Daily Market Analysis from NordFX

EUR/USD: Panic Named B.1.1.159

The past week can be divided into two parts: before and after Thanksgiving. Let us remind you that the day Thursday, November 25 was a day off in the United States. And since the lion's share of capital is controlled by banks and funds located in this country, the lull comes in financial markets around the world on this day.

So, what happened before November 25? And there was everything, as predicted by most experts. Divergence in the economic growth of the US and the EU, as well as in the monetary policy of the FRS and the ECB, the energy crisis in Europe continued to push the EUR/USD pair further down. The reanimation of the Brexit theme contributed to its fall. As a result, the pair reached a local bottom at 1.1185 on the evening of November 24. This was followed by holiday Thursday and… the markets woke up on Friday.

And they not just woke up but woke up panicked by the news that a new dangerous strain of coronavirus has been discovered in South Africa that may be insensitive to existing vaccines. WHO convened an urgent meeting, noting that almost 100 cases of infection with the new strain B.1.1.159, which has a "large number of mutations", have already been recorded.

Against the backdrop of this alarming news, investors' expectations for an early increase in the Fed's interest rate went down, and pessimism, on the contrary, rose. According to experts from CME Group, if the likelihood that the rate will remain unchanged until June 2022 was 18% on Thursday, it rose to 34% on Friday.

Compared to November 24, the yield on 10-year Treasuries dipped by almost 10%. Stock indices and cryptocurrency quotes flew down. The markets began to run away from risks. Investor panic and falling US Treasury yields helped EUR/USD bulls to raise the pair to 1.1321, where it ended the working week.

In fact, it is difficult to predict to which of the American or European economies the new wave of coronavirus may do more harm. According to ING Group analysts, it is now important to understand whether the new COVID strain has already reached Europe (which is geographically closer to Africa). This could further worsen sentiment in the Eurozone and put pressure on the euro.

The difference in the monetary policy of the Fed and the ECB will undoubtedly continue to influence the behavior of the EUR/USD pair. Several representatives of the European regulator have recently made it clear that the central bank intends to complete the Pandemic Emergency Purchase Program (PEPP) in March 2022. The pair barely reacted to these comments. But the meeting of the ECB Governing Council on December 2, dedicated to monetary policy, may become the main event of the coming week. Markets expect not just words and hints, but specific decisions on the timing of the completion of the emergency PEPP program and adjusting the volumes of the main Asset Purchase Program (APP), QE analogue. Moreover, the volume of APP can be increased to compensate for the folding of PEPP. It is also possible that the regulator will raise inflation forecasts for 2021-2023.

It is logical to assume that the Fed's hawkish policy and the dovish policy of the ECB will continue to push the EUR/USD pair south in the coming months. Goldman Sachs experts predict that the key USD rate will rise in June, September and December 2022, and the Fed will increase the volume of QE reduction to $30 billion per month starting from January. The rate may be raised twice more in 2023 and will reach 1.5%. The ECB, on the other hand, plans for 2023 to take only the first step. Until then, it will be easy to watch record price growth in the Eurozone countries.

However, it is possible that the December 02 meeting of the Governing Council of the European regulator will bring investors some hawkish surprises. Therefore, the most cautious of them will begin to close short positions in advance, fixing profits, which in the short term will lead to further growth in EUR/USD.

35% of experts who vote for the growth of this pair in the coming week agree with this development. The opposite position is taken by 55% of analysts who believe that the ECB will not make any significant changes to its monetary policy now. The remaining 10% vote for the sideways trend.

Indicators on D1 have a predominantly red color. There are 75% of them both among oscillators and among trend indicators. As for the oscillators, 15% give signals that the pair is oversold, and another 10% have taken a neutral-gray position. As for trend indicators, 25% changed from red to green by the end of the week.

Resistance levels are located in the zones and at levels 1.1300-1.1315, 1.1360, 1.1435-1.1465 and 1525. The nearest support level is 1.1300, then 1.1230, 1.1185-1.1200, then 1.1075-1.1100.

As for the events of the coming week, apart from the ECB meeting, the publication of numerous statistics on the consumer markets of Germany and the Eurozone should be noted. These data will be released on November 29 and 30, December 01 and 03. As for the US, we are expecting a speech by the head of the Fed, Jerome Powell, who held this post for a second term, on Tuesday, November 30, the ADP report on the level of employment in the US private sector and the ISM Manufacturing PMI will be published on Wednesday December 01. And investors traditionally wait for data from the American labor market on the first Friday of the month, including such an important indicator as the NFP: the number of new jobs created outside the US agricultural sector.

GBP/USD: Pound Rescue Is in the Rate Growth

The GBP/USD pair also followed the forecast of the overwhelming majority (75%) of experts until Friday, November 26, falling to 1.3275, the lowest point for the last 5 months. The last chord of the week sounded at 1.3350.

Concerns about Brexit remain the main factor of pressure on the pound. Lord David Frost, the UK minister responsible for implementing the EU deal, said that while there was a desire to find a negotiated solution to the Northern Ireland problem, the gap between the positions of the UK and the EU was very large. The British Government is therefore prepared to use article 16.

As a reminder, the Northern Ireland Protocol was signed two years ago as part of the treaty on the withdrawal of the United Kingdom from the European Union. According to London's statements, it was precisely because of the shortcomings in this document that the country faced supply disruptions and a shortage of goods. For this reason, the British government offered Brussels a new version of the protocol, which European officials saw with hostility.

As for article 16 of the current document, it allows either party to unilaterally take "protective measures" in the event that the protocol leads to "serious economic, social or environmental problems" that persist for a long time.

Fears about a new strain of COVID, which caused investors to flee from risks, are also unlikely to help the British currency. Yes, the GBP/USD pair grew slightly on Friday due to the general weakening of the dollar (the USD DXY index fell to 96.037). But the pound has long been considered a riskier asset than the dollar. And expectations about the increase in interest rates were revised by the market not only in relation to the American, but also the British currency.

Threats of recession and stagflation, combining weak GDP growth and high inflation, are very dangerous for the British economy. According to forecasts of experts from the Bank of England, the annual inflation rate will accelerate to about 5% by April 2022 and will decrease to the target level of 2% as late as by the end of 2022.

These are very high rates, and shortly before the meeting of the Bank of England on November 4, its head Andrew Bailey said that with such indicators, it may be necessary to raise interest rates more quickly than planned. The markets believed that the regulator would raise the key rate in November, and... they were deceived. The Bank of England did not raise the rate, and the GBP/USD pair went further down. And Andrew Bailey told disappointed investors that "we never promised a November rate hike" and that "it's not my job to rule the markets."

Now, in addition to all other worries, there are also concerns about a new wave of the pandemic and the impact of the B.1.1.159 strain on the country's economy. And we are talking about raising the Bank of England rate not in November, but in December. And this is not at all great: while the probability of a rate hike by 15 basis points was estimated at 75% on Wednesday, November 24, then it fell to 55% two days later.

If, following the results of the December meeting, the British regulator still raises the rate, this will push the GBP/USD pair up. 70% of analysts hope so. As for the next week, their opinions are divided equally: 50% expect growth from the pair, 50% expect a fall.

But the indicators on D1 clearly support the bears. 100% of trend indicators point to the south. The same could be said about the oscillators, but 15% of them have reached the oversold zone.

Support levels are 1.3300, 1.3275, 1.3200, the target of the bears is 1.3135. The resistance levels and targets of the bulls are 1.3410, 1.3475, 1.3515, 1.3570, 1.3610, 1.3735, 1.3835.

The head of the Bank of England will make a speech on Wednesday, December 01. Investors hope that Andrew Bailey will clarify the situation with what the future monetary policy of this regulator will be.

USD/JPY: Who Benefits from COVID: Yen Takes Revenge


What is bad for risky assets, is good for the yen. This immutable rule worked this time too. The Japanese currency gained 230 pips in just one day, dropping the USD/JPY pair to 113.043. True, it once again renewed its multi-year highs  two days earlier, on November 24, reaching a height of 15.514. The pair bulls were hoping this stellar rally would continue. But this didn't happen. We can only guess how many Stop-loss orders were knocked out after such a rapid reversal.

“This is a typical scenario: the flight of investors to the quality of the yen and the Swiss franc due to a new strain of the virus,” analysts from Societe Generale explained the incident.

The USD/JPY pair completed the trading session at 113.112. And now there is an intrigue: whether it will return to the trading range 113.40-114.40 or continue falling.

There are slightly more supporters of further movement to the south among experts, 55%. The remaining 45% expect at least a correction in this direction if not returning to a full-fledged upward trend. The indicators do not have even the slightest hint of unity either. As for the oscillators, 25% are colored green, 40% are red, 20% give signals that the pair is oversold, and 15% have taken a neutral position. The trend indicators have the same discord: 50% of them point to the north, the same amount - to the south.

Resistance levels are 113.40, 114.00, 114.40, 114.70, 115.00 and 115.50, the long-term target of the bulls is the December 2016 high of 118.65. The nearest support level is 113.00, then 112.70, 112.00 and 111.65.

As for macroeconomic statistics, retail sales data are due Monday November 29, followed by labor market and industrial production data in Japan the next day.

CRYPTOCURRENCIES: Nobel Prize for Satoshi Nakamoto

We cited the opinion of specialists from the Kraken crypto exchange two weeks ago, according to which the BTC/USD pair could fall to $55,000. The cryptocurrency analyst Altsoin Sherpa called the same figure, $55,000. Another well-known journalist and expert, Willy Woo, cited a wider range ­from $50,000 to $60,000 as a reliable support. In addition, according to Willie Woo, bitcoin is not yet ripe for impulse growth and renewal of all-time highs.

Now, after a while, we can say that all these experts were generally right: the main cryptocurrency was moving, relying on support in around $55,500 and fixing the local maximum at $60.030 for all the following days, until Friday, November 26. And there was a panic in the markets on Friday. Frightened by the new strain of COVID, investors began to get rid of risky assets, including cryptocurrencies.

The total capitalization of the crypto market fell to $2.460 trillion ($2.590 trillion a week ago). And the Crypto Fear & Greed Index has risen from the fear zone to the center of the scale, up to 47 points. The BTC/USD pair was trading in the $54,350 zone at the time of this writing, on the evening of November 26, having found a local bottom at $53,600 before that.

A report by analyst firm Glassnode (which was released before November 26) showed that the market is not showing massive profit-taking. Analysts point out that the total supply of short-term bitcoin holders is at a multi-year low below 3 million BTC. This, in turn, means that the amount held by long-term holders is at a multi-year high. At the same time, they are constantly building up their positions. The total number of wallets with a non-zero BTC balance in the second half of November also reached an all-time high of 38.76 million.

The data obtained by Glassnode indicates that there are no signs of serious surrender, and that the flagship cryptocurrency may still have a rather long upward rally.

A similar opinion to Glassnode was expressed by the CEO of CryptoQuant Ki Young Ju. Despite the fact that bitcoin has been getting cheaper since the middle of last week, holders are in no rush to sell it. In parallel, there is a steady trend towards the withdrawal of cryptocurrency for autonomous storage. According to CryptoQuant, trading floors currently have the lowest amount of bitcoins since mid-2018.

Moreover, investors are withdrawing not only BTC, but also ethereum, which reduces the supply of the asset and eases the pressure on the market. In the long term, according to Ki Young Ju, this trend will drive the value of leading digital currencies upward.

A well-known trader and analyst known as Credible argues that the current correction of bitcoin is a necessity to continue the bullish trend and rise above $70,000. According to the expert, the first cryptocurrency is in the phase of a healthy correction at the moment.

The bitcoin price may fall to $52,000-53,000 in the near future, where the bottom of the current correction is located, Credible predicts. According to him, the $69,000 mark that bitcoin reached on November 10 cannot be the top of the current bull market, as historically each subsequent cycle of growth has lasted longer than the previous one.

Chief commodity strategist of Bloomberg Intelligence Mike McGlone, as well as Willy Woo, believes that the main support is slightly lower, at $50,000. At the same time, according to the expert, bitcoin will continue to grow in 2022, where it will face strong resistance around $100,000.

Founder of Skybridge Capital investment company Anthony Scaramucci expects that the flagship cryptocurrency “will eventually eclipse gold”, and its price will easily reach $500,000. “I think bitcoin is likely to be ten times better than gold... I would not be surprised if bitcoin grows exponentially and gold grows in line," said Anthony Scaramucci.

Mike Novogratz, CEO of investment firm Galaxy Digital Holdings, echoed him saying that gold "was just crushed by bitcoin."

The same target level for BTC, $500,000 was named by the CEO of ARK Invest Katie Wood, confirming her previous forecast. True, at the same time, she made a reservation that such a price could be achieved provided that institutional investors allocate 5% of their portfolios for bitcoin.

So far, 5% is out of the question. Indeed, the interest in digital assets among big business representatives is growing. So, over a quarter of super-wealthy families around the world have already invested in cryptocurrencies. This is evidenced by the results of a survey of the British consulting company Campden Wealth, conducted among representatives of 385 family offices. The average capital managed by such offices is estimated at $1.6 billion.

31% of wealthy households in North America and 28% in Europe invest in cryptocurrencies, while this share is lower in the Asia-Pacific region, 19%. But at the same time, the share of cryptocurrencies in the portfolios of billionaire families is on average only 1%. The majority of those surveyed (68%) said they plan to keep the volume of crypto investments at the current level next year, 28% are going to increase them, and only 4% are going to reduce them.

And at the end of the review, news for Satoshi Nakamoto fans. According to Daniel Leon, COO of the crypto platform Celsius Network, the creator of bitcoin should receive the Nobel Prize in Economics for this invention. "This guy [Nakamoto] has brought hundreds of thousands of people more financial benefits than the bulk of economists in academia," said Daniel Leon.

Now the little thing to do is to find out if Nakamoto really existed. After all, the Nobel Committee is unlikely to decide to reward a person who has never existed...

***

Clients of the brokerage company NordFX continue to accumulate lottery tickets: the New Year's draw of this Super Lottery will take place soon. And the more tickets, the more chances you have to win one or more prizes ranging from $500 to $20,000.

This money will be useful to you, won't it?

It is very easy to participate. All the details are available on the NordFX website.


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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EUR/USD: Closer to Parity


We made a short equation in the title of the previous review on the EUR/USD pair: “Inflation growth = USD growth”, and last week's events confirmed its fairness. Strong data on retail sales in the US, released on Tuesday, November 16, allowed the dollar to rally again, and the USD DXY index to return to the values of one and a half years ago and renew the highs of 2021. With the forecast of 1.4%, retail sales in October increased by 1.7% (the growth was twice less in September, 0.8%). The retail control group indicator went up as well, showing an increase in October by 1.6% (forecast 0.9%, growth a month earlier - 0.5%). Recall that this indicator represents the volume of retail trade in the entire industry and is used to calculate the chain price index for most goods.

Investors were also pleased with the data on industrial production and the housing market in the United States. As a result, the EUR/USD pair dropped to 1.1263 on Wednesday, November 17.

 It is clear that in the current situation the market is most interested in how this or that macro statistics will affect the rate of curtailing monetary stimulus (QE) and the rise in interest rates by central banks.

Thus, the data published last week gave investors another argument in favor of an earlier rate increase by the US Federal Reserve. According to John Williams, President of the Federal Reserve Bank of New York, the country's economy is recovering at a steady pace, the US has a huge growth in employment, and unemployment is falling very quickly. St. Louis Fed President James Bullard also added fuel to the fire when he said that the Fed should become more aggressive. If it accelerates the pace of QE reduction to $30 billion a month, this could provide an opportunity for raising rates in Q1 2022. Another "hawk", the head of the Federal Reserve Bank of Atlanta Rafael Bostic, believes that the Fed may start increasing rates in the middle of next year. And even such a famous “dove” as Chicago Fed President Charles Evans agreed that “raising rates in 2022 may be appropriate.”

As for analysts, Bank of America believes that rising prices and wages will push the US central bank to raise the federal funds rate in the summer of 2022, and maybe even earlier. The most conservative aggregate forecast is given by Reuters experts. According to them, the rate will rise for the first time in the Q4 2022, followed by two more increases, in Q1 and Q2 2023, as a result of which it will reach 1.25-1.5% by the end of the year.

Unlike the United States with its economic growth, things are not at all so rosy in the Eurozone with its energy crisis and the impending economic war with Great Britain. The preliminary data on GDP of the Eurozone for the Q3 published on Tuesday, November 16, showed the absence of even minimal growth. Well, at least there's no fall.

ECB President Christine Lagarde said speaking to the European Parliament that the increase in interest rates in 2022 does not correspond to the plans of her bank, since the conditions for monetary restriction will not be implemented in the coming year. According to the regulator, tightening monetary policy in such a situation will do more harm than good.

The euro weakened not only against the dollar, but also against other currencies after such statements by the head of the ECB. Great Britain helped the European currency a little. A record rise in inflation in this country pushed the GBP/USD pair up, and it pulled EUR/USD along with it. Two more factors also played into the hands of the euro. The first is the 66th update by the S&P 500 of its all-time high for this year. The second one is the possible resignation of Fed Chairman Jerome Powell and the appointment of Lael Brainard, who is considered to support a softer monetary policy, in his place.

A number of investors, influenced by the above factors, decided to take profit on short positions. But this only briefly helped the European currency. Having risen to 1.1373, the EUR/USD pair turned around and continued its southward movement, updated the local low at 1.1250 and closed the trading session at 1.1288.

If we translate what is happening on both sides of the Atlantic into the language of the military, then things have not yet come to real military clashes: neither side has yet raised the interest rate. The matter is limited to the maneuvers and statements of the chiefs of the "general staffs", that is, of the Central Banks. Although, of course, divergences in economic growth, as well as in the monetary policy of the Fed and the ECB, are likely to push the EUR/USD pair further down. Moreover, there is still room for it to fall. Recall that the quotes were at the level of 1.0635 in March 2020, 1.0352 in December 2016, and the pair was even below the parity line at 0.8225 in October 2000.

Indicators at D1 confirm the bearish forecast, pointing south. These are 100% among the trend indicators. The same can be said about oscillators, although 15% of them are in the oversold zone.

35% of experts vote for the correction and growth of the pair in the short term, 50% vote for its further fall, and 15% expect a sideways movement. Resistance levels are located in the zones and at levels 1.1315, 1.1360, 1.1435-1.1465 and 1525. The nearest support level is 1.1250, then 1.1175 and 1.1075-1.1100, then 100 points lower.

As for the upcoming release of macroeconomic statistics, preliminary data on business activity (Markit) in Germany and the Eurozone will be released on Tuesday, November 23. And the volumes of orders for capital and durable goods in the United States, as well as preliminary data on US GDP for the third quarter, will become known the next day. And finally, the minutes of the meeting of the US Federal Reserve Committee (FOMC) will be published on Thursday, November 25, from which investors will try to understand how strong the "hawkish" attitude among the leadership of this regulator is.

GBP/USD: Awaiting the Rate Hike on the Pound

As mentioned above, inflation in Britain hit 4.2%: the highest level since 2011 (it was 3.1% in September). The jump came amid rising energy prices and worsening supply problems. However, the core consumer price index (CPI), which excludes volatile food and energy prices, showed an increase of 3.4% (2.9% a month earlier). According to many economists, consumer prices will continue to rise further in the coming months.

The released statistics increased the likelihood that the Bank of England will decide to raise the interest rate on the pound this December. This contributed to the rebound of the GBP/USD pair from November 12 low of 1.3352, to which it fell after the US recorded its highest growth in 30 years inflationary pressure.

In general, the macroeconomic statistics of the United Kingdom looked quite optimistic last week, supporting the pound.

It became known last Tuesday that the number of jobs in the country increased by 160K in October. This figure is especially important against the background of the fact that the state program for subsidizing wages, which was in force during the COVID-19 pandemic, was completely phased out in September. Many experts expected employers to start cutting jobs after the end of support. However, this did not happen and the labor market, on the contrary, continues to recover. The UK unemployment rate fell to 4.3% in the Q3.

Recall that the Governor of the Bank of England, Andrew Bailey, speaking of curbing inflation on November 4, did not rule out the possibility of raising interest rates more quickly than planned. And now the published indicators allowed the bulls to seize the initiative and raise the pair to a height of 1.3513 on Thursday, November 18. However, this was followed by a rebound, and it completed the five-day period at 1.3444.

If the key rate for the pound increases in December, we can expect the GBP/USD pair to grow to the 1.3800-1.3900 zone. However, while this has not happened, most analysts (75%) expect the pair to fall further. Only 25% bet on a quick victory for the bulls.

As for the oscillators on D1, 80% are red, 10% are green and 10% are neutral gray. Trend indicators are still 100% red. Support levels are 1.3400, 1.3350, 1.3200, the target of the bears is 1.3135. The resistance levels and targets of the bulls are 1.3475, 1.3515, 1.3570, 1.3610, 1.3735, 1.3835.

As for the macro statistics for the coming week, it is worth noting the publication of the UK Services Business Activity Index (PMI) on Tuesday November 23. This indicator, published by the Chartered Institute of Procurement and Supply in conjunction with Markit Economics, is an indicator of the economic situation in the field of sales and employment in this sector. However, it is not as important as the country's manufacturing PMI

USD/JPY: Still East

While the US Federal Reserve cuts monetary stimulus, the ECB has frozen QE at the previous level, the Japanese government announced an unprecedented program of economic stimulus for the total 55.7 trillion yen ($487 billion) on Friday November 19. Tokyo hopes that this measure will increase the country's GDP by 5.6%. As stated, the Bank of Japan will pursue an appropriate monetary policy, closely monitoring market movements and the impact of the coronavirus pandemic on the economy.

“We hope that the Bank of Japan is clearly aware of the urgency of the measures and continues to coordinate closely with the government to achieve a proper mix of fiscal and monetary policy,” the Cabinet of Ministers of Japan said in a statement.

In what way did the USD/JPY pair react to this event? well, actually... in no way. A safe harbor should remain calm no matter what.

In general, the dynamics of the pair fully followed the forecast given the previous week. Most analysts expected the pair to rise, break through the upper border of the 113.40-114.40 channel and try to update multi-year highs. This is exactly what happened: the pair was noted at a height of 114.96 on November 17. However, then the strength of the bulls dried up, and the pair returned to the mid-term trading range, putting the last chord in its central part, at the level of 114.00.

Given the ultra-soft monetary policy of the Bank of Japan and the expansion of control over the yield curve, it is highly likely that the weakening of the yen and the growth of the pair will continue. And that USD/JPY will not only reach the 115.00-116.00 range, but will also consolidate there, updating the 2017 highs. Of course, the decisions of the US Federal Reserve regarding interest rates as well as the yield of American treasuries will also affect the dynamics.

As a result of the backward movement that the pair demonstrated last week, the oscillators on D1 are completely confused: 20% of them point north, 40% - south and 40% - east. There is no unity among trend indicators either: 60% look up, 40% - on the contrary, down.

The picture is similar among analysts. 40% of them expect the growth of the pair, the same amount expect its fall, and the remaining 20% just shrug their shoulders.  The resistance levels are 114.40, 114.70, 115.00 and 115.50, the long-term target of the bulls is the December 2016 high of 118.65. The nearest support level is 113.40, then 112.70, 112.00 and 111.65.

CRYPTOCURRENCIES: Where Will Bitcoin Fall and Rise?

Bitcoin updated its all-time high, reaching $68,917 on Wednesday, November 10. Ethereum also set a record, rising to $4,856. The total capitalization of the crypto market at the maximum reached $2.972 trillion. At the same time, the Crypto Fear & Greed Index rose to 84, being in the Extreme Greed zone, which indicated that the main cryptocurrency was strongly overbought and the need for a correction that was not long in coming.

We cited the opinion of specialists from the Kraken crypto exchange in the previous review, according to which if the current growth of bitcoin stops at strong resistance around $70,000, a correction of up to 20% can be expected. That is, the BTC/USD pair may fall to $55,000.

The cryptocurrency analyst Altcoin Sherpa called the same figure. Another well-known journalist and expert, Willy Woo, cited a wider range ­from $50,000 to $60,000 as a reliable support.

In addition, Willie Woo argues that bitcoin is not ready for impulse growth and renewal of all-time highs at the moment. Woo identified three factors that hinder the rise in price of the main cryptocurrency.

The first factor is bitcoin's high speculative activity. Woo argues that while long-term investors continue to accumulate cryptocurrency, a large number of positions are being opened for short-term speculative purposes.

Another factor that can hold bitcoin back is the launch of the first US exchange-traded fund (ETF) based on bitcoin futures. According to Woo, most institutional investors prefer to buy fund stocks and futures at the moment instead of buying the coin itself.

Recall that the first US exchange-traded fund based on bitcoin futures began trading on the New York Stock Exchange (NYSE) on October 19. Its assets exceeded $1 billion two days after the start of trading. Thus, the fund broke the record growth rate to $1 billion, which was held for 18 years.

The third factor is the overly optimistic sentiment of investors who are confident in the further growth of bitcoin and the entire cryptocurrency market. “Whenever most investors are bullish, it is very difficult for the price to go up because there are a lot of speculative longs in the markets,” Woo explains.

Analyst Nicholas Merten is also skeptical about the near future of the flagship cryptocurrency. “We won't get $100,000 or $150,000 in this Q4 or next Q1,” he says. “I'm sorry, but I'll have to say that. I think that many experts are mistaken. Bitcoin is aiming for growth, but we will only see around $100,000 or $150,000 by the fall of next year.”

At the time of writing the review, the BTC/USD pair is around $58,000, the local minimum was recorded on November 19 at $55,638. The total capitalization of the crypto market fell to $2.590 trillion. At the same time, the Crypto Fear & Greed Index fell by as much as 50 points, to 34, being in the zone of Fear.

The news background is neutral. More precisely, it is ambiguous. On the one hand, for example, the Bitcoin Taproot network was updated on November 14 - the first major change in functionality since 2017. The main cryptocurrency needs to become more efficient, scalable and confidential. On the other hand, US President Joe Biden signed a bill to upgrade the infrastructure. Depending on the interpretation of this document, it may turn out that miners, wallet developers, liquidity providers in DeFi-protocols and other players in the digital market may be required to report to the tax office. The crypto community is also concerned about another amendment to the infrastructure plan, which will oblige recipients of digital assets worth more than $10,000 to verify the sender's personal information.

No confidentiality!

A very good reason is needed for bitcoin to rise sharply again. And if it does not appear, the BTC/USD pair has many chances to stay stuck for a long time in the zone ­$50,000 to $60,000, sagging from the maximum by 15-30%. However, the current drawdown does not prevent many crypto enthusiasts from maintaining remarkable optimism.

Thus, Anthony Scaramucci, the founder of SkyBridge Capital investment company, is confident that bitcoin will “easily” reach the price of $500,000. He gave such a forecast, referring to the limited emission of the first cryptocurrency and the potential number of wealthy investors. He noted that according to JPMorgan, there are at least 49 million dollar millionaires, but the supply of digital gold is limited to 21 million coins. “You don’t have enough bitcoins for every millionaire in our society to have at least one coin,” Scaramucci said.

In his opinion, the current price level is still an early opportunity to enter the asset, and the price of the first cryptocurrency will reach the specified $500,000 mark by the end of 2024 or mid-2025. However, this requires that Ark Invest's forecast come true, according to which the number of bitcoin wallets should reach 1 billion by this time.

***

Clients of the brokerage company NordFX continue to accumulate lottery tickets: the New Year's draw of this Super Lottery will take place soon. And the more tickets, the more chances you have to win one or more prizes ranging from $500 to $20,000.

This money will be useful to you, won't it?

It is very easy to participate. All the details are available on the NordFX website.


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.

[You must be registered and logged in to see this link.]

EUR/USD: Rising Inflation Equals to Rising USD

All US macroeconomic statistics turned out to be worse than forecast. But despite this, the American currency continues to grow. The DXY dollar index, which measures it against a basket of six other major currencies, hit 95.26 on Friday, November 12, gaining about 2% over the past two weeks. It would seem that everything should be the other way around. So, what is the reason for this strange situation? It turned out to be the rapid growth of inflation.

According to the Labor Department, the US CPI rose 6.2% in October, a record in more than 30 years. Inflation was higher only in November 1990. Compared to September, the price growth rate has accelerated by 0.8%, while core inflation (excluding energy and food prices) has accelerated to 4.6%, which is also the highest in three decades. And, apparently, this is not the limit. Inflation in the US is forecast to continue to rise in the coming months on the back of housing, utilities, energy and car prices. The CPI, which reflects the change in the cost of living in the country, has surpassed the 5% mark for the fifth month in a row. And this makes us doubt the assurances of Fed Chairman Jerome Powell that high inflation is temporary. However, not only investors are in doubt, but also the Fed itself.

According to classical economic theory, the dollar should have weakened significantly in such a situation. However, the COVID-19 pandemic has turned everything upside down, forcing regulators to implement monetary stimulus (QE) programs in the spring of 2020, flooding markets with cheap money and lowering interest rates.

Finally, the Fed reported that it is gradually beginning to curtail $120 billion of the asset purchase program starting this month. As for the rate hike, according to Jerome Powell, the time has not yet come for this, since the labor market has not fully recovered and, according to forecasts, this will happen by mid-2022. The Fed will be patient until then.

However, many investors felt that with such a galloping inflation, the Fed's patience could quickly run out and the regulator would be forced to raise rates before the summer of 2022.

An analysis of the Chicago Mercantile Exchange (CME) derivatives shows that there is a 64% chance that rates may rise even before June. Previously, the market was confident that the regulator would raise interest rates at least once next year. Now the likelihood that it will happen twice has increased from 63% to 80%, three times - from 29% to 49%. And some hotheads believe that the US Central Bank will take the first step in this direction this year.

All these expectations made the dollar continue to grow. It was further supported by the soaring yields on US government bonds. Growing inflation reduces the purchasing power of the coupons paid on them, and there are few people willing to invest in securities, the yield on which covers inflation by only a third.

As for the data on the US labor market published on November 9, the inflation-shocked market practically ignored them. But they also turned out to be much worse than forecasts. The number of repeated claims for unemployment benefits was expected to decrease by 50K, and it rose by 59K instead.

The growing dollar pushed the EUR/USD pair to the lows of July 2020. It dropped to 1.1432 on Friday, November 12 and ended the week at 1.1446. The American currency has gained almost 900 points against the euro since the beginning of this year. And if the situation continues to develop as it is now, it will not stop there.

Indicators on D1 confirm this forecast, pointing to the south. These are 100% among the trend indicators. The same can be said about oscillators, although a quarter of them are in the oversold zone.

In anticipation of a correction, 40% of experts vote for the growth of the pair. 60% vote for its further fall. The nearest support level is 1.1435, then 1.1350 and 1.1250. Resistance levels are 1.1525, 1.1575, 1.1615, 1.1665, 1.1715.

As for the upcoming release of macroeconomic statistics, there will be preliminary data on the Eurozone GDP for the Q3 on Tuesday, November 16. Data on retail sales in the United States will be released on the same day, they are very important for assessing the impact of inflation on the country's consumer market. The working week will end with a speech by ECB President Christine Lagarde on Friday, November 19.

GBP/USD: Another Victory for the Dollar


The dollar, pushed by inflation in the US, continues to put pressure on the British currency, as a result, the GBP/USD pair has been falling for the sixth month. It updated another low last week and settled in the zone of long-term support/resistance, where it has been periodically since 2016. The local minimum of the week was fixed at 1.3352 this time, and the last chord sounded at 1.3421.

The macro statistics released on Thursday; November 11 did not help the pound either. And it seems that GDP for the Q3 turned out to be higher than the forecast, but the growth rates of the UK economy slowed down by more than 3.5 times, from 23.6% to 6.6%, and the industrial production growth rate fell from 4.0% to 2.9% (against the forecast of 3.4% ).  Such a sharp slowdown, especially noticeable against the background of smoother similar indicators of the Eurozone and the United States, disappointed greatly, and even scared investors.

The threats of recession and stagflation, combining weak GDP growth and high inflation, are very dangerous for the British economy, which is still under pressure from the Brexit effects. According to forecasts of experts from the Bank of England, the annual inflation rate will accelerate to about 5% by April 2022 and will decrease to the target level of 2% as late as by the end of 2022.

This is a very high rate, and shortly before the meeting of the Bank of England on November 4, its head Andrew Bailey said that with such indicators, it may be necessary to raise interest rates earlier than planned. The market reaction was similar to the one that strengthened the dollar last week. The markets believed that the regulator would raise the key rate in November, and... they were deceived. The Bank of England did not raise the rate, and the GBP/USD pair went further down.

UK unemployment data are due out on Tuesday November 16, followed by October CPI data the next day. Naturally, the state of the labor market and inflation will have an impact on market sentiment and the dynamics of the pound. In the meantime, analysts' opinions are almost equally divided: 35% of experts bet bears on the victory, 35% support the bulls, and the remaining 30% have taken a neutral position.

As for the oscillators on D1, 85% is colored red, 15% indicates that the pair is oversold. Trend indicators are 100% red. Support levels are 1.3350, 1.3200, the target of the bears is 1.3135. The resistance levels and targets of the bulls are 1.3510, 1.3570, 1.3610, 1.3735, 1.3835.

USD/JPY: Treasuries Strike

Giving a forecast for the previous week, most analysts expected the USD/JPY pair to return to the upper border of the 113.40-114.40 channel. At first, it seemed that this forecast would not come true: the pair continued its corrective movement to the south, reaching the level of 112.70. However, it then turned and soared to 114.30, confirming the expectations of experts. The week finished at 113.90.

The reason for this reversal was the “inflationary” strengthening of the dollar and, of course, a sharp increase in the yield of US Treasury bonds, with which the USD/JPY pair has a long-standing friendship. In other words, there is a direct correlation dependence.

Given the soft monetary policy of the Bank of Japan and the expansion of control over the yield curve, it is highly likely that the weakening of the yen and the growth of the pair will continue. Of course, the decisions of the US Federal Reserve regarding interest rates will also affect the dynamics.

A number of experts consider the rise of the USD/JPY pair to 114.00 as a return to the bullish trend that began back in January 2021. Although, the charts in the interval between March 10 and September 27 show that in the absence of strong drivers, the sideways movement can drag on for several months. Unlike the euro and the pound, the yen is a safe haven currency, and therefore is able to withstand storms in financial markets for a long time.

55% of analysts currently expect the pair to continue to rise, break through the upper boundary of the 114.40 channel, rise to a range of 115.00-116.00 and renew its multi-year highs. The opposite point of view is held by 35% of experts, and the remaining 10% expect the USD/JPY pair to stay in the 113.40-114.40 side channel for some time.

As for oscillators on D1, 80% face north, 10% face south, and 10% turn gray neutral. Among the trend indicators, 100% are on the green side. The resistance levels are 114.40, 114.70 and 115.50, the long-term target of the bulls is the December 2016 high of 118.65. The nearest support level is 113.80, then 113.40, 112.70, 112.00 and 111.65.

Monday, November 15, can be noted in the calendar for the coming week. Data on Japan's GDP for the Q3 will be published on this day, and, according to forecasts, this important indicator will decrease from + 0.5% to -0.2%.

CRYPTOCURRENCIES: Where Will Bitcoin Fall and Rise?

Bitcoin updated its all-time high, reaching $668,917 on Wednesday, November 10. Ethereum also set a record, climbing to $4,856. The total capitalization of the crypto market at the maximum reached $2.972 trillion.

The Crypto Fear & Greed Index climbed from 73 to 84, entering the Extreme Greed zone, indicating that the main cryptocurrency was heavily overbought, and a correction was needed. Which then followed: setting a record, the BTC/USD pair turned around and rolled back into the $63,000-64,000 zone.

