Daily Market Analysis from NordFX

  
Is it the "gold of the XXI century" or a soap bubble about to burst? We have repeatedly discussed the advantages and disadvantages of bitcoin over the past year,  and analyzed the reasons for its ups and downs. Therefore, we decided to cite only the opinions of experts regarding the prospects for the main cryptocurrency in this review.
You may decide to be patient and invest in bitcoin for a long-term profitability. Or, on the contrary, you do not want to take risks and prefer to forget this word altogether. In general, the decision to buy, sell bitcoin or simply do nothing is always yours.


Optimists' predictions: Only to the North!

1. Bestselling author of Rich Dad Poor Dad and entrepreneur Robert Kiyosaki is convinced that cryptocurrency will continue to rise to $50,000 next year amid further influx of institutional money. The entrepreneur, having said that “America is in trouble”, precludes the “death” of the US dollar and a “bright future” for gold, silver, bitcoin.
“Bitcoin's rise has outpaced gold and silver,” he wrote. - What does it mean? This means that you need to buy as much bitcoin and precious metal as you can and don't put it off. The train is already leaving. The dollar is dying. When the dollar falls, the price doesn't matter anymore. What matters is how much gold, silver and bitcoins you have.”

2. According to analysts at the JPMorgan Chase banking holding, bitcoin outperforms gold as an alternative currency and has a significantly better chance of continued growth. According to their report, the capitalization of the crypto market is not large enough yet. JPMorgan estimates that the physical gold market, including ETF backed by it, is $2.6 trillion. Bitcoin needs to hit the $130,000 mark to catch up with the precious metal in this respect.
According to JPMorgan Chase, institutional investors can invest up to $600 billion in the first cryptocurrency in the coming years. This requires American, European and Japanese insurance companies and pension funds to invest only 1% of their assets in bitcoin. However, at the moment there are still regulatory requirements for the selection of investment assets in terms of risks and performance of obligations for such traditional investors. This can limit the amount of funds available for buying BTC.

3. The well-known Dutch cryptanalyst PlanB, who developed the popular BTC stock-to-flow valuation model, believes that the price of the reference cryptocurrency may rise to $100,000 by the end of 2021, and maybe up to $300,000. PlanB admits his forecast sounds extremely optimistic. However, the rise in the price of bitcoin in the past allows him to make such predictions.
The expert notes that during periods of market corrections, the algorithms of bitcoin whales pick up hundreds of portions of 0.01 BTC from "weak hands". Later these coins “disappear” in “deep” cold vaults. This leads to a supply shock and triggers a bull market.

4. Scott Minerd, investment director of Guggenheim Investments, considers bitcoin to be a grossly undervalued asset, even at current price levels of around $23,000. “Our fundamental work shows that bitcoin should be worth about $400,000,” he said in a conversation with Bloomberg TV.
Analysts at Guggenheim Investments came to this conclusion based on two factors: the limited emission of bitcoin and its value relative to gold. There are many common characteristics that cryptocurrency shares with the precious metal, Minerd said, but bitcoin, unlike gold, "has extraordinary value in the context of transactions."

5. Popular analyst and founder of Quantum Economics Mati Greenspan believes that “we are at the very beginning of a period of mass investor entry into the cryptosphere. If demand continues to rise and supply is constrained, then there is a possibility that we will see growth of 250% or more." At the same time, Mati Greenspan excludes a scenario in which BTC will soar to $400,000. “The rally will certainly continue, but there is no need to talk about any astronomical figures yet,” the analyst sums up. He believes that, unlike in 2017, the market is now controlled not by speculators but by corporations and large investors interested in its stability. The entry of these large players leads to the fact that volatility will weaken, and this area will become more attractive.

6. Bloomberg experts believe that there is no reason for a change in the direction of bitcoin's movement now, and its cost may increase to $50,000 in 2021.  “The dollar is gradually losing its position, ducking other fiat currencies,” writes this authoritative agency, “All this is noticed by investors who are forced to switch to alternative assets.” Bitcoin has significantly more support now, which minimizes the likelihood of a pullback. Open interest in the CME bitcoin futures market has exceeded $1 billion for the first time in history, which also speaks of growing support from investors.
Looking into the longer term, Bloomberg analyst Mike McGlone has suggested that within 5 years the price of the main cryptocurrency could exceed $100,000.

7. A similar point of view is followed by the American billionaire Paul Tudor Jones, head of Tudor Investment Corporation, who said that “cryptocurrencies are facing a crazy flight on a rocket with ascents and descents along the way.” “In 20 years, bitcoin will be significantly higher than the point where it is now. From here, the road for it lies north,” Yahoo! Finance quoted him.

8. The report of the fintech company Cindicator is of great interest. This is due to the fact that the figures presented in it are not the opinion of individual specialists, but the average results of the survey of more than 156,000 participants of the crypto market, according to which bitcoin next year will rise to $29,569. The respondents with the most accurate forecasts, the so-called "superforcasters", expect even greater growth on average, to $32,056.
According to the calculations of the “Hybrid Intelligence” Cindicator, which uses machine learning algorithms to process data from a team of analysts, the BTC rate next year will not exceed $25,222.

9. According to Mike Novogratz, head of the Galaxy Digital crypto trading bank, everyone should invest 2-3% of their funds in bitcoin. “After that, it is enough to wait a little time, and you will be surprised, but cryptocurrencies will cost significantly more. If you wait for five years, the assets will multiply several times,” he wrote.

10. According to experts of Stack Funds, bitcoin is ready to rise to a new high of $86,000.

11. The Director General of Global Macro Investor Raoul Pal expects that even conservative institutional investors, who usually prefer precious metals, will start investing in bitcoin next year. Therefore, Pal made a bold assumption that the rate of the first cryptocurrency could reach $250,000 in a year and placed an order for the sale of all the gold he had in order to invest in BTC and ETH in the ratio 80 to 20.

12. Even more inspiring forecast was given by Gemini crypto exchange founder Tyler Winklevoss, one of the twin brothers who are called the first cryptocurrency billionaires. He said on CNBC that the value of bitcoin could exceed the $500,000 mark. 
"The question isn't whether bitcoin will cost $500,000 or not, the question is how quickly it will happen. In fact, even this assessment seems to me very conservative - the game has not really even started," said Tyler's brother Cameron Winklevoss.

13. A similar figure is also called by a member of the Board of Directors of the Bitcoin Foundation Bobby Lee, according to whom the price of the main coin can reach $500,000 by the year 2028.

14. According to experts from one of the shareholders of Tesla, the ARK Invest fund, the capitalization of bitcoin may exceed $5 trillion. This will take the coin up to 10 years, but massive investments can start earlier. This figure could reach $1 trillion in the next 5 years, after which growth will occur at a faster rate.

15. A forecast was presented by Tom Fitzpatrick, Managing Director of one of the largest banks in the world, Citibank. According to him, thanks to consolidation in the status of digital gold, the rate of the first cryptocurrency can reach $318,000 by the end of 2021.
In his new report, Bitcoin: Gold for the 21st Century, Fitzpatrick writes: "Bitcoin moved in the aftermath of the Great Financial Crisis of 2008, when new changes in the monetary regime took place and we dropped to zero interest rates." And further he concludes that currently, financial stimulus measures against the background of the coronavirus pandemic have led to the formation of conditions similar to the 1970s, when the dollar inflation led to the increased demand for gold.

16. Popular TV presenter and Wall-Street veteran Max Kaiser believes that at current levels, bitcoin futures traders are suppressing the price of BTC to give institutional players a chance to "load the boat." However, once the asset reaches the $28,000 mark (the intermediate benchmark set by Kaiser), the number of coins for sale will go zero, and thanks to the deficit, their price will burst up to the cosmic heights.
“For the poor of this world, the current price and availability of BTC,” says Kaiser, “is the only opportunity in life to purchase non-forfeitable hard money before the price of it rises to 40-80 times, and prices will soar to the level of golden parity at around $400,000.”
“The demand for bitcoin is growing almost exponentially,” he says, “while its supply is mathematically fixed at 900 coins per day. And in 2024, the supply will be halved to 450 BTC per day. That's why I think people simply won't have the opportunity to buy coins, since the price can soar even to $1,000,000 per BTC. Meanwhile, Gen Z, who bought a lot of bitcoins when they were under $100, will become the new global power elite. The world order is about to change...” 


Pessimists' Predictions: A Fly in the Ointment

1. Despite the optimism in general, Galaxy Digital CEO Mike Novogratz believes that bitcoin instability can be expected in the near future. Its price in 2021 will certainly not return to zero, but could fall to the $14,000mark, or even $12,000. Although a correction to such levels is unlikely, investors need to be prepared for losses of 30-40%.

2. According to the average forecast of fintech company Cindicator, the lower bar of the trading range for the BTC/USD pair in 2021 will be at the level of $15,000. “Superforcasters” are less optimistic and expect a decrease to $12,000, and according to the calculations of “Hybrid Intelligence” Cindicator, the bitcoin rate will not go down next year below $16,000.

3. Matt Maley, strategist at financial services firm Miller Tabak, believes the cryptocurrency market will face a major setback next year. According to him, the main coin may fall in price by about 25-30 percent in the first months of 2021. According to Maley, the market is overheated due to large-scale investments, which is why corrections by one or several thousand dollars may become a norm.
“I consider cryptocurrencies to be a promising asset, but the minimum correction size next year will be 10%. At the same time, the fall may be at the level of 30% or even more. Therefore, it is worth being prudent before large-scale investments,” the specialist warns.



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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Dear clients and partners! We extend our warmest congratulations on the upcoming holidays.

The outgoing 2020 turned out to be not the easiest one for most of us, requiring resilience, a lot of effort and energy. It has been a difficult time, but we are confident that together we can overcome any difficulties.

Let the coming year be the year of new joint victories and achievements. Let all adversity and troubles remain behind us, and only prosperity and success lie ahead.

Let all your hopes and dreams come true in the new year. We wish you and all your loved ones good health, prosperity, endless joyful smiles, and optimism! 

Happy New Year!

 
First, a review of last week’s events:
  
- EUR/USD. According to Bank of America Merrill Lynch, the most popular strategy in the market after “buy shares” is “sell the dollar”. Speculative short positions in this currency have risen to a two-year high. The USD index (DXY) has fallen below 90, while it was at 102.82 on March 15, 2020. As for the retreat of the dollar in recent days, it is taking place against the background of the discussion in the US Congress of an additional package of fiscal stimuli. After all, every new dollar poured into the country's economy will lead to a decrease in its purchasing power.
The Federal Reserve meeting held on Thursday, December 17 had virtually no effect on market sentiment. The interest rate remained at the same level, and, one might say, a blissful pre-Christmas mood prevailed at the press conference: nothing new was said about the prospects for further quantitative easing and no worries about the current state of the economy were voiced. Although, perhaps, such passivity was caused not only by Christmas, but also by the change of the US President. The new owner has not yet settled in the White House. And the old one is already a duck lame on both legs.
True, thanks to the hopes of investors for the future growth of the S&P500 and for a positive outcome of the Brexit negotiations, the EUR/USD pair still continued its movement northward, adding about 140 points in a week. As for the final chord, it sounded at the height of 1.2250;

- GBP/USD. With the weakening USD and hopes that the Brexit talks will succeed at the last moment, the pair continues to push higher. At the week's high, December 17, it reached 1.3625, showing a gain of as much as 400 points. However, then a correction followed, and it completed the five-day period just below the level of 1.3500.
Belief in the deal is fueled by media reports that the fishing problem in British waters remains the last hurdle. The markets were encouraged by the statements of the head of the European Commission, Ursula von der Leyen, who said that there is a "narrow path" to the agreement, as well as European Commissioner for Internal Trade Michel Barnier, who confirmed that "the possibility of a trade agreement remains."
Britain also seems to agree to the deal, but, as it was stated, "not at the cost of sovereignty, and control should include the sea as well." Prime Minister Boris Johnson has threatened to keep European fishermen out of British waters for at least eight years if his three years quota fishing proposal is not accepted.
In general, Hamlet's question “To be or not to be?”, which has been sounding for 420 years, as applied to Brexit, is still open;

- USD/JPY. The yen is stable, US Treasuries remain in the same trading range, the dollar is weakening, the USD (DXY) index is falling. All this allows the USD/JPY pair to continue its smooth descent within the downstream medium-term channel, which began at the end of last March. On Thursday December 17, it reached the midline of this channel, fixing a weekly low at 102.85. The last point in the five-day period was set at 103.30;

- cryptocurrencies. What has been expected from bitcoin for three whole years has come true. It not only renewed the all-time high, not only broke through the $20,000 level, but also soared in a short period from December 12 to 17 from $18,000 to $23,620, adding more than 30%. 
If we compare the rallies in December 2017 and December 2020, the main difference between them, according to many experts, is that in the first case, the main driving force was retail investors, but now it is institutional. According to the analytical company Chainalysis, the "population" of bitcoin whales (1000 BTC and more) has been expanded with 302 new wallets since the beginning of the year and peaked at 2274 at the end of last month, and balances at the corresponding addresses increased by 1.4 million BTC during this time.
To be fair, it should be noted that the number of retail users is also growing. The number of bitcoin addresses with a non-zero balance has approached the mark of 33 million, updating the historical maximum, according to the data of the analytical service Glassnode. The number of wallets with a balance of more than 1 BTC is also steadily growing. The indicator has set a new record at 827,105 recently, recovering from a slight recession at the end of September.    
Of course, we have written about this many times, the coronavirus pandemic contributed to the popularization of bitcoin. However, it is probably early to talk about the mass acceptance of cryptocurrencies by the population. So, in a survey conducted by Opinium and AltFi among UK residents, only 10% said they bought a cryptocurrency. And although the results of 2020 can be viewed as an undoubted improvement - a year ago the figure was half as much, 5.3% - it is still a very small percentage, which leaves significant potential for growth in the crypto market, the total capitalization of which reached $670 billion on December 17.
It should be noted that despite the fact that BTC/USD quotes have already by far exceeded the high of 2017, the capitalization has not reached its record value of $830 billion, recorded on 07 January 2018. That is, the rise in the value of bitcoin is fueled by significantly smaller amounts of fiat than before, which may indicate the pair is strongly overbought. This is evidenced by the values of the Crypto Fear & Greed Index, which rose again in seven days from 89 to 95 and is very close to the maximum value of 100 points. But while waiting for a correction, one should take into account that the end of the year is now, the Christmas holidays are coming, and the most unexpected things can happen on the thin market - from zero volatility to new spikes to the north;


As for the forecast for the coming week, summarizing the opinions 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. Next week on Thursday, December 24, Forex trading will end at 17:00 CET, and there will be no trading at all on December 25, Christmas. (please visit the NordFX website, the Company News section for details on the trading schedule during the Christmas and New Year holidays in the currency and cryptocurrency markets, as well as on CFD contracts).
The end of the year is a period when big players close their positions, sum up and go on vacation. But it is at this point of low liquidity in the market, as already mentioned above, that traders need to be prepared for sudden surprises. And it is not necessary that they will be as pleasant as gifts from Santa Claus. The main surprise may be the agreement between the EU and the UK on the Brexit terms (or lack thereof).  
At the time of this writing, 95% of the trend indicators on H4 and 100% on D1 are green. Also, 75% of oscillators on both timeframes look up. However, the remaining 25% signals that the pair is overbought, and a correction is possible.
Graphical analysis on H4 predicts the movement of the pair in the trading range of 1.2175-1.2300, and D1 indicates the possibility of its growth to the height of 1.2355. 80% of experts support this development. The remaining 20% expect the pair to decline to support 1.2100, and in the transition from weekly to monthly forecast, the number of bear supporters increases to 65%. Closest supports are at 1.2055 and 1.1900 levels.

