NordFX - ECN/STP, MT4, MT5, Multiterminal Broker

Forex and Cryptocurrencies Forecast for November 28 - December 02, 2022

EUR/USD: FOMC Protocol Dropped the Dollar

Last week ended quietly: the US celebrated Thanksgiving. But its first part was marked by the weakening of the dollar, as a result of which EUR/USD rose by more than 200 points, from 1.0222 to 1.0448. It has risen above its 200-day moving average (SMA) for the first time in 17 months, since June 16, 2021.

The reason for this behavior of the US currency was the forecasts regarding the future policy of the US Federal Reserve. Market participants expect the regulator to slow down the rate of interest rate hikes significantly. And the minutes of the November meeting of the FOMC (Federal Open Market Committee), published on November 23, confirmed the validity of such expectations.

They state that “Some of the Fed's leaders have observed that monetary policy has reached a point where it is sufficiently restrictive to meet FOMC targets and it would be appropriate to slow down the rate hike. The vast majority of participants in the meeting considered that a slowdown in the pace of recovery is likely to be appropriate in the near future.”

At the same time, some of the FOMC members believe that the rate "should reach a slightly higher level than previously expected," since both inflation and the imbalance of supply and demand in the US economy remain at a fairly high level. Combining these two points of view, we can conclude that the peak of monetary tightening (QT) may be higher than previously planned, but the rise to it will be longer and smoother.

Recall that the Fed has raised rates by 75 basis points (bp) four times in a row, and the market is now expecting a 50 bp rise in December, with the prospect of moving to a step of 25 b.p. in 2023. The key rate for the dollar is 4.00% at the moment.

As for actions on the other side of the Atlantic, the ECB raised the euro rate by 50 bps in July and then twice by 75 bps, and it is at 2.00% now. The swap market estimates it will rise by 50 b.p. in December, with a probability of 62%, and by 75 b.p. with a probability of 38%. The European regulator may also move to a step of 25 b.p. next year. In this case, the gap between the rates on the dollar and the euro will remain, which will give EUR/USD an incentive to fall below the parity line of 1.0000 again.

It should be noted that the ECB's monetary tightening has not had a suffocating effect on the European economy so far. Moreover, there is a way out of the energy crisis caused by the sanctions imposed on Russia because of its armed invasion of Ukraine. The EU countries have decided to exclude Russian gas from joint purchases. European Commissioner for Energy Kadri Simson said that the EU managed to replace the Russian fuel completely with the help of energy resources from other sources. Gas storages, primarily in Germany, are already filled to the very neck. And the risks of Europe experiencing rolling blackouts or freezing this winter have been drastically reduced.

Against this background, the Business Activity Index (PMI) in the German manufacturing sector rose from 45.1 to 46.7 instead of the expected fall, while it rose from 47.3 to 47.8 in the Eurozone as a whole. The IFO business climate index in Germany has also started to improve: with the forecast of 85.0, it rose from 84.5 to 86.3 in reality. These macro statistics, along with Germany's GDP growth of 0.4% in Q3 (0.1% in Q2, the forecast is 0.3%), give the ECB the green light for further rate hikes. And this, in turn, according to a number of analysts, may push EUR/USD further up, to the zone of 1.0500-1.0600.

The week closed at 1.0400, above the 200-day SMA. Scotiabank experts believe that this could strengthen the bullish momentum. And their colleagues from Commerzbank say that the comfort level for the pair is likely to be between 1.0400 and 1.0500. In general, among the analysts surveyed, 30% of analysts expect the pair to continue to grow, and 40% expect it to turn to the south. The remaining 30% of experts point to the east. The picture is different among the oscillators on D1. All 100% of the oscillators are colored green, while 15% is in the overbought zone. Among the trend indicators, the 100% advantage is on the green side.

The immediate support for EUR/USD is at the 1.0380 horizon, then there are levels and zones 1.0280-1.0315, 1.0220-1.0255, 1.0130, 1.0070, 0.9950-1.0010, 0.9885, 0.9825, 0.9750, 0.9700, 0.9645, 0.9580 and finally, the September 28 low at 0.9535. The next target of the bears is 0.9500. Bulls will meet resistance at levels 1.0430-1.0450, 1.0480, 1.0620, 1.0750, 1.0865, 1.0935.

The coming week will be full of macroeconomic statistics. Preliminary data on such an important indicator as the level of consumer prices (CPI) in Germany and the Eurozone, respectively, will be released on Tuesday, November 29 and Wednesday, November 30. Data on unemployment in Germany and on GDP and the US labor market will also become known on Wednesday. Fed Chairman Jerome Powell is expected to speak on the same day. Thursday will bring information on retail sales in Germany and business activity (PMI) in the US manufacturing sector. We are traditionally waiting for another portion of statistics from the US labor market on the first Friday of the month, December 02, including the unemployment rate and the number of new jobs created outside the country's agricultural sector (NFP).

GBP/USD: How Long Will the Pound Continue to Grow?

Despite the gloomy global outlook for the pound, a bullish scenario worked in the short term, voted by most experts, 85% of trend indicators and 100% of D1 oscillators. GBP/USD hit its highest level in three months at 1.2153 on Thursday, November 24. As in the case of the euro and other G10 currencies, the reason for its growth was not the achievement of the pound, but the weakening of the dollar.

The final chord for the pair sounded slightly below the maximum, at around 1.2095. According to Scotiabank strategists, the British currency rebounded strongly enough from the all-time low of September 26 (1.0350) to hold on to current levels. Fiscal policy in the UK has stabilized, market confidence has strengthened, and the pair's uptrend has been fairly stable. These factors, according to Scotiabank, should help the GBP/USD quotes stabilize in the 1.2000 area for the foreseeable future, and possibly even rise a little higher.

Analysts at ING, the largest banking group in the Netherlands, point to an even higher target. “We believe positioning has played a major role in the recovery of the pound, and GBP/USD could see further temporary gains towards the 1.22/23 area, which we see once again as the best level for the rest of the year,” they write.

At the same time, experts do not rule out a new bearish impulse and draw attention to the risks of the end of this year and the beginning of 2023, when the Central Banks of leading countries will raise rates during the recession. As we wrote earlier, rising inflationary pressures in the UK could lead to more aggressive rate hikes by the Bank of England (BoE). However, according to many economists, the regulator is likely to avoid drastic steps, since excessive tightening of monetary policy could knock out the UK economy for two long years. According to forecasts, the UK's current account deficit will remain at more than 5% of GDP in 2023-24. The result of such careful actions of the BoE may be the resumption of the downtrend of the British currency

The median forecast for the near term does not give any clear guidance: 45% of experts side with the bulls, exactly the same number side with the bears, and the remaining 10% prefer to remain neutral. Among the oscillators on D1, 100% are on the green side, however, 25% of them give signals that the pair is overbought. Among the trend indicators, the ratio of 85% to 15% is in favor of the greens, like a week ago. The levels and support zones for the pair are 1.2030, 1.1960, 1.1800-1.1840, 1.1700-1.1720, 1.1600, 1.1475-1.1500, 1.1350, 1.1230, 1.1150, 1.1100, 1.1060, 1.0985-1.1000, 1.0750, 1.0500 and the September 26 low of 1.0350. When the pair moves north, it will meet resistance at the levels of 1.2150, 1.2210, 1.2290-1.2330, 1.2425 and 1.2575-1.2610.

Among the events concerning the economy of the United Kingdom, Thursday 01 December attracts attention this week, when the value of November's Business Activity Index (PMI) in the country's manufacturing sector will be known.

USD/JPY: The Yen Thanks the Fed

As an analyst wrote, "The whole world (except the US) thanks the Fed for the minutes of its meeting, which reinforced the dovish reversal, crashing the dollar and US bond yields, and gave respite to the fallen currencies around the world." Indeed, the DXY Dollar Index went down and 10-year Treasury yields hit a 7-week low.

As the yields on these US Treasuries declined, the Japanese currency was among the leaders of growth, and USD/JPY rushed to November lows once again, finding a bottom at 138.04 this time.

(Recall that there is a fairly stable correlation between US government bond rates and USD/JPY. And if the yield on securities increases, so does the dollar against the yen. If the 10-year Treasury bill yield falls, the yen rises, and the pair forms a downtrend).

Strategists at Singapore's United Overseas Bank (UOB) say that if the dollar continues to weaken, the pair might retest the 137.70 area. ING strategists look even further here. According to their forecasts, if the yield on 10-year treasuries ends 2023 at around 2.75%, USD/JPY may end up in the 125.00-130.00 zone at that moment, that is, where it was traded in May-August 2022. As for the possible upward dollar rally this December, according to ING, it will not be able to lift the pair above the 142.00-145.00 zone. There is no question of updating the maximum of October 21 and a new assault on the height of 152.00.

In addition, we must not forget about Day X, which is scheduled for April 8 next year. 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 less dovish position. Such a change could lead to a revolutionary push for USD/JPY to the south. After that, it could end 2023 exactly where ING strategists expect it to be.

As for the current situation, the pair closed last week at 139.05. Only 10% of analysts are counting on the fact that the dollar will try to win back at least part of the losses in the near future, and USD/JPY will turn to the north. 45% vote for a breakthrough to the south and a new fall. And another 45% find it difficult to make a forecast. For oscillators on D1, the picture looks like this: 100% are looking south, 10% of them are in the oversold zone. Among the trend indicators, the ratio is 85% to 15% in favor of the red ones.

The nearest strong support level is located in the zone 138.00-138.30, followed by the levels and zones 137.50-137.70, 136.00, 135.55, 134.55 and the zone 131.35-131.75. Levels and resistance zones are 139.85, 140.60, 142.20, 143.75, 145.30, 146.85-147.00, 148.45, 149.45, 150.00 and 151.55. The purpose of the bulls is to rise and gain a foothold above the height of 152.00. Then there are the 1990 highs. around 158.00.

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

CRYPTOCURRENCIES: Market of Rumors and Fears

BTC/USD fell to its lowest level in two years on Monday, November 21. It was also trading in the $15,500 area on November 21, 2020. The local bottom was found at $15,482 this time. The main cryptocurrency was kept from falling further by the growth of risk sentiment, which is pushing up the S&P500, Dow Jones and Nasdaq stock indices. Additional support was provided by the minutes of the last Fed meeting published on November 23, in which the market saw dovish sentiment. But despite this, cryptocurrencies are still under strong bearish pressure, and many experts believe that a new collapse is inevitable.

JPMorgan analysts have warned that the collapse of major digital assets is not over, and the FTX crash crisis could act like a domino and lead to “cascading liquidations”. And now the market is gripped by anxiety related to the possible bankruptcy of Genesis, a subsidiary of the Digital Currency Group (DCG) fund. This happened after the company failed to raise $1 billion in funding. Citing the difficulties of Genesis, the lending arm of the Gemini crypto exchange has already frozen the withdrawal of client assets. Bloomberg estimates their volume at $700 million.

Investors are already afraid of their own shadow. And then Ethereum co-founder Vitalik Buterin added fear by posting a mysterious tweet. Without going into details, he wrote that "the rumor is that something important is about to happen." Almost at the same time, information appeared from somewhere that he was getting rid of his Ethereum reserves, and this alerted the crypto community furthermore. A wallet allegedly owned by Vitalik Buterin sold 3,000 ETH worth $3.75 million in the middle of the night, just hours after FTX crashed.

Jordan Belfort, a former stockbroker convicted of fraud and commonly known as The Wolf of Wall Street, believes that the FTX trading platform's bankruptcy was intentional, and Sam Bankman-Fried is a sociopath who implemented FTX pump and dump schemes.

The author of the world-famous book Rich Dad Poor Dad, Robert Kiyosaki, tried to soften the intensity of passions, saying that he still believes in the bright future of the two flagship digital assets bitcoin and Ethereum. According to him, bitcoin is not the same as Sam Bankman-Freed. The situation around FTX must be considered as a special case, and conclusions about the entire industry cannot be drawn only on its basis.

