers will end on April 8, and the meeting of the BoJ on April 28 will be held by the new head of the Central Bank. It is with this event that the markets associate a possible change in the monetary policy of the regulator. Although, until that moment, interventions from the BoJ, similar to those that the regulator undertook in October-November 2022, cannot be ruled out to stop the fall of the national currency.

So far, analysts' forecasts do not provide any clear guidelines: 40% of them side with the bulls, 40% with the bears, and 20% have decided not to make predictions at all.

Among the oscillators on D1, 75% point north (15% are in the oversold zone), 15% look south and 10% look east. For trend indicators, 50% look north, exactly the same number in the opposite direction. The nearest support level is located at -130.85 zone, followed by the levels and zones of 130.50, 129.70-130.00, 128.90-129.00, 128.50, 127.75-128.10, 127.00-127.25 and 125.00. Levels and resistance zones are 131.25, 131.65, 132.00, 132.80, 133.60, 134.40 and then 137.50.

No important events regarding the Japanese economy are expected this week.

CRYPTOCURRENCIES: BTC Has Become a Risk Protective Asset

The past week proved once again that the top cryptocurrencies, and primarily bitcoin, have long ceased to be independent. Their quotes, as well as risky assets in general, are firmly tied to the decisions of the US Federal Reserve: the US dollar is on the opposite side of the scale in BTC/USD. If it weakens, bitcoin gets heavier, and vice versa. Of course, decisions by other regulators, such as the ECB or the People's Bank of China, also influence the price of virtual assets, and internal crises such as the FTX collapse may also shake it up. But the Fed is still the main trend creator of BTC/USD.

Bitcoin is still an amazing asset. It managed, as they say, to sit on two chairs last year. On the one hand, its correlation with the stock market and stock indices S&P500, Dow Jones and Nasdaq allows it to be classified as a risky asset. But on the other hand, analysts at the crypto media site CryptoSlate draw attention to the correlation of cryptocurrency with... gold, which has been considered insurance against inflation and other financial risks since ancient times. The coincidence in movement between the two assets has reached, according to CryptoSlate, an absolute maximum,­ 83% since February 2022. It turns out that bitcoin is both a risky and protective asset at the same time. As they say, a friend among strangers and a stranger among friends.

According to Goldman Sachs economists, even after adjusting for risk, bitcoin has already significantly outperformed gold, stock markets and the real estate sector in terms of profitability and continues to do so. The main cryptocurrency is now showing its best start to the year since January 2013. Its rate rose by 51% then, the growth was 40% last month. It happened against the backdrop of the weakness of the US dollar. “At the same time, 85% of the contribution to the rally is associated with investors from the United States,” says Markus Thielen, head of research at crypto services provider Matrixport. The bullish stance of US companies is also confirmed by the renewed premium in bitcoin futures listed on the Chicago Mercantile Exchange.  Open interest in BTC futures on the Chicago Mercantile Exchange (CME) is significantly outperforming the price, with a 77% month-on-month rise to $2.3 billion. “We interpret this as a sign that faster institutional traders and hedge funds are actively buying back the recent fall in the cryptocurrency markets,” Thielen said.

Deutsche Digital Assets made a similar observation earlier, on January 20, drawing attention to the increase in Coinbase's premium as evidence of increased buying interest from sophisticated US institutional­ investors.

A survey by financial advisory firm deVere Group showed that despite the challenges of 2022, 82% of millionaires were considering investing in digital assets. 8 out of 10 surveyed clients of the company, with assets to invest from $1.2 to $6.1 million, turned to financial advisers for cryptocurrency advice.

Nigel Green, CEO and Founder of the deVere Group, believes that while the group surveyed is “generally more conservative,” its interest stems from the core values of bitcoin: “digital, global, borderless, decentralized, and secure from unauthorized access". Green also notes a growing interest in crypto services from older financial institutions such as Fidelity, BlackRock and JPMorgan, and considers this a good sign for the industry. He predicts that the momentum of interest will build as the “crypto winter” of 2022 thaws due to changing conditions in the traditional financial system. (For reference, a June 2022 Pricewaterhouse-Coopers report showed that roughly a third of the 89 traditional hedge funds surveyed had already invested in digital assets.)

Similar results were obtained by analysts from Pureprofile. Their study involved 200 institutional investors and asset managers from the US, the EU, Singapore, the UAE and Brazil. The total amount of funds managed by respondents was $2.85 trillion. Nine out of ten investors in the survey were in favor of the growth of the flagship cryptocurrency in 2023, and 23% believe that the value of BTC will exceed $30,000 by the end of the year.  In the longer term, 65% of respondents agree that the coin will break the $100,000 mark.

Not only whales, but also smaller investors remain optimistic, despite the dramatic events of the last year. According to statistics, the total number of digital wallets with a balance of $1,000 or more in bitcoin or ethereum increased by 27% in 2022. According to the survey, more than 88% of Binance crypto exchange customers plan to continue investing in cryptocurrencies, and only 3.3% do not consider this possibility. Bitcoin is still the dominant asset, owned by 21.7% of those surveyed.

Over 40% of respondents bought digital assets last year for investment purposes. Other motives were the decline in the value of bitcoin and the general bearish trend. Almost 8% cited the geopolitical situation in the world as a reason for the purchase, and 11.5% expressed distrust of the traditional financial system. 40.8% do not use traditional investment opportunities (buying shares, investing in real estate, mutual funds), while 32.4% do use them. At the same time, 79.7% are sure that cryptocurrencies are necessary for the development of the global economy, and 59.4% of respondents believe that deposits in cryptocurrencies will be able to replace bank deposits over time.

Galaxy Digital Holdings Ltd founder billionaire Mike Novogratz, having weathered a challenging 2022, is now committed to long-term investment in bitcoin mining with a $65 million acquisition of a Helios mining facility in Texas, USA. And according to estimates by a popular analyst aka Plan B, known for his “Stock-to-Flow” model, the price of bitcoin will reach $1 million by 2025, which will more than recoup Mike Novogratz's costs. As for this year, Plan B expects it to rise above $100,000. The analyst also said that the January bitcoin pump confirms that the asset's 4-year cyclical price bottom is over.

According to historical observations by Matrixport experts, while January bitcoin quotes were in the “green” zone on the chart (and they were there), the price rally usually continued in the following months of the year. Based on this, they predict that the flagship cryptocurrency could reach $45,000 by Christmas 2023.

And the well-known cryptocurrency trader Peter Brand considers the bulls' joy a little premature and sticks to the bearish forecast for the near future. As the expert noted, many traders and investors are now waiting for a certain pullback in order to enter the market at better prices. The specialist believes that the flagship of the crypto market may reach the level of $25,000 in the near future, after which there will be a correction closer to $19,000. However, in the medium term, Brand is still optimistic and predicts bitcoin to rise to $65,000 in the middle of this year.

Crypto analyst Benjamin Cowen, who said that bitcoin has a “long year” ahead of time, also warns against premature glee. According to the expert, it may appear that BTC has significant strength, while in fact the asset is likely to be in the process of forming a wide sideways range as a base. Cowen explained that sideways movement is not always an indicator of the growth of the first cryptocurrency and may also signal a fall in quotes.

The analyst reminded traders that a bearish cycle is usually followed by a year of sideways movement. Thus, there were three upward impulses in 2015, and only the last one turned into a real rally. There were also periods of growth in quotes in 2019, then their active fall followed, and a cycle that brought the crypto market to new highs started only after that. Cowen noted that 2023 can be seen as a year of accumulation and that investors can take advantage of this period to increase their holdings of BTC. In addition, he believes that the US Federal Reserve should ease monetary policy for cryptocurrency prices to grow. (The last meeting of the regulator gives hope for this).

At the time of writing this review (Friday evening, February 03), BTC/USD is trading in the $23,400 zone. The total capitalization of the crypto market is $1.082 trillion ($1.060 trillion a week ago). The Crypto Fear & Greed Index, a metric showing the general attitude of the community towards bitcoin, entered the Greed zone for the first time since March 30, 2022, reaching 60 points (55 a week ago). It is clear that this is due to the growth of the coin rate in the first month of the year and the general revival of the market. It is worth noting, however, that the increased confidence among crypto investors should not be directly viewed as a catalyst for the resumption of bullish growth in the bitcoin price. In fact, a Fear or Extreme Fear metric could indicate a good buying opportunity, and too high a Greed reading could mean the market is headed for a downward correction.

And at the end of the review, our half-joking column of crypto life hacks. This time we want to draw the attention of BTC holders to Nigeria. It turns out that this is where you could earn. News releases say that the price of bitcoin on the popular NairaEX exchange in this country, in terms of local currency, jumped to almost $40,000, which is about 70% higher than the global market quotes. As it turned out, the discrepancy is due to the limit imposed by the Central Bank of Nigeria on withdrawing funds from ATMs. So, ladies and gentlemen, do not forget about arbitrage deals, they can also bring good profits. The main thing is to know what, where, when and at what price to buy and then sell.


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.

#eurusd #gbpusd #usdjpy #btcusd #ethusd #ltcusd #xrpusd #forex #forex_example #signals #cryptocurrencies #bitcoin #stock_market

https://nordfx.com/

According to Forex-Awards expert council, NordFX won a convincing victory in the Best CFD Broker Asia 2022 nomination.

The past year was very fruitful for NordFX, as a result of which the company was awarded several prestigious professional awards recognizing its achievements both in specific regions and its success in general. THE BIZZ Business Excellence Award from the World Confederation of Businesses, Best Execution Broker LATAM from International Business Magazine Awards, Best Crypto Broker from AllForexRating Awards, Most Reliable Forex Broker Asia from Finance Derivative Awards, Best Broker Middle East from Forexing Awards were added to NordFX titles in 2022. NordFX is now also named Best CFD Broker Asia by Forex-Awards.

This honorary title was awarded to the company by the Forex-Awards Expert Council based on the opinions of both independent experts and the trading community. A unique team of expert professionals headquartered in Hong Kong honor the most remarkable solution and innovation in almost 30 nominations since 2010, reward market participants featuring breakthrough initiatives and excellent results in the Forex industry.

The Forex-Awards Expert Council has previously noted the merits of NordFX. This time, the Best CFD Broker Asia award is due to the company's achievements in online CFD trading, including an impressive range of trading instruments, instant order execution, as well as the lowest spreads and commissions, which have allowed clients from the Asian region to achieve outstanding success. Suffice it to say that the total earnings of traders from the TOP-3 NordFX in 2022 amounted to almost $1,500,000, and most of these traders are from Asia.
 

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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NordFX Brokerage company has summed up the performance of its clients' trade transactions in January 2023. The services of social trading, CopyTrading and PAMM, as well as the profit received by the company's IB-partners have also been assessed.

- The best result among traders was shown in January by a client from West Asia (account #1644XXX), whose profit amounted to 71,280 USD and was received mainly due to transactions with gold (XAU/USD) and Japanese yen (USD/JPY).
- The second place in the top three NordFX top performing clients belongs to the holder of account No.1543XXX from East Asia, who earned 19,983 USD. In addition to gold (XAU/USD) and yen (USD/JPY), this trader's arsenal has been supplemented with such an exotic pair as USD/ZAR (American dollar/South African rand),
- Finally, another representative of the West Asian region (account No. 1672XXX) took the third place on the January podium with a profit of 17,059 USD, whose trading instruments, in addition to gold (XAU/USD) and the Japanese yen (USD/JPY), also included the European currency (EUR/USD).

The passive investment services:

- In CopyTrading, the "veteran" signal - KennyFXPRO - Prismo 2K continues to increase profits. It increased its profit to 307% in 637 days. But given the relative stability, it should be borne in mind that this supplier's trade failed seriously last November, when the maximum drawdown on this signal was close to 67%. Bull trader is another interesting signal. True, it is much younger, it is only 183 days old. It has increased the deposit by 183% during this time, since July 25, 2022, while the maximum drawdown has not exceeded 23%.

Fans of algorithmic trading can look out for a startup called ATFOREXACADEMY ALGO 1. This signal has shown a profitability of 93% in just 41 days, although its drawdown was not small, 38%. Here, as usual, it is appropriate to recall that, in addition to a short life span, aggressive trading is a serious risk factor, which carries increased risks. Therefore, we urge you to be extremely cautious when working on financial markets.

- However, as practice shows, a long lifespan and good trading performance in the past do not guarantee against future losses. Thus, two leading accounts in the PAMM service suffered significant losses last November.

The KennyFXPRO-The Multi 3000 EA account has existed since January 2021, and the maximum drawdown on it did not exceed 20% for a long time. However, the situation became more complicated in mid-November 2022, the drawdown exceeded 42%, and the account manager decided to close unprofitable positions. As a result, profits fell from 170% to 70%. The TranquilityFX-The Genesis v3 account found itself in a similar situation: its maximum drawdown doubled as well, while profits fell from 130% to 44%. It should be noted to the credit of both managers that they did not allow a complete zeroing of deposits, and now they are moving forward again, although very cautiously. The yield on the first signal rose to 80% by January 31, 2023, and to 50% on the second one.

Among the NordFX IB partners, December TOP-3 is as follows:
- the largest commission, 8,141 USD, was credited to a partner from South Asia, account No.1618XXX;
- the next is their colleague from Southeast Asia (account No. 1656XXX), who received 6,196 USD during the month;
- and, finally, their colleague from Western Asia (account No. 1645XXX) closes the top three, earning 4,526 USD in commissions in January.
 

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.

#eurusd #gbpusd #usdjpy #btcusd #ethusd #ltcusd #xrpusd #forex #forex_example #signals #cryptocurrencies #bitcoin #stock_market

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CryptoNews of the Week


- Bitcoin has had its best start to the year since January 2013. The rate rose by 51% then, the growth was 40% last month. It happened against the backdrop of the weakness of the US dollar. “At the same time, 85% of the contribution to the rally is associated with investors from the United States,” says Markus Thielen, head of research at crypto services provider Matrixport. The bullish stance of US companies is also confirmed by the renewed premium in bitcoin futures listed on the Chicago Mercantile Exchange. “We interpret this as a sign that faster institutional traders and hedge funds are actively buying back the recent fall in the cryptocurrency markets,” Thielen said.
Deutsche Digital Assets made a similar observation earlier, on January 20, drawing attention to the increase in Coinbase's premium as evidence of increased buying interest from sophisticated US investors. An institutional-led bullish reversal in bitcoin could be a good sign for the US stock market, given that the cryptocurrency bottomed a few weeks before the S&P 500.