- GBP/USD. As we wrote last week, there are three possible options regarding Brexit.
1 - neutral soft. It is a decision to extend the current terms of the transition period for another six months or a year in order to gradually move to rules similar to the basic rules of the World Trade Organization. In this case, a catastrophic collapse of the pound would be avoided, although the pair would go south. The nearest support level in this case is 1.3275, then 1.3100, 1.3000 and 1.2850.
2 - the “hardest” Brexit, without any agreements or prolongations, which will lead the pair to fall first to the 1.2700 horizon, and over time, possibly to the lows of May 2020. in the area of 1.2075-1.2160.
3 - the conclusion of a full-scale deal between the EU and the UK. In this case, we will see a rise of the pound first to the height of 1.3500, and then perhaps to the highs of 2018 in the area of 1.4350.
We will know soon which of these options will be chosen;

- USD/JPY. 90% of oscillators and 100% of trend indicators on D1 are still colored red, expecting further decline in the pair within the descending medium-term channel. As for analysts, they, supported by graphical analysis on H4 and D1, they consider most likely the pair to move in the trading range 102.70-104.00, that is, between the central and upper boundaries of the designated channel;

- cryptocurrencies. So, is it worth waiting for a repeat of the "crypto winter" of late 2017 - 2018? Or, after a slight correction, the BTC/USD pair will again rush to new heights?
Bestselling author of Rich Dad Poor Dad and entrepreneur Robert Kiyosaki is convinced that cryptocurrency will continue to rise to $50,000 next year amid further influx of institutional money. The entrepreneur, having said that “America is in trouble”, precludes the “death” of the US dollar and a “bright future” for gold, silver, bitcoin.
The well-known Dutch cryptanalyst PlanB, who developed the popular BTC stock-to-flow valuation model, believes that the price of the reference cryptocurrency may rise to $100,000 by the end of 2021, and maybe up to $300,000. PlanB admits that his outlook sounds extremely optimistic and even somewhat amusing for some investors. However, the rise in the price of bitcoin in the past allows him to make such predictions.
According to analysts from the financial conglomerate JPMorgan Chase, institutional investors can invest up to $600 billion in the first cryptocurrency in the coming years. This requires that American, European and Japanese insurance companies and pension funds invest only 1% of their assets in bitcoin.
As JPMorgan lead strategist Nikolaos Panigirtzoglou noted, the recent $100 million investment by Massachusetts Mutual Life Insurance Company marks another milestone in the adoption of the first cryptocurrency by such organizations. At the same time, the analyst admits that it is quite difficult for such traditional investors to invest in cryptocurrency, since there are still regulatory requirements for the choice of investment assets in terms of risks and fulfillment of obligations. This can limit the amount of funds available for buying BTC.
In general, the topic of the attitude of government regulators to cryptocurrencies is one of the key factors for the development of this market. This issue has been actively discussed at the recent BlockShow conference. The speakers said that although decentralized finance needs to communicate with regulators, it cannot be full concessions to them. If we introduce complete regulation of the market, then it will hardly differ from fiat.
Now about the prospects of the BTC/USD pair for the next few weeks. According to the average forecast, the probability of its rise to $25,000-26,000 is estimated at 30%, above $30,000 - 10%. As for the fall, the probability that the pair will decrease to the $18.500-20,000 zone is 20%.
As for altcoins, those who at this stage are wary of investing in bitcoin may pay attention to ethereum. If BTC has already exceeded its 2017 high by 16%, then ETH is still to grow from its current values in the region of $670 to its all-time high of $1,420. And this despite the fact that this main altcoin showed better dynamics than bitcoin this year: it has added 640% from the March low against 465% for BTC.       
In addition, altcoin blockchain No.1 has recently been updated. Ethereum 2.0 has made the cryptocurrency safer, more efficient, scalable and, hopefully, potentially more profitable.
And here it is necessary to recall the recent warning of the co-founder of ethereum Vitalik Buterin, who urged not to get into debt or take out loans to buy any digital assets, be it bitcoin, ethereum or any other coins. He said he had “only a few thousand dollars of net equity” before Ethereum was created. “However, I sold half of my bitcoins to be sure I would not break up if the rate fell to zero,” he writes.


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 line of  the brokerage company NordFX trading accounts was supplemented by the new Stocks account last December, intended for transactions involving the shares of the world's largest companies. Due to favorable trading conditions, this account has gained considerable popularity over the past time, and therefore it has been decided to include CFD trading of shares in the list of trading instruments on the Fix, Pro and Zero accounts.


Now the company's clients do not need to open a separate account for these operations, since the trading terms and contract specifications on the Fix, Pro and Zero accounts will be exactly the same as they were on the Stocks account.

Trading on the Stocks account will be discontinued. At the same time, previously opened trade orders remain in effect until the client decides to complete these transactions.


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First, a review of last week’s events:
  
- EUR/USD. As expected, the European Central Bank left its interest rate unchanged, at the same level of 0%. The euro had a chance to somewhat weaken its position against the dollar. However, it missed it due to the ECB's decision to ramp up the volume of the Pandemic Emergency Purchase Programme (PEPP) by another €500bn and a subsequent comment from the head of that bank Christine Lagarde. Actually, there was nothing unexpected in this decision, we predicted such an outcome a week ago. In addition, it definitely fell into the middle of the market participants' forecast of €400-600 billion. But it was precisely this predictability that prevented the EUR/USD pair from turning south.
The hawkish sentiment of Christine Lagarde's statements also supported the European currency. It appears she tried to lower the euro rate by announcing that the ECB is closely monitoring the euro. However, the decision of the regulator not to interfere in the affairs of the foreign exchange markets influenced investors much more than a simple statement about “monitoring the exchange rate”. And the unexpectedly hawkish remark of Ms. Lagarde that if the situation with the Eurozone economy improves enough, it may not be necessary to use all these €500 billion, put the final end to the efforts of the bears to move the pair south.
As a result, having dropped to the level of 1.2060, the pair rushed to the north again, rising to the height of 1.2165, and completed the five-day period in the middle of this range, in the 1.2113 zone, practically in the same place where it started on Monday;

- GBP/USD. The weakening pound has outpaced the weak dollar. The British currency slid down as the threat of a "hard" Brexit becomes more evident. The latest statements by British Prime Minister Boris Johnson and the head of the European Commission Ursula von der Leyen suggest that there will be no real agreement on the terms of Britain's separation from the EU. Johnson advised his citizens to prepare for a "tough" exit, von der Leyen said about the same.
It is worth emphasizing the word "real" here, since some agreement may still be reached, and we will not see the "iron curtain" blocking the tunnel under the Channel. Neither side needs it, much less at the height of the COVID-19 pandemic. Most likely, the document that will be called the "Agreement", will have many blank spots left, which the parties will start filling in as early as 2021. But such an inferior contract will definitely not benefit the pound. The proof of this is what happened to the GBP/USD pair last week.
From the high of Friday 04 December to the low of Friday 11 December, the pound lost more than 400 points! And this despite the fact that the pair did not follow the EUR/USD in the wake, as it was until recently, but began to live a completely independent life. Having reached the local bottom at 1.3135 on Friday December 11 afternoon, it managed to win back about 90 points by the evening, putting the final chord at the level of 1.3225. However, this bounce may well turn out to be just a small correction in the pair's tendency to the south;

- USD/JPY. Due to the rise in risk sentiment, investors have lost interest in such protective assets as the dollar and the yen. As a result, these currencies reached a temporary truce and moved to a sideways trend. However, the pair never went beyond the medium-term channel, along which it has been smoothly sliding south since the end of March. And, giving a forecast for last week, the vast majority of experts (70%), supported by graphical analysis on D1, suggested that the lateral movement with bearish sentiment dominance would be continued.
In general, everything happened like that. The pair continued to move eastward, gradually reducing the amplitude of oscillations to the range of 103.85-104.55 and forming a medium-term “pennant” figure with the main support around 103.65. As for the end of the trading session, the finish was set at 104.00 this time;

- cryptocurrencies. Financial conglomerate Wells Fargo, one of the "big four" US banks, has published a new investment report, in which a separate page under the heading "Bitcoin - 2020's best performing and most volatile asset" is devoted to the cryptocurrency market. The authors do not directly encourage clients to invest in digital assets, but generally maintain an optimistic tone regarding their prospects. “Over the past 12 years, they have grown from literally nothing to a $560 billion market cap,” writes Wells Fargo. "Hobbies don't usually last 12 years."
The bank notes that bitcoin is up 170% over the year but warns about its high volatility. “Investing in cryptocurrencies today is akin to living in the early days of the 1850s gold rush, which involved more speculation than investing”, the bank's analysts think. And yet they add that cryptocurrencies attract a lot of attention, but not necessarily a lot of investment. (Here the title of William Shakespeare's play immediately comes to mind: "Much Ado About Nothing"). 
It is difficult to disagree with this: the total cryptocurrency market capitalization now is far from even its own high at the beginning of January 2018, $830 billion. And this is in a world where, according to billionaire Paul Tudor Jones, "there is a $90 trillion stock market, and God knows how many trillions are in fiat currency."
The crypto market went down another $50 billion last week: starting from $575 billion, it dropped to $525 billion. Optimists call the clear bearish trend a seasonal correction and associate it with the end of the year and the desire of investors to fix profits after such an impressive leap up. Recall that the BTC/USD pair was never able to overcome the $20,000 mark. And analysts estimated that it will be able to gain a foothold above this iconic level by the end of December, as 30% probability. The likelihood of its fall to the $15,000-15,700 zone is estimated at the same 30%.
In the meantime, the bears were able to lower quotations to $17,600, and they did it twice: on December 09 and 11. And also twice, at the time of these failures, buyers came to the rescue of bitcoin. However, they did not manage to radically reverse the trend, and as of Friday evening, December 11, bitcoin is trading in the zone of a strong support/resistance level of $18,000.
It should be noted that the Crypto Fear & Greed Index declined very slightly in seven days, from 92 to 89, still signaling the pair BTC/USD is strongly overbought, which could portend an even deeper correction.


As for the forecast for the coming week, summarizing the opinions 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 dollar is weakening. It has conceded more than 550 points to the European currency in the last month and a half alone. Finally, the pair moved to a sideways movement in the range of 1.2060-1.2165 last week. And although most oscillators (75%) and trend indicators (95%) are still green on D1, the market is waiting for a downward correction.
If you look at the statistics of a number of leading UK brokers, about 65% of their traders hold short positions. 55% of analysts agree with them as well as graphical analysis on H4 and D1, predicting a decline of the pair to the zone 1.1965-1.2010. Both a sharp drop in demand for risky assets and a "hard" Brexit can push it south.
However, given the cautious optimism of the ECB regarding the recovery of the European economy, the improvement of the epidemiological situation in the EU countries and the general weakness of the dollar, many experts believe that the pair will again move north after the correction, to the highs of the 1st quarter of 2018 in the zone of 1.2400-1.2565. Apart from analysts, the possibility of such a scenario is also confirmed by the readings of graphical analysis. And the resistance here is likely to be the round levels 1.2200 and 1.2300.
As for the events of the coming week, it is worth paying attention to the release of data on business activity in Germany and the Eurozone as well as on the US consumer market on Wednesday 16 December. But the most interesting events await us on Thursday 17 December, when, in addition to the US Fed's interest rate decision, the Summary of Economic Forecasts from the Open Markets Committee of the Fed will be published and a press conference of the leadership of this organization will take place.

- GBP/USD. We will have a lot of macro-statistics regarding the UK in the coming week. Data on the labor market of this country will be released on Tuesday, December 15, consumer prices and business activity in the services sector (Markit) will be published the next day, and a meeting of the Bank of England will be held on Thursday, December 17, where decisions will be taken both on the interest rate and on the planned volume of asset purchases. However, all these events pale in front of the threat of a "hard" Brexit. It is precisely what happens at the negotiating table between the UK and the EU that will decide the fate of the pound.
A message should be issued on the state of the negotiation process, either its termination or continuation, on Sunday, December 13. The softest (and most realistic) option would be to extend the current conditions of the transition period for another six months or a year in order to gradually move to rules similar to the basic rules of the World Trade Organization. In this case, although the downward trend of the pair would have continued, it would have been possible to avoid a catastrophic collapse of the British currency. The nearest support level in this case is 1.3100, then 1.3000 and 1.2850.
The second option is the “hardest” Brexit, without any agreements and prolongations, which will lead the pair to fall to the values of mid-May 2020 in the area of 1.2075 or even to the March low at 1.1420.
There is, of course, a third, most improbable, option in which the EU suddenly gives up its positions and completely yields to the British demands. In this case, we will see a rise of the pound first to the height of 1.3500, and then perhaps to the highs of 2018 in the area of 1.4350. Although, we repeat, this outcome is rather from the field of fiction;

- USD/JPY. The yen expects that the market's appetite for risk investments will finally recoil, and it will again turn its attention to the haven currencies. But that's what the dollar awaits too. The chance for the Japanese currency may be a "hard" Brexit, as a result of which investors will start fleeing from the euro and the pound. But what "safe haven" they will give preference to, the dollar or the yen, is another question.
85% of oscillators and 100% of trend indicators are still painted red, waiting for a further fall of the pair within the downward medium-term channel, the beginning of which was at the end of March. Supports are 103.65 and 103.15.
But the average forecast of experts is very different from the indicators. 90% of them, supported by the graphical analysis on D1, prefer the dollar and expect that the pair will first rise to the upper boundary of this channel in the area of 104.60, and then, breaking through it, the resistance of 105.00 will be tested. Although, it is entirely possible that before the onset of the new year, 2021, neither bulls nor bears will make sharp movements, and the pair will continue its sideways movement, consolidating in the 104.00 zone;

- cryptocurrencies. So, a correction or a repeat of the collapse of the late 2017-2018? The question is still open.
Bloomberg experts believe that there is no reason for a change in the direction of bitcoin's movement now, and its cost may increase to $50,000 in 2021.  “The dollar is gradually losing its position, ducking other fiat currencies,” writes this authoritative agency, “All this is noticed by investors who are forced to switch to alternative assets.” Bitcoin has significantly more support now, which minimizes the likelihood of a pullback. Open interest in the CME bitcoin futures market has exceeded $1 billion for the first time in history, which also speaks of growing support from investors.
A similar point of view is followed by the American billionaire Paul Tudor Jones, head of Tudor Investment Corporation, who said that “cryptocurrencies are facing a crazy flight on a rocket with ascents and descents along the way.” “In 20 years, bitcoin will be significantly higher than the point where it is now. From here, the road for it lies north,” Yahoo! Finance quoted him.
But Galaxy Digital CEO Mike Novogratz is less optimistic. In his opinion, bitcoin will certainly not return to zero, but may fall to the $14,000 mark. Therefore, although the losses of investors will not reach 80-90%, they may well be about 30-40%.
The report of the fintech company Cindicator is of great interest. This is due to the fact that the figures presented in it are not the opinion of individual specialists, but the average results of the survey of more than 156,000 participants of the crypto market, according to which bitcoin next year will rise to $29,569. The respondents with the most accurate forecasts, the so-called "superforcasters", on average expect even greater growth, to $32,056. As for the lower bar, according to the average forecast, it is at $15,000. “Superforcasters” are less optimistic and expect a decline to $12,000.
Cindicator's “hybrid intelligence”, which uses machine learning algorithms to process data from a team of analysts, predicts similar values, only in a narrower range. According to its calculations, the BTC rate next year will not exceed $25,222 and will not fall below $16,000. At the same time, the total capitalization of the cryptocurrency market in 2021 with a probability of 80% will surpass the 2018 record of $828 billion.
In addition to institutional investors, additional serious support for the crypto market in 2021 should be provided by countries with troubled economies and those under sanctions. As of now, the SWIFT International Banking System, together with the Financial Crimes Agency (FinCEN) and the Financial Anti-Money Laundering Development Group (FATF), control each international transaction in dollars. Because of this, the countries that have come under the sanctions are deprived of the opportunity for international trade and are literally forced to turn to cryptocurrencies. So, for example, Venezuela, which at first paid in gold, has now switched to settlements for imports with Turkey and Iran in bitcoins. At least this is evidenced by anonymous sources from the Central Bank of this country.