But it seems that investors are in no hurry to listen to Mr. Kiyosaki. Analytics firm Glassnode said in their November 21 report that recent market weakness has “shattered the confidence of bitcoin holders” and the looming crypto winter is following in the footsteps of its 2018-19 predecessor. According to Glassnode, most of the whales (wallets with more than 1,000 BTC) are now lying on the bottom, waiting for better times.

At the height of the previous bear market, bitcoin fell by 84% from its maximum. It took just under a year for the asset to fall from $20,000 in November 2018 to $3,200. It took about the same time this time to drop 77.3% and crash from $69,000 on November 21 to a new cycle low of $15,482. At the same time, some analysts believe that BTC should not be expected to recover soon, because several months had passed after the collapse of 2018 before the first noticeable upward impulse appeared.

In addition, last week saw the fourth-largest spike in realized losses with a daily volume of $1.45 billion. This dumping of crypto assets by long-term players “is often a sign of fear and capitulation among this more experienced cohort,” the Glassnode report notes.

According to the IntoTheBlock platform, out of 47.85 million BTC holders, 24.56 million addresses (51%) suffer losses. About 45% of wallets are still in the black, and the remaining addresses are in the break-even zone. According to IntoTheBlock analysts, the last time a similar situation was observed after the March market crash. At the same time, one of them added that the share of unprofitable addresses usually exceeds 50% at the moment when the market is at the bottom. Thus, he hinted that a more significant fall in the cryptocurrency should not be expected. However, statistics show the opposite: the share of addresses that suffered losses reached 55% in December 2018, and this figure exceeded 62% during the dominance of the bearish trend in 2015.

Arthur Hayes, former CEO of BitMEX, has increased the negative outlook for bitcoin to $10,000. American economist Benjamin Cowen does not rule out another decline in quotations either. He has recently published a comparison chart of the current bear market with the previous three, which shows that bitcoin is at a very interesting point today. On the one hand, 379 days have passed since ATH (the all-time high). In the previous two bearish markets, this period was 363 days in 2018 and 410 days in 2015. On the other hand, the current ROI (return on investment) is 0.247. In previous times, it has always fallen below the value of 0.2, which indicates a possible further fall of the market.

Another chart was published by a well-known cryptanalyst named Dave the Wave. According to his charts, bitcoin is now right at the lower end of the long-term LGC, which has historically acted as support. BTC's history has already seen price actions below this curve: for example, in the 2015 bear market or during the crash at the start of the COVID-19 pandemic in March 2020. However, such a fall did not last long then, and the cryptocurrency quickly restored its long-term support. This usually signaled the end of the bear market and the start of a new bull market.

Dave the Wave noted in a comment on his chart that special attention should be paid to the end of the month. According to him, there is technically nothing catastrophic in the price action yet, but the lower border of the model is hardly holding. If bitcoin closes the month below $16,000, LGC support is highly likely to collapse, and the fall will continue. And vice versa: if it manages to hold on and bounce up, this may be a signal for the beginning of a new bull market.

In the meantime, at the time of writing this review (Friday evening, November 25), BTC/USD is trading in the $16,520 zone. The total capitalization of the crypto market is $0.833 trillion ($0.832 trillion a week ago). The Crypto Fear & Greed Index fell from 23 to 20 points in seven days and could not get out of the Extreme Fear zone.


NordFX Analytical Group


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

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

https://nordfx.com/

CryptoNews of the Week

- A bull market will soon begin for bitcoin and other digital assets, but this will happen after a noticeable fall and reaching a real bottom. This opinion was expressed by cryptocurrency analyst Benjamin Cowen.
The expert expects the 2018 crypto winter scenario to repeat. At that time, digital gold demonstrated several stages of gradual recovery. But growth became stable after quotes fell to the minimum of the bearish cycle. “When the market is bearish, we see the following stages constantly: a fall, a consolidation, a small increase, and a failure again. We are following a simple signal: the intersection of the 200-day moving average and the bitcoin price chart,” the analyst said. According to him, such an intersection will take place on December 25-27. This is when we can expect the price to reach a real bottom and move to sustainable growth.
Cowen pointed to the duration of bearish markets, which has historically been about a year, as an additional argument. The 2014 cycle lasted 14 months, and the 2018 cycle lasted 12 months.
According to the expert's forecast, the bottom has not yet been reached so far. In addition to not crossing the BTC price with the 200-day SMA, Cowen also referred to the Puell Multiple indicator. The metric value at the minimum was about 0.3 in previous cycles. The indicator has so far dropped only to 0.375 this year.

- Mark Mobius, co-founder of Mobius Capital Partners LLP investment company, shared his prediction that bitcoin will continue to fall, and its immediate goal is $10,000. He added that he would not invest his own money or his clients' money in digital assets as "it's too risky." “But cryptocurrency is here to stay because there are some investors who still believe in it,” the famous investor “reassured” crypto enthusiasts.
Mark Mobius is not alone in his predictions. Deribit options data shows a large number of outstanding bitcoin put contracts, so called open interest, with an exercise price of $10,000 at the end of December.

- Analysts at IntoTheBlock note that bitcoin is currently experiencing a sharp backwardance: a situation where BTC futures are priced much lower compared to the current price of the asset in the regular (spot) market. This suggests that the market is under strong pressure from sellers. Traders are actively opening short positions, hoping that the price of bitcoin will continue to go down.
At the same time, IntoTheBlock points out that the times when futures contracts are backward tend to coincide with market lows, as was the case in March 2020 and May 2021. And it can also be a signal that the cryptocurrency has found a bottom now. A similar trend can be seen with extremely negative funding rates.

- Unlike Mark Mobius, Tom Lee, head of research at Fundstrat Global Advisors and well-known analyst, remains a bitcoin supporter and believes that this asset can still serve as an investment tool.
Lee agrees that the passing year has been a terrible year for the entire crypto industry. The macroeconomic events of early 2022, the collapse of Terra, which not only buried two TOP-10 cryptocurrencies, but also caused a domino effect that destroyed many industry participants. A new shock came in November when one of the market giants, the FTX crypto exchange, and related companies, collapsed. There are now rumors questioning the fortunes of Digital Currency Group and its subsidiaries, two of which are Genesis and Grayscale. However, despite all the tragedy of the current situation, Tom Lee believes that the above events are a "cleansing" moment for the industry, and next year should be better than this one.

- Michael Novogratz, CEO of the crypto investment company Galaxy Digital, said that digital assets will not leave the market, even though the industry is experiencing a crisis of confidence. “There are 150 million people who have chosen to store part of their wealth in bitcoin. […] Therefore, bitcoin, ethereum will not disappear. Other cryptocurrencies will not either,” he said.
Novogratz expects the recovery of the crypto industry and its slow growth. “You will see how people like ARK Invest CEO Cathy Wood will soon enter the crypto market and invest. I don't think this will be a quick recovery. It will most likely take a long time. It won't be easy to restore trust. Centralized companies will have to act differently,” the businessman said.
Cathy Wood herself, according to Yahoo, answered “yes” when asked whether she still sticks to her forecast of the BTC price of $1 million by 2030.

- Analysts at investment bank JPMorgan believe that the cryptocurrency industry will change significantly after the collapse of FTX. Primarily due to stricter regulations. They cite the bill on the regulation of cryptocurrencies in the European Union (MiCA) as an example.
JPMorgan expects regulators to pay close attention to the issues of storing crypto assets and protecting consumers. These areas should lead to the same level of security as in the traditional financial system. Another way to protect consumers could be the separation of roles for cryptocurrency companies. When, for example, a cryptocurrency broker cannot be a credit service or provide custodial services at the same time. It is also important to ensure the transparency of the crypto business and oblige companies to provide periodic reporting on their status.
JPMorgan researchers do not expect a significant increase in the role of decentralized exchanges due to numerous restrictions for such sites. “We believe,” they write, “that centralized exchanges will continue to play a huge role in the cryptocurrency ecosystem for the foreseeable future. Especially for large institutional investors, even despite the FTX crash.”

- Renowned crypto trader Ton Vays has described how bulls can end a year-long bearish market. According to him, they should push the price of the main cryptocurrency to the November high, and this will start an upward rally. “I want to see a move to $23,000. If there's a rebound, we'll need to hold on to $19,000 and then come back for a further $23,000. This is 95% to 98% likely to show that a bull market has begun.”
The crypto trader who predicted the collapse of bitcoin in 2018 accurately does not rule out that bitcoin will soon face a new sale. “Another scenario is we will fall to $11,000. I believe the bull market will start right after that because I just don't believe bitcoin could fall even lower.” In any case, under any of these scenarios, Vays expects bitcoin to reach $23,000 later this year or early 2023.

- Small retail investors (up to 10 BTC) are becoming increasingly optimistic about bitcoin and have accumulated a record number of coins despite the FTX crash and the ongoing crisis, according to a report by the Glassnode analytics platform.
It is reported that “shrimp” investors (less than 1 BTC) added 96,200 coins worth $1.6 billion to their portfolios after the FTX crash in early November, which is a “record high balance increase”. And now they own 1.21 million BTC in total, which is equivalent to 6.3% of the current turnover of 19.2 million coins. Meanwhile, “crabs” (up to 10 BTC) have bought about 191,600 coins worth about $3.1 billion over the past 30 days, which is also a “convincing all-time high.”
While crabs and shrimps were accumulating a record number of bitcoins, large investors were selling them. According to Glassnode, bitcoin whales have released about 6,500 BTC ($107 million) to exchanges over the past month. However, this is a very small fraction of their total holdings of 6.3 million BTC ($104 billion), which suggests that the whales remain somewhat optimistic as well.

- Texas Governor Greg Abbott sees bitcoin's value to the world, adding that his state “wants to be at the center of it all.” Abbott urged bitcoin companies to set up operations in Texas, promising that anyone who does so will be rewarded with ease of doing business and a lack of regulatory controversy.
According to a recent SmartAsset study on cryptocurrency-friendly states in the US, Texas ranked fourth along with New Jersey, behind Nevada, followed by Florida and California.


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/

November 2022 Results: A Difficult Month for Forex Traders

NordFX Brokerage company has summed up the performance of its clients' trade transactions in November 2022. 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 results show that November was not the best month for Forex traders.

- The maximum profit was received this month by a client from Western Asia, account No. 1652XXX, whose profit amounted to 24,789 USD. This solid result was achieved mainly in gold (XAU/USD), British pound (GBP/USD), and euro (EUR/USD) trades.
- Gold helped their compatriot, account No. 1638XXX, to take the second step of the podium with the result of 19,260 USD.
- The third place belongs to the owner of account No. 1664XXX from Southeast Asia. Using various trading instruments (GBP/NZD, EUR/JPY, EUR/NZD, etc.), this trader made a profit of 15,597 USD.

The passive investment services:

- “Veteran” signal, KennyFXPRO - Prismo 2K, continues to grow in CopyTrading. Ie brought the profit to 277% in 576 days, but its maximum drawdown approached 67% in November. The signal provider had to increase the leverage to 1:200 for the first time to get out of it. The indicators of the second signal from the same provider, KennyFXPro - The Cannon Ball, look like this: 244 days of lifespan, 79% profit. At the same time, its subscribers avoided stress: the leverage did not exceed 1:43, and the maximum drawdown remained at the same level, a little less than 13%.
Startups include the Jhunjhunu signal (profit 547%/max drawdown 61%/lifespan 55 days). Here, as usual, we recall that such profitability certainly looks very attractive, but the subscriber should definitely take into account risk factors such as drawdown and signal life.

- 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 in November.
The KennyFXPRO-The Multi 3000 EA account has been in existence since January 2021, and the maximum drawdown on it had not exceeded 20% until recently. However, the situation became more complicated last month, the drawdown exceeded 42%, and the account manager decided to close unprofitable positions. As a result, profits fell from 170% to 70% and returned to early 2022 levels. 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 is clear that closing losing orders was a very difficult decision for these PAMM managers, and they made it in order to save at least part of the money. Perhaps, if they had acted the same as with the KennyFXPRO - Prismo 2K account in CopyTrading, the losses would have been avoided, but the risk of a complete zeroing of deposits would have increased many times over. At the same time, it should be noted that the profit in both these accounts exceeds the interest on bank deposits many times even after the November losses.