- Binance Bitcoin Exchange reported that user interest in digital assets remains high. According to the survey, more than 88% of Binance customers plan to continue investing in cryptocurrencies, and only 3.3% do not consider this possibility. Bitcoin is still the dominant asset, owned by 21.7% of those surveyed. The top three also include Tether (17.8%) and BUSD (10.3%).
Over 40% of respondents bought digital assets last year for investment purposes. Other motives were the decline in the value of bitcoin and the general bearish trend. Almost 8% cited the geopolitical situation in the world as a reason for the purchase, and 11.5% expressed distrust of the traditional financial system. 40.8% do not use traditional investment opportunities (buying shares, investing in real estate, mutual funds), while 32.4% do use them. At the same time, 79.7% are sure that cryptocurrencies are necessary for the development of the global economy, and 59.4% of respondents believe that deposits in cryptocurrencies will be able to replace bank deposits over time.
According to statistics, the total number of digital wallets with a balance of $1,000 or more in bitcoin or ethereum has increased by 27% in 2022.

- Despite the fact that 2022 was a challenging year for the crypto industry, 82% of millionaires considered investing in digital assets like bitcoin. This follows from a survey conducted by financial consulting company deVere Group. The results of the survey, published on January 30, show that 8 out of 10 surveyed clients of the company, with assets to invest from $1.2 to $6.1 million, turned to financial advisers for cryptocurrency advice.
Nigel Green, CEO and Founder of the deVere Group, believes that while the group surveyed is “generally more conservative,” its interest stems from the core values of bitcoin: “digital, global, borderless, decentralized, and secure from unauthorized access". Green also notes a growing interest in crypto services from older financial institutions such as Fidelity, BlackRock and JPMorgan, and considers this a good sign for the industry. He predicts that the momentum of interest will build as the “crypto winter” of 2022 thaws due to changing conditions in the traditional financial system.
For the record: A June 2022 report by Pricewaterhouse-Coopers found that roughly a third of 89 traditional hedge funds surveyed had already invested in digital assets like bitcoin.

- The Fear and Greed Index, a metric showing the community's general attitude towards bitcoin, entered the “Greed” zone for the first time since March 30, 2022. This is due to the increase in the bitcoin rate in the first month of the year and the general revival of the entire market. It is worth noting, however, that the increased confidence among crypto investors should not be directly viewed as a catalyst for the resumption of bullish growth in the bitcoin price. In fact, a Fear or Extreme Fear metric could indicate a good buying opportunity, and too high a Greed reading could mean the market is headed for a downward correction.

- Tron founder Justin Sun said that the legalization of cryptocurrency will not only make it easier to buy and sell goods and services but will also give the public more control over their financial future. “Cryptocurrency can become a powerful tool for financial inclusion and improving the lives of people in all corners of the world. […] Let's work together to create a more inclusive and equal future for all,” wrote Justin Sun.
For the record: TRON is a decentralized entertainment content platform based on blockchain and using the TRX token. The platform also offers tools that allow developers to build and launch their own dApps.

- Jordan Belfort, a former stockbroker widely known as “The Wolf of Wall Street”, also believes that regulation of the digital asset segment may be a bullish catalyst for bitcoin in the future. According to the entrepreneur, the flagship cryptocurrency will only benefit from this. He also emphasized that if world governments continue to print money uncontrollably, more and more users will see bitcoin as a reliable tool to protect against inflation.

- The price of bitcoin on Nigeria's popular NairaEx exchange jumped in terms of local currency to almost $40,000, which is about 70% higher than the global market. The discrepancy is due to the limit imposed by the country's Central Bank on withdrawing funds from ATMs. The regulator took this step in order to reduce the share of cash in cash turnover.

- Arizona Senate Member Wendy Rogers has once again proposed approving bitcoin as legal tender in the state. In a tweet, Rogers quoted Goldman Sachs data that the first cryptocurrency is “the world's most profitable asset this year.” If the law is passed, the cryptocurrency will receive the same status as the US dollar.

- Billionaire founder of Galaxy Digital Holdings Ltd Mike Novogratz, having endured a challenging 2022, is now determined to increase investment in bitcoin mining. His focus is Texas, where Galaxy Digital Holdings Ltd is buying the Helios mining operation from Argo Blockchain for $65 million.
There are currently almost 30 mining companies in Texas. In total, they have already created about 2,000 new jobs directly, and indirectly, about 20,000 more. The Governor's Blockchain Working Group believes that Texas, which leads in oil production, is able to maintain leadership in the US in bitcoin mining as well.

- According to Matrixport experts, the flagship cryptocurrency rate may reach $45,000 by Christmas 2023. Researchers released a report in which they shared a historical observation: when January's bitcoin quotes on the chart were in the “green” zone, the price rally usually continued in the following months of the year.

- A popular analyst Plan B has outlined a scenario that, in his opinion, could raise the bitcoin price to $1 million by 2025. As for this year, he predicts the price will rise above $100,000. The analyst also said that the January bitcoin pump confirms that the asset's 4-year cyclical price bottom is over.
Plan B is known for the "Stock-to-Flow" model, which attempts to model the price of bitcoin based on its scarcity. His concept involves a parabolic jump in the price of an asset every 4 years due to halving. That being said, the analyst was heavily criticized in 2022 due to an unfortunate prediction that BTC would rise well above $100,000 at the end of 2021. After that, he adjusted his model based on 18-month statistics, as a result of which a smoother growth of the main cryptocurrency was incorporated into it.

- Cryptocurrency analyst Benjamin Cowen said that bitcoin has a “long year” to look forward to. According to the expert, it may appear that BTC has significant strength, while in fact the asset is likely to be in the process of forming a wide sideways range as a base. Cowen explained that sideways movement is not always an indicator of the growth of the first cryptocurrency and may also signal a fall in quotes.
The analyst reminded traders that a bearish cycle is usually followed by a year of sideways movement. Thus, there were three upward impulses in 2015, and only the last one turned into a real rally. There were also periods of growth in quotes in 2019, then their active fall followed, and a cycle that brought the crypto market to new highs started only after that.
The analyst noted that 2023 can be seen as a year of accumulation and that investors can take advantage of this period to increase their holdings of BTC. In addition, Cowan believes that the US Federal Reserve should ease monetary policy in order to increase cryptocurrency prices.

- Peter Brand, a well-known cryptocurrency trader, has a bearish forecast for the near future, as BTC has not been able to gain a foothold above $23,500 for a long time and is in consolidation. As the expert noted, many traders and investors are now waiting for a certain pullback in order to enter the market at better prices. The specialist believes that the flagship of the crypto market may reach the level of $25,000 in the near future, after which there will be a correction closer to $19,000. Brand remains optimistic from a medium-term perspective, predicting bitcoin to rise to $65,000 in the middle of this year.

- This release of CryptoNews was prepared a few hours before the meeting of the US Federal Reserve, following which the decision on the key rate will be announced. If the rate, according to forecasts, increases by 0.25%, and at the same time the head of the Fed, Jerome Powell, clearly hints at the dovish attitude of the regulator, this will most likely weaken the dollar and push the quotes of risky assets, including cryptocurrencies, up. On the other hand, if, contrary to the expectations of investors, the refinancing rate rises by 0.50%, a wave of panic sales in the crypto market cannot be ruled out. You can find out what will actually happen in NordFX's regular analytical review, which, as usual, will be published at the end of the week.


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.

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EUR/USD: Next week: Five Days of Storms and Tsunamis


It seems that the whole world celebrated the Chinese New Year last week. There was some volatility in all major currency pairs of course, but we got an almost perfect sideways trend in the end. We will not deny the importance of the New Year holidays, but the reason for the lull, of course, is not in this, but in the key events that are coming next week.

On February 1, when it will be late at night in Europe and dawn in Asia, the US Federal Reserve will announce its key interest rate decision, and the regulator's management will tell (or at least give a hint) about its future monetary policy. The European Central Bank will make its decision on the rate a few hours later, on Thursday, February 02.

But, before giving forecasts, let's turn to the events of the past five days. Data released on Thursday, January 26 showed that the US economy is doing better than expected. The country's GDP, according to preliminary estimates, grew by 2.9% y/y in Q4 against the forecast of 2.6%. At the same time, initial claims for unemployment benefits for the week to January 21 fell to 186K (forecast 205K, the previous value of 192K). This is the lowest weekly figure since April 2022. Underlying durable goods orders also beat estimates, dropping by -0.1% instead of the expected -0.2%. New home sales are also doing well, with sales up to 616K in December from 602K in November.

Looking at these figures, we can conclude that not everything is so bad and there is no recession in the United States. And that the Fed's 2022 aggressive monetary policy (QT) has not had a suffocating effect on the economy. Therefore, it is possible to move on to its easing (QE). However, some economists point out that consumer demand is losing its momentum (2.1% in Q4 against the forecast of 2.9% and 2.3% a quarter earlier). Based on this, they conclude that the chances of a mild recession remain.

For now, the market believes the Fed will raise rates by 25 basis points (bps) at its February meeting. It is currently 4.50%, and the market consensus indicates its peak value at the level of 4.90-5.00% in 2023. The probability that the rate will be raised by another 25 bp in March is estimated at 85%. Although some analysts believe that the peak value will stop at around 4.75%. Moreover, the rate may even be lowered to 4.25-4.50% by the end of 2023. Such dynamics will obviously not benefit the dollar, but it will push up the competing currencies from the DXY basket and risky assets.

As for the common European currency, the market is sure that the ECB will raise the rate by 50 bp on February 02. But, according to analysts, the difference in the rises in USD and EUR rates has already been taken into account by the market in the pair's quotes, which is why it keeps in the range of 1.0845-1.0925. And its foreseeable future will depend on the comments and signals that the leaders of the Fed and the ECB will give at the end of their meetings.

Starting at 1.0855 on Monday, January 23, the pair ended last week at 1.0875. At the time of writing the forecast (Friday evening, January 27), the votes of supporters of bulls and bears are divided almost equally. 50% of analysts expect further strengthening of the euro and the growth of the pair. 45% expect that the US currency will be able to win back part of the losses. The remaining 5% of experts, in anticipation of the meetings of the Central Banks, prefer not to make forecasts at all. Among the indicators on D1, the picture is different: 90% of the oscillators are colored green, 5% indicate that the pair is overbought, and 5% are colored gray neutral. Among trend indicators, 80% recommend buying, 20% recommend selling. The nearest support for the pair is in the zone 1.0835-1.0845, then there are levels and zones 1.0800, 1.0740-1.0775, 1.0700-1.0710, 1.0620-1.0680, 1.0560 and 1.0480-1.0500. The bulls will meet resistance at the levels of 1.0895-1.0935, 1.0985-1.1010, 1.1130, after which they will try to gain a foothold in the 1.1260-1.1360 echelon.

The coming week will undoubtedly be stormy and filled with events. In addition to these Fed and ECB meetings, it should be noted that data on GDP were published on January 30, on the unemployment rate and inflation rate (CPI) on January 31, and on business activity (PMI) in the German manufacturing sector on February 01. We will find out what is the situation with consumer prices ( CPI ) in the Eurozone and what is happening with business activity (PMI) in the USA also on Wednesday, February 01. In addition, we are traditionally waiting for an impressive portion of statistics from the US labor market on February 01, 02 and 03, including the unemployment rate and the number of new jobs created outside the agricultural sector (NFP).

GBP/USD: The Future of the Pound Is in a Thick Fog

The Bank of England (BoE) will also make its decision on the interest rate on Thursday, February 02. And if the probability that the Fed and the ECB will raise their rates is close to 100%, everything is not so simple with the pound. According to some analysts, the BoE may surprise the markets by pausing and slowing down the tightening of its monetary policy.

Although there may not be a pause, we will see a new round of QT instead of QE. British Chancellor of the Exchequer Jeremy Hunt said on Friday, February 27 that “the weak recovery in the public sector after the pandemic reinforces the need for reforms” and that “the best tax cut right now is lower inflation.” And the best (if not the only) cure for inflation, as the experience of overseas colleagues shows, is to raise interest rates.

Pound bulls hope that the Bank of England will raise the pound rate by 50 bp, and it will rise to at least 4.50% from the current 3.50% by the summer. As for the bears, they believe that the threat of an economic downturn and recession will prevent the Central Bank from raising it by more than 25 bps now, and it will do so for the last time, and then be forced to ease monetary policy despite high inflation.

In general, the future is shrouded in fog. But the fact that the country's economy has big problems is very clear. This is evidenced by the fall in the Composite Business Activity Index (PMI) from 49.0 to 47.8 points, instead of the expected increase to 49.3.

Bank of England Governor Andrew Bailey has recently said that the British economy after Brexit has faced a shortage of more than 300,000 workers due to the cessation of the free movement of labor from the EU. Such a deficit has become an obstacle to the fight against inflation, as it entails an increase in wages. In addition, the country's economy continues to be pressured by high energy prices and supply disruptions, as well as other problems related to sanctions against Russia due to its invasion of Ukraine.

The quotes of GBP/USD have not changed much over the past five days: starting from 1.2395, it set the final chord there. The median forecast for the near future also looks vague: 35% of experts believe that it is time for the pair to turn south, just as many point to the north, and the remaining 30% look east. Among the oscillators on D1, 85% are colored green, 15% signal that the pair is overbought. Trend indicators are 100% on the green side. Support levels and zones for the pair are1.2360, 1.2300-1.2330, 1.2250-1.2270, 1.2200-1.2210, 1.2145, 1.2085-1.2115, 1.2025, 1.1960, 1.1900, 1.1800-1.1840. When the pair moves north, it will face resistance at levels 1.2430-1.2450, 1.2510, 1.2575-1.2610, 1.2700, 1.2750 and 1.2940.

Among the events related to the economy of the United Kingdom in the coming week, apart from the meeting of the Bank of England, one can note February 01 and 03, when fresh January data on business activity (PMI) in the country will be published.