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 Forex market is a place where almost everyone has every chance to make money. But do not confuse luck with a professional approach. Trader is a profession that needs to be learned. Otherwise, intuition will fail sooner or later, and a series of trades will turn into a continuous loss. That is why, as a start to your career, it is better not to waste time, but to start by studying technical market analysis. It will let you trade with awareness.

Technical analysis is a global trend in the study of price behavior, its dynamics and external signs, which is based on statistical historical data. It is important to note this trend includes a huge arsenal of tools and specific movements that allow to analyze the quotes from different angles. Its main feature is its historical recurrence, cyclicality. Thanks to it, you will not only learn how to navigate in the current situation, but also to predict the future.

Whom Technical Analysis of Graphs Suits

There are two main areas that beginners should study at the level of theory ­ - fundamental and technical analysis.

The first is difficult, as it requires an understanding of macroeconomics, world politics and their relationship with each other. Therefore, it is logical that people with the appropriate education are inclined towards the fundamental analysis.

If you adopt technical analysis (TA), you will not need to study complex economic theory and immerse yourself in the monetary policy of each individual state or bloc. You will not need to think about how, for example, the presidential elections of any country might affect the demand for oil on the world market, and that, in turn, the quotes of a particular currency.

Unlike fundamental analysis, technical analysis assumes that the market has already taken into account all these factors in its current quotes. The price dynamics, its movement features demonstrate the psychological portrait of the bidders. Knowing what motivates the participants, the key players, it is possible to build unique trading systems.

Technical analysis is suitable for beginners not because of its simplicity, but because of its versatility. The history of its development gave birth to thousands of instruments and views on price movement. Each trader can choose something of their own, without delving into complex mathematical calculations. Regardless of your background, profession, type of character, Forex technical analysis is an effective solution for making money in the foreign exchange markets for both beginners and experienced professionals.

Trader's Work Environment

One of the main challenges in learning to work with charts can be the choice of the working environment and the object of study. For example, one of the key questions is the choice of the currency pair to be traded, the time frame and, of course, the trading terminal.

The trader adjusts all these parameters personally, depending on their goals. For example, the brokerage company NordFX provides its clients with the opportunity to trade on MetaTrader 4, the world's most popular terminal. It can be both a stationary MT4 terminal and its mobile versions, which allow you to analyze the market, open and close up to 100 trading orders at any time from anywhere in the world where there is Internet access. MetaTrader 4 has a friendly interface, a huge number of built-in useful features and is a powerful weapon in the hands of the trader. You can learn more about how MT4 works in the corresponding section on the official NordFX website. 

Time Frame

A time frame is a time interval during which one candle or bar is formed. Using different intervals allows you to cut off market noises and catch global trends, moving from a shorter time frame to a larger one.

In MT4 there are 9 options for presenting quotes charts - М1, М5, М15, М30 (that is, 1 candlestick or bar corresponds to 1, 5, 15 or 30 minutes), H1, H4, D1, W1 and MN (respectively, 1 candlestick is equal to 1 hour, 4 hours, 1 day, 1 week and 1 month). Thus, by choosing the one-minute time frame, you will see on the screen how the price has changed every minute for several hours, and by choosing, for example, the MN time frame, you will see the price change over several years.

Also, you will see the so-called tick charts in MT4 which are formed not by time, but by trades. One deal has passed - one tick has formed. And there can be several such ticks even within one minute.

Each trader selects the necessary interval for themselves, depending on the desired trading activity, their trading strategy and, ultimately, temperament and discipline. The higher the timeframe, the more averaged the picture you get. Some traders , called scalpers, can open and close trades in a very short time, so they use M1, M5 time frames and tick charts. Others are guided by long-term trends, relying on charts not lower than H4 or D1.

Currency Pairs

There are a lot of recommendations as to which specific currency pairs to use when trading. Moreover, in most cases, the emphasis is on the main, so-called "major", currency pairs, consisting of the main and most liquid currencies - USD, EUR, JPY, CHF, GBP. Pairs using AUD, CAD and NZD (Australian, Canadian and New Zealand dollars) as well as CNH (Chinese yuan) are also popular.

Basically, Forex technical analysis is applicable not only to these currency pairs, but also to rarer ones, such as ZAR (South African rand), SGD (Singapore dollar) or NOK (Norwegian krone). It can also be used to forecast many other trading instruments available to clients of the NordFX brokerage company. These are cryptocurrencies (bitcoin, ethereum and many others), gold, silver, oil, shares of various large companies and leading stock indices. That is, technical analysis is a universal method that can be used to make money not only in Forex , but also in other markets - stock, commodity, cryptocurrency.  However, the technical analysis tools used each time require individual settings depending on the currency pairs and time frames used in trading.

So, for example, exotic currencies and cryptocurrencies are more difficult for technical analysis, since interest in them is weaker, there are fewer transactions, and trading volumes are lower. As a result, any news or manipulation, even by a not very large speculator, can lead to sharp unpredictable jumps in quotations.

Technical Analysis Tools

Do not confuse trading tools and technical analysis tools. The first is what you trade (currencies, cryptocurrencies, stocks, etc.), while the second is what you use to analyze the market and make decisions about a particular transaction. The diversity of this area has no boundaries. Every year, many new and unique tools are invented that allow you to make more and more accurate trading decisions. At the same time, the vast majority of them can be divided into the following groups.

Graphic Tools

Using graphic tools, the trader sets out patterns on the price chart and simplifies the forecasting process. They can be based on both a complex mathematical model and ordinary geometric shapes, the main task of which is to simplify the work with chart markings. These include: lines, channels, shapes, icons. As a simple example, the graph shows a down-to-date price channel that has changed to an uptrend.

All graphical instruments, based on the Fibonacci numerical sequence (levels, arcs, extension, time zones) are commonly called the mathematical model in this analysis. This also includes developments using the methods of William Gunn (grid, line, fan, pitchfork), pitchforks of Andrews and Schiff, Eliott waves and the methods of a number of other well-known scientists and practicing traders.

With their help, you can determine the direction of the trend, possible pivot points, the depth of the rollback (correction), and form the current trading range.

Indicators

This is a separate area, the essence of which is a mathematical way of averaging and converting the price into different graphs (rarely tables), allowing to cut off the superfluous and highlight the most important characteristics, and therefore more convenient for analysis and forecasting. This can be work according to given formulas with trading volumes, volatility, speed and acceleration of price changes and, of course, trends.

There are a lot of variations of indicators, and there are both basic, time-tested and custom ones. Basic or standard indicators are usually called those that are included in the trading terminal toolkit by default. There are more than 50 of them in MetaTrader 4. A number of them are based on the aforementioned mathematical models of graphic analysis. Custom indicators can be either completely original developments or a modification of standard ones. There are thousands of them at the moment, and many new ones appear every day, which can be purchased or downloaded for free online and integrated into your personal MT4 terminal.

They are divided by their function and purpose:
- Trending (Moving Average, ADX, Bollindger Bands);
- Oscillators (Stochastic, RSI, RVI, MACD);
- Volumes.

The first huge category serves the trader in order to highlight the trend, its strength and direction, predict changes, cut off noise. The second group shows the overbought and oversold market, giving entry and exit points (for opening and closing trades). Volumes demonstrate the involvement of players and their money supply in the market. This is a kind of way to see what capital is behind the selected movement of an asset. All trading add-ons underlying the indicators are the transformation of mathematical formulas.

Patterns

Patterns are graphic patterns that are often repeated in the market, the appearance of which, according to long-term observations, can lead to one or another price movement. These are patterns of formation of bars or candles , their combinations, which are cyclical and in most cases lead to a pre-known scenario. The concepts of "Japanese candle" and "candle models" on Forex are discussed in a separate article in more detail. Here we note that in practice all models are divided into:
- Reversal Pattern;
- Uncertainty Pattern;
- Trend Continuation Pattern.

Each of them can lead to a specific scenario. However, one should not take any of them as an axiom. The efficiency changes in the conditions of the selected time frame, currency pair and type of trading asset. This is why each pattern is tested before being used in real trading conditions. Popular candlestick patterns: hammer, hanging man, harami, doji, falling star, absorption. Graphic shapes: wedge, rectangle, double top, head and shoulders, cup, flag, pennant.

The Main Purpose of the Study and Use

The mistake of beginners is that they try to absorb as much knowledge, and then use all of it in practice. In fact, it is impossible to do that, because it can lead to a “brain explosion”. Mutually exclusive conditions constantly arise in the market. For example, the trend line indicates a dominant up market, and the candlestick formation indicates an imminent reversal. We see a downward trend on the M30 timeframe, while on H4, it, on the contrary, is pointing upwards, and the oscillator is in a neutral position at the same time. What is the priority?

The main task of technical analysis is to give the conditions on the basis of which you will create a trading strategy.

A trading strategy is a set of rules and conditions that can include the readings of one or several indicators, analysis of patterns, and the construction of your own chart patterns on different time frames. A fundamental analysis of macroeconomic statistics and political events can be added there. And the more of these rules you put into your strategy, the worse it will be... the harder it will be for you to analyze the situation and make trading decisions.

There is this proverb — “All in good fun.” The complication of a trading strategy makes it impossible to apply it, even if you create a trading robot instead of your own brain and use all the capabilities of your computer.

A trading robot or a trading advisor is a computer program that will automatically implement the trading strategy embedded in it according to a given algorithm. The advantages are obvious: the program trades 24 hours a day, seven days a week, does not give in to panic or the excitement inherent in humans, and operates within a strictly specified algorithm. There are tens of thousands of trading advisors for MT4 . And now it is easier to buy a ready-made or even download one for free on the Internet than to invent your own with the help of a programmer. Most of the ideas that come to mind for a novice trader have long been implemented. However, keep in mind that an expensive advisor is not necessarily a good one, and a free one is not necessarily a bad one. Quite often the opposite is true.

How to Learn to Make money

The best way to learn is to use good literature. The main condition ­is to read the books of real traders. We can recommend the following fundamental textbooks among the huge number of repetitive editions:
- Jack Schwager “Technical Analysis. Full course”;
- Thomas DeMark "Technical Analysis - The New Science";
- Steve Nison “Japanese Candles: A Graphic Analysis of Financial Markets.”

Also note that the broker NordFX has created a special section "Education" on its website, where you can gather a lot of information necessary for both beginners and experienced traders. All this useful knowledge is presented not only in the form of dozens of books and articles, but also in the video format.

To consolidate your knowledge, you should definitely go from a theoretical plane to a practical one. The demo account NordFX will help you with this, on which you can, absolutely risk-free, gain real experience trading virtual money.


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First, a review of last week’s events:
  
- EUR/USD. The dollar continues to fall, the euro continues to rise. The pair has traveled from 1.1600 to 1.2175 since early November. The main reasons for the weakening of the US currency lie in the growing global risk appetite. Against the background of positive news about vaccines against coronavirus, the market has believed in the imminent recovery of the global economy. Moreover, not the US economy, but the economies of other countries, including developing. The situation in the United States itself is not encouraging: the main indicators, including business activity and employment of the population, turned red here last week. Suffice it to say that the number of new jobs created outside the agricultural sector (NFP) collapsed from 610K in October to 245K in November, due to new quarantine measures.
Investments in the US economy are becoming unpopular, the S&P500 and Dow Jones stock indices have switched to a sideways trend, treasury (government debt) yields are not growing, but inflationary expectations, on the contrary, have soared to annual highs. Interest rates are minimal, which contributes to the departure of investors to other assets, overseas.
The interesting thing is that Europe has enough problems as well. Based on the dynamics of purchasing managers' indices, it is the EU, not the United States, that is now the main brake on the world economy. Yes, Joe Biden has welcomed the compromise proposal for another $908 billion aid package for the US economy, adding that he would not be limited to it. But the ECB, according to the Bloomberg forecast, will expand the emergency asset purchase program by €500 billion at a meeting on December 10, extending its term from mid to late 2021. In addition, the European regulator will also increase the scale of LTRO, a program for long-term anti-crisis refinancing of banks. Added to this are concerns with the UK over the Brexit agreement, plus disagreements with Poland and Hungary over the COVID-19 Rescue Fund and interest rates in the EU are even lower than in the US.
In general, there are enough problems on both sides of the Atlantic. But, nevertheless, as expected by most experts (60%), the EUR/USD pair continued its growth last week, ending the five-day period at 1.2120. And the point here is not so much in the strength of the euro, but in the weakness of the dollar, the DXY index of which fell to 90.5 for the first time in two years;

- GBP/USD. The British currency has also grown against the dollar, having risen by 670 points since early November. And this despite the fact that London and Brussels cannot come to an agreement on the Brexit terms, and the tough position of France in general makes one doubt that such agreements are possible.
The forecast, which was supported by 75% of analysts last week, was absolutely correct: the pair rose to the upper limit of the 1.3300-1.3400 channel. Then it was broken down and the pair moved further north to 1.3540 and finished the trading session at 1.3435. 
The pound, of course, was supported by the weakening dollar. In addition, the bulls were also helped by the announcement of the signing of a contract between the British government and Pfizer for the purchase of 40 million doses of COVID-19 vaccine, 10 million of which the UK will receive next week. The market was also pleased with the removal of a number of quarantine measures in the country, and the decision on partial admission of spectators to the national football league games;