Among the NordFX IB partners, TOP-3 is as follows:
- the largest commission was accrued to a partner from Western Asia, account No. 1645XXX, for the second month in a row. It was 4,924 USD this time;
- the next is their colleague from Southeast Asia, account No. 1660XXX, who earned 4,173 USD in November;
- and, finally, a partner from Southern Asia, account No.1618ХХХ, who received 3,742 USD as a reward, closes the top three.

***

Attention! The NordFX Super Lottery New Year's Draw will take place in just a month, on January 04, 2023, where numerous cash prizes from 250 to 10,000 USD will be drawn among the company's clients.

You still have time to join it and get a chance to win one or even several of these prizes. All the details are available on the NordFX website.


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

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

https://nordfx.com/

Forex and Cryptocurrencies Forecast for December 05 - 09, 2022

EUR/USD: Focus on the US Labor Market

The DXY dollar index is down 5% over the past month. This is the largest monthly decline since September 2010. And the American currency lost more than 10% against the euro over the same period. EUR/USD was trading at 0.9541 back on October 28, and it reached the high of 1.0544 on December 2. There are several reasons for this, and the main one, of course, lies in the US Federal Reserve's interest rate forecasts.

The head of this organization, Jerome Powell, speaking on Wednesday, November 30, confirmed once again that the rate of rate growth in December may slow down. Market participants were finally convinced after these words that the rate would be increased not by 75 basis points (bp), but by only 50 bps in December. Thus, the futures market for the federal funds rate expects that there will be no increase at all in January, and the rate will be increased one or two times by 25 bps in February and March, as a result, its peak value will be 4.75-5.00%, and not 5.25%, as previously predicted. Then there will be a gradual decline and it will drop to 4.45% by December 2023.

Of course, this is only a forecast, but the market reacted to it with a sharp drop in US Treasuries. Thus, 10-year securities fell in yield to 3.5%, the lowest value since September 20, and two-year securities fell to 4.23%, which put strong pressure on the dollar. Moreover, the statement by the head of the Fed was made against the background of the publication of statistical data on the US economy. And it pointed, on the one hand, to a slowdown in inflation, and on the other hand, to the fact that the country's economy is quite successfully coping with rising interest rates and is not in danger of sliding into a deep recession. As a result, the risk appetite of the market began to grow, stock indices ( S&P500, Dow Jones and Nasdaq ) went up, pulling cryptocurrencies with them, and the dollar continued to fall.

China also intervened in the dollar exchange rate. Vice Premier of the State Council of the People's Republic of China Sun Chunlang said that the omicron strain of coronavirus is becoming less pathogenic due to the increase in vaccinated people. Therefore, the strategy to combat the pandemic is entering a new stage. The authorities will even allow some infected people to spend a period of isolation at home rather than in the hospital. This shift towards less stringent anti-COVID measures also had a positive effect on investors' appetite for investments in Asia, and the dollar received another blow, losing its attractiveness as a defensive asset.

The Fed chief's speech about avoiding a “collapse of the economy” suggests that the regulator wants to bring inflation down to its target level, while minimizing the rise in unemployment. Based on this, reports on the US labor market will soon be even more important than before. And this was clearly shown by the market's reaction to the macro statistics released on Friday, December 2. The unemployment rate in the US remained at the same level and was fully in line with the forecast of 3.7%. But as for the number of new jobs created outside the agricultural sector of the country (NFP), on the one hand, it turned out to be less than the October value (284K), but higher than the forecast of 200K, and amounted to 263K. The American currency reacted to this with a sharp increase, EUR/USD dropped to 1.0427. However, then the situation calmed down, everything returned to normal, and it finished at 1.0535.

Among the analysts surveyed, 50% of analysts expect the pair to continue growing to 1.0600, and 20% expect it to turn to the south. The remaining 30% of experts point to the east. It should be noted here that when moving to the medium-term forecast, the number of bearish supporters who expect the pair to drop below the parity level of 1.0000 increases sharply, up to 75%. The picture is different among the oscillators on D1. All 100% of the oscillators are colored green, while 25% is in the overbought zone. Among the trend indicators, the 100% advantage is on the green side.

The immediate support for EUR/USD is located on horizon 1.0500, then there are levels and zones 1.0450-1.0467, 1.0380-1.0405, 1.0280-1.0315, 1.0220-1.0255, 1.0130, 1.0070, 0.9950-1.0010, 0.9885, 0.9825, 0.9750, 0.9700, 0.964, 0.9580 and finally the Sep 28 low at 0.9535. The next target of the bears is 0.9500. Bulls will meet resistance at levels 1.0545, 1.0620, 1.0750, 1.0865, 1.0935.

We are in for quite a lot of macro-economic statistics this week. There will be data on retail sales in the Eurozone and ISM business activity in the US services sector on Monday, December 05. Data on Eurozone GDP in Q3 will be released on Wednesday, December 07. The number of applications for unemployment benefits will become known the next day, December 08, and the US Producer Price Index (PPI) - on December 09. In addition, market participants will be waiting for the speeches by the head of the ECB Christine Lagarde, which are scheduled for December 05 and 08.

GBP/USD: If the Dollar Falls, the Pound Rises

Business activity in the manufacturing sector of the UK increased slightly in November compared to September: the PMI rose from 46.2 to 46.5 points (against the forecast of 46.2). However, this did not have any noticeable effect on the quotes of GBP/USD: it moved almost in unison with EUR/USD, reacting to events in the US. The week resulted in the continuation of its growth from 1.2153 to 1.2310, the highest value since early August. The last chord of the week sounded a bit lower, at 1.2280.

Thus, the dollar weakened by about 1.2% against the pound over the week. And now GBP/USD is only a short distance away from the important level of 1.2450, which is the lower limit of the multi-year range from which it left at the beginning of this year. According to the strategists of the French financial conglomerate Societe Generale, this is where a strong resistance zone is located. “A retreat from this barrier could lead to a pullback phase,” they write. “The October high at 1.1500, which is also a 50DMA, is expected to be the first level of support if the decline continues.” If the pair fixes above 1.2450, Societe Generale predicts that the upward movement may last to 1.2750 and even higher, to the 1.3250-1.3300 zone.

Of course, as we have repeatedly written, the actions of the Central Banks of the leading countries and how quickly and how much they will raise key interest rates in a recession will be decisive for exchange rates. It is possible that the growth of inflationary pressure in the UK may cause a more active rate hike by the Bank of England (BoE). However, according to many economists, the regulator is likely to avoid drastic steps since excessive tightening of monetary policy could knock out the UK economy for a long time. Recall that the main events of the end of this year are expected on December 14 and 15, when the Fed, ECB and BoE meetings will be held almost at the same time.

The median forecast so far is similar to that for EUR/USD: 50% of experts are bullish, 30% are bearish, and the remaining 20% remain neutral. At the same time, when moving to a medium-term forecast, the number of bear supporters increases to 80%. Among the trend indicators and oscillators on D1, 100% side with the greens, however, among the latter, 15% of them give signals that the pair is overbought. Support levels and zones for the pair are 1.2210, 1.2145, 1.2085, 1.2030, 1.1960, 1.1900, 1.1800-1.1840, 1.1700-1.1720, 1.1600, 1.1475-1.1500, 1.1350, 1.1230, 1.1150, 1.1100. When the pair moves north, it will meet resistance at the levels of 1.2290-1.2310, 1.2425-1.2450 and 1.2575-1.2610, 1.2750.

Among the events concerning the UK economy, Monday 05 December will attract attention this week, when the November Composite Business Activity Index (PMI) and the UK Services PMI will be released. The change in the same indicator in the country's construction sector will be published the next day, on Wednesday, December 06.

USD/JPY: The Yen Thanks the Fed Once Again

The main trading range for USD/JPY for the last three weeks has been 137.50-140.60. It tried to move to a higher echelon on November 21, however, the published minutes of the Fed's last FOMC (Federal Open Market Committee) meeting returned it to the set limits. As an analyst wrote at the time, “the whole world (except the US) thanks the Fed for the minutes of its meeting, which strengthened the dovish reversal, bringing down the dollar and US bond yields.”

Last week, the world thanked once again the Fed represented by its head, Jerome Powell whose speech knocked over the dollar on Wednesday, November 30 and the yield on US securities is even lower. USD/JPY broke through the lower border of the channel after the speech of this important official and rushed down, finding the local bottom at the level of 133.61.

The American currency could get a chance to win back losses as a result of the release of the official report on employment in the US on Friday, December 02. As mentioned above, the NFP value of 263K was higher than the 200K forecast, and USD/JPY jumped more than 230 pips to 135.98. However, then the market realized that unemployment remained at the same level, and these 263 thousand new jobs are the lowest since April 2021. The pair turned south again and finished at 134.33.

Recall that 10-year US Treasuries fell to 3.5% after Jerome Powell's “epic” speech, the lowest level since September 20. And according to the forecasts of ING strategists, the largest banking group in the Netherlands, if their yield ends 2023 at about 2.75%, USD/JPY may end up in the 125.00-130.00 zone at that moment, that is, where it was traded in May-August 2022.

In the meantime, the forecast for the near future looks rather vague. 45% of analysts vote for the bearish scenario, 35% for the bullish one, and 20% prefer to remain silent. Although, in this case, most experts (70%) expect a serious strengthening of the dollar in the medium term. For oscillators on D1, the picture looks like this: 100% are facing south, 25% of them are in the oversold zone. Among the trend indicators, the ratio is 100:0 in favor of the red ones.

The nearest support level is located at 133.60 zone, followed by levels and zones 131.25-131.70, 129.60-130.00, 128.10-128.25, 126.35 and 125.00. Levels and zones of resistance are 135.20, 136.00, 136.65, 137.50-137.70, 138.00-138.30, 139.85, 140.60, 142.25, 143.75, 145.30, 146.85-147.00, 148.45, 149.45, 150.00 and 151.55. The purpose of the bulls is to rise and gain a foothold above the height of 152.00. Then there are the 1990 highs around 158.00.

Thursday, December 08 can be marked in the macroeconomic calendar, when the data on Japan's GDP for Q3 will be released. According to forecasts, this indicator will remain at the same negative level: a drop of 0.3%, which will serve as another argument in favor of the super-soft monetary policy of the Bank of Japan (BoJ). The next meeting of this Central Bank is scheduled for December 20, and it is likely to leave the interest rate on the yen unchanged at minus 0.1%.

CRYPTOCURRENCIES: Cryptogeddon Instead of Crypto Winter

If the most frightening word for investors was "crypto winter" earlier, a new, much more terrible term has appeared in the current situation: "cryptogeddon" (similar to Armageddon, the place of the last and decisive battle between the forces of good and the forces of evil).

Everyone will probably agree that the outgoing year was terrible for the entire crypto industry. Macroeconomic events in early 2022, the collapse of Terra, which not only buried two cryptocurrencies from the TOP-10, but also caused a domino effect that destroyed many industry participants. A new shock in November, when one of the market giants, the FTX crypto exchange and related companies, collapsed. There are now rumors that cast doubt on the fortunes of the Digital Currency Group and its subsidiaries, two of which are Genesis and Grayscale.

The next victim of "cryptogeddon" was the BlockFi platform. It filed for bankruptcy last Monday. Creditors that will suffer the most from this will include Ankura Trust Company ($729 million), West Realm Shires Inc ($275 million), and even the SEC itself, the great and all-powerful US Securities and Exchange Commission ($30 million).

Miners are in huge trouble as the cost of mining bitcoin has fallen deep below the market price. Thus, according to MacroMicro estimates, it was $19,400 on November 29 at the price of $16.500 per BTC. This situation led to the fact that the losses of such an industry leader as Core Scientific Inc reached $1.7 billion, and it was also on the verge of bankruptcy.

(By the way, on December 6, Bitcoin will face the largest reduction in computation complexity this year. It takes more than 10 minutes now to find a block, and the expected correction will be from 6% to 9%).