With regard to bitcoin, the sentiment among retail investors is "extremely bullish". This is reported by the analytical resource Santiment with reference to the off-chain BTC indicators. But the situation is not so clear-cut among the "bitcoin whales". On the one hand, the total volume of coins on addresses with balances of 100-10,000 BTC has decreased by almost 60,000 BTC over the past 10 days. On the other hand, it has grown significantly on addresses with balances of more than 10,000 BTС. According to experts, this may indicate that large whales are buying coins from smaller ones, protecting bitcoin from a sharp drop.

The correction that took place on November 10 was only about 8.5%. "Only", because with the typical volatility of bitcoin, this is not much. The current situation can be defined as "irrational confidence" in this coin on the part of investors, which can lead to a much stronger price correction.

The specialists of the Kraken crypto exchange agree with this. The review they published notes that November has historically been volatile, resulting in the highest monthly returns. But if bitcoin's current rally stops at strong resistance around $70,000, a correction of up to 20% can be expected, meaning the BTC/USD pair could drop to $55,000.

The cryptocurrency analyst Altsoin Sherpa calls the same figure. “There is the possibility of a short-term hike to $ 55,000,” he writes. “But I don’t care about these minor movements. I continue to accumulate BTC, and when it starts to move up, it will be rapid."

Another well-known expert, Willie Woo, came to the conclusion that the zone from $50,000 to $60,000 is more than reliable as a support. Bitcoin has secured a capitalization of $1 trillion, and it is difficult to imagine that it will fall below this zone, he said, referring to data from the analytical company Glassnode.

Bitcoin is a hedge against inflation, and the US has currently seen a record rise in consumer prices, which is a strong argument in favor of the flagship cryptocurrency. Despite the curtailment of the QE program and the expectation of an increase in interest rates, signs of a possible sharp devaluation of the dollar frighten investors, forcing them to invest in alternative assets in the stock and cryptocurrency markets. As a result, both BTC and stock indices update their historical highs over and over again. And forecasts for bitcoin will be in the green zone until the US Federal Reserve moves on to a broader tightening of its monetary policy.

The top of bitcoin's current bull cycle may be the price of $96,000. This conclusion was reached by analysts of the Kraken crypto exchange. According to their research, the current Q4 has dynamics most similar to the Q4 of 2017 (correlation 0.88), which showed a yield of +220%. In general, cryptocurrency exchange experts predict that BTC will reach heights around $300,000.

A respected cryptanalyst known as PlanB said that bitcoin could rise by 700% in early 2022. “If you look at the signals along the chain right now, I dare say that the price will reach the top in almost 6 months, this will be the end of Q1 of next year. - he thinks. - I believe that we will have a BTC rate of $100,000 at the end of the year, and then, perhaps, the currency will continue to grow up to model X (S2FX) and reach the level of $288,000, and possibly more. I would not be surprised if I saw the price rise to $400,000 - 500,000 in Q1 and Q2 of next year."

Unlike many optimists, crypto strategists Benjamin Cowen, on the contrary, believes that bitcoin will not please its supporters with explosive growth. “We started with about $28,000 to $29,000 and this was the start of 2021,­” writes Cowen. “What have we seen so far? Not much, right? Will it be able to show more significant results by the end of the year? Maybe, but I'm not sure that 2021 will be the year of a parabolic rally for bitcoin."

While the distance between the low and high of the annual range may seem significant, Cowen noted that bitcoin holders are unlikely to be thrilled with such profits: “Look what happened to bitcoin in 2021: nothing special. The profitability was about 130%, and I am sure that most holders will not even get up from the couch for 130%." “We have returned to the top of the range, so there may be some euphoria, as it was from January to March 2021,” the expert continues to reason. - There are chances of a sharp leap, but the data shows that the cycle should last at least through 2022. Looking back to 2021, I think it was, for the most part, a year of long-term re-accumulation.”

Ethereum, the main competitor of bitcoin, showed significantly higher profitability, it grew 6.7 times in 2021.  And the year is not over yet. Rahul Rai, the manager of the cryptocurrency fund BlockTower Capital, believes that the versatility of the ethereum blockchain will be the main factor that will attract both developers and investors. He is confident that if ethereum manages to restart the global financial system, its market will be much larger than that of bitcoin in the future. The crypto millionaire predicts that it may be as early as mid-2022. ETH will be the first cryptocurrency in terms of capitalization, which could reach several trillion dollars.

Analysts of the American investment bank JPMorgan made a similar statement in April. In their opinion, bitcoin is a consumer commodity. It can compete with precious metals and be seen as a store of value, but it will give way to ethereum in the long run, which is the pillar of the cryptocurrency economy.

And at the end of the review a warning from the billionaire, founder of Duquesne Capital and one of the most successful managers on Wall Street, Stanley Druckenmiller. The value of any asset can collapse at any moment, he warns. According to the financier, "cryptocurrencies, meme stocks, art, wine, securities ... There is a bubble in everything, in every asset on the planet." And bubbles, as you know, often burst.

“Every event in the world affects a certain amount of security,” explains Druckenmiller. "I try to imagine the world as it is today, and then I try to see if there are any seismic changes and what the world might look like in 18 months. And if this is true, then what securities will be worth very differently than now? I think that many investors live only in the present. It might work in the short term, but it's a disaster in the long term.”


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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EUR/USD: Focus on the US Labor Market

The central events last week were the meetings of two regulators, the US Federal Reserve and the Bank of England. Traders were also certainly interested in data from the US labor market, including such an important indicator as the NFP, the number of jobs created outside the US agricultural sector.

As expected, the Fed announced the curtailment of $120 billion quantitative easing (QE) program starting this month. The purchases of treasuries will decrease by $10 billion to $70 billion in November, mortgage bonds - by $5 billion, to $35 billion. The total reduction in the volume of asset repurchase will remain at the same level of $15 billion In December.

Commenting on the results of the last meeting, the head of the Federal Reserve Jerome Powell said that the time for raising interest rates has not yet come, since the labor market has not fully recovered and, according to forecasts, this will happen by mid-2022. The Fed will be patient until then. At the same time, Powell noted that the pace of reduction of incentives can be adjusted at the beginning of next year both towards acceleration and towards deceleration, depending on economic conditions.

It can be understood from this statement of the head of the FRS that the regulator keeps a path to retreat, and one should not expect an early cut in the ultra-soft monetary policy at the moment. This interpretation pushed the stock indices up again, and Dow Jones, S&P500 and Nasdaq updated their historical highs once again.

(It is worth noting that for the first time, transactions with NASDAQ 100 (Ustec.c) helped one of the traders to become one of the most productive NordFX clients, earning a profit of $38.124 in October).

So, the US Central Bank is ready to make and adjust its decisions depending on the market situation. As for the European Central Bank, unlike the Fed, it believes the markets are wrong. ECB President Christine Lagarde said Oo Wednesday November 03 that the bank's Governing Council has clearly formulated three conditions for raising interest rates, and that these conditions will not yet be met in 2022.

Investors were not pleased with the macro statistics of the Eurozone either. Composite PMI (Purchasing Managers Index) declined for the third month in a row, and the volume of industrial orders in Germany in September rose by only 1.3%, despite the fact that in August it fell by 8.8%. The growth in the yield of government bonds of the Eurozone countries, caused by their active sale, which reminds the markets of the prospects of the debt crisis, looks alarming as well.

All these factors put significant pressure on the common European currency and led to its fall, as a result of which the EUR/USD pair renewed its October lows.

Focusing on the recovery of the labor market, the head of the FRS outlined the priorities for his organization. Against this background, the dynamics of NFP (Non-Farm Payroll) becomes even more important. This US non-farm employment report is traditionally released on the first Friday of the month, this time November 05. According to its data, the number of new jobs in October was 531K (with the forecast of 425K and the previous value of 312K). In addition, the unemployment rate fell to 4.6% from 4.8% in September. Stock indices soared even higher against this background. As for the EUR/USD pair, after a correction, it completed the weekly session at 1.1567.

Naturally, most indicators on D1 face south. These are 100% among the trend indicators. The same could be said about oscillators. However, 10% of them have taken a neutral position, 10% are in the oversold zone and another 10% turned to the north at the very end of the week.

As for the experts, 25% vote for the growth of the pair, the same number is for its fall, and 50% is for the sideways movement. Support levels are 1.1535, 1.1500, 1.1485, 1.1425 and 1.1250. Resistance levels are 1.1575, 1.1615, 1.1665, 1.1715, 1.1800, 1.1910.

As for the upcoming release of macroeconomic statistics, data on the state of the consumer markets in Germany and the United States will be released on Wednesday, November 10, and the preliminary consumer confidence index of the University of Michigan will be announced on Friday, November 12. This index is an indicator of the US consumers’ confidence in economic growth and assesses their willingness to spend money.

GBP/USD: Shock from the Bank of England

The threat of stagflation, combining weak GDP growth and high inflation, is very dangerous for the British economy, which is still under pressure from the Brexit effects. According to forecasts of experts from the Bank of England, the annual inflation rate will accelerate to about 5% by April 2022 and will decrease to the target level of 2% as late as by the end of 2022. These are very high rates, and a few days before the meeting of the Bank of England, its head Andrew Bailey said that with such indicators, it may be necessary to act and raise interest rates more quickly than originally planned. As a result, the markets believed that the regulator would raise the key rate in November and... were deceived in their expectations.

The Monetary Policy Committee (MPC) of the Bank of England voted at its meeting on Thursday November 04 by seven votes to two to keep the interest rate at the previous level of 0.1%, and by six votes to three to keep the volume of asset purchases at £ 895 billion. Disappointed investors responded to the regulator with the collapse of the pound. The GBP/USD pair reached a local low, falling 270 points to 1.3425. The last chord of the week sounded at 1.3490.

Andrew Bailey stated in response to criticism that he misled investors, that "we never promised a November rate hike" and that "it is not my job to manage the markets." Sylvana Tenreiro, an external member of the Bank of England's Monetary Policy Committee, who believes that the Central Bank should not react to short-term shock situations and the problem of supply of goods will become less acute next year, spoke soothingly. The opposite position was taken by Deputy Head of the Bank Dave Ramsden, who said that he voted for a rate increase, as the shortage of labor is becoming more and more noticeable.

As some analysts note, there are currently growing expectations that London will decide to apply Article 16 of the EU Leaving Agreement. It is possible within the framework of this article for one of the parties to suspend part of the Brexit transaction if its further execution creates serious economic or other difficulties. That said, the EU's response could be more radical than the UK government expects. And this situation has and will continue to exert additional pressure on the pound.

The preliminary data on the UK GDP for the Q3 will be released on Thursday, November 11. They may affect market sentiment along with macro statistics from the US. In the meantime, analysts' opinion is as follows: 55% of experts bet on bears to win, 35%, along with graphical analysis on D1, support bulls, and the remaining 10% have taken a neutral position.

Among the oscillators on D1, 75% is colored red, 25% indicates that the pair is oversold. Trend indicators are 100% red. Support levels are 1.3470, 1.3420, 1.3380, 1.3200, the target of the bears is 1.3135. The resistance levels and targets of the bulls are 1.3510, 1.3570, 1.3610, 1.3735, 1.3835.

USD/JPY: Sideways Trend Again

The charts of the last three weeks showed that the upward momentum of the USD/JPY pair has dried up, and it has moved to its favorite activity: the sideways trend, limited by the range of 113.40-114.40. The yen rose on the back of the 10-year Treasury yield decline to 1.53% and continued to strengthen at the end of the working week, finishing at the lower boundary of this channel.

The current situation is clearly confirmed by the spread of expert opinions and indicator readings. Among analysts, 50% expect the pair to return to the upper border of the 113.40-114.40 channel, 25% to move along the 113.00 Pivot Point, and 25% to fall to the 112.00 area. It should be noted that, when moving from weekly to monthly forecast, the number of supporters of the latter increases to 50%.

There is a complete discordance among the oscillators on D1: 35% look north, 40% south, 15% give oversold signals and the remaining 10% turn neutral grey. There is a neutrality among the trend indicators: 50% side with the green ones, the other 50% side with the red ones. The resistance levels are 113.70, 114.40, 114.70 and 115.50, the long-term target of the bulls is the December 2016 high of 118.65. The nearest support level is 113.25, further targets are 112.00 and 111.65.

CRYPTOCURRENCIES: Ethereum Renews Its High


It was 13 years ago, on October 31, 2008, that a person or a group of people known as Satoshi Nakamoto published the bitcoin white paper. The nine-page technical document described how the peer-to-peer payment system worked that would revolutionize the financial technology world. The bitcoin network was launched in January 2009. Satoshi Nakamoto disappeared in April 2011, and the public was never able to find out who wrote these 9 pages, which marked the beginning of a multi-billion-dollar industry. More precisely, multi-trillion, since the total crypto market capitalization reached a new all-time high last week, exceeding $2.7 trillion.

But the share of bitcoin has decreased again: its dominance index fell over the week from 44.15% to 42.84%. The historical record of $ 66,925, set by bitcoin on October 20, has not yet been broken. The bulls did try to update this result on Tuesday November 02, but having reached the $64,260 high, the BTC/USD pair reversed and rolled back to $60,000. The Crypto Fear & Greed Index is still in the Greed zone at 73 points (70 weeks ago).

While the main cryptocurrency is marking time, the attention of many investors has turned to altcoins. Ripple rose in price (XRP/USD), and the ETH/USD pair updated its all-time high once again, reaching $4.657 on Wednesday November 03.

Among the top altcoins, Ethereum attracts with its long history and use in many projects. The main driver of its growth in recent months has been the burning of coins for transactions on the network and the fact that the rate of their burning outstrips the rate of their production. However, after the activation of the London hard fork and the latest Ethereum 2.0 Altair update, commissions on the network have almost doubled, but the developers promise to solve this problem.

The past week is the sixth in a row since the beginning of the rise in the rate of Ethereum, which has added 75% since September 21. This token appears now to be targeting the $5,000 level. And this is not a limit. So a reputable cryptanalyst known as CryptosRUs predicts that ETH will soon reach $10,000. Moreover, he is confident that it is almost the last opportunity now to purchase this altcoin at a price below this mark. The forecast of Goldman Sachs specialists, who do not exclude that the ETH/USD pair may rise to $8,000 by the end of the year, is somewhere in the middle.

Of course, it would be unfair to say that the market has completely forgotten about bitcoin. Many investors and experts still single out this cryptocurrency. Whales added 142,000 BTC to their wallets in the last week of October alone, according to Chainalysis.

“Bitcoin is mathematics, mathematical purity” that allows it to maintain a level of predictability. Therefore, it outperforms the US dollar. This was stated by Apple co-founder Steve Wozniak in a recent interview with Yahoo Finance. In his opinion, regulators can create new paper notes on their whim, and therefore it is difficult to predict inflation of fiat money.

The author of the book “Rich Dad Poor Dad”, writer and investor Robert Kiyosaki, like Steve Wozniak, has criticized the administration of President Joe Biden and has declared his distrust the US federal government. He believes that the authorities "rip off people", promote inflation and do not try to reduce it. Get ready for an economic collapse and a new depression. Be smart. Buy gold, silver and bitcoin,” Kiyosaki urged. “I love bitcoin because I don't trust the Fed, Treasury, and Wall Street.”

Chinese crypto analyst Willie Woo said in an interview with Bitcoin Fundamentals that the current “bullish” growth cycle for bitcoin is very different from previous similar periods. Woo noted that the latest wave of BTC accumulation began at the end of last year, when institutional investors began to enter the crypto market, aiming at the long-term accumulation of digital assets. This factor, in his opinion, indicates that the current growth cycle will be longer, will last another six months or a year, and the price of bitcoin during this period will exceed $100,000.

The forecast of analysts at JPMorgan Chase looks much more modest. Cryptocurrencies can continue to grow, but are unlikely to be stable, so they cannot be recommended as a key asset, JPMorgan says. As for bitcoin, its fair value is estimated by JPMorgan Chase analysts at $35,000. They came to such an assessment based on a comparison with gold, noting that the volatility of the cryptocurrency is about 4 times higher than that of the precious metal. However, if BTC's volatility is halved, the $73,000 target will "look reasonable."

PayPal co-founder Peter Thiel doubts as well that now is the right time to buy BTC. “You know, bitcoin is already worth $60,000 and I'm not sure it should be bought aggressively. But, of course, this tells us that we are in a crisis moment,” Bloomberg quoted him as saying. At the same time, Thiel expressed regret once again that he had not invested more money in the first cryptocurrency when its price was significantly lower.


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.

[You must be registered and logged in to see this link.]

NordFX Brokerage company has summed up the performance of its clients' trade transactions in October 2021. The services of social trading, PAMM and CopyTrading, as well as the profit received by the company's IB-partners have also been assessed.

October Results: Pound, Gold and Bitcoin Prioritized Again, NASDAQ 100 Is the Newcomer1 

The undisputed leader at the end of the month was a trader from India, account No. 1556XXX, whose profit amounted to 169,533 USD. This solid result was achieved in the British Pound (GBP/USD) trades.

The second step of the podium was taken by a representative of China, account No.1593XXX, with a result of 38,124 USD.Their profits were mainly derived from operations with gold(XAU/USD), bitcoin ( BTC/USD), as well as withNASDAQ 100 (USTEC.C). By the way, this is the first time since the beginning of the year when a person who makes trades in stock indices is included in the top three.

The third place is taken by a trader from Vietnam, account No.1416XXX, who earned 37,116 USD in October on transactions on the XAU/USD and EUR/AUD pairs.

The passive investment services:

- in CopyTrading, as before, one can mark the KennyFXPRO signal, The Compass. It has shown an increase of 108% since November 2020. At first glance, this is not such an impressive result (although it is ten times higher than the interest on bank deposits). But combined with a moderate maximum drawdown of 22%, this signal becomes quite attractive for subscribers who have invested over 75,000 USD in it.

TheSkyAngle signal can also be noted. It showed a profit of 76.64% in just the last two weeks of October with a maximum drawdown of 10.47%. This very good result was obtained mainly in transactions with the EUR/JPY and GBP/USD pairs. However, the signal has one serious drawback: it has a very short lifespan. Therefore, those wishing to subscribe to it should be extremely careful.

Of course, there are long-livers in the CopyTrading service. For example, the signal MF989923, which is based on one of the Academy's MasterforeX-V trading systems. It has a lifespan of almost 2,500 days and has generated 510% profit (an average gain of 0.2% per day). However, it must be borne in mind that it has had serious drawdowns reaching 66% on several occasions in almost 7 years of the signal's life.

- In the NordFX PAMM service, as well as in CopyTrading, you can mark the manager under the nickname KennyFXPRO. They have increased their capital by 53% on their account KennyFXPRO-The Multi 3000 EA since january 2021, with a drawdown of less than 16%.

Investors who prefer moderate returns with moderate risk may also pay attention to TranquilityFX-The Genesis v3 account, which has gained 34.5% since April 03 with a drawdown of 16.7%.

Among the IB partners, NordFX TOP-3 is as follows:
- the largest commission, 8,841 USD, was credited in October to a partner from Vietnam, account No.1258ХXХ;
- the next is a partner from India, account No.1504XXX, who earned 4,132 USD in a month;
- and, finally, a partner from China, account No.1336ХХХ, who received 4,087 USD as a reward, closes the top three.

***

And summing up the results of the month, it should be reminded that traders have received another great opportunity to earn money. NordFX has a Super Lottery for NordFX clients this year, where many cash prizes ranging from $500 to $20,000 will soon be drawn.

It is very easy to take part in the lottery and get a chance to win one or even several of these prizes. All the details are available on the NordFX website.

EUR/USD: After ECB Meeting, Ahead of Fed Meeting

Last time the EUR/USD review was titled “In a state of uncertainty”, as confirmed by the previous week. Starting at 1.1643, the pair dipped to 1.1581, then rose to 1.1691, and ended the session with a new drop, this time to the 1.1560 level.

The main event last week was the European Central Bank meeting. As expected, the interest rate remained unchanged at 0%. Therefore, the commentary of the ECB management on monetary policy was of much greater interest. After the US Federal Reserve and the Bank of England outlined the timing of the start of curtailing their monetary stimulus (QE) programs, investors wanted to hear similar statements from the ECB. But… they didn’t hear them: the regulator’s press release practically repeated the previous one of September.

According to Bloomberg insider information, there is currently a split among ECB Governing Council members. First and foremost, this concerns estimating the extent of the upcoming inflation. ECB President Christine Lagarde's assurances that the recent rise in inflation to 3.4% is temporary does not suit all. Even more so, they look doubtful against Germany's 28-year inflation peak (4.6%) and Spain's 37-year peak (5.5%). The statement of the bank's management that the analysis does not confirm the need to raise the interest rate in 2022 also looks dubious.

All of the above has led investors to feel that the withdrawal of monetary stimulus in the Eurozone will not begin until late 2022 and early 2023. Against this backdrop, the European currency should have to weaken sharply. But if we look at the chart, we will see a sharp increase of the EUR/USD pair: the EUR/USD pair rose 110 points on October 28. Surprising but true!

The main reason lies in the macro statistics from the US, which came out at the same time as the ECB chief's press conference began. According to preliminary estimates, US GDP in Q3 will be 2.0%, well below not only the previous 6.7% but also the 2.7% forecast. The growth rate of the US economy fell from 12.2% to 4.9%. The figures tempered investor optimism and caused the dollar to weaken, with the USD index (DXY) falling from 93.86 to 93.33, and the Dow Jones and S&P500 stock indices almost returning to their historic highs. Falling gas and coal prices also played against the dollar, reducing the likelihood of an energy collapse in Europe.

At the end of the week, on Friday October 29, the dollar was able not only to win back losses, but also pushed the EUR/USD pair down to three-week lows. Investor positioning was key to this after the release of the US Fed's report on economic conditions, known as the Beige Book, ahead of the regulator's meeting next week. “With the Fed set to move to reduce asset purchases and flexibility, which is likely to be a key feature of future policy, the risk/return ratio becomes more positive for the dollar,” TD Securities analysts explained.

The dollar was also supported by a monthly gain on risk assets, a rise in bond yields to 1.672% (the highest since May) and good macro statistics from the US: the rise in the underlying PCE (Personal Consumption Expenditure) remained at 3.6% in September, in line with August. However, the European statistics caused another anxiety attack at investors, showing an acceleration in inflation and a sharp slowdown in GDP growth.

Despite the fluctuations of EUR/USD over the past few weeks, 100% of the trend indicators on D1 are looking south. But among oscillators, these fluctuations caused a certain amount of confusion: only 40% of them point south, 30% look north and 30% east. There is no unity among experts either. 30% vote for the growth of the pair, 55% for its fall, and 15% for lateral movement. Support levels are 1.1520, 1.1485, 1.1425 and 1.1250. Resistance levels are 1.1580, 1.1625, 1.1670, 1.1715, 1.1800, 1.1910.

As for important events and the release of macroeconomic statistics, there will be a lot of both in the coming week. German retail sales volumes and the ISM business activity index in the US manufacturing sector will be released on Monday November 01. The value of ISM in the service sector, as well as the ADP report on the level of employment in the US, will become public on Wednesday November 03. We will have such a key event as the Fed meeting on the same day, including the interest rate decision, as well as comments from its management on the US Central bank monetary policy. Christine Lagarde, head of the European Central Bank, is scheduled to speak on Wednesday and Thursday.

As usual, the first Friday of the month, November 05, will see data from the US labour market, including such an important indicator as the NFP, the number of jobs created outside the US agriculture sector. Eurozone retail sales statistics will be released the same day.

GBP/USD: Ahead of Fed and Bank of England Meetings

The Consumer Price Index (CPI), which reflects the retail price performance of goods and services that make up the consumer basket of United Kingdom residents, and is a key inflation indicator, was +0.3% in September (vs. +0.4% and +0.7% in August). On a year-on-year basis, the UK CPI grew by +3.1% (vs. +3.2% forecast and +3.2% in August). Although indicators showed inflation slowing in September, analysts expect it to accelerate sharply in October due to high energy prices, utility tariffs and a partial increase in VAT.

The coming week is not only the week of the Fed meeting, but also of the Bank of England, which will take place on Thursday November 04. According to a number of experts, the slowdown in inflation in September is unlikely to force the UK regulator to stop raising its key interest rate in the coming months (now at 0.1%).

The threat of stagflation, combining weak GDP growth and high inflation, is highly dangerous for the British economy, which is still being pressured by the effects of Brexit. According to the Bank of England experts, the annual inflation rate will accelerate to around 5% by April 2022 and fall to the 2% target as late as by the end of 2022. This is a very fast pace, and the head of the central bank, Andrew Bailey, has recently said that at such rates, it may be necessary to act and raise interest rates faster than originally planned.

Many investors now believe that the interest rate on the pound could reach 0.45% by the end of 2021 and 0.95% by June 2022, which is supposed to lead to a stronger pound. However, in the current substandard situation, things are not so simple, and the curtailment of monetary stimulus could lead to a deterioration in the British economy, deepening crisis and a drop in living standards of the UK residents. Retail sales volumes (excluding fuel), as determined by the Office for National Statistics, have shown a year-on-year decline of -0.9% to -2.5% for three consecutive months, suggesting that people have started saving.

The last week and a half shows that the bullish momentum on the GBP/USD pair that started on September 30 has dried up and, thanks to the same factors listed for EUR/USD, the pound ended the trading session at 1.3685 a month later.

Intrigue as to how the market will react to plans by the US Fed and Bank of England to wind down QE remains for now. But it's safe to say that coming Wednesday and Thursday, when these regulators meet, promise to be very interesting, high volatility is guaranteed. At the same time, 40% of experts are betting on the bears winning, 30% along with the graphical analysis on D1 support the bulls, and the remaining 30% have taken a neutral position.

As many as 50% of the oscillators are neutral grey. The readings of the rest oscillators are divided equally: 25% for the red and 25% for the green. As for trend indicators on D1, reds win with a clear advantage, they are 80%. Support levels are 1.3765, 1.3675, 1.3600, 1.3575, 1.3525 and 1.3400. The resistance levels and targets of the bulls are 1.3725, 3770, 1.3810, 1.3835, 1.3900 and 1.4000.

USD/JPY: The Yen Has Its Own Path


Charts from the past two and a half weeks show that the upward momentum has dried up for USD/JPY as well. Only if, in the case of GBP/USD, the dollar has been weakening against the pound since the end of September, on the contrary, it has been strengthening against the yen.

The Japanese currency is a safe haven currency for investors. And its recent weakening fits logically into a stable inverse relationship between the yen rate and the growing risk appetite of the market. It should also be added that another trigger for the yen's weakening was the shift in Japan's trade balance towards imports, due to a spike in energy and metal prices. And, of course, one cannot ignore such an important factor influencing the USD/JPY quotes as the yield of US Treasury bonds. However, it is also directly related to the market's risk-aversion.

USD/JPY upgraded its four-year high on October 20 to reach 114.70 high, the very point where it was in November 2017. After that, the enthusiasm of the bulls subsided, and the pair went down, ending last week at 113.95.

At this stage, 70% of analysts expect the pair to first return to the 113.00 horizon, and then drop to the 111.00-112.00 zone by the end of November. The remaining 30% of experts adhere to the opposite point of view, expecting the next update of multi-year highs and the rise of the pair to the range 115.00-116.00.

The resistance levels are 114.35, 114.70 and 115.50, the long-term target of the bulls is the December 2016 high of 118.65. The nearest support levels are 113.85, 113.40 and 113.25, then 112.00 and 111.65.

As for the events of the coming week, the release of the report of the Bank of Japan's Monetary Policy Committee meeting on Tuesday November 02 could be noted. However, it is likely the market will react to it fairly calmly. Especially since this event will take place just one day before the US Fed meeting, which will be the focus of all investors and speculators.

CRYPTOCURRENCIES: Ethereum Renews Its High

The historical record of $66,925 set by bitcoin on October 20 has not yet been broken. The imminent correction that followed taking that height brought forward a fierce bull and bear fight. The forces proved to be about equal. As a result, after swaying in the $57,590—63,645 range, the pair returned on Friday October 29 to roughly where it had been seven days earlier, to the $62,000 zone. The total crypto market capitalization is also unchanged at $2.6 trillion, but bitcoin's share has decreased somewhat: its dominance index has dropped from 45.94% to 44.15%. This was due to capital flows into altcoins, primarily ethereum, which rose from 18.72% to 19.61% over the week. The Crypto Fear & Greed Index is still in the Greed zone at 70 points (75 weeks ago).

Most analysts believe that the upward trend of the BTC/USD pair will continue. This is supported by statistics. Coin outflows from the exchanges have resumed, according to Glassnode. Bitcoin network hash rate has almost recovered after China's mining ban, which caused it to drop by 50%. At the same time, bitcoin supply is quite low: miners and investors are holding their reserves in the expectation of further price growth.

The macroeconomic background is also favourable. The New York Stock Exchange continues to list bitcoin-related ETFs. True, there is information that the Securities and Exchange Commission (SEC) is likely to reject Valkyrie's application to launch a leveraged ETF. Other of the 40 filings currently under consideration by the SEC, apart from applications to launch ETFs on bitcoin futures, will not receive the green light either. But those that will be approved are quite enough to ensure a solid inflow of funds into this sector from investors saving their capital from inflation.

The good news for BTC is that payments giant Mastercard will soon announce cryptocurrency support on its network. This includes bitcoin wallets, credit and debit cards, and loyalty programs where points can be converted into digital assets.

The American company Walmart Inc., which operates the world's largest wholesale and retail chain, has also turned to the main cryptocurrency and launched a pilot program to sell bitcoins in its stores.

Crypto trader and analyst known as Altcoin Sherpa is confident that bitcoin will not fall below the $54,000 zone where the strong support is located and, pushed back from it, will update its historic high in November, exceeding $80,000.

Another prominent analyst, PlanB, also expects a parabolic increase in the price of bitcoin. As a reminder, PlanB is the creator of the Stock-to-Flow (S2F) model, which predicts the price of the flagship cryptocurrency, and which allowed it to accurately predict BTC prices in August and September. And if bitcoin continues to follow this model, it will reach $98,000 in November and $135,000 in December. “So, it's going to be a really good Christmas this year,” declared PlanB.  At the same time, the expert believes that the flagship cryptocurrency is unlikely to be able to avoid another major correction that historically follows each major bull cycle.

Another popular cryptanalyst and trader Lark Davis expects that “the next six months are likely to be mega-crazy for bitcoin and cryptocurrencies! Many of you will get the chance to completely change your financial destiny,” he tweeted.

Davis does not advise investors to get carried away with speculative altcoins and NFTs in the current situation, but to bet on time-tested coins. “Let the winners win, double and even triple your positions and cut the losers. Do it mercilessly, there is no point in keeping dubious assets,” writes Lark Davis.

In his view, BTC could increase investor savings by 20 times over the next 10 years, but individual altcoins could generate comparable returns much sooner. “Altcoins are for making money, BTC is for storage,” the expert explains.

The leading altcoin seemed to have heard Lark Davis's words. While bitcoin was hovering around $60,000-61,000, ethereum renewed its all-time high, peaking at $4,447 on October 29. The previous record of $4,360 was set back in May.

The ETH/USD pair is bursting up for the fifth week in a row, having added more than 65% since September 21. The reason for this growth is the coin-burning process that takes ETH tokens out of circulation. Another factor that pushed this altcoin up was the news of the successful start of the Ethereum 2.0 Altair update for the Beacon Chain, which brought the moment of the full launch of ETH 2.0 even closer.

And another piece of news that will be of interest for those who think not only about their future, but also the future of their children and loved ones. Russian insurance company Renaissance Life and InDeFi SmartBank have started jointly developing smart contracts to help inherit digital assets. With the growth of the cryptocurrency market, the problem of inheriting such property has become quite acute. Since cryptocurrencies are decentralized, in the event of the death of the owner, the heirs simply cannot dispose of the property of the deceased without access to the cryptocurrency wallet. Smart contracts under development should solve this problem by enabling the client to transfer the disposal of digital assets to their designated heir in the event of their death.


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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EUR/USD: In a State of Uncertainty

When giving their forecast a week ago, 20% of analysts were in favour of a decline in EUR/USD, 50% voted for it to rise, and 30% were neutral. As a result, 80% of those who pointed north and east were right. After starting at 1.1600, the pair first rose to 1.1668, then fell to 1.1616, and then moved sideways in this channel. After Friday's speech by the Fed Governor, the pair dropped to the bottom of this trading range but finished almost in its middle at 1.1643.

According to Reuters, Jerome Powell said it was time to start reducing asset purchases but added that it was not yet time to raise rates. In his view, high inflation is likely to continue into next year, but the central bank expects it to return to the 2% target.

The figures coming in the week from the US labour market could be considered positive. This was due to a larger revision of the previous data on repeated claims for unemployment benefits, from 2.593K to 2.603K. Thus, the current number of 2.481K showed a decrease of 122K instead of the forecast 118K.

Such "tricky" mathematics improved data on primary benefit claims as well. As a result of revising previous results, they decreased by 6K instead of increasing by 2K.

However, all this positive has not helped the dollar much, as US Treasury yields remain around 2.15%, while the probability of its growth towards 3.0% remains.

Weaker Markit PMI in German and Eurozone manufacturing sectors could push the EUR/USD pair down on Friday 22 October. But they turned out to be multi-colored. The European index turned into the red, dropping from 56.2 to 54.3 against a forecast of 55.2. But the index of the main locomotive of the European housekeeper, Germany, on the contrary, is green at 58.2 against the forecast 56.5.

The fact that the US labour market continues to improve should, in the end, provide more support to the dollar. Fed Governor Jerome Powell has repeatedly stressed that the monetary stimulus (QE) program is aimed at stabilizing the labor market, among other things. This task, although not fully accomplished, is very close to the goal. Consequently, there is nothing preventing the Fed from starting to reduce monetary stimulus in the near future.

So, what to expect from EUR/USD in the near future? Whereas 55% of the oscillators on D1 were painted red, 15% green and 30% neutral grey a week ago, the picture has changed now. 50% of the indicators are pointing up, 20% have taken a neutral position, 15% are looking down, and the remaining 15% are signaling that the pair is overbought. As for trend indicators, their readings have also been affected by the sideways movement of recent days, resulting in a draw of 50% by 50%.

The overwhelming majority of analysts expect the dollar to strengthen by the end of the year. But their opinions are almost equally divided about the forecast for the coming week. 45% of experts vote for the bullish scenario, as much as bearish, and 10% have taken a neutral stance.

Support levels are 1.1615, 1.1585, 1.1560, 1.1520, 1.1485 and 1.1450. Resistance levels are 1.1670 1.1715, 1.1800, 1.1910.

As for next week's events, the Eurozone Bank Lending Report which will be published on Tuesday 26 October should be noted. Capital and durable goods orders are due from the US on Wednesday October 27. We are expecting quite a lot of macro statistics on Thursday and Friday, including consumer markets and GDP data from the Eurozone, Germany and the United States. In addition, the European Central Bank will meet on October 28. The interest rate is likely to remain unchanged at 0%. Therefore, the subsequent press conference and commentary by the ECB management on monetary policy is of much greater interest.

GBP/USD: Wherever the Euro Goes, the Pound Goes

Last week's GBP/USD chart is very similar to the EUR/USD chart: sideways movement with some advantage to bulls and finish just above the start level, at 1.3758. This stems from the absence of many serious drivers from the other side of the Atlantic, as well as from the statistics from the UK itself.

UK consumer price growth slowed from 3.2 per cent to 3.1 per cent, which is a good signal for investors fearing global inflation. However, the market has hardly reacted to these figures, keeping a close eye on gas prices, as the energy crisis is now a major threat not only for the United Europe but also for the UK that separated from it. Inflation is certainly very important, but the country is repeating the path already taken by the Eurozone and the United States, where it was followed by strong growth following a slight decline.

