Daily Market Analysis from NordFX

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


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

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

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

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

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

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


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

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

Forex and Cryptocurrencies Forecast for January 16 - 20, 2023


EUR/USD: Low Inflation Has Dropped the Dollar

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

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

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

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

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

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

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

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

GBP/USD: Surprise from UK GDP

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

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

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

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

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

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

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

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

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

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

CRYPTOCURRENCIES: Thaw or Crypto Spring?


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


NordFX Analytical Group


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

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

Forex and Cryptocurrencies Forecast for January 23 - 27, 2023


EUR/USD: The Calm Before the Storm


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

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

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

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

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

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

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

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

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

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

GBP/USD: Pound Counts on the Best

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

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

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

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

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

USD/JPY: Yen Outlook Is Positive as Well

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

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

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

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

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

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

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

CRYPTOCURRENCIES: Bitcoin Victory Over Artificial Intelligence

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

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

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

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

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

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

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

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

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

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

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

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

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


NordFX Analytical Group


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

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

Gold and Yen Became Most Profitable Instruments for NordFX Top Traders in January


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

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

The passive investment services:

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

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

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

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

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


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

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

Forex and Cryptocurrency Forecast for February 06 - 10, 2023


EUR/USD: Three Weeks of Uncertainty

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

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

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

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

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

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

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

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

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

GBP/USD: Riddles from BoE

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

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

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

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

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

continued below...

Forex and Cryptocurrency Forecast for February 13 - 17, 2023


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

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

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

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

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

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

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

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

GBP/USD: Coming Week: Volatility Guaranteed

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

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

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

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

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

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

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

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

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

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

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

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

CRYPTOCURRENCIES: Should Bitcoin ?Take a Break??


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

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

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

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

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

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

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

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

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

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

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

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

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


NordFX Analytical Group


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

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

Forex and Cryptocurrency Forecast for February 27 - March 3, 2023


EUR/USD: FOMC Protocol Strengthens the Dollar


Macroeconomic statistics in both the US and the Eurozone look mixed. In both regions, inflation is slowing down (which is good), but GDP growth is also decreasing (which is bad for the economy). According to the US Department of Commerce, the pace of consumer spending growth in the country for Q4 was +1.4% after +2.3% in Q3 (forecasted at +2.1%). The US GDP growth rate on an annual basis, according to preliminary estimates, will be lower than expected, +2.7% (forecast and previous value +2.9%). However, despite this, labour market statistics look positive enough. The number of initial claims for unemployment benefits, forecasted at 200K, actually decreased from 195K to 192K. According to final data from Eurostat, inflation in the Eurozone slowed down to +8.6% YoY in January (+9.2% a month earlier). Things are becoming more difficult in Germany, the main locomotive of the European economy. According to January data, the annual inflation rate was +9.2% compared to +9.6% in December, but at the same time, the country's GDP also went down, with a decline of -0.4% (forecast and previous value -0.2%). The very fresh February CPI data did not please either, showing an increase from +8.1% to +8.7%.

Against this backdrop, market sentiment remains in favour of the US dollar. This is primarily due to the Federal Open Market Committee's (FOMC) meeting minutes, which were published on Wednesday, February 22 by the US Federal Reserve. The minutes did not bring any surprises. However, market participants saw once again that the regulator is not going to stop its fight against inflation.

United Overseas Bank (UOB) summarized the main conclusions from the minutes as follows: 1) Despite progress in the fight against inflation, it remains significantly above the target level of 2%. 2) All Committee members agreed that achieving inflation targets will require more interest rate hikes and keeping it at a high level until the Fed is confident that inflation is sustainably going down. 3) Although the FOMC voted in February to raise the rate by 25 basis points (bps), several participants wanted it to be increased by 50 bps. 4) The Fed is still more concerned about inflation than slowing economic growth.

US Treasury Secretary Janet Yellen confirmed these conclusions. She stated at the G20 finance ministers and central bank governors meeting on Friday, February 24 that "inflation is coming down, measured on a 12-month basis, but core inflation is still above 2%". According to Janet Yellen, a "soft landing" for the economy without a recession is possible thanks to the strong labour market and strong US balances.