Despite all the losses, the industry continues to hope for the best. The main forecasts are divided into 1) BTC/USD will fall again, but then it will turn up, and 2) the pair has already found the bottom and there is only a bright future ahead. Let's start with the first scenario.

So, Mark Mobius, co-founder of Mobius Capital Partners LLP investment company, shared his prediction that bitcoin will continue to fall, and its immediate goal is $10,000. This target is in line with options data from Deribit, which shows a large number of outstanding bitcoin put contracts, so called open interest, with an exercise price of $10,000 at the end of December.

Crypto analyst Benjamin Cowen is waiting for the bull market to start soon. But this will happen, in his opinion, after a noticeable fall and reaching a real bottom. We are following a simple signal: the intersection of the 200-day moving average and the bitcoin price chart,” the analyst advises. According to him, such an intersection will take place on December 25-27. It is then that we can expect the price to reach the bottom and the transition of BTC/USDto a steady growth. According to the expert's forecast, the bottom has not yet been reached so far. In addition to not crossing the BTC price with the 200-day SMA, Cowen also refers to the Puell Multiple indicator. The metric value at the minimum was about 0.3 in previous cycles. The indicator has so far dropped only to 0.375 this year.

Cowen pointed to the duration of bearish markets, which has historically been about a year, as an additional argument for the future turn. The 2014 cycle lasted 14 months, and the 2018 cycle lasted 12 months.

Renowned crypto trader Ton Vays has described how bulls can end a year-long bearish market. According to him, they should push the price of the main cryptocurrency to the November high, and this will start an upward rally. “I want to see a move to $23,000. If there's a rebound, we'll need to hold on to $19,000 and then come back for a further $23,000. This is 95% to 98% likely to show that a bull market has begun,” he writes.

However, the crypto trader who predicted the collapse of bitcoin in 2018 accurately does not rule out either that bitcoin will soon face a new sale. “Another scenario is we will fall to $11,000. I believe the bull market will start right after that because I just don't believe bitcoin could fall even lower.” In any case, under any of these scenarios, Vays expects bitcoin to reach $23,000 later this year or early 2023.

The second scenario, the beginning of a bearish trend, is hinted at by IntoTheBlock data. Analysts of this company note that bitcoin is currently experiencing a sharp backwardance: a situation where BTC futures are priced much lower compared to the current price of the asset in the regular (spot) market. This suggests that the market is under strong pressure from sellers. Traders are actively opening short positions, hoping that the price of bitcoin will continue to go down.

At the same time, IntoTheBlock points out that the times when futures contracts are backward tend to coincide with market lows, as was the case in March 2020 and May 2021. And it can also be a signal that the cryptocurrency has found a bottom now.

This version is supported by small (up to 10 BTC) retail investors. According to a report from analytics platform Glassnode, they are becoming increasingly optimistic about bitcoin and have accumulated a record number of coins despite the FTX crash and the ongoing crisis.

Since the FTX crash in early November, shrimp investors (less than 1 BTC) have reportedly added 96,200 coins worth $1.6 billion to their portfolios, a “record high balance increase.” And now they own 1.21 million BTC in total, which is equivalent to 6.3% of the current turnover of 19.2 million coins. Meanwhile, “crabs” (up to 10 BTC) have bought about 191,600 coins worth about $3.1 billion over the past 30 days, which is also a “convincing all-time high.”

While crabs and shrimps were accumulating a record number of bitcoins, large investors were selling them. According to Glassnode, bitcoin whales have released about 6,500 BTC ($107 million) to exchanges over the past month. However, this is a very small fraction of their total holdings of 6.3 million BTC ($104 billion), which suggests that the whales remain somewhat optimistic as well.

Many influencers are also optimistic about the future. Tom Lee, head of research at Fundstrat Global Advisors and well-known analyst, said that the tragic events of 2022 mentioned above are a “cleansing” moment for the industry, the next year should be better than this one, and bitcoin can still serve as an investment tool.

Michael Novogratz, CEO of the crypto investment company Galaxy Digital, also thinks that digital assets will not leave the market, even though the industry is experiencing a crisis of confidence. “There are 150 million people who have chosen to store part of their wealth in bitcoin. […] Therefore, bitcoin, ethereum will not disappear. Other cryptocurrencies will not either,” he said.

Novogratz expects the recovery of the crypto industry and its slow growth. “You will see how people like ARK Invest CEO Cathy Wood will soon enter the crypto market and invest. I don't think this will be a quick recovery. It will most likely take a long time. It will not be easy to restore trust,” the businessman said. Cathy Wood herself, according to Yahoo, answered “yes” when asked whether she still sticks to her forecast of the BTC price of $1 million by 2030.

In the meantime, at the time of writing this review (Friday evening, December 02), BTC/USD is trading well below the coveted $1 million, in the $17,040 zone. Its correlation with stock market indices (S&P500, Dow Jones and Nasdaq) has almost recovered. The Crypto Fear & Greed Index rose from 20 to 27 points in seven days and finally got out of the Extreme Fear zone into the Fear zone. The total capitalization of the crypto market has also grown slightly and stands at $0.859 trillion ($0.833 trillion 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.

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

https://nordfx.com/

CryptoNews of the Week

- According to a Bloomberg poll, about 94% of respondents believe that the FTX bankruptcy will be followed by further turmoil as years of easy lending give way to a tougher business and market environment.

- The FTX collapse will continue to affect cryptocurrency market sentiment, leading to a drop in bitcoin's price to $5,000 in 2023. This is the conclusion reached by Standard Chartered. Eric Robertsen, chief strategist at this multinational bank, allowed interest to shift from the digital version of gold to its physical counterpart. The conclusion about the fall of bitcoin follows from his forecast for the growth of the precious metal by 30%, to $2,250 per troy ounce. Robertsen stressed that the proposed version of the development of events is not a forecast, but it only suggests a possible deviation from the current market consensus.
The described scenario is possible due to the suspension by the world's leading central banks of raising interest rates in 2023 after they have risen in recent months. An additional factor will be the expected continuation of a series of bankruptcies among major participants in the crypto industry with a loss of confidence in digital assets. “Gold will benefit from problems in the crypto industry in the future,” Nicholas Frappell, Global General Manager at ABC Refinery, agreed with Eric Robertsen.

- Galaxy Digital founder Mike Novogratz maintained his forecast for the price of the first cryptocurrency to rise to $500,000 in a comment to Bloomberg Television. However, due to significant changes in the macroeconomic situation, it will now take bitcoin more than five years to achieve this goal. “The reason bitcoin dropped from $69,000 to $20,000 is [Fed Chairman] Jerome Powell’s decision to start fighting inflation with a series of rate hikes from 0% to 4%,” he explained. “For this reason, all assets that are considered inflation hedges have fallen in value.”
The founder of Galaxy Digital said in early October that bitcoin would resume growth after the Fed backed away from aggressively raising rates to fight inflation.

- According to a report by CertiK, a blockchain security company, fraudulent bots are rapidly gaining popularity on YouTube: the number of dubious videos increased sixfold in 2022. CertiK describes a wave of fraud through bots that promise instant profits and up to 10 times a day in its report dated December 1. The scam itself usually involves victims being asked to download virus software that is designed to steal their assets the moment they attempt to initiate a pre-transaction.
North Korean hackers of the Lazarus group, which spread the AppleJeus virus under the guise of a bot for cryptocurrency trading BloxHolder are among the attackers, according to IT analysts from Volexity. The extent of the cryptocurrency they stole is still unclear. However, it is already known that the AppleJeus virus is actively updated and encrypted using a special algorithm, which complicates its tracking by antivirus programs.

- Investors lost $10.16 billion in just one week in November as a result of the collapse of the second-largest crypto exchange in terms of capitalization, FTX. According to the figurative expression of analysts, this was not a “crypto winter”, but a “crypto massacre”. The FTX crisis was like a domino that led to the collapse of many other companies.
To complicate matters, between 73% and 81% of investors lost money due to investing in cryptocurrencies between 2015 and 2022. This is evidenced by data from a study conducted by the Bank for International Settlements (BIS). According to many experts, regulators will no longer be able to ignore the complaints of those who have lost their savings in such a situation and will have to move to proactive action.

- Peter Schiff, a well-known financier and investor, is widely known as a supporter of gold and an opponent of cryptocurrencies. He expressed confidence in his latest interview that the global inflation rate will rise significantly in 2023, and what is happening now is just the beginning. In his opinion, the cryptocurrency market should fall even more, unable to withstand such strong pressure.
Schiff called the rising inflation rate a certain tax on the population. He noted that every US dollar that the government spends must be paid by citizens in one way or another. The authorities are using a dishonest path. They simply print new money and then put it into circulation. When this happens, the price of everything people buy is constantly increasing. So instead of taking money through taxes, they're stealing purchasing power.

- Texas Senator Ted Cruz said that cryptocurrency mining is essential to the US energy system. First of all, miners can use energy which is excess in the extraction of oil and gas. When it comes to extreme weather conditions in the state, whether it's severe frost or drought, miners can also benefit the Texas power grid. The senator explained that the energy generated by mining can be used to heat households and businesses.
Cruz stressed that Texas creates favorable opportunities for the development of the cryptocurrency industry thanks to an abundance of cheap electricity. In addition, the state government supports free enterprise, and this attracts companies working with blockchain and digital assets. According to the politician, he likes bitcoin, and this is the only crypto asset in which he invests and buys it on a weekly basis.

- Mike McGlone, senior strategist at Bloomberg Intelligence, believes that cryptocurrencies are now going through the last stage before reaching the bottom. However, he warned that it will be very difficult to survive this phase: “Normally, markets do not just form a V-bottom. They make it as hard as possible with a lot of volatility, taking money from all investors.”
Bloomberg analyst noted that there is good news as well. Thus, ethereum has grown 12 times compared to 2019 and is still growing. McGlone claims that ETH has strong support close to the current price level. According to his forecast, this coin will outperform all cryptocurrencies, thanks to growing demand and shrinking supply.

- According to Michael Van De Poppe, a well-known trader and analyst, the market situation has stabilized slightly, and BTC bulls need now to break through an important resistance level in the $17,400-17,600 range. In this case, the price will continue moving towards $19,000 quite quickly. He noted that one of the first goals was to reach the $18,285 horizon. As for the price of ethereum, Van de Poppe believes that the key support level for this cryptocurrency is the price of $1,200.

- JPMorgan CEO Jamie Dimon has once again criticized cryptocurrency and digital assets. He stressed that some people can be fooled into buying anything. The head of the bank has previously called cryptocurrencies “decentralized Ponzi schemes” and urged to stay away from bitcoin. However, he wrote in his annual letter to shareholders that “decentralized finance and blockchain are real new technologies” and went on to promote the bank’s efforts to implement them. In addition, JPMorgan registered a trademark for its own crypto wallet at the end of November. the bank will provide services related to digital assets under the new brand, including the transfer and exchange of cryptocurrencies, as well as the processing of cross-border payments.

- According to PricePredictions machine learning algorithms, which include a number of technical indicators (MA, RSI, MACD, BB, etc.), the price of bitcoin may rise in the near future. According to this forecast, the main cryptocurrency will reach $18,797 on December 31, 2022. It should be noted that this forecast is lower than the expectations of members of the CoinMarketCap crypto community, who believe that BTC will be trading at an average price of $19,788 by the end of the year.


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/

Forex and Cryptocurrencies Forecast for December 12 - 16, 2022

EUR/USD: Ahead of the Fed and ECB Meetings

Two key events await us next week. The first is the FOMC (Federal Open Market Committee) meeting of the US Federal Reserve, which will be held on Wednesday, December 14. Recall that the key interest rate on the dollar is 4.00% at the moment, and that Fed Chairman Jerome Powell confirmed on November 30 that the pace of rate growth may slow down in December. These words of his convinced market participants that the rate would be increased in December not by 75 basis points (bp), but by only 50 bp. The actual developments on December 14 will set the mood of the regulator for 2023. Naturally, an important role here will be played not only by the decision on the interest rate itself, but also by the economic forecasts of the FOMC and the press conference of the management of this organization following the meeting.