USD/JPY: The Future of the Pair Depends on the Fed

Unlike its counterparts, the Bank of Japan (BoJ) left its key rate unchanged at a negative level of -0.1% at its meeting on January 18. The next meeting is not soon, on March 10. The current head of BoJ chapter Haruhiko Kuroda will preside over it for the last time. His powers will end on April 08, and the meeting of the BoJ on April 28 will be held by the new head of the Central Bank. It is with this event that markets associate a possible change in monetary policy in the country. In the meantime, the views of market participants are focused on the US Federal Reserve.

As with the previous pairs, USD/JPY was not much active last week, starting at 129.57 and finishing at 129.85. Analysts' forecasts do not give any guidance until the next Fed meeting: 50% of them side with the bulls, 40% with the bears, and 10% have decided not to make predictions at all. Among the oscillators on D1, 10% point north, 35% look south, and 55% point east. For trend indicators, 15% look north, 85% look in the opposite direction. The nearest support level is located at 129.50 zone, followed by levels and zones 128.90-129.00, 127.75-128.10, 127.00-127.25, 126.35-126.55, 125.00, 121.65-121.85. Levels and resistance zones are 130.50, 131.25, 132.00, 132.80, 133.60, 134.40 and then 137.50.

No important events regarding the Japanese economy are expected this week.

CRYPTOCURRENCIES: New Trading Strategy: Chinese New Year

Bitcoin behaves even more calmly than the S&P500, Dow Jones and Nasdaq stock indices on the eve of the Fed meeting on February 01. Of course, a certain correlation between them remains, but the volatility of the main cryptocurrency has become noticeably less. Although, it is quite possible that this is just the calm before the storm. Which, as usual, will be arranged by the American regulator with its monetary policy and the key rate for USD.

According to Ark Invest CEO Cathy Wood, the cryptocurrency market will enter a new phase in 2023. The rise in bitcoin and other virtual currencies will be the result of the Fed's monetary easing in the second half of this year. It is this move that will become a trigger for investors testing stock markets and digital currencies. (Bloomberg strategist Mike McGlone expressed a similar point of view earlier, pointing out the possibility of BTC rising to $30,000).

Adam Farthing, Chief Risk Officer at crypto company B2C2, noted that the first cryptocurrency needs to overcome the key level at around $25,000 in order to continue the rally. “It will be a tough nut to crack,” the expert shared his opinion. According to him, after passing the designated milestone, interest will resume from outsiders who want to return to the market.

However, analysts at the brokerage company Bernstein are convinced that such a rally is unlikely to continue at the moment, as there are no signs of “any new injections” into the industry. However, in their opinion, institutional capital will still begin to show more interest in cryptocurrency this year, as it becomes an increasingly regulated asset class. (We have also repeatedly raised the topic of regulation and its conflict with the main idea of cryptocurrencies in our reviews).

And DataDash analyst and channel creator Nicholas Merten also believes that while cryptocurrencies have a bright future, many underestimate the current global environment. In his opinion, the damage caused by FTX, Celsius, Three Arrows Capital and Terraform Labs has left an indelible mark on the industry. In addition, it is necessary to take into account the macroeconomic component, since many countries are struggling with rapid inflation, and supply chains have not fully recovered after the coronavirus pandemic. According to the expert, investors need to understand that the long-term bullish trend is over. Unfortunately, the digital asset industry needs to prepare for new challenges, and the current bullish trend in the market is only a local correction within the overall bearish trend.

Jim Cramer of CNBC agrees with Nicholas Merten. The “Mad Money” TV presenter has also focused on the risks in light of the FTX crash. He noted that a similar situation could happen at any time with any other large crypto company. In his opinion, no one knows what the big players in the industry are really hiding. And there are no guarantees that they are actually honest with their customers. Any new scandal, according to him, will cause a sharp drop in bitcoin quotes, which means that investors' assets are at risk. Citing Carley Garner, senior commodity strategist & broker at DeCarley Trading, he recommended staying away from virtual currencies and opting for physical gold instead as a hedge against rising inflation and economic chaos.

Such an authority as Jamie Dimon, the head of the American banking giant JPMorgan, has also gone with a heavy roller on digital gold. He doubted on the air of CNBC that the supply of bitcoin is really limited to 21 million coins. "How do you know? Maybe it will go up to 21 million, and Satoshi's photo will pop up and laugh at all of you,” he suggested. This top manager already publicly expressed skepticism in October 2022 regarding the code embedded in the algorithm of the first cryptocurrency. “Have you all read the algorithms? Guys, do you believe in all this? ”Dimon grinned at the time.

For your information. Given the programmed halvings, the bar of 21 million should be reached by 2141. At the same time, experts say that the limit on bitcoin emissions is provided by only five lines of the code. It is open for study, and anyone can verify this.

And here the question arises: what if Jamie Dimon's raids on bitcoin are connected with the desire to eliminate this successful competitor? After all, thanks to the recent bullish rally, the capitalization of the flagship cryptocurrency has exceeded $443 billion, and has surpassed all key traditional financial institutions, including global world banks, in this indicator. For example, the capitalization of the American banking giant JPMorgan Chase is $406.42 billion, while Bank of America has a capitalization of $277.56 billion. In addition, BTC is ahead of companies such as Alibaba ($317.01 billion), Samsung ($335.37 billion), Mastercard ($365.09 billion) and Walmart ($385.15 billion). However, it has slightly lost to Tesla ($454.72 billion).

According to CompaniesMarketCap, bitcoin is the 16th most valuable asset in the world. The leaders of the rating are gold ($12.77 trillion), Apple ($2.25 trillion) and Saudi Aramco ($1.94 trillion).

At the time of writing this review (Friday evening, January 27th), BTC/USD is trading in the $23,070 zone. The total capitalization of the crypto market is $1.060 trillion ($1.038 trillion a week ago). The Crypto Fear & Greed Index has grown from 51 to 55 points over the week and has moved from the Neutral zone to the Greed zone, where, according to the creators of the index, it is already dangerous to open short positions.

And at the end of the review, our half-forgotten half-joking column of crypto life hacks. This time we will talk about one interesting observation. Of course, if you decide to adopt it, the whole responsibility will fall on you. But if you can earn money thanks to it, be sure to tell us about it. And don't forget to say thank you.

So, it turns out that buying bitcoin at the end of the first day of the Chinese New Year and selling it after ten trading days guarantees an average profit of more than 9%. This was found out by Matrixport Research and Strategy Director Markus Thielen. According to his observations, the scheme has generated income in 100% of cases for the last eight years, from 2015 to 2022. Such an operation would bring the greatest profit in 2017: 15%. Even in 2018, against the backdrop of the previous crypto winter, the investor received income, although only 1%.

To implement the scheme In 2023, it was necessary to buy digital gold on January 22, and sell the assets 10 days later, on February 1. Bitcoin was trading near the $22,900 mark on the day of the proposed purchase. Thielen believes its price should approach $25,000 by the beginning of February. We will soon find out whether the phenomenon will be justified this time. And if anyone decides to follow Thielen's recommendations in the future, we would like to inform you that the next Chinese New Year begins on Saturday, February 10, 2024.


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.

#eurusd #gbpusd #usdjpy #btcusd #ethusd #ltcusd #xrpusd #forex #forex_example #signals #cryptocurrencies #bitcoin #stock_market

https://nordfx.com/

CryptoNews of the Week


- Jamie Dimon, the head of JPMorgan said on CNBC that he was not sure that the bitcoin issuance is really limited to 21 million coins. "How do you know? Maybe it will go up to 21 million, and Satoshi's photo will pop up and laugh at all of you,” he suggested. The top manager already publicly expressed skepticism in October 2022 regarding the code embedded in the algorithm of the first cryptocurrency. “Have you all read the algorithms? Guys, do you believe in all this?” Damon grinned at the time.
Given the programmed halvings, reaching the bar of 21 million should occur by 2141. At the same time, experts say that the limit on bitcoin emissions is provided by only five lines of the code. It is open for study, and anyone can verify this.

- According to Cathy Wood, CEO of Ark Invest, the cryptocurrency market will enter a new phase in 2023. The growth of bitcoin and other virtual currencies will be the result of the US Federal Reserve's easing of monetary policy in the second half of this year. It is this move that will become a trigger for investors testing stock markets and digital currencies. Earlier, Bloomberg strategist Mike McGlone expressed a similar point of view, pointing to the possibility of BTC rising to $30,000.

- Adam Farthing, Chief Risk Officer at crypto company B2C2, noted that the first cryptocurrency needs to overcome the key level at around $25,000 in order to continue the rally. “It will be a tough nut to crack,” the expert shared his opinion. According to him, after passing the designated milestone, interest will resume from outsiders who want to return to the market.
Analysts at the brokerage company Bernstein are convinced that such a rally is unlikely to continue at the moment, as there are no signs of “any new injections” into the industry. However, in their opinion, institutional capital will still begin to show more interest in cryptocurrency this year, as it becomes an increasingly regulated asset class.

- Brian Armstrong, head of crypto exchange Coinbase, called bitcoin “the right long-term bet” for Brazil and Argentina. According to the Financial Times, the two countries intend to create a single currency to reduce dependence on the US dollar and stimulate regional trade. The Argentine Minister of Economy spoke about plans to offer participation in the bloc to other Latin American countries. The FT estimates that the new union will cover approximately 5% of global GDP and will be the second largest in the world after the EU (14%). “I wonder if they would consider switching to bitcoin. That would probably be the right long-term bet,” Armstrong said.
Former Goldman Sachs executive and macro investor Raoul Pal criticized Armstrong's idea because of the volatility of the first cryptocurrency. “No one can currently afford a national currency with 100% volatility, which falls by 65% and rises tenfold. Businesses are fighting to plan and hedge this,” he wrote.

- The Binance exchange press service said that an unknown artist under the nickname Sabunir tried to sell his digital image for bitcoins for the first time in the world. This happened 13 years ago, on January 24, 2010. The picture was a desktop wallpaper for a personal computer and was designed in a resolution of 1280x960 pixels. Sabunir tweeted at the time that he wanted to try to earn some bitcoins. He priced his picture at $1 and stressed that he plans to get 500 BTC for it. It is not known whether this deal took place, but if it did, Sabunir would now be a wealthy man, as these coins are worth more than $11 million.

- Carley Garner, senior commodity strategist & broker at DeCarley Trading, recommended staying away from virtual currencies and choosing gold instead as a hedge against rising inflation and economic chaos. Garner studied the daily chart of BTC and Nasdaq 100 futures since March 2021 carefully, and noted that the picture was almost identical, and the price movements were in sync. According to her, this indicated that bitcoin is more of a risky asset than a means of saving capital.
Garner's opinion was referred to by Jim Cramer of CNBC. “Mad Money” TV presenter also highlighted the risks associated with the flagship cryptocurrency in light of the collapse of the FTX marketplace. He noted that a similar situation could happen at any time with any other large crypto company. In his opinion, no one knows what the big players in the industry are really hiding. And there are no guarantees that they are actually honest with their customers. Any new scandal will cause a sharp drop in bitcoin quotes, which means that investors' assets are at risk.

- The first nuclear-powered bitcoin mining center will open in Pennsylvania (USA). Cumulus Data has completed construction of the country's first zero-carbon data center. The new data center will have a capacity of more than 40 MW, achieved through a direct connection to the Susquehanna nuclear power plant in northeast Pennsylvania. In addition to server equipment for cloud computing, the data center will house equipment for mining the main cryptocurrency.
Cumulus Susquehanna is the first in Cumulus Data's future network of 18 combined data centers with a combined capacity of more than 470 MW. They will be used to deploy the first Nautilus Cryptomine mining complex in the United States, which operates exclusively on nuclear energy and produces “carbon-free crypto assets”.

- “Buying bitcoin at the end of the first day of the Chinese New Year and selling it ten trading days later guarantees an average profit of more than 9%,” Markus Thielen, director of research and strategy at Matrixport, found out. The scheme has been profitable in 100% of cases for the last eight years, from 2015 to 2022. Such an operation would bring the greatest profit in 2017: 15%. Even in 2018, against the backdrop of the previous crypto winter, the investor received income, although only 1%.
To implement the scheme In 2023, it was necessary to buy digital gold on January 22, and sell the assets 10 days later, on February 1. Bitcoin was trading near the $22,900 mark on the day of the proposed purchase, January 22. Thielen believes its price should approach $25,000 by the beginning of February.
We will soon find out whether the phenomenon will be justified this time. And if anyone decides to follow Thielen's recommendations in the future, we would like to inform you that the next Chinese New Year begins on Saturday, February 10, 2024.

- Nicholas Merten, a cryptocurrency analyst and creator of the DataDash channel, noted that cryptocurrencies have a bright future, but many people underestimate the global situation. The damage done by FTX, Celsius, Three Arrows Capital and Terraform Labs has left an indelible mark on the industry. In addition, the macroeconomic component should also be taken into account, since many countries are struggling with rapid inflation, and supply chains have not fully recovered after the coronavirus pandemic. According to the expert, investors need to understand that the long-term bullish trend is over. Unfortunately, the digital asset industry needs to prepare for new challenges, and the current bullish trend in the market is only a local correction within the overall bearish trend.

- Thanks to the recent bullish rally, the capitalization of the flagship cryptocurrency has exceeded $443 billion, and has surpassed all key traditional financial institutions, including global world banks, in this indicator. For example, the capitalization of the American banking giant JPMorgan Chase is $406.42 billion, while Bank of America has a capitalization of $277.56 billion. In addition, BTC is ahead of companies such as Alibaba ($317.01 billion), Samsung ($335.37 billion), Mastercard ($365.09 billion) and Walmart ($385.15 billion). However, it has slightly lost to Tesla ($454.72 billion).
According to CompaniesMarketCap, bitcoin is the 16th most valuable asset in the world. The leaders of the rating are gold ($12.77 trillion), Apple ($2.25 trillion) and Saudi Aramco ($1.94 trillion).


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.

#eurusd #gbpusd #usdjpy #btcusd #ethusd #ltcusd #xrpusd #forex #forex_example #signals #forex #cryptocurrencies #bitcoin #stock_market

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EUR/USD: The Calm Before the Storm


The DXY Dollar Index (the ratio of the USD to a basket of six other major foreign currencies) has been moving in a fairly narrow sideways channel since January 12. A small surge in volatility was caused by the publication of data on retail sales in the US on Wednesday, January 18. However, everything returned to normal quickly, and DXY continued its eastward journey, sandwiched in the 102.00-102.50 range. EUR/USD behaved similarly, which, having started on Monday at 1.0833, completed the five-day period at 1.0855.