The Markit Business Activity Index (PMI) in the British services sector published on Friday, October 22, rose from 55.4 to 58.0 instead of the expected decline. This didn't help the pound. The dollar, with the help of Jerome Powell, who made a speech shortly before the markets closed, strengthened not only against the euro, but also against the British currency.

Unlike its European counterpart, the pound had been growing since September 29. And this could not but affect the readings of the indicators on D1, among which the advantage is still on the side of the green. Among the oscillators, these are 55%, 25% are grey and 20% signal that the pair is overbought. Among the trend indicators, 60% are looking north, 40% have already turned south.

As far as experts are concerned, there is no discernible advantage: 35% vote for the pair's growth, 25% for its decline, and 40% for movement in the side channel.

The supports are located at levels 1.3740, 1.3675, 1.3600, 1.3575, 1.3525 and 1.3400. The resistance levels and bull targets are 1.3770, 1.3810, 1.3835, 1.3900 and 1.4000

USD/JPY: Return to 2017

USD/JPY upgraded its four-year high on October 20 to reach 114.70 high, the very point where it was in November 2017. After that, the enthusiasm of the bulls subsided, and the pair returned to the values of a week ago.

While the dollar has strengthened against the euro and the British pound since Fed Governor Jerome Powell's speech on October 22, it has weakened a bit against the yen as a safe haven currency. As a result, the final chord sounded at around 113.42.

As we know, the pair's performance is strongly influenced by the yield of US government bonds, which hovers around 2.15% so far. However, if it rises, USD/JPY will see a new rise in volatility.

At this stage, 65% of analysts expect the pair to first return to the 113.00 horizon, and then drop to the 111.00-112.00 zone by the end of November. The remaining 35% of experts adhere to the opposite point of view, expecting the next update of multi-year highs and the rise of the pair to the range 115.00-116.00.

The resistance levels are 114.45, 114.70 and 115.50, the long-term target of the bulls is the December 2016 high of 118.65. Support levels are 113.25, 112.00 and 111.65.

As for the events of the coming week, one could note the meeting of the Bank of Japan, which will be held on the same day as the meeting of the ECB, on Thursday October 28. However, it is highly likely to bring no surprises, and the interest rate will remain negative at minus 0.1% as before.

CRYPTOCURRENCIES: $66,925: Bitcoin's New High


Bitcoin hit $64,850 on April 14, followed by a 55% pullback to $29,230. And now what crypto investors have been waiting for has finally happened. After months of anxiety and anticipation, the BTC/USD pair not only regained what it had lost, but also upgraded its historic high, peaking at $66,925 on October 20. Ethereum also reached its all-time high: the ETH/USD pair was noted at a height of $4,363.

Analysts say the reasons for the current rise are two. The first is the launch of Bitcoin ETFs (exchange-traded investment funds). First, the US Securities and Exchange Commission (SEC) approved a Bitcoin futures ETF from ProShares, followed by approval of VanEck's application to launch a similar ETF.

The second and main reason for the bullish trend was investors' concerns about inflation. Experts at JPMorgan Chase, the largest banking conglomerate, pointed out that real gold, unlike digital gold, has hardly responded to inflationary concerns. This suggests bitcoin's renewed role as the best capital protection tool for investors and supports the bullish outlook for BTC until the end of the year.

Many other analysts agree with JPMorgan Chase, who are optimistic about the performance of the main cryptocurrency until the end of December. But at the same time, they urge investors to be extremely cautious in early 2020 as the big four-year BTC cycle is about to end. So Scion Capital hedge fund founder Michael Burry, who predicted the 2007 mortgage crisis, has already thought about opening a short bitcoin position.

Finder conducted a survey of 50 fintech industry experts with representatives from Cypherpunk Holdings, Bitcoin Reserve, Kraken, Arcane and CryptoQuant, as well as 7 professors, representing universities in Asia, Europe and Australia. In their opinion, the BTC rate will peak at a level slightly above $80,000 within the next two months, and the flagship cryptocurrency will end the year around $71,400.

The levels indicated by these experts turned out to be significantly lower than the forecasts of analysts of Standard Chartered and Bloomberg, who believe bitcoin could exceed $100,000 this year.

Popular crypto analyst Willy Woo believes that the next phase of the bitcoin market will be more volatile than previous bullish periods, implying a longer time frame for the current cycle. recall that this analyst wrote in a series of Twitter posts a year ago that, according to his model, $200,000 per bitcoin by the end of 2021 is a conservative forecast. However, he did not exclude the likelihood that BTC will soar up to $300,000.

Morgan Creek Capital Management CEO Mark Jusko calls the numbers similar to Willie Woo's predictions. He suggests that the price of the oldest cryptocurrency could soar to the level of $250,000, only to happen not in 2021, but in the next 5 years. In doing so, he acknowledged that the path to such a peak may not be easy.

In the meantime, there is a rollback in the crypto market. The most cautious investors close long positions. Bitcoins are also sold by those who bought them at the spring highs. They have earned a little and do not want to risk again.  A glitch in the algorithm on the Binance.US exchange added fears as well, when the price immediately collapsed by 87%. However, the performance of other exchanges and brokers was not affected by this, and the BTC/USD pair was trading at $61,000 at the time of writing. The total crypto market capitalization is $2.6 trillion, and the Bitcoin Dominance Index is 45.94%. The Crypto Fear & Greed Index is in the Greed zone at 75 points. However, this does not mean that the market is strongly overbought, and, in the opinion of the index developers, it can still be dangerous to open short positions in this situation.


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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EUR/USD: Correction or Trend Change?

Having reached a local low of 1.1523 on Tuesday October 12, EUR/USD ended a five-week downward marathon, turned, and moved up. Since autumn started, the dollar has won back 385 points from the euro. And is the pan-European currency going to regain losses now?

The situation is actually ambiguous. Some experts expected a much more powerful correction further north. But it didn't happen: the pair managed to rise only to 1.1624 and ended the five-day run at 1.1600.

The week's data show that the US economy continues to recover fairly quickly, increasing to almost 100% the chance that the Fed will start tapering monetary stimulus (QE) program next month.

Initial claims for unemployment benefits in the US fell to 293,000 for the first time since the start of the COVID-19 pandemic (down 36K against 14,000 forecast). And the number of those already receiving benefits, with the forecast of 78 thousand, decreased by 134 thousand: from 2.72 to 2.59 million. Producer prices also showed an increase, from 8.3% to 8.6% (with a forecast of 8.5%). Year-on-year, therefore, inflation of these prices showed the most powerful uptick in history.

It should be noted that the Producer Price Index serves as a leading indicator for consumer prices. And consequently, inflation can be expected to continue rising, bringing the beginning of the end of QE closer. Especially as retail sales released on Friday 15th October were also in the green zone: ­plus 0.7% versus the forecast minus 0.2%.

 And here the question arises: if everything is so good in the US economy, why hasn't the pair continued its precipitous decline? Grasping at straws, euro-bulls are likely still hoping that the winding down of the fiscal stimulus program will be delayed at least until December. This is supported by the jump in stock indices: the S&P500 rose 3 per cent in the second half of the week (its highest gain in seven months) and the Dow Jones rose 3.4 per cent. This index has not seen such a big break in almost three months.

So what to expect from EUR/USD in the near future? Continuation of the downtrend after the correction? A stronger euro and an upward trend reversal? Or respite in the side channel?

The readings of the indicators on D1 look quite chaotic. Among oscillators, 55% are red, 15% green, and the remaining 30% are neutral grey. There is a lack of unity among trend indicators as well: 65% of them point south and 35% are looking north. The graphical analysis draws the pair's rise to 1.1725, then a fall back and move in the range of 1.1585-1.1725.

As for analysts, 20% favour further decline of the pair, 50% are for its growth, and 30% have taken a neutral stance. Support levels are 1.1585, 1.1560, 1.1520, 1.1485 and 1.1450. Resistance levels are 1.1625, 1.1685 1.1715, 1.1800, 1.1910.

For next week's events, the European Council meeting on Thursday October 21 and the Markit Manufacturing PMI in Germany and in the Eurozone as a whole on October 22 can be noted. The decision of the People's Bank of China on the interest rate, which will be made public on Wednesday, October 20, may also rock the pair.

GBP/USD: The Victory Is with the Pound So Far

Unlike its European neighbour, the British pound continues to strengthen actively against the dollar: the GBP/USD pair showed a 360-point gain (from 1.3412 to 1.3772) since September 29 and finished at 1.3744. The reason for this dynamic is understandable and lies in the Bank of England's intention to start tightening monetary policy and raising interest rates considerably in the foreseeable future.

As we have already written, according to Citibank experts, the pound is currently supported by the following factors. First is the UK's success in the fight against COVID-19. Secondly, the reduction of political risks associated with the negotiations between the EU and the UK on the Northern Ireland Protocol and the rejection of the referendum on the independence of Scotland. And of course, this is the decision of the Bank of England on a possible increase in the key interest rate to 0.25% in May 2022 and to 0.50% in December. Such prospects for UK monetary policy, according to Citibank analysts, are “well placed to confront Fed policy”, which is what we have seen during October.

However, once the Fed moves to wind down its QE programme, things could change dramatically in favour of the dollar. 60% of experts predict at the moment that the pair will head south again to test the supports at 1.3675, 1.3600, 1.3575, 1.3525 and 1.3400. 20% of analysts vote for the continuation of the upward trend (resistance levels and targets of bulls 1.3770, 1.3810, 1.3900 and 1.4000). And 20% of experts, supported by graphical analysis on D1, predict a sideways trend.

Among the indicators, a significant advantage is still on the side of the green. 60% of oscillators and 100% of trend indicators indicate the continuation of the uptrend on the daily timeframe. 25% of oscillators signal that the pair is overbought, and 15% are in a neutral position.

As for the economic calendar for the coming week, attention should be paid to such an important measure of inflation as the UK CPI (due on Wednesday October 20), as well as Markit's UK services PMI to be released on Friday October 22.

USD/JPY: Per Aspera Ad Astra


There is such an expression in Latin, Per aspera ad astra, the authorship is attributed to the ancient Roman philosopher Lucius Anna Seneca. It literally translates as "Through hardships to the stars” and means "Through difficulties to victory." This is exactly what the USD/JPY bulls won.

Most experts expected that they would not calm down until they took the 112.00 height by storm. And now, finally, their months-long efforts have succeeded. And in a great way. After jumping 222 points over the week, the pair reached a height of 114.45 on Friday October 15, and the last chord was slightly lower at 114.21, near the upper limit of the trade range since the beginning of 2017.

Such a fiasco of the Japanese currency is fully consistent with its role as a haven currency and reflects a stable inverse relationship between its rate and the demand for risks. The growing interest of investors in the American and Japanese stock markets (the Japanese stock index Nikkei 225 grew in parallel with the S&P 500) dealt a strong blow to the yen. A pullback in energy prices, which the country mostly imports, supported the market's appetite for Japanese stocks as well.

According to Japanese Finance Minister Shunichi Suzuki, the weak yen supports exporters, but inflates import costs for a number of companies and consumers. At the same time, he said that the stability in the Forex market is important for the government, and it closely monitors the impact of exchange rates on the Japanese economy. But the minister refused to comment directly on the current situation.

However, the yen's fall in two weeks of October looks too fast against the background of the dynamics of the last five months. And this could be the reason for a strong correction of the USD/JPY pair to the south. So 70% of analysts believe that the pair will return to the 111.00-112.00 zone within the next three to five weeks. However, the bulls will have the advantage in the short term. According to 55% of experts, the continued interest of investors in the stock market could lead to further weakening of the Japanese currency.

At the time of writing this review, 75% of oscillators and 100% of trend indicators on D1 indicate further growth in the pair. 25% of oscillators signal that it is overbought and a possible correction. The resistance levels are 114.55 and 115.50, the long-term target of the bulls is the December 2016 high of 118.65. Support levels are 113.80, 113.25, 112.00 and 111.65.

CRYPTOCURRENCIES: BTC's New Target Is $68,000

China-related news almost reversed the bitcoin trend south again on Wednesday, October 13. Binance, the largest cryptocurrency exchange, has announced, following other exchanges, that it will stop serving Chinese clients and remove the yuan from the list of supported currencies as of December 31.

Prior to Beijing's repressions, residents of this country formed one of the major parts of the crypto community, with the country leading bitcoin mining. Back in 2020, its share was 50-60% of the global hash rate. The situation has changed dramatically since then and, according to Cambridge University, the top three in crypto mining are now the United States (35.4%), Kazakhstan (18.1%) and Russia (11.2%).

If you look at the map, you can see that the last two of these countries have a land border with China, which made it possible to move numerous mining equipment there. As a result, illegal miners in some Russian border regions have increased annual electricity consumption by 160%.

Time will tell whether China will win or lose from the imposed bans. This applies to other countries as well, some of which seek to tighten legislation in this area as much as possible, while others are very loyal to digital assets. For example, Director of US National Intelligence John Ratcliffe sent a letter to the SEC chairman last year asking him not to restrict the activities of US miners. There is no need to talk about El Salvador, which recognized bitcoin as the official currency.

Interestingly, this decision was heavily criticized by ethereum creator Vitalik Buterin. “Shame on everyone (okay, I'll name the main culprits: shame on bitcoin maximalists) who praise him [El Salvador President Nayib Bukele] without any criticism,” Buterin wrote on Reddit. And he stressed that the process of forcibly integrating digital assets into the financial system “runs counter to the ideals of freedom that should be appreciated by members of the cryptocurrency community. In addition, the tactic of simultaneously distributing BTC to millions of El Salvadorians with little or no prior training is reckless and fraught with the risk of large numbers of innocent people being hacked or tricked."

The Capgemini Research Institute is also concerned with the question of how widely cryptocurrencies have entered the life of ordinary people. In addition to surveys conducted in many countries, it examined statistics from the Bank for International Settlements, the European Central Bank, the International Monetary Fund, the World Bank and other central banks.

Capgemini noted that less than 10% of consumers currently use cryptocurrency for payments. However, the institute predicts that nearly 45% of customers will use this new payment method in one to two years. This trend will be supported by the growing demand for international payments and the reluctance to pay high transaction fees.

If the world's leading powers don't start chasing bitcoin after China, the flagship cryptocurrency has a lot of chances to to bypass leading corporations and even entire sectors of the world economy in terms of capitalization.

According to Coinmarketcap, the largest capitalization currently belongs to Apple ($ 2.34 trillion), followed by Microsoft, Google, Amazon, and BTC is in fifth place. If you look at the statistics, the total capitalization of the stock market is currently about $100 trillion, the capitalization of the gold market is around $12 trillion, the total capitalization of the cryptocurrency market at the time of writing the review is $2.42 trillion, and the capitalization of BTChas already reached $1.12 trillion (dominance index 46.24%).

Bitcoin continued to delight investors over the past week. Over the seven days, the BTC/USD pair rose 16% to reach a local high of $62,880. Projections supported by many experts suggest that it will soon test the historic high of $64,810 on April 14. If successful, taking into account the statistical volatility, the pair will reach the $68,000, followed by a serious correction associated with massive profit taking.

However, despite a possible pullback, the mid-term outlook for this pair remains positive. The next major resistance level is located in the $80,000-81,000 area. American Crypto Exchange Kraken experts believe that the price of the flagship asset could reach $100,000 by the end of 2021. Based on the analysis of the dynamics of previous years, a calculation was made, according to which, the price of bitcoin tends to grow during the fourth quarter of any year. During this period, "the average and median returns reached +119% and +58%, respectively." If the average return of the previous 2020 year recurs, BTC could end the year close to $100,000. More precisely, around $96,000. However, if we see not the average, but the median profitability, Kraken experts write, then the price of bitcoin will rise to about $70,000.

The Crypto Fear & Greed Index climbed from the Fear Zone to the Greed Zone in the two weeks of October to reach 71 points. However, this does not mean that the market is strongly overbought, and, in the opinion of the index developers, it can still be dangerous to open short positions in this situation.


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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EUR/USD: First Down, Then Up


The global economy is recovering from the effects of the COVID-19 pandemic, and this process will continue in 2022. At least. The forecast for global GDP growth of 6% is maintained this year. Growth will continue (unless there are new “surprises”) to roughly 5% next year, according to preliminary forecasts. However, this is an average indicator, and it is the difference in the rates of recovery of the economies of different countries that will affect the rates of their national currencies.

You can see quite different vector behavior of the EUR/USD pair since the beginning of the pandemic. Having started at 1.0635 in March 2020, the pair was already at 1.2350 in early January 2021. The weakening of the dollar has been affected by the intense pumping of the US economy with a huge dollar mass as part of the monetary stimulus (QE) policy implemented by the US Federal Reserve.

With the start of a new 2021 and the arrival of the administration of a new President Joe Biden in the White House, the market has a feeling of greater stability and the imminent winding down of QE. All the more so because macroeconomic indicators, particularly inflation and the labor market recovery, were encouraging. The dollar gained muscle and the EUR/USD pair dropped to 1.1700 by the end of March.

But dovish sentiment prevailed among the Fed's leadership, the pumping of the economy with money continued, the beginning of the curtailment of the quantitative easing program was postponed indefinitely, and one could not even think about raising the base interest rate. And the pair rose above the important psychological level 1.2000 again, reaching the height of 1.2265.

The competition between the central banks of Europe and the United States certainly did not end there. But while the ECB's rhetoric continued to be dovish, the statements of some Fed leaders already sounded a harsh hawkish note. Investors started to expect that the Fed would begin to roll back QE at the end of this year and will complete it in 2022, in order to start raising the discount rate in early 2023. And the dollar gained ground again, dropping the pair back into the 1.1700 zone.  

At its September meeting, the American regulator did not announce any specific plans regarding the curtailment of the monetary stimulus program. But, if decision-making dynamics remain the same, the Fed will be ahead of the ECB by about six months.

On this basis, many experts predict the dollar will continue to strengthen in late 2021 and in the first half of 2022. In this case, the pair will continue to move south, first to support 1.1500 and then to 1.1200. Some particularly zeal bears predict the pair will even drop to the lows of March 2020.

As for the second half of 2022, according to a number of forecasts, the US economic situation will stabilize, while the “slow” Eurozone, on the contrary, will begin to gain momentum. A reduction in the European QE program and a rise in the euro interest rate could reverse the trend and return the pair to the 1.1700-1.2000 zone.   

It is clear that the dynamics of the pair depends on many factors on both sides of the Atlantic Ocean: political, economic, and in recent years, epidemiological. One other major player is China, which also has a strong influence on the economies of both the Old World and the New World. Therefore, it should be understood that everything said is based on a vision of the situation at the moment, and can be (and should be) subject to adjustment many times over the coming months.
 

Cryptocurrencies: Virtual and Real Gold

While there is a rough understanding and political and economic justification of forecasts with the major currency pair EUR/USD, things look much more complicated as far as cryptocurrency is concerned. Despite the assurances of influencers, this market looks more like the epicenter of mass speculation over the past 1-1.5 years, rather than a reliable investment platform. The year is not over yet, but bitcoin has already managed to soar from $28,550 in January to $64,800 in April, then collapsed to $29,300 in July, and then repeat this rally, only on a slightly smaller scale.

The rate of the BTC/USD pair can be influenced not only by the decisions of US regulators and the Chinese government, but even the mood Elon Musk has woken up in. One of his tweets can make you a millionaire or rip you to the bone. That's why NordFX brokerage gives its clients the opportunity to make money not only on the growth, but also on the fall of cryptocurrency rates, even without having a single token in stock. Why take the risk and buy bitcoin and then sell it? After all, you can just open a sell trade right away.

Nobody knows exactly how much the reference cryptocurrency will cost. Expert opinions vary widely. Some, like Standart Chartered, see $100,000 by the end of this year, and some predict a rise to the same $100,000, but only by the end of 2022. And some, like the Nobel laureate Robert Schiller, are sure that this bubble will burst soon, burying the two trillion USD plus that the investors have invested in this market.

Much will depend on the recovery of the US economy, the pace of the winding down the monetary stimulus (QE) programme, the prospects for the Fed raising interest rates and the dynamics of treasury yields. These are factors that can severely reduce the risk appetite of institutional investors and return them to more familiar financial instruments.

For ethereum, the forecast of Standard Chartered experts is as favorable as for bitcoin and looks very optimistic. A range of $26,000-35,000 per coin was announced in an interview for Reuters. But that's not the limit either, especially if the bitcoin rate approaches $175,000 by the end of 2022.

According to a report by the major investment bank Goldman Sachs published in Forbes, the base cryptocurrency has the chance to lose its leading position, giving way to ethereum. Goldman Sachs believes that the main reason for the popularity of the main altcoin is the ability to create new applications. And also the fact that many financial instruments can be replaced on the basis of its platform. This includes, among other things, loans and other banking operations.

As for real, not digital, gold, a number of experts believe that this precious metal has yet to run out of growth potential in 2022. They do not rule out that the XAU/USD pair could break the August 2020 record and rise to $2,200-2,300 per ounce. However, the price performance of this reserve asset will also depend on investors' willingness or reluctance to take risks, as mentioned above.


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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NordFX Brokerage company has summed up the performance of its clients' trade transactions in September 2021. The services of social trading, PAMM and CopyTrading, as well as the profit received by the company's IB-partners have also been assessed.

The highest profit in the first month of autumn was received by a client from India, account No.1584XXX, earning almost USD 300,000, or USD 291,944 to be exact. As the analysis shows, the main trading instruments of the leaders are still the pairs with the British pound (GBP/USD, GBP/CHF, GBP/AUD). The winner of the September rating used a number of other pairs as well, such as EUR/NZD, for example.

The second place on the podium was taken by a representative of China, account No. 1397XXX. Their result was almost half that of the leader, but still amounted to an impressive USD 159,241, and was obtained for the same volatile pairs including the British currency: GBP/USD and GBP/JPY.

A trader from Vietnam, account No.1499XXX, who ranked third, used the GBP/JPY pair heavily as well. Their profit at the end of the month amounted to USD 93.610.

The passive investment services:
- CopyTrading has changed its leader. It is the aggressive SHASK VN signal broadcast from Vietnam now. It showed a yield of 435%  on deals with oil (72% of the total) and with gold (21%), in the last three days of September alone. At the same time, the maximum drawdown during the lifetime of the signal was close to 63% of the deposit, making subscribing to it a high-risk event.

As for the leader of July-August, BangBigBosStop1, the first autumn month was not very successful for it. It suffered a loss of 6% in September. There is nothing critical about it, though, as the total profit for the five months is 668%. However, despite the advantages of this signal, the maximum drawdown of 58% also makes it a high-risk group. 
As for less risky but also less profitable signals, one might look at KennyFXpro-The Compass, for example. This signal has shown a gain of 135% with a drawdown of around 29% since last November.

- Judging by the title, the same author acts as a manager for NordFX PAMM service as well. Using the nickname KennyFXpro-The Multi 3000 EA, they have increased their capital there by 42% with a drawdown of less than 15% since January 2021.

There are other, even less risky offers in the PAMM service. For example, capital gains under TranquilityFX-The Genesis v3 exceeded 26% over six months with a maximum drawdown of about 10%.

Among the IB partners, NordFX TOP-3 is as follows:
- the largest commission, USD 8,710, was credited in September to a partner from India, account No.1258ХXХ;
- next is a partner from the Philippines, account No.1352ХХХ, who received USD 6,384;
- and, finally, their colleague from China (account No.1336XXX) closes the top three, earning USD 5,992 in commission.

EUR/USD: Bears' New Win


EUR/USD fell to 1.1562 last week, breaking through the key support level of 1.1630, which separated the bullish trend that began in March 2020 from the bearish trend.

September turned out to be the worst month for the US stock market, allowing the dollar to strengthen its position as a safe-haven asset. In addition, the Fed made it clear at its last meeting that it may be ready to begin a soft rollback of the monetary stimulus (QE) program in November. After that, the DXY dollar index posted its best monthly gain this year.

Things could have changed last Thursday. The US ended its fiscal year on September 30, and as of October 01, the country must live under a new budget, which is still not there. If President Biden had not signed legislation before midnight to increase the national debt limit, it would have threatened not only with the suspension of U.S. government, but also with a potential default. However, Biden approved lifting the limit at the very last moment, but only until December 3.

Amid the intrigue with government debt, the market hardly reacted to the contradictory US macro statistics, although the news from the labour market was not the most gratifying. For example, initial applications for unemployment benefits rose from 351,000 to 362,000, against the forecast decline to 335,000. The PMI index of Chicago in September fell from 66.8 to 64.7 points (against the forecast of 65 points). But the US GDP for the Q2 grew by 6.7% and turned out to be better than the forecast by 0.1%.

Governors of Central banks on both sides of the Atlantic remained cautious last week, leaving their escape routes. Fed Chairman Jerome Powell, speaking to members of the Senate, said once again that the acceleration of inflation should be replaced by its slowdown. The strong rise in prices, he said, is “driven by supply chain problems” that his department cannot control.

Almost the same statement was made by ECB Governor Christine Lagarde on Tuesday 28 September. She warned market participants against overreacting to the acceleration of inflation in the Eurozone, considering the phenomenon a temporary factor.

Consumer inflation rose 3.4% in September, the highest level in 13 years, according to Eurostat data. As for inflation in Germany, the main locomotive of the EU, it peaked in 29 years at 4.1%. According to preliminary forecasts, inflation in the Eurozone will approach 4% in Q4 and remain above 2% in the first half of 2022. According to analysts, such an increase is most likely caused by a sharp jump in energy prices.

These statistics and the fact that some market participants decided to close short EUR/USD positions at the end of the US fiscal year, recording gains, helped the common European currency a little, and the pair, having fought back from the local bottom, ended the five-day run at 1.1595.

As for the long-term forecast, many experts believe that the euro has no particular prospects. Some even believe that the pair will return to the spring 2020 lows by the end of next year. As for the near future forecast, 50% of analysts are in favor of a further decline in the pair. They are supported by 100% of trend indicators and 85% of oscillators on D1 (15% give signals that the pair is oversold). 20% vote for the sideways trend, and the remaining 30% of experts vote for the growth of the pair.

Support levels are 1.1560, 1.1500 and 1.1450. Resistance levels are 1.1685 1.1715, 1.1800, 1.1910.

Of the events to come, note the release of the ISM PMI in the US services sector on Tuesday October 05. Eurozone retail sales will be available on the following day, October 06. The ADP U.S. private employment report will also be released on that day, and another piece of data from the American labor market will arrive on Friday, October 08, including such an important indicator as the number of new jobs outside the agricultural sector (NFP). 

GBP/USD: Bank of England vs US Fed

Last week ended with a bearish win for the GBP/USD pair as well. After starting at 1.3670 and losing 260 points, it bottomed at 1.3410 on Wednesday September 29. This was followed by a fairly powerful rebound and a finish at 1.3545.

Due to the US government debt situation, the market hardly paid attention to the encouraging macro statistics from the UK. But it turned out to be significantly better than forecast. Not only has the GDP drop in the Q1 2021 been revised down from minus 6.1% to 4.8%, but, with a forecast of minus 1.5%, it was 5.5% in Q2.

However, according to a number of experts, the growth of the pound at the end of the week is only indirectly related to these impressive positive statistics. The main reason is that the British currency has been strongly oversold: it has lost about 500 pips to the dollar since mid-September.

At the moment, 70% of experts predict that the pair will go south again to test support in the 1.3400 zone. The remaining 30% have taken a neutral position. As for technical analysis, it still sides with the bears as well¬: 85% of oscillators and trend indicators on D1 are colored red. 

It should be noted that when we move to the forecast before the year end, the picture abruptly changes to the opposite: 70% of analysts already say that the GBP/USD pair will return to the 1.3900- 1.4000 zone. Moreover, a third of these 70% does not rule out that it can even reach the May-June highs of 1.4200-1.4250.

The nearest resistances along the way are 1.3600, 1.3690, 1.3765, 1.3810. Supports are in zones 1.3400, 1.3350 and 1.3185.

According to Citibank experts, the pound is currently supported by the following factors. First, there is a decrease in the number of hospitalizations in the UK due to COVID-19. UK assets are attractive both in terms of valuation and in terms of economic normalization after the pandemic. Secondly, it is a decrease in political risks associated with the negotiations between the EU and the UK on the Northern Ireland Protocol and the rejection of the referendum on Scottish independence. And of course, this is the decision of the Bank of England on a possible increase in the key interest rate to 0.25% in May 2022 and to 0.50% in December. Such prospects for UK monetary policy, according to analysts at Citibank, are “well placed to confront Fed policy.”

USD/JPY: 112.00 Again

As predicted by most experts (60%), the USD/JPY pair managed to climb to 112.00 after the Fed's QE cut announcement, and even slightly higher, recording a high at 112.07. The forecast went on to say that it was unlikely to gain a foothold above this horizon. This is exactly what happened. Amid a drop in US government bond yields from 1.567% to 1.474% and a weaker dollar, the yen managed to recoup much of the losses at the end of the week and ended the trading session at 111.02.

Recall that unlike other central banks in developed countries, the Bank of Japan remains committed to ultra-soft monetary policy and negative interest rates. Therefore, the yen is still of interest not as a tool for making money, but as a safe haven currency.

At the moment, 50% of experts expect the pair to make another attempt to consolidate above the 112.00 horizon. 25% of analysts are neutral, and another 25% expect the pair to fall.

Support levels are unchanged: 110.45, 110.15, 109.60, 109.10, 108.70 and 108.30. The dream of the bears (it seems to be already impossible) is to retest the April low of 107.45. The nearest resistance levels are 111.00 and 111.65.

It should be noted that the USD/JPY pair has been moving along the 110.00 horizon since last March, making rare attempts to get out of the 108.30-111.00 trading channel. On this basis, the absolute majority of analysts believe that after the failed storm of 112.00, the pair will return to this trading range, where it will continue to move.

CRYPTOCURRENCIES: "Goodbye Bears"

According to statistics from the 99Bitcoins website, digital gold was predicted to die 37 times in 2021. Interestingly, this amount is 2.65 times higher than in 2020, during which BTC “passed away” only 14 times.

99Bitcoins has acted as the official repository for all bitcoin obituaries since 2010, with precise criteria for selecting such publications. The last registered obituary dates from September 21, 2021 and was written by renowned economist Steve Hanke of Johns Hopkins University, who stated that bitcoin is a highly speculative zero-value asset.

Another obituary may soon be registered, this one authored by entrepreneur Robert Kiyosaki. The other day, this best-selling author of “Rich Dad, Poor Dad” projected a “giant stock market collapse” due in October. The same fate awaits gold, silver and bitcoin, he said. The main reason for Kiyosaki's upcoming collapse is the Fed, which has started to sell too many Treasury bonds.

Another unhappy forecast was given by an analyst under the nickname PlanB, the author of the Stock-to-Flow (S2F) model. This model predicts the value of bitcoin based on the ratio of the asset's total available supply and its annual increase. Calculations by PlanB have recently showed that the bitcoin rate will exceed $100,000 at the end of this year. And now things have changed for the worse: according to the analyst, the price of the flagship coin could drop to $30,000 instead of rising.

Indeed, bitcoin dynamics did not bode well for the crypto market in September, with the BTC/USD pair falling to $39,666. However, the first day of October changed everything¬: bitcoin flew up, rising to $48,250. We have repeatedly noted the correlation between the stock and crypto markets, which is based on the risk appetite of investors. This time, too, the rise in the price of digital assets occurred in parallel with the rise of stock indices such as the S&P500 and Dow Jones.

An additional impetus for bitcoin could have been given by a surge in the volume of cryptocurrency derivatives exchanges. According to analyst Joseph Edwards of London-based firm Enigma Securities, derivatives trading often affects BTC spot prices. Another impetus may have been the decision by Iranian authorities to lift the ban on cryptocurrency mining.

Famous trader hailed the rise of the major cryptocurrency, exclaiming: “Goodbye bears “, and pointed to the move of leading altcoins into the green zone.

Another trader, billionaire Steven A. Cohen, owner of hedge fund SAC Capital Advisors, saw a perfect scenario for bitcoin that could steer it into future rallies. Cohen believes that BTC may still decline, while it is important its price doesn't fall below the 20-week simple moving average (SMA). This will be the key to creating bullish momentum that will push the the coin up to $64,000.

The 20-week SMA, coupled with the 21-week exponential moving average (EMA), is what Cowen calls the "bull market support band." In his view, it is crucial for bitcoin to stay above this band, as history shows that BTC tends to break through the first time it is retested.

The total crypto market capitalization rose again above the psychologically important threshold of $2.0 trillion on October 01 and stands at $2.06 trillion ($1.84 trillion a week ago). But the Crypto Fear & Greed Index is still in the Fear zone at 27 points.

And in conclusion, another tip in our joke crypto life hacks column. So what does it take to make money on cryptocurrencies? It turns out it's all about getting a hamster and giving it a chance to... trade. Over the past three months, the value of the portfolio of Mr. Goxx - a crypto trader hamster on the Twitch platform - has increased by 30%. Over the same time, Warren Buffett's Berkshire Hathaway fund assets fell 2%.

The hamster's owner built a special cage for it in June 2021, equipped with optical sensors that are connected to the Arduino Nano controller. Turning the running wheel, Mr. Goxx "selects" a specific cryptocurrency for trading. The program will sell the coin when the rodent runs through the left tunnel and will buy it if it passes through the right one.

The talented hamster managed to outperform not only Berkshire Hathaway, but also the S&P 500 (+6% over the same period) and NASDAQ 100 (+12%), as well as bitcoin itself (+23%).


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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The second draw of the Super Lottery by brokerage NordFX took place on October 1, 2021. Like the first time, it was held online, and anyone could follow the prize draw on the Internet. The video of the draw has been posted on the company's official YouTube channel.

Another $20,000 of the total prize pool of $100,000 was raffled off among NordFX clients. The winners are the holders of the following lottery tickets:


According to the rules, the prize funds can be used by the lottery winner in trading or withdrawn from the account at any time by any of the available methods and without any restrictions.

The third, final draw will take place immediately after the New Year holidays, on January 03, of already the new year, 2022. A substantial amount of $60,000 will be drawn, which is divided into:
- 30 prizes of $500
- 10 prizes of $1000
- 6 prizes of $2,500 each
- and 1 super prize of $20,000.

Everyone can take part in the lottery and get chances of winning one or even more cash prizes, including the $20,000 super prize. Terms of participation are available on the NordFX website.

EUR/USD: Close Start of QE End

The Fed did not make any changes to its monetary policy at its meeting on September 21-22. However, the regulator made it clear in its commentary that it was possibly ready to start a gentle tapering of the monetary stimulus (QE) program as early as November.

More than half of the FOMC (Federal Open Market Committee) members believe that interest rate hikes will begin a few months after the end of QE, that is, even before the end of 2022. In total, in the period 2022-2024 the Fed plans to raise rates at least 6 times. (For comparison, the ECB will only start doing this in three years).

Such prospects were in favor of the dollar, the DXY index rose to 93.498, and the EUR/USD pair renewed its monthly minimum, falling to 1.1683.

There was a slim chance that the start of QE tapering would be announced now. But that hasn't happened, and the Fed will continue to print new dollars for now in a volume of at least $120bn a month. The amount of money on US household balance sheets increased to $16.5 trillion in Q2 and will continue to grow in the near future (it was $12.7 trillion at the end of 2019). But there is bound to come a time when the population starts spending that money supporting the American economy after QE winds down.

Such statistics have given investors confidence in a bright future and revived their risk appetites, pushing the S&P500, Nasdaq and Dow Jones stock indexes up again. By the end of the week, the stock market had virtually compensated for the losses suffered on Monday due to information about the possible bankruptcy of Evergrande, one of China's largest construction companies. Its debt of 2 trillion yuan ($309 billion) is the world largest  and is nearly 80 times its net worth (about $3.9 billion). According to Bloomberg, Evergrande includes 200 offshore and 2,000 Chinese companies operating in many countries, so the bankruptcy of such a giant would deal a powerful blow to the global economy.

