Daily Market Analysis from NordFX

Forex and Cryptocurrencies Forecast for July 18 - 22, 2022


EUR/USD: Parity 1:1 Achieved

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

USD/JPY: The Storm After the Calm

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

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

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

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

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

CRYPTOCURRENCIES: The Beginning of the End of the Bear Phase


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

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

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

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

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

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

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

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

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

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

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

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

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

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


NordFX Analytical Group


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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Forex and Cryptocurrencies Forecast for August 01-05, 2022


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

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

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

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

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

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

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

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

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

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

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

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

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

GBP/USD: BOE Decision Threatens to Become a Sensation

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

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

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

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

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

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

USD/JPY: Record 500 Pips Down


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

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

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

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

CRYPTOCURRENCIES: Bitcoin May Rise. But not soon.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


NordFX Analytical Group


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

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

Forex and Cryptocurrencies Forecast for August 08 - 12, 2022


EUR/USD: Unexpected Positive News from the US

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

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

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

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

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

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

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

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

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

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

GBP/USD: Bank of England: No Sensation Happened

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

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

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

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

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

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

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

USD/JPY: High Volatility, Neutral Outlook

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

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

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

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

CRYPTOCURRENCIES: Influencers Talk about a Very Long Crypto Spring


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


NordFX Analytical Group


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

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

Forex and Cryptocurrencies Forecast for August 22 - 26, 2022


EUR/USD: Back to 1:1 Parity

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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

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


NordFX Analytical Group


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

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

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


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

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

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

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

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

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

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

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

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


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

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

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


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

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

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

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

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

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


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

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

Forex and Cryptocurrencies Forecast for September 19 - 23, 2022


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

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

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

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

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

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

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

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

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

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

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

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

GBP/USD: Ahead of the Bank of England Meeting

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

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

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

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

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

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

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

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

USD/JPY: Ahead of the Bank of Japan Meeting

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

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

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

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

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

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

CRYPTOCURRENCIES: ETH After the Merge: Fall Instead of Growth


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

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

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

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

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

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

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

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

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

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

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

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

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

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


NordFX Analytical Group


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

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

Results of September 2022: Gold Is Still Valuable at NordFX


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

Gold, or rather the XAU/USD pair, remains one of the most popular instruments among traders of the NordFX brokerage company. So, it was this precious metal that helped them take all three steps of the podium in September.

- The highest profit in the first month of autumn was received by a client from West Asia, account No. 1634XXX. Trading on the XAU/USD pair, this trader managed to earn 34,551 USD.
- The second step on the September podium went to the representative of East Asia (account No.1646XXX), whose result of 24,154 USD was also achieved thanks to transactions with gold.
- This precious metal helped another trader from West Asia as well (account No.1632XXX) enter the September TOP-3 with a profit of 22,735 USD.

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

- At CopyTrading, we highlighted a number of startups a month ago. That's what we call them because of their short lifespan, which is an additional risk factor. Three such signals continued to work in September, still attracting attention. These are Andy EU250 (profit 372%/maximum drawdown 26%/75 days of life), JANUNGFX (261%/48%/75) and PT_bot Scalping (51%/8%/99) signals. Here, as usual, we recall that, in addition to a short lifespan, aggressive trading is a serious risk factor. Therefore, we urge you to be extremely cautious when working on financial markets.

- As for ?veteran? signals, the first of them, KennyFXPro, Prismo 2K, has increased profits to 208% in 522 days with a maximum drawdown of about 45%. The readings of the second, KennyFXPro - The Cannon Ball, are slightly lower in all respects: a lifespan of 190 days, a profit of 61%, a drawdown of slightly less than 13%.
   
- The TOP-3 in thePAMM service has undergone certain changes over the past month. The leader is still the same manager under the nickname KennyFXPRO. The capital on his KennyFXPRO-The Multi 3000 EA account has been increased by 155% in 621 days. The account TranquilityFX-The Genesis v3 also remained among the leaders, showing a profit of 117% in 553 days. Both of these accounts have a very moderate maximum drawdown, about 20%. KennyFXPro - The Multi 3000 v2, closes the top three, which showed a return of 32% in 103 days of life with a drawdown of less than 14%.

TOP 3 NordFX IB Partners in September are as follows:
- the largest commission amount, 15,684 USD was accrued to the partner with account No.1645ХXХ;
- the second place went to the owner of account No.1507ХХХ, who received 8,394 USD;
- and, finally, the partner with account No.1633XXX, who received 7,178 USD as a reward, closes the top three.


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

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