Daily Market Analysis from NordFX

[Stan NordFX]

USD/JPY: The Yen Pleased Investors Once Again

For the second week in a row, yen investors have been rewarded for their patience. USD/JPY continued its descent from the Moon to Earth, marking a local minimum at 137.23. Thus, since June 30th, in just two weeks, the Japanese currency has gained more than 780 points against the US dollar.

Compared to other currencies included in the DXY basket, the yen appears to be the primary beneficiary. The main ace up this safe-haven currency's sleeve is investor fears about a recession in the US and narrowing yield differentials on US government bonds. The correlation between Treasuries and USD/JPY is no secret to anyone. If the yield on US Treasury bills falls, the yen shows growth against the dollar. Last week, following the publication of CPI data, the yield on 10-year US papers slipped from 3.95% to 3.85%, and on 2-year papers – from 4.85% to 4.70%.

Speculation that the Bank of Japan (BoJ) may finally adjust its ultra-loose monetary policy towards tightening in the coming months also continues to favor the yen. We are talking about speculation here, as no clear signals have been given by the country's Government or the BoJ leadership on this matter.

Let's recall that at the French Societe Generale, it's expected that the yield on 5-year US bonds will fall to 2.66% in a year's time, which will allow USD/JPY to break below 130.00. If, at the same time, the yield on Japanese government bonds (JGBs) remains at its current level, the pair could even drop to 125.00. Economists at Danske Bank are forecasting a USD/JPY rate below 130.00 within a 6–12-month horizon. Similar forecasts are made by strategists at BNP Paribas: they are aiming for a level of 130.00 by the end of this year and 123.00 by the end of 2024. Against this backdrop, many hedge funds have begun active selling of dollars and buying of yen.

Last week, USD/JPY ended at 138.75 after a correction to the north. As of this review, 45% of analysts believe the pair will resume growth in the coming days. Only 15% support further fall, and 40% maintain a wait-and-see stance. The D1 indicators are as follows: 100% of oscillators are coloured red, but 10% signal oversold. The balance between green and red among trend indicators is 35% to 60%. The nearest support level is in the 138.05-138.30 zone, followed by 137.25-137.50, 135.95, 133.75-134.15, 132.80-133.00, 131.25, 130.60, 129.70, 128.10, and 127.20. The closest resistance is 1.3895-1.3905, then 139.85, 140.45-140.60, 141.40-141.60, 142.20, 143.75-144.00, 145.15-145.30, 146.85-147.15, 148.85, and finally the October 2022 high of 151.95.

No significant economic information related to the Japanese economy is expected in the upcoming week. However, traders may want to note that Monday, July 17th is a holiday in Japan: the country is observing Marine Day.

CRYPTOCURRENCIES: Karl Marx and $120,000 for BTC

After the release of impressive consumer inflation data in the US last week, the markets became confident in the Fed's imminent abandonment of monetary restriction and a turn towards lowering the key rate. The dollar responded to this with a sharp fall, and risky financial instruments - with growth. The S&P500, Dow Jones, and Nasdaq Composite stock indices went up, but not bitcoin. The BTC/USD pair continued to move sideways along the Pivot Point $30,600, trapped in a narrow range. It seems as if it has completely forgotten about its direct correlation with stocks and its inverse correlation with the dollar. On Thursday, July 13, after the release of the American PPI, bitcoin still tried to break through to the north, but unsuccessfully: the very next day it returned within the limits of the sideways channel.

Why did this happen? What prevented digital gold from soaring along with the stock market? There don't seem to be any super serious reasons for this. Although analysts do point to three factors that are weighing on the crypto market.

The first of these is the low profitability of mining. Due to the increasing computational complexity, it remains close to a historical minimum. Moreover, it is accompanied by the fear of a possible new price drop. This is pushing miners to sell not only freshly mined coins (about 900 BTC per day), but also accumulated reserves. According to Bitcoinmagazine data, miners have transferred a record volume of coins to exchanges in the last six years.

In addition to miners, the US Government is contributing to the increase in supply. On just one day, July 12, it transferred $300 million worth of coins to crypto exchanges. And this is the second negative factor. Finally, the third is the bankrupt Mt.Gox exchange, which must pay customers everything that remains in its accounts by the end of October. This equates to approximately 135,900 BTC, totalling roughly $4.8 billion. Payments will be made in cryptocurrency, which will then be available on the market for sale and exchange for fiat.

Of course, all of this does not add positivity, increasing the supply but not the demand. However, considering that the average trading volume of bitcoin exceeds $12 billion daily, the figures mentioned do not seem that apocalyptic. In our view, the main reason for the current sideways trend is a balance between positives and negatives. The positives are the applications to launch spot btc-ETFs from such giants as BlackRock, Invesco, Fidelity, and others. The negatives are the increasing regulatory pressure on the crypto market by the US Securities and Exchange Commission (SEC).

It should be noted that the SEC has previously rejected all applications for spot BTC-ETFs and is not currently eager to give them the green light. Therefore, the struggle for these funds could be drawn out over many months. For instance, a final decision on BlackRock's application is not expected until mid-Q3 2023 at the earliest, and no later than mid-March 2024, just a month before the next BTC halving. The halving could be the trigger for not only the subsequent, but also the preceding growth of BTC.

According to economists at Standard Chartered Bank, the price of bitcoin may exceed $50,000 this year, and it could reach $120,000 by the end of the next year. In the view of bank analyst Geoff Kendrick, as the price rises, miners will return to a strategy of accumulation. As already mentioned, they are currently selling everything they mine. However, when bitcoin is trading at $50,000, their sales will decrease from the current 900 coins to 180-270 per day. Such a decrease in supply should lead to further growth in the value of the asset. In general, everything is in line with Karl Marx's economic theory of supply and demand.

In addition to miners, institutional investors are also expected to show interest in accumulating bitcoins, in anticipation not only of the launch of spot BTC-ETFs and the halving, but also of a shift in the Federal Reserve's monetary policy and a weakening of the dollar. As Grayscale Investments CEO Michael Sonnenshein recently stated, it has become clear that the first cryptocurrency is no longer a "passing fad". "Recent news [...] underscores the resilience of this asset class in a broader sense, and many investors view [digital gold] as a unique investment opportunity."

Analyst and trader Michael Pizzino also believes that the dollar is ready to significantly depreciate. However, he does not consider an apocalyptic scenario of a collapse of the world's main currency, as the dynamics of its exchange rate are slower than those of other classes of financial assets. However, Pizzino predicts a steady downward trend in USD in the foreseeable period and a redistribution of funds in favor of digital assets. The macrographic chart suggests their upward trend, and given the correlation between USD and BTC, a fall in the former could contribute to an increase in the value of the latter, followed by growth in other significant crypto assets.

Robert Kiyosaki, author of the famous book "Rich Dad, Poor Dad", claims that by 2024, bitcoin will reach the $120,000 mark. The economist bases his forecast on the fact that BRICS countries (Brazil, Russia, India, China, and South Africa) will soon move to the gold standard and issue their own cryptocurrency backed by gold. This could undermine the dominance of the U.S. dollar in the world economy and cause its devaluation. He also warns that many traditional financial institutions may go bankrupt in the near future due to their imprudent decisions and corruption. In this regard, Kiyosaki recommends protecting your money from inflation by buying physical gold and bitcoin.

A similar figure, only not at the beginning, but by the end of 2024, was named by the head of research at the crypto-financial service Matrixport, Markus Thielen. He stated in an interview with CoinDesk that the quotes of the first cryptocurrency could overcome the $125,000 mark by the end of next year. "On June 22, bitcoin reached a new annual high. This signal historically indicated the end of bearish and the beginning of bullish markets," he explained.

According to Thielen, the price of bitcoin can soar by 123% over 12 months and by 310% over a year and a half. With such growth, the asset will rise to $65,539 and $125,731, respectively. The expert's forecast is based on the average profitability of similar signals in the past: in August 2012, December 2015, May 2019, and August 2020. (Thielen intentionally ignores the first case with growth of 5,285% over 18 months, calling it "epic" and "disproportionate".).

As for a more short-term forecast, Michael Van De Poppe, founder of venture company Eight, believes that bitcoin is preparing for a leap to $41,000. The popular analyst bases his opinion on the recent growth of the first cryptocurrency rate and Fibonacci levels. According to him, "the previous annual high for BTC was overcome in April. And now we are seeing increasingly higher highs as traders build up bullish momentum and positions." "To continue the uptrend, which we call a bull cycle, bitcoin needs to reach a new and clearer high," explains Michael Van De Poppe. "There are several points that allow determining the possibilities of further growth using Fibonacci levels. And now I would say that there is a rally to $41,000 ahead."

"There are two scenarios: a rise above the current maximum, followed by some consolidation and a rollback before a new growth. Or consolidation at current levels, and then accelerated growth in the coming months. For bitcoin, this is pretty standard behaviour. And then we will go to $41,000 or even $42,500," the analyst predicts.

As of writing this review on the evening of Friday, July 14, BTC/USD is trading around $30,180. The total market capitalization of the crypto market has slightly increased and stands at $1.198 trillion ($1.176 trillion a week ago). The Crypto Fear & Greed Index is in the Greed zone and stands at 60 points (55 points a week ago).


NordFX Analytical Group


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

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[Stan NordFX]

CryptoNews of the Week

– Mike Novogratz, the CEO of blockchain company Galaxy Digital, recommends buying bitcoin, pointing to the rising US national debt. In just the first week of July, the country's debt to creditors has increased by $1 trillion, reaching a total of $32.47 trillion. It is evident that this could destabilize the financial system, lead to another round of inflation, and result in a drop in the dollar's value. "This is madness... Buy bitcoin," Novogratz urged in response to a publication about the escalating debt of the United States.

– However, not everyone, like Mike Novogratz, foresees a bright future for BTC. According to the educational project 99bitcoins, bitcoin has been declared dead 474 times. The published "obituaries" spoke of the "insolvency and uselessness" of the primary cryptocurrency, asserting that the Bitcoin network is a "bubble," an "elaborate Ponzi scheme," and a "cryptocurrency dummy, with no real substantiated value."
Among the authors of these "posthumous messages" in 2023, there were quite a few well-known names in the financial world. These included Chamath Palihapitiya, the founder and CEO of venture company Social Capital; Robin Brooks, the chief economist of the Institute of International Finance (IIF); Harvey Jones from the British news agency Daily Express; Jamie Dimon, the CEO of JPMorgan Chase; TV host Jim Cramer; and John Reed Stark, a former official of the US Securities and Exchange Commission (SEC).
Vitalik Buterin has recently also criticized bitcoin. In the view of the creator of ethereum, the flagship cryptocurrency lacks scalable second-layer solutions to become more than just a payment network.

– Crypto market experts have drawn the results for Q2 2023. These three months proved to be turbulent, and the industry experienced a series of ups and downs. Most high-capitalization projects displayed negative dynamics during this period, primarily due to ongoing legal disputes between the SEC and major crypto exchanges Binance and Coinbase. This had a significant negative impact on many coins in the TOP-100, as the SEC classified them as securities.
However, amidst the turbulence, bitcoin, and some other digital currencies, such as BCH and LTC, demonstrated high performance. According to the CryptoRank report, their success was driven by news related to exchange-traded funds and institutional listings. Bitcoin, in particular, delivered an impressive return that outperformed traditional financial instruments, overshadowing the Nasdaq and S&P 500 indexes, as well as gold and silver, in the first half of 2023.
Undoubtedly, one of the most significant events was the application for a spot bitcoin ETF by BlackRock, the world's largest asset manager. This event particularly benefited BTC, which reached a new high for 2023. BlackRock's initiative started a chain of events where numerous asset managers also began either renewing or submitting new applications for spot bitcoin ETFs. It is important to note that the SEC has previously rejected all such applications. In this case, a final decision on BlackRock's application is expected no earlier than the middle of Q3 2023 and no later than mid-March 2024, just a month before the next BTC halving.

– The crypto market traditionally experiences a lull during the summer. Admittedly, trading volumes increased in June thanks to spot bitcoin ETF applications from BlackRock and other companies, but overall, Q2 witnessed a decrease in trading activity. According to CryptoRank, crypto exchanges recorded a decline in trading volume in Q2, reaching the lowest level in the last two years.

– The bitcoin halving in 2024 is tentatively set to take place on April 12. It has the potential to exert a fundamental influence on both the price of BTC and the overall cryptocurrency market, as it is a crucial mechanism in the primary cryptocurrency's protocol. Every 210,000 blocks, or once every four years, it halves the reward that miners receive for mining a block. This is done to create a deflationary environment and to support the value of BTC by reducing the rate of new coin issuance. (The total emission size is set at 21 million coins.)
Originally, from 2009, miners received 50 BTC for each generated block. In 2012, the reward decreased to 25 BTC, in 2016 – to 12.5 BTC, and after 2020 – to 6.25 BTC. When the 2024 halving occurs, the mining reward will be reduced to 3.125 coins.
Historical data suggest that after this event, the bitcoin exchange rate may once again sharply increase. After the 2012 halving, the BTC price rose from $11 in November 2012 to $1,100 in November 2013. Following the 2016 halving, the price increased from $640 in July to $20,000 in December 2017. The 2020 halving enabled the coin's price to rise from $9,000 in May 2020 to a peak of $69,000 in November 2021. However, despite this statistic, experts warn that past results do not guarantee their repetition in the future.

– After the 2024 halving and the halving of the reward for a mined block, miners will have to adapt to a new reality. They will need to acquire more powerful and energy-efficient equipment or upgrade their existing ones. According to forecasts, many small companies will most likely leave the market or be acquired by larger players. As a result, we should expect the mining market to become centralized, falling under the control of a few large pools. This would make the network more susceptible to manipulations and hacking attacks. However, a sharp increase in the price of bitcoin could at least partially offset these negative factors.

– Analysts asked ChatGPT to talk about some potential events that could have a significant impact on the cryptocurrency market. The Artificial Intelligence's response was as follows:
1. Regulation: Legislative or regulatory changes in key countries can greatly affect the cryptocurrency market. If important jurisdictions adopt laws that severely limit the use or trade of cryptocurrencies, it could strongly affect their prices and accessibility.
2. Large-scale hacking attacks: If large-scale hacking attacks occur on major cryptocurrency exchanges or wallets, it could cause panic in the market and lead to significant losses.
3.Technological breakthroughs: New technologies or improvements in blockchain and cryptocurrencies can also have a significant impact. This can include new consensus protocols, improved scalability, or enhanced privacy protection methods.
4. Large companies' investments: If major companies like Apple, Google, or Amazon start actively investing in cryptocurrencies or integrating them into their services, it could significantly increase the value of cryptocurrencies and overall interest in them.
5. Global economic events: Cryptocurrencies are often considered a "safe haven" during economic instability. So global economic crises or significant changes in inflation, interest rates, or currency exchange rates could also influence the crypto market.

– The former CEO of BitMEX cryptocurrency exchange, Arthur Hayes, has speculated that bitcoin might become the ideal currency for artificial intelligence (AI) systems. In his opinion, digital gold is superior to other assets in this respect, as it possesses characteristics such as decentralization, resistance to censorship, proven deficit, and dependence of intrinsic value on energy costs. "There is nothing today that can compare to bitcoin in these parameters," wrote Hayes.
He believes that in the future, investors may reevaluate the first cryptocurrency due to its "adoption" by artificial intelligence. According to Hayes, this will occur due to a desire to "avoid inflation in the fiat financial system" and to "capture part of the next phase of human and computer evolution." The former CEO of BitMEX added that by 2025-2026, the AI economy will account for up to 50% of global GDP, against which backdrop bitcoin will reach $760,000.