This behavior suggests that the market has already taken into account everything that is possible in quotes. This includes a slowdown in inflation, a possible recession, and prospects for changes in the US Federal Reserve's monetary policy. A trigger is needed In order for a jump to occur, which, most likely, will be the FOMC (Federal Open Market Committee) meeting on February 01 and the comments of the Fed management following it. Only US GDP data will be released until then as for important macro statistics. This indicator will be announced on February 26, and it is very likely to show a slowdown in the country's economic growth (the forecast is 2.6-2.8% against 3.2% a quarter earlier).

Market participants continue to wonder how much the interest rate will be raised at the February FOMC meeting. There are two options: either by 25 or 50 basis points (bp). Michelle Bowman, member of the Board of Governors, Mary Dehli, Chairman of the Federal Reserve Bank (FRB) of San Francisco, and Patrick Harker, Chairman of the Federal Reserve Bank of Philadelphia, spoke about 25 bp. Fed Vice Chair Lael Brainard did not express a clear preference for either of these options on Thursday, January 19. She did not say what peak rate she expects to see in 2023 either. However, she said the regulator's policy should remain restrictive to ensure a return to the 2.0% inflation target.

Her words coincide with the opinion of Fed Chairman Jerome Powell, who said a month ago that the regulator will keep rates at their peak until they are sure that the decline in inflation has become a sustainable trend. In his opinion, the base rate can be increased in 2023 to 5.1% and stay that high until 2024.

The market consensus forecast in December indicated the same value, 5.10%. However, the market has now stopped trusting the Federal Reserve, and expectations have fallen to 4.90%. And some analysts believe that the peak value of the rate will not rise above 4.75% at all. Moreover, it can even be lowered to 4.50% by the end of 2023. Given that the rate has already reached 4.50% at the moment, such a slight increase will clearly not benefit the dollar, but it will push up the competing currencies from the DXY basket and risky assets.

As for the common European currency, the swap market believes at the moment that with a probability close to 100%, the ECB rate will be increased by 50 bp on February 02, and the probability of the same rise in March is estimated at 70%.

Christine Lagarde, the head of the European regulator, speaking on Thursday, January 19 at the World Economic Forum in Davos (Switzerland), stressed that inflation remains too high, so the ECB will not relax its efforts to bring inflation under control. Ms Lagarde's colleague, ECB Governing Board member and Dutch Central Bank Governor Klaas Knot said on Thursday that the inflation situation remains unsatisfactory and that the market is wrong to expect only one 50bp rate hike in the future. There will be several such increases, according to Klaas Knot.

Such statements give euro bulls some hope. However, there are also those among European officials who take a more cautious position. Thus, Francois Villeroy, the head of the Bank of France, said in Davos that it is too early to talk about raising rates in March. And his words fell into rumors that the ECB is ready to move to 25 bps.

It is clear that the future of EUR/USD will be decided on February 01-02. In the meantime, 40% of analysts are counting on further strengthening of the euro, and the growth of the pair in the coming days. 50% expect that the US currency will be able to win back part of the losses. The remaining 10% of experts take a break in anticipation of the meetings of the Fed and the ECB. Among the indicators on D1, the picture is different: all 100% of the trend indicators are colored green. Among the oscillators, those are 65% of them, 20% signal that the pair is overbought, and the remaining 15% are painted in neutral gray. The nearest support for the pair is at 1.0800, then there are levels and zones 1.0740-1.0775, 1.0700, 1.0620-1.0680, 1.0560 and 1.0480-1.0500. The bulls will meet resistance at the levels of 1.0865, 1.0935, 1.0985-1.1010, 1.1130, after which they will try to gain a foothold in the 1.1260-1.1360 echelon.

China is celebrating the New Year next week, so we are happy to congratulate Chinese traders. As for the US and the Eurozone, the following events can be noted on the calendar. The ECB President Christine Lagarde will deliver a speech on Monday, January 23. Business activity indices (PMI and S&P Global) in the manufacturing sectors of Germany and the Eurozone as a whole will be published the next day. We will find out the value of the Business Climate Index (IFO) in Germany on Wednesday, January 25. As already mentioned, the value of the US GDP will become known on Thursday, in addition, a number of data from the consumer market and the labor market of this country will also come the same day. And the value of the Basic index of US household spending on personal consumption will be published at the very end of the working week, on Friday, January 27.

GBP/USD: Pound Counts on the Best

As in the US, retail sales in the UK also went down. They fell­ -1.0% (mom) in December, which is significantly lower than the forecast +0.5%. Analysts note that real spending in the country was significantly ahead of GDP in 2020-2022, but the rise in inflation led to a sharp halt in this process. And it is predicted that 2023 will be a period of retribution for this waste.

However, according to economists at HSBC, one of the world's largest financial conglomerates, things are not so bad. “With UK inflation likely to have peaked and could potentially slow more than the consensus forecast,” they write, “a less aggressive tone of tightening from the BoE now could mean a less dramatic reversal later in the year. And this may eventually become a minor positive factor for the British pound in the coming months. The shift towards better-than-expected domestic data should also be positive for the British pound." Economic performance is improving rapidly, experts say, thanks to a combination of a cheaper currency and higher interest rates. Suffice it to say that the UK trade balance for Q3 of last year showed the lowest deficit since December 2021. HSBC also believes that the growth of global market risk appetite will benefit the British currency as well.

In contrast to the EUR/USD flat trend, the British currency showed growth last week: GBP/USD approached the local December highs on January 18, reaching a height of 1.2435. Pound bulls are inspired by expectations that the Bank of England (BoE), in contrast to the fading activity of the Fed, on the contrary, will continue to vigorously tighten its monetary policy. It is predicted that from the current 3.50%, the rate may rise to 4.50 by summer. And an important day on this path may be February 02, when the next meeting of the BoE will take place.

The last chord of the week sounded at 1.2395. The median forecast for GBP/USD in the near future looks like this: 50% of experts believe that it is time for the pound to slow down its growth and are waiting for a correction to the south. Only 15% of experts side with the bulls, and 35% have taken a neutral position. Among the oscillators on D1, 85% are colored green, 15% signal that the pair is overbought. Trend indicators have 100% on the green side. Support levels and zones for the pair are 1.2330, 1.2250-1.2270, 1.2200-1.2210, 1.2145, 1.2085-1.2115, 1.2025, 1.1960, 1.1900, 1.1800-1.1840. When the pair moves north, it will face resistance at levels 1.2435-1.2450, 1.2510, 1.2575-1.2610, 1.2700, 1.2750 and 1.2940.

Highlights for the UK economy in the coming week include Tuesday January 24, when a pool of UK business activity (PMI) data will be released.

USD/JPY: Yen Outlook Is Positive as Well

Despite the fact that the Bank of Japan left its key rate unchanged at a negative level of -0.1% at its meeting on January 18, the yen is still among the favorites among the DXY currencies. USD/JPY fixed a low at 127.21 on Monday. It hasn't dropped this low since last May. Recall that this happened against the backdrop of a fall in the dollar and a decrease in the yield of US bonds (the US/Japan spread is at the lows of August-September 2022).

However, the pair corrected to the north and finished at 129.57 at the end of the week. However, according to many experts, data on the acceleration of inflation in the country will still force the Bank of Japan (BoJ) to tighten its monetary policy.

In general, inflation in the country in December amounted to 4.0% (y/y), accelerating from 3.8% in November. These rates are the highest since January 1991. Consumer prices in Japan excluding fresh food (a key indicator monitored by the country's central bank) rose 4.0% last month compared to the same month of the previous year. And this is the highest rate since December 1981. The indicator has remained above the BoJ's 2% target for 9 consecutive months.

Markets expect serious changes in monetary policy after April 08. It is on this day that Haruhiko Kuroda, the head of the Bank of Japan, will end his term, and he may be replaced by a new candidate with a tougher position. Prime Minister Fumio Kishida is likely to nominate this candidate in February. Kuroda will hold his last meeting on March 10, and the next BoJ meeting on April 28 will be held by the new head of the Central Bank.

Factors that could lead to further appreciation of the yen, in addition to a change in the BoJ, include improving Japan's balance of payments due to the devaluation of the yen and the resumption of tourism, as well as the revival of the safe-haven status of the yen and currency hedging by resident investors of their foreign investments. Economists at Danske Bank expect USD/JPY to fall towards 125.00 in the coming months. And according to the strategists of the international financial group Nordea, it may fall below 120.00 by the end of 2023.

Analysts' median forecast is also in line with Danske Bank and Nordea's forecasts. Their opinion on the near future of USD/JPY is distributed as follows: 75% of them vote for the pair to fall further. The remaining 25% have taken a neutral position. Not a single vote was given for the pair's growth this time. Among the oscillators on D1, 10% point north, 75% look south, and 15% point east. For trend indicators, 15% look north, 85% look in the opposite direction. The nearest support level is located at 129.30 zone, followed by levels and zones 128.90, 127.75-128.00, 127.00-127.25, 126.35-126.55, 125.00, 121.65-121.85. Levels and resistance zones are 130.45, 131.25, 132.00, 132.80, 133.60, 134.40 and then 137.50.

Among the events of the coming week, the report on the Meeting of the Monetary Policy Committee of the Bank of Japan, which will be published on Monday, January 23, is of interest.

CRYPTOCURRENCIES: Bitcoin Victory Over Artificial Intelligence

If you look at last week's chart, you can clearly see that the explosive growth of bullish optimism has almost come to naught. Recall that bitcoin received a powerful boost from January 09 to January 14 amid the publication of data on lower US inflation (CPI). Another contribution to the bulls' piggy bank was the news that FTX liquidators found liquid assets worth $5 billion. According to a number of bitcoin enthusiasts, this should allow crypto markets not to worry too much about the macroeconomic picture, which is still bearish.

But most likely, the last statement is wrong, and we should still worry. The growth of digital assets has been the result of an increase in the general global appetite of investors for risky assets. This can be seen if we compare the quotes of BTC/USD and stock indices S&P500, Dow Jones and Nasdaq. And while bitcoin has become the main beneficiary in this case, it was due of its increased volatility. And as we have repeatedly noted, the main factor determining the dynamics of both the stock and crypto markets in this situation is the monetary policy of the US Federal Reserve, including the change in the dollar interest rate.

Bitcoin has risen in price by more than 37% from January 01 to 18 2023, reaching a high of $22,715. The total market capitalization has exceeded $1 trillion for the first time in a long time. The enthusiasm of market participants has led to an increase in BTC trading volume twice in a week: the figure rose to $11 billion in the spot market. But, according to analyst Craig Erlam, there are no specific fundamental reasons for the further development of the bullish trend now.

Market growth in the first half of January came as a surprise to the bears. According to the statistics, they have lost about $1.2 billion in the last week alone. And this is only in BTC. The volume of liquidated short positions exceeded long positions by six times at some points. But all this happened at the expense of small and medium-sized investors. The number of bitcoin addresses that hold up to 1,000 BTC has increased dramatically. But institutional whales (more than 1000 BTC) practically did not react to what was happening and watched the bustle of shrimp with their characteristic grandeur and calmness. Suffice it to say that the inflow into bitcoin funds has been only about $10 million since January 10, and the number of wallets owned by whales continues to fall.

We have already written that many institutional investors are deterred from the crypto market by the lack of sufficient regulation. And now the US Congress has even created a new special subcommittee to solve this problem. However, Kevin O'Leary, CEO of venture capital firm O'Leary and host of the Shark Tank TV show, believes that adopting a strong regulatory framework will not solve the industry's problems or change the scale of fraud. The expert believes that even more crypto companies and exchanges will collapse this year. The reason for this, in his opinion, is people's ignorance.

Now let's talk about forecasts expressed in numbers. Ben Armstrong, a popular cryptocurrency YouTuber, believes that the price of the flagship cryptocurrency will jump to $30,000 by the end of February. And this will happen despite the fact that miners have been actively selling their assets lately in order to fix profits.

Legendary stock trader and analyst Peter Brandt, who, among other things, predicted the 2018 BTC correction accurately, also gave a fresh forecast for bitcoin’s movement. According to the specialist, BTC will be able to realize growth to levels near $25,000 in the near future. After that, a correction is not ruled out by the end of spring, that will give the cryptocurrency strength for a new rally. As a result, the coin will reach its previous highs near $68,000 in the second half of 2023. After that, another correction and a subsequent update of the absolute high are possible. In the longer term, Peter Brandt does not rule out bitcoin rising to $150,000 by early 2025. However, he warns that this is nothing more than his guess. Nobody knows how the main cryptocurrency will actually behave, according to the eminent trader.

The value of bitcoin could increase to $50,000-100,000 over the next two to three years. This opinion was expressed in an interview with CNBC by the founder of the hedge fund SkyBridge Capital Anthony Scaramucci. The businessman called 2023 a “recovery year” for the main cryptocurrency. Of course, the decisions of the US Federal Reserve will influence the digital gold rate. And if the financial regulator takes measures to stimulate the economy in the middle of the year, this will be a good impetus for the rise in the bitcoin price. Will it take the measures?

Bloomberg Intelligence senior strategist Mike McGlone agrees that the bottom in the cryptocurrency market has already been passed. But his opinion on the Fed's monetary policy is very different. McGlone has noted that the charts are reminiscent of the 2018 dynamics, when the price of the first cryptocurrency rebounded from $5,000. However, the macroeconomic situation is now completely different, which is why the bitcoin growth may stop at current values. Thus, the NASDAQ index may continue to fall, and the correlation between bitcoin and the stock market has been quite significant in recent years. “We are still pulling liquidity from global markets, and there are reasons for this. And even if equities and other risky assets rise, liquidity will remain limited by central banks. The big difference from 2018 is that the Fed had already begun to ease its policy then, and we do not see any easing today,” the Bloomberg strategist explained.

“Look at the NASDAQ, the chart breaks through the 200-week SMA. This has only happened 3 times in history, and the Fed has always eased its monetary policy. But the US Central Bank is tightening it now. The overall picture is optimistic for bitcoin, but the situation is unprecedented now, so anything can happen,” McGlone said.