- USD/JPY. The forecast for this pair also turned out to be correct. Supported by graphical analysis on D1, 60% of experts had said that the pair would stop its decline and move east in the 103.70-105.30 range. In reality, this lateral channel turned out to be somewhat narrower, 103.66-104.75. And the reason for the emerging equilibrium between the dollar and the yen was the same rise in risk sentiment and a drop in interest in such protective assets as the Japanese currency. The final chord of the week sounded in the central zone of the specified channel at 104.15;

- cryptocurrencies. Bitcoin has been pounding towards the psychologically important $20,000 level over the past two weeks. And although it updated the historical high, reaching the mark of $19,930 on December 01, all attempts to conquer the height of twenty thousand ended in profit taking and a rollback.
According to a number of experts, in addition to triggering stop orders, there are also political reasons that force investors to go to fiat. So, according to one version, the correction of the main cryptocurrency on November 25-26 from $19,480 to $16,280, which had many chances to develop into a catastrophic collapse, was associatedwith the decision of the administration of American President Donald Trump to tighten control over the circulation of digital assets. Officials chose to change the rules for registering cryptocurrency wallets as one of the ways to manage transactions.
Many crypto companies have already begun developing new versions of wallets, which will receive permits from the US Securities and Exchange Commission before launching. Trump is probably trying to resist China in this way, which is preparing to release its own cryptocurrency. If the digital yuan becomes a cross-border payment instrument, it can be used instead of the dollar. This will make sanctions against China ineffective, and Washington will lose the ability to put pressure on Beijing.
“Bitcoin has an indirect relationship to everything that happens", Mark Usko, head of Morgan Creek investment company, comments, "but even the first statements by representatives of the American government about the desire to start controlling the industry brought it down by several thousand dollars in a matter of hours".  
After this drop, bitcoin returned to the $19,000 zone very quickly. Along with the BTC/USD quotes, the total market capitalization of the crypto market has also recovered. It stood at $582 billion at its peak on November 25, then dipped to $500bn on November 27. And now, seven days later, on December 04, it is at $575 billion.
According to analytical companies Glassnode and BitInfoCharts, the number of addresses containing more than one bitcoin is also steadily growing, exceeding 820 thousand at the moment. These wallets hold 95% of the total BTC market volume. In total, there are 32.6 million addresses with a non-zero balance in the world.
Despite the seemingly positive dynamics, the fall ofbitcoin by 16.4% on November 25-26shows the precariousness of its current state. Both investors and traders understand this, and they are ready to start massively closing long positions at any time. Bitcoin's Crypto Fear & Greed Index rose from 86 to 92 in seven days, showing that the overbought coin is only getting worse, which could lead to another strong correction. In the meantime, the pair has chosen the $19,000 horizon as the Pivot Point, along which it has been moving throughout the past week.
As for altcoins, they, rise and fall for the most part, following the reference cryptocurrency. So, despite the increase in the total capitalization of the crypto market, the bitcoin dominance indicator has remained practically unchanged and is 62.44% (62.33% a week ago). Similar indicators of altcoins from the TOP-10 have hardly changed either. Although, we can highlight the ripple (XRP/USD), whose share in the total market capitalization has grown 1.8 times over the month, from 2.69% to 4.89%. This is because Flare Networks will airdrop spark coins on December 12th based on a snapshot of all XRP Ledger addresses. Thanks to this, each ripple holder will receive free spark in a 1:1 ratio, which is reflected in the popularity of this coin and the growth of its quotes. After a long stagnation in the region of $ 0.24, it rose to $ 0.77 at the high over the past three weeks, and it is quoted in the zone of $ 0.60 at the time of writing.


As for the forecast for the coming week, summarizing the opinions 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 higher this pair rises, the more willingness of large speculators to start taking profit on it. Moreover, the end of the financial year is just around the corner, it's time to take stock. In order for the dollar to continue its fall, the risk sentiment needs constant recharging, but the market may lose it. US stock indexes have been holding sideways since November 09. But this stability is very relative and threatens with a sudden collapse, which will entail the withdrawal of investors from the stock market in favor of the dollar.
For example, a reassessment of the optimistic expectations related to vaccination against the COVID-19 may lead them to this. And there are reasons for this. For example, the Pfizer has already reported problems with supplies, due to which the volume of vaccine production in 2020 will be halved, from 100 million to 50 million doses. A sharp rise in the yield of 10-year US government bonds could also strike the stock market. And you never know what else can happen this year rich in surprises!
There will be a meeting of the European Council, the ECB's decision on the interest rate and a subsequent press conference by the bank's management on Thursday, December 10. But the meeting of the US Federal Reserve on December 16 seems to be more interesting.
At the moment, graphical analysis on H4, 90% of trend indicators and 75% of oscillators on H4 and D1 are colored green. However, the remaining 25% of the oscillators are already giving active signals that the pair is overbought. The pair is expected to decline to the 1.1850-1.1950 zone by the majority (65%) of experts as well, supported by graphical analysis on D1. Immediate support is at 1.2000. Resistance levels are 1.2175, 1.2200, 1.2260 and 1.2320;

- GBP/USD. Significant for this pair is the level of 1.3500, which it reached at the end of last week. Graphical analysis, 100% of trend indicators and 85% of oscillators on H4 and D1 predict further movement to the north. Resistance levels are 1.3625 and 1.3725. However, only 40% of analysts agree with this scenario. The remaining 60% believe that this pair will also turn down, following the EUR/USD reversal. Moreover, if the negotiations on Brexit do not come out of the impasse, its fall may turn into a collapse. However, even if the agreement is concluded, it is likely to be formal and very limited, and is unlikely to please the fans of the British currency. Support levels are 1.3400, 1.3285, 1.3175. The ultimate goal of the bears in December is to return to the 1.3000 horizon;

- USD/JPY. The dollar and the yen have reached a temporary truce due to rising risk sentiment, moving to a sideways trend. However, the pair never went beyond the medium-term channel, along which it smoothly slides south since the end of March. And the vast majority of experts (70%), supported by graphical analysis on D1, believe that this downtrend will continue. More precisely, it will be a lateral movement with a dominance of bearish sentiment. The main resistance will be the level of 104.50, fighting off from which, the pair will fall first by 100 points lower, and then reach the November 09 low in the zone of 103.15.
An alternative point of view is held by 30% of analysts who expect that the pair will first reach the upper border of the two-week sideways channel 104.75, and then try to consolidate above the horizon of 105.00. The next target of the bulls is 105.65;

- cryptocurrencies. The fall of bitcoin on November 25-26 by 16.4% occurred, according to a number of experts, due to the tough decision of the Donald Trump administration regarding digital assets. However, if the team of the current US President is an obstacle to the development of the crypto market, then everything can change with the arrival of Joe Biden in the White House. Former Harvard and Oxford professor and now Stanford senior fellow Niall Ferguson believes that the administration of the new President should focus on integrating bitcoin into the US financial system instead of creating a digital dollar following China's example.
In a new article, the world-renowned economic historian looked at the US dollar, gold and bitcoin as the monetary revolution continued, accelerated by the COVID-19 pandemic. Drawing parallels with the plague of the 14th century, the historian noted that the pandemic let digital gold cover a decade-long path in only ten months. And this happened not only because of the closed banks, but also due to the tightening of financial supervision.
According to Mike Novogratz, head of the Galaxy Digital crypto trading bank, everyone should invest 2-3% of their funds in bitcoin. “After that, it is enough to wait a little time, and you will be surprised, but cryptocurrencies will cost significantly more. If you wait five years, the assets will multiply several times,” he wrote. According to the head of Galaxy Digital, bitcoin volatility can be expected in the near future, but it is unlikely to sink below $12,000, and even a correction to such levels is unlikely. The above-mentioned correction on November 25-26, according to experts from Stack Funds, is not only "healthy", but will also allow Bitcoin to prepare for a new high of $86,000.
The Director General of Global Macro Investor Raoul Pal expects that even conservative institutional investors, who usually prefer precious metals, will start investing in bitcoin next year. Therefore, Pal made a bold assumption that the rate of the first cryptocurrency could reach $250,000 in a year, and placed an order for the sale of all the gold he had in order to invest in BTC and ETH in the ratio 80 to 20.
Even more inspiring forecast was given by Gemini crypto exchange founder Tyler Winklevoss, one of the twin brothers who are called the first cryptocurrency billionaires. He said on CNBC that the value of bitcoin could exceed the $500k mark. He called the current price of the main digital coin “an opportunity to buy” as it could rise in price by 25 times in the future. “Bitcoin will surpass gold. If this happens, the capitalization of this cryptocurrency will exceed $9 trillion,” predicted Tyler Winklevoss.
In the meantime, the probability that the BTC/USD pair will be able to gain a foothold above $20,000 by the end of this month is estimated at 30%. The likelihood of its fall to the $15,000-15,700 zone is estimated at the same 30%.


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 November.

The maximum profit for that month was received by a client from Vietnam, account No.1416xxx. The client's profit of 40.153 USD was obtained mainly from transactions with the EUR/AUD currency pair and gold (XAU/USD).

Second is the trader from India (account No.1485xxx), whose profit was just under 40 thousand dollars (38.930 USD), and was obtained through trading on many pairs, including GBP/USD, USD/CHF and GBP/NZD.

The third place in the November TOP 3 belongs to the Vietnamese trader (account No. 1511xxx), with a result of 15.925 USD, who traded in the NZD/USD, AUD/USD and XAU/USD pairs.

The passive investment services in November:

- in CopyTrading, the signal provider under the nickname 78XGaming showed the maximum growth with a fantastic result of + 1539% with a drawdown of 79%;

- in the PAMM service, the results are much more modest. Here the manager with the nickname ProCapital became the leader, showing an increase of 15.51%. However, the drawdown here was significantly lower, only 9.8%, which can be attractive for investors who prefer stable income with a moderate degree of risk.


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First, a review of last week’s events:
  
- EUR/USD. Making a forecast for the past week, most experts (65%) preferred the European currency. Graphical analysis, 90% of trend indicators and 75% of oscillators on D1 also sided with the bulls. And this forecast turned out to be almost correct. “Almost”, because it was expected that, having broken through the resistance of 1.1900, the EUR/USD pair will reach the zone 1.2000-1.2100. However, it managed to rise only to the height of 1.1960 at the very end of the working week. Perhaps this is due to the weekend in the United States - Thanksgiving on Thursday November 26th and Black Friday on the 27th. 
The pair is pushed to growth by the improvement of the epidemiological situation in the European region. For example, France has already passed the peak of the second wave of the pandemic, and on November 28, a phased weakening of the existing restrictions begins. But there are also numerous global factors that make this pair's movement difficult to predict. The number of applications for unemployment benefits in the US last week was as much as 778 thousand - the worst figure in five weeks. This indicates a worsening economic situation.  That being said, Republicans and Democrats still have no way to agree on the amount of additional stimulus payments under the QE program. And incumbent President Donald Trump does not want to cooperate with the opposite camp at all.
As for the timing of the appearance of the vaccine against COVID-19 and how vaccination will affect the recovery of the economies of the Old and New Worlds, there is no clarity, only guesses. The assessments of experts are diametrically different about the decision of the US President-elect Joe Biden to appoint the former head of the Fed Janet Yellen to the post of Treasury Secretary, Markets hoped that some guidelines would be suggested by the minutes of the meeting of the US Federal Reserve Committee on Open Markets. But there was not much clarity in it either, only an indecisive discussion of the asset purchase program. We quote: “Most of the participants believed that the Committee should update the forecast of actions over time and apply results-oriented guidance of a qualitative nature”. Well, and then everything is in the same style.
So far, the only indisputable thing is that the dollar index dropped from the March highs by more than 10% as a result of the Fed's monetary policy, reaching a two-year low, and the EUR/USD pair returned to the values of mid-August 2020. These facts are beyond doubt;

- GBP/USD. The result, which, due to general uncertainty, including negotiations on Brexit, was shown by this pair, can be called zero. Three weeks of November marked the Pivot Point at 1.3300. But if this line performed the function of resistance for the first two weeks, then it turned into support. The pair spent the entire five-day period in a lateral trend in a fairly narrow range of 1.3300-1.3400, and finished the trading session at its lower border;

- USD/JPY. The yen has made its unconditional contribution to the fall in the DXY dollar index. Its strengthening and the entry of the USD/JPY pair into the downward channel started at the end of March this year, in parallel with the spread of the coronavirus epidemic around the world. And in search of a safe haven currency, investors once again turned to the Japanese currency.
The pair not only kept within this channel last week, but also narrowed its trading range to 100 points in its upper half. As for the final indicators, they turned out to be even less - having started the five-day week at 103.80, it ended it at 104.05, showing an increase of only 25 points;

- cryptocurrencies. This time we will skip the introduction, like crime news, and immediately move on to the most important thing. Bitcoin being overbought is something we've written about on numerous occasions, something that has long been warned about by indicators including the RSI and Crypto Fear & Greed Index. Everything indicated that the market urgently needs a correction. And so it happened: the BTC/USD pair fell down, and now traders and investors are concerned about only two very important issues. 1) If this is a correction, at what level will it end? And 2) Is this a correction, and will the disaster that occurred with bitcoin in December 2017 happen again? Recall that then, getting close to $20,000, the pair turned sharply and found itself in the $3.125 region a year later, shrinking more than 6 times.
The current rally of the main cryptocurrency started in the first decade of September from the $10,000 area and was stopped on November 25 in the area of $19,500. This was followed by a collapse, and the local weekly low was fixed the next day at $16.280. After a slight rebound, BTC was quoted in the $17,000 zone on the evening of Friday 27 November.
At its peak on November 25, the total capitalization of the crypto market was $582 billion, but on Friday 27 November fell to $500 billion, losing 14%. This movement is fully correlated with the BTC/USD quotes. Much more interesting is that the Crypto Fear & Greed Index is still at 86 as it was seven days ago, and continues to indicate that the pair is strongly overbought. So, it is entirely possible that bitcoin has not yet completed its journey south.
As for altcoins, a number of them have recently shown more positive dynamics than the reference cryptocurrency. So, if the BTC/USD pair lost about 11% over the past seven days, the ripple (XRP/USD), for example, on the contrary, grew heavier by almost 70%, while ethereum (ETH/USD) ended this period with a zero result. Note that the leading altcoin still has good growth prospects. Business for the leading altcoin took off in the summer, thanks to the growth of the decentralized finance sector (most of these projects were created on the basis of Ethereum). To date, investors have already invested $13 billion in the DeFi-sector, and the number of wallets on which at least 1 ETH is stored has reached a historic high of 1.171 million.