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

[Stan NordFX]

Forex and Cryptocurrencies Forecast for July 24 - 28, 2023

EUR/USD: Awaiting the Federal Reserve and ECB Meetings

When the DXY Dollar Index dropped to April 2022 levels (99.65) on July 14, many market participants concluded that the best days for the American currency were over. Inflation is nearing target levels, and in order not to suffocate the economy, the Federal Reserve will soon initiate a campaign to ease its monetary policy. However, things aren't that straightforward. After reaching a peak of 1.1275 on Tuesday, July 18, the EUR/USD pair reversed and started to decline.

In general, against the backdrop of weak macroeconomic reports coming from the United States, the dollar could have given up a few dozen or even a couple of hundred points to the euro. Industrial production in the country is falling for the second month in a row, with a 0.5% decrease in June. Retail sales, expected to grow by 0.5%, only increased by 0.2% (a 0.5% increase in May). The Philadelphia Federal Reserve's Manufacturing Activity Index continues to be in the negative territory (-13.5). The real estate market data also turned out worse than predicted. For instance, the number of new constructions in the U.S. fell by 8.0% in June, following a 15.7% increase in the previous month. The number of issued construction permits also dropped by 3.7% after a 5.6% rise in May. Sales in the secondary housing market were below the previous values (4.16M in June, 4.30M in May, forecast 4.20M). However, the labour market data turned out slightly better than expected - the number of initial jobless claims was 228K (previous value 237K, forecast 242K). Yet, this is a highly volatile indicator, and it may not reflect the actual situation, but the market was pleased with this bit of positivity.

Overall, the published macro-statistics vividly illustrate the cooling of the American economy. The worsening situation in the real estate market clearly signals the pressure that high-interest rates exert on this important sector. It's enough to recall the Global Financial Crisis of 2007-2008, which began with a mortgage crisis in the U.S.

In such a situation, the hawkish course of the Federal Reserve is likely nearing its end. Almost all Bloomberg experts anticipate that on July 26, the Federal Open Market Committee (FOMC) will raise the interest rate by 25 basis points to 5.5%. There's a possibility that the hike could be even less: not 25, but just 10 basis points. Afterwards, the regulator is expected to take a wait-and-see approach, which could last until the end of the year. The futures market estimates the probability of a rate increase to 5.75% in 2023 at 28%.

However, there's not just the American currency on the EUR/USD scale but also the pan-European one. Revised statistics show that in Q1, the Eurozone's GDP was almost at zero, the economy is stagnating, and its growth prospects appear rather weak. It is clear that the hike in the euro's key interest rate, which has grown from 0% to 4.00% in this tightening cycle, has had and continues to have a negative impact. The lagging effect of monetary tightening is becoming more and more palpable.

On the other hand, despite a 400 basis point increase in rates, inflation (CPI) in the Eurozone is declining quite slowly - in June, it was 5.5% year-on-year compared to 6.1% a month earlier. It is still very far from its target level of 2.0%.

Therefore, on one hand, we see significant price pressure, on the other – the difficulties the EU economy is experiencing. In such an ambiguous situation, the further steps of the European Central Bank officials also seem uncertain. More clarity regarding future monetary policy is expected to emerge at the upcoming European Central Bank Monetary Policy Committee meeting on Thursday, July 27. At least, that's what market participants are hoping for.

Even somewhat unclear data from the US labour market was enough to trigger a DXY correction northwards and send EUR/USD south. The final note of the working week was set at 1.1125. As for the near-term prospects, at the time of writing this review, the evening of July 21, only 20% of analysts voted for the pair's further rise, 50% for its fall, and the remaining 30% took a neutral stance. As for technical analysis, on D1, 75% of trend indicators point up, 25% point down. Of the oscillators, 85% recommend buying, while the remaining 15% take a neutral stance. The pair's nearest support is located around 1.1090-1.1110, 1.1045, 1.0995-1.1010, 1.0895-1.0925, 1.0845-1.0865, 1.0800, 1.0760, 1.0670, 1.0620-1.0635. Bulls will meet resistance around 1.1145, then 1.1170, 1.1230-1.1245, 1.1275-1.1290, 1.1355, 1.1475, and 1.1715.

Undoubtedly, the key events of the upcoming week will be the FED meeting on July 26 and the ECB meeting on July 27, along with the subsequent press conferences held by the leaders of these regulators. Additionally, on Monday, July 24, numerous preliminary business activity data (PMI) will come from Germany, the Eurozone, and the US. The next day, the Eurozone Bank Lending Survey will be published, and the value of the US Consumer Confidence Index will be known. On Thursday, data on durable goods orders will arrive from the United States, along with real estate and unemployment statistics. Finally, at the very end of the working week, on Friday, July 28, we will learn the preliminary data on inflation (CPI) in Germany, as well as personal consumption expenditure data in the US.

GBP/USD: 50 Basis Points or is it 25 After All?

The next meeting of the Bank of England (BoE) is set for August 3. Some market participants are inclined to believe that at this meeting, the regulator will raise the base rate for the pound by another 50 basis points (bps) to 5.50%. Economists from the French financial conglomerate Societe Generale have formulated three main reasons why the BoE will take this step.

Firstly, inflation in the service sector and wages may have peaked in June, but both indicators remain uncomfortably high. The Consumer Price Index (CPI), although it fell over the month from 8.7% to 7.9% (with a forecast of 8.2%), is still far from the target level of 2.0%.

Secondly, as Societe Generale believes, investors are avoiding UK bonds due to persistent inflation in the country. Such high and stable inflation means that investors require higher compensation for holding UK bonds compared to US Treasuries and German bonds. To reassure investors, it is necessary at this stage to continue a strict monetary policy.

Thirdly, in recent weeks the Bank of England and its governor Andrew Bailey have been heavily criticized for sticking to a soft monetary course for too long, thereby allowing a powerful surge in inflation. And now the BoE may overdo it in its desire to prove that its critics are wrong. This can lead to more aggressive actions, such as a significant rate hike. However, we must also consider the possibility that the BoE could choose a more conservative 25 basis point rate hike instead.

Indeed, not everyone agrees with the arguments put forth by the French economists. For instance, their colleagues at the German Commerzbank have noted that consumer prices (CPI) in the UK grew at a much slower rate in June than was expected. Therefore, the market's built-in expectations for a rate increase are too high and require a downward correction. This, in turn, will lead to a weakening of the pound. A similar viewpoint was expressed by strategists at the Netherlands' largest banking group, ING, who believe the rate will be increased by a maximum of 25 basis points.

The above-mentioned CPI data was published on Wednesday, July 19. However, in addition to this, the Office for National Statistics (ONS) in the UK also published retail trade data for the country on Friday, July 21. It turned out that in June, the volume of retail trade increased by 0.7% on a monthly basis, compared to the expected 0.2% and 0.1% previously. The main indicator of retail sales, excluding auto fuel sales, increased by 0.8% over the month compared to the forecasted 0.1% and 0% in May. The annual volume of retail sales in the UK fell by -1.0% in June against the forecasted -1.5% and May's decline of -2.3%, while the base volume of retail sales dropped by -0.9% against the expected -1.6% and the previous -1.9%.

After the release of these favorable data, the UK Finance Minister Jeremy Hunt stated that "we will start seeing results if we stick to our plan to halve inflation". The minister's words could be interpreted as support for further tightening of the BoE's hawkish policy. However, the markets practically ignored them, and the strengthening dollar continued to pressure GBP/USD, which ended the five-day trading period at the 1.2852 mark.

As for the pair's movement, it will, of course, depend on the decisions and statements of the Fed on July 26. Undoubtedly, the ECB's meeting on July 27 will also influence the pound through EUR/GBP. But all this is in the near future. As for the present, at the time of writing this review, the median forecast of experts for GBP/USD looks maximally neutral: a third of them voted for the pair's growth, a third - for its fall, and a third maintained neutrality. On D1 oscillators, 35% are coloured green, 25% - red, and the remaining 40% - neutral grey. Among trend indicators, 60% sided with the green, and 40% sided with the red. In case of the pair's movement south, it will meet support levels and zones at 1.2800-1.2815, then 1.2675-1.2695, 1.2570, 1.2435-1.2450, 1.2300-1.2330, 1.2190-1.2210. In case of the pair's growth, it will meet resistance at 1.2940, then 1.2980-1.3000, 1.3050-1.3060, 1.3125-1.3140, 1.3185-1.3210, 1.3300-1.3335, 1.3425, 1.3605.

Apart from the FED and ECB meetings, another notable event in the upcoming week's calendar is on Monday, July 24, when the preliminary business activity data (PMI) for various sectors of the UK economy will be published.

USD/JPY: Two Steps Forward, One Step Back

The Russian revolutionary Vladimir Lenin wrote a book in 1904 titled "One Step Forward, Two Steps Back". What happened to the yen over the past three weeks can be titled as "Two Steps Forward, One Step Back". For the first two weeks of July, the Japanese currency grew, and for the third, it gave back more than half of its gains. And while its peers - the euro and pound, retreated thanks to a stronger dollar, in the case of USD/JPY, a significant blow to the national currency was not dealt by the US, but by a fall in inflation in Japan.

It should be recalled that at the time of writing the previous forecast, the number of supporters of yen weakening was three times the number of those expecting its further strengthening (45% versus 15%). And the majority turned out to be correct. The Inflation Report published on Friday, July 21st, sent the Japanese currency into a knockdown. USD/JPY jumped by more than 1%. It turned out that despite the ultra-dovish policy of the BoJ and a negative interest rate of -0.1%, consumer price growth has decreased. Despite a forecast of 3.5%, in reality, inflation (CPI) in June was 3.3%. The consumer price index excluding food and energy fell to 4.2% compared to the previous value of 4.3%.

These data, if not completely, then at least for a long time, buried hopes for a tightening of the monetary policy of the Japanese Central Bank. Moreover, the Prime Minister Fumio Kishida, who spoke the day before, supported the current monetary policy of the regulator. Therefore, with a high degree of probability, at its meeting on Friday, July 28, the Bank of Japan will leave the interest rate unchanged. And to maintain the course of the national currency, if necessary, as before, it will resort to currency interventions.

In the meantime, to stop the yen's fall, Japan's Chief Currency Diplomat Masato Kanda stepped in with a "verbal intervention". In particular, he stated that he "never felt a limit to the possibilities for currency interventions" and that when it comes to them, he takes various steps to avoid running out of "ammunition".

The situation has somewhat calmed down after the comments made by Masato Kanda, with USD/JPY ending the past week at a mark of 141.80. At the time of writing this review, 25% of analysts predict the pair will continue its upward movement in the upcoming days, 55% voted for a downward trend, and 20% took a neutral position. The readings of the D1 indicators are as follows: among the oscillators, 25% are coloured red, 50% green, and 25% grey. Trend indicators show a clear advantage for the greens at 90%, with only 10% on the opposite side. The nearest support level is located in the zone of 141.40, followed by 140.45-140.60, 139.85, 138.95-139.05, 138.05-138.30, then 137.25-137.50, 135.95, 133.75-134.15, 132.80-133.00, 131.25, 130.60, 129.70, 128.10, and 127.20. The nearest resistance is at 142.20, followed by 143.75-144.00, 145.05-145.30, 146.85-147.15, 148.85, and finally the peak of October 2022 at 151.95.

Besides the Bank of Japan's meeting, no significant economic information pertaining to the country's economy is anticipated in the upcoming week.

CRYPTOCURRENCIES: Litecoin Halving - Rehearsal for Bitcoin Halving

Observers note that the peak of the Dollar Index DXY in 2023 almost coincided with bitcoin's trough. There's nothing surprising about this: BTC/USD is like a scale. If the dollar gets heavier, bitcoin becomes lighter. Last week, the rise of the American currency led to a weakening of the digital one. It's worth noting that bitcoin is desperately trying to hold onto the support zone at $29,850 and avoid a collapse to the June lows around $25,000.

The relationship between BTC and USD is logical and understandable. However, some crypto enthusiasts are trying to position bitcoin as the primary, leading asset, with the dollar trailing behind like a dog's tail. As an argument, they cite, for example, the fact that bitcoin entered a horizontal channel by the middle of last year, while the Dollar Index caught up with it a few weeks later. If you look closely, you can find many such moments on the charts. But in our opinion, one should not overestimate the significance of the main cryptocurrency.

At the moment, many experts and influencers continue to paint a bright future for bitcoin. Although the heights of target horizons differ by times, sometimes even by tens of times. For example, Standard Chartered economist Geoff Kendrick recently stated that his financial corporation has adopted a more optimistic forecast for bitcoin's market value, targeting the $120,000 level by the end of 2024.

In response, BBC World analyst Glen Goodman wrote that these $120,000 "seem more like a figure pulled out of thin air than a genuinely justified forecast." He believes that the authors of such predictions are siding with the bulls and are not considering a number of key factors. The most important of them is that the US financial regulators are ruthlessly cracking down on the crypto industry, inundating its participants with lawsuits and investigations. Moreover, Goodman refers to forecasts by American economists who expect a protracted recession next year, the consequences of which can seriously suppress activity in the financial markets, including the digital asset market.

Unlike Glen Goodman, Real Vision CEO and former Goldman Sachs top manager Raoul Pal believes that economic troubles, confusion in the banking sector, and the real estate market crisis are beneficial for bitcoin, which serves as a defensive asset against this backdrop. According to Raoul Pal, a bullish rally for digital gold is inevitable, and BTC can easily reach the $50,000 mark later this year.

Renowned analyst under the nickname PlanB, on the other hand, does not believe that a powerful pump of the flagship cryptocurrency can occur before the halving in April 2024. His forecast is based on using the MA-200 as an indicator. This line increases on average by $500 a month, so in nine months it will be at the $32,000 mark. According to PlanB, it is possible that the coin's price might even be about 50% above this mark, but even then, it would be only $48,000.

Michael Van De Poppe, the founder of venture firm Eight, has clarified his prediction from last week. He believes that the current trend is breaking the minimums, as a result of which bitcoin could drop to $29,500 and even $29,000. However, he thinks that such a price movement could precede a bullish rally, during which the main cryptocurrency will raise its rate first to $32,500, then to $34,000, followed by a surge to $38,000.

Shifting from short- and medium-term forecasts to long-term, one could mention the opinion of Catherine Wood, CEO of ARK Invest. It seems that she is not particularly interested in jumps to $38,000 and even to $120,000. Once again, she reaffirmed her forecast that in about seven years, against the backdrop of inflation and a banking crisis, bitcoin will trade at $1,500,000 per coin, or at least at $625,000.

Against the backdrop of Catherine Wood's boundless optimism, data from CryptoVantage, whose employees surveyed 1,000 crypto investors from the U.S., comes as a cold sobering shower. It turned out that only 23% of them believe that the Bitcoin rate will reach its historical maximum of $68,917 next year. 47% think that the coin's price will rise to this mark within five years. 78% are confident that BTC will eventually return to its all-time high, but in an uncertain future. And 9% believe that this will never happen again.

We've paid significant attention to the upcoming bitcoin halving in April 2023 in our previous reviews. Let's now remember that the Litecoin halving is due quite soon, on August 2nd of this year. The reward for mining a block will be reduced to 6.25 LTC. Given that Litecoin is a fork of bitcoin, and its total emission is capped at 84 million coins, it will be interesting to observe the changes in Litecoin's price and attempt to forecast bitcoin's performance after its future halving based on these observations.