It is highly likely that the decision of the Committee members will be influenced by data on inflation in the US: the November values of the Consumer Price Index (CPI) will be announced on the eve of the meeting, on Tuesday, December 13.

The second event is the ECB meeting on Thursday, December 15. The interest rate on the euro is 2.00% at the moment, and according to forecasts, the European regulator will also raise it by 50 bp, which will keep the advantage in favor of the US currency: 4.50% against 2.50%. As in the case of the Fed, the comments and forecasts of the ECB leaders, which will be made after this meeting, will also be important for market participants.

As for the past week, the DXY Dollar Index did not manage to win back at least some of the losses it has suffered since the end of September. This time it was hampered by statistics from China. On the one hand, China's manufacturing sector continues to deflate: the Producer Price Index (PPI) has been falling by 1.3% for the second month in a row. On the other hand, inflation is slowing down: the Consumer Price Index (CPI) in November was 1.6% against 2.1% a month ago. In this situation, the Chinese government has taken a course of easing monetary policy (QE) to support the country's economy. A survey conducted by Bloomberg showed that the market expects the People's Bank of China to cut interest rates on the yuan as early as Q1 2023. Against this background, stock indices, primarily Asian ones, went up, and the dollar went down. Optimism over the easing of strict COVID-19 restrictions in China also supported the positive tone in equity markets.

Additional pressure on the US currency was exerted by statistics on the US labor market. The number of initial applications for unemployment benefits became known on Thursday, December 08. This figure showed a slight increase from 226K to 230K, which was fully in line with the forecast. But repeated applications have reached a maximum over the past ten months: 1671K, which is also a signal for the Fed, pointing to problems in the economy.

On the contrary, European macro statistics looked good. Thus, the GDP of the Eurozone in Q3 turned out to be higher than the forecast, 0.3% vs. 0.2% (q/q) and 2.3% vs. 2.1% (y/y).

As a result, EUR/USD abandoned a deep correction and, having reached a local low of 1.0442 on December 07, reversed and rose to the level of 1.0587 on December 09. The Producer Price Index (PPI) and the Consumer Confidence Index from the University of Michigan made modest adjustments to the prices at the very end of the working week, after which the pair finished at 1.0531.

50% of analysts count on its further growth, 25% expect the pair to turn south. The remaining 25% of experts point to the east. It should be noted here that when moving to a medium-term forecast, the number of bearish supporters who expect the pair to drop below the parity level of 1.0000 increases sharply, up to 75%.

The picture is different from the oscillators on D1. All 100% of the oscillators are colored green, while 10% is in the overbought zone. Among the trend indicators, the 100% advantage is on the green side.

The nearest support for EUR/USD is located at the 1.0500 horizon, then there are levels and zones 1.0440, 1.0375-1.0400, 1.0280-1.0315, 1.0220-1.0255, 1.0130, 1.0070, followed by the parity zone 0.9950-1.0010. Bulls will meet resistance at levels 1.0545-1.0560, 1.0595-1.0620, 1.0745-1.0775, 1.0865, 1.0935.

We will see other important macro statistics next week in addition to the above. Thus, data on consumer inflation (CPI) and economic sentiment (ZEW) in Germany will be released on Tuesday, December 13. And business activity indicators in the manufacturing sectors of Germany and the Eurozone (PMI), as well as the November value of the European Consumer Price Index (CPI) will become known on Friday, December 16.

GBP/USD: Ahead of the Bank of England Meeting

Not only the ECB, but also the Bank of England (BoE) will decide on the interest rate on Thursday, December 15. It should be noted that the regulator of the United Kingdom was one of the first among the G10 Central Banks, following the Fed, to curtail the policy of quantitative easing (QE). It raised the pound interest rate by 75 bps in November. However, it is expected that like the ECB and the Fed, it will raise it by only 50 bp in December, after which it will reach 3.50%. According to a survey conducted by Reuters, 96% of economists have voted for this step. And only 4% of them insist on 75 bp.

Most respondents believe that the recession will be long and shallow. According to forecasts, the economy contracted by 0.2% in Q3 2022 (exact data will be known on December 12) and will decrease by another 0.4% in Q4. The fall in the first three quarters of 2023 may be 0.4%, 0.4% and 0.2%, respectively.

As for inflation, the survey conducted by the BoE showed that the fears of the UK population about it have slightly decreased. If we talk about economists' forecasts, it is expected that in it will reach a peak of 10.9% in Q4, and then it will decline. The current value is more than five times higher than the target level of 2.0%. And the Bank of England will be forced to continue to raise the rate to fight inflation, despite the threat of a deepening recession. It is predicted that BoE will raise it in Q1 and Q2 2023, another 50 bp and 25 bp, respectively, to 4.25%.

GBP/USD, as well as EUR/USD, has been developing an upward trend since the end of September taking advantage of the weakness of the dollar. In addition, it is being pushed up by the end of the fiscal micro-crisis and the Bank of England's actions to tighten monetary policy and support the British government bond market. GBP/USD reached its maximum value on December 05 at the height of 1.2344, however, it did not go further north and completed the five-day period at the level of 1.2260 in anticipation of the decisions of the coming week.

Strategists at the German Commerzbank consider the current situation only a temporary respite and expect increased pressure on the British currency. “At present,” they write, “the relief that the fiscal crisis has been brought under control prevails, and there are no signs of a further worsening of the energy crisis. In our opinion, this is only a temporary respite for the pound. The deteriorating economic outlook, relatively prudent monetary policy […] and continued high inflation continue to put major pressure on the pound.”

The median forecast for the near term copies the forecast for EUR/USD in full: 50% of experts side with the bulls, 25% side with the bears, and the remaining 25% prefer to remain neutral. At the same time, there is a slight difference when moving to the medium-term forecast: the number of bear supporters here is 10% higher, 85%.

The readings of trend indicators and oscillators on D1 also copy the readings of their counterparts for EUR/USD: all 100% are on the green side, and 10% of the oscillators give signals that the pair is overbought.

Levels and support zones for the pair are 1.2210-1.2235, 1.2150, 1.2085-1.2105, 1.2030, 1.1960, 1.1900, 1.1800-1.1840, 1.1700-1.1720, 1.1475-1.1500, 1.1350, 1.1230, 1.1150, 1.1100. When the pair moves north, it will meet resistance at the levels of 1.2290-1.2310, 1.2345, 1.2425-1.2450 and 1.2575-1.2610, 1.2750.

As already mentioned, Monday, December 12, when the country's GDP data will be published, attracts attention this week, as for the events concerning the economy of the United Kingdom. Data on unemployment and wages will arrive the following day, that on consumer prices (CPI) will become known on Wednesday, December 14, and on retail sales and business activity in the UK - on Friday, December 16. And of course, a special emphasis is on December 15, when the Bank of England will issue its verdict on the interest rate.

USD/JPY: What Can Help the Yen

USD/JPY rose from the Dec 02 low of 133.61 to 137.85 last week, slightly above the strong 137.50 support/resistance zone. The last chord of the week sounded at 136.60.

The future of the pair will continue to depend on the difference in interest rates between the US and Japan. If the Fed remains at least moderately hawkish and the BoJ remains ultra-dovey, the dollar will continue to dominate the yen. The threat of new foreign exchange intervention by the Ministry of Finance of Japan, the same as it was on November 10, seems unlikely at current levels. Raising the key rate could help, but it is very likely that the Bank of Japan (BoJ) will leave it unchanged at its meeting on December 20: at the negative level of -0.1%. A radical change in monetary policy can be expected only after April 8 next year. 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. Although this is not a fact.

Another hope is for renewed concerns about China's economic prospects. “Weak growth rates and a clear decline in bond yields,” economists from the ING banking group believe, “should lead to the fact that safe currencies, such as the yen, will begin to show superiority,” and this will support the Japanese currency.

Analysts' forecast for the near future is bearish: 50% of them vote for the pair to fall, the remaining 50% have taken a neutral position. However, in the medium term, most experts (60%) are shifting their gaze from south to north, expecting a serious strengthening of the dollar and the return of the pair to the 145.00-150.00 zone. For oscillators on D1, the picture looks like this: 90% look south, 10% look north. Among the trend indicators, the ratio is 85% versus 15% in favor of the red ones.

The nearest support level is located at 136.00 zone, followed by levels and zones 134.10-134.35, 133.60, 131.25-131.70, 129.60-130.00, 128.10-128.25, 126.35 and 125.00. Levels and resistance zones are 137.50-137.70, 138.00-138.30, 139.00, 139.50-139.75, 140.60, 142.25, 143.75, 145.30, 146.85-147.00, 148.45, 149.45, 150.00 and 151.55. The purpose of the bulls is to rise and gain a foothold above the height of 152.00.

The calendar could mark Wednesday December 14, when the values of the Sentiment Indices of Large Manufacturers and Non-Manufacturing Tankan Companies for Q4 2022 will be announced. The publication of other macro indicators of the Japanese economy is not expected next week.

CRYPTOCURRENCIES: Christmas Rally After Crypto Massacre

We titled the last review “Cryptogeddon Instead of Crypto Winter” (by analogy with Armageddon, the place of the last and decisive battle between the forces of good and the forces of evil). There is another “bloody” term now: “crypto massacre”, which characterizes what happened as a result of the collapse of the second most capitalized crypto exchange, FTX. Investors lost $10.16 billion in just one week in November. This crisis was like a domino, which led to the collapse of many other companies. About 94% of respondents believe the FTX bankruptcy will be followed by further turmoil as years of easy lending give way to a tougher business and market environment, according to a Bloomberg survey. To complicate matters , between 73% and 81% of investors lost money due to investing in cryptocurrencies between 2015 and 2022. This is evidenced by data from a study conducted by the Bank for International Settlements (BIS).

The price of bitcoin is consolidating around $17,000 at the moment, and the readings of the SMA100 and SMA200 indicators on the four-hour chart have converged almost at one point. BTC/USD is kept from falling by the dollar that has sagged in recent weeks. Markets froze in anticipation of December 14, when the Fed will make a decision on the interest rate. And it, in turn, depends on the data on inflation in the US, which will arrive the day before. The FOMC (Federal Open Market Committee) Economic Forecasts will also play a significant role in the dollar dynamics.

Optimists, including crypto communities such as Credible Crypto, Moustache and Dave the Wave, expect this data to positively influence the market's risk appetite, and the Christmas rally will push bitcoin to $20,000. According to the expectations of members of the crypto community CoinMarketCap, BTC will trade at an average price of $19,788 by the end of the year.

PricePredictions' machine learning algorithms, which include a number of technical indicators (MA, RSI, MACD, BB, etc.), indicate a price of $1,000 lower. According to their metrics, the main cryptocurrency will reach $18,797 on December 31, 2022.

However, not everything is so rosy and unambiguous. For example, Bloomberg Intelligence senior strategist Mike McGlone believes that cryptocurrencies are now going through the last stage before reaching the bottom. However, he warns that it will be very difficult to survive this phase: “Normally, markets do not just form a V-bottom. They make it as hard as possible with a lot of volatility, taking money from all investors.”

According to Michael Van De Poppe, a well-known trader and analyst, the pair will face many difficulties on the way to $19,000. The bulls will need to break through the important resistance level in the $17,400-17,600 range and then try to reach the $18,285 horizon.

As for the price of ethereum, Van de Poppe believes that the key support level for this cryptocurrency is the price of $1,200. Mike McGlone is of the same opinion. According to his calculations, ETH has strong support close to the current price level.

There is very little time left until the end of the year, and then we will find out who was more accurate in their forecasts. In the meantime, at the time of writing the review (Friday evening, December 09), ETH/USDis trading around $1,260, and BTC/USD - $17,100. The total capitalization of the crypto market has not changed much over the week and is $0.852 trillion ($0.859 trillion a week ago). The Crypto Fear & Greed Index has fallen only 1 point in seven days, from 27 to 26 and still remains in the Fear zone.