The recovery of investors' interests in risky assets and the outflow of money to the stock market reversed the trend of the EUR/USD pair to the north on Thursday. The weakening of the dollar accelerated after the publication of weak data from the US labor market.

Initial jobless claims rose to 351,000 in the week, against the forecast of 320,000. The number of repeated applications for state benefits increased to 2.8 million. This is certainly not a disaster, but a wake-up call for the Fed. And if the NFP and other indicators, which will be published on October 8, turn out to be disappointing as well, the regulator may consider delaying QE tapering for a more distant period.

Both of these factors helped EUR/USD bulls raise the pair to 1.1750 on September 23. As for the end of the working week, the pair struck a final chord at around 1.1715 after the speech of FRS Chairman Jerome Powell on Friday evening.

The fact that the US Central Bank can start winding down QE in 1-2 months and complete the process by mid-2022, after which it will proceed with an interest rate hike, allows forecast a stronger dollar in the medium term. Most experts (65%) expect a rise in the US currency and a further decline in the EUR/USD pair in the coming week. They are supported by 85% of oscillators and 100% of trend indicators on D1. The remaining 35% of analysts vote in favor of the pair's growth, and 15% of oscillators also indicate that it is oversold.

Support levels are 1.1705, 1.1685, 1.1600 and 1525. Resistance levels are 1.1750, 1.1800, 1.1845, 1.1908, 1.1975, 1.2025 and 1.2100.

Of the events to come, Germany's federal elections, which will be held on Sunday 26 September and after which Chancellor Angela Merkel will leave office, should be noted. US capital and durable goods orders will be released on Monday September 27. There will be statistics on the consumer markets of Germany and the Eurozone on the last day of the month, as well as data on the US GDP. And finally, the ISM Manufacturing PMI will be released on Friday October 01.

GBP/USD: Bank of England Hawks Win

The past week can be safely called the week of Central banks. Not only the US Federal Reserve, but also the Banks of England, Japan and Switzerland flourished it with their meetings. And while the latter two are not ready to sweep course just yet, the UK regulator has erupted with hawkish rhetoric all of a sudden.

The Bank of England has been extremely passive over the past few years, following in the wake of the ECB and the Fed. And it lasted until the middle of last week. But, apparently, leaving the EU made such behavior impossible. At its meeting on Thursday, September 23, the bank made decisions that made the market literally flinch, and the GBP/USD pair soar by 140 points, from 1.3608 to 1.3748. The regulator not only announced its plans to tighten monetary policy, but also outlined the timing of the refinancing rate increase. The first increase to 0.25% is due in May 2022 and it will rise to 0.50% in December.

In contrast to the Fed's vague timetable, the Bank of England's plan outlined fairly clear milestones, which, as already stated, the market received with enthusiasm. But the GBP/USD pair did not go above 1.3748, because despite the lack of concrete figures at the moment, the Fed's massive plan to end QE will be implemented, and in a short enough time frame. This cooled the fervor of the pound supporters, and as a result, the week-long bout of bulls and bears on the GBP/USD pair ended with a victory for the latter: starting the five-day run at 1.3730, it ended it at 1.3670.

Technical analysis is also ­on the bear side: both oscillators and trend indicators are red on D1. It is not only the trend of the last two weeks that affects, but also the dynamics of the three months of the past summer. But as for the experts who forecast the week ahead, the vote is 50 to 50.

Resistances are at levels 1.3690, 1.3765, 1.3810, 1.3910, then 1.3960, 1.4000 and 1.4100. The bulls aim to refresh the June 01 high at 1.4250. Supports are in zones 1.3640, 1.3600, 1.3570 and 1.3520.

In terms of macro statistics, the UK GDP for Q2 2021 will be released on Thursday 30 September. And, while the previous value was positive (+4.8%), it is now forecast to go negative, minus 1.5%.

USD/JPY: Japanese Doves Lose

The USD/JPY pair has been moving along the 110.00 horizon since last March, making rare attempts to get out of the 108.30-111.00 trading channel. This time too, having started the five-day period at 109.95, it reached a height of 110.78 by the end of the week, and ended the trading session at 110.75.

Unlike other central banks in advanced economies, the Bank of Japan remains committed to ultra-soft monetary policy and negative interest rates. That is why the yen is still of interest not as a tool for making money, but as a safe haven currency.

The start of the week was good for it: the risk aversion triggered by the possible bankruptcy of Evergrande pushed the pair USD/JPY down to the horizon of 109.10. However, things went wrong later. Investors wanted profit again, turning to risky assets. After the Fed meeting, the 10-year US treasuries yield soared above 1.44%. In fact, the yield spread on Japan's 10-year bonds and similar US bonds has gone beyond the recent consolidation in favor of US bonds. And such a balance of strength played into the hands of USD/JPY bulls, weakening the yen's position.

If the Bank of Japan continues to maintain dovish policy and the US Fed actively winds down its fiscal stimulus program, the yen will not feel good. And the USD/JPY pair will still take the 112.00 high by storm. The Japanese currency can be saved by either another drop in demand for risk assets or simply market reluctance to move the pair above the established medium-term corridor.

At the moment, 60% of experts believe that the USD/JPY pair can get close to 112.00. But only half of the analysts vote for it to move above that level. The second half believes that the pair will return to the above-mentioned corridor again.

As for the indicators on D1, 65% of the oscillators look north, the rest are either colored neutral gray or signal the pair is overbought. But the trend indicators unanimously vote for the continuation of the hike to the north.

Support levels are unchanged: 110.15, 109.60, 109.10, 108.70 and 108.30. The dream of the bears (it seems to be already impossible) is to retest the April low of 107.45. The nearest resistance levels are 110.80, 111.00 and 111.65. The ultimate goal of the bulls is still the same: to reach the cherished height of 112.00. And maybe even overcome it.

As for the events that will take place in Japan in the coming week, we note the meeting of the Monetary Policy Committee of the Bank of Japan on Tuesday September 28 and the publication of the Tankan Index of Large Producers of the country for the Q3 on Friday October 01. But will they be able to seriously affect the USD/JPY quotes? In our view, not likely.

CRYPTOCURRENCIES: Whales prepare for Bear Attack


This week's BTC/USD and ETH/USD charts are very similar to those of the S&P500 and Dow Jones stock indices. The reason is fluctuating investor sentiment.

The risk of default on obligations of one of the largest construction companies in China, Evergrande, which has accumulated debt in the amount of 2 trillion yuan ($ 309 billion), provoked panic in the financial markets on September 20. Investors began to get rid of risky assets, crashing stock markets. The cryptocurrency market did not escape the sell-off either. If bitcoin was at $52,870 on Monday, it fell to $39,666 for a short time on Tuesday, losing up to 25% of its value.

The panic caused by Evergrande subsided on September 22, followed by a correction, and moderate risk appetite returned to investors after the Fed meeting, and the charts crept further north. However, it was too early to think that the sell-off was over. After rising to $45,150, bitcoin flew down again on Friday, September 24, then fought back and is trading at $43,000 at the time of writing.

The reason for another fall was China again, with the People's Bank of China declaring all cryptocurrency related activities illegal, promising to take tough action against violators. The ban includes the services of foreign crypto exchanges provided in the country, among other things.

In addition to pressure from regulators, whale behavior is another warning sign. On the one hand, the number of coins they own is growing. If in February there were an average of 3236 BTC per whale,  this figure increased to 3722 BTC in September. But the number of whales themselves has decreased by 15% and now stands at 2,125. This is thelowest for the last 15 months. In addition, significant amounts of their coins have flowed from their wallets to exchange accounts. This suggests that the whales are preparing for a possible continuation of the bear market.

Of course, whales are not a single entity. And despite the general desire to make a profit, they can be divided into short-term and long-term investors. The former are prone to speculation and quick fixation of small profits. The second, such as MicroStrategy, prefer to restock on price downturns. And it is thanks to them that the market is kept from a complete collapse.

As for investor sentiment, the data provided by Glassnode in the latest report is interesting. Since late July, while the price of bitcoin has been climbing from $31,000 to $52,000, long-term holders have sold coins they purchased between the $18,000 and $31,000 levels. According to analysts, this suggests that some of the passive investors have moved into the category of active traders selling coins that were purchased at close to current prices.

The total crypto market capitalization has again dropped below the psychologically important threshold of $2.0 trillion and is at $1.84 trillion. The Crypto Fear & Greed Index has moved from the neutral zone (48 points) to the Fear zone. It was 27 on Thursday, September 23, at the low of the week, and it grew slightly on Friday September 24 - up to 33 points.

In general, the crypto market is now in a state of uncertainty, some influencers predict unprecedented growth for it, while others, like the president of Euro Pacific Capital, Peter Schiff, believe that this “bubble” will burst soon. Of course, this discord applies not only to bitcoin, but also to ethereum.

The ETH price dropped 40%, from $4,020 to $2,650 in just three days last week, from September 20 to September 22. At the same time, JPMorgan bank strategist Nikolaos Panigirtzoglou believes that it should be even lower. In his opinion, the fair price for this altcoin is $1,500, based on the metrics of network activity.

The opposite view is taken by cryptocurrency trader and analyst Lark Davis, who said that ETH will reach $10,000 in the coming weeks. He noted that large investors, banks and corporations continue to invest in the ethereum ecosystem. Davis cited its limited supply in the market as another factor in favor of altcoin growth. 87% of Ethereum coins have not moved for more than three months, indicating investor reluctance to sell their savings. In addition, a significant shortage is created by burning of underlying transaction fees as well as by an increase in ethereum 2.0 staking deposits.

And in conclusion, one discovery that could be called a sensation. It turns out that exactly 100 years ago, the famous auto industrialist Henry Ford was already putting forward the idea of replacing gold with a so-called “energy currency.” The issue was raised by him in the New York Tribune as early as 1921. It is striking that Ford's proposed project to launch a new currency is strikingly similar to the description of BTC, which was presented in 2008 by Satoshi Nakamoto.

The front page of the newspaper featured an article detailing the "energy currency" that Ford believed could replace gold and become the backbone of a new era's monetary system. This currency would be fully functioning on the basis of "units of force", and it was proposed to build a huge hydroelectric power station to issue it. Thus, it could become the most stable and secured monetary unit and would prevent the growth of the rich who profit from speculating in gold.


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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EUR/USD: Awaiting US Fed Decision

The dollar continues to strengthen, and the EUR/USD pair moves south. Starting on Monday September 13 at 1.1810, it ends the five-day run at 1.1730. The movement is certainly not very strong, only 80 points. But it must be taken into account that it was 1.1908 two weeks ago, on September 03.

 US retail sales statistics were much better than expected. Sales showed a 0.7% increase in August, although according to the forecast, should have decreased by 0.8%. The number of repeat applications for unemployment benefits, which was supposed to decrease by 72K, fell by 187K.

Such strong statistics raised the likelihood that the Fed will announce the curtailment of $ 120 billion of the quantitative easing (QE) program to 55% at its next meeting on September 21-22.

As a result of the dollar emission, carried out by the FRS for the last year and a half, the US national debt has grown to 130% of GDP, and the budget deficit exceeds a trillion dollars. As a result, it is not just about winding down the fiscal and credit stimulus, but also a shift to a tight fiscal policy. The Democratic Party and President Biden's Administration have introduced a draft tax reform to the U.S. Congress, which includes a sharp increase in federal income taxes. If passed, the tax rate in such states as New York or California could exceed 60%. In addition, a three per cent wealth tax is proposed for the first time in US history. 

The stock market responded to all this news with active sales. The S&P500 index fell 4,550 to 4435, the Dow Jones dropped 35517 to 34510 in two weeks. The gold price also fell 4.5%.

As for Europe, it was gripped by the real panic associated with the record rise in gas prices, which at one point reached $970 per 1,000 cubic metres. (It was 2.8 times lower a year ago). In anticipation of the autumn-winter heating season, the necessary energy reserves are only 75% (according to other estimates, only 50%). Such energy shortages could not only drive up prices but also reduce production. And this is fraught with a new recession and will definitely not benefit the common European currency.

By far the most important event of the coming week will be the Federal Reserve meeting on September 21-22. The interest rate is likely to remain unchanged at 0.25%. Therefore, first of all, investors are waiting for signals or even a concrete decision about the beginning of the QE curtailment. As we have written before, more members of the Fed's leadership are taking a hawkish stance and supporting a reduction in the asset purchase program as early as this year. And if the hawks win at this meeting, we can expect a sharp strengthening of the dollar, and a further fall in stock indices and gold prices.

At the moment, 60% of experts vote for the rise of the US currency and the decline of the EUR/USD pair, while 30%, on the contrary, believe that nothing  will happen at the Federal Reserve meeting and the pair will win back north. The remaining 10% of analysts abstain from forecasts.

The indicator readings on D1 are as follows. Among the oscillators, 75% are colored red and 25% give signals that the pair is oversold. Among the trend indicators, 100% point to the south.

Support levels are 1.1705, 1.1665, 1.1600 and 1525. Resistance levels are 1.1770, 1.1800, 1.1845, 1.1908, 1.1975, 1.2025 and 1.2100.

In addition to the Fed meeting, events in the coming week include the release of German and Eurozone PMI statistics on Thursday September 23.

GBP/USD: BoE Hawks vs Fed Hawks

The British pound, although down against the dollar, is generally holding up better than the common European currency. As expected by most analysts (60%), the GBP/USD pair went north on Monday and tested the 1.3900 high the next day, helped by good statistics from the UK labor market. This was followed by a reversal, a gradual decline and the pair's finish at 1.3730. As a result, it failed to update the two-week low of 1.3725, although it was very keen to do so.

The GBP/USD pair hardly reacted to the above forecast inflation data in Britain (CPI rose 3.2% in August vs. 2.0% in July vs. 2.9% forecast). However, such indicators reinforce the hawks' position at the Bank of England. So far, the forces of "hawks" and "doves" are equal there. According to Bank Governor Andrew Bailey, four members supported raising the key interest rate and four opposed at the last meeting of the Monetary Policy Committee (MPC).

Analysts believe that the likely rate hike in February 2022 will support the pound and further declines in the GBP/USD pair will be limited. If that expectation grows into confidence, the UK currency could move up strongly.

We will not only have an important meeting of the US Federal Reserve this week, but also a meeting of the Bank of England on Thursday, September 23, from which investors also want to receive signals on the timing of tightening monetary policy. And here, in contrast to the EUR/USD forecast, most experts side with the pound. 65% of analysts vote for the growth of the GBP/USD pair, and 35% for its further decline. But the technical indicators' readings are 100% in line with the previous pair.

Resistances are at levels 1.3765, 1.3810, 1.3910, then 1.3960, 1.4000 and 1.4100. The bulls aim to refresh the June 01 high at 1.4250. Supports are in zones 1.3700-1.3725, 1.3665 and 1.3600.

USD/JPY: Zero Again


The coming week can be safely called the week of the central banks. In addition to the US Federal Reserve and Bank of England meetings, investors will learn the views of the People's Bank of China and the Bank of Japan on the economic situation in their countries on Wednesday September 22, as well as decisions on interest rates of their national currencies. With a probability close to 100%, the yen rate will remain the same, at minus 0.1%. But BOJ leaders have a lot more to think about: they need to fill the economy's 22 trillion yen (approx. $200 billion) deficit.

However, the USD/JPY pair reacts to such figures and the news quite calmly. Unnecessary excitement is not needed in a quiet Japanese harbor.

The USD/JPY pair has been moving along the 110.00 horizon since last March, making rare attempts to get out of the 108.30-111.00 trading channel. So this time, having started the five-day week at 109.85, it finished the week almost at the same place where it started, at the level of 109.95. At the same time, the experts' forecast can be considered to have come true: most of them (50%) sided with the bears last week and 35% took a neutral stance. Everything went exactly according to this scenario: at first the pair went down sharply, and then, having reached a strong medium-term support at 109.10, it failed to break it, turned around and went back.

The pair was supported by positive US retail sales statistics. In addition, according to a number of experts, the outflow of Japanese capital into foreign bonds did not allow it to go far down. Japanese investors hardly bought any bonds from other countries in 2021. But the sharp rise in US Treasuries yields pushed them to buy more than 1.76 billion yen worth of securities this Thursday. That has become a record since last November.

The experts' forecast for the near future looks like this: 50% of them side with the bears once again, 35% with the bulls, and 15% have taken a neutral stance. As for the indicators on D1, there is a complete diversity among the oscillators after such week results, while the green ones have a convincing advantage for the trend indicators.

Support levels are unchanged: 109.60, 109.10, 108.70 and 108.30. The dream of the bears (it seems already unrealizable) is to retest the April low of 107.45. The nearest resistance levels are 110.15, 110.25, 110.55, 110.80, 111.00 and 111.65. The ultimate goal of the bulls is still the same: to reach the cherished height of 112.00.

CRYPTOCURRENCIES: Black to Slightly Greenish

El Salvador entered into force a law recognizing bitcoin as a legal means of payment on Tuesday, September 7. And the quotes of the flagship cryptocurrency fell by 18%  in a matter of hours: from $52,870 to $43,205. The market is slowly trying to recover after this "black" day. At the time of writing this review, the BTC/USD pair had risen to the $47,300-48,000 zone. Of course, it's not much, which is why the past week can only be described as “slightly greenish.”

The Crypto Fear & Greed Index has risen by only 2 points, from 46 to 48, and is in the central neutral zone. The total crypto market capitalization remained virtually unchanged, at $2.120 trillion compared to $2.100 trillion a week ago.

The news background looks “slightly greenish” too. The most interesting news is that Panama has decided to follow El Salvador's example. A draft law on cryptocurrencies was presented to the Congress of this country. Panama currently uses the US dollar as a means of payment. If the law is passed, it will also be possible to use BTC and ETH. Unlike El Salvador, the Panamanian option does not provide for the mandatory use of cryptocurrencies, that is, citizens and companies will be able to freely decide whether they want to accept cryptocurrencies or be limited to just the dollar.

The law has not yet been passed, but analysts are already wondering how the market will react to its entry into force. Should we wait for another "black" day of the calendar, as in the case of El Salvador?

One more piece of news. Analytics software provider MicroStrategy additionally purchased 5,050 BTC at $48,099. This was announced by the head of the company Michael Saylor. As of September 12, MicroStrategy owns 114,042 BTC. A total of $3.16 billion was spent on their purchase, thus the average cost was $27,713 per coin.

Other US companies that have made similar large investments in cryptocurrency include Jack Dorsey's Square and Elon Musk's Tesla. Now they are set to be joined by billionaire Alan Howard's Brevan Howard Asset Management hedge fund, which opened a dedicated BH Digital division for these purposes.

Influencers continue to predict a great future for major cryptocurrencies. So, Austrian economist Ronald-Peter Stoferle, managing partner of investment company Incrementum AG, said that "in five to ten years, bitcoin will rise to heights that we cannot currently imagine." At the same time, the top manager noted that the next phase of bitcoin's growth has not yet begun. According to him, the rise in price of bitcoin will occur when the asset becomes "a means of inflation protection during the ongoing large monetary experiments."

Ark Invest CEO Cathie Wood expects bitcoin to rise to $500,000 within five years. In a conversation with CNBC, Wood explained that the validity of her forecast will depend on whether companies continue to diversify their bitcoin reserves and whether institutional investors decide to place 5% of assets in it.

The head of Ark Invest also highlighted the potential of Ethereum, saying that her company will likely continue to adhere to a 60% Bitcoin and 40% Ethereum strategy.

In terms of shorter-term forecasts, crypto trading veteran Ton Vays believes that the BTC/USD pair will complete the current correction relatively soon, and then rise sharply to six-digit levels. Vays explained that the recent move in the BTC price is reminiscent of July, when the flagship cryptocurrency fell to a one-year low below $29,000 and then aggressively rose to $52,000 in less than six weeks.

According to Ton Vays, bitcoin is likely to fall short and give traders an opportunity to buy near the $40,000 level. After that, it will sharply bounce off this support and rush upward. “The $40,000 low will come either next week or may be delayed until early October, and then we will cross that area with a rise to $50,000 in mid to late October. We will be over $65,000 by early November, and probably $100,000 by the end of December,” he said.


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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EUR/USD: Eurozone QE Recalibration

The ECB meeting on Thursday 09 September went off as expected with no surprises. The interest rate remained unchanged at 0%. The European regulator has proposed a “dovish” reduction in the monetary stimulus program (QE). More precisely, according to Christine Lagarde, the bank's governor, it is not even about “tapering” but “recalibrating” the program. And the decline in asset purchases in Q4 is just a reversal of the decision made in March to increase them. In doing so, the ECB remains flexible, and may change the pace of purchases early next year if necessary.

It is likely that the regulator does not want to take any sharp moves until its meeting in December, when it will have to present a clearer plan to wind down QE. In the meantime, it will monitor the development of the situation. The results of the parliamentary election in Germany, which will be held on September 26, will be of great importance. Especially since this will be the first election since 2005 in which the Christian Democratic Union will not be led by Angela Merkel.

 In addition to the “recalibration” decision, the ECB raised its 2021 forecast for Eurozone GDP from 4.6% to 5.0% and for inflation from 1.9% to 2.2%. At the same time, the bank expects consumer price growth to fall to 1.7% in 2022 and 1.5% in 2023. This suggests that its ultra soft monetary policy will last for a very long time. And there is no need to talk about raising interest rates earlier than the end of 2023 - early 2024.

Economic growth sides with the bulls on the EUR/USD pair, while the monetary policy sides with the bears. There have been no clear signals from the ECB, and they are unlikely to arrive until December. Therefore, the market will still be waiting for them from the US Fed to decide which currency to prefer.

The long life of the European QE program has been mentioned above. The Federal Reserve may begin to cut its QE already this year and complete it by the end of 2022. This view is held by the hawkish lobby in the leadership of the US Central Bank. FOMC member Michelle Bowman has even specifically stressed that disappointing employment statistics for August would not get the Fed out of the way.

This balance of strength plays on the dollar side and should send the EUR/USD pair south. At the moment, 50% of experts agree with this, supported by graphical analysis. The pair finished last week at 1.1810, and now it is expected to be supported at levels 1.1800, 1.1750, 1.1705 and 1.1665. 15% of analysts expect the pair to consolidate in the 1.1800 zone, while the remaining 35% are looking north. Resistance levels are 1.1845, 1.1908, 1.1975, 1.2025 and 1.2100.

The indicators on D1 are as follows. Among the oscillators, 50% point north, 10% south, and the remaining 40% are neutral. Among trend indicators, 35% are colored green, 65% are colored red.

The US economic calendar next week looks quite busy, and all the important statistics will be focused on the country's consumer market. The Consumer Price Index will be released on Tuesday, September 14, retail sales on Thursday, September 16, and the University of Michigan Consumer Confidence Index will be released the following day.

GBP/USD: Movement with Almost Zero Result


Having drawn a parabola with a low of 1.3725, the GBP/USD pair returned on Friday September 10 to almost the same place it started on Monday (1.3865) and ended the five-day run at 1.3830. It never managed to break beyond the central part of channel 1.3700-1.4000, where it has been intermittently since February 2021.

If it continues to move north (this scenario is now supported by 60% of analysts), then the nearest strong resistance will be met at 1.3909, then 1.3960, 1.4000 and 1.4100. The bulls aim to refresh the June 01 high at 1.4250. In case of the opposite development (30% of experts' votes), it will be supported in zones 1.3730, 1.3665 and 1.3600. The remaining 10% of analysts vote for a sideways trend.

As for the oscillators on D1, 70% are colored green, 15% have taken a neutral position, and another 20% indicate that the pair is overbought. In trend indicators, like a week ago, the greens win 9-1.

Events in the coming week include the release of unemployment data in the UK on Tuesday, September 14, and statistics on the country's consumer market on Wednesday, September 15.

USD/JPY: Another Zero Result Pair

Being a safe haven, the USD/JPY pair has been moving along the 110.00 horizon since last March, making rare attempts to get out of the 108.30-111.00 trading channel. So this time again, having started the five-day week at 109.70, it ended the week almost at the same place where it began, at the level of 109.85. Moreover, the trading range has become even narrower, keeping within 85 points: from 109.60 to 110.45. Those who are actively trading are hardly happy with such volatility. Although, on the other hand, it allows you to quite accurately place Stop Loss and Take Profit orders and taking into account the minimum spreads and leverage up to 1: 1000, you can make significant profits with the NordFX broker even in such a narrow corridor.

The experts' forecast for the near future looks like this: 50% of them side with the bears, 15% - with the bulls, and 35% have taken a neutral position. As for the indicators on D1, the red ones have 60% advantage among oscillators, the green ones have 10%, and those that have taken a neutral, grey position - 30%. Trend indicators have a 50-50 draw.

Support levels are 109.60, 109.10, 108.70 and 108.30. The bears' dream is to retest the April low of 107.45. The nearest resistance levels are 110.00, 110.25, 110.55, 110.80, 111.00 and 111.65. The ultimate goal of the bulls is still the same: to reach the cherished height of 112.00.

CRYPTOCURRENCIES: September 07: Rainy Day

The past week on the crypto market can be reduced to one day, Tuesday September 07. A law came into force in El Salvador on that day recognizing bitcoin as a legal means of settlement on par with the dollar. The country's young president, Nayib Bukele,  twitted about this three minutes before midnight local time. “In three minutes we will go down in history,” he wrote. Earlier, the head of state confirmed that the government of El Salvador acquired the first 200 BTC. Bitcoin has been rallying since July 20 and has jumped above $52,000 since this announcement.

Roughly 20% of the country's GDP comes from remittances that Salvadorans working abroad send to their relatives. The huge commissions in USD that have to be paid are extremely unprofitable and enrich the US financial structures. This is what has been one of the main reasons for bitcoin adoption. However, for most Salvadorans, a third of whom do not even use the internet, digital assets still remain a mystery behind seven seals. According to surveys, about 70% of the population fear the innovations, and pensioners believe that the government wants to take away their USD pensions in this way. The result of these concerns and misunderstandings were protests and demonstrations that swept across the country.

The World Bank refused to support the initiative of Nayib Bukele, which jeopardizes the receipt of tranches from the IMF. According to analysts, El Salvador does not have specific laws to address the many nuances of bitcoin use, increasing the risks associated with money laundering and terrorist financing . And leading rating agencies such as Fitch believe El Salvador's insurance industry will be particularly hit. Bonds rated B- are already circulating in it, and now the situation will be aggravated by the presence of an unstable cryptocurrency.

September 7 clearly showed how unstable it is. In a matter of hours, bitcoin prices fell 18%, from $52,870 to $43,205, dragging down the entire crypto market.

Then the leading cryptocurrency managed to win back some of the losses, and it is trading in the range of $45,000-46,000 per coin at the time of writing the review, on Friday September 10.
The Crypto Fear & Greed Index has shifted into the fear zone, dropping from 74 to 46 points. The total crypto market capitalization fell below the important psychological level of $2 trillion to $1.975 trillion by September 08, but then rose to $2.100 trillion by the end of the working week.

Despite what has happened, many experts are still positive about the prospects for both bitcoin and ethereum. For example, senior strategist Mike McGlone called the $100,000 mark for bitcoin and the $5,000 mark for ethereum as "the path of least resistance" in the September Bloomberg Crypto Outlook report. “Crypto assets enter a renewed second-half year bull market after a serious drop from previous highs,” the Bloomberg expert noted, adding that he sees “bitcoin's future as a digital reserve asset to complement the dollar.”

The management of the billionaire Bill Miller's Miller Opportunity Trust also speaks about the significant growth potential of the BTC/USD pair, calling bitcoin a digital analogue of gold. “Gold capitalization is $11 trillion, bitcoin is only $900 billion, which is a significant lag. We are in the early days of bitcoin adoption and the asset will be very volatile, but we believe the risk to reward ratio is attractive," the Miller Opportunity Trust said in a statement filed with the US Securities and Exchange Commission (SEC).

Ark Invest CEO Cathy Wood also believes that the cryptocurrency market is far from the end of the rally. There are no signs of a price bubble in the markets, she said. “We think bitcoin is much more than a store of value or digital gold. This is a new global monetary system that is completely decentralized and not subject to politicians' whims". That being said, Cathy Wood thinks the next five to fifteen years will be very provocative, causing the quotes to draw S-shaped curves. And therefore, for the sector to mature, regulation is needed that will affect bitcoin in the most positive way.

Analysts at the international banking group Standard Chartered have also given a positive assessment of the outlook for bitcoin and ethereum. They compared the first with currency, and the second with the financial market, where lending, insurance and exchange transactions take place. Therefore, given the wider range of ETH use cases, its capitalization may eventually reach that of the first cryptocurrency.

Standard Chartered predicts bitcoin prices in the $50,000-$175,000 range and ethereum in the $26,000-$35,000 range. Thus, these cryptocurrencies should grow threefold and tenfold, respectively. “While the return on ETH may outperform BTC in the future, the risks associated with it are also higher,” the bank representatives said.

On average, 20% of analysts agree that the BTC/USD pair will cross over $50,000 in the coming week, their number increases to 40% onthe monthly forecast, and 80% agree that it will happen before the New Year.


NordFX Analytical Group


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

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What is the most important thing for a broker? Is it money? No, it isn't. Is it computers and software? It is not either. The most important thing is the clients, their trust, and their satisfaction with the level of services received. Therefore, the awards that the broker receives from traders' associations are of particular value. This is exactly the award from the Forex Traders Association, which has recognized NordFX Customer Support as the best in 2021.

Forex Traders Association (FTA) is a grassroots organization of 89 affiliates in America, Europe and Asia. FTA members represent individuals employed in the financial services industry across varying business models. FTA educates its members on market structure issues while representing their interests with legislators, regulators, and other industry associations. FTA events keep attendees informed on industry trends and provide unique networking opportunities, which contribute to career development and productivity. FTA is committed to promoting goodwill and fostering high standards of integrity in accord with its founding principle, dictum meum pactum, my word is my bond.

Since 2017, the members of this association have been evaluating various financial institutions in a wide variety of categories. And this year, 2021, NordFX has won in such an important category as Customer Support.

Customer Support can be called the face of the company, since it is this service that traders have to contact most often, addressing the most pressing issues related to opening an account, specifics of trading and investing, payments and partnerships. It is very important that this support is prompt and skilled. And in such a large international company as NordFX, it is also multilingual.

Over the years, traders from almost 190 countries have opened their accounts with NordFX, and it is very important that they communicate with the company representatives in a language they understand. You can currently ask your questions and get answers in 12 most popular and widespread languages. This can be done in a variety of ways: by phone, email, online chat, on forums and on social media, choosing the most convenient one. According to the assurances of the Customer Support experts, they will be glad not only to answer your questions, but also to hear criticisms and wishes. After all, it is so important not to rest on what you have achieved, but to constantly move forward.

NordFX brokerage company has summed up the performance of its clients' trade transactions in the last summer month of 2021.

The leader was once again a trader from India, account No.1584XXX, earning a profit of 326,278 USD. This impressive amount was earned through numerous trades on the British pound (GBP/USD, GBP/JPY, GBP/CHF) and Euro (EUR/USD, EUR/NZD, EUR/AUD) pairs.

The representative of China (account No.1397XXX) moved from third to second place with a profit of 210,308 USD, also obtained through trading operations with the British currency (GBP/USD and GBP/JPY pairs). Recall that their result was 179,327 USD in July.

This time the third step of the podium was taken by a NordFX client from Vietnam (account No.1416XXX) who earned 85,467 USD using XAU/USD, AUD/ JPY and... of course still the same pair GBP/USD as trading instruments.

The passive investment services:

- BangBigBossTop1 and EAs for Life signals remain among the leaders in CopyTrading for the second month in a row.

BangBigBossTop1 almost doubled its result over the past month, raising the signal yield from 398% to 729%. At the same time, the maximum drawdown remained the same at 55%. This failure occurred on the first day of summer, June 01, after which the yield curve is creeping upward. However, 55% is a quite serious drawdown, so the signal is still in the high-risk group.

The EAs for Life signal has shown a return of 1602% from November 2020 up to now. However, at the very start, on November 19, the maximum drawdown reached 75%, which is why it can also be classified as high-risk. Interestingly, almost 70% of trades on this signal are all on the same GBP/USD pair.

- Those investors who prefer minimal or moderate risk may find the manager under the nickname KennyFXPRO-The Multi 3000 EA in the NordFX PAMM service, interesting. This manager has increased their capital by 37% at a drawdown of less than 15% since January 2021.

There are other low-risk offers in the PAMM-service as well. For example, capital gains under TranquilityFX-The Genesis v3 were 21% over five months with a maximum drawdown of less than 10%.

Among the IB partners, NordFX TOP-3 is as follows:
- the largest commission, 23,498 USD, was credited in August to a partner from India, account No.1504ХXХ;
- next is a partner from the Philippines, account No.1352ХХХ, who received 6,608 USD;
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EUR/USD: Falling Dollar and Rising Risk Appetite


The majority is not always right. Thus, only 30% of the experts voted for EUR/USD to grow to 1.1900 last week. But they were the ones who proved right. After the release of data from the US labour market on Friday 03 September, the pair soared to a height of 1.1908, and finished five days at 1.1880. The weakening of the US currency continues after Fed chief Jerome Powell's dovish statements in Jackson Hole and amid uncertainty with the timing of the beginning to wind down the fiscal stimulation program (QE).

Fed management cites sustained improvement in the employment situation as a major condition for reducing stimulus. However, ADP data on changes in the number of US private sector employment released on Wednesday was significantly worse than expected, with 374K instead of the projected 613K. Such an important indicator as the number of new jobs created in August outside the agricultural sector (NFP) added pessimism: the real figure was 3.2 times lower than the forecast (235K instead of 750K). And this despite the fact that the NFP was 1053K in July. All this suggests strongly that the pace of recovery in the US economy is falling, and it is too early to talk of the start of QE reduction and, even more so, of an interest rate rise on the dollar.

As a result, the DXY dollar index (the ratio of USD to a basket of six major foreign currencies) has dropped from 93.63 to 92.07 since August 20, while risk sentiment in the market, on the contrary, has increased. The S&P500 stock index continues to update historic highs, and its chart resembles a north-easterly straight now. It is very similar to the one drawn by the martingale-based expert advisor until... a collapse occurs. A number of experts predict the fate of a bursting bubble in the future for the stock market as well.

As for the EUR/USD pair's future, only 35% of the experts surveyed vote for its continued growth, 20% vote for the pair's fall. The remaining 45% have taken a neutral position in anticipation of clearer signals from the US Federal Reserve regarding the start of QE curtailment.

The indicators on D1 are as follows. Among the oscillators, 85% point north, the remaining 15% give signals that the pair is overbought. Among the trend indicators, 75% are directed upward (note that there were only 20% of those a week earlier). Support levels are 1.1845, 1.1800, 1.1750, 1.1705 and 1.1665. Resistance levels are 1.1910, 1.1975, 1.2025 and 1.2100.

As for the events of the coming week, the release on September 7 of the data on GDP of the Eurozone for Q2 should be noted. The forecast here is disappointing: it is expected to fall 0.6% compared to a 2.0% increase in the previous period. The ECB's interest rate decision will be known on Thursday September 09, but it is very likely to remain unchanged at 0%. Therefore, a subsequent press conference by the European regulator's leadership will be of much greater interest. Finally, Germany's HICP, the Consumer Price Index, which estimates the inflation rate of the country that is the locomotive of the European economy, will be unveiled on Friday, September 10.

GBP/USD: Wherever the Euro Goes, the Pound Goes

We called this part of the review “Wherever the Euro Goes, the Pound Goes” last time and we left the title unchanged this week. Because nothing that would initiate an independent movement of the GBP/USD pair has happened. Just like the European currency, and for the same reasons, the British one has been growing against the dollar since August 20. The two-week high was reached on September 03 at 1.3890, and the last chord of the trading session sounded at 1.3865.