At the time of writing this review, on the evening of Friday, July 21, BTC/USD is trading around $29,850. The total capitalization of the crypto market has barely changed and stands at $1.202 trillion ($1.198 trillion a week ago). The Crypto Fear & Greed Index is in the Neutral zone, at 50 points (down from 60 points a week ago).


NordFX Analytical Group


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 #cryptocurrencies #bitcoin #stock_market

[Stan NordFX]

CryptoNews of the Week

– Robert Kennedy Jr., a U.S. presidential candidate from the Democratic Party, advocates for the support of the U.S. dollar using hard assets such as gold, silver, platinum, and bitcoin. The politician believes that this move could stabilize the economy, curb inflation, and usher in a new era of financial stability and prosperity in America.
Market strategist Todd "Bubba" Horwitz responded to Robert Kennedy Jr.'s inclusion of bitcoin in the basket of hard assets. According to him, this will enable bitcoin to reach a price of $35,000, and then $40,000, within the next six months. Horwitz highly praised the growing recognition of BTC by regulatory bodies such as the Commodity Futures Trading Commission (CFTC), which will also contribute to the growth of the leading cryptocurrency.

– The implementation of central bank digital currencies (CBDCs) worldwide varies significantly: projects are divided into retail ones, intended for citizen use, and so-called wholesale ones, geared towards interbank transfers and large businesses. Currently, 125 central banks are working on launching national CBDCs, but only three countries, Nigeria, the Bahamas, and Jamaica, have already put their CBDCs into full operation. Meanwhile, Ecuador and Haiti have abandoned this idea due to the high cost of the projects and low demand from the population. Ecuador launched its project as early as 2014 but withdrew it as the number of users did not exceed 3% of the country's population.
Even a number of senators resist the development of a digital dollar in the U.S. In a pre-emptive move, the governors of Texas and Miami banned its circulation within their states in May of this year.

– Bloomberg Senior Analyst Eric Balchunas believes that the approval of applications to launch spot bitcoin exchange-traded funds (ETFs) in the U.S. will open up the bitcoin market to $30 trillion in capital. According to forecasts by analytics firm Fundstrat, the launch of a bitcoin ETF could increase daily demand for bitcoin by $100 million. In this case, even before the halving scheduled for April 2024, the price of BTC could rise by 521% from current levels and reach up to $180,000.

– Craig Steven Wright, an Australian computer scientist and businessman, has claimed since 2016 that he invented bitcoin. He filed a lawsuit against 13 BTC developers and several crypto companies, including Blockstream, Coinbase, and Block, alleging they infringe his copyright to the first cryptocurrency.
However, Wright lost the copyright lawsuit in February. The court deemed his arguments insufficient. Now, a UK court has satisfied an appeal that has granted Wright the right to claim copyright over bitcoin.
Whether Wright truly created bitcoin and hid under the pseudonym Satoshi Nakamoto will be determined by the court during a trial in January 2024. "Copyright protection issues will be resolved during a full court hearing, but only if Dr. Wright demonstrates that he is Satoshi Nakamoto," the court statement said. Meanwhile, Wright's lawyers stated that he is "pleased" with the outcome of the case and acknowledged his high chances of winning.

– Experts at SlowMist reported the discovery of a phishing program in the App Store aimed at stealing user data and cryptocurrencies. It mimics legitimate applications and thereby ends up on the user's device. The victim is then asked to enter their Apple ID password. Once they have this information, the malicious actors add their phone numbers to the trusted list for Apple's two-factor authentication. This allows them to control account permissions and gain full access to its contents. To mask their activity, the hackers create additional Apple IDs and use the victim's resources through the family account access feature.

– Just like on traditional markets, changes in investor sentiment on the crypto market follow certain patterns. Considering the so-called "Wall Street Cheat Sheet," which describes the psychology of market cycles and the corresponding emotions of traders, after passing through the pessimistic phases of "panic," "capitulation," and "depression," bitcoin is moving towards the "hope" stage.
According to analyst CryptoYoddha's chart, the cryptocurrency is currently going through the "disbelief" or "sucker's rally" stage. The next step is the "hope" of price recovery, potentially to $50,000 and above by the end of 2023. The upward movement will correspond to the passage through the stages of "optimism," "belief," "thrill," and finally, "euphoria."

– An analyst known as Trader Tardigrade believes that bitcoin is replicating the same price structure as it did in the period from 2013 to 2018, when it followed the pattern of transitioning from the "previous peak" to the "top-1", which preceded "top-2" and the "retest" (the stage at which bitcoin currently stands). If this model holds true, the next step would be a price "boom" which could lead to bitcoin rising to $400,000 by 2026.

– According to another expert, Stockmoney Lizards, bitcoin has just emerged from its third historical cycle, during which it reached an all-time high of $68,900, and has entered its fourth price cycle. The culmination of this cycle could be a new record between $150,000 and $200,000 in Q2 or Q3 of 2025.

– Cody Buffington, the host of the Altcoin Buzz YouTube channel, holds the view that a surge in bitcoin's volatility will occur sooner than everyone anticipates. According to him, the upcoming volatility of the flagship cryptocurrency could rival its growth since January 2023.
Buffington noted that in July, the price of bitcoin oscillated in a narrow range around the $30,000 mark, which served as a kind of test for both bulls and bears. And more often than not, such flat trading occurs before major movements. As proof, he pointed to the Bollinger Bands and a visual display of the indicator, which shows that the bitcoin price chart is in its narrowest state since the start of 2023.

– Ripple recently released a review examining the impact of the cryptocurrency and blockchain industry on business and the financial sector. According to the document, more than 90% of global financial leaders believe that blockchain technology will significantly influence business and finance over the next three years, indicating a substantial increase in their confidence in virtual currencies. 79% of business leaders expressed interest and confidence in using cryptocurrencies in their business. When considering various areas of cryptocurrency application, 44% of financiers chose their use for cross-border payments. Moreover, over 76% of company leaders are interested in institutional DeFi as a strategy for implementing innovations.

– According to a survey of 29 analysts conducted by Finder.com , their median forecast is as follows. Experts expect that by the end of the year, BTC will rise to $38,488, while the potential peak of bitcoin in 2023 could reach $42,000. By the end of 2025, according to the averaged opinion of analysts, the coin's price could reach $100,000, and by the end of 2030 - $280,000.
Naturally, individual forecasts of experts varied. Overall, the majority of survey participants (59%) are optimistic about BTC and believe that now is a good time to enter the market, 34% simply advise holding the existing cryptocurrency, and 7% suggest selling it.

– At present, there is a certain hype around the artificial intelligence industry. Experts from the publication Finbold decided to ask Google Bard, a machine learning system, how much the flagship of the crypto market will cost after the long-awaited halving in 2024.
The AI noted that several factors could influence this, but bitcoin is very likely to reach a new all-time high. This will be facilitated not only by halving, but also by a more global implementation of BTC, as well as interest from institutional investors. Speaking of specific figures, Google Bard noted that after the halving, the coin could on a sharp impulse reach the $100,000 mark. On the other hand, Google Bard highlighted factors that could limit the growth of bitcoin. The AI also did not rule out the possibility that the crypto winter may continue in 2024.

– Sam Altman, founder and CEO of OpenAI, which created the popular AI chatbot ChatGPT, has launched his own cryptocurrency, Worldcoin, based on a blockchain system that uses eye recognition for user authentication and distinguishes between humans and bots. On July 24, the Binance cryptocurrency exchange listed the Worldcoin (WLD) token and preliminary trading began in the newly added spot pairs WLD/BTC and WLD/USDT.


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

[Stan NordFX]

Forex and Cryptocurrencies Forecast for July 31 - August 04, 2023

EUR/USD: From Hawks to Not-Yet Doves

The past week was filled with both events and the release of macroeconomic data. Regarding the Federal Reserve meeting on July 26 and the European Central Bank meeting on July 27, there were no surprises in terms of key interest rate hikes. In both cases, they were predictably increased by 25 basis points (bps): to 5.50% for the dollar and to 4.25% for the euro. Therefore, market participants' attention was drawn to the statements made by the heads of these regulators following the meetings.

Jerome Powell, the Chairman of the Federal Reserve, announced during the press conference on July 26 that the US central bank's monetary policy has now become restrictive. As is usual, he deflected a direct answer on whether there will be an additional rate hike within this year. He didn't rule out the prospect of a further surge in the cost of federal fund borrowings but neither did he confirm it, even though it has already touched a 22-year peak.

It became apparent from Powell's remarks that the Federal Reserve no longer anticipates a recession. Instead, the central bank's policy will aim for a 'soft landing' – a state of moderate economic expansion coupled with a continued deceleration in inflation. This upbeat forecast for the stock market prompted further growth in the S&P500 and Dow Jones indices, whereas the yields on US Treasury bonds and the Dollar Index (DXY) dropped. Amidst this backdrop, the EUR/USD pair recorded its weekly high at 1.1149.

Everything changed radically the next day, on Thursday, July 27. Almost simultaneously, with a 15-minute interval, the European Central Bank's decision on interest rates and preliminary US GDP data were announced. 15 minutes later, a press conference led by the head of the European Central Bank, Christine Lagarde, began.

The US economy, against a forecast of 1.8%, expanded by 2.4% in Q2, substantiating Powell's statements and removing the topic of recession from the current agenda. Against this backdrop, the Eurozone economy is clearly lagging behind (for instance, German GDP, after a drop of -0.3% in Q1, contracted further by -0.2% in Q2). The ECB's head lamented this weakness in her address. If a month ago it was said that the European regulator would bring rates to levels that would be sufficiently restrictive, on July 27 everything sounded different. It was now stated that the Governing Council of the Central Bank would maintain restrictive borrowing costs for as long as necessary. In other words, they would at least take a pause, or even cease further tightening of their policy.

Gediminas Šimkus, a member of the Bank's Governing Council, confirmed this, stating that the "economy is weaker in the short term than forecasted" and monetary authorities are "near the peak of rates or at it". As a result of these statements, the probability of a rate hike in September dropped below 50%, and EUR/USD plummeted. The pair bottomed for the week at the mark of 1.0943.

Towards the end of the work week, on Friday, July 28, the pair corrected into the 1.1000 zone. Following the publication of preliminary inflation (CPI) data in Germany and personal consumption expenditure data in the US, EUR/USD closed the five-day period at 1.1016.

As for the near-term prospects, at the time of writing this review on the evening of July 28, 30% of analysts voted for further growth of the pair, 55% foresaw a decline, and the remaining 15% held a neutral position. Among trend indicators on D1, 50% point upwards, 50% downwards. The oscillators present a more specific picture: only 15% recommend buying, 65% selling, and the remaining 20% are neutral. The nearest support for the pair is around 1.0985, followed by 1.0945-1.0955, 1.0895-1.0925, 1.0845-1.0865, 1.0780-1.0805, 1.0740, 1.0665-1.0680, and 1.0620-1.0635. Bulls will encounter resistance in the area of 1.1045, then 1.1085-1.1110, 1.1145, 1.1170, 1.1230-1.1245, 1.1275-1.1290, 1.1355, 1.1475, and 1.1715.

In the coming week, on Monday, July 31, we await data on retail sales in Germany and a whole raft of preliminary statistics for the Eurozone, including GDP and inflation (CPI) data. On Tuesday, business activity indicators (PMI) in Germany and the US will be revealed. The following day, August 2, we will receive data on the level of employment in the private sector of the United States. The labour market statistics will be supplemented on August 3 and 4, when we will learn the number of unemployment benefit claims and such important indicators as wage level, unemployment rate, and the number of new jobs created outside the agricultural sector (NFP) of the country.

GBP/USD: Awaiting the Bank of England's Meeting

The preliminary data released on Monday, July 24, showed a decline in business activity in the UK. According to the Chartered Institute of Procurement & Supply (CIPS), the PMI in the manufacturing sector, which was forecasted at 46.1, actually fell from 46.5 to 45.0 points. The PMI in the service sector and the composite PMI, although they remained above 50, also showed a decline: from 53.7 to 51.5 and from 52.8 to 50.7 points, respectively.

The Bank of England (BoE) meeting will take place on Thursday, August 3, and the market has yet to come to a consistent opinion on how much the regulator will raise the base rate for the pound under current conditions. Will it be 50 basis points or, like the Fed and ECB, 25? We've previously mentioned arguments in favor of both numbers. We'll just repeat some of them.

Three main reasons for the BoE to decide on a 50 basis point increase were formulated by economists of the French financial conglomerate Societe Generale.

Firstly, service sector inflation and wages may have peaked in June, but both indicators remain uncomfortably high. The Consumer Price Index (CPI), although it decreased from 8.7% to 7.9% (forecasted at 8.2%) over the month, is still far from the target level of 2.0%.

Secondly, as Societe Generale believes, investors are avoiding British bonds due to the persistent inflation in the country. Such high and steady inflation means that investors require higher compensation for holding British bonds compared to US Treasuries and German bonds. To reassure investors, it is necessary at this stage to continue a tight monetary policy.

Thirdly, in recent weeks the Bank of England and its governor, Andrew Bailey, have been subjected to extensive criticism for maintaining a soft monetary policy for too long, thereby allowing inflation to rise significantly. Now the BoE may overdo it in an effort to prove its critics wrong.

However, not everyone agrees with the arguments of the French economists. For example, their colleagues from the German Commerzbank note that consumer prices (CPI) in the UK grew much slower in June than expected. Therefore, market expectations for a rate hike are too high and need to be adjusted downwards. This, in turn, will lead to a weakening of the pound. A similar view was expressed by strategists from the largest banking group in the Netherlands, ING, who believe that the rate will be increased by a maximum of 25 basis points.

It can be seen on the long-term chart that the British currency has recovered more than three-quarters after a sharp fall in the second half of 2021 and in 2022. And according to economists at Scotiabank, the pound is "likely to continue to receive support from positive yield spreads, even though a very tight monetary policy will threaten the prospects for UK economic growth next year." Scotiabank predicts that the pound will reach 1.3500 by the end of 2023 and 1.4000 by the end of 2024.

As for the current situation, the GBP/USD dynamics last week were similar to how EUR/USD moved - both pairs reacted to the results of the Fed and ECB meetings, to the statements of their leaders, and to macroeconomic statistics from the US. As a result, the week's maximum was recorded on July 27 at the height of 1.2995, the minimum - the next day at the level of 1.2762, and the final chord sounded at the mark of 1.2850.

The median forecast for GBP/USD in the near term tends to be bearish, with 70% supporting this view and the remaining 30% taking the opposite position. On the D1 oscillators, 15% are coloured green, 25% neutral-grey, and 60% red. For trend indicators, as in the case of EUR/USD, the ratio between green and red is 50% to 50%. If the pair moves south, it is expected to meet support levels and zones - 1.2800-1.2815, then 1.2740-1.2760, 1.2675-1.2695, 1.2575-1.2600, 1.2435-1.2450, 1.2300-1.2330. 1.2190-1.2210. In case of pair growth, it will encounter resistance at levels 1.2880, then 1.2940, 1.2980-1.3000, 1.3050-1.3060, 1.3125-1.3140, 1.3185-1.3210, 1.3300-1.3335, 1.3425, 1.3605.

In the calendar for the upcoming week, in addition to the Bank of England meeting and the subsequent press conference of its management, Tuesday, August 1 can be noted when the final data on business activity (PMI) in the manufacturing sector of the UK economy will be published.

continued below...