As for the forecast for the coming week, summarizing the opinions 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 spoke about the fog that has covered financial markets in recent weeks, in the first part of this review. And even the appearance of a vaccine against COVID-19, for all its obvious usefulness, is unclear how it will affect the exchange rate of a particular currency. Indeed, the degree of damage to the economies of different countries by the coronavirus is different, and the speed of their recovery will also differ. Undoubtedly, the policies that the new US administration under the leadership of Joe Biden will carryout will play a huge role, including domestic policy and the end of trade wars with Europe and China. Considering scenarios for next year, Goldman Sachs predicts a 6% drop in the USD weighted rate in 2021, Citibank does not rule out that the dollar index could fall by 20%, and Morgan Stanley expects the EUR/USD pair to grow from the current levels to 1.2500.
Most experts (60%) expect the pair to grow in the coming week as well. 100% trend indicators and 75% of oscillators on both H4 and D1 side with them. The nearest goal is still the same: to overcome the  September 01 high and consolidate in the zone of 1.2000-1.2100. 
The opposite point of view is supported by the remaining 35% of analysts, graphical analysis and a quarter of oscillators that give signals that the euro is overbought on both timeframes. Support levels are 1.1880, 1.1800, 1.1740 and 1.1685. 
Among the macro-events of the week, we can note the publication of data on business activity (ISM) on December 01 and 03, as well as data on the US labor market on December 02 and 04. In addition, we will find out the statistics on the consumer market of the Eurozone on Tuesday 01 December and Thursday 03 December. Also, the speeches of the head of the ECB Christine Lagarde on November 30 and December 1, as well as the head of the Fed Jerome Powell on December 1, may also influence the formation of short-term trends;

- GBP/USD. The general tendency towards the weakening of the dollar affects the forecasts for this pair as well. 75% of analysts predict its growth first to the upper border of the channel 1.3300-1.3400. Perhaps it will be able to break through the resistance of 1.3400 and rise another 80-100 points higher, but only 30% of experts vote for this. Graphical analysis on H4 and 90% of oscillators and trend indicators on D1 also side with the bulls.
Indicators on H4 give a mixed picture. But graphical analysis on D1 showed that, after several days of movement in the 1.3300-1.3400 corridor, the pair may decline to 1.3200, after which it can return to the upper border of this corridor and even reach the September 1 high at 1.3480.
Support levels 1.3175, 1.3100 and 1.3000;

- USD/JPY. Albeit minimal, but still the growth of this pair last week made analysts think about its transition from a downward movement to a sideways movement. So, 60% of them assumed that it would move east in the range 103.70-105.30 for some time. Such a scenario is supported by graphical analysis on D1 and only 10% of oscillators giving signals that the pair is oversold. In case of a breakout of the upper border of the channel, the pair will meet resistance at 105.70, then at 106.15.
The remaining 40% of experts, along with graphical analysis on H4, as well as 100% of trend indicators and 90% of oscillators on both timeframes, side with the bears, indicating the direction to the south for the pair. The first support is 103.70. It is followed by the 09 November low at 103.15, which corresponds to the center line of the descending medium-term channel. The ultimate target of the bears is the 2020 low, which the pair reached on March 09, at 101.17;

- cryptocurrencies. If you look at the charts, you can see that the current situation is very similar to what it was in December 2017. At the same time, many experts say that the market is no longer the same, and that the collapse of three years ago is unlikely to repeat. Indeed, there is a growing acceptance of bitcoin by both private depositors and large institutional investors. Indeed, against the background of the coronavirus pandemic, the mass of fiat is growing, which increases the popularity of bitcoin as a protection against inflation. But what if the current fall is caused by the fact that large speculators simply started taking profits ahead of the end of the year? What if the stop orders set near the historic high have already started to work?
According to CoinTelegraph, shortly before the collapse, the All Exchanges Inflow metric showed an increase in BTC placement on exchanges, which clearly indicates the intentions of whales to start selling their crypto assets. But after the whales, looking at the current situation, many retail investors will follow. Moreover, Christmas holidays are not far off, and this is a period of increased need for fiat.
So there are plenty of resons for the further fall of the BTC/USD pair. But no compelling reasons for new growth are foreseen at least until early 2021. Although, of course, the pair's jerks to the north are quite possible. Some of the major speculators may try to play bullish, or, for example, the Chinese government will deal another blow to its miners, creating a supply shortage in the crypto market. All of this could push the quotes back up.
Looking ahead, it is appropriate to quote the opinion of the analyst Mati Greenspan. He believes that, unlike in 2017, the market is now controlled not by speculators but by corporations and large investors interested in its stability. The entry of large players leads to the fact that volatility will weaken, and this area will become more attractive. In connection with the above, Greenspan, like many other experts (there are now 65% of them), expects a further update of the bitcoin highs already this year.
In the meantime, the market is interested in the level at which the current correction will end. In general, is it a correction or a global trend reversal downward? In addition to the $17,000 zone, in which there was a consolidation at the end of the last working week, the next strong support may be the November 26 low in the $16,000-16,300 area, which fits within the Fibonacci correction. However, if the pair overcomes this support confidently, then it will return to the $14,700-15,700 zone, where it stayed in the first decade of November and from which the last stage of the upward rally started.
And at the end of the review, one more, already global, forecast from Max Kaiser. This Wall Street veteran believes the supply shock will drive bitcoin to rise to $1 million. “The demand for bitcoin is growing almost exponentially,” he says, “while its supply is mathematically fixed at 900 coins per day. And in 2024, the supply will be halved to 450 BTC per day. This is why I think that institutions that buy bitcoins will do it directly from miners, and people simply won't have the opportunity to buy coins as the price will skyrocket to $1 million per BTC. Meanwhile, Gen Z, who bought a lot of bitcoins when they were under $100, will become the new global power elite. The world order is about to change.” 


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. Last week, we talked again about complete uncertainty in the market, when investors just shrug their shoulders, not knowing what to expect in the near future. And then the forecast was appropriate: 50% of the experts sided with the bulls, 40% supported the bears, and the remaining 10% took a neutral position. And it turned out to be the most correct: the pair moved in a very narrow range of 1.1815-1.1890 for the whole week and completed the five-day period in its central part, at the level of 1.1858.
The reason for this is the same uncertainty caused by the unclear balance of power after the US election and, as you might guess, by the situation with the second wave of the COVID-19 pandemic.
In addition to the fact that President Donald Trump has already reached the Supreme Court, where he is going to challenge the election results and where the Republicans have strong enough positions, there is now another conflict in the United States, between Treasury Secretary Stephen Mnuchin and the Federal Reserve System.
Mnuchin has said that emergency lending programs have already achieved their goals and that they should be completed this year. The Fed would like to see all of these programs designed to support the economy during the pandemic continue to work in full. 12 of the 13 credit lines through which the Fed is pumping trillions of cheap dollars into the economy are due to close on December 31, and if that happens, the stock market will be under intense pressure. Which will trigger a sell-off in stocks and a rise in the dollar as a haven currency.
According to the head of the Federal Reserve Jerome Powell, the time to complete emergency lending programs will not come soon. He is supported in this by the International Monetary Fund, which believes that the real state of the economy leaves much to be desired and the cessation of funding will lead to another collapse of world GDP.
It was reported on Thursday, November 19 that Republican Majority Leader in the US Senate, Mitch McConnell, seemed to be ready to resume negotiations on a new stimulus package. However, no one can say yet how these negotiations will end.
The situation with measures to counter the spread of COVID-19 also remains unclear. State authorities are trying to prevent a new round of the epidemic. New York has already decided to close schools, and the stock market went down on Thursday on the announcement of Mayor Bill de Blasio about the possible introduction of a ban on eating in public catering establishments. And although in Europe the situation with the pandemic is also quite difficult, it is still better than in the United States: thanks to the restrictive measures adopted in the EU, the virus is spreading more slowly here. But making any predictions is a thankless job in this case as well; 
 
- GBP/USD. At the end of the week, the pound, albeit slightly, but grew up, having risen at the maximum from 1.3200 to 1.3310. And this despite the fact that negotiations on Brexit conditions between the EU and the UK were suspended on Thursday due to the infection of one of the members of the European delegation with the coronavirus. The pound was supported by the information about the resumption of negotiations between the Democrats and the US Republicans on fiscal stimulus, which we described above. Another support was the published data on retail sales in the UK, which increased by 1.2% in October. As a result, the pair closed the trading session closer to two-week highs, at 1.3290;
 
- USD/JPY. While the economies of the US and the EU are only trying to fight off another coronavirus attack, Japan is showing impressive success. GDP of this country for the third quarter increased to plus 5.0%. And this despite the fact that a quarter earlier it was minus 8.2%. Such indicators allow the yen to maintain its status as a major haven currency, making it more attractive, compared to the US dollar. 
As a result, the forecast, which was given by 60% of analysts, supported by 90% of trend indicators and 70% of oscillators, was quite accurate. Recall that they felt that the pair would be kept within the downstream channel and would once again try to test the support in the 103.00 zone. True, the pair did not reach the target horizon and found a local low at 103.65. But its aspiration to the south is beyond doubt: having started the five-day week at 104.60, it finished it at 103.80;  

- cryptocurrencies. The forecast we gave the previous week suggested that the BTC/USD pair should consolidate above the $17,000 level by the end of November. At the same time, it was noted that it is hardly worth waiting for a massive profit-taking in the near future, as it will be restrained by greed in anticipation of the price growth at least to $20,000. Especially since there are no serious levels of resistance along the way.  
The reality has surpassed forecasts: having broken through the $17,000 and $18,000 levels, the pair soared to a height of $18,780, showing a weekly gain of 15%. In total, the first three weeks of November saw, bitcoin grow by 35%, and the total crypto market capitalization increase from $401 billion to $515 billion, and at the time of writing the forecast, on November 20, it continues to grow. Such volumes were only seen during the historic 2017 rally.
Among the main reasons for the growth, experts cite the increasing adoption of bitcoin by both private investors and large institutional investors. Thus, a survey of 700 millionaires conducted by DeVere Group showed that 73% of them either already own this cryptocurrency or are going to invest in it.
Another reason is the monetary policy of the US Fed. Amid the coronavirus pandemic and interest rate cuts, the US money supply has risen by 22% this year. And that is not the limit, as another stimulus package of about $2 trillion is expected under the QE program.
Finally, there is a third serious reason for the growth of the basic cryptocurrency. Recently, net purchases of bitcoin on crypto exchanges have been significantly larger than the sales of miners. Citing data from analyst firm Glassnode, cryptanalyst Will Wu pointed out that hourly purchases of BTC on exchanges are almost 20 times higher than the amounts attributed to miner sales. Another specialist, Lark Davis, also confirmed that only 27,000 BTC were mined in the last month, and as many as 145,000 coins left the exchanges. Moreover, most of them migrated to "cold wallets" as an object of accumulation.
It should be noted here that, according to experts, the imbalance between BTC supply and demand will only increase, stimulating the growth of the coin. The reason is that the Chinese government has started a fight against the largest community of miners¬: Beijing has banned ICOs, cryptocurrencies are classified as unwanted speculation, and miners' bank accounts have begun to be blocked. This is despite the fact that more than half of bitcoins are mined in China at the moment.
Returning to the results of the week, we note that Bitcoin Fear & Greed Index froze at 86 by the evening of Friday, November 20, in the zone that the developers of the index designated as "Extreme Greed". This value corresponds to the BTC/USD pair being strongly overbought and portends its correction.


As for the forecast for the coming week, summarizing the opinions 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 US problems were described in the first part of this review. Considering scenarios for next year, Goldman Sachs predicts a 6% drop in the USD weighted rate in 2021, Citibank does not rule out that the dollar index could fall by 20%, and Morgan Stanley expects the EUR/USD pair to grow from the current 1.1800-1.1900 to 1.2500.
Looking to the near future, experts also give preference to the European currency. Thus, 65% of them expect that the pair will break the resistance of 1.1900 in the coming weeks and reach the zone of 1.2000-1.2100. Accordingly, 35% of analysts expect a decline to the level of 1.1700-1.1750. The likelihood of a fall to the November 4 low of 1.1600 is estimated so far at only 10%.
On the bulls side, there is a graphical analysis of 90% of trend indicators and 75% of oscillators on D1. The remaining 25% of the oscillators give signals that the pair is overbought. Closest supports are at 1.1740 and 1.1685 levels.
As for the most important economic events of the coming week, one should pay attention to the data on business activity in Germany and the Eurozone, which will be released on Monday 23 November,  to macro statistics from the United States, including GDP for the third quarter and data on orders for durable goods  on Wednesday 25 November, and to the results of the meeting of the Federal Reserve and on Thursday, November 26;

- GBP/USD. The October growth in consumer activity in the UK was most likely caused by the fact that the population was buying goods for future use before the coming lockdown. Therefore, it is possible that in November this figure will go into negative territory. Sales through online stores will not save it either. We should not forget the increasing likelihood of parting with the EU without a trade agreement. The leaders of European Union member states have already begun preparations for a hard Brexit, according to The Times newspaper.
Analysts' opinion has so far been divided equally. But when switching from a weekly forecast to a monthly one, the scales tilt in favor of the bears, and 65% of experts do not bode well for the pound, expecting the GBP/USD pair to fall by 300-400 points.
But the indications of technical analysis still look quite optimistic. 75% of oscillators, 100% of trend indicators on H4 and D1, as well as graphical analysis on H4 are colored green. An alternative point of view is represented by 25% of oscillators and graphical analysis on D1. Support levels are 1.3200, 1.3165, 1.3100, 1.3035 and 1.2855, resistance - 1.3310, 1.3400 and the August 1 high of 1.3480.
As for macroeconomic indicators, we advise you to pay attention to the November Markit PMI, which will be published on November 23 and, according to forecasts, may fall by more than 15%, from 51.4 to 42.5;  

- USD/JPY. Until there is some clarity regarding the further monetary policy of the United States, the preferences of conservative market representatives will remain on the side of the Japanese currency. This is what at least 45% of analysts think, supported by 80% of indicators on both timeframes. 25% of experts have supported the growth of the dollar and the USD/JPY pair, and the remaining 30%, together with graphical analysis on D1, have taken a neutral position. Supports are located at 103.65, 103.15 and 102.00, resistance levels are 104.50, 105.15 and 105.70.
As for the graphical analysis, it draws a rebound upward from the central line of the descending channel in the 103.40 zone on D1, and the pair's return to its upper border in the 105.40-105.65 area;

- cryptocurrencies. Many investors are wondering if it is too late to buy bitcoins now. The Crypto Fear & Greed Index, together with other indicators, have been in the overbought zone for a long time, the pair has almost approached the cherished $20,000, and no serious correction has yet occurred.
Actress Maisie Williams, who portrays Arya Stark in Game of Thrones, asked her Twitter followers if she should invest in bitcoin. More than 650 thousand users expressed their opinion, of which 50.7% answered in the affirmative, 49.3% - in the negative. The result is almost equal, which indicates a possible reversal of the downward trend.
A number of specialists expect the BTC/USD pair to fall to support in the $15,700 zone. But there are also notorious pessimists who recall the catastrophe of 2018, when the price collapsed from an all-time high of $20,000 to $3.125.
However, now the situation is somewhat different than in 2018. Bitcoin has proven not only its survivability during this time, but also its ability to generate colossal profits. Even Jamie Dimon, CEO of banking giant JPMorgan, admitted it. Now his analysts advise investing in this cryptocurrency, which Daimon had called "fraud and stupidity" back in 2017 Another giant is the PayPal payment system, which has only recently introduced a service for investing in cryptocurrencies, due to high demand, it has already doubled the limit, which has now reached $20,000.
A forecast was presented by Tom Fitzpatrick, Managing Director of one of the largest banks in the world, Citibank. According to him, thanks to consolidation in the status of digital gold, the rate of the first cryptocurrency can reach $318,000 by the end of 2021. Fitzpatrick believes that the bitcoin market is now reminiscent of the 1970s, when dollar inflation led to increased demand for gold. In 1971, US President Richard Nixon carried out a series of reforms, abandoning the Bretton Woods system and pegging the dollar to gold. As a result, the price of this precious metal showed a steady increase over the next 50 years.
In his new report, Bitcoin: Gold for the 21st Century, Fitzpatrick writes: "Bitcoin moved in the aftermath of the Great Financial Crisis of 2008, when new changes in the monetary regime took place and we dropped to zero interest rates." He notes that currently, financial stimulus measures against the backdrop of the coronavirus pandemic are leading to the formation of conditions similar to the 1970s.
It seems that legislators in Washington are also turning to cryptocurrencies. While Beijing is putting pressure on its miners, new US Senator Cynthia Lummis plans to bring discussions on the first cryptocurrency to the national level. “21 million bitcoins will be mined and that's it, this is a limited emission. Therefore, I am confident that it will become an important player as a store of value over time” said Lummis.
Robert Kiyosaki, a popular American entrepreneur and author of the bestselling Rich Dad Poor Dad, also agrees with the Senator. “Bitcoin's rise has outpaced gold and silver,” he wrote. - What does it mean? This means that you need to buy as much bitcoin and precious metal as you can and don't put it off. The train is already leaving. The dollar is dying. When the dollar falls, the price doesn't matter anymore. What matters is how much gold, silver and bitcoins you have.”
As for the forecast for the coming days, the overwhelming majority of experts (80%) have supported the sideways movement of the BTC/USD pair in the $18,000-19,000 range. And only 20% expect it to fall below $18,000. No one has voted for the breakdown of the $19,000 resistance in the coming week. However, if we talk about the forecast before the end of the year, 70% of analysts agree that bitcoin can update historical highs.