All of the above has led to the US dollar index, DXY, continuing its rise, reaching a local high of 105.26 points, while EUR/USD ended the workweek at the level of 1.0546 (week low at 1.0535).

Most likely, the main factor determining the dynamics of the dollar until the next FOMC meeting on March 21-22 will be speculations on how far the regulator is willing to go in its "crusade" against inflation. According to UOB's forecast, the rate may be raised by 25 bps in March and May, ultimately reaching 5.25%, and remain at this level until the end of the year. According to some other estimates, the peak federal funds rate by July could be 5.38%.

According to specialists at ING, the largest banking group in the Netherlands, February and March are seasonally strong months for the dollar, and the rate of 4.50% for overnight deposits may still slightly support the dollar. However, according to their colleagues at Commerzbank, it will become increasingly difficult for the US currency to strengthen against the euro. Much has already been priced in, and there are no strong new drivers in sight. Especially since the ECB is not standing still in tightening its monetary policy. The final data on consumer prices in the Eurozone, which were revised upwards to 5.3% in the core index, published on February 23, will be the next stimulus for such QT.

At the time of writing this review (evening of February 24), 40% of analysts expect further strengthening of the dollar (half as many as a week ago), 50% expect a correction of EUR/USD to the north, and the remaining 10% have taken a neutral position.

All 100% of D1 oscillators are painted red, although a quarter of them are signalling the pair is oversold. Among trend indicators, 75% recommend selling and 25% buying. The nearest support for the pair is located in the zone of 1.5000-1.0525, then come levels and zones of 1.0440 and 1.0370-1.0400, 1.0300, 1.0220-1.0255. Bulls will encounter resistance in the region of 1.0560-1.0575, 1.0600-1.0620, 1.0680-1.0710, 1.0745-1.0760, 1.0800, 1.0865.

Events of the upcoming week include the publication of data on orders for capital goods and durable goods in the US on Monday, February 27. Wednesday, the first day of March, will bring a large volume of macro statistics from Germany. This includes the Harmonized Consumer Prices Index (CPI), the Purchasing Managers' Index (PMI) in the manufacturing sector, as well as the change in the number of unemployed in the country. In addition, the value of the PMI in the US manufacturing sector will be announced on this day. We are expecting the February CPI for the Eurozone, the ECB's statement on monetary policy, and data on unemployment in the US on Thursday, March 2. And there will be another portion of American statistics, including the Purchasing Managers' Index (PMI) in the service sector, at the very end of the workweek.

GBP/USD: Business Activity Grows, but the Pound Falls

The British pound is struggling to resist the advance of the dollar. Despite regular counterattacks, it is retreating step by step. Starting the week at 1.2040, GBP/USD reached a local peak at 1.2147, but then went down and ended the five-day period at 1.1942.

It is worth noting that the UK economy managed to avoid a recession at the end of 2022, and the data on business activity in the United Kingdom, published on Tuesday, February 21, is quite optimistic. The Composite PMI Index, with a forecast of 49.0, should grow from 48.5 to 53.0 points over the month. However, these are only preliminary data, with the final ones becoming available on March 1 and 3. At the same time, the confidence of British consumers is lower than during the financial crisis, the COVID-19 pandemic, and the recessions of the 1980s and 1990s.

Although inflation in the country is decreasing, it remains in double digits and is five times higher than the Bank of England's target rate. (CPI fell to +10.1% in January, with a forecast of +10.3%, and +10.5% in December). Inflation is being kept high in part due to the labour market, and there is currently no reason to believe that wage growth in the UK is slowing down.

The market expects that the Bank of England, like the Federal Reserve, will raise the key interest rate twice by 25 basis points in March and April, bringing it to a peak of 4.5%. However, many in the BoE leadership are very concerned that a significant increase in rates could overly slow down the economy. Therefore, the regulator's monetary policy, which is already ambiguous, could be adjusted at any time.