[Stan NordFX]

USD/JPY: BoJ Delivers a Surprise

The second half of the past week turned out to be not just volatile, but insanely volatile for USD/JPY. Jumps of 100, 200, and even 300 points followed one after another. Not only did the yen react sharply to the meetings of the Fed and the ECB, but also its own Bank of Japan (BoJ) delivered a surprise. The fire was started by the Nikkei newspaper, which published an insider that the BoJ intends, on the one hand, to maintain control over the bond yield curve in the same range, but on the other hand - to allow the rates of the debt market to go beyond its limits.

The results of the regulator's meeting fully confirmed the journalists' information. As expected, the Japanese Central Bank kept the key rate at an ultra-low negative level of -0.1%. However, for the first time in many years, the new head of the bank, Kazuo Ueda, decided to turn strict targeting of the yield curve into flexible one. For some central banks, this is a common practice. But for the BoJ, it's a desperately bold, revolutionary step.

The target yield level of Japanese 10-year bonds remains 0%. The permissible range of yield changes of +/-0.5% is also maintained. But from now on, this limit should no longer be seen as a hard boundary but is more flexible. True, to certain limits - the Bank of Japan drew a "red line" at the level of 1.0% and will conduct daily purchase operations so that the yield does not rise above this mark.

Initially, this decision literally blew up the market, the yen's rate began to strengthen. USD/JPY dropped to the mark of 138.05. But then everything calmed down. Investors reasoned that, essentially, the BoJ policy remained ultra-soft. The review of the target range for long-term government bonds has purely symbolic significance so far, as it is unknown whether such a range will actually be used.

Especially since there were immediate critics of this decision. Thus, strategists from Commerzbank warned in advance that the possibility of a slight increase in rates could be devastating for the yen. They referred to the potential growth of inflation and the high level of public debt in the country. "With such half-hearted measures," they said, "the Bank of Japan is fuelling fears that the actual cessation of control over the yield curve could be undesirable or impractical. [...] Even if the yen currently benefits from the possibility of a slight increase in interest rates in the long run, this will be a catastrophic signal for it.".

"And in general, it is still unclear what and how will happen in this distant future," thought market participants, and as a result, the end of the week ended in favour of the dollar. The final point of the week was set at the level of 141.15.

At the time of writing the review, the forecast is maximally neutral: a third of analysts believe that in the coming days the pair will continue to grow, a third expect its fall, and a third have taken a wait-and-see position. The readings of the indicators on D1 look as follows. Among oscillators, 35% are coloured red, 25% are gray, and 40% are green (a quarter of them are in the overbought zone). Among trend indicators, green has a total advantage, such are 100%. The nearest support level is located in the zone of 140.60-140.75, then 139.85, 138.95-139.05, 138.05-138.30, 137.25-137.50, 135.95, 133.75-134.15, 132.80-133.00, 131.25, 130.60, 129.70, 128.10, and 127.20. The nearest resistance is 141.95-142.20, then 143.00, 143.75-144.00, 145.05-145.30, 146.85-147.15, 148.85, and finally, the maximum of October 2022, 151.95.

Part from the meeting of the Bank of Japan, no significant economic information related to the economy of this country is expected to arrive in the coming week.

CRYPTOCURRENCIES: In Search of a Lost Trigger

The decisions of the Federal Reserve (and even more so the European Central Bank and the Bank of Japan) have not had a significant impact on bitcoin quotes. After a decline on Monday, July 24, BTC/USD attempted to rise slightly in line with stock indices, but it did not manage to consolidate above $30,000.

Statistics show that after a price surge in June, blue whales (those holding more than 10,000 bitcoins) are locking in profits and selling bitcoin at record rates for 2023, offloading an average of 16,300 coins per day onto exchanges. During this period, the share of whale transactions in the overall inflow to these platforms reached 41%. This even surpasses crisis periods in 2022, such as the Terra project crash and the FTX bankruptcy (when whale proportions were 39% and 33%, respectively).

Conspiracy theorists attribute this sell-off to the whales possessing some kind of insider information. However, it's more likely that the sales are driven by increasing risks due to heightened regulatory pressure on the crypto market from the U.S. Securities and Exchange Commission (SEC), including the legal pursuit of its prominent participants.

As for the smaller members of the whale family (those holding between 1,000 and 10,000 bitcoins), they have been actively replenishing their reserves over the past month. Other market participants behaved fairly passively, not exerting a significant impact on quotes.

The only positive development for the crypto market this summer has been the submission of applications to launch spot bitcoin exchange-traded funds (ETFs) by giants such as BlackRock, Invesco, Fidelity, and others. Thanks to these developments, BTC/USD managed to rise above $30,000 in mid-June.

Senior Bloomberg analyst Eric Balchunas believes that SEC approval of these applications will open up $30 trillion worth of capital to the bitcoin market. According to forecasts by the analytical company Fundstrat, the launch of a bitcoin ETF could increase the daily demand for bitcoin by $100 million. In this case, even before the halving scheduled for April 2024, the price of bitcoin could rise by 521% from its current levels, reaching up to $180,000.

However, clarity about the fate of these applications is still a long way off. For instance, the final decision on BlackRock's application is not expected until the middle of Q3 2023 and no later than mid-March 2024. And this decision does not necessarily have to be positive. As a result of this uncertainty, the joyful excitement among crypto enthusiasts in June has fizzled out, but fear of the SEC remains. This fear continues to put pressure on the market.

Two events could potentially serve as new triggers to initiate a bull rally. The first is a shift in the Federal Reserve's monetary policy towards easing (QE). In other words, it would involve not just an end to the tightening cycle (QT), but the actual start of easing. But so far, this isn't even being discussed. The interest rate will either be frozen at its current level or rise by another 25 b.p. However, based on recent statements, the Federal Reserve does not intend to lower it. In general, we are still far from the point where a significant amount of free money appears on the market, which investors would want to invest in digital assets.

The second trigger is the halving, which could cause not only the subsequent, but also preceding growth in bitcoin. As on traditional markets, shifts in investor sentiment on the crypto market follow certain patterns. Taking into account the so-called "Wall Street Cheat Sheet," which describes the psychology of market cycles, and the emotions traders typically experience, bitcoin is moving towards the "hope" phase after passing through pessimistic phases of "panic," "capitulation," and "depression."

According to the chart by analyst CryptoYoddha, the cryptocurrency is currently going through the "disbelief" or "sucker's rally" stage, with the next step being "hope" for a price recovery, possibly to $50,000 and higher by the end of 2023. The upward movement will correspond to the passage through the stages of "optimism," "belief," "thrill," and finally, "euphoria.".

Cody Buffington, the host of the Altcoin Buzz YouTube channel, holds the view that a surge in bitcoin's volatility will happen even sooner than everyone expects. In his opinion, the impending volatility of the flagship cryptocurrency could rival its growth since January 2023. Buffington noted that in July, the bitcoin price fluctuated in a narrow range around the $30,000 mark, which was a kind of test for both bulls and bears. More often than not, such a flat period occurs before large movements. As evidence, he referred to the Bollinger Bands and a visual display of the indicator, where it can be seen that the bitcoin price chart is in its narrowest state since the beginning of 2023.

A survey of 29 analysts conducted by Finder.com resulted in the following median forecast. Experts expect BTC to rise to $38,488 by the end of the year, with a potential peak for bitcoin in 2023 potentially reaching $42,000. By the end of 2025, according to the average opinion of those surveyed, the price of the coin could reach $100,000, and by the end of 2030 - $280,000.

Naturally, individual forecasts of the experts varied. Overall, the majority of survey participants (59%) are optimistic about BTC and believe that now is a good time to enter the market, 34% simply advise holding existing cryptocurrency, and 7% recommend selling it.

Market strategist Todd "Bubba" Horwitz believes that within the next six months, the flagship cryptocurrency will rise to $35,000, and then to $40,000. Interestingly, "Bubba" has chosen neither the Federal Reserve nor the halving as the trigger, but... Robert F. Kennedy Jr. This Democratic presidential candidate stated that saving the country's economy and supporting the dollar could be facilitated by hard assets such as gold, silver, platinum, and... bitcoin.

Analyst under the pseudonym Trader Tardigrade believes that bitcoin is repeating the same price structure as in the period from 2013 to 2018 when it followed the model of transition from the "previous peak" to the "top-1", which preceded the "top-2" and the "retest" (the stage where bitcoin is now). If this model is correct, the next step will be a price "boom", which could lead to bitcoin's growth to $400,000 in 2026.

Another expert, Stockmoney Lizards, opines that bitcoin has just exited its third historical cycle, during which it reached a historical maximum of $68,900, and has entered its fourth price cycle, the culmination of which could be a new record between $150,000 and $200,000 Q2 or Q3 2025.

Artificial Intelligence also has an opinion on this matter (we couldn't possibly proceed without it!). The experts at Finbold decided to ask the Google Bard machine learning system how much the flagship of the crypto market will cost after the long-awaited halving in 2024. The AI noted that several factors could influence this, but it's highly likely that bitcoin will reach a new all-time high. This will be facilitated not only by halving but also by a more global integration of BTC and interest from institutional investors. Speaking in specific figures, Google Bard noted that after halving, the coin could spike to a $100,000 mark. On the other hand, the AI highlighted factors that could limit the growth of the main cryptocurrency and did not rule out the possibility that the crypto winter could continue in 2024.

As of the time this review was written, on the evening of Friday, July 28, bitcoin doesn't seem to be significantly affected. BTC/USD is being traded around $29,400. The total capitalization of the crypto market has slightly decreased and is at $1.183 trillion ($1.202 trillion a week ago). The Crypto Fear & Greed Index is currently in the Neutral zone, standing at 52 points (compared to 50 points a week ago)


NordFX Analytical Group


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 #cryptocurrencies #bitcoin #stock_market

[Stan NordFX]

July Results: NordFX's Top 3 Traders Surpass $230,000 in Profits

NordFX, the brokerage firm, has summarized the performance of its clients' trading transactions for July 2023. The social trading services, PAMM and CopyTrading, have also been evaluated, as well as the profits gained by the company's IB partners.

- The highest profit in July was achieved by a trader from Western Asia, with account number 1692XXX, whose profit amounted to 192,396 USD. This substantial result was achieved through transactions involving gold (XAU/USD) and the British pound (GBP/USD).
- The second spot in the ranking of the most successful traders of the month was taken by a client from East Asia, account number 1663XXX, who earned 26,699 USD exclusively through transactions with the currency pair XAU/USD.
- Third place on July's honour podium went to a representative from South Asia (account number 1705XXX), whose result, 15,358 USD, was also primarily achieved through operations with gold (XAU/USD).

The situation unfolded as follows in the NordFX passive investment services:

- In CopyTrading, a fairly large number of interesting (at least at first glance) signals periodically appear among startups, combining high profitability with moderate maximum drawdown. Here are just a few of them: G@SDR (profit 126% / max drawdown 27% / lifespan 50 days), Leonard6789 (184%/27%/27), SURE PROFIT (328%/25%/14). However, looking at these impressive results, it should be understood that they have been achieved through quite aggressive trading. Therefore, when subscribing to them, risk factors must certainly be taken into account. One of the main factors in this case is the very short lifespan of these signals.
   
As for the long-livers, we continue to monitor the fate of the signal KennyFXPRO - Prismo 2K. It started working on May 2, 2021. During this time, the 'veteran' experienced two serious drawdowns: on November 14, 2022, and June 20-23, 2023. In both cases, to avoid account liquidation, its author took the difficult step of closing loss-making positions. However, as a result, the signal is still alive and has shown a profit of 231% over 819 days.

- On the PAMM service display, there are two accounts that we have mentioned several times in previous reviews. These are KennyFXPRO-The Multi 3000 EA and TranquilityFX-The Genesis v3. Just like their veteran colleague from CopyTrading, they suffered serious losses on November 14, 2022: the drawdown at that time approached 43%. However, the PAMM managers decided not to give up, and the profit on the first of these accounts exceeded 106% by July 31, 2023, and on the second - 70%.
   
We also continue to monitor the Trade and earn account. It was opened more than a year ago, on March 8, 2022, but was in a dormant state, awakening only in November. As a result, over the past 9 months, its profitability has exceeded 153% with a very small drawdown - less than 13%.

The top three among NordFX's IB partners are as follows:
- A partner from Western Asia, with account number 1645XXX, has claimed the top spot for the third consecutive month. They earned a reward of 13,891 USD in July, bringing their total earnings to nearly 35,000 USD over the three-month period.
- Next is a partner from East Asia, who received 5,565 USD.
- Finally, rounding out the top three is a partner from South Asia, account number 1672XXX, who received a reward of 5,435 USD.


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

[Stan NordFX]

CryptoNews of the Week

– Michael Novogratz, the CEO of Galaxy Investment Partners, shared his investment advice in a recent Bloomberg interview. "For Newbie trader investors who are comfortable with taking risks, I would advise buying Alibaba stocks and investing in silver, gold, bitcoin, and ethereum, which would make up my $100,000 portfolio," he said. For those who are more cautious, he recommends allocating only 30% of their investment to this portfolio, with the remaining balance to be invested in bonds and index funds.
Novogratz's confidence in the future of bitcoin has been bolstered after the largest investment company, BlackRock, filed for a spot bitcoin ETF. The businessman noted that Larry Fink, BlackRock's CEO, had never believed in bitcoin, but has now changed his opinion. "Now, he's saying that BTC will be a global currency, and people worldwide will trust it. He's taken the orange pill. He believes in bitcoin," said Michael Novogratz.

– Peter Brandt, a legendary trader and veteran of the financial industry, believes that over time, bitcoin, the first cryptocurrency, will "emerge from the shadow" of more traditional investment assets like stocks and gold, and in the future, it will be bitcoin that sets the tone in the financial market.
Brandt emphasized that U.S. regulators will certainly approve the launch of spot bitcoin ETFs. However, the analyst believes this approval, and even the halving, won't be news. Following these events, instead of rising, the price of BTC could decline. "In 48 years of speculation," Brandt writes, "I have always found that markets anticipate events before they happen." The Wall Street legend advises always adhering to the adage, "Buy on the rumour, sell on the facts."

– Robert Kiyosaki, the investor and author of the financial bestseller "Rich Dad Poor Dad", has stated that he still favours bitcoin, along with gold and silver. He has noted that the rise in the stock market won't save the U.S. economy as it occurred solely due to President Joe Biden raising the debt ceiling.

– Fernando Perez Algaba, a prominent crypto and forex influencer who disappeared on July 18, was found dead in Argentina, according to media reports. A group of children discovered the millionaire's mutilated body in a suitcase. His head was later found in a backpack, which had been shot three times.
Algaba, in the months prior to his death, had been sharing photos of his opulent lifestyle with his nearly 920,000 Instagram followers. He had also recounted a fairy tale-like story to the media about his rise from a simple pizza delivery man to a highly successful "Forex and crypto trader". However, it came to light at some point that Algaba was grappling with escalating debts, tax complications, and monetary demands from investors in a crypto scheme that he admitted had "spiralled out of control".
A threat to gouge out his eyes and cut off his hands was received by Algaba a week before his assassination. The New York Post reported that one suspect has already been apprehended by the police in relation to the murder of the crypto millionaire.