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. Last week, we started talking about complete uncertainty in the market, when investors just shrug their shoulders, not knowing what to expect in the near future. Yes, Joe Biden has won the presidential election. It seems to have won. Since Donald Trump's team has already collected a lot of facts about the violations and falsifications and is going to challenge the election results in court. For the time being, a number of state bodies, including even the Office of the Director of National Intelligence (ODNI), refused to support the change of president. The distribution of seats in the US Senate remains questionable, and the priorities in the country's policy, including fiscal measures and programs to support the economy, depend on this.
It is completely unclear in which direction and at what speed the situation with the coronavirus pandemic will develop as well. Will there be a new lockdown and of what scale? The daily number of new cases of COVID-19 infection has exceeded 100 thousand in the United States for almost a week and a half already, which requires the adoption of new restrictions at least in some states. And this is a reduction in production, a decrease in the number of jobs and, as a result, a fall in stock indices.
In general, there are still much more questions than answers. And that is precisely why the forecast that we gave last week turned out to be absolutely correct. recall that the opinions of experts were equally divided then: one third voted for the growth of the EUR/USD pair, one third - for its fall, and one third took a neutral position. The nearest levels were named: support - 1.1760, resistance - 1.1965. The EUR/USD pair spent the whole week around these boundaries, fluctuating in the range from 1.1745 to 1.1920, and eventually returned to the Pivot Point zone, along which it has been moving for 16 consecutive weeks. The final chord sounded at 1.1830;

- GBP/USD. Let us start right away with the results of the week - the long-awaited breakthrough did not happen in the Brexit negotiations. And the storms, when the pound, following the forecasts of 70% of experts, first rushed to the north, reaching a height of 1.3315, and then turned southward, falling by 210 points to 1.3105, ended in complete calm in the middle of this range - near the horizon 1.3200;

- USD/JPY. We can state looking at the chart of this pair that those 30% of experts who had sided with the bulls and voted for the return of USD to the 104.00-105.00 zone were right. Following the yield on long-term American securities, the pair even tried twice to break through the resistance at 105.65, but failed, and eventually completed the five-day period at 104.60, climbing 130 points;

- cryptocurrencies. Let's start with the crime news, which did not differ much last week from what had happened before. For example, hackers have reminded of themselves again. This time, Taiwanese laptop maker Compal Electronics fell victim to the ransomware DoppelPaymer. The hackers demanded 1,100 BTC (almost $17 million at the time of writing) for decrypting the files. According to information security experts from Group-IB, DoppelPaymer spreads on Windows networks, is known for attacks on corporate networks by gaining access to administrator rights and was among the three most aggressive and greedy ransomware of 2019.
One more piece of news. The intrigue with the mysterious transfer of bitcoins worth over $1 billion on the night of the US presidential election ended. The most fantastic versions had been put forward, but it turned out later that it was US Department of Justice that had confiscated almost 70,000 BTC from the wallet associated with the Silk Road darkmarket.
Now some statistics. The number of cryptocurrency ATMs has increased by 80% in 2020 compared to their number in 2019. An average of 23 new ATMs are installed every day. Currently, there are about 11 thousand of them in the world, and most of them are located in the United States and Canada. According to experts, most often such ATMs are installed by small startups that are trying to make money on the exchange of cryptocurrency for fiat.
Last week, exchanging bitcoins for dollars became even more profitable, since, as predicted by most experts, the BTC/USD pair crossed the $16,000 mark. The main cryptocurrency rose to a height of $16,460 at its peak, and it happened on Friday 13 - the so-called "day of trouble", which got its name from numerous superstitions and myths and was immortalized in the famous American horror film.   
However, as far as Bitcoin is concerned, this day, on the contrary, has delighted many holders of the reference cryptocurrency. Some began to take profits, hoping then to replenish their BTC wallets on a rollback. And those who were not going to sell their coins just got another dose of optimism in anticipating further growth in their capital.
If you look at the chart of the total capitalization of the cryptocurrency market for the last week, you can clearly see that when the BTC/USD quotes fell, active buying of coins began again. This happened both with the price falling to $14,390 on November 07, and the next pullback two days later. As a result, step by step, the pair rose higher and higher, which indicates an overall positive sentiment, and which allowed the total capitalization, as a result, to grow in seven days from $447 billion to $465 billion.
The Crypto Fear & Greed Index was in the same place as a week ago by the evening of Friday, November 13 - at 90, in a zone that the developers of the index designated as "Extreme Greed". This value corresponds to the BTC/USD pair being strongly overbought and portends its correction. Recall that in a similar situation on November 07, the pair lost about 8%. True, it then took less than a day to restore the quotes to the previous values.
As for ethereum, as the Unfolded notes, its dependence on bitcoin has been weakening since the end of October. The correlation of the two largest cryptocurrencies decreases amid preparation for the release of the updated version of the ETH 2.0 network. It is this factor that has accelerated the separation of the main altcoin from BTC. Now the correlation is at its lowest level since early 2018. If ethereum rises in price to $500 in December against the background of weakening bitcoin (now ETH is holding at $460), then it will be able to finally "untie" from its "big brother".


As for the forecast for the coming week, summarizing the opinions 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. According to 90% of 65 Wall Street Journal experts, uncertainty in financial markets should decrease with clarity regarding the outcome of the US presidential election and news about the COVID-19 vaccine. Moreover, the head of the ECB, Christine Lagarde, believes that much has become clearer to her personally, thanks to Joe Biden's victory, the expected success in the Brexit negotiations and vaccine development. As a result, the more clarity, the less desire to buy up dollars, and the greater the cravings for riskier assets. And this should lead to the growth of the EUR/USD pair.
But Ms. Lagarde's view is not yet the view of the whole market. The second wave of the pandemic is only gaining momentum. How the United States will behave under Biden's presidency is also unknown. So, for example, 58% of Wall Street Journal experts expect that the size of the next economic aid package will be $1-2 trillion, 29% vote for an amount less than $1 trillion, and the remaining 13% call the figure of $2-3 trillion The continuation and scope of the trade and economic war between Washington and Beijing and many other factors remain in question.
Unlike fundamental, technical analysis doesn't know what presidential elections, trade wars or vaccinations are. That is why, despite the uncertainty prevailing in the market, the indicator readings now look much more specific. Thus, 100% of the trend indicators and 75% of the oscillators on H4 and D1 are painted green. They are opposed by only 25% of the oscillators signaling that the pair is overbought.
But as for analysts, although moods similar to Christine Lagarde's expectations prevail, it is still difficult to call them dominant. The bulls have very little priority: 50% of the experts side with them. Bears have 40% of supporters. The remaining 10% have taken a neutral position.
The narrowest trading range for the pair is limited by the channel 1.1740-1.1845, the next one with the increase in volatility is 1.1700-1.1900, and finally, the maximum swing of fluctuations, since August, is 1.1600-1.2000.
Among the most important economic events of the coming week, the publication of macro-statistics on the US consumer market on Tuesday, November 17 should be noted;

- GBP/USD. Bank of England Governor Speaks Marathon continues, albeit with less tension¬ - if last week Andrew Bailey spoke as many as three times, then for the next one only one of his speeches is scheduled, on Tuesday, November 17th. It is possible to predict with a high degree of probability that the purpose of such public activity of the banker is to convince the government and the public that the regulator has its finger on the pulse and that, despite the difficulties, one should look to the future with optimism.
However, the financier's optimism about the prospects of the British currency is shared by only trend indicators on H4 and D1 and oscillators on H4. But on D1, there is already complete turmoil among the oscillators - one third is colored green, one third is red and one third is neutral gray. This color scheme almost coincides with the forecasts of analysts, among whom 30% are in favor of the growth of the pair, 25% are in favor of its fall, and another 45% take a neutral position. As for the graphical analysis on D1, it definitely leans towards the strengthening of the dollar and the fall of the pound. The supports are 1.3100 and 1.3055, the goal is to return the pair to the echelon 1.2850-1.3000. Resistance levels are 1.3315 and 1.3285.

- USD/JPY. It is well known that the dynamics of this pair is greatly influenced by the yield of US securities - where they are, there it is. After falling to the horizon 103.15, the reversal of this pair and the rise to the level of 105.65 looks very impressive. But the result of the week turned out to be not so bright at all, because, after the rise, another fall followed, as a result of which the yen managed to win back more than 40% of its losses.
If you look at the D1 chart, the USD/JPY pair is still within the downlink, which began in the last week of March 2020. And whether it can reverse this trend depends largely on what happens to the real, rather than nominal, yield of 10-year US bonds. And it depends on the policy of the Fed, which, in turn, depends on who will soon be in the White House and what kind of strength awaits us in the Senate of this country.
In the meantime, 60% of analysts, supported by 90% of trend indicators and 70% of oscillators on both timeframes, believe that the pair will keep within the descending channel and will try to test support in the 103.00 zone again. Supports are at 104.35 and 104.00 levels.  According to an alternative point of view, the pair is expected to rise first to resistance in the 105.00 zone, and then to a height of 105.65. The next goal is 100 points higher;

- cryptocurrencies. We have already written that the COVID-19 pandemic has become a winning card for bitcoin. The more money Central Banks print, the more investors begin to acquire bitcoin as a protective asset. But this card is not the only one. Many representatives of the crypto sphere were encouraged by the results of the US presidential election, where Joe Biden may have won. The crypto community believes that, unlike Donald Trump and his Treasury Secretary Steven Mnuchin, Biden will be more liberal about digital currencies and the blockchain industry in general. However, the issue of Biden's reigning in the White House has not yet been resolved, as Trump intends to prove numerous irregularities during the vote in the courts. So this “Big Game” has not yet ruled out big surprises.
Bloomberg analyst Mike McGlone believes that the bitcoin rate will rise to at least $20 thousand in 2021 and renew its all-time high. This is not McGlone's first positive prediction. In early October, he suggested that the first cryptocurrency would rise in price to $100,000 by 2025 and gave several reasons for this. These include the monetary policy of the states, which leads to the depreciation of fiat currencies.
Former associate of George Soros in the Quantum fund billionaire Stanley Druckenmiller agrees with McGlone, he also expects the dollar to fall on the horizon of three to four years. He revealed in an interview with CNBC that he invested some of the capital in the first cryptocurrency, while admitting that bitcoin may be a better tool for preserving value than gold.
A sharper growth curve for BTC/USD is predicted by a popular blogger under the nickname PlanB. So, if according to Mike McGlone's forecasts, the first cryptocurrency will reach $100 thousand only by 2025, PlanB expects to see it at this height by December 2021. The expert notes that during periods of market corrections, he observes how the algorithms of bitcoin whales pick up hundreds of portions of 0.01 BTC from "weak hands". Later these coins “disappear” in “deep” cold vaults. According to the S2F model, this move of bitcoins to wallets for long-term storage leads to a reduction in their sales. This is especially true for the period after the halving, which leads to a supply shock and provokes a bull market for the next 18-20 months. This was the case for the first and second halving of miner awards in 2012 and 2016. According to PlanB, the dynamics of bitcoin after the third halving in May 2020 is developing like clockwork, which once again confirms he is right.
At the moment, the BTC/USD pair has reached the highs of January 2018. But mass profit-taking is holding back greed in anticipation of its growth to at least $20,000. Especially since there are no serious levels of resistance along the way. However, global factors, such as Trump's victory or mass vaccination against COVID-19, as well as Chinese miners who have relaunched their equipment and need cash money to cover capital expenditures and operating expenses, may reverse the trend.
60% of experts expect the BTC/USD pair to be fixed above the $17,000 level by the end of November. 20% give a neutral forecast, and the remaining 20% expect the pair to fall to the $14,000-15,000 zone.