Peter Brand admitted Above that it is almost impossible to accurately predict the behavior of bitcoin. The artificial intelligence (AI) of the ChatGPT test platform supported him in this opinion. This platform has become popular due to its ability to solve a wide range of tasks with high accuracy, including asset trading.

Experts from Finbold asked the artificial intelligence what the bitcoin price will be in 2030. Finbold suggested that ChatGPT would be able to provide a fairly accurate forecast based on historical BTC price data, market data, technical and fundamental analysis, and other indicators. But the AI didn't live up to expectations. It was never able to predict the exact rate and admitted that it is hard to name the price of the coin in the long term. The AI cited high market volatility and unclear regulatory rules as the reasons. However, the AI, like Peter Brandt, believes that the flagship cryptocurrency has potential for growth in the coming years. This will be possible due to the development of technology, the maturation of the cryptocurrency market and their mass distribution.

The future of the digital market is indeed vague. However, we can tell exactly what is happening in the present. So, at the time of writing the review (Friday evening, January 20), BTC/USD is trading in the $22,700 zone. The total capitalization of the crypto market is $1.038 trillion ($0.968 trillion a week ago). The Crypto Fear & Greed Index has left the Fear Zone and is now in a Neutral state at 51 points (46 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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CryptoNews of the Week


- Texas A&M University (USA) will launch an educational program dedicated to bitcoin in spring 2023. The Bitcoin Protocol course will be included in the educational program of students at such university schools as as May Business School and College Engineering. The initiative is based on the book Programming Bitcoin by Bitcoin Core developer Jimmy Song.

- Shaktikanta Das, Governor of the Reserve Bank of India (RBI), said during a speech at the BT Banking & Economy summit that digital assets should be completely banned in the country. “The position of the RBI is extremely clear: all cryptocurrencies should be banned. However, blockchain technology needs to be supported as it has many other uses,” he explained.
Das emphasized the unreliability of cryptocurrency due to constant price changes and the “ambiguity” of the definition. According to him, some consider it an asset, others consider it a financial product. However, according to the manager, “disguising a cryptocurrency as a financial product or asset” is inappropriate. As for changing the price of coins, this is 100% speculation and gambling, which, by the way, are prohibited in India.

- Unlike India, the US has a more loyal attitude towards cryptocurrencies and other digital assets. Thus, the country's Congress has created a new subcommittee that will deal with new rules for regulators regarding digital currencies, as well as develop policies to further promote digital financial technologies.
The new organization will be led by Republican Congressman French Hill, who previously led the Fintech and Artificial Intelligence Task Forces. Hill noted in his statement that at a time of significant technological advancement and change in the financial sector, the subcommittee's job is to promote responsible innovation by encouraging the development of FinTech in the country.

- Bank of America (BAC) researchers believe that digital currencies, CBDCs and stablecoins are a natural evolution of money and payments. Central bank digital currencies can “revolutionize global financial systems and may become the most significant technological achievement in the history of money.”
BAC researchers believe that monetary regulators in developed and developing countries will focus on the efficiency of payments and their availability. However, some countries will not issue such means of payment even in the next ten years. But their central banks will have to “either innovate technologically or become irrelevant in the long term.”

- Kevin O'Leary, head of O'Leary Ventures and host of the TV show Shark Tank, expects even more crypto exchanges to crash in the industry. The reason for this, in his opinion, is people's ignorance. “If you ask me if there's going to be another crash to zero, 100% that's going to happen. And this is going to happen again and again... I don't think it's about regulation. It will not change the scale of fraud,” the investor said. Legislators are likely to put in place a solid regulatory framework soon, O'Leary said, but that won't do the industry any good.

- The value of bitcoin could increase to $50,000-100,000 over the next two to three years. This opinion was expressed in an interview with CNBC by the founder of the hedge fund SkyBridge Capital Anthony Scaramucci. The businessman called 2023 a “recovery year” for the main cryptocurrency.
Of course, the decisions of the US Federal Reserve will influence the digital gold rate. And if the financial regulator takes measures to stimulate the economy in the middle of the year, this will be a good impetus for the rise in the bitcoin price. This is evidenced by the January price jump caused by US inflation data for December. The market decided based on this data that the Fed could significantly ease its monetary policy, as a result, BTC quotes went up sharply.

- Positive sentiment dominates the cryptocurrency market, and its total capitalization reached $1 trillion on January 16, for the first time in a long time. In turn, bitcoin is firmly held above $20,000. Analyst Craig Erlam noted that digital assets have become the main beneficiary during the current increase in risk appetite.
In his opinion, it is also possible to say that the industry has recovered from the recent FTX collapse. On the other hand, there are no specific fundamental grounds for the development of a bullish trend at the moment. In the current conditions, it is necessary to monitor the macroeconomic situation, as it will have a strong impact on the dynamics of digital assets. At the moment, the consensus forecast of market participants is based on the fact that following the results of the February meeting, the Fed will raise the refinancing rate by only 0.25%. In this case, the bullish mood in the cryptocurrency market is likely to receive serious support.

- Bloomberg Intelligence senior strategist Mike McGlone believes that the bottom in the cryptocurrency market has already been passed. But his opinion on the Fed's monetary policy differs from that of other analysts.
McGlone has noted that the charts are reminiscent of the 2018 dynamics, when the price of the first cryptocurrency rebounded from $5,000. However, the macroeconomic situation is now completely different, which is why the bitcoin growth may stop at current values. Thus, the NASDAQ index may continue to fall, and the correlation between bitcoin and the stock market has been quite significant in recent years. “We are still pulling liquidity from global markets, and there are reasons for this. And even if equities and other risky assets rise, liquidity will remain limited by central banks. The big difference from 2018 is that the Fed had already begun to ease its policy then, and we do not see any easing today,” the Bloomberg strategist explained.
“Look at the NASDAQ, the chart is breaking through the 200-week SMA. This has only happened 3 times in history, and the Fed has always eased its monetary policy. But the US Central Bank is aggressively tightening it now. The overall picture is optimistic for bitcoin, but the situation is unprecedented now, so anything can happen,” McGlone said.

- Legendary stock trader and analyst Peter Brandt, who, among other things, predicted the 2018 BTC correction accurately, gave a fresh forecast for the bitcoin movement in the short and long term.
According to the specialist, BTC will be able to realize growth to levels near $25,000 in the near future. After that, a correction is not ruled out by the end of spring, that will give the cryptocurrency strength for a new rally. As a result, the coin will reach its previous highs near $68,000 in the second half of 2023. After that, another correction and a subsequent update of the absolute high are possible.
Peter Brandt does not rule out bitcoin rising to $150,000 by early 2025. However, he warns that this is nothing more than his guess. Nobody knows how the main cryptocurrency will actually behave, according to the eminent trader.

- Peter Brandt was supported in this opinion by artificial intelligence (AI) of the ChatGPT test platform. This platform has become popular due to its ability to solve a wide range of tasks with high accuracy, including asset trading.
Experts from Finbold asked the artificial intelligence what the bitcoin price will be in 2030. Finbold suggested that ChatGPT would be able to provide a fairly accurate forecast based on historical BTC price data, market data, technical and fundamental analysis, and other indicators. But the AI didn't live up to expectations. It was never able to predict the exact rate and admitted that it is hard to name the price of the coin in the long term. The AI cited high market volatility and unclear regulatory rules as the reasons. However, the AI, like Peter Brandt, believes that the flagship cryptocurrency has potential for growth in the coming years. This will be possible due to the development of technology, the maturation of the cryptocurrency market and their massive
distribution.

- Ben Armstrong, a popular cryptocurrency YouTuber, believes that the price of the flagship cryptocurrency will jump to $30,000 by the end of February 2023. However, analyst and investor Ali Martinez disagrees. According to him, miners have recently been actively selling their assets to lock in profits. In addition, according to the expert, traders trading on the world's largest crypto exchange, Binance, massively opened short positions on BTC. According to analytical resources, as of the morning of January 17, 51% of the users of the trading platform had bitcoin shorts. This number then increased to 57%.


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.

#eurusd #gbpusd #usdjpy #btcusd #ethusd #ltcusd #xrpusd #forex #forex_example #signals #forex #cryptocurrencies #bitcoin #stock_market

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10 years ago, back in 2013, NordFX won the Best Forex Arabic Platform award at the MENA 12th Forex Show. In 2020, the Forex Awards Ratings Expert Committee also recognized the company's efforts in this region. And now, following a vote by traders and visitors to Forexing site, NordFX has been named “Best Broker Middle East 2022”.

Forexing is a popular global financial news portal delivering up-to-date Forex & Other Financial market news and analysis to Newbie and Professional Traders. In addition, the portal pages contain educational and other useful materials, the purpose of which is to help visitors improve the efficiency of their trading.

Forexing presents Forex Awards to Brokers across the Globe for their best approach to clients for the particular year. The portal team reviews, evaluates and nominates the best companies in the industry. Throughout the voting time, all the retail traders are welcome to vote for their favorite company for a particular service. The awards are given to the retail international and regional Forex brokers that receive the most votes. One of the winners in 2022 was NordFX, which confidently outperformed its competitors in the Best Broker Middle East nomination.
 

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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EUR/USD: Low Inflation Has Dropped the Dollar

The main event of the past week, which dealt another blow to the dollar, was the publication on Thursday, January 12, of data on consumer inflation in the US. The actual figures were fully in line with market expectations. The consumer price index (CPI) in annual terms fell to its lowest level since October 2021 in December: from 7.1% to 6.5%, and excluding food products and energy, from 6.0% to 5.7%. Thus, the US inflation rate has been slowing down for 6 months in a row, and core inflation has been slowing down for 3 consecutive months, which is a strong catalyst for easing the Fed's current monetary policy.

Market participants are firmly convinced that the interest rate will be increased by no more than 25 basis points (bp) at the February meeting of the FOMC (Federal Open Market Committee). In particular, Michelle Bowman, a member of the Board of Governors, and Mary Deli, Chairman of the Federal Reserve Bank (FRB) of San Francisco, spoke about this. The head of the Philadelphia Fed, Patrick Harker, left the camp of the hawks as well, also saying that the rate should be raised only by 25 bp.

Fed chief Jerome Powell noted a month ago that the regulator would keep rates at their peak until they were sure that the decline in inflation has become a sustainable trend.  According to him, the base rate may be increased to 5.1% in 2023 and stay that high until 2024. However, the latest macro statistics, including data on inflation, business activity and the labor market, suggests that the peak value of the rate will be 4.75%. Moreover, it can even be lowered to 4.50% by the end of 2023.

As a result of these forecasts, the US currency depreciated against all G10 currencies. The DXY dollar index updated the June 2022 low, falling to 102.08 (it climbed above 114.00 at the end of September). The 10-year Treasury yield dropped to a monthly low of 3.42%, while EUR/USD jumped to 1.0867, the highest since last April.

The yield spread between 10-year US and German bonds is at its lowest level since April 2020, with smaller European countries narrowing their spreads. This dynamic indicates a decrease in the likelihood of the EU economy falling into a deep recession. Moreover, the winter in Europe turned out to be quite warm and energy prices went down, despite problems with their supply from Russia. And this put pressure on the US currency as well.

China could help the dollar. According to various estimates, China's GDP growth may reach 4.8-5.0%, or even higher in 2023. Such economic activity will add 1.0-1.2% to global inflation, which will give Fed hawks certain advantages in maintaining tight monetary policy. But all this is in the future. The market is currently waiting for the next meeting of the FOMC on February 01 and for the statements that will be made by the US Federal Reserve officials on its results.

EUR/USD closed last week at 1.0833. 20% of analysts expect further strengthening of the euro and the growth of the pair in the coming days, 50% expect that the US currency will be able to win back part of the losses. The remaining 30% of experts do not expect either the first or the second from the pair. The picture among the indicators on D1 is different: all 100% are colored green, but 25% of the oscillators are in the overbought zone. The nearest support for the pair is at 1.0800, then there are levels and zones 1.0740-1.0775, 1.0700, 1.0620-1.0680, 1.0560 and 1.0480-1.0500. The bulls will meet resistance at the levels of 1.0865, 1.0935, 1.0985-1.1010, 1.1130, after which they will try to gain a foothold in the 1.1260-1.1360 echelon.

Next week, traders should take into account that Monday is a holiday in the US, Martin Luther King Day. The calendar can highlight Tuesday, January 17, when the values of the Consumer Price Indices (CPI) and Economic Sentiment (ZEW) in Germany will become known. Data on Eurozone consumer prices and US retail sales will be released on Wednesday, January 18. The December value of the American Producer Price Index (PPI) will also become known the same day.

GBP/USD: Surprise from UK GDP

GBP/USD took advantage of broad pressure on the dollar on Thursday, January 12 to rise to its highest level since December 15, reaching 1.2246. The UK GDP gave the pound bulls a pleasant surprise the next day, on Friday, December 13: it suddenly turned out that the country's economy expanded by 0.1% over the month against expectations of its fall by 0.3%. However, in annual terms, GDP was significantly lower than the previous value: 0.2% against 1.5% a month earlier. As a result, the pair ended the five-day period a little lower than the local high, at the level of 1.2234.

An important day for the pound may be February 02, when the next meeting of the Bank of England (BoE) will take place. And while investors expect the Fed to slow down the rate of interest rate hikes, the Bank of England, on the contrary, will further tighten monetary policy. It is predicted that the rate may rise from the current 3.50% to the level of 4.50% by the summer, which will serve as a certain support for the British currency.

As for the short term, here the median forecast for GBP/USD looks as uncertain as possible: 10% of experts side with the bulls, 25% side with the bears, and the vast majority (65%) have taken a neutral position. Among the oscillators on D1, 90% are colored green, of which a third gives signals that the pair is overbought, the color of the remaining 10% is neutral gray. Trend indicators are 100% on the green side. Support levels and zones for the pair are 1.2200-1.2210, 1.2145, 1.2085-1.2115, 1.2025, 1.1960, 1.1900, 1.1800-1.1840. When the pair moves north, it will face resistance at levels 1.2250-1.2270, 1.2330-1.2345, 1.2425-1.2450 and 1.2575-1.2610, 1.2700 and 1.2750.