– Cryptocurrency traders lost digital assets amounting to $303 million due to hacking attacks in July, according to experts from CertiK. The latest major breach involved an attack on DEX Curve Finance's stablecoin pools, exploiting a vulnerability in the Vyper code. The exchange lost digital assets worth about $52 million. It's worth noting that, as per data from PeckShield, the crypto industry experienced at least 395 hacks from January to June 2023, resulting in a theft of approximately $480 million.

– Billionaire venture capitalist Tim Draper, in an interview with FOX Business, stated that the acceptance of the first cryptocurrency, bitcoin, by the world is simply a matter of time. "Retailers will eventually recognize the 2% savings they could make by accepting bitcoin, eliminating the need to pay banks and credit card companies," he explained.
Draper repeated his prediction in July that the value of bitcoin would ascend to $250,000, a milestone he expects will be reached by 2025. Notably, Draper had made the same price prediction back in 2018, although he then envisaged that bitcoin would hit this mark by 2022, a forecast that evidently did not materialize.

– An analyst under the pseudonym TechDev forecasts a slightly lower but still significant figure for BTC. To predict the price of BTC, he relies on the behaviour of traditional financial markets, such as the price of 10-year Chinese government bonds, the dynamics of the Dollar Index, as well as the balance sheets of Central Banks in major countries, and so on. According to him, the coin's price closely follows global liquidity indicators, and the current economic cycle should once again conclude with a substantial increase in the money supply. Therefore, bitcoin is gearing up for growth.
The analyst believes that the logarithmic growth curve indicator, which overlooks short-term asset fluctuations, suggests that by 2025, the leading cryptocurrency will reach a level of $140,000. "Note that this is a very rough approximation, based on specific parameters of the indicator and the steepness of the momentum," TechDev warned. He also noted that another indicator, Bollinger Bands, is in a very narrow range. The last time bitcoin exited such a range, a full-scale bull trend began.

– According to Crystal Blockchain, an analytics firm, Ukraine has received $225 million in cryptocurrencies since February 2022 to counteract the deployment of Russian troops. The bulk of these donations have been in USDT ($83 million), ethereum ($79 million), and bitcoin ($41 million), with additional contributions made in other cryptocurrencies. On the other hand, Russia has also solicited cryptocurrencies for military expenditure, though the total collected is significantly less, ranging between $2 million to $8 million.

– George Milling-Stanley, the Chief Gold Strategist at State Street Global Advisors, maintains that bitcoin cannot be considered a replacement for gold due to the risk of extensive losses. He emphasized that gold has a history spanning 6,000 years during which it has repeatedly proven its reliability and value, whereas bitcoin has only been around for a dozen years. "Bitcoin's volatility merely refutes claims that the primary cryptocurrency is a long-term strategic asset and can compete with gold. Gold is a hedge against inflation. Gold is insurance against a stock market fall. Gold is insurance against a weakening dollar," the strategist stated.
Notably, State Street Global Advisors manages the world's largest physically backed gold ETF. Therefore, it comes as no surprise that George Milling-Stanley is defending the positions of the precious metal.

– Arthur Hayes, the co-founder of BitMEX exchange, has published an article in which he predicts the flagship cryptocurrency will skyrocket to $760,000. In his view, the integration of Artificial Intelligence (AI) projects into the bitcoin blockchain will significantly increase the coin's attractiveness as the base asset of the ecosystem.
Hayes believes that ethereum should exhibit a similar development model. If AI-based projects are integrated into this altcoin, the investment attractiveness of ETH, the primary transaction tool in the network, will greatly intensify. In this case, the altcoin could appreciate by 1,556%. Thus, the BitMEX co-founder doesn't rule out the possibility that ETH might soar to $31,063.
Another factor Hayes considers will stimulate the growth of ETH over the next five years is the expansion of the decentralized finance (DeFi) market. The majority of protocols in this ecosystem are based on ethereum, and their popularity continues to increase. The growth in the number of decentralized exchange (DEX) users will lead to a rise in ETH transaction volumes and, consequently, an increase in the altcoin's price.

– A CME Group report reveals that ETH/BTC exhibits almost zero correlation with changes in interest rates, gold futures, and crude oil. However, it is significantly influenced by factors such as the strength of the U.S. dollar, changes in bitcoin market supply, and the performance of tech company stocks. The research states that ETH is more vulnerable to USD, and the ETH/BTC pair is more influenced by changes in BTC supply than ETH. Simultaneously, ETH often grows relative to BTC on days when tech company stocks increase in value.
According to CME Group economists' predictions: 1) ETH/BTC will follow the price dynamics of bitcoin. This is due to the fact that ETH strongly correlates with BTC, yet it's more volatile than bitcoin. 2) Increased demand for BTC due to geopolitical factors will also strengthen ETH. 3) ETH will strengthen ahead of the bitcoin halving in 2024, assuming BTC's price increases. However, the analysts noted that the growth in demand for crypto assets, which was very strong during the first eight years of bitcoin's existence, has noticeably slowed down in the past five years. Therefore, there is no guarantee that the halving will lead to a price increase for both BTC and ETH.

– A survey conducted on the financial platform Finder has given insights into the future prospects of Ethereum. Industry experts who took part in the survey predict that Ethereum (ETH) will reach an average value of $2,400 by the end of 2023. Furthermore, they estimate that Ethereum's price will escalate to $5,845 by the end of 2025, and by 2030 it will rise to $16,414. It's important to highlight that 56% of these experts believe the present time is the most favourable for purchasing ETH. Approximately 41% recommend holding onto the cryptocurrency, while a meagre 4% suggest selling it.


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

[Stan NordFX]

Forex and Cryptocurrencies Forecast for August 07-11, 2023

EUR/USD: Dollar Bulls Disappointed by NFP

Throughout the past week, leading up to Thursday, August 3, the dollar continued to strengthen its position and build on the offensive that began on July 18. It appears that markets, wary of the global economic condition, have once again turned to the American currency as a safe haven.

Interestingly, the dollar seemed to benefit from Fitch's first downgrade of the long-term US credit rating in 12 years. The agency reduced the rating by one notch from the highest AAA to AA+, a move that seems more of a reputational hit than a trigger for market collapse. However, in such situations, investors tend to shed the weakest and most risky assets in their portfolio, opting for more liquid US treasury bonds and the dollar instead. It's worth recalling 2011 when the US rating downgrade by Standard & Poor's triggered a stock market fall and multi-year dollar growth as it turned out that other countries were in even worse conditions. The shaky state of high-risk corporate bonds doesn't need to be mentioned, as it is self-evident.

A number of analysts do not rule out the possibility that a similar situation could repeat this time around. The key level of the DXY Dollar Index at 100.0 points could serve as a launching pad for further growth. (Round levels like 80.0 during the periods from 1990 to 1995 and in 2014, and 90.0 from 2017 to 2021 played a similar role.).

The macroeconomic data released last week for the United States proved to be rather mixed. On one hand, the Purchasing Managers' Index (PMI) in the country's manufacturing sector grew month-over-month from 46.0 to 46.4 points, but on the other hand, it fell short of the forecast of 46.8. Conversely, the PMI in the services sector declined from 53.9 to 52.7, against a forecast of 53.0. Despite the index remaining in the recovery zone (above 50), the figures suggest that this sector of the economy is also grappling with the consequences of the Federal Reserve's hawkish policy and decreasing consumer demand. The increase in initial jobless claims from 221K to 227K also put pressure on the dollar.

As for the Eurozone, preliminary data shows that inflation, albeit slowly, is beginning to recede. The Consumer Price Index (CPI) fell from 5.5% to 5.3%, which fully met market expectations. The rate of decline in retail sales volumes also slowed, moving from -2.4% to -1.4%, beating the forecast of -1.7%.

Following such statistics, everything was set to be decided on Friday, August 4. The market was awaiting fresh data from the US labour market, including indicators such as wage levels, unemployment rates, and Non-Farm Payrolls (NFP): the number of new jobs created outside the agricultural sector. These figures play a special role as the state of the labour market, alongside inflation, influences the Federal Reserve's decisions regarding future monetary policy.

In the end, the figures didn't change significantly. However, market participants decided that they were more indicative of a bearish than bullish sentiment for the dollar. The increase in average hourly earnings (month over month) remained at the previous level of 0.4%, the unemployment rate dropped slightly from 3.6% to 3.5% (forecast was 3.6%). The NFP figure also remained relatively unchanged, registering at 187K compared to 185K a month earlier. However, this number fell short of expectations of 200K.

The NFP is a key barometer of potential cooling in the US economy. A decline in NFP suggests that the 'screws' have been tightened too much, the economy is stagnating, and perhaps further tightening of monetary policy needs to be paused. At the very least. Or maybe it's time to end the cycle of monetary restriction altogether. This logic drove the DXY down and pushed EUR/USD up. As a result, the pair ended the five-day period at a mark of 1.1008.

As for the near-term prospects, at the time of writing this review on the evening of August 4, only 25% of analysts voted for the pair's growth and further dollar weakening, with 75% taking the opposite stance. The picture is similar among the oscillators on D1: 75% point south (15% are in the oversold zone), 15% point north, and 10% are in the neutral zone. The trend indicators present the opposite situation: 75% recommend buying, and the remaining 25% recommend selling.

The pair's nearest support is located around 1.0985, then 1.0945, 1.0895-1.0925, 1.0845-1.0865, 1.0780-1.0805, 1.0740, 1.0665-1.0680, and 1.0620-1.0635. The bulls will meet resistance around 1.1045, then 1.1090-1.1110, 1.1150-1.1170, 1.1230, 1.1275-1.1290, 1.1355, 1.1475, and 1.1715.

We've already mentioned that the state of the labour market and inflation are the defining factors for Central Banks' monetary policy formation. While we received plenty of statistics on the former last week, the coming week will bring data on the latter. On Monday, August 8, we'll find out what's happening with inflation in Germany, and on Thursday, August 10th, the US Consumer Price Index (CPI) values will be made public. Also, on this day, unemployment statistics in the US will be released. To round off the work week, on Friday, August 11, another important inflation indicator, the US Producer Price Index (PPI), will be revealed.

GBP/USD: Was the BoE Right or Wrong?

The intrigue regarding how much the Bank of England (BoE) would raise the key interest rate on August 3, by 50 or 25 basis points (bps), ended in favour of a more cautious step. The rate increased from 5.00% to 5.25%, returning the GBP/USD pair to the zone of five-week lows, with the local bottom found at the level of 1.2620.

Economists at Commerzbank commented on the decision by the British regulator as follows: "The Bank of England is trying to restore its authority," they write. "However, it is still unclear how successful it will be." Commerzbank believes that the BoE's decision to slow the pace of rate hikes, based only on the fact that June's inflation surprised with a smaller figure, does not necessarily indicate that the Central Bank has changed its overall approach. "If inflationary conditions in the UK continue to improve," the bank's economists believe, "the current rate decision may turn out to be adequate. But if the June inflation report turns out to be an isolated case, then the Bank of England will most likely seem too hesitant again, which will put pressure on the pound.".

In June, the Consumer Price Index (CPI) in the United Kingdom decreased from 8.7% to 7.9% (with a forecast of 8.2%). However, inflation in the country remains the highest among developed nations. Considering that it significantly exceeds the target benchmark of 2%, the British regulator, according to some experts, will still have to maintain a more active stance and continue raising the rate, despite the growing risks of recession.

After the fall of DXY due to disappointing labour market data in the US, GBP/USD ended the week at 1.2748. The median forecast of experts for the near future looks quite neutral. Bears were backed by 45%, bulls by 30%, and the remaining 25% preferred to abstain. Among the oscillators on D1, 10% are coloured green, 15% are neutral grey, and 75% are red (a quarter of them signal oversold). The ratio of green and red for trend indicators remains 50% to 50%, as a week ago. If the pair moves south, it will encounter support levels and zones at 1.2675-1.2695, 1.2575-1.2600, 1.2435-1.2450, 1.2300-1.2330. 1.2190-1.2210, 1.2085, 1.1960, and 1.1800. In case of the pair's growth, it will meet resistance at the levels of 1.2800-1.2815, then 1.2880, 1.2940, 1.2980-1.3000, 1.3050-1.3060, 1.3125-1.3140, 1.3185-1.3210, 1.3300-1.3335, 1.3425, 1.3605.

It's noteworthy that the UK's GDP data is set to be released on Friday, August 11, offering some insight into the country's economic health. However, you can expect more significant volatility in the exchange rate on Thursday, August 10, when the U.S. inflation (CPI) data will be published. These economic indicators wield a significant influence on the exchange rate, and will be closely scrutinized by traders and investors. The outcome could potentially influence the Bank of England's future monetary policy decisions and, in turn, impact the value of GBP/USD.

continued below...

[Stan NordFX]

USD/JPY: Inflation Decides Everything

During the first half of the week, the yen, like other currencies in the DXY basket, retreated under the pressure of the dollar, and the USD/JPY pair reached a high of 143.88. However, then the Bank of Japan (BoJ) came to the aid of the national currency.

We reported in our last review that for the first time in many years, the new head of the Bank, Kazuo Ueda, decided to turn the rigid targeting of the yield curve into a flexible one. The target level of yield on Japanese 10-year government bonds (JGB) remained the same, 0%. The allowable yield fluctuation range of +/-0.5% was also maintained. But from now on, this limit was no longer to be seen as a rigid boundary but became more flexible. Of course, within certain limits – the Bank of Japan drew a "red line" at the 1.0% level and announced that it would conduct purchase operations to keep the yield from rising above this mark.

And now, less than a week after this revolutionary step for the BoJ, the yield on JGB reached nine-year highs near the 0.65% mark. As a result, the central bank hurried to intervene, and to avoid further growth, it conducted an intervention by buying these securities, thereby supporting the yen.

The Japanese currency received further support on Friday, August 4th, due to weak data on the NFP in the USA. As a result, the week's finish for USD/JPY was at the level of 141.73.

There is no doubt that inflation data will be crucial for central banks and, in turn, for currency markets. At the moment, there is much evidence that inflation in Japan will continue to rise. A few days ago, the country's government recommended a 4% increase in the minimum wage, and spring wage negotiations secured the highest wage growth in the last three decades. Against this backdrop, there is increasing evidence that businesses are ready to pass this growth on to consumers, leading to a rise in the Consumer Price Index (CPI). This trend reflects a willingness among Japanese companies to respond to growing labour costs by increasing prices, potentially fuelling inflation. In turn, this may have an impact on the Bank of Japan's policy decisions and influence the value of the yen in currency markets. The situation clearly highlights the interconnectedness of labour markets, monetary policy, and currency value, and underscores the importance of closely monitoring economic indicators and central bank actions.

To combat rising prices, the Bank of Japan's (BoJ) counterparts in the U.S. and Europe are tightening monetary policy and raising interest rates. Analysts at the Dutch Rabobank are hoping that the BoJ will finally follow suit and gradually move away from its ultra-soft policy. As a result, they anticipate that the USD/JPY exchange rate could return to the 138.00 mark within a three-to-six-month period.

The view of strategists at Japan's MUFG Bank is less optimistic. They write, "Currently, we forecast the first rate hike by the Bank of Japan in the first half of next year. The shift towards tightening BoJ policy supports our forecast of yen strengthening in the coming year." As for the recent change in the yield curve control policy, MUFG believes that it alone is insufficient to cause a recovery of the Japanese currency.

Economists at Germany's Commerzbank and Finland's Nordea Bank agree that if the Japanese regulator manages to tame inflation, the yen's exchange rate should rise. However, changes in the Bank of Japan's policy will not happen quickly. Therefore, according to many specialists, significant shifts can only be expected around 2024.