And to conclude the review, a few words about longer-term forecasts. Such popular Twitter analysts as Bluntz and Korinek_Trades do not rule out BTC/USD falling to $15,000 or even $12,000 in Q1 2023.

The picture drawn by Standard Chartered economists is even bleaker. They expect that the collapse of FTX will continue to affect the mood of the crypto market, the series of bankruptcies of large industry participants will continue, which will lead to a further loss of confidence in digital assets. As a result, bitcoin's price could fall to $5,000 during 2023. Standard Chartered Chief Strategist Eric Robertsen allowed investor interest to switch from the digital version of gold to its physical counterpart and the price of the precious metal to rise to $2,250 per troy ounce. At the same time, Robertsen emphasized that the proposed scenario is not a forecast, but only suggests a possible deviation from the current market consensus.

Galaxy Digital founder Mike Novogratz looked farthest into the future and saw a light at the end of the tunnel. In a comment to Bloomberg Television, he maintained his forecast that the price of the first cryptocurrency will rise to $500,000. However, it will now take more than five years for bitcoin, in his opinion, to achieve this goal due to significant changes in the macroeconomic situation and the aggressive actions of the Fed.


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

- Following the FOMC (Federal Open Market Committee) meeting, the US Federal Reserve will decide on the interest rate on December 14. Although its current level is still far from the expected peak of 5-5.25%, the US Central Bank may raise the rate not by 0.75%, but by 0.5% this time. Such a decision will signal the easing of monetary policy and that additional volumes of dollar liquidity may appear on the market. According to experts, this will have a positive impact on the prices of risky assets, including cryptocurrencies. If bitcoin settles above the $18,000 area in the near future, some experts estimate that it is likely to reach an extreme of $20,000 by the end of December.
In such a situation, the bitcoin price will again be on a growth parabola, according to an analyst known as Plan B. According to their latest forecast, BTC could reach $100,000 in 2023. Jim Wyckoff, Senior Analyst at Kitco News, also believes BTC is close to developing a sustained bullish rally in the current environment as strong buyers have stepped in.

- Sam Bankman-Fried (SBF), the 30-year-old founder of the collapsed crypto exchange FTX, has been arrested in the Bahamas after U.S. prosecutors filed eight felony charges against him. According to law enforcement officers, SBF colluded with partners to deceive, misappropriate funds from clients of the trading platform and use them to pay the expenses and debts of their companies. As a result of the leak of deposits, an $8 billion hole was created on the exchange's accounts. The charges also include money laundering and violations of US political campaign finance laws. Earlier, the US Securities and Exchange Commission (SEC) also accused SBF in defrauding FTX investors. According to the representative of the prosecutor's office, Bankman-Fried faces up to 115 years in prison in the aggregate of all criminal cases.

- ARK Invest CEO Catherine Wood said that Sam Bankman-Fried has always disliked bitcoin because it is transparent and decentralized, and he could not control it, including during the crisis caused by opaque centralized players.
Despite the difficult situation caused by the bankruptcy of FTX, the head of ARK Invest remains optimistic. In her opinion, DeFi will be further developed, as investors have learned how important fully transparent decentralized networks are thanks to the crisis. “When centralized crypto companies went bankrupt, investors who invested in transparent distributed networks saw what was happening. They were able to withdraw their assets on time. Even those who used high margin leverage were able to survive,” Catherine Wood said.
Recall that, in addition to the FTX bankruptcy in November, the crypto industry has experienced a number of major shocks this year. First of all, this is the collapse of the Terra ecosystem in May. Compute North, Voyager Digital, Celsius Network, Three Arrows Capital, and Blockfi also filed for bankruptcy. According to some estimates, approximately several million customers lost billions of dollars as a result of all these events.

- Arthur Hayes, the former CEO of the BitMEX crypto exchange, said that the first cryptocurrency reached the lowest level of the current cycle, as almost all “irresponsible organizations” ran out of coins to sell. Hayes explained that when facing financial difficulties, centralized credit companies often borrow first and then sell off their BTC holdings, followed by a collapse. “When you look at the balance of any of these ‘heroes’, you won’t see bitcoin there. They sold it before they went bankrupt."
This is how Hayes explains the reasons for the fall of the first cryptocurrency even before the bankruptcy of centralized credit companies. At the same time, the expert believes that the period of large-scale liquidations is over. In his opinion, the digital asset market expects a partial recovery in 2023 amid the next launch of the “printing press” by the US Federal Reserve.

- According to Bloomberg's leading strategist Mike McGlone, bitcoin is likely to outshine gold. The popular analyst added that the flagship cryptocurrency is currently only four times more volatile than the precious metal, which is negligible compared to what it was in 2018.
McGlone called next year the bitcoin market and a time of shine after a year and a half of direct downtrends. This will happen due to the fact that the Central Banks, primarily the Fed, will move from an aggressive tightening of monetary policy to its easing. If this does not happen, Bloomberg strategist says, the world could plunge even deeper into a recession with negative consequences for all risky assets.
Max Keiser, a former trader and now TV host and filmmaker, also believes that BTC will certainly catch up in 2023 and may stage an epic rally before the 2024 halving. In his opinion, the growth of the flagship cryptocurrency will continue over the next decades.

- The FTX crash gave additional arguments to those US officials who are skeptical about cryptocurrencies. For example, Senator Jon Tester, a member of the Senate Banking Committee, has recently said that digital assets failed the “tightness” test. “I haven't found anyone who could explain to me what their value is,” the senator says. “The problem is that if we regulate them, people will start to think that crypto assets are really legal.”
The decision of the US authorities to regulate cryptocurrencies will determine the further behavior of institutional players and large owners of bitcoins, which are often the same persons. So far, 80% of the losses that occur in the market of the main cryptocurrency are caused by the sale of BTC by “whales”, most wallets with a balance of more than 10 thousand BTC continue to sell more than buy digital gold since mid-July.

- The proportion of US adults who have ever invested in cryptocurrencies increased from 3% in 2020 up to 13% in June 2022. This is evidenced by a study conducted by JPMorgan analysts. The specialists of the financial conglomerate analyzed a sample of 5 million accounts and found that the majority of retail users invested in digital assets for the first time close to the price peak. The average purchase price for their first cryptocurrency is $42,400-$45,500. At the same time, most low-income investors bought at a higher price.
Retail investors' inflows of money into crypto accounts have far exceeded outflows from them over the past few years. The cash flow has become more balanced against the background of the market decline in the first half of 2022. At the same time, the researchers found that the average investment is relatively small: about $620, which is approximately equal to a weekly salary. Only 15% of investors have invested more than their monthly earnings in digital assets. JPMorgan analysts also noted that Asians with high incomes are most likely to invest in cryptocurrencies.

- Twitter's new CEO Elon Musk managed to silence cryptocurrency spam bots. The businessman had promised to solve the problem with a huge number of advertising messages before buying the social network and has already started working in this direction. The volume of mailings has decreased significantly, but Elon is not going to stop there.
“My guess is that there are a small number of people running a huge army of bots and trolls. Today [December 11] we will block IP addresses of known violators. Although this should have been done much earlier,” Musk said. Twitter will now immediately blacklist the IP addresses of spammers, so they won't be able to use the social network for a long time using the VPN service or the Tor browser. In addition, Elon Musk promised to punish all scammers, but has not yet said exactly how.
Dogecoin creator Billy Markus, known under the pseudonym Shibetoshi Nakamoto, has confirmed the effectiveness of anti-spam measures. After Musk announced the blocking of IP addresses, only one bot responded to Marcus' post instead of the usual 50. Thus, the social network has neutralized almost all spammers.


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/

Forex and Cryptocurrencies Forecast for December 19 - 23, 2022

EUR/USD: The Fed Doesn't Want to be Dovish. The ECB Either.

The past week can be divided into two parts: before and after the FOMC (Federal Open Market Committee) meeting of the US Federal Reserve. The US inflation data produced a bombshell effect on the eve of this event, on Tuesday, December 13. The Consumer Price Index (CPI), with the forecast at 7.3%, fell in November from 7.7% to 7.1% (y/y), reaching its lowest level in almost a year, while core inflation fell from 6.3% to 6.0%. As a result, the market decided that since things were going so well, it was time for the Fed to turn from hawk to dove. Or at least ease their monetary policy significantly. Based on these expectations, the 10-year Treasury bond yield fell from 3.60% to 3.43%, and the DXY Dollar Index peaked and fell to its lowest levels over the past six months, from 105.07 to 103.60 points. Accordingly, stock indices (S&P500, Dow Jones, Nasdaq) flew up, and EUR/USD jumped to 1.0672.

The feast of risk appetites and the glee of opponents of the dollar did not last long. The FOMC raised its key interest rate by 50 basis points (bp) to 4.5% at its meeting. That is, exactly as market participants expected. Surprises were expected at the subsequent press conference, which showed that the US Central Bank is still hawkish. Fed chief Jerome Powell noted that the regulator will keep rates at their peak until they are sure that the decline in inflation has become a sustainable trend. The base rate could 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. The situation turned around 180 degrees after such statements: DXY went up, stock indices flew down, and EUR/USD fell by more than 140 points.

The last meeting of the European Central Bank this year was also held last week, on Thursday, December 15. The ECB, as well as the Fed, raised the interest rate by 50 bp: up to 2.5%, which fully met the forecasts. ECB President Christine Lagarde, as well as her overseas counterpart, showed a hawkish attitude at the press conference 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 moment, the gap between the dollar and euro rates is 200 bp (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. Read our upcoming reviews to find out what forecasts leading financial institutions give regarding its quotes.

The data on business activity in the manufacturing sectors of Germany and the Eurozone (PMI), as well as the November value of the European Consumer Price Index (CPI) were published at the very end of the last week, on Friday, December 16. Data on consumer inflation did not have a significant impact on market sentiment: on the one hand, CPI in annual terms fell from 10.6% to 10.1%, and on the other hand, it turned out to be higher than the forecast of 10.0%. After the release of these macro statistics, the pair placed the last chord at 1.0590.

40% of analysts expect the euro to strengthen in the coming days and EUR/USD to grow, 50% expect Santa Claus to help the US currency. The remaining 10% of experts do not expect either the first or the second from the pair. The picture is different among the oscillators on D1. As for the oscillators, 75% are colored green, 10% are set to neutral gray and 15% stand out against this background with a bright red color. Trend indicators also have an advantage on the green side, these are 80%, and 20% are on the red side. The nearest support for EUR/USD is at the 1.0560 horizon, followed by levels and zones at 1.0500, 1.0440, 1.0375-1.0400, 1.0280-1.0315, 1.0220-1.0255, 1.0130, 1.0070, followed by the parity zone 0.9950-1.0010. Bulls will meet resistance at levels 1.0620, 1.0675-1.0700, 1.0740-1.0775, 1.0865, 1.0935.

Next week's calendar includes Thursday December 22 for the release of 3Q US GDP data, and Friday December 23 for the release of orders for capital goods and durables, as well as the core US Personal Consumption Expenditure Index. .

Attention! Christmas and New Year holidays fall on weekends this year; however, we strongly advise you read the trading schedule for this period, it is published on the NordFX website in the Company News section.

GBP/USD: The Market No Longer Trusts the Bank of England

Even more disappointment than EUR/USD awaited the bulls on the British pound. Having reached a six-month high of 1.2450 on December 14, GBP/USD then fell to 1.2119 and ended the weekly session at 1.2160.

There were quite a lot of statistics on the economy of the United Kingdom Last week, and they looked diverse: sometimes green, sometimes red. The country's GDP grew by 0.5% and was higher than the forecast of 0.4%. The manufacturing sector also rose to 0.7% after the zero dynamics in September. Such an important indicator of inflation as CPI was 10.7% in November (it was at the highest level since November 1981 - 11.1% a month ago). But retail sales fell to 0.4% in November against 0.9% in October. The unemployment rate rose from 3.6% to 3.7%. The business activity index (PMI) in the manufacturing sector of the UK fell to 44.7 in December against 46.5 in November. And in the services sector, on the contrary, it rose to 50.0 compared to the November value of 48.8 and the forecast of 48.5.