As for the developments regarding the UK economy in the coming week, we can highlight Tuesday January 17, when we find out what is happening in the country's labor market. The value of such an important inflation indicator as the Consumer Price Index (CPI) will be published the same day, which will certainly have an impact on the BoE's decision on the interest rate. Data on December retail sales in the UK will also be published at the very end of the working week, on Friday, January 20. It is expected that they will rise by 0.4% compared to the fall of 0.4% in November thanks to the pre-Christmas hype.

USD/JPY: Should We Expect Surprises from the Bank of Japan

The yen turned out to be the favorite of the week, and even on Friday, January 13, it continued to put pressure on the dollar, fixing a local low at 127.45. It put the last chord of the week a little higher, at the level of 127.85.

Why did this happen? First, the yen strengthened against the background of a falling dollar and a decrease in US bond yields (the US/Japan spread fell to its lowest level since August 2022). Being the most sensitive to the dynamics of treasuries, it managed to win back 2.5% from the dollar. And second, the press seriously helped it. Japanese newspaper Yomiuri Shimbun, citing confidential sources, reported that Bank of Japan (BoJ) officials plan to discuss the implications of their ultra-dove approach to monetary policy and consider adjusting their bond-buying program to "reduce its negative effects" on January 17-18. Other adjustments in the actions of the regulator are not ruled out.

The Bank of Japan is the latest major central bank to keep interest rates at a negative level of -0.1%. We wrote Earlier that a radical change in monetary policy can be expected only after April 8. It is on this day that Haruhiko Kuroda, the head of the Bank of Japan, will end hs term, and he may be replaced by a new candidate with a tougher position. And now, almost all experts interviewed by Bloomberg believe that the Japanese Central Bank will not change the main parameters of its policy next week but will limit itself to discussing them. At the same time, 38% of respondents expect real changes either in April or June.

Of course, it will be possible to give more accurate forecasts after the January meeting of the Bank of Japan. So far, the opinion of analysts regarding the near future is distributed as follows: 50% of analysts vote for the correction of the pair to the north, and 50% simply decline to comment. The number of votes cast for the continuation of the downtrend turns out to be 0 this time. For indicators on D1, the picture mirrors the readings for GBP/USD. Among the oscillators, 90% are colored red, of which a third gives signals that the pair is oversold, the color of the remaining 10% is neutral gray. Trend indicators have 100% on the red side. The nearest support level is located in the zone 127.00-127.45, followed by the levels and zones 126.35-126.55, 125.00, 121.65-121.85. Levels and resistance zones are 128.00-128.25, 129.60-130.00, 131.25-131.70, 132.85, 133.60, 134.40 and then 137.50.

From the events of the coming week, in addition to the mentioned meeting of the Bank of Japan and its interest rate decision, the market's attention will be drawn to the subsequent press conferences and comments from the regulator's officials regarding its monetary policy.

CRYPTOCURRENCIES: Thaw or Crypto Spring?


BTC/USD has once again returned to the $18,500-20,000 area. This zone acted as support since last June, and it turned into resistance in November. The pair traded there in December 2017 as well, after which a protracted crypto winter followed. Bitcoin was able to return to these values only three years later, at the end of November-December 2020. This rise marked the beginning of a powerful bullish rally then: the coin rose in price by 3.5 times in less than six months, reaching $64,750 in April 2021. This was followed by another collapse.

How will bitcoin behave this time: will it collapse like in 2017, or will it take off like in 2020? Is this the onset of crypto spring or just a small thaw? There is no consensus on this matter. It is possible that the pair's current rise is due not to the growing strength of digital gold, but to the dollar, which has been weakening for 16 consecutive weeks. Bitcoin received a powerful boost after the publication of the US CPI. Against this background, the voices of bitcoin optimists sound more confident and louder. Moreover, the liquidators of the FTX exchange found liquid assets worth $5 billion, which will be used to pay off part of the debts to creditors. According to some analysts, along with the decline in CPI, this makes it possible for crypto markets not to worry too much about the macroeconomic picture, which is still bearish.

Dante Disparte, Head of Strategic Development at Circle, believes that despite the 2022 Ice Age, digital assets and blockchain will continue to be integral tools of the economy. Major banks and financial institutions will continue to introduce cryptocurrencies into their product lines. As for the bankruptcy of several crypto-lenders and the collapse of the FTX exchange, these events, according to Dispart, can be a boon for the industry, as they lay the foundation for more responsible and affordable investments.

Increasing regulatory pressure can help restore investor interest and confidence in the industry. The long-awaited MiCA (Markets in Crypto Assets Regulation) is expected to come into force this year. The SEC is highly likely to take a number of important steps in this direction as well.

Another expert with a positive outlook is University of Sussex finance professor Carol Alexander. She had been prone to BTC falling to $10,000 in 2022 in her previous forecast. This did not happen, although the forecast almost came true. However, the financier predicts now that the first cryptocurrency can reach $50,000 in 2023. The professor believes that the catalyst will be the influx of more “dominoes” that fell apart after the collapse of the FTX exchange. “2023 will be a managed bull market, not a bubble,” she writes. - We will not see a jump in the rate, as before. But we will see a month or two of stable trending prices interspersed with periods of limited range, and perhaps a couple of short-term crashes.”

Bill Miller, an American investor, and fund manager, also defended bitcoin. He believes it is wrong to link BTC to the bankruptcy of crypto companies such as FTX and Celsius, since these are centralized entities that should not be confused with the decentralized bitcoin network. Miller has once again confirmed his belief in the main cryptocurrency and said that its price will definitely increase by the end of the year.

According to Alistair Milne, Chief Information Officer of the Altana Digital Currency Fund, “we should see bitcoin at least at $45,000 by the end of 2023.” However, the specialist warns that “if central banks decide to allow a higher inflation target […] to avoid a recession, hard assets could become fashionable again.” As for the longer-term outlook, Milne believes that BTC should reach $150,000-300,000 by the end of 2024, “and this is probably the peak of opportunities for the bulls.”

Tim Draper, a third-generation venture capitalist and co-founder of Draper Fisher Jurvetson, is also hoping for 2024. He believes that the halving planned for this year will have a big impact on the price of the main cryptocurrency, which will eventually reach $250,000.

Another expert who joined the bull train was analyst Dave the Wave, known for predicting the 2021 bitcoin crash. He believes that the coin is now on its way to breaking through its “long-term resistance diagonal.” In his opinion, "a technical movement over the next month or two may be enough to break this resistance." Dave the Wave has previously said that its Logarithmic Growth Curve (LGC) model indicates that bitcoin could rise to $160,000 by January 2025.

Eric Wall, Chief Investment Officer at crypto-currency hedge fund Arcane Assets, gives a much more modest forecast: the expert believes that the price of bitcoin may exceed $30,000 in the coming year. Eric Wall often bases his comments on the BTC Rainbow Price Chart, an analytical tool created by BlockchainCenter. And this time he said that the $15,400 exchange rate was the bottom for bitcoin.

Jiang Zhuoer, founder and CEO of a number of crypto projects, agrees with Eric Wall. By his calculations, all three previous bear markets took the same amount of time to go from the previous high to the bottom. Based on this, Jiang Zhuoer concludes that we are now in the last sideways period of the bear market bottom. His optimistic estimate suggests that if the 2018 scenario repeats, BTC price could be flat for another two months before the next bull run begins. At the same time, events such as bankruptcies of crypto companies will no longer have a significant impact on the prices of major digital assets.

The strategists of the British international financial conglomerate Standard Chartered strongly disagree with this statement. According to them, “more and more crypto companies and exchanges are facing insufficient liquidity, leading to further bankruptcies and the collapse of investor confidence,” which could lead to BTC falling to $5,000 this year.

It is said that the truth lies in the middle. This is exactly the “optimistic-pessimistic” position taken by Galaxy Digital CEO Mike Novogratz. He said in a recent interview with CNBC that the prospects for cryptocurrencies are not so good, but everything is not so bad either. Leveraged traders closed out their positions in December 2022, creating what the entrepreneur called a “clean market.” In addition, market participants have significantly reduced their spending and will continue to do so in order to get through the transition period. Novogratz also stressed that 2023 will be a defining year for the future development of the industry. At the same time, he pointed to the problems that exist between Gemini and Genesis, which could create an unpleasant situation for the entire digital asset market.

Another source of nervousness is the Binance situation. According to a recent Forbes report, the exchange lost $12 billion in assets due to users continuing to withdraw money from the exchange. And despite statements from Binance CEO Changpeng Zhao that the situation has calmed down, the outflow of funds is now only increasing.

The new year 2023 has just come. There are still eleven and a half months ahead, which will show which of the forecasts will turn out to be closer to reality. In the meantime, at the time of writing the review (Saturday January 13), BTC/USD has broken through the $20,000 horizon and is trading in the $20,500 zone. The total crypto market capitalization is $0.968 trillion ($0.790 trillion at the low of December 30). The Crypto Fear & Greed Index rose from 25 to 46 points in a week, but still remains in the Fear zone, although it is already close to the Neutral state.


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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CryptoNews of the Week


- Nine months before the collapse of the FTX bitcoin exchange, its top management spent $40 million on luxury hotels, flights and food. Business Insider writes about this with reference to court documents. Thus, the founder of the stock exchange, Sam Bankman-Fried, lived in a $30 million penthouse in the prestigious resort of Albany (New Providence, Bahamas) before his arrest. In addition, Bankman-Fried's parents, himself, and FTX executives have owned at least 19 luxury properties worth $121 million.

- The Hong Kong Financial Secretary announced that the jurisdiction is ready to accept cryptocurrency companies from around the world. The official noted that the authorities of this administrative region of China have recently completed work on a licensing regime for the industry. In accordance with the adopted rules, crypto companies are subject to the requirements that apply to the traditional financial sector. Earlier, the Hong Kong Financial Services and Treasury Bureau announced the introduction of regulatory mechanisms to protect investors.
Analysts expect that regulatory pressure on the crypto industry will increase in many countries in the coming year. The long-awaited law MiCA (Markets in Crypto Assets Regulation) will come into force. Most likely, the SEC will also do something important in terms of regulating cryptocurrencies. And it is possible that such steps will help restore investors' interest and confidence in the industry, lost after the turmoil of 2022.

- Despite the recovery of cryptocurrency markets after the collapse of the FTX exchange, the situation with Binance has not yet returned to normal. According to a recent Forbes report, the exchange lost $12 billion in assets due to users continuing to withdraw money from the exchange. Despite statements from Binance CEO Changpeng Zhao that the situation has calmed down, the outflow of funds is now only increasing.
According to a Forbes study, Binance lost about 15% of its assets. According to analytical company Defillama, customers of this largest crypto exchange withdrew approximately $360 million last Friday alone.
The performance of Binance Coin (BNB) and Binance USD (BUSD), the exchange's own tokens, is the best indicator of investor mistrust. According to Forbes, BNB has lost 29% of its value in the last two months and more than 37% compared to last year. In addition, the exchange was losing about $3 billion a year as a result of the cessation of bitcoin spot trading fees.

- Bill Miller, an American investor and fund manager, has confirmed his belief in bitcoin and called it a completely different asset. According to him, the Fed intervened actively in the situation in order to save the markets during the COVID-19 pandemic, and the BTC network, without any support, worked continuously and without interruptions. Miller also noted that the global market has risen by only 70% since the crash in March 2020, while the price of bitcoin has risen by 190% over the same period. Thus, BTC is a more efficient asset.
The expert also believes that it is wrong to link BTC to the bankruptcy of crypto companies such as FTX and Celsius. He emphasized that these are all centralized organizations, which should not be confused with the decentralized bitcoin network. In addition, Miller advised the public not to confuse volatility with value, stating that the price of the main cryptocurrency will rise by the end of the year.

- Cryptocurrency analyst Dave the Wave, known for predicting the collapse of bitcoin in 2021, believes that the coin is now on track to break its “long-term resistance diagonal”. In his opinion, "a technical movement within the next month or two" may be enough to break this resistance. Dave the Wave has previously said that its Logarithmic Growth Curve (LGC) model indicates that bitcoin could rise to $160,000 by January 2025.

- Ukrainian startup Global Ledger has become a partner of the United Nations Department on Drugs and Crime (UNODC) in launching a new educational course on cryptocurrencies. This will be the third such virtual resource program for UNODC.
Participants will be able to conduct real cybercrime investigations during the course, gain experience both on the basis of historical data and on "live" cases. In the context of the ongoing Russian-Ukrainian conflict, the program is designed to train representatives of the Ukrainian Cyber Police and other services to identify and prevent the use of cryptocurrencies in criminal and terrorist activities and circumvent international sanctions.

- The German Federal Financial Supervisory Authority (BaFin) has issued an official warning about the new Godfather malware that collects user data in banking and cryptocurrency apps. Experts discovered the Trojan back in 2021, but the program was underdeveloped then. The improved and finished build of The Godfather was discovered on Android devices in December 2022 for the first time.
BaFin said that the program targets more than 400 apps operating not only in Germany but throughout the world. The principle of operation of The Godfather is simple: the program simulates banking and cryptocurrency application websites, stealing user data at the time of entry. Moreover, the software can send push notifications to receive two-factor authentication codes. BaFin experts are trying to figure out how the malware gets on users' devices.

- Blockchain security company CertiK reported earlier that the level of fraud and hacking in the cryptocurrency industry will increase significantly this year as the industry becomes more popular. Another computer security company, Kaspersky Lab, believes that “a major cyber epidemic of unprecedented proportions may occur in 2023”, as the BlueNoroff cybergroup has again intensified its attacks on organizations working with cryptocurrencies, such as venture funds, banks and startups.
Kaspersky Lab experts discovered new BlueNoroff traps for startup employees in autumn 2022: 70 fake domains masquerading as well-known venture funds and banks from Japan, the USA, Vietnam, and the UAE. In addition, hackers are now experimenting with new file types to inject malware. For example, it can be an email with an allegedly important document in the “doc” format attached. If you open this file, the device will be immediately infected with malware, and attackers can monitor all daily operations and plan to steal funds.

– Galaxy Digital CEO Mike Novogratz said in a recent interview with CNBC that the prospects for cryptocurrencies are not so good, but everything is not so bad either. Bitcoin and Ethereum prices have remained stable lately despite the bad news. Leveraged traders closed out their positions in December 2022, creating what the entrepreneur called a “clean market.” In addition, market participants have significantly reduced their spending and will continue to do so in order to get through the transition period.
 Novogratz also stressed that 2023 will be a defining year for the future development of the industry. At the same time, he pointed to the problems that exist between Gemini and Genesis, which could create an unpleasant situation for the entire digital asset market.