The various views and forecasts presented highlight the complexity of the economic environment and the challenges of predicting monetary policy changes and currency movements. The situation in Japan is particularly nuanced, given the BoJ's long-standing struggle with deflation and its commitment to an extremely accommodative monetary stance. Market participants and policymakers will need to pay close attention to a range of economic indicators, central bank signals, and global economic trends to navigate the evolving landscape.

As for the analysts' short-term forecast, it offers no clear direction. A third of them believe the USD/JPY pair will move north in the coming days, a third expect it to move south, and the final third anticipate a sideways or "east" movement. The indicators on the D1 timeframe look as follows:

Oscillators: 75% are coloured green, and 25% are neutral grey. Trend indicators: The greens have a clear advantage, with 85%, and the reds account for only 15%.

The nearest support level is positioned at 141.40, followed by 140.60-140.75, 139.85, 138.95-139.05, 138.05-138.30, 137.25-137.50, 135.95, 133.75-134.15, 132.80-133.00, 131.25, 130.60, 129.70, 128.10, and 127.20. The nearest resistance stands at 141.20, then 142.90-143.05, 143.75-144.04, 145.05-145.30, 146.85-147.15, 148.85, and finally, the October 2022 high of 151.95.

Given the divergent opinions of analysts and the varying readings of the technical indicators, market participants should approach this currency pair with caution. A careful examination of upcoming economic data releases, central bank statements, and other fundamental factors could provide additional insights into the likely direction of USD/JPY.

No significant information concerning the Japanese economy is expected in the upcoming week. Traders should be aware that Friday, August 11, is a holiday in Japan, as the country observes Mountain Day.

CRYPTOCURRENCIES: ETH/BTC - Who Will Win?

Last week's crypto review was titled "In Search of a Lost Trigger." Over the past week, the trigger has still not been found. After the decline on July 23-24, BTC/USD moved to another phase of sideways movement, vigorously resisting the strengthening dollar. The surge on August 1-2 to $30,000 looked very much like a bull trap and ended with the pair hesitating and returning to the Pivot Point around $29,200. Digital gold, unlike physical gold, hardly reacted to the publication of labour market data in the US on August 4.

Some analysts believe that the crisis in DeFi is putting additional pressure on Bitcoin, and even predict a significant decline for the leading cryptocurrency in the near future. However, in our view, what they call a "crisis" is not actually one. Everything comes down to the vulnerabilities in early versions of the Vyper programming language, which is used to write smart contracts on which decentralized exchanges (DEX) operate. On July 30, liquidity pools in four pairs (CRV/ETH, alETH/ETH, msETH/ETH, pETH/ETH) using early Vyper versions 0.2.15-0.3.0 were hacked on the Curve Finance exchange. Other pools, the total number of which exceeds two hundred, were unaffected. The total loss amounted to about $52 million.

According to CertiK experts, traders lost digital assets worth $303 million as a result of hacking attacks in July. According to PeckShield data, from January to June 2023, the crypto industry faced at least 395 hacks, resulting in the theft of about $480 million. So, the hacking of Curve Finance is certainly unpleasant, but nothing extraordinary. It's far from the scale of last year's crashes in Terra (LUNA) and FTX.

Perhaps in order to feel more or less at ease, one should not put all their eggs in one basket. This was the message from the CEO of Galaxy Investment Partners, Michael Novogratz, in an interview with Bloomberg. "If an investor was Newbie trader and took risks calmly, I would advise him to buy Alibaba shares," the billionaire said. "I would also advise investing in silver, gold, bitcoin, and Ethereum. That would be my portfolio."

Novogratz's confidence in bitcoin's future was bolstered after the largest investment company, BlackRock, filed an application for a spot bitcoin ETF. The businessman noted that BlackRock's CEO, Larry Fink, never believed in bitcoin, but has now changed his mind. "Now he says that BTC will be a global currency, and people around the world will trust it. He took the orange pill. He believes in bitcoin," Michael Novogratz stated.

Peter Brandt, a legendary trader and veteran of the financial industry, has also "taken the orange pill." He believes that over time, the first cryptocurrency will "come out of the shadow" of more traditional investment assets, such as stocks and gold, and in the future, it will be bitcoin that sets the tone in the financial market.

Peter Brandt emphasized that U.S. regulators will surely approve the launch of spot bitcoin ETFs. However, in his opinion, this approval will not be news, just as the halving will not be an event. After them, the price of BTC may even go down instead of up. "In 48 years of speculation," Brandt writes, "I have always found that markets take into account events before they happen." Always follow the saying "Buy on the rumour, sell on the fact," advises the Wall Street legend.

Moderate pessimism regarding the consequences of the halving was also expressed by analysts at CME Group. They noted that the demand for crypto assets, which was very strong during the first eight years of bitcoin's existence, has noticeably slowed down over the past five years. Therefore, in their opinion, there is no guarantee that the halving will lead to an appreciation of either BTC or altcoins.

Despite the warnings, many influencers and crypto enthusiasts continue to compete in forecasting how much bitcoin will grow in the coming years. Here are some opinions, sorted in ascending order. An analyst going by the nickname TechDev forecasts the price of BTC by relying on the behaviour of traditional financial markets, including the price of 10-year Chinese bonds, the dynamics of the Dollar Index, as well as the balances of the central banks of major countries, etc. According to him, the coin's rate closely follows the indicators of global liquidity, and the current economic cycle should once again conclude with massive growth in the money supply. Therefore, bitcoin is preparing for growth. In the analyst's view, the logarithmic growth curve indicator, which ignores short-term asset fluctuations, indicates that the leading cryptocurrency will reach a level of $140,000 by 2025.

"I will note that this is a very rough approximation, based on specific parameters of the indicator and the steepness of the momentum," warned TechDev. The analyst also noted that such an indicator as Bollinger Bands is in a very narrow range. The last time bitcoin exited such a range, a full-scale bull trend began.

Next in our top 3 is venture capitalist and billionaire Tim Draper, who stated in an interview with FOX Business that sooner or later, the entire world will embrace the first cryptocurrency. "It's only a matter of time before retailers realize they can save 2% by accepting bitcoin. They don't have to pay banks and credit card manufacturers," he explained. Draper repeated his forecast for the first cryptocurrency's growth to $250,000, predicting this would happen by 2025. (It's worth noting that the investor had already mentioned this price back in 2018, though at that time he referred to 2022 as the "Hour X." As we can see, the billionaire was mistaken.)

And finally, the gold step of the podium of honor this time goes to BitMEX co-founder Arthur Hayes. He published an article in which he forecasted the flagship cryptocurrency's surge to $760,000. In his opinion, the integration of Artificial Intelligence (AI) projects into the BTC blockchain will sharply increase the coin's appeal as a foundational asset of the ecosystem.

Hayes believes that ethereum should demonstrate a similar development model. If AI-based projects are integrated into this altcoin, the investment attractiveness of ETH, the main transaction instrument in the network, will sharply intensify. In this case, the altcoin may appreciate by 1,556%. In other words, the BitMEX co-founder does not rule out that ETH may soar to $31,063.

Another factor stimulating the growth of ETH over the next five years, according to Hayes, will be the expansion of the decentralized finance (DeFi) market. Most protocols of this ecosystem are based on ethereum, and their popularity continues to grow. An increase in the number of users of decentralized exchanges (DEX) will lead to a growth in transaction volumes with ETH and, consequently, to a rise in the price of the altcoin.

A survey was conducted among industry experts on the financial platform Finder to assess the future prospects of ethereum. The experts forecasted that ETH would be valued at an average of $2,400 by the end of 2023. They also predict that the price of ethereum will reach $5,845 by the end of 2025, and $16,414 by the end of 2030. It's worth noting that 56% of the experts believe that now is the most opportune time to buy ETH, while 41% advise holding the cryptocurrency, and a mere 4% recommend selling it.

PwC, the world's second-largest consulting firm, conducted a survey involving representatives from both cryptocurrency and traditional hedge funds. 93% of those surveyed believe that the market has already hit bottom, and they expect the cryptocurrency market to grow by the end of 2023. Among cryptocurrencies, they continue to favour bitcoin and ethereum. However, 72% think that ethereum has no chance of ever surpassing bitcoin in market capitalization. Of the remaining 28% who believe in the altcoin's victory, the majority expect that it will occur within the next 2 to 5 years.

A recent report from CME Group showed that ETH/BTC exhibits almost zero correlation with changes in interest rates, gold futures, and crude oil. However, it is significantly influenced by factors such as the strength of the dollar, changes in the market supply of bitcoin, and the dynamics of technology company stocks. The research indicates that ETH is more vulnerable to the strength of the USD, and changes in BTC supply have more influence on ETH/BTC than changes in ETH supply. At the same time, ETH often grows relative to BTC on days when technology company stocks (S&P 500 and Nasdaq-100 Tech indices) are on the rise.

As of the time of writing this overview, on the evening of Friday, August 4, BTC/USD is trading around $28,950, ETH/USD is around $1,820, and ETH/BTC is at 0.0629. The total market capitalization of the crypto market continues to decline and stands at $1.157 trillion ($1.183 trillion a week ago). The Crypto Fear & Greed Index remains in the Neutral zone at a mark of 54 points (52 points a week ago).


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

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[Stan NordFX]

CryptoNews of the Week

– Craig Wright, an Australian computer scientist and businessman who claims to be Satoshi Nakamoto, has now expressed his disillusionment. "As the creator of bitcoin, I am both fascinated and disappointed by how far the so-called cryptocurrency industry has deviated from bitcoin's original vision," he wrote. Wright insists that bitcoin was never intended to be an investment or a store of value. Yet, the focus has now shifted towards speculation, quick profits, and "pump and dump" strategies. "It's saddening to see so much attention given to the price, rather than the transformative power of the technology," laments the scientist.

– Adam Back, one of the leading figures in the crypto industry and CEO of Blockstream, has wagered a million satoshi (0.01 BTC) that the price of bitcoin will reach $100,000 before the next halving. The bet was the result of a wager made with a user of platform X (formerly Twitter) under the pseudonym Vikingo. Vikingo believes that the 'digital gold' will not achieve this price level until at least 2025. The head of Blockstream is confident it will happen by March 31, 2024, which is roughly a month before the halving. Blockstream's former Director of Strategy and now CEO of Jan3, Samson Mow, agreed with his former colleague. He also anticipates a new all-time high will be reached before the halving, not after.
At the time of writing, a bet of 1 million satoshi is approximately worth $290. Considering Adam Back's net worth is estimated to be between $100-300 million, the bet amount elicited a number of cheeky comments. Some users even offered to provide the entrepreneur with financial assistance.

– The popular analyst known as PlanB, who created the S2F (Stock-to-Flow) bitcoin forecasting model, believes that by the time of the next halving, BTC will be valued at around $55,000. The S2F model's signals indicate the likelihood of the coin moving to this price point.
Opinions gathered by the BeInCrypto editorial team vary from PlanB's prediction. For instance, analysts from Seeking Alpha believe that the cryptocurrency should be priced at about $98,000 for miners to remain profitable after the halving event.

– Mayor of Miami and U.S. presidential candidate, Francis Xavier Suarez, told CoinDesk TV in an interview that his election campaign is accepting donations in the leading cryptocurrency. Supporters of the politician can donate a minimum of 0.00034 BTC or an equivalent of $1.
"Nobody wants the federal government to know how much money you have and where you keep it," Suarez stated. "The biggest mistake made by this administration [under President Biden] is that they don't understand the crypto industry, so they've resorted to a heavy-handed regulatory approach instead of establishing basic rules.".

– Trader, analyst, and founder of the venture company Eight, Michael Van De Poppe, debunked investors' speculations about the first cryptocurrency's price plummeting to the $12,000 mark and reassured those talking about a total capitulation of altcoins.
"The bear market has been ongoing for over two years," he wrote, making it the longest market in cryptocurrency history. However, this is unsurprising against the backdrop of hacks, bankruptcies, and legal disputes in the crypto industry. From the analyst's observations, bearish sentiments are most often found among those who invested in digital assets for the first time in 2021. "For them, the slow loss of money feels extremely painful, and they only anticipate further portfolio value decline," noted the expert.
In his view, we are currently in the second stage of capitulation – the most boring period of the cycle where it seems like nothing is happening in the markets. "Be patient, take solace in the fact that you're still in the game, accumulate positions. [...] Major companies are entering the fray, and the wisest thing you can do is follow their lead," Van De Poppe advised.

– Founder of the charitable foundation The Bitcoin Foundation, Charles Shrem, believes that the issuance of stablecoins by PayPal (PYUSD) will lead to an increase in the price of bitcoin to at least $250,000 much faster than anticipated. In his view, ETH will surge at an accelerated pace to $18,000 since PYUSD is issued on the Ethereum blockchain. Consequently, the value of this altcoin may rise due to an increased number of network users brought by PayPal clients.
It remains a mystery why Shrem believes PYUSD will positively impact bitcoin's price. A crypto trader known by the pseudonym Smitty thinks that the issuance of stablecoins will, on the contrary, result in a decrease in BTC's value, as it will boost the investment appeal of its competitor, ETH.

– The primary digital asset has been held within a narrow trading range for two months, and network indicators point to accumulation in anticipation of a price breakout. According to the Blockware Intelligence newsletter, the volume of liquid and highly liquid supply is at its lowest level since 2018. Speculative traders swap a decreasing number of coins back and forth, while long-term holders consistently resort to cold storage, Blockware stated.

– Prominent trader, Tone Vays, noted that selling pressure is on the rise and the price of the foremost cryptocurrency could significantly decline. "Bitcoin continues to struggle, but I'd say there's a high probability of the BTC rate dropping to the next moving average. And if daily candles keep closing below the previous ones, I'd advise reducing the position by 50% because I can't pinpoint to what levels bitcoin might drop. It could potentially fall to $25,000. There are enough people in the market who, for some reason, keep selling their coins," the analyst writes.
Tone Vays is convinced: if bitcoin does drop to $25,000, there's a high likelihood of further long-term decline. From an expert's perspective, the primary cryptocurrency "stands on the edge of a cliff, and things are looking grim." "The price needs to rebound immediately, I mean, within this month. We can't afford to decline for another month; otherwise, panic will ensue in the market, and I wouldn't be surprised if BTC trades below $20,000. Moreover, miners might start offloading their reserves, which is highly risky," the specialist warns.
It's worth noting that in late May, Vays predicted a swift rise of the premier cryptocurrency above $30,000. The forecast turned out to be accurate; however, BTC couldn't sustain that level.

– The Arkham Intelligence platform has offered a $46,000 reward for credible information leading to the perpetrator behind the FTX exchange hack. It's worth noting that on November 11, 2022, FTX suffered a theft of crypto assets amounting to approximately $400 million. On the same day, the exchange filed for bankruptcy. To claim the reward, individuals are required not only to identify the hacker but also to provide indisputable evidence of the individual's guilt. Submissions for this bounty must be made by August 17.
Miguel Morel, CEO of Arkham, has expressed that the platform will persistently support such investigations in the future to deter potential offenders.