It seems that such multi-vector statistics have greatly confused market participants, and they focused not on the pound, but on the US dollar. Although the Bank of England (BoE) also issued its verdict on the interest rate last week. Like the Fed and the ECB, the regulator raised it by 50 bp up to 3.5% per annum (14-year maximum). However, BoE's statements turned out to be more dovish than those of their colleagues. According to the regulator, inflation may have already reached its peak. And two out of nine members of the Monetary Policy Committee considered that interest rates are already high enough and it is time to ease price pressures.

Prior to this meeting, quotes expected a maximum rate increase of up to 4.6%. After the meeting, the swap market lowered its forecast to 4.5% by August (that is, a total increase of another 100 bp). As for the survey of market participants conducted recently by the Bank of England, the median expectations are even lower here: only 4.25% with a peak in March 2023.

These forecasts put strong pressure on the British currency. Therefore, according to Commerzbank economists, the pound does not have much potential for recovery. “After the Bank of England hesitated for several months, the market now believes that it is the least trustworthy thing to suddenly become a mega hawk,” they write. “So, the pound has no chance against either the euro or the dollar.”

As for the short term, the median forecast for GBP/USD looks quite neutral here: 45% of experts side with the bulls, the same number side with the bears, and the remaining 10% prefer to decline to comment.

The readings of the indicators on D1 look mixed as well. Among the oscillators, 30% are colored green, 25% are red and 45% are neutral gray. Trend indicators have a ratio of 65% to 35% in favor of the green ones. Support levels and zones for the pair are 1.2085-1.2115, 1.2030, 1.1940, 1.1900, 1.1800-1.1840, 1.1700-1.1720. When the pair moves north, the pair will face resistance at the levels of 1.2200-1.2225, 1.2270, 1.2330-1.2345, 1.2425-1.2450 and 1.2575-1.2610, 1.2700 and 1.2750.

Among the events related to the United Kingdom economy this week, we can highlight Thursday, December 22, when we will find out what happened to the country's GDP in Q3 2022. We also pay attention to the early closing of trading in the UK on Friday, December 23, which, of course, is associated with the upcoming Christmas.

USD/JPY: What to Expect from the Bank of Japan

Like previous pairs, USD/JPY reacted to both US inflation data and statements by the Fed Chairman. But, unlike EUR/USD and GBP/USD, this pair has not gone beyond the side corridor for the last two weeks. Its boundaries can be designated as 134.25-137.85, and timid attempts to break through in one direction or another can be ignored. This balance is most likely due to the fact that both the dollar and the yen are safe-haven currencies. Of course, the global advantage, thanks to the difference in interest rates, is on the side of the dollar. But, having carried out a number of foreign exchange interventions, the Bank of Japan (BoJ) has managed in recent months not only to stop the advance of the American currency, but also to significantly push it back.

As we have already mentioned, the future of the pair will continue to depend on the difference in interest rates between the US and Japan. If the Fed remains at least moderately hawkish and the BOJ remains ultra-dovish, the dollar will continue to dominate the yen. The threat of new foreign exchange intervention by the Ministry of Finance of Japan, the same as it was on November 10, seems unlikely at current levels. Raising the key rate could help, but it is very likely that the Bank of Japan (BoJ) will leave it unchanged at its meeting on December 20: at the negative level of -0.1%. A radical change in monetary policy can be expected only after April 8 next year. 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. Although this is not a fact.

Another hope is for renewed concerns about China's economic prospects. By the way, the People's Bank of China will also make its decision on the interest rate on the yuan on Tuesday, December 20.

USD/JPY finished at 136.70 on Friday, December 16. Analysts' forecast for the near future is exactly the same as the forecast for GBP/USD: 45%/45%/10%. For oscillators on D1, the picture looks like this: 25% look south, 40% look north, and 35% look east. Among the trend indicators, the ratio is 60% versus 40% in favor of the red ones. The nearest support level is located at 136.00 zone, followed by levels and zones 134.40, 133.60, 131.25-131.70, 129.60-130.00, 128.10-128.25, 126.35 and 125.00. Levels and resistance zones are 137.50-137.70, 138.00-138.30, 139.00, 139.50-139.75, 140.60, 142.25, 143.75. The goal of the bulls to renew the October 21, 2022 high, and to gain a foothold above the height of 152.00 seems realistic only in a very distant future.

In addition to the mentioned interest rate decision by the Bank of Japan, the calendar also includes Friday, December 23, when the Report from the BoJ Monetary Policy Committee meeting will be published. Market participants will try to catch at least small hints of changes in this policy. However, the chances of this happening are close to zero.

CRYPTOCURRENCIES: Santa Claus Is the Only Hope

The results of the Fed meeting seem to have greatly tempered investors' risk appetites. If stock indices (S&P500, Dow Jones, Nasdaq) were growing throughout the first half of the week, and after the publication of inflation data in the US, they just soared up, dragging crypto asset prices, they all went into the red after the Fed meeting, on Wednesday evening, November 14. Amid fears of a global recession, the decline continued on Thursday and Friday. The local maximum for BTC/USD was fixed at $18.381, but it met the end of the working week much lower, in the $16.830 zone.

The general situation in the crypto industry does not help the growth of prices either. Recall that, in addition to the bankruptcy of FTX in November, it has experienced a number of major shocks this year. First of all, this is the collapse of the Terra ecosystem in May. Compute North, Voyager Digital, Celsius Network, Three Arrows Capital, and Blockfi also filed for bankruptcy. According to some estimates, approximately several million customers lost billions of dollars as a result of all these events.

The events of recent days are not encouraging either. Sam Bankman-Fried, founder of crypto exchange FTX, has been arrested in the Bahamas after U.S. Attorney's Office filed eight felony charges against him. According to the representative of the prosecutor's office, Bankman-Fried faces up to 115 years in prison in the aggregate of all criminal cases. Market participants were also alarmed by the strange, to put it mildly, financial report by FTX's main competitor, the Binance exchange. It contained only three indicators, which caused bewilderment and criticism from representatives of the accounting community.

There is very little time left until the end of this year, and it is only Santa Claus Rally, a phenomenon when stock indices suddenly begin to go up at the very end of December, that can help the growth of bitcoin and the crypto market as a whole. This Rally usually starts on the last Monday of the month and lasts for seven trading days. However, sometimes Santa Claus decides to help not risky assets at all, but the dollar. And then, instead of the North Pole, they head south. (You can read more about Santa Claus Rally on NordFX's Useful Articles section).

Some experts hope that bitcoin will still be able to gain a foothold above the $18,000 area in the coming days. Then, in their opinion, it will most likely reach an extreme of $20,000 by the end of the year.

In such a situation, the price of the flagship cryptocurrency will again be on a growth parabola, according to a well-known analyst under the nickname Plan B. According to their latest forecast, BTC could reach $100,000 in 2023. Jim Wyckoff, Senior Analyst at Kitco News, also believes BTC is close to developing a sustained bullish rally in the current environment as strong buyers have stepped in.

Arthur Hayes, the former CEO of BitMEX, expressed a similar point of view, although his arguments differ from those of Jim Wyckoff. Hayes believes that the first cryptocurrency has reached the low of the current cycle, as almost all “irresponsible organizations” have run out of coins to sell. He explained that when facing financial difficulties, centralized credit companies often borrow first and then sell off their BTC holdings, followed by a collapse. “When you look at the balance of any of these ‘heroes’, you won’t see bitcoin there. They sold it before they went bankrupt." That is why, according to Hayes, the fall in the quotes of the first cryptocurrency precedes such bankruptcies. At the same time, the expert believes that the period of large-scale liquidations is over.

ARK Invest CEO Catherine Wood also spoke negatively about centralized companies and positively about DeFi. In her opinion, DeFi will be further developed, as investors have learned how important fully transparent decentralized networks are thanks to the crisis. “When centralized crypto companies went bankrupt, investors who invested in transparent distributed networks saw what was happening. They were able to withdraw their assets on time. Even those who used a large margin leverage were able to survive,” said Catherine Wood. And she added that Sam Bankman-Fried has always disliked bitcoin because it is transparent and decentralized, and he could not control it, including during the crisis provoked by opaque centralized players.

According to former BitMEX CEO Arthur Hayes, the digital asset market expects a partial recovery in 2023 amid another launch of the US Federal Reserve's printing press. Mike McGlone, senior strategist at Bloomberg Intelligence, also expects new flows of cash liquidity from the Central Bank, he called next year the bitcoin market and a time of shine after a year and a half of direct downward trends. However, at the same time, the analyst added that if the easing of monetary policy does not happen, the world may plunge even deeper into a recession with negative consequences for all risky assets.

Max Keiser, a former trader and now TV host and filmmaker, also believes that BTC will certainly catch up in 2023 and may stage an epic rally before the 2024 halving. In his opinion, the growth of the flagship cryptocurrency will continue over the next decade. And, as Cathie Wood stated, it will reach a price of $1 million per coin by 2030.

In the meantime, at the time of writing this review (Friday evening, December 16), ETH/USD is trading around $1,200, while BTC/USD is trading at $16,830. The total capitalization of the crypto market for the week decreased by almost 4.0% and amounted to $0.818 trillion ($0.852 trillion a week ago). The Crypto Fear & Greed Index has grown by only 3 points in seven days, from 26 to 29, and still remains in the Fear zone.


NordFX Analytical Group


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

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

https://nordfx.com/

CryptoNews of the Week

- The SEC and CFTC may need to consider banning cryptocurrencies. Sherrod Brown, Chairman of the US Senate Banking Committee, said this on NBC. “We [legislators] want them [regulators] to do what they need […] perhaps by banning them [cryptocurrencies]. Although this scenario is extremely difficult, since they [digital assets] will go offshore, and few people can predict what this measure will lead to,” the senator explained.
Sherrod Brown backed Jon Tester, who also sits on the banking committee. The legislator stated on December 12 that cryptocurrencies have not passed the “gut check”, and therefore there is no reason for them to exist.
Brown admitted that he has been “educating” senators and the public on the “dangers of cryptocurrencies” over the past 18 months, calling for immediate and aggressive action. “I've already reached out to the Treasury and Secretary [Janet Yellen] and asked for a nationwide assessment through all the various regulatory agencies [...] The SEC has been particularly aggressive,” he explained. Brown cited the collapse of FTX as justification for the position, adding that this is only part of a huge problem.

- According to the chairman of the US Securities and Exchange Commission (SEC) Gary Gensler, digital assets are too volatile and speculative, which puts investors at great risk. “It is important that cryptocurrency issuers, as well as other intermediaries, operate in accordance with clear rules,” he said. “Although the industry usually does not pose a threat to the traditional financial sector, we must be vigilant to prevent such a situation from developing.”
Gensler noted that the Financial Stability Oversight Council (FSOC) was able to effectively identify gaps in the regulation of the crypto industry. The FSOC has recommended passing bills that would empower federal financial regulators to control the spot market for crypto assets, similar to stock markets.

- Michael Burry, the hero of The Big Short, who predicted the 2007-8 mortgage crisis, called audits of the balances of cryptocurrency exchanges FTX, Binance and others pointless. This is how the investor commented on the news about the termination of services for crypto companies by the French auditor Mazars.
Mazars's audit of Binance's bitcoin balances was actively criticized by experts who said that it was not a full audit and that its results did not convince users of the safety of users' assets. Following the criticism, Binance faced a significant outflow of funds. The exchange also had problems withdrawing the USD Coin (USDC) stablecoin on some networks. Against this background, Binance CEO Changpeng Zhao was forced to refute rumors about a lack of liquidity on the platform.

- Edward Snowden, a former NSA and US CIA officer who now lives in Russia, proposed his candidacy for the post in response to Twitter owner Elon Musk's post about the search for the social network's CEO. “I accept payment in bitcoin,” Snowden wrote.
Elon Musk posted that he needed a CEO who could "keep Twitter alive." Earlier, the billionaire conducted a survey in his profile about the need for him to resign from the post of head of the social network. 17.5 million users participated in it, the majority of them (57.5%) voted for Musk's resignation, and he promised to follow the results of the poll.