- The founder and CEO of BTC.TOP & B.TOP crypto projects, Jiang Zhuoer, studied the historical charts of the bitcoin and ethereum rates. All three previous bear markets took the same amount of time to go from the previous high to the bottom. Thus, the expert concludes that the four-year cycle is still working.
Based on this, Zhiang Zhuoer believes that we are now in the last sideways period of the bear market bottom. Events such as bankruptcies of crypto companies will no longer have a significant impact on prices. The optimistic estimate suggests that if the 2018 scenario repeats, BTC price could stay flat for another two months before the next bullish rally begins.
The analyst emphasized that Ethereum now looks much stronger than bitcoin. Currency freedom and increased opportunities for smart contracts have attracted new users and encouraged the creation of innovative apps. Zhiang Zhuoer noted that the decline in ETH was no more than that of BTC, and the ETH/BTC ratio was kept at a high level. Bitcoin's inflation rate was 1.72%, while after switching to the PoS algorithm, the same rate for ETH was only 0.01%. According to the expert, ETH deflation will have a very positive effect on its future price, and Ethereum will begin to grow in value earlier than bitcoin and will become the leader of the next bullish market. This should happen between March and May 2023.


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.

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We talked a week ago about how economists from the world's leading financial institutions see the future of EUR/USD in 2023. However, our reviews have included two more major pairs for many years, USD/JPY and GBP/USD. And it would be unfair to ignore them this time. Moreover, after the euro, the Japanese yen and the British pound are the most significant components in the formation of the US Dollar Index DXY (13.6% and 11.9%, respectively).

But in addition to forecasts for the future, we will traditionally tell you what the experts' expectations were regarding the past, 2022, and how close they turned out to be.



USD/JPY: First North, Then South

We titled the forecast for this pair a year ago as “Japan Needs a Weak Yen”. And this was absolutely true: starting at 115.00 on January 1, thanks to ultra-soft monetary policy and a negative interest rate (minus 0.1%), the pair came close to 152.00 on October 21. The last time it was this high was 32 years ago. Even the Ministry of Finance and the Bank of Japan (BoJ) were afraid of such a weakening of their national currency, and currency interventions were urgently launched to save it. The yen was also assisted by the expectations of the US Federal Reserve's transition from an extremely tough, hawkish policy to a softer one. As a result, the annual dynamics of USD/JPY took the following form (data are as of the end of each quarter): Q1 - 121.00, Q2 - 135.00, Q3 - 144.00 and Q4 - 131.00.

 Almost none of the experts doubted a year ago that the differentiation between the approaches of the US and Japanese regulators would strengthen the dollar's position. But almost no one expected that the jump would be so powerful. The closest to reality (but still far enough) was the forecast of the Dutch banking ING Group (Internationale Nederlanden Groep), which looked like this: Q1 - 114.00, Q2 - 115.00, Q3 - 118.00 and Q4 - 120.00. Morgan Stanley (Q4 - 118.00) and Amundi (Q4 - 116.00) are next in descending order.

The French financial conglomerate Societe Generale, the British Barclays Bank and CIBC (Canadian Imperial Bank of Commerce) also indicated a maximum of 116.00, but not at the end of the year, but in the Q2. Further, according to analysts of these financial institutions, the yen had to move the dollar to the zone of 114.00-115.00. Goldman Sachs missed the most, they believed that the pair would meet 2023 with a fall to 111.00.

The final statistics for the past year are not yet known. But it is expected that the final consumer inflation in 2022 will be 2.9%. This is slightly above the target, but well below the performance of other major countries whose regulators have been aggressively raising rates over the past year in an effort to curb price increases. Moreover, according to BoJ forecasts, this figure may fall to 1.6% by the end of 2023. And this raises a logical question: if everything is so good, why tighten the current monetary policy, raise the base rate and create problems for producers?

The Central Bank of Japan did just that at its last meeting last year, on December 20, leaving the rate unchanged. However, it still managed to surprise the market by expanding the range of fluctuations in government bond yields to 0.5%. This decision led to the growth of the national currency against the dollar by more than 3%.

Further, a period of calm is likely to come, and there will be no major changes in the monetary policy of the Central Bank of Japan during the Q1. Certain steps can be expected only after April 08. It is on this day that the term of office of BoJ head Haruhiko Kuroda ends, and a new candidate with a tougher position may take his place. However, despite the fact that there are candidates with more hawkish views among the candidates, we can hardly expect radical changes.

We described what the US Federal Reserve, counterpart for USD/JPY, plans for 2023 in the previous review. And if the Japanese regulator remains in its current positions, the interest rate gap will increase, but not by much. And then it stabilizes completely.  Some experts suggest that the state of affairs in China may have a serious impact on the yen. If China's economic indicators continue to sag, the Japanese currency may become a "safe haven" for Asian investors, which will help strengthen it.

Perhaps it was the above factors that influenced the opinion of the strategists at the world's leading banks. Thus, ING assumes that USD/JPY may approach 125.00 at the end of 2023. Societe Generale gives a similar quarterly forecast: Q1 - 135.00, Q2 - 135.00, Q3 - 130.00 and Q4 - 125.00. HSBC also estimated that it will meet 2024 almost where it is now, around 130.00.

There are still 12 months to go until the end of December, and a lot of unexpected things can happen during this time. The previous three years have been clear evidence of this: the COVID-19 pandemic and Russia's armed invasion of Ukraine have shattered many forecasts and calculations. That is why it is interesting to see what experts say in a shorter time period.

The range of opinions regarding the dynamics of the pair in Q1 is unusually wide. Some analysts (not many of them) expect the pair to further decline, now to the 124.00-125.00 zone. Goldman Sachs and Brown Brothers Harriman, on the contrary, expect the pair to test the 150.00 height again. Barclays Bank and Bank of America are also looking north at 146.00-147.00. And although the forecasts of ING, BNP Paribas and CIBC look somewhat more modest (136.00-138.00), it is obvious that most influencers expect the dollar to strengthen against the yen in January-March.


GBP/USD: Still at the Crossroads

Last year's forecast for this pair was headlined "At the Crossroads of Three Roads." And this was due to the fact that the position of the Bank of England (BoE), unlike its counterpart from Japan, was much less predictable. There were three options: north, south, or east.

Although the UK's dependence on energy was incomparably lower than in the European Union, the global crisis associated with anti-Russian sanctions did not bypass it.  Starting at 1.3500 on January 1, 2022, the pair moved as follows (the data are as of the end of each quarter): Q1 - 1.3100, Q2 - 1.2100, Q3 - 1.1100 and Q4 - 1.2000. GBP/USD reached a 37-year low on September 26, 2022, finding a bottom around 1.0350.

Analysts at ING had forecast that the pound would fall somewhere in the middle of a triangle of a stronger US dollar, stable commodity currencies and weaker low-yielding currencies. Therefore, according to their scenario, GBP/USD  should have moved sideways: Q1 - 1.3300, Q2 - 1.3400, Q3 - 1.3400 and Q4 - 1.3400. However, they were wrong. But this mistake is nothing compared to the patriotic scenario of the British bank Barclays: Q1 - 1.3300, Q2 - 1.3700, Q3 - 1.4000 and Q4 - 1.4200. That is, instead of 1.4000, the pair was at 1.0350 at the end of Q3. An error of 3,850 points! 

Thanks to the tightening of the BoE position and expectations of a softening of the Fed's position, the pound managed to win back part of the losses and rise to the 1.2000 zone in October-December 2022. However, specialists of the German Commerzbank consider the current situation only a temporary respite and expect increased pressure on the pound.

With the economic recovery from the crisis, the US is doing much better than the UK. Representatives of the Central Bank of the United Kingdom spoke openly about the difficult times. A recession began last year, which, according to the forecasts of the Central Bank, will last until mid-2024, while the economy will shrink by 2.9%. At the moment, the pound's vulnerability is also associated with a large current account deficit and galloping inflation, which shows multi-year highs. First of all, this situation has arisen due to the sharp increase in the cost of importing oil and gas.

It is likely that the Bank of England will continue to raise rates in 2023 in an attempt to bring price growth under control. At the moment, the Fed and BoE interest rates are 4.50% and 3.50%, respectively. The gap is not as big as it used to be, only 100 bp. This advantage of the dollar may continue, and rates may reach parity if the British regulator becomes even more hawkish.  In the meantime, economists are talking about raising rates in Q1 and Q2 by 50 bps (basis points) and 25 bps, respectively, to 4.25%.

In such a situation, according to HSBC, one of the largest financial conglomerates in the UK, events in GBP/USD will develop as follows: Q1 - 1.2200, Q2 - 1.2300, Q3 - 1.2400 and Q4 - 1.2500. The French Societe Generale Group sees quotes as follows: Q1 - 1.2000, Q4 - 1.2400.

As in the case of USD/JPY, the forecast for GBP/USD for the next quarter looks more specific and varied: from 1.0700 at TD Securities Research to 1.2600 at Citi Bank. In the middle of this range are forecasts: BNP Paribas (1.0800), Barclays (1.1300), CIBC (1.1500), Scotiabank (1.2000) and Westpac Institutional Bank (1.2200).

***

We will traditionally switch from annual and quarterly forecasts to weekly ones starting next week. We think the guidelines will be much clearer there.


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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CryptoNews of the Week


- It was on January 3, 2009, that a person or a group of people known as Satoshi Nakamoto launched the main bitcoin network, mining a genesis block with 50 BTC. Shortly before the network was launched, on October 31, 2008, the white paper of the first cryptocurrency was published. The first bitcoin transaction took place on January 12, 2009: Satoshi Nakamoto sent 10 BTC to Hal Finney. A version of Bitcoin_0.1 software was published three days earlier.
Nakamoto's identity and motives for creating bitcoin are still a mystery that the crypto community and beyond are trying to unravel. One of the probable reasons for the creation of bitcoin was the global financial crisis that broke out in 2007-2008, accompanied by the collapse of the largest investment banks, a widespread decline in production, falling demand and prices for raw materials, rising unemployment and active state intervention in the economy.

- The Italian Parliament approved amendments to the 2023 budget, which involve the introduction of a 26% tax on capital gains received from the trading of digital assets. The tax will be levied if there is a profit of more than €2,000 ($2,145), and citizens will be obliged to inform tax authorities about such investments.
The UK, by contrast, has offered tax breaks for non-residents and foreign investors when buying digital assets through local investment managers or brokers. The new rule came into effect on January 1, 2023 and is part of Prime Minister Rishi Sunak's plans to make the UK the world's crypto powerhouse.

- Sam Bankman-Fried, 30, founder of cryptocurrency exchange FTX, which collapsed in November, causing billions of dollars in losses to investors, pleads not guilty. He faces eight criminal charges, including electronic fraud, conspiracy to launder money, and campaign finance violations, for which he could spend decades in prison.
According to Reuters, the court has set the first date for the Bankman-Fried trial on October 2, 2023. In the meantime, the defendant has been released to his parents' home in California on $250 million bail. Parents are two of the four people who have paid bail. Lawyers said they were threatened with harm, so two more names have not yet been disclosed.

- The past 12 months have been particularly difficult for the cryptocurrency market, which has lost more than 70% of its total capitalization. However, many analysts seem to be quite optimistic about the short-term outlook for BTC.
Tim Draper, third-generation venture capitalist and co-founder of Draper Fisher Jurvetson, believes bitcoin will be worth $250,000.
It will take a rally of about 1,400% upside to reach this cosmic mark. Draper is also positive about the halving, which should take place in 2024, believing that this event will have a big impact on the price of the main cryptocurrency.
Another expert with a positive outlook is Carol Alexander, professor of finance at the University of Sussex. She had been prone to BTC falling to $10,000 in 2022 in her previous forecast. This did not happen, although the forecast almost came true.
However, the financier predicts now that the first cryptocurrency can reach $50,000 in 2023. The professor believes that the catalyst will be the influx of more “dominoes” that fell apart after the collapse of the FTX exchange. “2023 will be a managed bull market, not a bubble,” she writes. - We will not see a jump in the rate, as before. But we will see a month or two of stable trending prices interspersed with periods of limited range, and perhaps a couple of short-term crashes.”
Alistair Milne, IT Director of the Altana Digital Currency Fund, is also among those who gave several high-profile forecasts about the bitcoin rate. In his opinion, “We should see bitcoin at least $45,000 by the end of 2023.” That being said, Milne warns that “if central banks decide to allow a higher inflation target […] to avoid a recession, hard assets could become fashionable again.” He also tweeted that BTC should reach $150,000-300,000 by the end of 2024, “and this is probably the peak of opportunity for the bulls.”
Another expert joining the bull train is Eric Wall, Chief Investment Officer at cryptocurrency hedge fund Arcane Assets. It is also called the "altcoin killer". However, his forecast for 2023 looks much more modest: the expert believes that the bitcoin rate may exceed $30,000. Eric Wall often bases his comments on the BTC Rainbow Price Chart, an analytical tool created by BlockchainCenter. And this time he said that the $15,400 exchange rate was the bottom for bitcoin.
Unlike previous forecasts, strategists at the British international financial conglomerate Standard Chartered believe that the BTC rate may, on the contrary, fall to $5,000. In their opinion, “more and more crypto companies and exchanges are facing insufficient liquidity, leading to further bankruptcies and the collapse of investor confidence in digital assets.”

- Luke Dashjr (alias Luke-Jr), one of the main developers of the first cryptocurrency core, who has made more than 200 proposals to the bitcoin code since 2011, is now the victim of hackers. Luke-Jr claims to have lost "virtually" all of his BTC in a brazen hack that took place on New Year's Eve. The programmer said in a January 1 message that hackers gained access to his Pretty Good Privacy (PGP) key, a common security method. As a result, more than 215 BTC ($3.6 million) were stolen.
Dashjr said he had "no idea" how the attackers got access to his key. He only noticed the recent hack after receiving emails from Coinbase and Kraken about login attempts, he said.