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

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[Stan NordFX]

Forex and Cryptocurrencies Forecast for August 14-18, 2023

EUR/USD: Inflation, GDP, and Prospects for Monetary Policy

Looking at the two-week flat trend on the EUR/USD chart, one is reminded that it's August, a vacation season. Even the US inflation data released on Thursday, August 10th, couldn't disrupt the relaxed demeanour of traders. And yet, they warrant close attention. The year-on-year Consumer Price Index (CPI) growth of 3.2% and core inflation at 4.7% came in below forecasts (3.3% and 4.8% respectively). The monthly CPI remained unchanged at 0.2%, marking the lowest figure in over two years. As for the GDP, previously released data confirmed a diminished risk of the national economy slipping into a recession. After a 2.0% year-on-year rise in the first quarter of 2023, the second quarter recorded a 2.4% growth, significantly surpassing market expectations of 1.8%.

Therefore, the US boasts a robust economy with a gradually cooling labour market and inflation steadily approaching the 2.0% target level. All of this suggests that the Federal Reserve's monetary policy has been bearing positive fruits. The regulator can now, at the very least, pause the tightening process. They might even conclude the current monetary restriction cycle. The likelihood of the dollar interest rate remaining at the current 5.50% level in September is estimated at 89%, whereas the odds of it increasing by 25 basis points (b.p.) by year's end stand at just 27%.

In such a situation, the dollar should have begun to relinquish its positions, but this did not occur. Of course, immediately after the inflation data release, EUR/USD spiked by approximately 50 points but soon reverted. Why did this happen? While the vacation season theory could be considered, there are two considerably more crucial reasons. The first is the disappointing results of the latest auction for the 30-year US Treasury bonds, which concluded with a yield of 4.199%, lower than rates in the secondary market. The second reason lies in the weakness of the dollar's European counterpart.

The best insight into how the Eurozone's economy is faring is provided by the "Economic Bulletin" published by the European Central Bank (ECB) on that same Thursday, August 10. Here are its key points:

"Inflation continues to decline, but it is expected to remain too high for an extended period." "The immediate economic outlook for the Eurozone has worsened, mainly due to weakening domestic demand. High inflation and tighter financing conditions are suppressing spending growth." "A modest production growth in the Eurozone is anticipated in the third quarter, largely driven by the services sector." "Upside risks for inflation include potential resurgence in energy and food prices, as well as risks associated with Russia's unilateral withdrawal from the Black Sea Grain Initiative." "The prospects for economic growth and inflation remain highly uncertain." According to a recent Reuters poll, such a bulletin from the ECB has left market participants guessing about their next moves.

Next week, Eurostat will present a report with revised GDP data for the Eurozone for Q2 2023, as well as figures for industrial production and inflation for July. The preliminary GDP estimate showed a growth of +0.3% (+0.6% year-on-year) after stagnant growth in Q4 2022 and a decline of -0.1% in Q1 2023. While inflation is on the decline (currently at 5.5%, compared to 10.6% in October 2022), it still exceeds the target level of 2.0%. If the ECB continues to maintain a strict monetary policy and energy prices rise, many economists believe this could lead to a 5.0% drop in the Eurozone's GDP in 2024.

The comparison of the provided data suggests that the US currency currently has a greater chance of prevailing. The dollar's role as a safe-haven asset also plays in its favour. Naturally, a lot hinges on the actions of the Fed and the ECB this fall. As for the past week, after the release of the US production inflation data (PPI), the dollar further strengthened its position, and the EUR/USD pair concluded the week at 1.0947.

At the time of writing this review, on the evening of August 11, 35% of analysts have voiced in favour of the pair's rise in the near term, 50% sided with the dollar and took the opposite stance, and the remaining 15% voted for the continuation of the sideways trend. Among the oscillators on D1, the majority, 80%, favor the US currency (with 15% in the oversold zone), 10% point northward, and 10% are in the neutral zone. Among the trend indicators, 65% recommend selling, and the remaining 35% suggest buying. The nearest support for the pair is located around 1.0895-1.0925, followed by 1.0845-1.0865, 1.0780-1.0805, 1.0740, 1.0665-1.0680, and 1.0620-1.0635. Bulls will encounter resistance around 1.0985, then at 1.1045, 1.1090-1.1110, 1.1150-1.1170, 1.1230, 1.1275-1.1290, 1.1355, 1.1475, and 1.1715.

For the upcoming week, notable events include the release of U.S. retail sales data on Tuesday, August 15. On Wednesday, August 16, the Eurozone's GDP figures will be revealed, and the minutes from the latest FOMC (Federal Open Market Committee) meeting will also be published. Data on U.S. unemployment and manufacturing activity will be presented on Thursday. To cap off the week, on Friday, August 18, we'll get insights into the inflation (CPI) situation in the Eurozone.

GBP/USD: Day X – August 16

According to data released on Friday, August 11, by the UK's Office for National Statistics (ONS), the country's economic growth for the second quarter was 0.2%, compared to a 0.1% increase in the first quarter (with a forecast of 0.0%). Year-on-year, while forecasts were at 0.2%, the actual GDP growth was 0.4% (with the previous figure being 0.2%). The total volume of industrial production in June also rose, registering a +1.8% compared to a forecast of +0.1% and a -0.6% decline in May. Overall, the upward momentum is evident. This reduces the risks of recession and heightens the likelihood that the Bank of England (BoE) will maintain its hawkish stance at least until the end of 2023. Especially given that the country's inflation remains relatively high, with the year-on-year CPI at 7.9%. To combat this, according to predictions, the BoE might increase the key interest rate in 2-3 steps from the current 5.25% to 6.00% this year, giving the British currency a distinct edge.

Strategists at the Netherlands' largest banking group, ING, believe that the positive GDP figures won't be the defining factor for the Bank of England. "The June GDP growth numbers for the UK surpassed expectations," they agree. "However, we believe that the implications for the Bank of England are likely to be quite limited, as the numbers aren't significantly different from its forecasts. The primary focus will be on next week's service sector inflation and wage growth figures, [...] which are crucial for the pound."

GBP/USD closed at the 1.2695 mark on Friday, August 11. The near-term forecast from experts is as follows: 60% are bearish on the pair, 20% are bullish, and the same percentage chose to remain neutral. On the D1 oscillators, bears have a unanimous 100% backing, with 15% of these indicating an oversold condition. Trend indicators display a 65% to 35% split in favour of the bears (red). Should the pair trend downwards, it will encounter support levels and zones at 1.2675, 1.2620-1.2635, 1.2575-1.2600, 1.2435-1.2450, 1.2300-1.2330, 1.2190-1.2210, 1.2085, 1.1960, and 1.1800. In the event of an upward movement, resistance can be expected at 1.2760, followed by 1.2800-1.2815, 1.2880, 1.2940, 1.2980-1.3000, 1.3050-1.3060, 1.3125-1.3140, 1.3185-1.3210, 1.3300-1.3335, 1.3425, and 1.3605.

As for the UK macroeconomic statistics, a flurry of data from the national labour market awaits us on Tuesday, August 15, including indicators such as wage growth and unemployment rates. The next day, on Wednesday, August 16, key inflation (CPI) figures for the United Kingdom will be released. Lastly, on Friday, August 18, we'll receive statistics on retail sales in the country.

continued below...

[Stan NordFX]

USD/JPY: The Pair Returns to its Moonshot

While EUR/USD and GBP/USD spent the week trading sideways, USD/JPY once again soared into the stratosphere. On Friday, it reached a height of 144.995, almost touching the peak of June 30. It last traded at such levels over a year ago, in June 2022. The week concluded slightly lower, settling at 144.93. Neither the Bank of Japan's (BoJ) recent decision to shift from a rigid yield curve targeting for government bonds to a more flexible approach, nor the interventions conducted by the Japanese regulator, were able to support the yen.

Inflation data is crucial for most central banks. To combat rising prices, regulators in the US, EU, and the UK are tightening monetary policy and raising interest rates. However, the BoJ disregards such methods, even as inflation in the country continues to climb. Moreover, the country's government has recommended a 4% increase in the minimum wage, and spring wage negotiations have resulted in the highest wage growth in three decades. Against this backdrop, there's mounting evidence that businesses are ready to pass on these increases to consumers, which could lead to a rise in CPI.

At Japan's MUFG Bank, they forecast that the Bank of Japan might only decide on its first rate hike in the first half of the following year. Only then will there be a shift towards strengthening the yen. As for the recent change in the yield curve control policy, MUFG believes it's insufficient on its own to prompt a recovery of the Japanese currency.

Analysts at Germany's Commerzbank feel that the lack of clarity in the Bank of Japan's policy further depresses the yen and hinders its growth. Over the recent months, when all Central Banks, except the Japanese one, have raised their key rates, one thing has become clear: the monetary policy of the Bank of Japan will not be favourable for the yen in the foreseeable future, Commerzbank shares. They add that the yen is a complex currency to understand, possibly linked to the BoJ's monetary policy.

Strategists at Societe Generale opine that if the USD/JPY pair consolidates above 144.50-145.00, growth may continue to 146.10 (76.4% correction of the movement from last October) and then even higher to 147.90.

Analysts at Credit Suisse also maintain a bullish outlook on the pair and aim higher in their forecasts. "We continue to anticipate a retest of our interim target of 145.00-145.12," they write. "Although this mark is expected to hold again, our core forecast remains bullish, and we anticipate that it will ultimately be breached. This will lead the market to resistance at 146.54-146.66, and eventually, to a target of 148.57.".

Concerning the near-term perspective, the median forecast of experts greatly diverges from the aforementioned opinions. An overwhelming majority of them (80%) expect a correction of USD/JPY downwards. (One possible reason for the decline could be another currency intervention.) The remaining 20% chose to remain neutral. The number of those expecting further growth of the pair this time was zero. Both trend indicators and oscillators on D1 are 100% green, although a quarter of the latter signals overbought conditions. The nearest support level is located at 144.50, followed by 143.75-144.04, 142.90-143.05, 142.20, 141.40-141.75, 140.60-140.75, 139.85, 138.95-139.05, 138.05-138.30, 137.25-137.50. The closest resistance stands at 145.30, followed by 146.85-147.15, 148.85, and finally, the October 2022 high of 151.95.

Among the events of the upcoming week in the calendar, one can note Tuesday, August 15, when data on consumer spending, industrial production volumes, and Japan's GDP will be published. The next day, the value of the Reuters Tankan Business Confidence Index will be known, and on Friday, August 18, we will learn the values of the National Consumer Price Index (CPI).

CRYPTOCURRENCIES: The Search for a Trigger Continues

Two weeks ago, we titled our review "In Search of the Lost Trigger". Over the days that have passed since then, the trigger has still not been found. After the drop on July 23-24, BTC/USD moved to another phase of sideways movement, moving along the Pivot Point around $29,500. According to some analysts, market participants avoided sharp movements in anticipation of inflation data in the US, which was published on Thursday, August 10. Which, as a result, the crypto market completely ignored.

Bitcoin network indicators suggest accumulation in anticipation of a price breakthrough. According to the Blockware Intelligence newsletter, the volume of liquid and highly liquid supply has dropped to its lowest level since 2018. As noted in Blockware, speculative traders are exchanging a decreasing amount of coins back and forth, while long-term holders have tucked their reserves into cold wallets.

Opinions on which direction this breakthrough may take, as usual, are divided. For instance, trader, analyst, and founder of the venture firm Eight, Michael Van De Poppe, refuted suggestions about the first cryptocurrency's price dropping to the $12,000 mark and reassured those talking about a complete capitulation of altcoins.

"The bear market has been ongoing for more than two years," he wrote, making it the longest market in cryptocurrency history. However, this is not surprising given the hacks, bankruptcies, and litigations in the crypto industry. From the analyst's observations, the most bearish sentiments are often found among those who first invested in digital assets specifically in 2021. "For them, the slow loss of money feels extremely painful, and they only expect further portfolio value decreases," the expert noted.

In his opinion, the second stage of capitulation is now taking place: the most boring period of the cycle, during which it seems that nothing at all is happening in the markets. "Be patient, enjoy the realization that you are still in the market, accumulate positions. [...] Big companies are getting into the game, and the wisest thing you can do is to follow them," Van De Poppe advised.

A considerably less optimistic forecast was given by another renowned trader, Tone Vays. He noted that selling pressure is increasing and the price of the first cryptocurrency might significantly decline. "Bitcoin continues to struggle, but I'd say there's a high chance the BTC price could drop to the next moving average. And, if daily candles keep closing below the previous ones, I would advise reducing the position by 50% because I can't predict how low bitcoin might fall. It could easily drop to $25,000. There are enough people in the market who, for some reason, keep selling their coins," the analyst writes.

Tone Vays is convinced: if bitcoin does indeed drop to $25,000, there's a high likelihood of further long-term decline. From the expert's perspective, the first cryptocurrency is "on the edge of a cliff, and things look bad." "The price needs to turn around immediately, I mean - this month. We don't have the luxury to drop another month, otherwise, panic will spread in the market, and I won't be surprised if BTC trades below $20,000. Miners will also start liquidating their holdings, which is very dangerous," warns the specialist. (It's worth noting that at the end of May, Vays spoke about the imminent rise of the first cryptocurrency above $30,000. The forecast turned out to be correct, but BTC couldn't maintain that level.).

A potential trigger for the start of a bullish rally could have been the news of payment giant PayPal issuing its own stablecoin, PayPal USD (PYUSD). This was announced on Monday, August 7. The founder of the charity The Bitcoin Foundation, Charlie Shrem (Charles Shrem), quickly stated that this event would lead to a rise in bitcoin's price to at least $250,000. Moreover, this will happen much faster than expected. In his opinion, ETH will also appreciate at an accelerated pace to $18,000, as PYUSD is issued on the Ethereum blockchain. Consequently, the price of this altcoin may increase due to a rise in the number of network users from PayPal's clientele.

However, unlike Charlie Shrem, most experts reacted sceptically to the news, as the tool doesn't offer anything new or useful for users. It also remains a mystery why Shrem suddenly decided that PYUSD would positively affect the price of bitcoin. Logically, the issuance of stablecoins should, on the contrary, cause a decrease in BTC's value, as it would enhance the investment appeal of a competitor - ETH. Nonetheless, PYUSD did not act as a trigger for either bitcoin or Ethereum, which is evident from the BTC/USD and ETH/USD charts.

As a result, investors have three events in "reserve" that can potentially push the crypto market upward. These are: 1) a radical easing of the monetary policy of the US Federal Reserve, 2) the approval by the Securities and Exchange Commission (SEC) to launch spot bitcoin ETFs, and 3) the bitcoin halving.

It should be noted that the next halving is tentatively scheduled for April 12, 2024. Every 210,000 blocks or once every 4 years, it halves the reward that miners receive for mining a block. This is done to create a deflationary environment and support the value of BTC by reducing the rate of new coin issuance. (The total emission limit is set at 21 million coins). Initially, from 2009, miners received 50 BTC for each generated block. In 2012, the reward was reduced to 25 BTC, in 2016 to 12.5 BTC, and after 2020, to 6.25 BTC. When the 2024 halving occurs, the mining reward will decrease to 3.125 coins.

As a result of this event, miners will have to adapt to the new reality. They will need to acquire more powerful and energy-efficient equipment or upgrade existing ones. According to forecasts, many small companies will likely leave the market or be acquired by larger players. Consequently, a centralization of the mining market can be expected, which will be taken over by a few large pools. This will make the network more susceptible to manipulations and hacker attacks. However, a sharp increase in the price of BTC can at least partially offset these negative factors.

Many market participants expect that after this event, the bitcoin price might skyrocket once again, as evidenced by historical data. After the 2012 halving, the BTC price rose from $11 in November 2012 to $1,100 in November 2013. The 2016 halving: the price increased from $640 in July to $20,000 in December 2017. The 2020 halving allowed the coin's price to rise from $9,000 in May 2020 to a peak of $69,000 in November 2021. However, despite these statistics, experts warn that past results do not guarantee their repetition in the future.