- Elon Musk had admitted back in August that a recession could trigger a number of bankruptcies, and the period itself could continue until the end of 2023. Although the billionaire admitted that “making macroeconomic forecasts ¬is a lost cause,” he still assumed that the upcoming crisis will be “relatively mild”. In particular, he referred to the "relatively low debt levels for most companies." This allows us to hope that the recession will remain in the range of "mild to moderate, lasting about eighteen months," Musk said at the time.
Mike Novogratz, the head of the venture capital company Galaxy Digital, adheres to similar deadlines. In his opinion, bitcoin will continue to remain in the zone of uncertainty as long as the US Federal Reserve is trying to curb inflationary risks. He also suggested that it is high time for the crypto market to pause due to excessive activity.
Novogratz called the takeover of the American crypto exchange Coinbase “by some big traditional financier” one of the worst recession scenarios. Coinbase has long been cutting operating expenses in anticipation of worsening business in 2023.

- According to a number of analysts, there are currently no significant prerequisites for the growth of the bitcoin rate in the global cryptocurrency market. On the contrary, the anxiety of traders against the background of the bankruptcy of the FTX exchange may lead to a collapse in its value. According to RBC, “investors are now actively withdrawing funds from the Binance exchange, and in record volumes. The US intends to strictly regulate the crypto market and citizens' transactions. So we should expect that bitcoin will not grow, but will come to its lows soon. It is possible that its value will be at the level of $10,000 in the first half of 2023, or even in Q1.”
The tightening of the US Federal Reserve's monetary policy may also put pressure on the bitcoin rate. Its plans to raise the interest rate above 5.00% next year may limit the potential for BTC to rise in value. And as analysts at the British investment company AJ Bell predict, the main cryptocurrency rate will be very volatile in 2023.

- Given the deteriorating macroeconomic conditions, the crypto market is likely to face another collapse in quotes in the near future. This conclusion was reached by analysts at the Nansen research portal, considering the correlation between the S&P500 index and cryptocurrencies. Experts expect that the US recession will affect not only stocks, but also digital assets. At the same time, it is possible that this fall will be the last in the current cycle (until 2024). However, Nansen experts did not specify how soon it will happen and how long the market will be at the bottom.

- Bloomberg senior strategist Mike McGlone shares the opposite point of view. According to him, despite the fact that “the global benchmark digital asset was defeated in 2022”, it is ready to once again lean towards faster growth. The expert believes that the global economy may continue to fall in 2023, but BTC is likely to grow and become more actively used as digital security. The correlation of the digital asset with the Nasdaq index can be a supporting factor in this matter.
Mike McGlone had earlier predicted that the "macroeconomic global winter" could last up to three years. At the same time, he expects that the crypto industry will become stronger than ever in the next few years, and the bitcoin exchange rate will reach $100,000, and Ethereum at $6,000 by 2025.

- To circumvent sanctions imposed due to Russia's invasion of Ukraine, the Russian Parliament is studying the possibility of issuing a gold-backed cryptocurrency that is stored in the country's Far East. This is not the first initiative on the topic of gold backing of digital assets. Economists at Vnesheconombank of the Russian Federation proposed issuing a gold-backed stablecoin called the “golden ruble” last June. In their opinion, it will be impossible to block transactions with the crypto-gold ruble, since the exchange rate will be tied to the gold rate on the world market.

- The research company Solidus Labs has published a report on fraudulent schemes in the crypto industry. According to the firm, scammers released over 100,000 new "cryptocurrencies" (117,629 to be exact) from January 1 to December 1, 2022. This figure is 41% higher than the figure recorded in 2021. The BNB Smart Chain blockchain, developed by the Binance exchange, took the first place in terms of the number of coins issued by fraudsters. 12% of the tokens created on this network were issued by scammers. In second place is the Ethereum cryptocurrency blockchain, in which 8% of new coins were associated with scam projects.
The most profitable scam was the so-called honeypot, which is a trap for greedy people. To pull off this scam, attackers develop a smart contract with a vulnerability that supposedly allows you to withdraw cryptocurrency after making a deposit. In practice, those who fall for the bait of the scammers cannot take the coins from the "pot" and lose their assets. The authors of one of these virtual traps, based on Squid Game (SQUID) tokens, earned $3.3 million in just a few days.


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/

Dollar and Euro 2020-2022: Forecasts and Realities

Traditionally, we publish currency forecasts from the world's leading financial institutions at the turn of the outgoing and coming years. We did this two years, and a year ago. Therefore, we can not only look into the future now, but also analyze whether experts were right in the past.

2020-2021: EUR/USD in Times of COVID

December 2019 There was no talk of a global pandemic that month, when the first outbreak of COVID-19 was recorded in Wuhan, China. But even then, the Financial Times published a forecast of Citigroup experts that the quantitative easing (QE) policy pursued by the US Federal Reserve and pumping the market with cheap dollar liquidity could cause the dollar to fall.

As the pandemic raged on, this scenario began to prove its case. The dollar began to lose ground starting from the last decade of March 2020. The Fed's printing press was running at full capacity, flooding the US market with new cheap dollars. There were no plans to curtail monetary stimulus and, moreover, to raise the interest rate. Starting from 1.0630 on March 22, 2020, EUR/USD met the new 2021 at 1.2300.

The pair continued to grow with the onset of 2021. But this trend lasted... less than one week. It reached the level of 1.2350 on January 6, and this was the year's high. Everything changed starting from January 7, and the dollar began to win back losses.

The US currency moved in a sinusoidal manner until the end of May, fluctuating along with the waves of the coronavirus and statements by the Fed leaders. But the mood of the US Central Bank began to clearly change from dovish to hawkish just before summer, the country's economy was recovering, and investors began to grow confident in the imminent rise in the key interest rate from the current "miserable" level of 0.25%. As a result, the dollar went into steady growth, and EUR/USD ended 2021 in the 1.1350 zone, having lost 1,000 points in a year.


2022: EUR/USD During the Russian-Ukrainian Conflict

The prospect of a tightening of the Fed's monetary policy (QT) and a further rate hike inspired investors to be optimistic about the future of the US currency. Experts' forecasts also looked optimistic. The US economy, including the labor market, was recovering at a good pace, and GDP growth was forecast at 5%, which gave the Federal Reserve the opportunity to actively combat inflation. The fact that the interest rate will rise to at least 1.5% by the end of 2023 was almost beyond doubt. Confidence in the further strengthening of the dollar was added by the dovish position of the Central Banks of the G7 countries, which are more tolerant of rising prices.

Strategists at the Dutch banking Group (Internationale Nederlanden Groep) predicted that EUR/USD would trade at 1.1000 in Q4 2022. Analysts of one of the largest financial conglomerates in the world, HSBC (Hongkong and Shanghai Banking Corporation) were in solidarity with ING. “Our main argument,” their forecast said, “is based on two factors supporting the dollar: 1. a slowdown in global economic growth, and 2. the Federal Reserve’s gradual transition to a possible rate hike." In addition, HSBC considered that the ECB would not raise the interest rate on the euro until the end of 2022.

CIBC (Canadian Imperial Bank of Commerce) specialists also sided with the US dollar, setting the same goal for EUR/USD for the last two quarters of 2022: 1.1000. The JP Morgan financial holding assessed the pair's prospects more modestly, pointing to the level of 1.1200.

However, not all financial authorities relied on the growth of the dollar. Thus, Barclays Bank considered the dollar to be highly overvalued. The bank's economists predicted its modest depreciation as risk appetite and commodities surged on the back of the global economic recovery and cooling inflation. The scenario written for EUR/USD in Barclays looked like this: Q1 2022 - growth to 1.1600, Q2 - 1.1800, Q3 and Q4 - movement in the 1.1900 zone.

Reuters interviewed the largest banks represented on Wall Street and published their scenarios of the dynamics of the foreign exchange market for the next 12 months. In addition to the aforementioned JP Morgan and Barclays, the respondents were banking conglomerates Morgan Stanley, Goldman Sachs, as well as Europe's largest asset management company Amundi.

Morgan Stanley believed that the Fed's rate hike would proceed fairly smoothly, while other central banks would move from dovish to hawkish politics. This should lead to convergence in the actions of regulators, put pressure on the dollar and raise EUR/USD to 1.1800.

Goldman Sachs strategists called the same target of 1.1800. And Amundi said the Fed "can do little to surprise market expectations," although it agreed that the momentum "would remain broadly positive for the dollar." According to the company's strategists, EUR/USD should have ended 2022 around 1.1400.

It's safe to say now that analysts from ING, HSBC, CIBC gave the closest forecast. And it is possible that this forecast could come true by 100%. Or maybe their opponents from Barclays, Morgan Stanley and Goldman Sachs would be right. But if the whole world was turned upside down by the coronavirus pandemic in 2020, a war entered the life of the planet in 2022. Russia's armed invasion of Ukraine and the subsequent anti-Russian sanctions have caused an economic crisis, energy starvation and increased inflation in many countries, even very far from this region.

The proximity of the EU countries to the conflict zone, their heavy dependence on Russian natural energy resources, the nuclear threat and the risk of the transfer of hostilities to their territory all dealt a serious blow to the Eurozone economy and forced the ECB to act as carefully as possible so as not to bring it down completely. The USA found itself in much more favorable conditions, which allowed the Fed not only to continue, but also to accelerate the pace of QT and rate hikes. EUR/USD fell below the 1.0000 parity line for the first time in 20 years on July 14, and it hit a low at 0.9535 on September 28.

The main driver for the strengthening of the dollar was the expectation of a sharp rise in the refinancing rate, supported by the statements and actions of the Fed leaders. The rate was at the level of 0.25% between March 15, 2020 (beginning of the pandemic) to March 16, 2022. It was then raised by 25 basis points (bp), then by another 50 bps, followed by four more 75 bps increases. Then the US Central Bank slightly slowed down the pace of tightening and raised the rate by only 50 bps at its last meeting in 2022, after which it reached 4.50%.

The ECB kept the euro rate at 0.00% for a long time. However, it was forced to start tightening his monetary policy following the Fed. The regulator raised the rate to 0.50% at its meeting on July 21, to 1.25% on September 08, to 2.00% on October 27, and, finally, to 2.50% on December 15.

The fact that the ECB did start tightening its monetary policy has benefited the euro. The fact that Europe filled its oil and gas storage facilities to capacity before the winter cold and also found ways to replace Russian energy resources helped the pan-European currency as well. As a result, EUR/USD rose again above the 1.0000 level and reached a high of 1.0735 on December 15.

***

So, the common European currency lost 2,815 points to the American one from January 06, 2021, to September 28, 2022. Then the euro launched a counterattack, and it managed to win back 1,200 points by the end of the year, or more than 40% of losses. We will tell you what leading experts expect from these two currencies in the coming year, 2023, in a week, in our next review.

In the meantime, let us wish you and your loved ones success in your work, financial well-being, good health and the fulfillment of all your desires, even your most daring ones. And let's hope that unlike the past three years, the coming year will be filled with only positive events. Happy New Year!


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/

What to Expect from the Dollar and the Euro in 2023

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/

Traders from NordFX TOP-3 Earned Almost 1.5 Million USD in 2022

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.1562ХXХ;
- 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.1371ХXХ 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

https://nordfx.com/

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

https://nordfx.com/

USDJPY and GBPUSD: What Happened in 2022, What Will Happen in 2023

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 Сrossroads

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.

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

https://nordfx.com/

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.

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

https://nordfx.com/

Forex and Cryptocurrencies Forecast for January 16 - 20, 2023

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.

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

https://nordfx.com/

NordFX Efforts in the Middle East Are Recognized by Forexing Award

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.

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

https://nordfx.com/

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

https://nordfx.com/

Forex and Cryptocurrencies Forecast for January 23 - 27, 2023

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.

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

https://nordfx.com/