- Dante Disparte, Head of Strategic Development at Circle, shared his opinion on the developments in the cryptocurrency sector over the past year and the prospects for the industry in 2023. According to the specialist, digital assets and blockchain will still remain indispensable tools of the economy, despite the terrible events in 2022, which indicate not a crypto winter, but a whole “ice age” for the industry. However, despite these setbacks, many major banks and financial institutions will continue to introduce cryptocurrencies into their product lines. As for the bankruptcy of several crypto-lenders and the collapse of the FTX exchange, these events, according to Dispart, can be a boon for the industry, as they lay the foundation for more responsible and affordable investments.

- Rich Dad Poor Dad author Robert Kiyosaki revealed that he is buying more bitcoin (BTC) at current prices. Kiyosaki explained that, unlike altcoins, bitcoin is likely to be able to dodge the hammer of regulators: “Why? Because bitcoin is classified as a commodity much like gold, silver and oil. Most crypto tokens are classified as securities, and the US SEC will crush most of them.”

- As it turns out, Darren Nguyen, a 25-year-old crypto trader who traded nearly $2 billion worth of crypto in 2021, was running his crypto empire from the comfort of his parents' home in Sydney. This is evidenced by an article published on January 2 in The Australian. Until now, the family has kept quiet about the crypto business Nguyen runs, and his mother refused to answer the question of whether she knew about what the child was doing under her roof.


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.

#eurusd #gbpusd #usdjpy #btcusd #ethusd #ltcusd #xrpusd #forex #forex_example #signals #forex #cryptocurrencies #bitcoin #stock_market

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NordFX publishes regular statistics on the performance of its clients' trading transactions, as well as the profits received by the company's IB partners. The results of not only the last month, but the whole of 2022 have been summed up this time.

- The best result among traders was shown in December by a client from West Asia (account No. 1657XXX), whose profit amounted to 115,335 USD and was received mainly due to transactions with gold (XAU/USD).
- The second place in NordFX's top three highest-performing clients belongs to the holder of account No. 1637XXX, who earned 46,115 USD from transactions with Brent crude oil (Ukoil.c).
- And, finally, the third step of the December podium was occupied by another representative of the West Asian region (account No. 1644XXX) with a profit of 22,256 USD, who also traded gold (XAU/USD).

Now about the results of the entire 2022. The composition of the top three changed from month to month, with representatives from various countries and regions taking places on the trading podium. In total, the TOP-3 participants earned an impressive amount of 1,441,457 USD last year. Thus, the average income of a trader who was in the TOP-3 was 40,040 USD per month. The client from Southeast Asia (account No. 1620XXX) managed to get the maximum profit, having earned 146,396 USD on transactions with gold (XAU/USD) in April.

Note that gold occupies the top, golden step in the TOP-3 of the most profitable trading instruments. It was transactions with this noble metal that brought NordFX traders to the podium most often. The British pound is on the silver step. As for the most famous pair, EUR/USD, it managed to take only third place in this ranking, having hardly overtaken pairs with the Japanese yen, Canadian and Australian dollars.

Among the NordFX IB partners, December TOP-3 is as follows:
- the largest commission, 5,830 USD, was credited to a partner from South Asia, account No.1562XXX;
- the next is their compatriot (account No. 1618XXX), who received 5,692 USD in a month;
- and, finally, their colleague from Western Asia (account No. 1621XXX) closes the top three, having earned 3,525 USD in commissions in December.

Like traders, the composition of the top three was constantly updated. In total, its participants were paid 243,344 USD in 2022. The largest commission, 24,700 USD, was credited to a partner from Southeast Asia, account No.1371XXX in June.
 

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.

#eurusd #gbpusd #usdjpy #btcusd #ethusd #ltcusd #xrpusd #forex #forex_example #signals #cryptocurrencies #bitcoin #stock_market

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We analyzed last week what happened to the two most popular currencies in 2020-2022, what forecasts were given then by the strategists of leading financial institutions for EUR/USD, and how accurate they turned out to be. Now it's time to tell what experts expect from 2023.


It should be noted right away that these forecasts differ greatly: life has brought too many “surprises” in recent years and has left too many unresolved problems for the future.

What will be the geopolitical situation, in what direction and at what pace will the monetary policy of the Fed and the ECB go, what will happen to the recession and labor markets, will it be possible to defeat inflation and curb energy prices? We have yet to find out the answers to these and many other questions. There are a lot of uncertainties, which do not allow experts to come to a common opinion.

Some believe that EUR/USD will approach the 2000-2002 lows around 0.8500, while others believe that it will rush to 1.6000, as it was in 2008. Of course, these are extreme values. It is highly likely that the pair will not reach either the first or the second of these extremes, and the range of oscillations will be much narrower.  At least, this is what most reputable experts point out, and we will introduce you to their forecasts.


What the Bulls Say for EUR/USD

Deutsche Bank strategists assume that the pair may return to the February-March 2022 figures in 2023 (a two-month fluctuation range of 1.0800-1.1500). In their opinion, this may happen even if the geopolitical situation does not improve and remains at the level of the second half of 2022. However, in their opinion, such a weakening of the dollar is possible only if the Federal Reserve begins to ease its monetary policy in the second half of 2023.

And that is what might not happen. Recall that Fed Chairman Jerome Powell said at the press conference following the December FOMC (Federal Open Market Committee) meeting that the regulator will keep interest rates at their peak until it is sure that the decline in inflation has become a stable trend. The base rate can be raised to 5.1% in 2023 and remain so high until 2024. (Recall that 4.6% was mentioned as the peak rate in the September statement). According to Jerome Powell, the Fed understands that this will trigger a recession, but is willing to pay that price to control inflation.

It should be noted that the position of the US Central Bank runs counter to the position of the United Nations, which called for a suspension of rate hikes. The UN believes that further tightening of monetary policy could cause serious damage to developing countries, which have already suffered greatly from the increase in the cost of goods in the United States.

In addition to putting pressure on the Fed, there is another way to balance and even weaken the dollar's position. This is what the ECB and several other Central Banks have demonstrated in recent months by raising their own interest rates. As we wrote in the previous review, the common European currency managed to seriously push the dollar over the last three months of 2022 and lift EUR/USD by about 1,200 points.

ECB President Christine Lagarde, as well as her overseas counterpart, showed a hawkish attitude at the press conference on December 15 and made it clear that quantitative tightening (QT) in the Eurozone will not end there: the euro interest rate will face several more increases in 2023. The ECB also plans to start reducing its balance sheet from March.

At the beginning of 2023, the gap between the dollar and euro rates is 200 basis points (4.5% and 2.5%, respectively). The swap market expects that the European regulator may raise its rate by another 100 bp in the coming year, which will provide some support for EUR/USD.

Economists at Bank of America Global Research agree with this development. “According to our baseline scenario,” they write, “the US dollar will remain strong in early 2023 and will switch to a more stable downward trajectory after the Fed's pause.” Starting from Q2, according to BofA, the dollar will gradually weaken, and EUR/USD will rise to 1.1000.

German Commerzbank supports this scenario. “Given the expected change in the interest rate of the Fed and provided that the ECB refrains from cutting interest rates […], our target price for EUR/USD for 2023 is 1.1000,” economists of this banking group predict.

The French financial conglomerate Societe Generale also votes for the weakening of the dollar and the growth of the pair. “We expect,” says Kit Juckes, Chief Global FX Strategist at SocGen, “that the yield difference between 10-year US and German bonds will fall from 180 basis points to 115 basis points by the end of Q1, and the difference between 2-year interest rates will fall from 190 bps to less than 1%. The last time we saw such a difference between rate and return, EUR/USD was above 1.1500 and this is where it will be by the end of Q1 if it continues to rise at the same rate as it reached 0.9500 at the end of September ".


What the Bears Say For EUR/USD

Analysts at the Economic Forecasting Agency expect the pair to grow to 1.1160 in the coming year, but then, in their opinion, it will fall smoothly but steadily and reach 1.0430 at the end of Q2, 1.0050 at the end of Q3, and end the year at 0.9790.

Economists at Internationale Nederlanden Groep have taken a much more radical stance. ING is confident that all the pressures of 2022 will continue into 2023. High energy prices will continue to put pressure on the European economy. Additional pressure will be exerted if the US Federal Reserve suspends the printing press before the ECB does. Analysts of this largest banking group in the Netherlands believe that the exchange rate of 0.9500 euros per dollar will be adequate in Q1 2023, which, however, may grow to parity of 1.0000 in Q4.

Many other authoritative experts also support the US currency. Thus, Dave Schabes at the University of Chicago's Harris School of Public Policy believes that Russia's war with Ukraine threatens to slow economic growth across Europe and prolong the continent's energy crisis until 2023 and possibly 2024. According to the scientist, this is a specific factor contributing to the strength of the dollar. “The US has always been considered the world's number one safe haven in times of political or military uncertainty,” he says.

Eric Donovan, head of Institutional FX at StoneX, a financial services company, shares the same point of view. “The main reason the dollar has become so strong is because it is still considered a safe-haven currency and it will strengthen during periods when the markets are in a state of fear,” he explains. Therefore, the dollar will remain strong against European currencies as long as this war continues.

***

The past year, 2022, was not an easy one: the problems created by the coronavirus pandemic were superimposed by the tragic events in Ukraine, which have hit the entire global economy. However, as the legendary King Solomon said to the king of Ethiopia: "This too shall pass." We really want to believe this.


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.

#eurusd #gbpusd #usdjpy #btcusd #ethusd #ltcusd #xrpusd #forex #forex_example #signals #cryptocurrencies #bitcoin #stock_market

https://nordfx.com/

CryptoNews of the Week


- Billionaire Mark Cuban had an argument with Club Random podcast host Bill Maher regarding investments in bitcoin and gold. Maher noted that he is an opponent of the first cryptocurrency and believes in the value of the precious metal. In response, Cuban called those who invest in gold dumb. “I want bitcoin to drop lower so I can buy some more,” the billionaire said.
Cuban also criticized Maher's claim that gold is a hedge against inflation and other risks. According to him, buying the precious metal does not mean owning a physical ingot. “This is a digital transaction that proves ownership […]. Do you know what would happen if you had a gold bar in your hands? Someone would beat you to a pulp or kill you to take it,” Cuban added.

- The mining company BIT Mining Limited reported a hacker attack on the BTC.com pool under its control. “As a result of the cyber attack, certain cryptocurrencies were stolen, including assets of BTC.com customers worth about $700,000 and approximately $2.3 million owned by the company,” BIT Mining Limited said. According to Immunefi, the crypto industry's total losses from hacks and scams in Q3 22 amounted to $428.7 million.

- According to South Korea’s National Intelligence Agency, North Korean hackers have stolen $1.2 billion worth of cryptocurrencies and other digital assets over the past five years. More than half of this amount ($626 million) was stolen over the past year.
North Korea's hackers are considered among the best, as Kim Jong-un's regime is investing heavily in cybercrime. CNN has published a major investigation into how the North Korean regime is financing its nuclear program by creating a network of agents and hackers embedded in various crypto exchanges and crypto companies, mainly from the United States.

- Large institutional investors are still “staying away” from digital assets due to high volatility. This was stated by Jared Gross, Managing Director of JPMorgan Asset Management. In his opinion, bitcoin has not become an alternative to gold and a hedge against inflation, as many hoped, and for most large institutions, cryptocurrencies “actually do not exist” as an asset class. “[A lot of big investors] breathed a sigh of relief that they haven't entered this market and probably won't do so anytime soon,” added Jared Gross.

- Bobby Lee, co-founder and former head of the BTCC exchange, allowed the cryptocurrency bull market to return by early 2025, in an interview with CNBC. “It is difficult to determine exactly when this bear market will bottom out. I expect the bull market to return in two years,” he said.
The expert also believes that it is necessary to strengthen regulation, especially for companies providing custody services, to restore confidence in the digital asset industry. “I have always been a supporter of more regulation in the cryptocurrency market. To understand, I'm talking about regulating companies, not the asset itself, because it's inert. It is a commodity like gold and silver. No regulation can change the chemical composition of gold or silver. It’s the same with bitcoin,” Lee explained.

- Bitcoin has been recognized as a means of payment in Brazil. The law that has secured this status for it has been passed by Congress and signed by the president of the country. The Bank of Brazil is expected to be in charge of using the first cryptocurrency as a means of payment, while the Securities and Exchange Commission is expected to take responsibility for overseeing digital gold as an investment asset.
At the same time, the Chairman of the Bank of Brazil has repeatedly stated that he does not consider cryptocurrencies as an alternative to fiat. Based on this, according to a number of experts, the Central Bank will not help create favorable conditions for the use of bitcoin in mutual settlements.

- Ethereum's fundamentals are strong, but analysts expect ETH to further depreciate. The Ethereum blockchain is at its best since its launch. 100 days have passed since the transition from Proof-of-Work to Proof-of-Stake. The chain is now protected by almost half a million validators, and energy consumption has decreased by 99%.
In addition, Ethereum remains the best ecosystem of non-fungible tokens, or NFTs. According to Nansen, almost $24 billion worth of NFTs were minted and sold in 2022. However, these positive factors have not increased ETH quotes. The price of the coin is still close to $1,200, and some analysts predict a further drop in the rate to the $1,000 zone.

- Crypto trader Dan Gambardella, who runs a YouTube channel called Crypto Capital Venture, released a video on whether the crypto industry can reach a capitalization of $100 trillion by 2030. Gambardella quoted Raoul Pal, former Goldman Sachs chief executive and CEO of RealVision, who compared the cryptocurrency industry to the stocks, bonds and real estate industries, whose market capitalization ranges from $250-350 trillion. Based on this analysis, the top manager believes that a $100 trillion crypto market capitalization could become a reality.

- Popular analyst Benjamin Cowen believes that bitcoin’s current percentage drawdown from its all-time high is approaching the level that signaled the bottom of the 2018 and 2014 bear markets. According to Cowen's chart, bitcoin then fell by more than 80%, today its fall is 75.6% from the high set in November 2021. This figure indicates the approaching end of the bear market. But it is too early to say that the bottom has already been reached.
Cowen is also keeping a close eye on the percentage drawdown of total market capitalization from all-time highs. According to him, it is now down by 72%, which is also still less than the drawdowns observed during the previous two bear markets.


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.

#eurusd #gbpusd #usdjpy #btcusd #ethusd #ltcusd #xrpusd #forex #forex_example #signals #forex #cryptocurrencies #bitcoin #stock_market

https://nordfx.com/