The pair is currently in the central part of the 1.3800-1.4000 channel, where it appears periodically since February 2021. If it goes north (this scenario is now supported by 60% of analysts), then the nearest strong resistance will be met at the level of 1.3960, then 1.4100. The bulls aim to refresh the June 01 high at 1.4250. In case of the opposite development (20% of experts' votes), it will be supported in zones 1.3730, 1.3665 and 1.3600. The remaining 20% of analysts vote for a sideways trend.

Among the oscillators on D1, 60% are colored green, 20% have taken a neutral position, and another 20% indicate that the pair is overbought. In trend indicators, greens win with a score of 9:1.

As we know, the main indicators of economic recovery and the signal for the start of contraction of monetary stimulus programs are two factors: labour market health and inflation. That is why it is worth paying attention this week to the hearing of the UK Inflation Report, which will take place on Friday September 10.

USD/JPY: Most Unflappable Pair

As a safe haven, the USD/JPY pair has been moving along the 110.00 horizon since last March, making rare attempts to get out of the 108.30-111.00 trading channel. So this time, having started the five-day week at 109.80, it first dropped by 20 points, then rose by 80, then dropped again and ended the week almost at the same place where it started, at the level of 109.70.

Even the statement of Japanese Prime Minister Yoshihide Suga about his intention to resign could not influence the yen rate. His popularity was hit by the Tokyo Olympics this summer. Many considered their hosting not a celebration of sport but a fueling of another wave of coronovirus, leaving COVID-19 incidence in the country now three times higher than during the previous waves.

A number of experts consider the departure of Yoshihide Suga a harbinger of possible changes in the economic policy of the Japanese government, in connection with which the Nikkei index rose by 2%, but the yen rate decided not to react to this, showing a truly icy calm.

The experts' forecast for the near future looks like this: 35% of them side with the bulls, 45% - with the bears, and 20% have taken a neutral position. As for the indicators on D1, here it is still impossible to give priority to any of the directions.

Support levels are 109.40, 109.10, 108.70 and 108.30. The bears' dream is to retest the April low of 107.45. The nearest resistance levels are 109.85, 110.25, 110.55, 110.80, 111.00 and 111.65. The ultimate goal of the bulls is still the same: to get to the cherished height of 112.00.

CRYPTOCURRENCIES: Ethereum vs Bitcoin

Amid the continued weakening of the dollar and rising risk appetite, the BTC/USD pair is trying to gain a foothold above the important psychological level of $50,000 for the second week. It broke through this resistance for the third time and reached $51.085 at the time of this writing, on Friday September 03.

The Crypto Fear & Greed Index added just 1 point for the week, rising from 71 to 74. But the total crypto market capitalization has grown from $2.021 trillion to $2.275 trillion. And the core cryptocurrency accounts for only about $58bn: bitcoin's dominance continues to decline. It fell from 43.77% to 41.41% in seven days, while ethereum is improving its position step by step. So, if the share of ETH was 18.07% of the total market capitalization on August 28, it was already 20.45% on September 03.

Many analysts and influencers continue to sing difirambs to ethereum, preening that it will push bitcoin back to the second line at some point. A week ago, we cited the opinion of the creator of this altcoin, Vitalik Buterin, who expects the price of ETH to reach $30,000. In this case, the capitalization of the coin will rise to $3 trillion, and exceed the capitalization of all major technology companies in the world.

Analyst Aaron Arnold agrees with Buterin. In his YouTube channel (952 thousand subscribers) he named the fundamental factors that, in his opinion, will provoke the "explosive" growth of ethereum. The expert considers a key feature the recent change in the altcoin blockchain, which introduced a digital coin burning mechanism. The London update was released on ethereum network on August 05, which completely changed the transaction fee mechanism. A portion of the commission that miners previously received as a reward is now burned. According to the Ultrasound.Money service, more than 174,000 coins worth more than $565 million have been burned since the activation of this update. The average burning rate is 3.77 coins per minute.

The analyst named the decrease in net inflation in Ethereum as the second growth factor. According to Arnold's calculations, it is only 1.1% in annual terms at the moment, while the same indicator for bitcoin is at the level of 1.75%.

Arnold also recalled the multiple growth of funds blocked in the decentralized finance (DeFi) sector. In his view, this is the third factor that contributes to ethereum's price hike. According to DeFi Pulse, if the volume of blocked funds was $16 billion on January 1 of this year, this figure had already reached $82 billion by August 30 (an increase of 412% since the beginning of the year).

It should be noted that the dynamics of recent months confirms the rosy forecasts for ethereum in full. If BTC has risen in price by about 72% since July 20, ETH has grown by 130%. In the last week alone, this altcoin is up 22%, while bitcoin is up just 2.5%. The advantage of ethereum is also obvious at a distance of 12 months: plus 820% for ETH, plus 350% for BTC.

If Vitalik Buterin predicts the growth of his brainchild to $30,000, you can still hear the figure of $100,000 in the forecasts for the BTC/USD pair. It is exactly the height that British analyst and Northstar & Badcharts co-founder Kevin Wadsworth believes the pair will reach before the end of 2021. After that, the current bullish stage for the cryptocurrency will be completed.

Speaking of the first cryptocurrency, Wadsworth believes that its value will increase "in September, October and, presumably, in November." Some of the leading altcoins (such as ethereum), he said, could also rise significantly, since a rise in prices by 3-4 times is quite likely.

PlanB analyst is also confident that BTC will break the $100,000 level by Christmas. This is indicated by the signals of his S2F forecasting model.

Bitcoin's prospects for further growth are also indicated by year analysis of cryptocurrency behavior. Analysts at Twitter Root channel are confident that the main driver of BTC is halvings (a 2-time reduction in mining awards). They form a shortage of coins in the market, which positively affects the value of a digital asset. As for bitcoin, it has yet to fulfil the growth potential that halving put into it in May 2020.

Another growth driver, besides halving, is the US Federal Reserve's full-fledged printing press. Moreover, both corporations and individuals get substantial chunks of this dollar "pie". CNBC revealed that 11 per cent of young US residents have invested some of the capital they received in the form of assistance from the state during the COVID-19 pandemic in bitcoin and other coins. And 60 per cent of them are set to hold the asset long-term.

On the other hand, the CEO of Euro Pacific Capital and the "golden beetle" Peter Schiff, said that he considers those who hold and do not sell bitcoins to be "real idiots". Investor John Paulson expressed a similar opinion. This billionaire called cryptocurrency a "bubble" in an interview with Bloomberg. In his view, the digital asset market will “ultimately prove worthless,” so it is not worth investing in it. “Cryptocurrencies are a bubble. I would describe them as a limited supply of nothing. If the demand is greater than the limited supply, the price will rise. But, if demand falls, the price will also fall. None of the cryptocurrencies have intrinsic value,” Paulson explained his point.

And in conclusion, as usual, our not very serious section of life hacks with another piece of advice on how to get rich on cryptocurrency. It turns out that you just need to purchase an electric car of the IM brand for this. Backed by the Internet giant Alibaba, electric car maker Zhiji Auto has developed an app for car owners to earn digital currency per mileage traveled.

Motorists will have to enter information about each kilometer they run in order to enter the mining pool. They will receive the Stone digital currency as a reward. The company plans to issue 500 coins 144 times a day for a start. The issue will be halved every four years to maintain liquidity.

The asset can be exchanged for various services of the company. When the car's mileage reaches 5,000 km, its owner will be able to purchase a next-generation smart driving system for coins or increase the battery capacity to 120 kWh.


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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EUR/USD: Three Hawks and a Dove in Jackson Hole

The return of the EUR/USD pair to 1.1700-1.1900 was predicted by 35% of experts supported by 25% of oscillators that showed it was oversold. After renewing the annual low of 1.1665 on August 20, the pair did go into a correction, reaching 1.1775 on Thursday.

The week's economic statistics proved weak enough for both the US and Eurozone, and all market attention has been shifted to the annual Jackson Hole symposium, running from 26 to 28 August. There were speeches by three representatives of the US Fed leadership, which turned out to be even more hawkish than investors had expected.

So the president of the Federal Reserve Bank of St. Louis James Bullard said that the asset purchase program is doing the US economy more harm than good at the moment by inflating another soap bubble in the real estate market. According to Esther George, head of the Federal Reserve Bank of Kansas City, the current outbreak of the pandemic caused by the Delta strain will not have a significant impact on the economic situation in the country, and it would be better if the process of winding down QE starts earlier than later.

Robert Kaplan from Dallas joined his fellow hawks. Thus, the overall sentiment of these three high Federal Reserve officials can be reduced to the desire to start reducing asset purchases as early as the first and early second quarter of 2022, in the amount of $15 billion per month. Such a pace will allow the US central bank to raise its interest rate by the end of next year.

Fed chief Jerome Powell spoke at the Jackson Hole symposium at the very end of the working week, on the evening of Friday August 27. Some investors hoped that his position would be significantly softer than that of the Bullard-George-Kaplan trio. Otherwise, it could have dealt a major blow to the stock market, knocking down major indices including the Dow Jones, S&P500 and Nasdaq Composite. The bulls on the DXY dollar index, on the contrary, would be fazed by Jerome Powell's hawkish speeches. And although the consensus is gradually shifting to the fact that the regulator will announce the start of reducing monetary stimulus in November and will start implementing its plans in December-January, there was no need to wait for exact dates from the head of the Federal Reserve. That's exactly what happened: the high official said discussions about timing were still under way, that the issue would depend on economic and health risks, and that the central bank would continue to take a patient approach to their policies. The dollar weakened sharply after these words, and stock indices, on the contrary, updated historical highs once again. 

Experts and investors have yet to analyze the likelihood of monetary restriction beginning in a period or another. So far, after some hesitation following Mr Powell's vaguely dovish position, the EUR/USD pair flew north, recorded a local high at 1.1802 and ended the five-day level at 1.1795.

Talking about the future, only 30% of the experts surveyed voted for the further growth of the pair, with the next targets of 1.1830 and 1.1900. The remaining 70% of analysts have taken the opposite view. They believe that the pair should retest the 1.1665 level. The nearest support is 1.1750 and 1.1700. The position of the indicators in total can be described as neutral. Among the oscillators on D1, 50% indicate a rise in the pair, 25% indicate a fall, and another 25% are colored neutral gray. As for trend indicators, 80% look south and 20% look north.

The coming week's events include the release of German consumer market statistics on August 30 and September 01. Similar statistics for the Eurozone will be released on August 31 and September 03. As for the US, the ADP report on the employment in the private sector and the ISM index of business activity in the manufacturing sector of the country will be published on September 1. And on the first Friday of the month, September 03, we will traditionally learn the most important indicators from the US labor market, including the number of new jobs created outside the agricultural sector (NFP).

GBP/USD: Wherever the Euro Goes, the Pound Goes

Overall, GBP/USD dynamics was reminiscent of the previous pair's movements. After reaching a low of 1.3600 on August 20, a rebound followed as a result of which the British pound rose to the mark 1.3767 on Thursday, August 26, as predicted by most (70%) experts.

Then came the meeting of American bankers in Jackson Hole and the hawkish speech of the aforementioned leaders of the Federal Reserve Bank, which led to some strengthening of the dollar and a decline in the pair to 1.3680. And then, thanks to the Fed chairman, the American currency began to fall in price again. As already mentioned, the market's hopes that Powell would announce a specific and early date for winding down the asset repurchase program did not come to fruition. As a result, the pair went up sharply, reaching a height of 1.3780, and completed the trading session at 1.3760.

Giving a forecast for the coming week, the majority of analysts (75%) expect the US currency to strengthen and a new storm of the 1.3600 level. If successful, the next target will be the horizon 1.3480. The nearest support is the zone 1.3680-1.3700.

The remaining 25% believe that the growth opportunities for the British currency have not yet been exhausted. The nearest resistance is at 1.3780, the nearest target is the return of the GBP/USD pair to the 1.3800-1.3875 zone. The nearest resistance levels are 1.3910 and 1.3960.

As for the oscillators on D1, 40% look south, 50% look east, and only 10% look north. Among the trend indicators, the ratio of forces is 60% to 40% in favor of the reds.

USD/JPY: Calm, and Calm Again

Amid market unrest caused by statements from Fed executives, unlike the rest of the currencies, the yen, as a quiet haven, is successfully countering any storms. The USD/JPY pair has been moving along the 110.00 horizon since last March, making rare attempts to get out of the 108.30-111.00 trading channel. This time, starting the week from 109.80 mark, it finished it almost there, at 109.82, and the range of fluctuations narrows even more: from 109.40 at the low to 110.25 at the high.

This behavior of the pair leads experts to give very versatile predictions. 40% of them have sided with bulls this time, 30% side with bears, and 30% have taken a neutral position. As for the indicators on D1, one cannot give priority to any of the directions here either.

Support levels are 109.40, 109.10, 108.70 and 108.30. The bears' dream is to retest the April low of 107.45. The nearest resistance levels are the 110.25, 110.55, 110.80, 111.00 and 111.65 zones.  The ultimate goal of the bulls is still the same: to get to the cherished height of 112.00.

CRYPTOCURRENCIES: at the Crossroads

 
We put a question in the heading of the previous review. "The Lull Before the Storm?" - that is what it was. We also noted that powerful drivers will be needed to push bitcoin quotes above the current levels. But there were no drivers, so the storm hasn't happened yet. Although the news background is generally quite positive.

Thus, one of the digital market locomotives, MicroStrategy, purchased an additional 3,907 BTC on August 24 for about $177 million. The average purchase price was $45,294 per coin. And this suggests that the company does not expect any serious drawdown of the BTC/USD pair, and, on the contrary, expects its further growth.

In total, this analytics software provider has invested more than $2.9 billion in digital gold. Now there is a total of 108,992 BTC on MicroStrategy's balance sheet worth over $5 billion.

American banking giant Citigroup is awaiting regulatory approval to begin trading bitcoin futures contracts on the Chicago Mercantile Exchange (CME). Citigroup will therefore become another megabank after Goldman Sachs offering similar opportunities.

Bloomberg experts suggest that the US Securities and Exchange Commission (SEC) will approve not one, but several applications for the launch of ETFs on bitcoin futures. The goal is to maintain competition and not give anyone any advantage. The SEC may make its decision by the end of October. And the first European bitcoin futures could be launched as early as mid-September. This was announced by Europe's largest derivatives exchange Eurex.

Having reached the medium-term target, the BTC/USD pair is "stuck" in the $47,000-50,000 range. This zone is a kind of intersection of two roads: horizontal and ascending channels. And the mood of the market for the coming weeks depends on whether the pair will be able to break through the support at the level of $47,000.

In terms of medium- to long-term forecasts, they remain positive overall. This was shown by a survey conducted by Elwood Asset Management with 55 out of approximately 175 cryptocurrency hedge funds. According to the data, 65% of these hedge funds predict that bitcoin will be trading in the $50,000 to $100,000 range by the end of 2021. 21% of those surveyed named a price between $100,000 and $150,000. And only 1% of hedge funds predicts that the asset's value will be below $50,000. 

63% of hedge funds believe that the cryptocurrency market capitalization will be in the range of $2 trillion to $5 trillion, with another 11% estimating a market capitalization of between $5 trillion and $10 trillion.

The fact that the price of BTC can show impressive growth, reaching $100,000, was admitted even by the constant critic of bitcoin, the president of the brokerage company Euro Pacific Capital Inc. Peter Schiff. 

This "golden beetle" is known as the man who takes every opportunity to strike at cryptocurrency and call for the purchase of gold. However, this time, he did not undertake to dispute the fact that BTC is a great store of value. In fact, the ROI on bitcoin has been 8,900,000% over the past decade. At the same time, he remains bearish and excludes the possibility that the asset will ever be massively used as a means of payment. According to the financier, the only merit of bitcoin is that people speculate on it.

Mike McGlone, senior strategist at Bloomberg Intelligence, has also repeatedly predicted BTC's growth to $100,000. But, according to the expert, the mainstream of the second largest cryptocurrency by capitalization can become an obstacle to growth. People are beginning to realize that ethereum is “the building block for all financial technology, DeFi and infrastructure in a world that is going digital,” McGlone said.

The expert named non-fungible tokens (NFT) as another powerful support for the price of the main altcoin. Such assets are becoming extremely popular and are mostly issued on the ETH blockchain.

At the same time, McGlone considers the former Goldman Sachs hedge fund manager Raoul Pal's forecast of ethereum growth to $20,000 as overstated. But, according to the analyst, the price will not fall below $2,000 either, rather the rate will exceed $4,000.

The creator of this altcoin, Vitalik Buterin, is much more optimistic about the future of ethereum. He expects that after the recent London hardfork and implementation of EIP-1559, the ETH price will be 10 times higher than current levels and reach $30,000. In this case, the capitalization of this altcoin would reach $3 trillion, and exceed the capitalization of all the major technology companies in the world. In the meantime, this figure is about $380 billion.

As far as the total capitalization of the crypto market is concerned, as we suggested in the previous review, there is now a struggle in the area of the psychologically important $2.0tn level. Starting at $2.043 trillion, this figure rose to $2.162 trillion on August 23, it fell to $1.973 trillion by August 27, and it rose again to $2.021 trillion by Friday evening.

Trading volumes on the BTC network remain low. The Crypto Fear & Greed Index froze practically, having risen by only 1 point in a week, from 70 to 71.

And in conclusion, our not-so-serious life hacks column has another tip on how to get rich on cryptocurrency. It turns out that for this you just need to move to live in Cool Valley in Missouri (USA). The mayor of this town decided to seriously raise the welfare of its 1,500 residents, and to that end promised to transfer $500 to $1,000 to each of them in BTC. At the same time, he put forward one condition: recipients will not be able to sell their bitcoins for five years, which, according to the mayor, will allow them to wait for the price of BTC to rise to half a million dollars.


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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EUR/USD: Fed Needs Strong Dollar, ECB Needs Weak Euro


A previous review named the publication of the US Fed's FOMC meeting minutes on Wednesday 18 August as the most important event of the past week.  This document was supposed to clarify the situation regarding the timing of the curtailment of the monetary stimulus (QE) program. Of course, 100% clarity never came out. Some Fed executives still believe that it is necessary to start winding down stimulus at the earliest in spring 2022. However, there is also the opposite view that a parting with QE should happen before the end of this year. And it was this view that led to another decline in investor risk appetites and a further strengthening of the dollar.

Stock indexes - the Dow Jones, S&P500, Nasdaq Composite, have been falling since the start of the week, with the release of the minutes pushing them further down. And while a certain wave of purchases could be observed after each pullback, the trend still remains downward: the market gets rid of stocks, preferring dollars. The DXY index, which tracks the USD against a basket of 6 major currencies, heaped nearly 1.3 per cent over the week, rising from 92.500 to 93.700.

In addition to anticipating the early start of QE, the new strain of Delta coronavirus is also pressing the stock and commodity markets. In anticipation of new lockdowns, investors fear for the fate of both the global economy as a whole and its locomotive, the US economy. According to the Ministry of Health, the number of new infections totaled more than 268,000 in one day on August 17 alone, which compares with the peaks of the beginning of the year.

That being said, the US job market feels pretty good at all. At least for now. Thus, the number of initial applications for unemployment benefits decreased from 377 thousand to 348 thousand for the week, which is much better than the forecast of 363 thousand. This has been the best indicator since the beginning and has benefited the dollar.

Another source of support for the USD was the widening spreads between the yields of US and foreign bonds. Foreign investors support and will support the demand for dollars in order to then purchase American Treasuries.

Because of the above factors, the result of the past week was the strengthening of the dollar against the euro by 130 points. having started Monday from 1.1795, EUR/USD groped the local bottom at 1.1665 by the end of the week and finished five days in 1.1700.

A strong dollar is needed by the Fed to reassure investors about unmanageable inflation. Therefore, new, clearer signals regarding the folding of QE can be expected from this regulator. But the ECB is not at all opposed to further weakening of the euro, which has been repeatedly stated by the head of the bank Christine Lagarde. So, according to many experts, the downtrend of the EUR/USD pair will continue in the medium term.

The pair has now fallen below the low of April 01, 2021, 1.1704, and if this breakdown is confirmed, the next targets will be the lows of last autumn in the 1.1600-1.1610 zone. If it is able to overcome this barrier, it will open a road to targets in zones 1.1450 and 1.1240. A 300-400 point path is likely to take a month or two to overcome. But if the Fed announces the completion of QE, the pair will fly that distance in a matter of days. This development is supported by 65% of experts.

The remaining 35% believe that the dollar may take a pause in its growth and the EUR/USD pair will return to the 1.1700-1.1900 range for a while. The nearest targets here are 1.1750 and 1.1830.

In terms of technical analysis, D1 has 100% of the trend indicators and 75% of the oscillators painted red. The remaining 25% oscillators give signals that the pair is oversold.

In the coming week, we should note the publication of Markit's German and Eurozone PMI on Monday 23 August, as well as of capital orders goods and durable goods in the US on Wednesday 25 August. On Thursday, we'll find out preliminary US GDP figures. In addition, the annual symposium will be held in Jackson Hole from August 26 to 28, where Fed Chairman Jerome Powell will speak on Friday.

GBP/USD: Escape from the Pound

If the pound could still struggle with the dollar two weeks ago, it surrendered all its positions last week. Investors rushed to secure assets due to the rapid spread of the Delta strain and its impact on the global economic recovery. Plus, the possible winding down of QE in the USA. And then the Gfk UK Consumer Confidence Index fell from minus 7 in July to minus 8 in August, the worst performance since the start of the COVID-19 pandemic. As a result, GBP/USD falls almost 270 points to mid-term support in the 1.3600 zone and finishes at 1.3622.

We would like to remind that in the previous forecast, the specialists of the German Commerzbank designated the July 20 low at 1.3571 as the target for the pair. Given the slight backlash, this forecast proved correct. And now they say that in its fall, the pair may test the 200-week moving average at 1.3146. The strongest support along the way is located in the 1.3480 and 1.3200 zones.

South is also indicated by 100% of trend indicators and 65% of oscillators on D1. However, only 30 per cent of experts agree with them among analysts. The remaining 70% believe that the British currency's potential for resistance is far from exhausted, especially if the Bank of England takes a more active position. 35% of oscillators in the oversold zone talk of a possible reversal to the north as well. The nearest resistance is at 1.3725, the nearest target is the return of GBP/USD to the 1.3800-1.3875 zone. The nearest resistance levels are 1.3910 and 1.3960.

Of the most significant macro statistics to be released next week, the publication of Markit's UK services business index on Monday 23 August can be singled out.

USD/JPY: Yen Is Not Afraid of Dollar

Against the backdrop of investors” defection from risk, unlike the rest of the currencies, the yen, as a quiet haven, successfully resists the dollar's gaining strength. Since past March, USD/JPY has been moving along the 110.00 horizon, making rare attempts to get outside the 108.30-111.00 trading channel. This time, starting the week from 109.55 mark, it finished it almost there, at 109.80, and the range of fluctuations barely exceeded 110 points: from 109.10 at the low to 110.22 at the high.

 This behavior of the pair forces both experts and indicators to make very contradictory forecasts. Among the first, 45% side with the bulls, 35% side with the bears and 20% take a neutral position. Among the oscillators on D1, 35% are colored red, 15% - green, 50% - neutral gray. Among trend indicators, the ratio is 60% to 40% in favor of green.

 Support levels are 109.10, 108.70 and 108.30. The bears' dream is to retest the April low of 107.45. The nearest resistance levels are the 110.00, 110.55, 110.80, 111.00 and 111.65 zones.  The ultimate goal of the bulls is still the same: to get to the cherished height of 112.00. 

CRYPTOCURRENCIES: The Lull Before the Storm?

Bitcoin has slowly and uncertainly creeped up all week, trying to overcome a strong level of resistance around $48,000. Two attempts, on August 14 and 16, ended in failure, after which BTC/USD rolled back to the support of $44,000. At the time of writing this review, towards the end of Friday, August 20, it went to the assault again, broke through the resistance and reached the level of $49,000 in the thin market.

The total crypto market capitalization increased over the week from $1.957 trillion to $2.043 trillion, that is, by just 4.4%. And, although it has overcome the $2.0 trillion bar, it is not at all a fact that it will be able to gain a foothold above this level. Trading volumes on the BTC network remain low. The Crypto Fear & Greed Index has also remained still at 70 points.

This sluggishness and uncertainty may be due to the fact that large institutional investors are currently focusing on the traditional market. But we must not forget that mid-August is the height of the holiday period, and many traders will not step up until the end of the month.

Very strong drivers are needed to dramatically push the market up or down. World media reporters drew attention to Jerome Powell's online speech to students at the Town Hall conference. The Fed chief noted the ever-increasing importance of cryptocurrencies, outlining the phrase about the U.S. Treasury's examination of holding a portion of the country's reserves in digital assets. Making such a decision would literally blow up the cryptocurrency market, repeating the situation of 2017. The price of bitcoin soared then from $750 to $19,270, which is 25 times, getting the slang name “To the Moon”. But for now, the head of the Federal Reserve's reasoning about supporting cryptocurrencies is only theoretical.

Bloomberg analyst Michael McGlone also spoke in favor of the first cryptocurrency, who emphasized that “digitalizing money and the financial industry” gives bitcoin a huge boost to growth. Once upon a time, similar factors allowed the US dollar to dominate the global financial arena. At the same time gold, according to the analyst, has no strong drivers for growth, and BTC is therefore quite capable of replacing this metal as an asset for risk hedging and wealth accumulation.

According to McGlone's forecast, bitcoin could well reach $100,000 in the medium term. The well-known cryptanalyst PlanB calls a slightly bigger figure. In his opinion, bitcoin follows the Stock-to-Flow (S2F) model he developed very closely, so the BTC/USD pair should reach $135,000 by the end of December.

Of course, all these figures are only the assumptions of specialists. Another cryptocurrency analyst Benjamin Cowen believes bitcoin is facing a crucial test this September, which will determine the future direction of the entire market. Bitcoin has tested the 20-week moving average every September since 2017 and either bounced or broke through it. And if another test happens this September, it will be possible to make a forecast basing on it until April 2022. “We will find out if the market will be bullish or if growth will stall for several months,” the analyst says.

The 20-week MA is currently around $43,500 and if BTC can hold that level as support, according to Benjamin Cowen, we will see an upward move.

Santiment, a web data analysis firm, reported encouraging data for investors. Bitcoin supply on exchanges fell to a two-week low. This suggests that a large amount of BTC will go to cold wallets. Analyst firm Glassnode has made a similar observation: “Bitcoin continued to leave exchanges in August at rates ranging from 75,000 to 100,000 coins per month. This outflow is similar to the period between 2020 and the Q1 21, when large accumulations prevailed.”

Bitcoin miners are also in no hurry to part with their coins, over the past month, their balance has grown steadily. This means that they expect further growth in the price of the coin as well, so they do not want to take profits now.

Despite the fact that the dominance of bitcoin has decreased from 69.7% to 43.8% since the beginning of the year, this coin is without a doubt still the main engine of the digital market. It is clear that the main competitor for BTC at the moment is ethereum. On some exchanges, it overtakes the reference cryptocurrency in terms of trading volumes already. And according to some experts, such as the head of the deVere Group Nigel Green, ETH may push bitcoin to second place in a few years.

As for the closer prospects, the popular cryptocurrency analyst and trader with the nickname DonAlt named several altcoins that are ready for a rally and may surpass BTC in profitability in the near future. The first on the list is ripple. According to the trader, the XRP/BTC pair is already "up 50 per cent but is still far from the level of resistance." DonAlt believes this pair could yet show 185% growth from current levels.

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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In mid-August, NordFX brokerage company received its first award this year. Experts from one of the major financial portals and business award organizations, World Forex Award (WFA), named NordFX the Most Transparent Broker-2021.

This award is important primarily because transparency is one of the most important factors, the same as financial performance, technology, risk, etc., that allows traders, investors and partners to assess the reliability of a company.

Before reaching their verdict, WFA experts assessed whether the information the company provides to stakeholders is open, complete and timely, and expressed in an understandable form required for objective decisions. An important role was played by the fact that NordFX had practically no claims from the state bodies of its regulation for 13 years of its work in the financial markets, and controversial issues that sometimes arose with clients were resolved openly and, if necessary, with the involvement of independent experts.

It should be noted that NordFX business policy focuses on all three main areas of transparency: openness, clarity and accuracy of information. This applies both to the documents governing client and partner relationships, as well as the description of trading terms, including speed of order execution, spreads and commissions during transactions and when depositing/withdrawing funds.

Promotions run by NordFX are no exception. A fresh example here is the super lottery, where 100,000 USD is drawn among traders this year. Any client of the company can take part in this lottery, who can check the correctness of the accrual of lottery tickets in real time on the company's website, and the draws are held online, making it possible for anyone to follow the prize draw on the Internet.

EUR / USD: it's All About the Labor Market

The forecast given last week has come true 100%. Recall that 70% of experts suggested that EUR/USD will test the late March low at 1.1700 once again. And it did drop to the level of 1.1705 as early as Wednesday. However, the drivers for further strengthening the US currency were not enough, and the pair was moving in reverse, north, for the second half of the week.

It reached weekly highs on Friday, August 13, climbing to the 1.1800 horizon, and completed the five-day period at 1.1795, the best gain in recent months. This happened during the American session due to a sharp drop in the University of Michigan Consumer Confidence Index, the value of which dropped to the December 2011 low: from 80.2 to 70.2 points. This indicator is based on a survey of consumers and measures their confidence in US economic growth. Simply put, it evaluates their willingness to spend money. Other indicators presented by the university also fell short of expectations.

The Federal Reserve has repeatedly stressed that the timing of curtailing the monetary stimulus (QE) program and raising interest rates directly depends on the acceleration of inflation and a full recovery of the US labor market. But it turns out that Americans' desire to shop is on the wane, which does nothing to boost inflation and meet the Fed's goals.

On the back of disappointing data from the University of Michigan, the DXY dollar index dipped to 92.50, and the Dow Jones and S&P500 have once again renewed their highs, reaching 35612.25 and 4467.13, respectively.

Interestingly, US stock indices have been growing recently both when economic releases delight investors and when they upset them. This is apparently due to the pumping of the market with a huge amount of dollars under the QE program. Investors simply have nowhere to put it, especially since the Fed's interest rates are extremely low now. So you have to invest it in stocks.

But the voices of the “hawks” that it is time to end with QE can be heard more and more clearly inside the US Central Bank itself. According to 28 out of 43 Reuters experts, the Fed will announce the start of the program's curtailment in September. More than a third of respondents believe that this will happen in November-December. The decline in asset purchases, according to 60% of the experts surveyed, will start in Q1 2022, almost everyone else believes it will happen even earlier, in Q4 this year.

Starting to wind down fiscal stimulus is extremely likely to lead to outflows from the stock market and strengthen the dollar. But so far, there is no clarity on the timing, and there is no certainty in the opinions of experts. Assessing the prospects of the EUR/USD pair for the near future, 30% vote for its growth and 35% for the fall and for the sideways trend along the horizon of 1.1800.

There is no unity among indicators either. It is clear that after the jump on Friday the 13th, most of them, including graphical analysis, are colored green. Although here, too, 25% of oscillators are already giving signals that the pair is overbought. As for D1, it is simply impossible to give preference to any of the colors: one third of the oscillators are colored green, one third - red, and one third - neutral gray. As for the trend indicators on D1, the majority (65%) indicate the continuation of the medium-term downtrend, and the pair's desire to test the support of 1.1705 once again. If it succeeds, it will encounter a strong support in the 1.1600-1.1610 zone. If the bulls win, then the resistances are located at levels 1.1840, 1.1910 and 1.1975.

Of the events of the coming week, which may affect trends, it is worth noting the release of Eurozone GDP data for Q2, as well as US retail sales and inflation data. These releases will be out on Tuesday August 17. And the next day, August 18, the minutes of the FOMC meeting of the US Fed will be published, from which experts will try to understand whose side, pigeons or hawks, is advantageous now relative to the timing of the QE folding.

GBP/USD: Waiting for the Start of QE

As expected, data released on Thursday August 12 showed strong UK GDP growth in Q2 2021, from minus 1.6% to plus 4.8%. However, this coincided with the forecast completely and therefore did not make a special impression on the market. But the University of Michigan data caused GBP/USD to soar 85 points, from 1.3790 to 1.3875, and end the trading session almost where it started, in 1.3868.

Prior to the release of this data, many experts expected the pair's downtrend which started in late July to continue. Commerzbank specialists called the June 21 low of 1.3786 as initial support, after breaking which the pair will consistently drop to the lows on July 02 (1.3735) and April 12 (1.3669). The target is the July 20 low at 1.3571.

A similar scenario was suggested by the analysts of the Singapore-based OCBC Bank, who named the levels 1.3779 and 1.3732. The economists of the French Societe Generale agreed with this, believing that the combination of a strong dollar and a weak pound would lead the GBP/USD pair to fall below 1.3750.

However, none of that has happened yet. And it is appropriate to cite here the opinion of Credit Suisse experts, according to which the pair has completed the formation of a bullish reversal pattern. But to continue its growth, it needs to rise above 1.3895. Then the next targets will be closing above 55-DMA at 1.3920, and then zone 1.3978-1.4010.

As for the readings of the indicators, they are similar to the readings of their "colleagues" for the previous pair, EUR/USD. Although there is some advantage of greens on H4, it is not possible to be guided by their signals now.

Among the important macro statistics for the pound next week is the release of UK labour market data on Tuesday August 17 and on the consumer market on Wednesday August 18. However, even if both turn out to be positive, it is still not worth waiting for clear signals from the Bank of England about the timing of its QE curtailment.

USD/JPY: North Following Treasury Yields


Last week we named our forecast for this pair “North Following Treasury Yields”. In the current one, only one word has been replaced, "North" for "South".

The previous title has fully justified itself. As anticipated, USD/JPY grew in the first half of the week, reaching the height of 110.80 on August 11. However, then “something went wrong”, the pair turned around and flew down, putting the last chord at 109.55. The first reason is repeated many times above. An additional advantage to the Japanese safe-haven currency was given by the yield on 10-year US Treasury bonds. This indicator dropped sharply by 4.5%, reaching a weekly low of 1.3%.

The USD/JPY pair finished five days substantially below the key 110.00 horizon, and experts say this does not bode well for the dollar. (Of course it's about the near term). Thus, 45% of analysts vote for the continuation of the downtrend, another 45% prefer a sideways trend, and only 10% believe that the bulls will be able to turn the pair northward again.

As for the trend indicators, there is also a clear advantage on the side of the reds: 100% side with them on H4, 75% on D1. There is not a single one among the oscillators on H4 that would point to the north. True, 25% have taken a neutral position, and out of 75% of those looking down, almost half are in the oversold zone. On D1, 65% point south, 20% point west, and 15% point north.

Support levels are 109.35, 109.05 and 108.70, the target of the bears is to retest the April low of 107.45. The nearest resistance levels are the zone 110.00, 110.55, 110.80, 111.00 and 111.65.  The ultimate goal of the bulls is still the same: to get to the cherished height of 112.00.

Among the week's events would be the release of preliminary Japanese GDP figures for Q2 2021 (forecast: growth from minus 1.0% to plus 0.2%). However, as the practice shows, this will have little effect on the pair's behavior. The main focus should be on US macro statistics. And it could quite break the current trend and re-send the pair north. 

CRYPTOCURRENCIES: Is Crypto Winter Canceled?