NordFX Analytical Group


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

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First, a review of last week’s events:
  
- EUR/USD. As we expected in the previous forecast, thanks to Joe Biden's victory in the U.S. presidential election, the growth of U.S. stocks and encouraging reports from the front against COVID-19, the euro and other competitors of the dollar can very quickly recover the positions previously lost.
As for the coronavirus, no positive news has yet been received from this front. Moreover, voting in the elections led to a new anti-record in the United States: 100,000 new infection cases in just one day.
Joe Biden, too, is finally yet to win. But the growing likelihood of a change in the owner of the White House has already led to an overflow of investor funds from fiat to the stock market. Investors loved the idea of a Democratic president and the division of Congress into two camps. In this case, there is less risk of tax increases Most likely, due to the relaxation of regulation, life will become easier for technology companies. As a result of such expectations, the dollar went down, while the S& P500, Dow Jones, as well as the euro and other major currencies, went up. So, the Chinese yuan managed to win back more than half of the losses suffered as a result of trade wars unleashed by Donald Trump. The common European currency also showed impressive growth. Starting on November 02 from 1.1645, the EUR/USD pair reached the level of 1.1890 by the evening of Friday 06 November, showing an increase of 245 points. The last chord was placed at 1.1875;

- GBP/USD. The British currency grew not only due to the fall in the dollar, but also thanks to the decision of the Bank of England, which decided to further support the country's economy on Thursday, November 05 by increasing the bond purchase program by ?150 billion and bringing it to ?895 billion. The market had expected increases to just ?845 billion pounds and this additional QE extension pushed the pound up to the October 21 high of 1.3175. The pair ended the week session at 1.3150, showing an increase of 200 points;

- USD/JPY. Recall the forecast that was given last week. We cite:
"Now this pair is sandwiched between two very strong levels - 104.00 and 105.00, and its further movement depends on the risk sentiment of investors. And those, in turn, depend on what will happen in the United States in the coming week. 65% of experts, supported by 85% of indicators and graphical analysis on D1, believe that the pair will make another attempt to break through the support of 104.00. But only 30 per cent are confident that it will be able to reach the 103.00 zone".
And now judge for yourself how accurate it was. The pair did go to break the support 104.00, broke it, but managed to go down only to the horizon 103.17. This was followed by a slight rebound and a finish at 103.30;

- cryptocurrencies. Let us start with statistics. According to Google Trends, according to the number of searches related to the first cryptocurrency, Nigeria, Cuba, South Africa, Cameroon are in the TOP-5 countries with the highest interest in bitcoin, and Ghana closes the top five. Residents of Taiwan, Kazakhstan and Japan turn to the search engine with such a request less often than others.
And, before moving on to the main event of the crypto week, some more statistics, from the world of crime. It has finally become known how many digital assets have been stolen by cybercriminals. According to a study by the analytical service Atlas VPN, since 2012, hackers have stolen more than $13.6 billion in cryptocurrency, making more than 330 hacks. Most often, thefts were carried out from crypto exchanges and crypto wallets. According to Atlas VPN, there were 87 successful hacks of trading platforms, as a result of which the attackers managed to withdraw $4.8 billion. Wallets suffered even more damage, where the total damage amounted to almost $7.2 billion.
And now the main promised news: Bitcoin soared to a height of $15.880 on the night of November 05-6, adding 17.2% over the week. It should be noted that since the last days of October, the main cryptocurrency again correlates with both stock indices Dow Jones, Nasdaq and Standard & Poor's 500 and with gold. Not surprisingly, during the pandemic, the US Federal Reserve printed a huge amount of new money, and many large investors, fearing inflation, included bitcoin in their portfolios as a protective asset. Therefore, a sharp jump in BTC / USD quotes in the second half of the outgoing week was associated with the expectations of Joe Biden's victory in the US presidential election, which caused a sharp weakening of the dollar and a capital flow into risky protective assets.
The total capitalization of the crypto market grew in 7 days by 9%, having risen from $410 billion to $447 billion.The Crypto Fear & Greed Index was at around 90 by the evening of Friday, November 06, in the zone that the developers of the index designated like “Extreme Greed”. This value corresponds to the BTC/USD pair being strongly overbought and portends its correction. Although, it should be noted, a certain correction has already taken place, and the pair rolled back to the $15.150 zone from the highs of the week and completed the seven-day period at $15.510.
Bitcoin's growth has pulled many top altcoins with it. So, Ethereum (ETH/USD) has grown 15% heavier over the week. Additional support for this coin was provided by the news about the imminent launch of the ETH 2.0 branch. However, for this to happen, the developers must raise funds in the amount of 524,288 ETH (about $230 million). Investments should be frozen for a period of one and a half to two years; the expected return is 8-15% per annum. If the necessary funds are raised in November, the launch of the ETH 2.0 genesis block will take place on December 1 at 12:00 UTC.


As for the forecast for the coming week, summarizing the opinions 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. Stock markets are growing, investors continue to pour money there, hoping that the wave raised by the hopes for the arrival of a new US President will grow higher and stronger. At the same time, the market forgets that the situation with the coronavirus is only getting worse, that Trump has not gone anywhere yet, and that no one has yet canceled the fiscal burden, and all this remains only at the level of election promises. Trump, if he loses, may well protest the election results. We should also not forget about the weakness of the common European currency.
In general, the flight of investors from the dollar towards stocks, bonds, gold, bitcoin and the euro, while understandable, may be premature. Everything can turn in the opposite direction overnight.
In such a situation, it is quite natural that the opinions of experts are equally divided: one third vote for the growth of the EUR/USD pair, one third - for its fall, and one third take a neutral position. As for technical analysis, 100% of the trend indicators on H4 and D1 are still green, but among the oscillators, 25% are already giving signals that the pair is overbought, which indicates a possible downward trend reversal or a serious correction. The trend reversal is also indicated by graphical analysis on D1.
The pair is in a strong mid-term support/resistance zone 1.1880-1.1900 now. The nearest support levels are 1.1760, 1.1700 and 1.1610. Resistance levels are 1.1965 and the September 01, 2020 high of 1.2010. It should be borne in mind here that this maximum is the highest point at which the pair has been located since May 2018. And if EUR/USD continues its northward movement, its main target is likely to be the zone 1.2200-1.2400;

- GBP/USD. There is a movie, “The King's Speech”, dedicated to George VI, father of Britain's current Queen Elizabeth II. The upcoming week can be called "The Head of the Bank of England' Speech." Moreover, he speaks a lot: Andrew Bailey's speeches are scheduled for November 09, 12 and 13. In addition, the data on the UK labor market will become known on Tuesday, November 10, and the GDP of this country for the III quarter and the consumer price index - on Thursday, November 12. According to forecasts, everything is quite contradictory. On the one hand, GDP can grow from -19.8% to +15.8%. But on the other hand, the growth of applications for unemployment benefits is expected from 28.0K to 78.8K. Now it is worth adding to this the ambiguity with the dollar exchange rate, which now depends on the outcome of the presidential election in the United States, as well as the still unresolved terms of the deal with the EU on Brexit.
As a result, we have rather vague prospects for the GBP/USD pair, although most experts (70%) tend to continue its uptrend - first to 1.3265, and then perhaps to the high of 01 Sept, 1.3480. The nearest resistance is 1.3175.  
As for technical analysis, here the situation is completely identical to the readings for the EUR/USD pair: 100% of the trend indicators and 75% of the oscillators on H4 and D1 point to the north, while the graphical analysis looks to the south as well as 25% of the oscillators which are signaling the pair is overbought. Supports are 1.3085, 1.3000, 1.2855. The next target of the bears is 1.2755, but it is unlikely to be reached in the coming week;

- USD/JPY. So, as already mentioned, amid the protracted vote count in the US elections, the dollar dropped to a two-month low against the basket of major currencies last week, and most investors expect it to weaken further. Currency markets are betting that Democrat Joe Biden will be the next president, but Republicans will retain control of the Senate. In this situation, 70% of analysts believe that the Japanese currency will continue to strengthen against the dollar, as a result of which the pair will still break through support in the 103.00 zone and approach the level of 102.00. (Taking into account the backlash, slippage up to 101.75 is possible). It should be noted that it has not fallen so low since the beginning of the panic of March 2020, caused by the onset of the coronavirus pandemic.
In the current situation, one should probably not be surprised that the readings of the indicators for the USD/JPY pair coincide completely with the readings of their "colleagues" for the previous two pairs, with the only difference that the weakening of the dollar corresponds to the movement of this pair down, and not up, as in the case of the euro and the pound.   
The remaining 30% of experts side with the bulls and vote for the return of USD first to the resistance of 104.00, and then fixing in the zone 104.00-105.00;

- cryptocurrencies. The COVID-19 pandemic has become a winning card for bitcoin. The more money Central Banks print to support the economies of their countries, the more investors begin to acquire Bitcoin as a protective asset. And not only private but also large institutional investors.   
Cryptocurrency is no longer a pariah for financial giants such as JPMorgan and PayPal. The "king of bonds", the head of the management company DoubleLine Capital ($141 billion) Jeffrey Gundlach, who had recently called the first cryptocurrency "a lie", now recommends it as insurance against dollar depreciation.
According to Brian Brooks, head of the US Currency Exchange Office (OCC), some US banks are already actively negotiating with major cryptocurrency custodians such as Anchorage and Coinbase on potential cooperation. Brooks believes that financial conglomerates around the world will not create their own solutions for storing cryptocurrencies from scratch, but rather will buy market leaders or enter into cooperation with them to meet the needs of their customers. According to Off The Chain Capital investment fund founder Brian Estes, roughly 90% of households in the U.S. will use BTC coins by 2030.
As for the near future, according to a number of experts, after overcoming the critical $12,000 mark, there are no serious obstacles for bitcoin on the way to $20,000. At the moment, 60% of analysts agree that the BTC/USD pair will set off for a new assault on the $16,000 height in the near future.    
Although, there are other opinions. For example, well-known analyst Willie Wu believes that bitcoin has entered the "safe haven" stage. “Correlation of the main cryptocurrency by other market industries is gradually decreasing. This ensures the stability of the asset, which is why it is not worth waiting for a repeat of the 2017 rally. And even if bitcoin goes to aggressive growth, Willy Wu believes, it will face constant corrections and return to the $14,000-15,000 zone. This point of view is now shared by 40% of analysts, while in the medium term their number increases to 60%. However, it is absolutely clear that the determining factor for the BTC/USD quotes in the foreseeable future will be the success of Donald Trump or Joe Biden in the fight for the presidency of the United States.


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. It seems that the market has decided not to pay much attention to the US presidential election. Investors are much more concerned about what is happening with the second wave of the pandemic COVID-19 in the Old and New Worlds, and what steps will be taken by regulators on both sides of the Atlantic Ocean.
In the United States - a record increase in the number of infected, which could lead to a collapse of stock markets, akin to March. However, in an effort to support the economy, the current White House administration is not yet going to introduce a lockdown, hoping for an early vaccination of the population. This decision was also influenced by the strong statistics of US GDP growth in the III quarter: plus 33.1% instead of minus 31.4% three months earlier.
As for Europe, many countries, including Germany and France, have already begun to implement stricter quarantine measures. Moreover, although at the last meeting on Thursday, October 29, the ECB did not lower the already low interest rate, the head of the bank, Christine Lagarde, made it very clear that very serious steps could be expected from the regulator in a month and a half, aimed at easing the monetary politics and stimulating the economy of the Old World.
Apparently, the European regulator decided to spend this time to determine the necessary amount of support for the economy, see how the situation with the coronavirus will develop and analyze the results of the US presidential election.
The data released on Friday, October 30, showed the growth of GDP in the Eurozone in the III quarter from minus 11.8% to plus 12.7%. But this, firstly, is significantly lower than in the United States, and secondly, according to Lagarde, the prospects with the onset of COVID-19 are so gloomy that the ECB does not rule out a recession in the Eurozone in the IV quarter. As a result, the ECB will have to expand its QE program by another €500 billion in December, and, and maybe lower the interest rate on the euro.
In general, the prospects for easing monetary policy in Europe seemed to investors much more real and large-scale than in the United States for now, which entailed a strengthening of the dollar by 220 points this week, a fall in EUR/USD to the level of 1.1640 and the pair's finish at 1.1645;

- GBP/USD. Most experts (60%), together with graphical analysis on D1, had expected the pair to fall to 1.2860 within two to three weeks. However, it happened much faster: it found a local bottom at 1.2880 as early as on Thursday, October 29. And the reason for the fall of the pound is not so much in the increased risks of a second wave of coronavirus in the UK, but in Brexit, which remains the main topic in this case. And the situation in this case is not in favour of the British currency.
Market hopes that the deal with Europe will be reached by the X hour in December this year are dimming like morning fog over London. And as former Bank of England governor Mark Carney used to say, a no-deal Brexit would come as a shock to the country's economy. And in anticipation of this shock, the pair set the last chord at 1.2950 after a week's hike to the south and a correction to the upper border of the descending channel;

- USD/JPY. As we expected, the meeting of the Bank of Japan on October 29 went without the slightest surprises. In a country whose currency is a safe haven and protection from financial storms, everything must remain calm and quiet. 
More interesting is the tug of war between the dollar and the yen as safe haven currencies. And here, taking into account the pre-election and pandemic chaos in the US, 75% of experts, supported by 90% of oscillators and 100% of trend indicators on D1, preferred the Japanese currency as more stable. And they turned out to be right. As expected, having bounced off one significant level - 105.00, the pair made an attempt, the third one since July 31, to break through another significant level - support at 104.00. And again, it was unsuccessful. As a result, after the rebound, it returned to where it started from at the beginning of the five-day period, and completed the trading session at 104.65; 

- cryptocurrencies. The market is filled with optimism after payment giant PayPal announced the launch of features to buy, sell and store Bitcoin, Bitcoin Cash, Ethereum and Litecoin.  Visa, Mastercard and American Express should follow his example in the next few months, such opinion was expressed in an interview with Bloomberg by CEO of cryptocurrency fund Galaxy Investment Mike Novogratz.
Against the backdrop of the bitcoin rally in the second half of October, the number of cryptocurrency "whales" began to increase. This is evidenced by the CoinMetrics data service. According to experts, the number of wallets containing more than 1000 coins has reached 2.2 thousand. Based on the current rate, it turns out that each of their owners now has a fortune of at least 13 million dollars!
On this positive wave, the bulls tried to break to a height of $14,000 on Wednesday October 28, however they were stopped at $13,830. The next attempt followed on Thursday night, but was even less successful ¬: the maximum was fixed at $13,615. The bulls gave up after the third unsuccessful attempt, the BTC/USD pair rolled back down, and it is consolidating in the $13,300 zone by the evening of Friday October 30.
Following the growth of quotations on October 28, the total capitalization of the crypto market began to grow, rising from $390 billion to $410 billion. However, a rollback in the value of the main coin by the end of the week caused the closure of short-term positions and its sale, as a result of which the market returned to its starting point in the area of $388 billion.
The Crypto Fear & Greed Index also returned to its original position: to around 74, at the very border of the last quarter of the scale. Recall that level 74 corresponds to the average indicator of greed, when opening short positions is still dangerous. But the range from 75 to 100 is designated by the developers of the index as “Extreme Greed”, which corresponds to the pair BTC/USD being strongly overbought and foreshadows its correction.