As for the median forecast of experts, 45% of them vote for further weakening of the pound, 25% expect GBP/USD to rise, and 30% prefer to refrain from making predictions. Among the trend indicators on D1, the balance of power is 85% to 15% in favour of the red. Among the oscillators, the red has a 100% advantage, 15% of which are in the oversold zone. The support levels and zones for the pair are 1.1900-1.1915, 1.1840, 1.1800, 1.1720, and 1.1600. If the pair moves north, it will face resistance at levels 1.1960, 1.1990-1.2025, 1.2075-1.2085, 1.2145, 1.2185-1.2210, 1.2270, 1.2335, 1.2390-1.2400, 1.2430-1.2450, 1.2510, 1.2575-1.2610, 1.2700, 1.2750, and 1.2940.

As for the economy of the United Kingdom, in addition to the final data on business activity (PMI) in the UK, which will be released on March 1 and 3, we can note the speech of the Governor of the Bank of England, Andrew Bailey, scheduled for Wednesday, March 1.

USD/JPY: Hopes for QT Are Weakening, but Still Remain

"It seems that the appointment of academic Kadsuo Wada as the new head of the Bank of Japan (BoJ) has not benefited the Japanese currency," we wrote in our previous review. And now, looking at the USD/JPY chart, we can only confirm this statement. In addition to the strengthening dollar, another blow to the yen was dealt by Kadsuo Wada himself. His speech on Friday, February 24, helped the pair to rise from the level of 134.04 to a height of 136.41. The comments of the future head of the central bank, who spoke in the lower house of the Japanese Parliament, in general corresponded to the current BoJ policy, and only exacerbated the disappointment of those who hoped for significant changes in the regulator's monetary policy. Investors could not discern in these comments a clear "hawkish" signal that would boost the resumption of speculative demand for the yen, which was already weakening against the backdrop of the rise of the DXY and the increase in the yield of 10-year treasuries. It should be reminded that there is a direct correlation between USD/JPY and U.S. Treasury bills. If the yield of securities rises, then the dollar rises against the Japanese yen.

We already wrote a week ago that some experts expect a serious strengthening of the Japanese currency in the future. For example, economists at Danske Bank predict that the USD/JPY rate will fall and reach the level of 125.00 in three months. BNP Paribas Research strategists hold a similar position. According to their forecasts, in the event of a tightening of monetary policy, positive yields in Japan may stimulate the repatriation of funds by local investors, resulting in USD/JPY falling to 121.00 by the end of 2023. But all of these are still quite shaky assumptions, although 75% of analysts share them. As for the near-term prospects, currently only 35% of experts expect a southward movement of the pair, while an equal number look in the opposite direction, and the remaining 20% remain neutral. Among the oscillators on the D1 chart, 100% indicate a northward movement (15% of which are in the overbought zone). Among the trend indicators, 75% point to the north and 25% to the south. The nearest support level is located in the 135.90 zone, followed by levels and zones of 134.90-135.15, 134.40, 134.00, 133.60, 132.80-133.20, 131.85-132.00, 131.25, 130.50, 129.70-130.00. Resistance levels and zones are at 136.70, 136.00, 137.50, 139.00-139.35, 140.60, 143.75.

No important macroeconomic statistics regarding the state of the Japanese economy are expected next week. However, Kadsuo Wada will give another speech on Monday, February 27, but it is unlikely to contain anything new and revolutionary.