“Investors hope that the crypto freeze has passed, and instead of the crypto winter, the crypto spring came straight away,” - this is how we described the situation in this market in the previous review. The past week did not spoil the spring mood. Bitcoin has heaped by about 12% in seven days and is approaching $47,800 at the time of writing. The total capitalization of the crypto market increased over the same period from $1.67 trillion to $1.957 trillion, and the day it will once again cross the bar of $2.0 tn seems not far off. As for the Crypto Fear & Greed Index, it finally moved from the central zone to the green part of the scale, rising from 52 points to 70. At the same time, it is still far away to a state of severe overbought, which foreshadow a strong correction. And it gives investors hope that the day will come when the BTC/USD pair updates its historic high.

In addition to optimists, of course there are enough pessimists in the market. Including those among recognized professionals. For example,  Bridgewater Associates billionaire founder Ray Dalio does not rule out bitcoin growth, but still prefers gold. Dalio has stated that he holds a "very small volume" of bitcoin. “If you put a gun to my head and let me choose only one of the two, I’ll choose gold,” he said.

Reputable bankers like Goldman Sachs CEO David Solomon and fellow JPMorgan Chase Jamie Dimon continue to criticize cryptocurrency. But at the same time, they and many other banks continue to actively implement services related to digital assets. And analysts at JPMorgan predicted BTC's rise to $146,000 earlier in the year.

Disputes about where it is better to invest money, in precious metal or in cryptocurrencies, do not subside. At the same time, simple calculations show the obvious superiority of bitcoin. The price of gold has fallen by about 5.5% over the past 10 years. As for the core cryptocurrency, it grew 571,000% during the same time. That is, having invested only two dollars in bitcoin then, you would be a millionaire by now. In the last five years alone, gold has fallen in price against bitcoin by 25 times.

The numbers speak for themselves. But the reliability of investments cannot be forgotten. Between 2010 and 2015, the price of gold experienced a maximum drop, losing approximately 40% in five years. But if you look at the April-May chart this year, you'll see that bitcoin lost the same 40% in just four weeks!

Investing in cryptocurrencies requires significantly stronger nerves and a safety margin. During the rapid collapse of the crypto market, some get rid of their coins, succumbing to panic. Others, on the other hand, see such corrections as an excellent buying opportunity.

According to Tom Lee, head of research firm Fundstrat, the “golden rule” for crypto investors is to buy bitcoin every time the quotes cross the 200-day moving average (MA 200) from the bottom up. Starting in 2017, in three out of five cases, the closing of the daily candle above this line was the beginning of a gradual increase in trading volumes and the development of long-term upward trends that lasted from 4 months to a year. Two failures, according to Tom Lee, do not in any way cancel his "golden rule", since in these cases the BTC rate managed to rise enough for traders to protect their positions from any loss.

Tom Lee also reiterated his prediction that he sees bitcoin in the region of $100,000-120,000 in 2022. Bloomberg Intelligence senior strategist Mike McGlone pointed to the same level of $100,000 in his latest report. “Bitcoin seems to have found support around the $30,000 mark, just as it did at $4,000 in early 2019. We see parallels with those events and, apparently, bitcoin may well reach $100,000," he wrote.

More modest predictions were given by three other crypto experts. Well-known cryptocurrency analyst Willie Wu believes that, based on fundamentals, the fair price for bitcoin is $53,200. However, he warned that fundamental factors do not allow forecasting for a short period, but with sufficient time, they will fully justify themselves.

Another analyst, Will Clemente, agreed with Wu's opinion and noted that, based on the bitcoin liquidity data from the Glassnode analytical platform, he predicted its growth to about $53,000 back on July 31. The well-known crypto strategist with the nickname Crypto Dog confirmed these predictions. In his opinion, "bitcoin will get to $50,000 very soon."

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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EUR / USD: it's All About the Labor Market

The EUR/USD pair drew another wave of sine waves on the chart: it fell by the same amount in the first week of August as it rose in the last week of July.

Statistics from the US labor market set the tone for the week's trends. In anticipation, the pair was moving in the sideways range of 1.1850-1.1900 throughout the first half of the week. The bears tried to break through its lower border on Wednesday, August 04. However, amid disappointing private sector employment statistics from the ADP, the pair reversed and, conversely, aimed at a breakout of the channel's upper border. But this attempt, now by the bulls, failed. The reason was the record growth of business activity in the US services sector from ISM: it rose to 64.1 in July.

After pulling back to support 1.1830, the pair froze in anticipation of the release of non-farm payrolls (NFP), data on the number of new jobs created outside the US agricultural sector. This data is traditionally published every first Friday of the month. And the report released on August 6 did not disappoint investors. Moreover, some analysts called it "stellar" as it showed employment growth of 943 thousand against the forecast of 870 thousand. In addition, the unemployment rate fell from 5.9% to 5.4%.
The market responded immediately with a surge in the US currency, as according to Fed statements, the timing of the monetary stimulus program (QE) and interest rate hikes are directly dependent from a crackdown on inflation and a full-fledged recovery in the US labor market.

After the release of the report, the yield on 10-year US bonds went up in the direction of 1.30%, which supported the rally in the dollar. The DXY rose 0.60% to 92.80, while EUR/USD plunged to 1.1755. The last chord of the week sounded very close, at the level of 1.1760.

Impressive labor market data allowed President Joe Biden to say his approach to economics is working. True, the White House host urged not to relax and stated that there was still a lot of hard work to do. Moreover, the country has to extinguish a new wave of coronavirus associated with the Delta strain. The president believes that the number of new cases of Covid will initially rise, but then decline, thanks to the current scale of vaccinations. And therefore, the US economy will not suffer as much damage as it did before.

Biden's words also went into the piggy bank of those waiting for the Fed's policy tightening soon. For example, analysts at Canadian investment bank TD Securities forecast that the dollar will perform better against currencies whose national central banks retain a dovish mood.

The overall picture for the pair looks bearish, something 70% of experts agree on. They believe that the EUR/USD pair intends to test the end-March low of 1.1700 once again. If it succeeds, it will encounter a strong support in the 1.1600-1.1610 zone. This forecast is supported by 100% of trend indicators on both H4 and D1. But the oscillators note the weakening of the bearish onslaught. 10% of them have taken a neutral position on H4, and 15% are giving signals that the pair is oversold. There are even more of them on D1, 35%, which indicates a possible quick correction to the north. The remaining 30% of the experts are also expecting it. Moreover, in their opinion, the pair may not just limit itself to correction, but return first to the channel 1.1850-1.1900, and then rise to 1.2000. Although, of course, this is not a matter of the next few days.

As for the macro statistics for the coming week, here we can note the release of data on the consumer market in Germany and the United States on Wednesday, August 11. In addition, the University of Michigan Consumer Confidence Index will also be released at the end of the five-day period, on Friday, August 13. It is predicted that it may show a slight increase, which will slightly strengthen the US currency.

GBP/USD: Waiting for the Start of QE

The Bank of England held a meeting on Thursday August 05, which, as expected, offered no surprises. Even with the good pace of recovery from the pandemic and rising inflation, all basic monetary policy parameters remained unchanged. The regulator kept the interest rate at a historically low level of 0.1%, and the quantitative easing (QE) program at ?895 billion.

The GBP/USD pair was never able to break the record of 30 July and was held in 1.3870-1.3935 for the whole week. An attempt made, in parallel with the euro, to break through its upper border on August 4, ended in nothing. As a result of the week's session, thanks to strong US statistics, the pair returned to the bottom of the channel, where it placed the final point at 1.3875.

The main interest for investors was not the predictable decision of the Bank of England, but the subsequent comments of its management regarding the future monetary policy. As mentioned above, the country's economy is confidently moving along the path of recovery. According to the data released earlier, inflation in June rose to 2.5%, exceeding the target level of 2%. The government is managing to cope with the next wave of COVID-19, so no new restrictions or lockdowns are yet to be seen. And although the Deputy Chairman of the Bank of England Benjamin Broadbent uttered a mysteriously ornate phrase that “moderate (!) tightening is likely (!), maybe (!) will be needed”, it did not impress investors. Especially as Broadbent said inflation in the country will rise 4% in Q4 2021 and Q1 2022.

Therefore, according to 75% of experts, any signal about a possible transition from QE to a tighter policy, will be enough to lift the GBP/USD pair to 1.4000. 60% of oscillators agree with this position, but only 40% of trend indicators on D1. There is even greater discord in the readings of the indicators on H4. Graphical analysis on this timeframe first draws a fall of the pair to the 1.3800 horizon, and then a return to the highs of the end of July in the 1.3980 zone. It is clear that the support/resistance levels along the way will be the 1.3870-1.3935 channel boundaries.

As for the events of the coming week, we can single out the publication of preliminary data on UK GDP for tQ2 2021 on Thursday August 12. This figure is projected to show a very significant increase, from minus 1.6% to plus 4.8%. And if the forecast is met, it will give the pound strong support, thus becoming a signal to the possible start of the QE program cuts.

USD/JPY: North Following Treasury Yields

Starting on Wednesday August 04, the yen surrendered one frontier of defense after another, losing 150 points. The USD/JPY pair jumped from 108.71 to 110.21 in just three days. And, of course, it's all again to blame the same growing US labor market, pulling the yield of American treasuries. As mentioned above, this indicator approached 1.30%, which hit the Japanese currency hard.

Most experts (55%) expect the pair to return to support at 109.00. However, according to 45% of analysts, the pair has not yet exhausted its upside potential, especially if the yield on 10-year US Treasuries continues to rise. This forecast is actively supported by 100% of trend indicators on both timeframes, 65% of oscillators on H4 and 50% on D1. Graphical analysis on D1 predicts that the pair will finally be able to reach the coveted 112.00 level. The resistances on the way to this target are 110.65, 111.10 and 111.65. 

CRYPTOCURRENCIES: Is Crypto Winter Canceled?


The digital currency market is optimistic. Investors hope that the crypto freeze has passed, and instead of a crypto winter, a crypto spring has immediately arrived. Indeed, over the past two weeks, a lot of green leaves have appeared on the "tree" of bitcoin quotes, of which there are much more than yellow-red dull autumn ones.

Bouncing off the low of $29,300 on July 20, the BTC/USD pair added about 40% and is trading in the $41,000-42,500 zone at the time of writing the forecast. The total capitalization of the crypto market grew by the same 40% over this period: from $1.19 trillion to $1.67 trillion. As for the Crypto Fear & Greed Index, it has finally moved from the Extreme Fear zone to the center of the scale, rising from 10 points to 52.

In addition to the quotes, major influencers statements and macro statistics support the market optimism. Recall that it was these factors that served as the main drivers of the bitcoin rally last fall.

For example, MicroStrategy chief Michael Saylor, said in an interview with Bloomberg TV that bitcoin has “the greatest growth potential and the lowest risk” and could therefore become “the property of the future” which will be possessed by everyone from small investors to big tech companies and governments. We see a future in which digital gold will become the basis of technological innovation in Apple, Amazon and Facebook and will take place on the balance sheets of corporations, cities, states and countries," the billionaire explained.

Analysts at one of the largest U.S. financial institutions, Bank of America, confirmed Saylor indirectly. They believe that the recognition of bitcoin as an official means of payment in El Salvador can give this country a number of serious advantages. This could potentially reduce the cost of remittances from abroad, which account for almost a quarter of El Salvador's GDP, and positively affect the incomes of the country's citizens. The analysts have called the democratization of financial services another advantage of the introduction of bitcoin, since approximately 70% of the adult population of the country does not have bank accounts. El Salvador can also attract direct foreign investment flows, becoming a major cryptocurrency mining center.

State Street, the second oldest bank in the United States with an investment portfolio of $3.1 trillion, plans to begin providing cryptocurrency related services. It is about helping private foundations to carry out transactions with digital assets and provide them with information on the optimal price levels for entering the crypto market.

But of course, things are not limited to State Street alone. Michael Miebach, CEO of payment giant Mastercard, said that cryptocurrencies must enter the banking sector on a large scale. Moreover, his company will do everything possible to become an integral part of the crypto space. "Mastercard is ready to become an assistant for the authorities in this task. We are ready for experiments and testing of digital currencies, so that in the end banks begin to work with them," said Miebach. And he added that Mastercard will allow 1 billion of its users to pay with digital assets in more than 30 countries around the world in 2021.
Recall that another payment giant, Visa, is already working on the integration of stablecoins into the global economy.

In terms of statistics, according to the research resource Glassnode, there was a sharp jump in the total number of active bitcoin addresses at the end of July. The increase in the indicator was about 30% in just a week. And the purses of "whales" accumulated 9.23 million BTC for the first time in history.

A further rise in prices is predicted by such an indicator as the ratio of put and call contracts in the bitcoin derivatives market. Low values of this indicator indicate that investors are supporting the rise in prices. And it fell to an 8-month low on August 01, that is, it is below the April value: the very one after which BTC surged above $60,000.

The likelihood index shows that there is a 30% chance that BTC will reach $46,000 in the near future. Moreover, according to the indicator, the overall probability that bitcoin will be worth between $50,000 and $55,000 is 28.3%.

The mood of analysts is even more elated. 60% of them vote for growth above $46,000. On the contrary, 20% are expecting a fall to the $30,000 area, and the remaining 20% vote for a sideways trend in the $35,000-42,000 range.


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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NordFX Brokerage company has summed up the performance of its clients' trade transactions in July.

The most impressive result was a trader from India, account No.1566XXX, with a profit of USD 5,114,045. But he did not stop there, adding to this multimillion-dollar profit another half a million dollars, or rather USD 463,953, which he earned on his second account opened with NordFX. Thus, the total income of this client amounted to USD 5,577,998 in just one month and was obtained thanks to transactions in pairs with the British pound (GBP/USD, GBP/JPY, GBP/CHF), Euro (EUR/USD, EUR/NZD) and a number of other currencies.

The pound helped another Indian trader as well (account No.1569XXX), who came in second with a result of USD 318,398 and used practically the same Forex pairs as trading instruments.

The British currency may well be called the hit of the month, since a client from China (account No.1397XXX), who was third with a profit of USD 179,327, rose to the podium thanks to transactions in GBP/USD and GBP/JPY.

The passive investment services:

- in CopyTrading in July, the largest increase of 164% was shown by the signal with the name claiming to be the top: BangBigBossTop1. If you look at the history of this signal, you can see that May, the first month of its life, was unprofitable, and then the signal went into plus and showed an increase of 398% for two summer months. At the same time, the highest drawdown on the account reached 55%, which would attribute it to high-income and high-risk signals.

The EAs for Life signal also attracts attention, showing a yield of 1207% since November 2020. The signal was generating stable profits for eight out of nine months of its life. However, May turned out to be extremely unsuccessful for it, the drawdown reached 75%, which is why it can also be classified as high-risk.

Those investors who prefer small stable profits with minimal risk can pay attention to the COEX.Investments-Treis3 signal: about 5.5% gain in July with a maximum drawdown of only 1%. This signal has only one drawback so far: it is still very young and has existed since June 05, 2021.

- the PAMM service also has a lot of offers for investors who prefer low or moderate risk. For example, the manager under the nickname KennyFXPRO-The Multi 3000 EA increased his capital by 34% since January 2021 (5.3% in July) with a drawdown of less than 15%. And the capital gain under the management of TranquilityFX-The Genesis v3 in four months was 18.4% with a maximum drawdown of less than 10%.

Among the NordFX IB-partners, the TOP-3 was headed by a representative from India (account No.1504XXX), who received USD 58,960 as a commission.

His colleague from the Middle East (account No.1569XXX) came in second, earning USD 10,405.

The third place went to a partner from Vietnam (account No. 1551XXX) with a result of USD 8,053


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

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Traders can use not only their knowledge in their work, but also various computer programs: auxiliary scripts, as well as algorithms that can give recommendations and even open and close transactions on their own. These automated trading systems are called Forex robots. This article will discuss them in detail, as well as talk about the types and how to use them.

What is a Forex Robot?

This is a program code that operates according to the algorithm installed in it. There are several types of Forex robots from the point of view of the trading system embedded in them. They can work on the basis of indicators or a specific money and risk management strategy. A very large number of free Forex trading robots operate on the basis of the well-known Martingale strategy.

How does a Forex Trading Robot work? It is pretty simple. In fact, it is an automated strategy that does all the same things that the trader would do, but only without the participation of the latter.

Suppose the robot is based on the Relative Strength Index RSI indicator and operates on the principle of getting out of the overbought and oversold areas (70% and 30% of the indicator scale, respectively). As soon as such a situation occurs on the chart, the robot opens a transaction on its own (Fig.1). A trader would do the same if they worked with such an indicator.

Such a computer assistant program can include either one single indicator or several similar algorithms. For example, the MACD indicator or the famous Stochastic Oscillator can be used in addition to the moving average. In this case, the robot's algorithm will be configured to receive signals based on two indicators, and trades will be opened only when these two indicators give the same commands, for example, to open a long position.

Main Types of Trading Robots

There are two main types of trading systems. The first one is semi-automatic, which only gives recommendations. That is, the trader needs to make their own decisions. The second one works completely autonomously. A trader launches it on their trading platform, and such a system analyzes the market and makes decisions by itself.

It's hard to say which approach is better. Each of these types has both advantages and disadvantages. For example, semi-automatic advisors (with manual opening of transactions) do not provide the trader with complete freedom and require the presence of the terminal at the moment the signal appears.

Fully automated trading bots work on the "plug and forget" principle, but there are also drawbacks here. Given that such robots are programmed to work with a certain set of tools, they cannot take into account, for example, the influence of fundamental factors on the market. And this can lead to losses from the work of such an advisor.

Some Recommendations for Working with Automated Trading Strategies

We have already noted above that robots that work completely autonomously have both their pros and cons. At least, it is not recommended to leave such algorithms unattended for a long time. Below we will give some useful tips for those planning to work with such bots.

1. Take a closer look at the trading system underlying the robot.

If you purchase an expert advisor or download it for free on the Internet, you need to carefully study what lies at the heart of such a trading bot. The fact is that the overwhelming majority of Forex robots are based on the so-called "martingale". What is that? This is a money management method that came to trading from casino.

It is based on the fact that every time you close a losing trade, you need to double the size of the next position. For example, if you opened a trade with 0.1 lot, then in case of a loss, the next trade would open with 0.2 lots. Further, if this trade has not made a profit, the next one will open in the size of 0.4 lots, and so on until you close the transaction at a profit.

As a result of this approach, the very first profitable trade will allow you to cover all losses and make a profit. But the risks of such a strategy are great. The fact is that the trader's deposit is always limited. If there is not enough money to open the next position, the trader will lose all the money that they invested in the formation of martingale steps earlier.

It should be noted here that the settings of the absolute majority of Forex trading robots using this trading strategy allow the trader to change the lot increase coefficient. And it can be set as more than 2.0 or less, for example, 1.5. That is, if you opened the first trade with 0.1 lots, then in case of a loss, the next trade will be opened with 0.15 lots, and so on.

2. Pre-settings.

Before giving the robot the opportunity to trade independently on the financial market, it is necessary to configure its main parameters. This applies to both functionality in terms of strategy, and in terms of capital and risk management. (One example of such settings was given above).

The strategy settings can be identical to the indicator settings. Some expert advisors have the option to regulate the algorithms they use. For example, you can set what period of the Moving Average will be used in the robot for trend trading.

As for money and risk management, most automated trading systems have such settings. For example, you will be able to set the robot software at which distance to put stop loss or take profit. And whether to place them at all. Also, the size of the lot with which the bot will work in the financial markets is determined. Some expert advisors set additional parameters, such as maximum deviation or spread when opening positions in order to avoid sending an order to a broker at a disadvantageous price. You can also limit the maximum number of simultaneously opened positions to reduce the risk of losing capital.

The number of settings in Forex trading robots can vary significantly: one computer program can have two or three of them, another - several dozens. The strategy tester, which is built into the MetaTrader-4 (MT4) trading platform, which NordFX brokerage company offers to its clients, will help to deal with them. 

3. Paid VS Free Trading Robots.

Today, you can find both paid and free advisors on the Internet. Many traders prefer the second option, since in this case there are no additional financial costs associated with their purchase.

The advantage of free Forex trading robots is that they really do not require any investment from the trader. However, there is one important nuance here that must be considered. When choosing a free Forex trading robot, you most often do not know the developer and the trading system that underlies such an algorithm. Therefore, in order to understand how it works, calculate its pros and cons, determine the presence or absence of errors in a computer program, you will need to test the work of such an assistant trader in the MT4 strategy tester, and then trade with it on a free demo account.

Paid trading robots are distinguished by a number of advantages, including full technical support from developers, a flexible system of settings and a history of their work with various parameters and trading instruments. In some cases, developers will be ready to make adjustments to the operation of this trading bot, recommended by the Forex trader.

How Forex Trading Robots Are Created

The first thing to know is that a trading robot may not work on all trading platforms. The most popular in the world, as already mentioned, is the MetaTrader-4 platform (or trading terminal), which uses a special programming language MQL4, with which thousands of programs for automatic Forex trading have already been created.

On the MetaTrader-4 platform, a trader will find special tabs with which they will get access to a huge number of special scripts, indicators and robots. One can buy them, rent them or just take them to test. You will also have hundreds of experienced programmers at your service, ready to create an automated trading system according to the algorithm specified by the trader. At the same time, it is very important to correctly draw up a technical task so that programmers do exactly what you expect to receive from them.

Myths about trading robots

There are several myths that are actively spreading on the Internet. We decided to dispel them and give objective information to those who want to try using trading robots in their trading. Here are the most interesting points:

1. Brokers are against the use of trading robots.

That's not true. For example, broker NordFX does not in any way prevent its clients from using such automated solutions. Moreover, robots have absolutely no effect on the relationship between the client and the company. The use of Forex trading robots is completely legal and does not constitute a violation of the Client Agreement.

2. Only paid robots give results.

It's not true either. And very often a free program can turn out to be no worse, if not better, than the one for which the owner asks hundreds or thousands of dollars. Moreover, it is not at all excluded that this "super-expensive", "super-professional" and "super-profitable" robot was stolen from real developers by hacking, or is simply an exact copy of a well-known, outdated model.

Therefore, once again, before using or acquiring any robot, it is necessary to carefully examine its “stuffing” and understand how it works.

3. Robots free the trader completely from having to make any decisions.

This is a false statement. A Forex trader tests and sets up the robot before launch anyway. Moreover, it is recommended to carefully monitor how the bot is trading and in case of a change in the market situation, either temporarily suspend the work or make the appropriate changes to the settings.

So, is it worth using trading robots in trading? This question is completely individual and depends on your preferences, experience, knowledge, availability of free time and the characteristics of your psyche. Definitely, the use of robots does not guarantee success, but the fact is that they can provide serious help in the work of the trader.


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

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First, a review of last week’s events:

- EUR/USD. Macroeconomic data continued to arrive last week, indicating a recovery in the US economy and labor market. Inflation figures released on Tuesday July 13 were well above forecasts. ?he consumer price index increased by 0.9% ?n June, and by 5.4% and on an annualized basis, which is the highest growth rate since 2008. The core index, which excludes energy and food prices, has posted record growth since 1991, at 4.5% year on year.
The number of primary claims for jobless benefits dropped by 26,000 to 360,000 from July 04 to 10. This is the lowest since March 20, when the coronavirus pandemic struck the economy first. Earlier this month, the US Department of Labor released data showing that the number of jobs in the country increased over the past month by 850,000 (up 583,000 in May).
The US import price index rose 1% in June, while import prices excluding oil rose 0.7% in June. The Fed-New York manufacturing index rose from 17.4 to 43.0 for the month, also well above the forecast. According to the Federal Reserve data released on Thursday July 15, industrial production in the US as a whole increased by 0.4% in June compared to May, which also indicates a good pace of recovery in the US economy.
By “pre-covid” logic, all this data would have strengthened the dollar seriously. However, it has risen against the euro by just about 50 points in the past four weeks. And the pair has generally been in a sideways corridor with a minimal dominance of bears for the last two weeks: it traded in the range of 1.1780-1.1895 from July 05 to 09, and in the 1.1770-1.1880 range from July 12 to 16.
These figures fully confirmed the compromise scenario presented by the experts. As for the forecast of graphical analysis, it turned out to be almost perfect. Recall that it indicated a sideways trend within 1.1780-1.1900 on H4.
So why isn't the American currency growing? The reason lies in the hesitancy and doubts that still bedevil the US Fed. The head of this regulator Jerome Powell said speaking on July 14 at the Financial Services Committee of the US Congress that his department would not rush to tighten credit and financial policy and reduce the purchase of assets within the framework of QE. He repeated roughly the same thing the next day, in front of the Senate Banking Committee.
Powell acknowledged that inflation is growing faster than expected, and if it goes beyond acceptable limits, monetary policy will have to be tightened ahead of schedule. But for now, the economy is “still far” from set goals. The rise in inflation, like many other factors, can be temporary. But after they disappear, they can be replaced by others. Now, the spread of the new COVID-19 strain supports the dollar against commodity currencies, but there is no telling how the markets will behave in the future. It is unclear how the early curtailment of the fiscal stimulus program will affect their mood as well.  
As a result, having given all this portion of doubts to the congressmen, Powell assured them that the Fed was certainly monitoring the situation closely and would respond promptly to its changes. However, the head of the central bank was unable to influence investor sentiment in any way (or perhaps did not want to), as a result of which the EUR/USD pair remained within a narrow trading range and completed the five-day period at 1.1805;

- GBP/USD. The pair failed to gain a foothold above the resistance of 1.3900 over the past week. As with EUR/USD, bears had a slight advantage, helped by positive economic statistics from the USA. Great Britain could not please with anything like that. And although the number of applications for unemployment benefits for the month decreased by 24% - from 151,400 to 114,800, the unemployment rate remained at the same level of 4.8% (instead of the forecast drop to 4.7%). Investors are also worried about the onset of a new wave of COVID-19, due to which the number of new infections here has exceeded 50,000 per day. As a result, despite the fact that the bulls managed to keep the pair in the 1.3800-1.3900 channel all week, its lower border was broken on Friday, July 16 and the pair finished at 1.3760;

- USD/JPY. It was not possible to understand the sentiment of investors, as well as indicators, last week. The experts' voices were almost equally divided: 30% sided with the bulls, 40% with the bears, and 40% just shrugged their shoulders. The inconsistency in the indicators' readings did not allow bringing their readings to any common denominator either. And, as the past five days have shown, it was this lack of forecast that proved to be the most accurate prediction: the USD/JPY pair drew a virtually perfect sinusoid.
As expected, the Bank of Japan did not present any surprises on Friday, July 16, and did not surprise anyone with its inaction, once again confirming the country's reputation as a super-safe haven for investors. Bank Governor Haruhiko Kuroda did not utter a single new intriguing word during the press conference once again. Investors knew very well without him that the Japanese economy remains in a difficult situation, but the level of activity will increase as the population is vaccinated.
The balance of power between the dollar and the yen was not affected by the discrepancy in the macroeconomic indicators of the United States and Japan. As a result, the pair ended the week almost where it started, at 110.05;

- cryptocurrencies. Bitcoin was ripping up in late June to early July, wishing to break through the $36,000 resistance. However, none of the attempts made by the bulls were successful. Now the initiative has passed to the bears, and we saw the opposite picture last week: the desire to drop the BTC/USD pair below the psychologically important level of $30,000, after which another wave of mass sales may follow.
Trading volumes on major crypto exchanges including Coinbase, Kraken, Binance, and Bitstamp fell more than 40% in June, according to CryptoCompare. The decline in volumes was due to falling prices and lower volatility. But not only. The absence of large investors, most of whom are now engaged in traditional markets, trying to understand the situation with the coronavirus and the accompanying steps of regulators, is also affecting.
At the time of this writing, the flagship currency is held in the $31,000-32,000 region. And according to Galaxy Digital crypto bank founder Mike Novogratz, this is because of the USA. He stated in a comment to CNBC that the US cryptocurrency community has taken an important defensive line in a market that has its bearish origins in Asia. “We see Asia selling bitcoin and the US buying back. China has declared war on the crypto industry as part of the broader Cold War that we are getting into." 
To be honest, it is not yet clear whether it is good or bad that the crypto industry has grown to become a prominent part of the economic policies of the world's leading powers. Time will tell. Of course, Mike Novogratz can consider the exodus of miners from China to be a "big plus" and say that Beijing's repressive policies will not hinder the development of the industry. But judging by the charts, so far the advantage is on China's side. Many investors and traders prefer to stay out of the market for fear of further falls in quotes. Average daily trading turnover is now 76% below peak levels when the price was above $60,000. The total capitalization of the crypto market declined by nearly $100 billion in seven days, from $1.370 trillion to $1.275 trillion. And the Crypto Fear & Greed Index cannot get out of the Extreme Fear zone for several weeks now, fluctuating in the range from 20 to 22 points. (Recall that the market sentiment looked more optimistic a month ago, and the average value of the Index was 33 points).


As for the forecast for the coming week, summarizing the views of a number of experts, as well as forecasts made on the basis of a variety of methods of technical and graphical analysis, we can say the following:

- EUR/USD. We talked about the doubts prevailing at the Fed in the first part of the review. In such a situation, the rare unity of analysts looks all the more surprising. Thus, 75% of them were voted for a stronger dollar and a decrease in EUR/USD, 25% for the side trend, and, respectively, 0% for the euro to rise. Perhaps the principle "if you are not sure, buy dollar" worked. 
According to 39 out of 41 Reuters experts, the Fed will curtail its monthly asset purchase program by $120 billion before the end of 2022. Three of them believe that this will happen very soon, this year already. The number of those who expect an interest rate increase in 2022, and not in 2023, is also growing. Therefore, the consensus forecast for QE completion is in the next year, which supports the US dollar. The new wave of COVID-19 is also playing on the side of the American currency, recalling that it was during the pandemic that the dollar gained great importance as a reserve currency.
It should be noted that with the transition to the forecast by the end of summer, the number of supporters of a weakening dollar and a strengthening of the euro among experts increases from 0% to 50%.
Graphical analysis on H4 still indicates a sideways trend within the channel 1.1780-1.1900. There is a mixture of red, green and neutral gray colors among the trend indicators and oscillators on H4, but the situation is different on D1: 100% of trend indicators and 85% of oscillators look down.
The nearest target of the bulls is 1.1880-1.1900, then 1.1975-1.2000, 1.2050 and 1.2150. The challenge before the end of summer is to update the high of May 25 1.2265. The bears' task is to test the March low of 1.1700. The nearest support on the way to this target is 1.1780. 
The economic calendar for the coming week can note the ECB's interest rate decision on Thursday July 22. The rate is highly likely to remain unchanged, at 0%. Therefore, the subsequent press conference of the bank's management and its commentary on monetary policy is of much greater interest. According to Reuters, the ECB will have to decide at its meeting on Thursday what the new inflation target will mean for its future course. If the regulator is serious about raising inflation to 2% (compared to the previous target - close, but below 2%), then the large-scale purchase of assets is likely to continue. But the "hawks" insist on curtailing incentives, and therefore investors will be interested in whether the head of the Bank, Christine Lagarde, will be able to achieve a certain compromise. 
The Markit PMI values in Germany and the Eurozone will become known the day after the ECB meeting, on July 23, on the basis of which it will be possible to get an impression of the pace of the European economic recovery;

- GBP/USD. Experts are a little more optimistic about the future of the British currency than the future of the euro. So, 25% of specialists vote for the growth of the GBP/USD pair in the near future (as opposed to 0% for EUR/USD). The same is higher at the month and a half interval as well: 65% are bull supporters (the euro has 50%).
As for the technical analysis, there are only faint hints of a possible rise in the pair. 100% of trend indicators and 75% of oscillators are colored red on H4 (the remaining 25% are in the oversold zone). 85% of trend indicators and 75% of oscillators look south on D1. 
Support levels are 1.3740, 1.3700, 1.3670 and 1.3600, resistance levels are 1.3800, 1.3840 and 1.3900. The further target of the bulls is the upper border of the medium-term channel 1.3700-1.4000;


- USD/JPY. As in the case with the previous two pairs, in this case, the majority of experts (70%) expect the dollar to strengthen and a new attempt by the pair to gain a foothold above the level of 111.00. Such a forecast comes into a certain contradiction with the indications of technical analysis on D1. Here 65% of oscillators and 80% of trend indicators are colored red.
As for the graphical analysis, it draws the movement of the pair in the range of 109.70-110.40 on H4, with a subsequent fall to support at 109.30. The range of fluctuations is somewhat wider on D1: first, the fall to the zone 108.65-109.30, and then the rise to the resistance 111.00 and further growth to the July 02 high, 111.65;   

- cryptocurrencies. We provided the key estimates of the digital market over the last period in the first part of the review. And they don't look rosy at all. It may be too early to talk about the onset of "crypto winter", but it is quite possible to call the current situation "crypto freezes". The BTC/USD chart continues to form a triangle with downward resistance and horizontal support around $31,000. 65% of analysts vote for its breakthrough during the coming month. That being said, according to some experts, if the bulls fail to hold that front line, we stand a lot of chances to see the pair in the region of $10,000 by the end of the year.
But, as usual, there is an opposite point of view as well. So, for example, analyst Will Clemente believes that bitcoin is already ready for a major price movement. He published a chart in his Twitter (136 thousand subscribers) with an indicator, which speaks of a possible imminent exit of the price of the first cryptocurrency from the narrow range. As to the direction of the bitcoin rate, Clemente wrote that he was optimistic. According to him, the market is now in the accumulation stage, and large players continue to actively buy the first cryptocurrency. "Whale" stocks increased by 65,429 BTC just last week. According to Clemente, there may be a shortage of supply of the main cryptocurrency in the near future, since large players often acquire assets for long-term purposes.
The expert also stressed that the growth in the number of cryptocurrency users continues. Whereas their number usually decreases after the peak in prices. But now there is no fall, and this is also an argument in favor of the upcoming growth of BTC.
Another specialist, Bloomberg analyst Mike McGlone, agrees with Clemente's opinion. According to him, the flagship cryptocurrency has reached a level where it can resume its rally towards $100,000. "Bitcoin is poised to return to a bullish trend in the second half of the year, and crude oil is ready to resume a bearish trend," McGlone wrote on Twitter. The expert is confident that the growth of the cryptocurrency will "have serious macroeconomic consequences" this time. It is worth noting, however, that this is not the first time McGlone predicts a sharp rise in digital assets. For example, he announced in early February that the volatility of bitcoin can increase the gap between its price and gold "hundreds of times."
No one knows yet which of the predictions will turn out to be correct. But there are a couple of ways to make money on cryptocurrency without spending a dime to buy it. However, both of these methods can be classified as "dirty" business. And this in our traditional heading crypto-life hacks.
First, you can help British IT engineer James Howells sort through rubbish. The fact is that this wonderful person threw a hard drive with 7,500 BTC into rubbish eight years ago, confusing it with another device. He then asked local authorities for permission to excavate a local dump to find his property but was refused. And now Howells has developed a new search plan using a super system with multiple conveyor belts, X-ray scanners and artificial intelligence. However, the implementation of this project requires significant financial costs. And if suddenly someone helps an engineer find the disk in a simple way, with the help of a shovel, he will surely share his new-found wealth. Today, his bitcoins are worth more than $230 million, and it is necessary to sort out "only" 300-400 thousand tons of waste.
Another way of “dirty” earnings was told by Reuters. According to this agency, students at Ulsan National Institute of Science and Technology (South Korea) make money from... going to the toilet. For each visit, they are paid a certain amount in digital currency Ggool.
One of the institute's professors has developed a plant that uses student waste to produce biogas. According to the scientist's calculations, a person produces about 500 grams of feces every day, which can be converted into 50 liters of methane. This amount of gas generates 0.5 kW of electricity, which is equal to the cost of a car to cover a distance of 1.2 km.
The science Initiative brings students up to 10 Ggool per day. The coin is accepted as payment in shops on campus. And the energy produced with the help of students powers a number of devices on the territory of the institute.