As for the forecast for the coming week, summarizing the opinions 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. So, the head of the ECB Christine Lagarde made it clear that her bank is ready to ease its monetary policy from next month. On the other hand, Donald Trump also speaks of possible support for the US economy. But the latter has elections on Tuesday, November 03, and all his rhetoric, as well as the rhetoric of his rival Joe Biden, can still be attributed to pre-election communications. it is hard to predict now what will happen in the US in reality, unlike in the Old World.
It is just as difficult to predict what will happen with the pandemic. It was said at the beginning of the review that the current White House administration is very much counting on vaccinations and a medical solution to the problem. However, the situation may deteriorate sharply until this happens and the stock indices will go down, as it happened last spring.
Then, against the backdrop of falling stock markets, the Fed began to flood the fire with cheap money, cut the interest rate, which led to the weakening of the American currency and the growth of the EUR/USD pair by more than 1300 points. Now, the EU is ahead of the United States in its measures of quantitative easing and the introduction of quarantine restrictions, which launched a sale in the euro last week and allowed the dollar to grow. However, it is clear that the weekly increase in USD by 220 points and the fall of 1300 points since March are two incomparable things.
The main US elections are scheduled for next week. And, in case of Joe Biden's victory, and thanks to rising stocks of American companies and encouraging vaults from the front of the fight against COVID-19, the euro can very quickly regain its lost ground. We should also pay attention to the meeting of the US Fed on Friday, November 06. And even not so much to its decision on the interest rate, which will hughly likely remain unchanged, as to the Fed's comment on monetary policy, which, it is possible, will already take into account the results of the presidential election.
Of course, as usual, data on the number of new jobs outside the US agricultural sector (NFP) will be released on the first Friday of the month. But, against the background of the above-mentioned events, it is unlikely they will have any serious impact on quotes.
In the meantime, giving a forecast for the coming week, the majority of experts (65%) are looking south. The nearest support is the September 25 low 1.1610, the next target is zone 1.1500. This development is supported by graphical analysis on D1, 100% of trend indicators and 75% of oscillators on H4 and D1. But the remaining 25% of oscillators are already giving strong signals about the pair being oversold and the upcoming correction. The most likely rebound zone is 1.1600, the targets are 1.1700, 1.1750, 1.1830 and 1.1880;
 
- GBP/USD. A number of experts do not exclude that the Bank of England may announce the next measures aimed at supporting the country's economy at the nearest meeting on Thursday, November 05. The list of possible steps includes an increase in bond purchases to ?850 billion, and a decrease in the interest rate, which is 0.1% today. The last step is unlikely, though.
The British currency is likely to remain under pressure until the meeting of the Bank of England. But we should not forget about the unresolved issue on the terms of Brexit, which will also push the GBP/USD pair down. That is why, giving the forecast for November, the majority of analysts (60%) sided with bears, heralding the pair a further decline first to support 1.2860 and then 100 points lower. The final goal is the September 23 low at 1.2675. Exactly the same picture is drawn by graphical analysis on D1. 70% of technical indicators on both timeframes, H4 and D1, are also colored red.  
A diametrically opposite position is now taken by 40% of experts. And here it should be noted that when switching to forecasting until the end of the year, the number of bulls' supporters increases to 70%. Apparently, the market still hopes that at the most critical moment the Brexit deal with the EU will be agreed and signed. The nearest resistance is zone 1.3000. It is followed by levels 1.3080, 1.3175 and 1.3265;
 
- USD/JPY. Now this pair is sandwiched between two very strong levels - 104.00 and 105.00, and its further movement depends on the risk sentiment of investors. And those, in turn, depend on what will happen in the United States in the coming week.
65% of experts, supported by 85% of indicators and graphical analysis on D1, believe that the pair will make another attempt to break through 104.00 support. But only 30 per cent are confident that it will be able to reach the 103.00 zone.
The same graphical analysis for the first half of November draws the lateral movement in the corridor 104.00-105.00. In case of breaking through its upper boundary, the pair has a chance to gain a foothold in the next echelon, 105.00-105.80, and possibly reach the height of 106.10. However, the chances of doing so are currently estimated at only 15%;

- cryptocurrencies. It has been repeatedly discussed how the change in ownership of the White House could affect the cryptocurrency market. The election of the President of the United States is pretty soon. And here it is impossible not to mention the fact¬ that on Wednesday, October 28, Donald Trump's campaign website was attacked by hackers - followers of the Monero cryptocurrency. As a result, an advertisement for this altcoin and a statement by attackers that the Trump administration was allegedly involved in the emergence of the coronavirus, and that Trump himself was involved in criminal activity and cooperation with foreigners to manipulate the upcoming elections, appeared in the About Us section of the website.
In addition to the election results, other factors contribute to the uncertainty in the prospects for bitcoin. So, according to analysts at Glassnode, stock markets and other external factors have practically ceased to affect the BTC rate, which is now more focused on the internal environment, and investors are still trying to figure out its new policy. At the same time, Glassnode believes that the asset has every chance to take new barriers in the future. 
Having prophesied the imminent decline of cryptocurrency in the past, MicroStrategy CEO Michael Saylor now claims to be ready to hold bitcoin for at least 100 years. The company led by Saylor has invested $425 million in bitcoin over the past months. According to him, having considered the available options for preserving capital amid the economic uncertainty in the world, MicroStrategy has concluded that bitcoin is the best long-term store of value. Saylor is sure that even gold does not compare with this cryptocurrency. In his opinion, people who hold $100 million in fiat will lose 99% of the value of their assets in 100 years, and investments in gold will, at best, bring 85% of the loss.
Specialists from the American investment bank JPMorgan have also preferred bitcoin. In their view, BTC outperforms gold as an alternative currency and has a substantially better chance of continued growth. According to their new report, the capitalization of the crypto market is not large enough yet as digital currencies are chosen mainly by millennials. The older generation prefers more tangible assets, particularly gold. Despite this, however, bitcoin has significant potential for long-term growth as millennials will become "an increasingly important component of the investment space" over time.
JPMorgan estimates that the physical gold market, including ETF backed by it, is $2.6 trillion. Bitcoin needs to raise its current value of around $13,000 10 times to equal the precious metal in this respect.
The previous positive outlook was confirmed by the founders of the cryptocurrency exchange Gemini brothers, saying that the BTC/USD pair will reach $500,000 sooner or later. "The question isn't whether bitcoin will cost $500,000 or not, the question is how quickly it will happen. In fact, even this assessment seems to me very conservative - the game has not really even started," said Cameron Winklevoss.
If we turn to the forecast for the near future, the majority of analysts (60%) believes that the BTC/USD pair will continue to attack the resistance of $14,000. But it is only 25% of analysts that say that this assault will end in luck and the pair will be able to gain a foothold in the $15,000 zone by the end of the year. The probability of reaching a height of $16,000 is estimated today at only 10%. But the possibility of quotes returning to $12,000 increases to 40%.


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. 40% of analysts predicted the growth of this pair to the 1.1900 zone and were right: the local weekly high was recorded at 1.1880, and the five-day period ended at 1.1860.
Strong macro statistics from the United States, as well as a record increase in the number of COVID-19 infected in the Old World, seemed to reverse the pair's trend south on October 21. But then Europe, together with Germany, showed an increase in business activity. This reduced the chances of a build-up of the European quantitative easing (QE) program and further growth in bond prices, which allowed the pair to return to its weekly highs;

- GBP/USD. The hope of a third of analysts that the uptrend was over and the pair shifted to a sideways movement did not come true: it moved north again, turning the upper border of the sideways channel 1.2845-1.3035 from resistance to support.
The UK and the EU continued negotiations, breaking the deadlock in which they stood since the end of last week. But then... they hit it again. As a result, the pair rushed upwards, but having reached a height of 1.3175, it turned in the opposite direction. Contributing to the decline was the Markit PMI in the UK services sector, which fell from 56.1 to 52.3.
The last chord of the week sounded at 1.3045. This means that the pound still gained 130 points in 5 days, and investors still hope that the UK and the EU can come to an agreement on Brexit. Although the main reason, of course, is not the strengthening of the pound, but the weakening of the dollar;  

- USD/JPY. Recall that 30% of analysts, along with graphical analysis, expected the pair to rebound from the horizon at 105.00 and rise to the resistance of 106.00. And they turned out to be right: the pair reached a height of 105.75 by Tuesday October 20.
The remaining 70% of experts, supported by 75% of oscillators and 90% of trend indicators on D1, claimed that the USD/JPY pair will be able to approach the September 21 low of 104.00 at least for a while. And they were not mistaken either: - on Wednesday, October 21, the pair recorded a local low at 104.33, followed by a rebound and a finish at 104.70.
According to experts, such a sharp reversal and a fall from a height of 105.75 to 104.33 were a reaction to the general weakening of the dollar and, first of all, its depreciation against the Chinese yuan. The massive triggering of Stop-Loss orders when the support broke out in the 105.00 zone added fuel to the fire;

- cryptocurrencies. Finally! Bitcoin broke the $12,000 level and even hit the $13,200 high. And, as the CEO of analyst firm CryptoQuant, Ki Yong Joo, predicted, this growth has not led to a massive sell-off of the coin. This gives reason to hope that the main cryptocurrency will be able to gain a foothold in this zone.
Bitcoin has grown by almost 80% since the beginning of 2020. According to the analytical service Glassnode, the number of addresses that store more than 100 BTC has grown to 16,159, reaching the maximum value in six months. The total number of addresses with a non-zero balance is approaching 32 million.
According to another analytical agency, The Block, in addition to the growth in the number of wallets, the number of transactions and the volume of commissions in the BTC blockchain are also growing. Over the past quarter, transactions worth $225 billion were made on this network. That is, on average, users were conducting transactions for $2.4 billion per day. Four months ago, the average transaction was about $25,000, but it jumped 6 times by October 20, reaching $150,000.
Over the past week, bitcoin's gains have been driven by a very positive news background. Large institutional investors such as Square, MicroStrategy, Stoneridge and Mode Global Holdings have turned to Bitcoin. And the news that the payment giant PayPal is adding to its line of services the ability to buy and sell cryptocurrencies, including Bitcoin, Ethereum, Litecoin and Bitcoin Cash, came as a "cherry on the cake". 
As a result, the benchmark coin rose 13.5% in seven days, pulling the entire crypto market with it, the total capitalization of which increased from $357 to $390 billion.The Crypto Fear & Greed Index rose from the neutral yellow zone to the border of the last quarter of the scale reaching the value of 74. Recall that the range from 75 to 100 is designated by the developers of the index as “Extreme Greed”, which corresponds to the pair BTC/USD being strongly overbought and foreshadows its correction.


As for the forecast for the coming week, summarizing the opinions 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. If you follow the textbooks on fundamental analysis, macroeconomic statistics is of basic, fundamental importance. However, there was no coronavirus pandemic when these books were written. And now it's here. And it is capable of destroying any predictions.
On the one hand, the incidence schedule in Europe is bursting upward, Germany and France set a new "anti-record" for the number of infected people on Thursday, October 22. Spain has become the first European country to see the number of people falling ill above 1m, putting pressure on the euro. But COVID-19 has hit supply as well as demand.  
The situation is similar in the US. The number of coronavirus patients is approaching record levels. But at the same time, the country's authorities do not want to introduce new quarantine restrictions in order to support economic activity. Much, including the mood of the markets, depends on the outcome of the US presidential election on November 3.   
According to Deutsche Bank, Morgan Stanley and JP Morgan, Democrat Joe Biden's victory will reduce the likelihood of a new wave of protectionist US policies and allow the pair to reach the 1.2000 mark. If Donald Trump wins again, the dollar, in anticipation of a new round of trade war, is likely to go into growth, and the EUR/USD pair will fall to the lows of September in the 1.1600 zone.
In the meantime, despite the fact that Biden's ratings are higher, investors are in no hurry to get rid of the dollar, because they remember how, unexpectedly for many, Donald Trump became the resident of the White House in 2016. And this can happen again.
The intrigue with the election results will continue after November 3, because they may be challenged, especially those of voting by mail, and the electoral college will meet only on December 14.
Now about the forecast for the coming week. The listed uncertainties prevent analysts from unambiguously pointing in one direction or another. However, 75% of them do not exclude a slight rise in the EUR/USD pair at least to the level of 1.1900. Also, 100% of indicators and 85% of oscillators on H4 and D1 are colored green.
The remaining 15% of the oscillators give signals that the pair is overbought. Its fall is also supported by 25% of experts, supported by graphical analysis on both timeframes. Support levels are 1.1800, 1.1760 and 1.1700. The ultimate goal, as already stated, is 1.1600.
As for the events of the coming week, special attention should be paid to the meeting of the European Central Bank on Thursday, October 29, and especially to the final press conference of its lmanagement, which will be held in the afternoon of the same day. The data on US GDP, which will be released on October 29, and the Eurozone GDP, which will be released a day later, on Friday, October 30, can also influence the formation of local trends;

- GBP/USD. The overwhelming majority (90%) of experts, supported by graphical analysis and trend indicators on D1, believe that the pair changed the echelon 1.2845-1.3035 to a higher one - 1.3000-1.3175. However, this forecast is very short-term, and its further behavior will be determined by the result of the presidential election in the United States, the epidemiological situation on both sides of the Atlantic Ocean and the course of negotiations between the EU and the UK on the terms of Brexit. If the parties show that there will be no withdrawal from the Agreement, this will have a beneficial effect on the pound rate. The situation on this issue should be clarified by mid-November. In the meantime, COVID-19 will continue to play the main role, having the most serious impact on the British economy and especially on finances.
It should be noted that when switching from a weekly to a monthly forecast, the picture changes radically, and here already the majority of experts (60%) and  graphical analysis on D1 expect the pair to fall rather than rise: first to the level of 1.2860, and then by another 100 points below;

- USD/JPY. We are waiting for the Bank of Japan's interest rate decision and its management's comment on monetary policy next week, on October 29. But, as usual, we do not expect any surprises from them, and the rate is highly likely to remain at the same negative level, minus 0.1%.
More interesting is the tug of war between the dollar and the yen as safe haven currencies. And here, given the pre-election and pandemic chaos in the US, 75% of experts prefer the Japanese currency as more stable. This scenario is supported by 90% of oscillators and 100% of trend indicators on D1.
Note that, starting in 2016, the USD/JPY pair has fallen below 105.00 for the seventh time. However, it usually lingers there only for a very short time, after which it returns above this mark. The question is still open as to what will happen this time. However, in the medium term, 60% of experts do not exclude that the pair may break through the support of 104.00 and even go down to the zone 102.00-103.00.
As for the graphical analysis, on D1 it draws a sideways movement in the 104.00-105.55 channel within the next three weeks;

- cryptocurrencies. On Friday evening, October 23, the BTC/USD pair is in the $12.860 zone - a new local support/resistance level. If bitcoin holds above $12,800, it promises to be the highest weekly rise in 2.5 years and offers hope for growth to historic highs around $20,000. The immediate challenge is testing the July 2019 high of $13,760.
Bitcoin's rise right now is driven by the pandemic, the monetary printing press that trillions of fiats are coming out of, and the growing popularity of cryptocurrency with large institutional investors. Thus, co-founder of Morgan Creek Digital investment firm Anthony Pompliano increased accumulations in the main cryptocurrency from 50% to 80%.
The number of contracts to buy BTC accumulated in the hands of institutional investors has reached an all-time high, according to the Chicago Mercantile Exchange (CME). However, according to the Commitment of traders (COT) reports, hedge funds hold no fewer contracts to sell bitcoin. A number of experts believe that hedge funds do this in order to provide sufficient liquidity for institutional investors.
Popular TV host and long-time bitcoin supporter Max Kaiser agrees with this version. He believes that at current levels, bitcoin futures traders are slowing the price of BTC to give institutional players a chance to "load the boat." However, once the asset reaches the $28,000 mark (the intermediate benchmark set by Kaiser), the number of coins for sale will go zero, and thanks to the deficit, their price will burst up to the cosmic heights.
“For the poor of this world, the current price and availability of BTC,” says Kaiser, “is the only opportunity in life to purchase non-forfeitable hard money before the price of it rises to 40-80 times, and prices will soar to the level of golden parity by around $400,000.”
Turning to the forecast for the coming months, we will cite the opinion of Anton Kravchenko, CEO of the investment company Xena Financial Systems, according to which the rate of the BTC/USD pair may reach $14,000 by the end of the year. 65% of experts agree with this forecast. The fact that the pair could fall to $9,000 was mentioned by 25% of analysts a week ago, now their number has fallen to 15%. The remaining 10% have taken a neutral position.


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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