• Media reported that the S.Korean government is about to inforce additional countermeasures regarding cryptocurrencies. The measures may include a ban in opening anonymous cryptocurrencies accounts and enable regulatory authorities to shutdown cryptocurrency exchanges. Also, past warnings were reiterated that virtual currencies cannot play a role as actual currency and could result in high losses due to excessive volatility. The new development follows and could be regarded as in line with previous announcements for taxing profits of cryptocurrencies and banning foreigners from trading virtual currency in the country. The news are expected to have a detrimental effect on bitcoin as the stress South Korea’s efforts to regulate cryptocurrencies and again outline the speculative nature of Bitcoin and other cryptocurrencies.

• Meanwhile Bitcoin yesterday and during today’s Asian morning, broke the 15580 (R1) support level (now turned to resistance) and tested the 14000(S1) support level. We continue to have the opinion that the risks in trading the cryptocurrency are tilted to the downside, especially as it’s price dropped beneath the 100 Moving Average in the four hour chart. Should the bears continue to have the upper hand we expect the cryptocurrency to break the 14000 (S1) support level, test the 12960 (S2) level and should that be breached head for the 12000 (S3) support barrier. Should the bulls take the driver’s seat, bitcoin could break the 15580 (R1) resistance level and aim for the 17000 (R2) resistance hurdle.

JPY supported amid good news

• Japanese retail sales data for November, were released today and accelerated in a surprising +2.2% on a yearly basis versus the +1.2% expected. Also, industrial output for November has upticked. Today’s data follow a string of good financial data regarding JPY in the last week concerning unemployment, household spending and inflation, all of which reignited discussions among investors about BoJ’s policies. A subject which also commented upon in the last BoJ meeting as evidenced by the summary of opinions at the monetary policy meeting on December 20th and 21st of the BoJ. Despite the fact that the opinions seem to align with the current policy, some members seem to have expressed opinions such as that “adjustments to the level of interest rates will be necessary” and cautiously questioning the current ETF purchasing policy. Overall the news are expected to strengthen the JPY across the board.

• USD/JPY had continued to trade in a sideways manner yesterday, however during today’s Asian morning it dropped reflecting the relative strengthening of the JPY and broke the 113.15 (R1) support line (now turned to resistance) and clearly aimed for the 112.70 (S1) support level. We see the case for the pair to be in a bearish mood today as the price approaches the 100 moving average and as out opinion is supported by the aforementioned fundamentals. Should indeed this direction be verified we could see the pair drop beneath the 112.70 (S1) support level and explore the 112.30 (S2) support territory. Should the pair come under buying interest we could see it breaking the 113.15 (R1) resistance level and aim for the 113.80 (R2) resistance zone.

Today’s other economic highlights

• As for today’s other economic data, the US initial jobless claims are to be released and later on US crude oil inventories which could gain further on importance after yesterday’s oil surge.

BTC

• Support: 14000(S1), 12960 (S2), 12000 (S3)

• Resistance: 15580 (R1),17000 (R2), 19100 (R3)

USD/JPY

• Support: 112.70(S1), 112.30 (S2), 112.00 (S3)

• Resistance: 113.15(R1), 113.80(R2), 114.30(R3)