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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First, a review of last week’s events:

- EUR/USD. As predicted by the majority (65%) of experts, the dollar continued to weaken at the beginning of the week, and the EUR/USD pair went up. Disappointing data from the US labour market, released on July 02, affected the dollar. According to forecasts, the unemployment rate was supposed to fall from 5.8% to 5.7%, however, contrary to expectations, it rose to 5.9%. 
The US business activity indicators released on Tuesday July 6 saved the American currency from further falling. And although the ISM index in the services sector fell to 60.1 in June (from a record 64 in May), this did not frighten investors, as a result above 50 is seen as positive and is in favor of the dollar. This is exactly what happened: having reached the height of 1.1895, the EUR/USD pair reversed and went down, reaching the local level at 1.1780 on Wednesday, July 07.
The minutes of the June meeting of the FRS, published at the end of the same day, showed that although curtailing financial and credit stimulation (QE) programs was discussed at it, it did not come to specific decisions. The regulator will still not rush to tighten monetary policy, relying only on inflation indicators, and will wait for the full recovery of the labor market. And on that end, as mentioned above, the indicators are not particularly optimistic at the moment, indicating a slowdown in the American economy. 
The next day, Thursday, July 8, was the day when the euro was able to win back losses, not only because of the dovish position of the Fed, but also thanks to the publication of a new inflation target by the European Central Bank. Previously, the goal was to keep inflation “below but near 2%.” Now, the official target level allows for exceeding or lagging the indicator at certain points in time. At the same time, the head of the ECB Christine Lagarde stressed that her bank will not copy the new strategy of the Fed and will not specifically stimulate the growth of consumer prices in order to reach the average.
The growth of the European currency and a decrease in global risk appetite caused by the spread of the delta strains of coronavirus helped. Carry traders began to close positions open on high-interest currencies in developing countries and return to fund currencies such as EUR and JPY.       
As a result of all the fluctuations and changes in trends, the five-day total can be considered close to zero, the EUR/USD pair ended the weekly session almost the same as it started ¬at 1.1877;

- GBP/USD. The dynamics of the British pound against the dollar last week followed the movements of its European counterpart. The prediction given by the graphical analysis proved to be the most accurate, it indicated first the GBP/USD growth to 1.3870-1.3900 and then its lateral movement in 1.3730-1.3870 channel. In reality, adjusted for a few points, that's what happened. As for the last chord of the week, it sounded near the upper boundary of the channel, at 1.3890; 

- USD/JPY. The competition over which currency is the best refuge from financial storms continues. And the yen won it with a clear advantage last week, having outperformed the dollar by 100 points. As predicted by the vast majority of experts (75%), the pair moved purposefully south for the entire first half of the week, recording a local low on the horizon of 109.50 on July 07. At one point, thanks to flight from stock market of investors and falling US government bond yields, its superiority was as much as 150 points.
Then, against the backdrop of the recovery in the yield of US Treasuries to 1.3433%, the dollar was able to win back some losses, and the pair finished at 110.10;

- cryptocurrencies. A poll by Morning Brew found that what retail crypto investors fear most is... Elon Musk's tweets. This was confirmed by another survey conducted by Investing.com. According to its results, one in five respondents who sold bitcoin in May 2021 associated this decision with Musk's criticism of the cryptocurrency.
To be sure, his tweets, like bans on cryptocurrency transactions in China, triggered the collapse, which saw bitcoin collapse from a height of $64,600 to $30,000. However, many experts believe that the main reason for what happened is the use of leverage in the crypto market, otherwise margin trading, which allows traders to open large positions with little funds. And it was the avalanche-like closing of such positions that led to a drop in quotations and a decrease of more than 45% in the total capitalization of the crypto market.
As for the Chinese authorities, they continue to squeeze virtual currencies out of the country. The People's Bank of China said bitcoin and stablecoins pose a threat to financial security and social stability and has banned the provision of a range of services to companies associated with the market, including software development, rental of premises and marketing services.
At the moment, large capital is watching the migration process of miners from the PRC. And the country in which they will resume their work is of particular interest. If it's going to be the US, it's likely to bolster the industry's image in the eyes of institutionals. Especially since Crypto Head estimates that of 76 countries, the United States is the best prepared for mass adoption of digital assets. However, it is believed that miners fear the US authorities no less than the Chinese. And therefore, they can choose the countries of Central Asia - Kazakhstan, Mongolia, etc., where there are territories with a cold climate and access to relatively cheap energy resources. Although not everything is so smooth here. For example, as we wrote, Kazakhstan had already passed a law on additional energy charges for cryptocurrencies in anticipation of miners.
Note that due to the bans introduced in China, the hash rate in the blockchain fell by almost 50%. This led to major changes in the complexity of the algorithm, and an equally serious increase in the profits of the remaining miners. They are now earning income, about the same as at BTC's $60,000 cost.
As for investors, they have been watching the main cryptocurrency trying to rise above the resistance of $ 36,000 for the third week. Another attempt by the bulls last week was unsuccessful again, and the BTC/USD pair was trading in the $32,500-33,500 zone by Friday night July 09.
The total crypto market capitalization has changed insignificantly over the week: from $1.358 trillion to $1.370 trillion. That being said, there has been a small flow of funds from altcoins (including ethereum) to bitcoin over the past few days. JP Morgan’s analyst Nikolaos Panigirtsoglou also noted this in an interview with CNBC. This move has reversed a trend that began in April when there was a large inflow of funds into altcoins and could mean that the bear market for BTC is coming to an end. But it is clearly premature to talk about any serious progress. This is confirmed by quotes, capitalization volumes, and readings of the Crypto Fear & Greed Index, which is still in the Extreme Fear zone, having dropped by 1 point over the week, from 21 to 20.


As for the forecast for the coming week, summarizing the views of a number of experts, as well as forecasts made on the basis of a variety of methods of technical and graphical analysis, we can say the following:

- EUR/USD. It seems that the epidemiological situation associated with the spread of new strains of COVID-19 is coming to the fore again. Risk cravings are falling and investors, fearing a repeat of last year's situation, are once again beginning to gravitate towards protective assets. Stock indices - Nasdaq, Dow Jones, S & P500 - stopped growing, going into a sideways trend. And impressive black candles appeared on their daily charts. In parallel, demand for U.S. Treasury liabilities rose: the yield on Treasuries fell to a new multi-month low, to 1.25%.
Despite the worsening epidemiological situation, the European Commission has raised its forecast for GDP growth in the Eurozone from 4.3% to 4.8% in 2021. The growth of economic activity should be influenced by the softening of quarantine measures (if it continues, of course) and the mass vaccination of the population. GDP is expected to return to pre-crisis levels as early as Q4 of this year, a quarter earlier than forecast, and this could prompt the ECB to start winding down QE programmes more quickly.
But if European inflation and GDP are growing by 2% and 4.8%, then the growth of similar American indicators is 5% and 7%, respectively. And who will start tightening monetary policy earlier, we wonder? Yes, the Fed has taken a wait-and-see, almost dovish position. But there are not so many hawks among the ECB's leadership, and its current position is more like a compromise between supporters of monetary expansion and their opponents.
Experts’ opinion on the EUR/USD pair's immediate future can also be considered a compromise, with 40% in favour of growth, 45% in favour of falling, and 15% for continuing the side trend. At the same time, the number of supporters of a weaker dollar and a stronger euro rises to 60% when you move to the forecast by the end of summer.
Among the trend indicators and oscillators on H4, 70% are colored green, 30% - red. On D1, the situation is different: 70% of trend indicators look down, and the oscillator readings are a mixture of red, green and neutral gray. Graphical analysis on H4 indicates a sideways trend within the 1.1780-1.1900 channel.
The nearest target of the bulls is 1.1900, then 1.1975, 1.2000, 1.2050 and 1.2150. The challenge for July is to update the May 25 high of 1.2265. The bears' task is to test the March low of 1.1700. The supports on the way to this target are 1.1845, 1.1800 and 1.1780.
The following events can be noted in the economic calendar for the coming week. German and US consumer market data will be released on Tuesday July 13. US Federal Reserve Chief Jerome Powell is scheduled to speak in Congress on Wednesday and Thursday, and another set of US consumer data, including retail sales and the University of Michigan Consumer Confidence Index, will close the working week on Friday July 16;

- GBP/USD. The UK's GDP, trade and industrial production figures did not reach forecast values. And this will put some pressure on the pound. But despite this, 60% of analysts vote on the GBP/USD pair's move north.
It finished the last week, rising to the 1.3900 zone. The mid-term chart clearly shows that this level is in the central part of the 1.3700-1.4000 channel. Therefore, the pair has many chances to continue the upward movement to its upper border.
The remaining 40% of experts, in agreement with the graphical analysis on H4, believe that the British currency will not be able to break through the resistance of 1.3900 so far, including due to a new wave of COVID-19 spread in the country.
The indicators' readings are almost completely consistent with their readings for EUR/USD. In terms of macroeconomic statistics, the June Consumer Price Index (CPI) will be known on Wednesday 14 July, which is projected to rise from 2.1% to 2.2 per cent. And the next day, a portion of data on the state of the UK labour market, including claims for unemployment benefits and the country's unemployment rate, awaits us. Recall that a rise in the same indicator in the US hit the dollar on the first Friday in July. For the United Kingdom, it is expected to remain flat at 4.7%;

- USD/JPY. It is almost impossible to bring the indicator readings for this pair to any denominator, neither on H4, nor on D1. Will it continue its upward trend, which began in early January? Will it be able to gain a foothold above 111.00? A new impetus to this movement was given after the correction on April 26, and only now the first hint of a trend breakdown and a breakout of the lower border of this channel has appeared.
We spoke above about the reasons for the strengthening of the yen last week. However, it is not possible to catch investor sentiment, as well as indicators, for the week ahead. The experts' voices are almost equally divided: 30% side with the bulls, 40% side with the bears, and 40% just shrug their shoulders. 
Graphical analysis on D1 first indicates a sideways movement of the USD/JPY pair in the 109.50-111.00 trading range, and only then does it rule out the continuation of the uptrend and its breakout to 112.00. 
The Bank of Japan's interest rate decision and the traditional subsequent press conference of its management may be of some interest the week ahead. Both of these events are scheduled for Friday July 16. And most likely, there will be no surprises for us, and Japan will once again reaffirm its title as an ultra-quiet haven for investors; 

- cryptocurrencies. Bitcoin's daily trading volume has dropped to its lowest level since early 2021, according to analyst firm Arcane Research. The BTC/USD pair is trying unsuccessfully to climb above the $36,000 horizon for the third week in a row. The fact that it has been trading near local lows since the end of May, of course, scares investors. A dip below the current low of $28,800 could lead to another massive sell-off and a new crypto winter.
At the same time, a number of experts interpret the current situation as a phase of accumulation according to the Wyckoff method. This means that $28,800 is the minimum of the correction (“Spring”), and a stepwise growth should be expected in the future. Wyckoff's scheme will be confirmed if bitcoin fixes above the $36,000 resistance.
- Popular cryptanalyst PlanB (609,000 subscribers) outlined the worst scenario of the main cryptocurrency movement. This expert is known for applying to bitcoin the stock-to-flow ratio (S2F) model, previously traditionally applied to commodities such as gold and silver. According to PlanB's calculations, the worst-case scenario for bitcoin in July is closing the month at $28,000. In August, this is where the worst-case closing scenario could be $47,000. According to him, the next six months will determine whether, by the end of the bull race, BTC will actually be able to reach the six-digit range and, as a result, reach the $288,000 mark. 
It should be noted that the forecasts of the institutions look much more modest. For example, CNBC conducted a Wall Street survey of nearly 100 investment directors, financial strategists and portfolio managers. 44% of them believe that bitcoin will close 2021 with a price below $30,000. 25% of respondents believe that the rate of the first cryptocurrency at that time will reach $40,000. A similar proportion of respondents chose the $50,000 level, with only 6% predicting a rise to $60,000.
Discussing the results, the channel's hosts agreed with the short-term outlook in general, noting that even $30,000 for the end of the year would alleviate many of the concerns of market participants by setting a long-term bottom.
While assessing altcoin prospects, many experts, including Galaxy Digital cryptocurrency bank founder Michael Novogratz, say that Ethereum may well weaken bitcoin in the future and become the foundation for pricing in the market. BTC became popular as a means of saving. But if you sum up the number of projects and directions working on the ETH blockchain, the advantage of Ethereum becomes obvious. Stablecoins, De-Fi, and NFT tokens work on its blockchain. The ETH platform has the potential to become the foundation for the upcoming Web 3.0. However, there is one issue: Ethereum is facing stiff competition from Solana, Terra and other ecosystems in this direction.
Experts from Goldman Sachs, one of the largest investment banks, also believe that today ethereum is the cryptocurrency with the highest real use potential that can overtake bitcoin. But at the same time, the bank's experts are also confident that neither bitcoin, nor ethereum, nor any other cryptocurrency will overtake gold in popularity in the near future. Because of its high volatility, digital assets cannot be accepted as a safe haven by investors, and therefore lose out in direct competition with this precious metal.


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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NordFX Brokerage company has summed up the performance of its clients' trade transactions in June 2021. The services of social trading, CopyTrading and PAMM, as well as the profit received by the company's IB-partners have also been assessed.

By a huge margin, the best result of the month was shown by a client from India, account No. 1566XXX, with a profit of 329,320 USD, which was obtained thanks to numerous transactions in a variety of pairs: GBP/USD, EUR/AUD, EUR/GBP, EUR/NZD, GBP/CHF, etc.

The second ranking of most successful traders was a NordFX client from Vietnam, account No.1416XXX, who used some of the most popular instruments, bitcoin (BTC/USD) and gold (XAU/USD) and generated revenue of 74,865 USD. It should be noted that the profit of this trader looked very impressive in May as well, 53,207 USD.

The TOP-3 of June is closed by a trader from China (account No.1397XXX) with a result of 41,862 USD, obtained through operations with the British pound (GBP/USD and GBP/JPY pairs).

In the CopyTrading service, a young account Fire_1 can be noted among signal providers. It has existed for only a month, and the profit on it has been 414% during this time with a maximum drawdown of 55%.

Those investors who prefer less aggressive, but also less risky trading can pay attention to the PAMM account KennyFXPRO-The­ _Multi_3000_EA. It has been working for 160 days, and it has shown an increase of 28% during this period with a drawdown of less than 15%. The profit is certainly not that great, but it is still many times higher than the interest on bank deposits.

Commissions of NordFX IB partners in June were as follows:
- the largest commission, 32,079 USD, was credited to a partner from India, account No.1504ХXХ;
- next is a partner from Vietnam, account No.1401ХХХ, who received 7,959 USD;
- and, finally, a partner from China, account No. 1522ХХХ, who received 5,899 USD as a reward, closes the top three.
 

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


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First, a review of last week’s events:

- EUR/USD. Making a forecast for the previous week, the majority of analysts (60%), supported by 85% of oscillators and trend indicators, voted for the strengthening of the dollar and the decline of the EUR/USD pair to the June 18 low of 1.1845. The forecast turned out to be absolutely correct, and the pair reached the set goal as early as Wednesday, June 30. But the dollar did not stop there and its DXY index renewed a three-month high on Friday, July 02, peaking at 92.699.  
The growth of the American currency was due to the expectation that the pace of the US economic recovery will force the Fed to accelerate plans to reduce the programs of financial and credit stimulus (QE). And the market expected the strong labor market data, which was due out in mid-Friday, to push the dollar even higher.
According to the Department of Labor, the number of new jobs created in the non-agricultural sectors in the United States (Nonfarm Payrolls) actually turned out to be higher than the forecast by 150 thousand: 850 thousand instead of the estimated 700 thousand. The EUR/USD pair fell further downward, however, having reached the level of 1.1805, it unexpectedly turned around and soared to the north no less rapidly. The reason was the second published indicator: according to forecasts, the unemployment rate should have decreased from 5.8% to 5.7%, however, contrary to expectations, it rose to 5.9%. 
This result showed a weak recovery in the US labor market, investors' expectations regarding the imminent tightening of the Fed's monetary policy weakened, and this supported the risk sentiment. The Dow Jones index went up, and the S&P500 and Nasdaq Composite renewed all-time highs once again. The DXY fell to 92.24 and EUR/USD closed the weekly session at 1.1863;

- GBP/USD. Concerns about the Delta COVID-19 strain are putting a lot of pressure on the pound sterling. Investors were not pleased with the data on the UK GDP for Q1, which turned out to be worse than the forecast (minus 1.6% versus minus 1.5%). 
With regard to inflation, in his speech on Thursday July 1, the head of the Bank of England Andrew Bailey stressed that its high rates are temporary, as the British economy returns to the average and slows down the growth rate. This announcement pushed the pound further down. And if not for the disappointing US unemployment data, the GBP/USD pair would probably have tested the 1.3670 support. In reality, its fall was stopped at the 1.3730 horizon, and the last chord of the week sounded 100 points higher, at 1.3830; 

- USD / JPY. the Bank of Japan published the value of the Tankan index for Q2 of this year on July 1. This index reflects the general business conditions for large companies in the country. A reading above 0 is considered to be a positive factor for the JPY, while a reading below 0 is considered negative. The index was projected to rise to 15, up from 5 in Q1 2021. Tankan did grow, though not to 15, but to 14. But neither its growth nor its value have had virtually any impact on the USD/JPY pair. As it was not strongly influenced by the decline in the yield of US Treasury bonds. The pair basically just copied what was happening with the DXY index. The dollar grew, and the pair also grew, breaking through the important resistance of 111.00 and finding itself at a height of 111.65 - very close with the high of March 24, 2020 - 111.70. Then the dollar collapsed, and so did the pair. True, it was able to stay above the horizon at 111.00 and finished at 111.05;

- cryptocurrencies.  The forecast, which was given seven days ago, said that "with a high degree of probability, the fight between bulls and bears in the $30,000 area will continue." This is exactly what happened. The local bottom was reached at $30,200. Then the bulls managed to raise the BTC/USD pair to $36,590, but they could not keep it above the psychologically important level of $36,000, and the price of bitcoin dropped to $32,700 on Friday, July 02.
The lack of significant victories on both sides was facilitated by a fairly calm news background. We list just a few, more or less noticeable, of these news stories:
- There was a rumor that Paraguay could be the next country after El Salvador to recognize bitcoin as legal tender. However, then it was clarified that the purpose of the bill, which will be presented to Parliament on July 14, is completely different and is to regulate digital assets, and not to turn bitcoin into a national currency.
- The panic after the mining ban in China is gradually subsiding. In China itself, authorities have banned energy companies from supplying electricity to miners. In theory, this should have brought the hash rate down to zero in the country. However, some enterprising crypto miners are trying to continue their business using small private hydroelectric power plants. Another part of mining companies migrates - some to the USA, and some, for example, to Kazakhstan. Against this background, the President of Kazakhstan signed a law on the introduction of additional payments for electricity when mining cryptocurrencies, which may negatively affect the country's attractiveness for this industry.
- Ark Invest, managed by Katie Wood, is the ninth company to apply to the US Securities and Exchange Commission to launch a Bitcoin Exchange Traded Fund (ETF). 
- According to the analytical service Chainalysis, the number of crypto investors in India has exceeded 15 million, and investments in cryptocurrency over the past year have grown from about $200 million to almost $40 billion, which means an increase of 20,000%.
- A veteran of the crypto market and one of the largest holders of BTC, 41-year-old Mircea Popescu, drowned in Costa Rica. He was known as a blogger and self-proclaimed "greatest erotic writer in the world." The crypto community called him "the evil genius of bitcoin maximalism", "the father of toxicity around bitcoin" and the "sleeping giant" who "could at one moment bring bitcoin to virtually zero and hold the price for some time." The actual number of coins owned by Popescu could be between 50,000 and 300,000 BTC, making him one of the largest cryptocurrency holders in the world. Now, this huge number of bitcoins seems to have disappeared forever.
And a few words about Elon Musk (we can't do without him!). Perhaps the billionaire has already played enough with bitcoin and Dogecoin, and now he has a new hobby - BabyDoge. After his tweet with three repeated unpretentious text "Baby Doge, doo, doo, doo, doo, doo, ...", the value of this coin has increased by 500% in two weeks, and the trading volume has tripled. It is still unknown whether Musk himself made money on such a "pump".
As for the crypto market as a whole, unlike BabyDoge, its capitalization increased very slightly over the week: from $1.336 trillion to $1.381 trillion. The Bitcoin Dominance Index fell from 47.05% to 45.52%, and the BTC Crypto Fear & Greed Index found itself in the Extreme Fear zone once again, at around 21 points.


As for the forecast for the coming week, summarizing the views of a number of experts, as well as forecasts made on the basis of a variety of methods of technical and graphical analysis, we can say the following:

- EUR/USD. The data on inflation and consumer markets in Germany and the Eurozone are not the most encouraging. Tourism revenues are falling, due to the Delta strain of the coronavirus and the divorce from the UK. In general, optimism about the recovery of the European economy is declining.
As for the United States, Congress has raised its forecasts for 2021 both on the growth of inflation - from 1.7% to 2.8%, and on the growth of the country's economy - from 3.7% to 7.4%. The IMF expects US GDP to grow by 7%, the fastest pace since 1984. As for the interest rate, according to the IMF experts, the Fed will raise it either at the end of 2022 or at the beginning of 2023. Federal Reserve Bank of Philadelphia President Patrick Harker suggests starting to wind down the Asset Purchase Program (QE) as early as this year. And the faster that happens, the sooner the interest rate will be raised in 2022.
The Fed is constantly saying that it will raise the interest rate in full employment only. And if the labour market data released on July 02 were positive, it would have sent EUR/USD to the March 31 lows of 1.1700. However, instead of falling, the unemployment rate rose from 5.8% to 5.9% in June, casting doubt on the continuation of the pair's downtrend.
Before the release of unemployment data, 70% of experts sided with the bears. Now the situation has changed, and 65% expect the pair to grow during July. The same applies to indicators: 100% of oscillators and trend indicators on H4 and D1 were colored red until mid-Friday July 02. But by the time the markets closed, the color scheme on H4 had changed: some of the indicators turned into neutral grey, and some even turned green.
The nearest target of the bulls is 1.1975, then 1.2000, 1.2050 and 1.2150. The challenge for July is to update the May 25 high of 1.2265. The bears' task is to test the March low of 1.1700. The supports on the way to this target are 1.1845, 1.1800 and 1.1765.
The economic calendar for the coming week looks rather modest. It highlights Tuesday, July 06, when the Eurozone retail sales data and the ISM business activity index for the US services sector will be released;

- GBP/USD. There is no unity in inflation estimates in the ranks of the Bank of England's senior management. Suffice to listen to the soothing statements of the head of the Bank, Andrew Bailey, and the exact opposite - of the chief economist Andy Haldane, who is greatly alarmed by inflationary risks. We have already said in the first part of the review that thanks to Bailey's position, the pound came under pressure, and its quotes were “saved” from a further fall by the increased unemployment in the US. Otherwise, the pound would have continued its decline as a pair with the euro.
The GBP/USD forecast, as with EUR/USD, changed the vector dramatically at the very end of the past week as well. If before the US unemployment data was published, 60% of analysts had expected the UK currency to weaken further, 75% vote for the growth of the pair during the month. Technical analysis readings on H4 have also mixed, although 90% of oscillators and 100% of trend indicators on D1 are still facing south. Graphic analysis on H4 indicates the pair's growth to 1.3900, and D1 shows its movement during the week in the range 1.3730-1.3870.
Support levels are 1.3800, 1.3730 and 1.3670, resistance - 1.3900, 1.4000, then the zone 1.4100-1.4165;

- USD/JPY. The indicators for this pair are almost no different from those of their EUR/USD and GBP/USD counterparts. (Only in this case, their color changes from red to green). But the opinion of experts here turned out to be more constant, it just changed quantitatively: if 55% had voted for the strengthening of the yen and the decrease in the pair, then their number increased to 75%. Graphical analysis on H4 indicates a sideways movement of the pair along the support/resistance line of 111.00, on D1 it forecasts first a decline to 110.40, and then an increase above the high of March 24, 2020, at 111.70.
The targets of the bears are the zones 109.75-110.100 and 108.00-108.55. The bulls, subject to taking the height of 111.70, will seek to raise the pair to the high of February 20, 2020, 112.25; 

- cryptocurrencies. According to a report by cryptanalytics company Glassnode, institutional demand for bitcoin is declining. One of the main factors supporting the upward trend in BTC was the influx of institutional investments into the GBTC Grayscale trust fund. Glassnode analysts note that declining GBTC premiums, net outflows from ETFs, and stagnating Coinbase balance sheets indicate that demand for the main cryptocurrency from institutions remains weak.
Despite this, many of the experts are optimistic about the current situation. According to JPMorgan analysts, "the cryptocurrency market is not yet quite healthy; however, the healing process has already begun." Although bitcoin is still far from highs, cryptocurrencies are gradually recovering from the collapse. For example, the lack of activity in the bitcoin futures market is described by JPMorgan strategists as a “positive factor.” However, the short-term outlook, in their opinion, is "extremely difficult." 
Sam Trabucco, a trader at Alameda Research, also believes that the bitcoin market is already preparing for an upswing. In his opinion, a number of negative news that have been released recently have no fundamental value and is only aimed at creating short-term negative sentiments.
Trabucco writes that negative news from China, Elon Musk's concerns about the environmental friendliness of bitcoin and the likely insolvency of MicroStrategy associated with the fall in BTC are causing an overly negative reaction. Previously, the price reacted in the same way to the Tesla purchase for BTC and Musk's optimistic messages. “But none of this news in any way affects the value of bitcoin and how people should evaluate it in the medium term,” the expert said. And he adds that the $30,000 price should be taken as a buy signal.
Jason Urban, co-head of trading at Galaxy Digital, is waiting for the market to turn north as well. He notes that negative news should exhaust itself by autumn, and bitcoin will continue its upward movement. Urban believes that many institutional investors have not yet entered the crypto market due to regulatory uncertainty, however, they will sooner or later, creating an increased demand for BTC. According to the specialist, “we will soon see an update to the historical high,” and the quotes could reach $70,000 by the end of this year.
Former Gyft CEO and Civic project co-founder Vinny Lingham also spoke out. He was once nicknamed "the oracle" for the fact that he was able to predict the future value of the oldest cryptocurrency.
Lingham's predictions for BTC are not always optimistic, and his calls are traditionally more conservative than those of people with fantastic ideas. However, like many others, he believes there is a possibility that BTC could hit six figures as early as this year. Oracle wrote in his Twitter account that if the price continues to hold at $30,000, then we will probably see bitcoin at $100,000 by the end of the year.
Billionaire Ricardo Salinas Pliego, who is one of the top three richest people in Mexico according to Forbes, said that when choosing an asset for the next 30 years, “would I never choose the stinking fiat”, and preferred bitcoin. Salinas believes that bitcoin should be part of every investor's portfolio. “This is an asset that has international value and is traded globally with incredible liquidity. That's enough for it to be part of every portfolio, period." 
The key advantage of bitcoin, according to the billionaire, is its limited emission. For the same reason, he does not believe in Ethereum, explaining that unlimited emission leads to the depreciation of existing assets.
Former Cramer & Co hedge fund manager and host of NBC's Mad Money show Jim Kramer is of the opposite opinion. He has again increased his savings in the second most capitalized cryptocurrency. Surprisingly, it was the positive dynamics of... bitcoin that pushed him to buy Ethereum. “I went back to Ethereum because bitcoin held above $30,000,” he claimed. And he explained that he gave preference to this altcoin, since Ethereum is much more useful for people than the main cryptocurrency.


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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The first draw of the Super Lottery by brokerage NordFX took place on July 1, 2021. It was online, and anyone could follow the prize draw on the Internet. The video of the draw has been posted on the company's official YouTube channel.

The first $20,000 of the total prize pool of $100,000 were raffled off among NordFX clients. The winners are the holders of the following lottery tickets:

Prize amount $2500
No. of the winning ticket: 2595, 1183
Prize amount $1000
No. of the winning ticket: 0455, 3243, 2611, 3282, 4826
Prize amount $500
No. of the winning ticket: 3142, 1763, 4176, 3784, 2302, 3465, 5793, 2150, 4434, 2656, 1322, 4204, 3436, 4681, 2296, 1443, 4172, 3834, 1362, 4574.

According to the rules, the prize funds can be used by the lottery winner in trading or withdrawn from the account at any time by any of the available methods and without any restrictions.

The next draws will take place on October 01, 2021 (prize fund $20,000) and January 03, 2022 (prize fund $60,000).

Everyone can take part in the lottery and get chances of winning one or even more cash prizes, including the $20,000 super prize. Terms of participation are available on the NordFX website.


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First, a review of last week’s events:

- EUR/USD. The data on the labor market and the US economy released last week did not have much positive to please. Q1 GDP growth (6.4%) coincided with forecast data, which is no better but also no worse than market expectations. And then there were some disappointments. Initial jobless claims were 411K with a forecast of 380K. The increase in durable goods orders for May was lower than expected at 2.3% instead of 2.7%. And capital goods orders fell into the negative zone, minus 0.1%. And all this is against the back of Markit's business growth in Germany (60.4 in June versus 56.2 in May) and in the Eurozone as a whole (59.2 vs. 57.1).
Despite the slowing American economy, the risk appetite of those willing to invest in it has not subsided, but, on the contrary, even grew. They were backed by President Joe Biden's Senate-approved infrastructure plan. This plan includes the construction of new roads and bridges, ports, investments in water supply, clean energy and broadband internet. The total investment will amount to $1.2 trillion. Such an infusion will create thousands of new jobs and add points to the United States in the economic confrontation with China.
The rise in related investor optimism has already led the Dow Jones to gain more than 1,400 points over the week, the S&P500 and Nasdaq Composite once again updating historic highs, and The VIX Fear and Volatility Index fell to a one-year low.
The outflow of funds to the stock markets weakened the dollar. The DXY dollar index fell from 92.32 to 91.80, while the euro was winning back 110 points from the American currency at the week's high. Starting from 1.1865, the EUR/USD pair reached 1.1975 on Friday June 25, after which the bulls dried up, followed by a fightback and finish at 1.1940;

- GBP/USD. A meeting of the Bank of England took place on Thursday, June 24. As for the specific momentary steps of the regulator, no one expected any surprises from it. It was clear to everyone that the Bank of England would not make drastic moves and would leave the parameters of its monetary policy unchanged. So it happened: the asset buyback program was maintained at ?895bn and the interest rate at 0.1%.
However, investors had hoped that positive UK labor market data would prompt the Bank's management to start discussing moves to wind down programs for quantitative easing (QE) soon. Just as their colleagues from the other side of the Atlantic intend to do.
On these expectations, as most analysts predicted (55 per cent), the GBP/USD pair moved north, reaching the key 1.4000. However, then the degree of optimism went down. The first tub of cold water was poured on Wednesday June 23 following the publication of the June Markit PMI for the UK services sector. It turned out to be lower than in May: 61.7 compared to 62.9. And then a whole chilling waterfall followed: the Bank of England not only did not change the parameters of the quantitative easing (QE) program but did not give a hint that these parameters could be changed in the foreseeable future.
Carried away by a stream of sobering water, the GBP/USD pair groped the local bottom only at 1.3870. And barely pushing off from it, it was able to complete the week 20 points higher, at the level of 1.3885;   

- USD/JPY. When making a forecast for the past week, the majority of experts (65%) voted for further strengthening of the dollar and the growth of the pair above the 111.00 horizon. They were supported by graphical analysis on H4, as well as 85% of oscillators and 95% of trend indicators on D1. And they were all right: despite the fact that the dollar was falling against the euro and the pound in the first half of the five-day period, it was growing against the Japanese yen, reaching the height of 111.10 on June 24. True, the Japanese currency failed to gain a foothold there, and it placed the last chord at 110.75;

- cryptocurrencies. Although these currencies are virtual, the news regarding them is quite real. Let's start with a brief overview.
The developer of the well-known anti-virus of the same name, “crypto-baron” John McAfee has been found dead in a cell at a prison in Barcelona. The cause of death, Forbes reports citing the Spanish Ministry of Justice, is believed to have been suicide after a Spanish court decided to extradite McAfee to the United States. There, among other things, he was accused of money laundering, tax evasion and orchestrating altcoin fraud. The US DOJ claimed McAfee and his partner earned more than $2 million on cryptocurrencies.
However, this 2 million seems a ridiculous figure compared to the $3.6 billion that Africypt's creators, brothers Raees and Ameer Cajee, from South Africa, stole from investors. And if John McAfee was already 75, then these scammers were barely 17 and 20 years old, respectively.
According to Bloomberg, the Cajee brothers' scam could become the largest in the history of the cryptocurrency market. So far, the top line has been held by Canadian QuadrigACX project creator Gerald Cotten, emptying the pockets of $162 million worth of customers.
These amounts are large, of course. But the main losses for investors do not come from the actions of fraudsters, but because of the regulators. The total crypto market capitalization decreased by almost $400 billion in just 10 days, from June 15 to June 25, - from $1.734 trillion to $1.336 trillion. It even fell to $1.164 trillion at the low, returning to the values of February 2021. In addition, almost $900 million of futures positions were liquidated in just one day, June 23.
Along with the fall of the crypto market, the hash rate of the BTC network also decreased. However, according to a number of experts, this may be due to the relocation of miners from China to other countries.
The negative news background led to a drop in bitcoin quotes below the dangerous psychological level of $30,000. As a result, the BTC/USD pair returned to where it was five months ago, on January 27, 2021. The local bottom was reached at $29,240 (a loss of about 55% from the April 14 high).
According to a number of experts, the benchmark currency could have fallen down to $25,000, but buyers came to its rescue, who were waiting for the moment to buy an asset at a large discount. As a result, the pair grew slightly, and on the evening of Friday June 25, BTC traded in the region of $32,000-33,000 per coin.
It would seem that in such a situation, the Crypto Fear & Greed Index would have to fall deep into the Extreme Fear zone, to zero. However, having shown a minimal drawdown of up to 22 points, it quickly returned to where it was a week ago, to the 25-point mark.
According to some experts, the fact that bitcoin has held up in the $30,000 area proves its exclusivity. Without it, altcoins would most likely just go into free fall.