One of the leading figures in the crypto industry and CEO of Blockstream, Adam Back, placed a bet of one million satoshi (0.01 BTC) that the price of bitcoin would reach $100,000 a month before the halving. The bet was made as a result of a wager with a user of platform X (formerly Twitter) under the nickname Vikingo, who believes that the digital gold quotes will not reach this height until 2025.

Back's former colleague at Blockstream, and now CEO of Jan3, Samson Mow, agreed with him. Experts from Seeking Alpha mention almost the same figure. They believe that the cryptocurrency should be worth about $98,000 for miners to stay afloat after the halving. However, a popular analyst known as PlanB, based on his S2F model, stated that by the time of the halving, BTC will be worth much less - only about $55,000.

As of the time of writing this review, on the evening of Friday, August 11, BTC/USD is trading around $29,400, ETH/USD is around $1,840. The total market capitalization of the crypto market has grown and is now $1.171 trillion ($1.157 trillion a week ago). The Crypto Fear & Greed Index remains in the Neutral zone at 51 points (54 points a week ago).


NordFX Analytical Group


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 #cryptocurrencies #bitcoin #stock_market

[Stan NordFX]

CryptoNews of the Week

– The digital gold market has reached a stage of extreme apathy and exhaustion, with volatility indicators at the beginning of the week hitting record low levels. This conclusion was drawn by Glassnode analysts. To support their statement, the experts pointed to the Bollinger Bands spread narrowing to 2.9%. Lower values were observed only twice in history: 1) in September 2016, when quotes were at $604 ahead of the bull market's onset, and 2) in January 2023, when the price traded between $52 and was at $16,800.
Such low volatility reflects a situation where the acquisition cost of most coins moving on the blockchain is very close to the spot price. For this reason, realized gains and losses are relatively small. "This suggests that all investors wanting to lock in profits or losses at this price range have done so. The market needs to take steps to incentivize new spending and break the investors' apathy," the specialists explained.

– Michael Van De Poppe, a trader, analyst, and founder of Eight Venture Company, posits that we're currently in the second phase of capitulation. This phase is often perceived as the most uneventful period in the cycle, making it feel as though the markets are stagnant. "Stay patient and find solace in the fact that you're still engaged in the market. Continue to accumulate positions," Van De Poppe suggests. He emphasizes that as major corporations make their moves, the smartest strategy is to follow their lead. He believes that for bitcoin to experience substantial growth, it needs to break the $29,700 barrier. Once this is achieved, its next significant milestone will be reaching $40,000.

– Kevin Kelly, the co-founder and head of research at Delphi Digital, has identified signs of an early bull rally. According to Kelly, a typical crypto cycle begins when bitcoin reaches an all-time high (ATH), followed by an 80% drop. Roughly two years later, it rebounds to its previous ATH and continues to ascend to a new peak. This pattern typically spans about four years.
Kelly believes this trend isn't arbitrary and aligns with a "broader business cycle." He observed that bitcoin's price peak often coincides with the ISM manufacturing index, which is currently in the final phase of a downtrend. This situation reminds Kelly of the market dynamics between 2015 and 2017.
He pointed out that the last two bitcoin halvings occurred approximately 18 months after the asset hit its lowest point and seven months before it broke its historical high. The next halving is anticipated in April 2024. Following that, Kelly estimates that about six months later, bitcoin might reach a new ATH. However, he cautioned that there's no certainty this scenario will play out as described. He also speculated on the possibility of a "false bottom" emerging.

– An analyst known as Ignas has also conducted a cyclical analysis and predicts a bitcoin bull market in 2024. He bases his projection on a recurrent sequence observed in the primary cryptocurrency over the years: 1. A descent of 80% from its all-time high (ATH), bottoming out a year later (4th quarter of 2022). 2. A two-year period to recover and reach its preceding peak (4th quarter of 2024). 3. An additional year of price appreciation leading to a new ATH (Q4 2025).
Ignas notes that in 2022, the cryptocurrency sector grappled with macroeconomic hurdles. However, current indications suggest an improving landscape. The anticipated bitcoin halving in April 2024 might align with a worldwide uptick in liquidity, potentially fuelling the expected bull run. Furthermore, emerging applications for bitcoin and the initiation of spot bitcoin ETFs, once greenlit by the SEC, are likely to have a consequential impact on its price.

– Based on a survey conducted by the popular blogger and analyst known as PlanB, 60% of respondents believe that a bull market will commence following the halving. PlanB himself estimates that by the time of this event, BTC will be valued at around $55,000. Indications for the coin's potential rise to this level are suggested by the Bitcoin forecasting model S2F, which was developed by him.

– Since November 2022, the Russian rouble has depreciated by approximately 65% (from 50 to 100 roubles per $1). This devaluation has allowed miners in Russia to earn substantially more since mining costs have remained constant. This has sparked a significant surge, despite international sanctions. Representatives from the company BitCluster have shared that orders for large batches of equipment (of 10, 20, or even 30 MW) are coming in almost daily. "The market simply can't construct new data centres fast enough to meet the demand. Major clients find themselves waiting for months," shared sources at BitCluster.
A significant portion of the demand comes from Chinese miners who are migrating from the US to Russia. However, there remain inherent risks in conducting this business in Russia due to the near absence of regulatory oversight.

– The author of the best-selling financial book "Rich Dad Poor Dad," Robert Kiyosaki, dubbed gold and silver as "God's money," while designating bitcoin as the "dollar of the people." "I have an affinity for bitcoin primarily because we both oppose the same entities - the US Federal Government, its Treasury, the Federal Reserve, and Wall Street. I hold no trust in them. If you trust them, then keep your savings in dollars; you'll essentially have an IOU," he expressed.
He further opined, "Bitcoin seems to be on a trajectory towards $100,000. The downside: if there's a crash in the stock and bond markets, we might see gold and silver prices soaring astronomically. Even grimmer, a collapse of the global economy could see bitcoin valued at a million, with gold potentially costing $75,000 and silver around $60,000. The magnitude of the national debt is alarming, putting everyone in a precarious position," Kiyosaki commented. He concluded with, "I sincerely hope I'm mistaken.".

– Goldman Sachs strategists anticipate that the US Federal Reserve (Fed) will cut its key interest rate in the second quarter of 2024. Such a move is expected to provide a boost to BTC's price. The motivation behind this rate cut could be the inflation reaching its target rate of 2.0%. However, Goldman Sachs acknowledges that the Fed's actions remain unpredictable, and the rate might linger at its peak level for an extended period.
For context: According to the CME FedWatch Tool, 68% of market participants expect that by May 2024, the rate will be reduced by at least 25 basis points.

– American political commentator Jon Stewart accused Wall Street, the global financial hub, of corruption and compared its operations to the schemes of Sam Bankman-Fried, the head of the now-bankrupt cryptocurrency exchange FTX. "His objective was to sow discord in certain parts of the financial system, namely the cryptocurrency sector. When I look at the intricate workings of Wall Street, it doesn't seem much different from what Bankman-Fried was up to," Stewart stated.

– Well-known trader and analyst, Dave_the_Wave, who has a reputation for accurate predictions, has cautioned that bitcoin might undergo a major correction by the end of 2023. He suggests that bitcoin could drop to the lower end of its Logarithmic Growth Curve (LGC), marking an approximate decline of 38% from its high this year. However, Dave_the_Wave also points out a silver lining: as bitcoin experiences heightened price stabilization from a macroeconomic standpoint, it's gradually shedding its volatility and evolving into a more stable investment asset.


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

[Stan NordFX]

Forex and Cryptocurrencies Forecast for August 21-25, 2023

EUR/USD: What Strengthens the Dollar and What Can Weaken It

The US currency maintained its ascent last week. The minutes from the Federal Open Market Committee (FOMC)'s July meeting of the US Federal Reserve were published on Wednesday, August 16, suggesting the possibility of further monetary policy tightening.

Before the minutes were unveiled, market players debated how long the central interest rate would linger at 5.5%. However, once the document's content was revealed, discussions shifted to how much more this rate could increase. Several FOMC members expressed in the minutes that the current economic landscape might not see as significant a decrease in inflation as hoped. This sentiment paves the way for the Fed to consider another rate hike. As a result, the likelihood that the interest rate could climb to 5.75% or even higher in 2023 has surged from 27% to 37%, reinforcing the dollar's position.

Other factors bolstering the US dollar include the favourable state of the securities market and the robust health of the US economy. Positive retail sales figures prompted the Federal Reserve Bank of Atlanta to revise its Q3 GDP forecast for the country, raising it from 5.0% to 5.8%. The real estate market is also showing promising signs: the monthly issued construction permits rose by 0.1%. Furthermore, the construction of new homes increased by 3.9%, reaching 1.452 million units, surpassing the projected 1.448 million. Retail sales statistics released on August 15th further supported the Dollar Index (DXY), with consumer activity in July expanding by 0.7%: outpacing the anticipated 0.4% and the prior 0.2% figure. Collectively, these data points underscore a diminishing risk of the US economy entering a recession, suggesting a likely continuation of the monetary restriction phase. Additionally, escalating oil prices might nudge the regulator towards subsequent rate hikes, potentially spurring another inflationary wave.

On the other hand, the situation in the US banking sector could pose challenges for the dollar. Neil Kashkari, the President of the Federal Reserve Bank of Minneapolis, believes that the crisis that began in March, leading to the bankruptcy of several major banks, might not yet be over. He opines that if the Federal Reserve continues to raise interest rates, it will significantly complicate the operations of banks and could trigger a new wave of bankruptcies. This perspective is echoed by analysts at Fitch Ratings. Their projections even consider the possibility of downgrading the ratings of several US banks, including giants like JPMorgan Chase & Co.

Strategists at Goldman Sachs believe that the Federal Reserve might only consider reducing the key rate in Q2 2024. A potential trigger for this move could be the inflation rate stabilizing at the target level of 2.0%. However, Goldman Sachs acknowledges that the actions of the regulator remain unpredictable, which means the rate could stay at peak levels for a more extended period. Overall, according to the CME FedWatch Tool, 68% of market participants anticipate that by May 2024, the rate will be reduced by at least 25 basis points (b.p.).

Regarding the Eurozone's economy, data published on August 16th showed that it grew by 0.3% (quarter-on-quarter) for Q2 2023. This figure aligns perfectly with predictions and matches the growth rate of Q1. On an annual basis, the GDP growth stood at 0.6%, which is consistent with both forecasts and the previous quarter's numbers. The inflation figures released on Friday, August 18, were also unsurprising. They matched both market expectations and previous figures. In July, the Core Consumer Price Index (CPI) was recorded at 5.5% (year-on-year) and -0.1% (month-on-month).

Amid such consistently modest economic performance, the euro continues to face downward pressure. Factors contributing to this include the potential energy crisis in Europe this upcoming winter and uncertainties surrounding the monetary policy of the European Central Bank (ECB).

Starting the five-day trading period at 1.0947, EUR/USD closed at 1.0872. As of the evening of August 18, when this review was written, 50% of analysts predict a rise for the pair in the near future, 35% favour the dollar, and the remaining 15% maintain a neutral stance. Regarding oscillators on the D1 timeframe, 100% are leaning towards the US currency, but 25% of them indicate that the pair is oversold. Trend indicators show 85% pointing southward, while the remaining 15% look north. The nearest support levels for the pair lie in the range of 1.0845-1.0865, followed by 1.0780-1.0805, 1.0740, 1.0665-1.0680, 1.0620-1.0635, and 1.0525. Bulls will encounter resistance in the range of 1.0895-1.0925, then at 1.0985, 1.1045, 1.1090-1.1110, 1.1150-1.1170, 1.1230, 1.1275-1.1290, 1.1355, 1.1475, and 1.1715.

Next week, the spotlight will be on the symposium of heads of major central banks in Jackson Hole, taking place from August 24 to 26. If the Federal Reserve Chairman, Jerome Powell, even hints at the imminent conclusion of the current rate-hike cycle in his speech on August 25, the DXY (Dollar Index) might turn downward. However, it's evident that currency pair dynamics will also depend on what leaders of other central banks say, naturally including ECB President Christine Lagarde.

Other notable events for the week include the release of US labour market data on August 22 and 23. On Wednesday, August 23, business activity indicators (PMI) for the United States, Germany, and the Eurozone will be disclosed. Additionally, on Thursday, August 24, statistics on durable goods orders and unemployment in the US will be made available.

GBP/USD: BoE's Indecision - A Disaster for the Pound

GBP/USD has oscillated within the 1.2620-1.2800 range for the past two and a half weeks, with neither bulls nor bears establishing a clear upper hand. Despite the Bank of England (BoE) recently raising interest rates, bullish momentum for the pound remains elusive.

There's growing concern among market stakeholders that an aggressive monetary policy tightening could further destabilize the UK's already fragile economy, which teeters on the brink of recession. In July, the unemployment rate rose notably by 0.2%, settling at 4.2%. More worryingly, youth unemployment surged by 0.9%, moving from 11.4% to 12.3%. Additionally, there was an increase of 25K in those claiming unemployment benefits compared to the prior month. This rise in unemployment can be largely attributed to the wave of business bankruptcies that initiated in 2021. This trend saw a stark acceleration in early 2022, matching levels witnessed only during the late 1980s crisis and the 2008 financial meltdown.

As per the latest data released by the Office for National Statistics (ONS) on August 18, retail sales in the UK for July declined by 1.2% on a monthly basis, a more significant drop than the 0.6% seen the previous month. On an annual basis, there was a 3.2% contraction, compared to the 1.6% decrease observed in June.

The inflation data (CPI) released on August 16 indicates that despite dropping from 7.9% to 6.8% year-on-year (YoY), inflation remains notably high. Moreover, the core rate remained steady at 6.9%. The rising cost of energy could potentially lead to a further inflationary surge.

The market firmly believes that the Bank of England must take appropriate action in response. The central bank might need to continue increasing rates not only this year but potentially into 2024. However, as economists from Commerzbank suggest, if in the coming weeks the market gets the impression that the BoE is wavering in its commitment to tackle inflationary risks for fear of hampering the economy too much, it could have catastrophic implications for the pound.

GBP/USD closed at 1.2735 n Friday, August 18. Experts' forecast for the near future is as follows: 60% lean bullish on the pound, 20% are bearish, and the remaining 20% prefer a neutral stance. On the D1 oscillators, 50% are coloured red, indicating a bearish trend, while the other 50% are in a neutral gray. For trend indicators, the ratio of red to green is 60% to 40%, favouring the bullish side.

Should the pair move downward, it will encounter support levels and zones at 1.2675-1.2690, 1.2620, 1.2575-1.2600, 1.2435-1.2450, 1.2300-1.2330, 1.2190-1.2210, 1.2085, 1.1960, and 1.1800. If the pair ascends, resistance will be met at 1.2800-1.2815, 1.2880, 1.2940, 1.2980-1.3000, 1.3050-1.3060, 1.3125-1.3140, 1.3185-1.3210, 1.3300-1.3335, 1.3425, and 1.3605.

In terms of macroeconomic data, Wednesday, August 23 will be the "PMI day" not only for Europe and the USA but also for the UK, as business activity indicators in various sectors of the British economy will be released. And, of course, one cannot forget about the annual symposium in Jackson Hole.

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