CRYPTOCURRENCIES: Bitcoin Is Under Pressure, but It Doesn't Give Up. Not yet

Regarding the past week, we can say this: bitcoin is under pressure, but it is holding up. Among the main pressure factors, we can name the financial report of the Coinbase exchange for Q4 2022 and the strengthening of the dollar. Coinbase's revenue plummeted by 75% in the last quarter of last year, which was unusually difficult for the cryptocurrency market. The reason for such a collapse is clear: customer outflows due to a series of scandals and bankruptcies of major and not-so-major industry players. As a result, Coinbase's losses amounted to $2.46 per share. (For comparison, the profit per share of this crypto giant was $3.32 a year ago). It is unknown whether Coinbase will explode like FTX. But in any case, investors should not forget about the risks associated with this market.
As for the second pressure factor, it's all about the Federal Reserve System (FRS) of the United States, as always. Increased market expectations regarding the interest rate have strengthened the quoted currency in BTC/USD and, accordingly, weakened its base part. And it should be noted that bitcoin has shown itself to be a stronger asset in this situation than stock indices, with which it usually correlates. Thus, the S&P500 returned to mid-January values, and the Dow Jones even fell to December values, while the flagship cryptocurrency has grown by 40% since January 1, 2023.

Debate over the future of digital assets continues. Vice Chairman of legendary holding company Berkshire Hathaway and Warren Buffet's right-hand man, Charlie Munger, still calls on US authorities to completely ban cryptocurrencies. The 99-year-old billionaire called anyone who disagrees with him "idiots" and added, "I'm not proud of my country for allowing this filth. It's just ridiculous that anyone buys this [digital assets]. It's no good. It's crazy. It only does harm." Kevin O?Leary, investor, journalist, and host of the popular show Shark Tank recalled this as well. He said that "American financial regulators are tired" of watching waves of bankruptcies in the cryptocurrency industry. "These guys in Washington are very angry. The FTX collapse woke up the bear. It woke up in a rage. Senators are really tired of having to gather every six months when another major cryptocurrency firm collapses. They're tired of the industry being unregulated and anyone being able to issue their absolutely useless tokens," said the Canadian entrepreneur. His conclusion was much softer than Charles Munger's choking calls. O'Leary called on all industry participants to cooperate with the SEC and other government agencies and said that regulated companies would attract significantly more investment than their unregulated competitors.

Bitcoin quotes are mainly supported by small and medium investors at the moment. According to the analytics company Glassnode, the number of wallets with a volume of at least 1 BTC is constantly reaching new highs. Their number has increased by 20% over the past year, approaching 982,000. As for addresses with a balance of 1000 BTC or more, it has fallen from its peak in February 2021 (about 2,500) to levels in August 2019. And now (as of 20.02.2023) there are only 2,024 such whales. However, the number of addresses with a balance of 10,000 BTC or more (worth $240 million at current prices) has consistently remained near peak levels, corresponding to November 2022 and October 2018 values. Currently, there are 115 such "mega-whale" wallets.

According to co-founder of the Gemini crypto exchange Cameron Winklevoss, Asian investors may push bitcoin prices up. Winklevoss believes that the next phase of price growth will occur in the East, and the US will have to adapt to the new conditions. According to Chainalysis, the Asia-Pacific region already ranks third in the world in terms of cryptocurrency investment volume.

Several experts believe that it is crucial for the market for bitcoin to maintain levels above the intermediate resistance at $24,500. This will allow the coin to rise to $25,000 first and then to the $29,000-30,000 range. According to analysts at Matrix, the rise to $29,000 is possible by the summer, and BTC could reach $45,000 by the end of this year. However, they note that this will happen only if the pace of consumer inflation in the US continues to slow. Matrix analysts also point out that the cryptocurrency's price has already risen above $25,000 several times in recent days, despite negative news about tightening cryptocurrency regulations in the US and Europe, which they see as a positive sign.

Speaking of their forecast, Matrix also refers to the "January effect": a price success in the first month often determines the movement of the main cryptocurrency price for the entire year. In addition, experts note that historically, 12-15 months before the next halving, bitcoin's price tests its minimums. This time, such a period fell on December 2022 - March 2023.

Well-known analyst Plan B also suggests a possible rally, estimating that bitcoin may test the $42,000 level in March. As of the time of writing (Friday evening, February 24), BTC/USD is trading around $23,100. The total market capitalization of the crypto market is $1.059 trillion ($1.106 trillion a week ago). The Crypto Fear & Greed Index fell from 61 to 53 points over the week and returned from the Greed zone to the Neutral 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