As for the forecast for the coming week, summarizing the views of a number of experts, as well as forecasts made on the basis of a variety of methods of technical and graphical analysis, we can say the following:

- EUR/USD. Recall that after the June 16 meeting, the hawkish forecasts of Federal Reserve executives have dramatically revived the market's appetite for the dollar. Inspired by their rhetoric, investors rushed to buy USD even despite weak US macro statistics.
As a result, having started on June 16 from a height of 1.2125 and flying down 280 points, the EUR/USD pair completed the five-day period at 1.1845 on Friday June 18. And it turned around again and went up on Monday, June 21.
What is that? Have investors changed their minds? Or is it just a correction on the downtrend path?
On the one hand, representatives of the FRS continue to insist that the US labor market is still far from the pre-crisis level, and therefore, for now, it is necessary to maintain soft financial conditions. Such statements, coupled with improved global risk appetite and positive economic data from the Eurozone, should push the EUR/USD pair higher.      
But on the other hand, Jerome Powell and his colleagues recognized the need to discuss the process of winding up stimulus programs (QE). There was also a signal of their intention to raise interest rates earlier than expected. The ECB, on the contrary, declares that they are not going to rush to reduce QE volumes, and that the current inflation rate in the Eurozone does not cause concern. And these factors are already not playing on the side of the dollar.
The macroeconomic indicators published next week may tip the scales in one direction or another. Data on the German consumer market will be released on Tuesday June 29 and Thursday July 1, and a preliminary consumer price index will be released on Wednesday, showing the level of inflation in the Eurozone as a whole. As for the statistics from the United States, we will find out the change in the ISM business activity index in the country's manufacturing sector on July 1. And data on the US labor market will come out on June 30 and July 02, including such an important indicator as the number of new jobs created outside the agricultural sector (NFP).
In the meantime, 60% of analysts, supported by 85% of oscillators and trend indicators on D1, expect the dollar to strengthen and the pair to decline to the June 18 low of 1.1845. The next target for the bears is the March 31, 2021 low. 1.1700. The nearest support is 1.1915 and 1.1880.
The remaining 40% of the experts side with the bulls, which will try to regain the positions lost over the last month. The first serious resistance is in the 1.1985-1.2000 zone, the next one is 100 pips higher. The goal is to update the May 25 high at 1.2265;

- GBP/USD. As a reminder, British Prime Minister Boris Johnson has postponed the full opening of the country's businesses for a month. This is due to an increase in cases of infection with the Delta coronavirus strain, first discovered in India, which doubles the risk of hospitalization. The number of infections has approached 20,000 a day, and this is putting pressure on the pound. (Although only 18 people died from COVID-19 during the same period. The ratio is less than 0.001, which is a very optimistic indicator).
The increasingly unstable relations between London and Brussels after Brexit continue to put pressure on the pound. This is especially true for trade between Northern Ireland and the rest of the UK.
However, at the same time, 50% of experts hope that the British currency will find the strength to retest the level of 1.4000 and rise another 100 points higher. The nearest resistance is 1.3940. More distant targets are 1.4150 and 1.4250. 
20% of analysts are betting on the victory of the dollar and the fall of the pair to the zone 1.3670-1.3700. The remaining 30% believe that the pair will remain in the sideways channel 1.3800-1.4000.   
The indicator readings look like this: 85% of the oscillators are colored red, the remaining 15% give signals that the pair is oversold. Trend indicators are also overwhelmingly in the red zone. Those are 100% on H4 and 85% on D1. Graphical analysis draws the following trading ranges: 1.3850-1.4050 for H4, 1.3770-1.4000 for D1.
As for the events of the coming week, we can note the publication of UK GDP data on Wednesday June 30, as well as the speech of the head of the Bank of England Andrew Bailey on Thursday July 1;

- USD/JPY. Who will win: USD haven currency or JPY's safe haven?  Or, if you like, you can ask the question the other way around: a safe haven currency JPY or a safe haven USD? 80% of oscillators and 90% of trend indicators on D1 bet on the dollar to win. However, the remaining 20% of the oscillators are signaling that the pair is overbought.
Graphical analysis believes that having pushed off the support in the 109.75-110.100 zone, the pair will go up, break through the resistance at 111.00 and try to first update the high of last year March 24 at 111.70, and then the high of February 20, 2020, of 112.25.
Experts’ opinions on the pair's movement in the coming week were divided equally, 50 by 50. However, in the transition to the forecast for July, 75% side with the bears, believing that the USD/JPY pair will be able to drop to the area of 108.00-108.55.
In terms of macro statistics, the Bank of Japan will release the Tankan Index for Q2 of this year on July 01. This Large Producers Index reflects the general business environment for the country's large, mostly export-oriented companies. A reading above 0 is positive for the JPY, while a reading below 0 is negative. The index is projected to rise to 15, up from 5 in Q1 2021.  

- cryptocurrencies. It is highly likely that the bull and bear fight in the area of $30,000 will continue. The medium-term goal of the latter is to bring the BTC/USD pair back to the $20,000 mark, the December 2017 high, after reaching which the market was pinned down by ice frosts. Now the pair has lost about 55% in just two months. So, the current crypto winter could turn out to be much harsher than in 2018. As mentioned above, investors are actively closing long positions and liquidating futures transactions. And the heads of financial giants JPMorgan and Goldman Sachs have again declared bitcoin an unwanted investment.
Investor and founder of the hedge fund Scion Capital, Michael Burry who had predicted the 2007 mortgage crisis, warned his subscribers about the collapse of the cryptocurrency market. "All the hype and speculation is just attracting retail traders before the mother of all the crashes. Parabolic [uptrends] will not pass. [...] History has not changed,” Burry wrote. The investor also noted that the problem of the digital asset market lies in too much leverage. “If you don’t know how much leverage is in cryptocurrencies, you don’t know anything about cryptocurrencies,” he stressed.
Burry had earlier warned that the market had inflated "the biggest bubble in history." In his post, he used the hashtag FlyingPigs360, which, according to Business Insider, may be a reference to the adage about investment: "Bulls make money, bears make money, but pigs get slaughtered." 
The author of the bestselling "Rich Dad Poor Dad" entrepreneur Robert Kiyosaki joined Michael Burrie. He also expects the crypto market to collapse. “The biggest bubble is getting bigger. The biggest crash in world history is approaching. Buy more gold and silver. Expect bitcoin to drop to $24,000,” he wrote. (Recall that in 2020, Kiyosaki advised buying the first cryptocurrency until its price exceeded $20,000 and predicted the growth of the asset to $50,000).
Jim Kramer, former Cramer & Co hedge fund manager and host of CNBC's Mad Money show, sold most of his bitcoins following news of China's mining restrictions. "When China pursues something, they tend to bring the matter to an end. I think they see bitcoin as a direct threat to the regime because of what it is - the system is beyond their control,” he said and he added that a decrease in the rate of mined coins could have a positive effect on the rate of the first cryptocurrency, but this did not happen. “When mining is limited, bitcoin obviously has to go up, unless holders are going out all over the place.” 
However, as usual, there are not only those who sell in the market, but also those who buy. Thus, for example, the founder of the Point72 Asset Management Fund Steve Cohen, unlike Jim Cramer, on the contrary, reformatted completely to cryptocurrency. Cohen, whose net worth is estimated at $14 billion, said that he does not care about the current price of bitcoin, as he is still an early investor: “Now I definitely won't miss anything. I missed the first part, but I still feel that I got involved quite early,” says the billionaire.
The MicroStrategy company also replenished its reserves of the main cryptocurrency, having bought another 13,005 coins. This Michael Saylor firm now owns 105,085 BTC, making it the largest corporate investor in digital assets.
The company made the purchase after it raised $500 million through the placement of high-priority securities. As Sailor wrote on Twitter, the 13,005 coins were bought for just under $500 million at an average price of $37,617. In total, the businessman invested over $2.7 billion in bitcoins, and the average purchase price was $26,080, which allows the company to remain in the black for now.
In terms of forecasts, the scenario described by the popular PlanB analyst is interesting. As usual, the specialist relies on a stock-to-flow ratio (S2F) model. PlanB emphasizes that the current price pattern is consistent with a bearish scenario, however he is confident that bitcoin will hit its all-time high by October. And the price will reach $135,000 by the end of the year.
“Bitcoin fell below $34,000 due to Elon Musk's tweet about the unsustainability of bitcoin, as well as due to the panic caused by the Chinese repression against miners,” PlanB tweeted. “However, there are more fundamental reasons for the June decline. Perhaps they will spread to July. My worst-case scenario for 2021 (based on on-chain analysis): August> $47,000, September> $43,000, October> $63,000, November> $98,000, December> $135,000." The most optimistic scenario assumes an increase in BTC to $450,000.
The weighted average forecast of experts for the coming week looks like this: 70% of them expect the BTC/USD pair to return to the $36,000 zone, the remaining 30% see it at $28,000-29,000.


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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First, a review of last week’s events:

- EUR/USD. The US Federal Reserve meeting on Wednesday June 16 was the key event of the week. No particularly significant decisions were made there: the interest rate remained unchanged at 0.25%. The Federal Reserve will also continue to print money and buy back assets in the previous volume of $120 billion. But, as expected, following the meeting, the regulator's roadmap was unveiled, as a result of which the dollar bulls got what they had been waiting for.
Fed Chairman Jerome Powell and his colleagues raised the forecast for US GDP for 2021 to 7%, and also recognized the need to discuss the process of curtailing fiscal stimulus programs (QE). The Fed has no intention of turning a blind eye to accelerating inflation to the highest marks since the 1990s. However, according to Powell, the US labor market is still far from the pre-crisis level, and therefore it is advisable to maintain soft financial conditions for now. At each subsequent meeting, the regulator will consider reducing QE volumes. And he will set out the level of employment after which incentives can be reduced, at the next meeting on July 28.
Investors also received a signal of intent to raise interest rates earlier than expected. An averaged forecast by Fed executives showed that the rate could be gradually raised to 0.5-0.6 percent by the end of 2023. At the same time, Jerome Powell noted that vaccination has a positive effect on the labor market, and we will soon see strong employment reports. Inflation may also be stronger and more stable than central bank officials had expected. And it will require a quicker response to what is happening.
Such "hawkish" forecasts of the Federal Reserve System instantly revived the market's appetite for the dollar. Investors continued to buy USD despite weak macro statistics, thinking that the indicators will improve as the US economy recovers.
One of the major currencies that suffered last week was the euro. Europe's economy has not kept pace with America's in any way. And according to Philip Laine, the ECB's chief economist, it will be too early even in September for the regulator to begin discussing the programme of winding down QE in the Eurozone.
As a result, starting from a height of 1.2125 on June 16 and flying 280 points, EUR/USD reached the local bottom at 1.1845 on Friday June 18. The finish took place at 1.1865, in the zone where the pair returned after a 10-week absence;

- GBP/USD. If the euro fell against the dollar by 280 points, the pound ceded as much as 340 to the US currency. Positive sentiment about the UK currency is melting like fog over London after the country's prime minister, Boris Johnson, delayed the full opening of the country's businesses by a month. This is due to an increase in cases of the Delta coronavirus strain, first discovered in India, which doubles the risk of hospitalization. And this despite the fact that about 80% of the country's adult population has already been vaccinated with one dose of the vaccine, and 30% have been vaccinated with two doses.
The pound is also under pressure from the increasingly unstable relations between London and Brussels after Brexit. This is particularly true of trade between Northern Ireland and the rest of the UK.
Against this unjoyful backdrop, another “blow” is being struck on 16 June by the U.S. Federal Reserve management. The result is a fall of the pound to the level of 1.3790, not far from which it ends the trading session;

- USD/JPY. Making a forecast for the past five days, the majority of experts (60%) voted for the strengthening of the dollar and the growth of the pair to the zone of 110.00-110.30. And, looking at the results of the week, they were right: starting at 109.70, the pair finished at 110.20. 
It is clear that the statements of Jerome Powell and other executives of the US Federal Reserve could not but affect the behavior of the USD/JPY pair: it reached 110.80 at the high. In addition to the dollar's strengthening, weak macroeconomic statisticians from Japan have added pressure on the yen. Thus, the growth of orders for engineering products in April slowed down from + 3.7% to + 0.6%, against the forecast of 2.7%. Of course, the rate grew by 6.5% in annual terms, but still turned out to be lower than the expected 8%.
Despite this, amid the subsidence of the remaining major currencies, the Japanese currency has shown maximum resilience against the dollar. At the time when the euro, pound and other currencies continued their decline, it was, on the contrary, able to win back about 60% of the losses. The reason for this, according to a number of analysts, lies in the lower risk appetite of the market and increased investor appetite for safer assets;    

- cryptocurrencies. It has long been clear that news has a fairly strong impact on cryptocurrency rates. However, much more powerful fluctuations in this market are caused by large investments. There were none of those last week. On the contrary, the total cryptocurrency market capitalization even decreased slightly, from $1.585 trillion to $1.560 trillion. So there remains news, whose source is influencers and regulators.
In terms of the former, Elon Musk was once again there with his tweets. This time, the owner of Tesla said that the company will resume selling electric cars for BTC when at least half of the miners switch to renewable energy. Bitcoin is up 12% amid this tweet, according to CoinGecko. 
It is worth noting that the tweet was a response to criticism from the head of the financial company Sygnia Magda Wierzycki. She said in the podcast The Money Show the Tesla founder was manipulating the price of the first cryptocurrency. In her view, the billionaire raised the price of digital gold deliberately and eliminated much of his position at highs. Sygnia's CEO emphasized that if Musk's tweets were about any public company, he would have already been targeted by the US Securities and Exchange Commission (SEC).
Now about the regulators, news from which comes from all over the planet. Thus, Tunisian Finance Minister Ali Kuli announced the need to change the country's legislation to “decriminalize” ownership of the first cryptocurrency. The government of India has also changed its anger to the mercy for bitcoin. Now, as in Tunisia, it intends not to ban but regulate the crypto sphere. Banks in Texas (USA) have been authorized to accept and store customers' bitcoins, as well as handle their cryptocurrency transactions. It should be noted that of all American states, Texas was one of the first, as early as 2019, to move on the path to legislate this market. 
Similar events are taking place in El Salvador. The president of this country, Nayib Bukele, has proposed a "bitcoin law" for parliamentary consideration. Under the bill, cryptocurrency is recognized as legal tender and companies are required to accept BTC as payment. In addition, bitcoin trading is exempt from capital gains taxes.
Some important European officials, however, have fallen out of favor with digital assets. Thus, Peter Hasekamp, director of the Bureau of Economic Analysis of the Dutch Ministry of Economy, said that a complete ban on mining and bitcoin transactions should be immediately imposed. In his opinion, digital gold has no intrinsic value, it is used in a criminal environment, and the collapse of the crypto market is inevitable.
But, judging by the emerging trend, Mr. Hasekamp will remain in the minority. Most regulators will try to take control of digital assets. As the great German chancellor Otto von Bismarck liked to repeat back in the 19th century, "If you cannot defeat the enemy, lead it."
Spurred on by the news and the bulls' desire to take revenge, the BTC/USD pair rallied earlier in the week, reaching $41,260 on Tuesday June 15. However, the sharp strengthening of the dollar after the US Federal Reserve meeting reversed the uptrend, bringing the pair back below the $36,000 level at the end of the working week.
The Bitcoin dominance index added slightly, rising from 44.03% to 45.33%. The same thing happened with Crypto Fear & Greed Index, which went up from 21 to 25 points. Note that since the BTC/USD pair went sideways at the end of May, its values have never gone beyond the 20-40-point range.


As for the forecast for the coming week, summarizing the views of a number of experts, as well as forecasts made on the basis of a variety of methods of technical and graphical analysis, we can say the following:

- EUR/USD. Does the EUR/USD fall mean a trend reversal? Or will everything be back to normal soon and the dollar will continue to retreat? (Recall that at the turn of 2016-17, these two currencies almost reached parity. Then 1 euro was only $1.034, and after only a year the European currency was worth $1.2565).
In the wake of the Fed's comments, some banks began to abandon their bullish forecasts for the euro. Others took a break. Still others, such as Societe Generale, expect the pair to return to 1.2000. Opinions among experts are almost equally divided: 55% of them vote for a further fall, and 45%, supported by graphical analysis on H4, support its growth. According to the latter, it is too early to talk about a trend reversal, additional confirmation is needed, and the collapse that occurred is the result of speculation on the Fed's statements, which led to panic closing of long positions.
Technical analysis readings look like this: 100% of trend indicators and 100% of oscillators on H4 and D1 are colored red. But at the same time, 35% of oscillators on both time frames are already in the oversold zone, which may indicate an approaching correction to the north.
The pair ended the previous week in a strong support-resistance zone, which it has been storming from time to time since 2017. The nearest target of the bears is the low of March 31, 2021, 1.1700, the next one - April 04, 2020 low, 1.1600. Bulls will try to regain their lost positions. The first serious resistance is in the 1.1985-1.2000 zone, the next one is 100 pips higher. The goal is to refresh the May high of 1.2265. However, it will obviously take more than one week to reach it. And here it should be noted that in the transition to the medium-term forecast, the advantage goes to the bulls, the number of which increases from 45% to 60%.
From the strategically important events of the coming week, it is worth highlighting the speeches of the head of the ECB Christine Lagarde on Monday June 21 and Wednesday June 23, the meetings of the European Council on June 24-25, as well as the speech of the head of the Fed Jerome Powell in Congress on June 22. In addition, Germany's Markit business activity will be released on June 23, followed by capital and durable orders and annual US GDP data the following day;

- GBP/USD. On Thursday, June 24, a meeting of the Bank of England is due. In the run-up to this event, experts continue to analyze incoming economic data in an attempt to forecast possible moves by the regulator.
As mentioned in the first part of the review, the negative factors include the risk of labor shortages arising from Brexit, the controversy in Northern Ireland and the problems associated with the new strain of coronavirus.
Against the backdrop of generally encouraging macro statistics, retail sales in the UK have unexpectedly dropped, especially food. This makes one think that the growth of the country's GDP in May and in the II quarter of 2021. will not be as strong as predicted.
The report released last Wednesday showed that overall inflation in the country is rising, and the CPI's annual rate rose by 2.1%, surpassing the 2% target for the first time in two years.
Adding to this the positive UK labour market data released on June 15, the Bank of England can be expected to start discussing moves to wind down programmes quantitative easing (QE) in the foreseeable future. As for the regulator's specific momentary steps, it is very likely that, like its counterparts in Europe and the United States, it will not move sharply and leave the parameters of its credit - monetary policy without change. Although, again, the Bank of England's management does not rule out hawkish statements similar to those of US Federal Reserve management. And they might, just as well, push the British currency back up.
55% of analysts expect the pound to rise, supported by graphical analysis on D1. Moreover, with the transition to forecasts for July-August, their number increases to 70%. The readings of the technical indicators are very similar to their readings for the EUR/USD pair: all 100% on both time frames are facing south. True, there are 25% oscillators in the oversold area here, not 35%. The nearest strong support is located in the 1.3670-1.3700 zone, followed by 1.3600. Resistances - 1.3920, 1.4000, 1.4150 and 1.4250;

- USD/JPY. Making a forecast for the near future, the majority of experts (65%) vote for further strengthening of the dollar and the growth of the pair above the 111.00 horizon. They are supported by 85% of oscillators and 95% of trend indicators on D1. Graphical analysis on H4 is also in agreement with this forecast, however, it does not exclude that the pair will make a spurt to the north, relying on support at 109.70-109.80.
The remaining 35% of analysts, together with the graphical analysis on D1, believe that this support will not become a serious obstacle to the strengthening of the yen, and the pair USD/JPY will be able to fall to the area of 108.00-108.55;

- cryptocurrencies. The Crypto Fear & Greed Index has not gone out of the fear zone for almost a month. Frightened by the collapse of quotes in April-May, many, especially retail, investors and traders take profits at the slightest sign of danger, which prevents the BTC/USD pair from gaining a foothold above the psychologically important level of $40,000.
And there's also the US Fed, fueling interest in the dollar and reversing stock indices. Suffice to compare the S&P500 and BTC charts to see their correlation, which, according to a number of experts, will now only grow stronger.
In the event of an active sale of shares, most likely, bitcoin will not feel good either, which is an even more risky asset for institutional investors. (Not to mention altcoins).
Yes, hedge funds understand not only the risks, but also the benefits of investing in digital assets. And, according to the Financial Times, they intend to "substantially" increase their shares in cryptocurrencies by 2026. But, first of all, 2026 will not come soon. And secondly, this "substantially" is not so "substantial". According to a survey of 100 hedge funds conducted by Intertrust, on average, they intend to allocate up to 7.2% of their investment portfolios to cryptocurrencies, which will amount to about $312 billion, that is, about 20% of the current volume of the crypto market. Agree that this kind of growth over 5-6 years looks modest enough.
Earlier, Tudor Investment hedge fund founder Paul Tudor Jones said in an interview with CNBC that hereserves 5% of his capital each for gold, bitcoin, exchange contracts and cash. The billionaire was going to determine the scenario for placing the remaining 80% funds after analyzing the outcome of the June 16 meeting of the US Fed. The investor hinted that he could increase the share of "inflationary" instruments if the monetary authorities ignore the recent "very significant" jump in consumer prices. The meeting has passed and, perhaps, we will soon know the final content of the Tudor Investment portfolio.
The above leads to the conclusion that, despite caution in approaches, institutional investors continue to believe in the prospects of the crypto market. As another billionaire, Avenue Capital Management founder Mark Lasry, observed, the cryptocurrency market has already formed and is not threatened by anything. “If a market is created, it does not disappear anywhere,” the financier believes.
It is also encouraging that hodlers holding bitcoins for more than six months have, for the first time since October 2020, started buying more than selling. And whales (wallets from 100 BTC to 10,000 BTC) have purchased about 90,000 coins in the last month for about $3.4 billion. 
Such optimists include venture investor and billionaire Tim Draper. Back in 2018, he predicted the growth of the first cryptocurrency to $250,000 by 2022. And he has confirmed his forecast now, albeit with some timing prolongation. Bitcoin will hit the $250,000 mark by the end of 2022 or early 2023, according to his latest statement, despite the sharp price fluctuations. The reasons for the growth, which the billionaire named, are still the same: the limited emission of coins and the growing demand for digital gold as protection from inflation.
And at the end of the review, our traditional heading of crypto life hacks. This time, the President of Salvador Nayyib Bukele is its hero, who has recently come up with another initiative. He instructed the head of state-owned electricity company LaGeo to develop a plan to mine bitcoin with "very cheap, 100% clean, 100% renewable, zero emissions" energy... of more than 20 volcanoes in the country. So, if you happen to have an active volcano in your possession, you may well follow the example of the head of El Salvador. Elon Musk will be pleased.


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.

[You must be registered and logged in to see this link.]

First, a review of last week’s events:

- EUR/USD. The key day last week was Thursday, June 10. There were two important events on the day: the European Central Bank meeting and the release of US consumer market data. Now let's talk about everything in order.
The ECB raised its forecasts for Eurozone GDP from 4.0% to 4.6% for 2021 and from 4.1% to 4.7% for 2022. Inflation is expected to rise by 1.9% this year and 1.5% next year (the previous forecast was 1.5% and 1.2% respectively). At the same time, the pace of economic recovery has not particularly impressed Ms. Lagarde, especially as it is lagging seriously behind the US. The ECB chief also considers the jump in inflation a temporary phenomenon. While prices may continue to rise in 2021 Q3 and Q4, they should go down as the “temporary factors disappear.” So, the overall inflation rate in the Eurozone, she believes, will remain below target “throughout the forecast horizon.” 
As a result, the result of the ECB meeting was... no result. Despite the debate, the Bank's Governing Board has not made any decisions regarding the winding down of QE, leaving the current stimulus measures in place. The interest rate on the euro was also unchanged, at 0%. But it was because of such passivity that Ms. Lagarde succeeded in achieving what she wanted: keeping the euro from rising. 
And now about the second event on Thursday - the publication of data on the US consumer market (CPI). It was just that, according to the reaction of the market, it resembled the moment when the regulator announced new interest rates. The CPI figures turned out to be much higher than forecasted, showing the fastest rise in consumer prices in the United States in more than 12 years.
Such a rise in inflation could scare investors, however, exactly the opposite happened: the S&P500 index updated another high, reaching 4250 (against 4244 exactly a month ago), and the yield on 10-year Treasuries fell to a 3-month low.
As for the EUR/USD pair, this is where the bears won. Their logic was as follows: the ECB postponed the decision to roll back QE in Europe, but in the US, a jump in inflation could push the Fed to take some real steps in this direction. And some goals are likely to be identified at the next meeting of the regulator next Wednesday, June 16. This expectation of tightening monetary policy has driven the dollar higher. Additional strength for the bears was given by the growth of the Consumer Confidence Index of the University of Michigan in the USA, which was published on June 11. As a result, the dollar won back about 100 points from the euro, and the EUR/USD pair finished just below the lower border of the four-week side channel 1.2125-1.2265, at around 1.2108; 

- GBP/USD. The statistics from the USA pushing the pair down was mentioned above. As for the UK's performance, it's not all that simple. Data released on Thursday June 10 supported the pound, showing a sharp rise in the Manufacturing PMI, which indicated a strengthening of industrial production and trade in the UK. However, another package of macro-statistics, published the next day, aroused caution among investors.
The center of the British economic recovery has shifted from manufacturing and the housing market to the service sector. Here, thanks to vaccinations and the easing of quarantine measures, activity has increased and even exceeded forecasts. But the figures were not so rosy in other sectors of the economy.
Construction volumes declined by 2%, while industrial production for April fell 1.3%. When compared to the same period in 2020, it added 27.5% during that time. It would seem that the growth is evident. But, according to a number of experts, there is nothing much to be happy about. If we compare the absolute values, they are 3% lower than the levels of February 2020 and 6.5% below the local peak in March 2019. And this speaks of the stagnation of the sector, which, apparently, was provoked not only by the COVID-19 pandemic, but also by Brexit.
These multidirectional statistics resulted in the GBP/USD pair failing to reach beyond the 1.4075-1.4220 side channel, along which it was drifting for the fourth week, and put the last point at 1.4115;

- USD/JPY. Having started the five-day period at 109.50, the pair completed it at 109.70. At the same time, it was below these levels almost all the time, bouncing over and over again from the support in the area of 109.18-109.30. However, thanks to strong statistics from the US, the pair managed to climb to the height of 109.85 at the end of the week. But even taking into account this spurt, the weekly fluctuation range of 45 points looks more than modest; 

- cryptocurrencies. The crypto market is calm. Bitcoin has been consolidating around $36,000-37,000 for the third week in a row. An attempt by the bears on to turn quotes downward June 8 ended in failure: the lowest point they managed to reach was $31.065. Having stayed there for only a few minutes, the BTC/USD pair turned around, climbed to $38.325, and then went back to the consolidation area.
Elon Musk is back in the news of the week, which could somehow influence the market sentiment. The owner of Tesla and SpaceX received a video allegedly from the Anonymous hacker group. It states that his tweets regarding cryptocurrency ruined the lives of ordinary working people, and their dreams were shattered by Musk's public tantrums.
The man in the video, in the group's familiar Guy Fawkes mask, changed his voice and called the billionaire a Bond villain who pretends to be a visionary, but in fact is a narcissistic rich man desperately in need of attention. The video indicates that Musk abandoned bitcoin only because he feared Tesla would lose subsidies from the state. And the hackers called Musk's recent initiative to create a Council of Bitcoin Miners an attempt to take control of the industry.
The video, which has already garnered about 2 million views, ends with a challenge: “You consider yourself the smartest, but this time you will play against an equal opponent. We are Anonymous! We are legion! Wait for us".
Another newsmaker, analytical software provider MicroStrategy Inc. announced a $400 million convertible bond offering maturing in 2028.  The company will use the funds raised from the placement to buy bitcoins.
According to Bitcoin Treasuries, MicroStrategy currently owns 92,079 BTC worth more than $3.37 billion.. And if you study the history of its crypto assets’ replenishment, it becomes obvious that the company is moving towards averaging its position in the market. And this happens due to borrowed funds.
Averaging is considered a rather risky investment method. For those who don't know, we'll explain in a simple example. Averaging is when you buy 3 BTC: the first one for $5,000, then you buy the second one for $20,000, and the third one for $35,000. The average price of 1 coin in this case will be equal to $20,000 ($ 60,000/3). And if quotes fall below this level, you will be at a loss. This is why some experts believe MicroStrategy has embarked on a "journey on thin ice."
At the time of writing the forecast, the BTC/USD pair is in the $37,000 zone. The Crypto Fear & Greed Index, as well as the coin itself, demonstrates "consolidation": it was equal to 21 points on May 28, 27 on June 04, and again 21 points on June 11, which corresponds to the average Fear indicator.
Among the 10,332 existing cryptocurrencies, bitcoin, despite its decline in its share in the total crypto market capitalization, still leads by a huge margin. Its dominance index is 44.03% at the moment. The capitalization of the entire digital currency market fell from $1.663 trillion to $1.585 trillion over the week.


As for the forecast for the coming week, summarizing the views of a number of experts, as well as forecasts made on the basis of a variety of methods of technical and graphical analysis, we can say the following:

- EUR/USD. As mentioned above, the Governing Council of the ECB has not made any decision regarding the winding down of the quantitative (QE) program. But the Fed can discuss this issue at its meeting on Wednesday, June 16, and, as a result, publish a "road map". If not publish a detailed road map, then at least indicate its certain stages. And if this happens, we can expect a rapid rise in the dollar and a decline in the EUR/USD pair to the level of 1.2000. The next support is 1.1945, then the zone 1.1880-1.1900.
If the Fed gets off with general phrases that the rise in inflation and the current improvement in the US labor market are not at all a reason for tightening economic policy again, then the pair may return to the upper border of the 1.2125-1.2265 channel. The next target for the bulls is the growth of the pair to this year's high of 1.2350.
So, all the market's attention is now focused on this event. And analysts avoid any predictions until it's over. Graphical analysis is in disarray as well. Among the trend indicators, 55% are colored red on D1, and 100% on H4. The picture is slightly different among oscillators. Here, 60% of them are looking down on both time frames, 20% have taken a neutral position, and the remaining 20% are signaling that the pair is oversold. 
In addition to the Fed meeting and comments on June 16, other events of the week include the release of statistics on the German consumer market and on retail sales in the United States. Both numbers will be released on Tuesday June 15;

- GBP/USD. The Bank of England now faces a difficult choice of which way to go further: to support economic growth by continuing fiscal stimulus programs, or to start fighting inflation and prices that have already exceeded pre-Covid levels.
If you look at the ECB and the Fed, they have preferred the first option so far, postponing the second one for later. The renewed trend towards the stagnation of the UK manufacturing sector indicates that the Bank of England should follow the example of its colleagues.  Especially since the country's coronavirus curve has moved up sharply again, and there is increasing discussion about moving the full abolition of the quarantine restrictions scheduled for June 21.
If this happens, the pound will be under strong pressure. However, there will be June 16 before June 21, when the Fed meeting will take place - the key event of the week for almost all dollar pairs. As in the case of EUR/USD, expert opinions are now almost impossible to be brought to any common denominator. Graphical analysis also indicates the continuation of the pair's sideways movement in the coming days within the range of 1.4075-1.4220. Oscillators on both timeframes give multidirectional signals, although the red ones have a slight advantage here. The trend indicators on D1 are split evenly: 50% pointing north, 50% pointing south. And it is only among the trend indicators on H4 that there is an overwhelming majority: 85% of them are colored red.
The targets of the bears: 1.4075, 1.4000, then the low in the 1.3900-1.3925 zone. The bulls' targets: 1.4185-1.4225 and 1.4250, having reached which, they will then try to break through the resistance of 1.4300 and refresh the 2018 highs.
Among the important events of the coming week: the release of UK labour market statistics and Bank of England Governor Andrew Bailey's speech on Tuesday June 15, as well as data on the country's consumer market on Wednesday June 16;

- USD/JPY. Giving a weekly forecast, the majority of experts (60%) vote for the strengthening of the dollar and the growth of the pair to the zone of 110.00-110.30. Graphical analysis and 65% of oscillators on H4, as well as 100% of trend indicators on H4 and D1 agree with them.

The remaining 40% of analysts, along with graphical analysis on D1, expect the pair to decline to support at 108.00-108.35. The next strong support is at 107.50.
When switching to the monthly forecast, the picture changes in a mirror-like manner: here it is already 60% that side with the bears. 40% remain on the side of the bulls, with only half of them believing that the pair will be able to rise above 111.00 and renew the March 31 high.
As for the events of the next week, one could note the decision of the Bank of Japan on the interest rate and the subsequent press conference. However, the likelihood that the bank's monetary policy will undergo changes that could seriously affect market sentiment is close to zero;

- cryptocurrencies. Goldman Sachs experts have downgraded bitcoin's rating from gold to copper. According to them, it is still difficult to put the main coin on a par with gold, since it does not have such a powerful support as this precious metal. Commodities expert Jeff Curry explained that the volatility of the main coin is very similar in nature to the price swings of copper in the global market.
Previously, a similar point of view was voiced by JPMorgan experts. According to them, the main cryptocurrency is a cyclical commodity, and therefore cannot compete with precious metals or fiat. Investment companies are well aware of this, which is why they have portfolios that only consist of a few percent of bitcoin and other digital assets.
The opposite point of view to bankers was expressed by the CEO of the crypto exchange Gemini and bitcoin billionaire Tyler Winklevoss. He believes that bitcoin is still in its early stages of development. “Bitcoin is Gold 2.0,” Winklevoss said, “and its market cap should be over $10 trillion, just like gold. It is currently at the level of $1 trillion, that is, growth may be at least 10 times more. "
In his opinion, even a rate of about $35,000 is an excellent opportunity to enter a long-term investment. With a capitalization of $10 trillion, 1 BTC will be worth $500,000, and this may happen within the current decade, or maybe within the next 5 years.
“We will hodl to at least $500,000, and even then, we will not have to sell the asset, because it can be lent, used as collateral, etc.,” the billionaire added. And then he flew into space in his fantasies, claiming that bitcoin could be used for transactions between planets in the future: “Bitcoin is a project that continues to evolve and can achieve much more. It could become the global reserve digital currency of the world or even several planets when we get to Mars."
The forecast (or rather, its absence) by another billionaire, the founder of Avenue Capital Management Mark Lasry, seems to be much more mundane. According to him, the cryptocurrency market has already formed, and nothing threatens it, and the rapid growth of bitcoin in 2021 has exceeded his expectations. That being said, “to be honest, I don't know where bitcoin is heading,” Larsy admitted. "I can justify why it will rise to $100,000, but I can also justify why it will fall to $20,000."
And it is difficult to argue with him about this. At least in the current situation, any movement of digital gold can be justified. Suffice it to recall two authoritative predictions:
: of the American company Fundstrat analysts, according to which, despite the fall in May, the bitcoin rate may return to the $50,000 mark in the near future,
 - and of the JPMorgan financial holding strategist Nikolaos Panigirtzoglou, who is confident that the fundamentally justified value of bitcoin is in the range of $24,000- $36,000.

***
 And in conclusion, our traditional, albeit irregular, section of crypto life hacks. True, it applies not only to cryptocurrencies, but also to fiat this week. We are talking about the opportunity to top up your budget with a fairly round amount by taking part in the lottery held by the NordFX broker. There are a total of 100 prizes to be won for a total of $100,000. And the first draft will take place in two weeks, on July 1, so you may well have time to become a participant. All the details are available on the NordFX website.


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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May Results: NordFX Trader Earns Over $50,000 on Bitcoin Collapse


NordFX Brokerage company has summed up the performance of its clients' trade transactions in May 2021. The total income of the three most efficient of them exceeded 175 thousand USD.

The undisputed leader at the end of the month was a trader from China, account No.1546xxx, whose profit amounted to USD 81,648. This solid result was achieved on transactions with the British pound (GBP/USD), gold (XAU/USD) and euro (EUR/USD).

The second step of the podium with a result of 53,207 USD was taken by a representative of Vietnam, account No.1416xxx, who showed how to make money during market crashes. Their profit was mainly obtained from transactions with bitcoin (BTC/USD), the quotes of which fell by about 40% over the month.

The third place is a trader from Indonesia, account No.1506xxx, who earned 41,799 USD in May on gold transactions (XAU/USD).       

The passive investment services:
- in CopyTrading, one can mark the KennyFXPRO signal -The Compass. It has shown an increase of 108% since November 2020. At first glance, this is not such an impressive result (although it is ten times higher than the interest on bank deposits). But combined with a moderate maximum drawdown of 22%, this signal becomes quite attractive for subscribers who have invested over 45,000 USD in it.
- in the PAMM service, the same trader, KennyFXPRO, also shows a good result, which may be interesting for investors who prefer moderate earnings with moderate risks. This manager has seen a 24% capital gain since the end of January with a maximum drawdown of 16%.

Among the IB partners, NordFX TOP-3 is as follows:
- the largest commission of the month amounting to 6,568 USD was credited to a partner from India, account 1527xxx;
- the second place is a partner from China, account No. 1522xxx, who received 4,146 USD;
- and another Indian partner closes the top three, account No.1229xxx, with earnings of 3.975 USD.


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