Weekly Forex Forecast and Cryptocurrencies Forecast

[Stan NordFX]

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

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[Stan NordFX]

CryptoNews of the Week

– Lucas Outumuro, head of research at IntoTheBlock, forecasts an 85% chance that bitcoin will reach a new all-time high within the next six months, potentially surpassing $70,000. He identifies five growth catalysts.
1. The halving in April, marking the fourth reduction of the mining reward from 6.25 BTC to 3.125 BTC per block, which is expected to decrease selling pressure. Outumuro suggests bitcoin could reach a new all-time high (ATH) just a month after the halving.
2. The continued influx of funds into spot exchange-traded funds (ETFs) based on bitcoin could act as a second growth catalyst. While the duration of this strong inflow remains uncertain, its persistence could bolster the cryptocurrency's price through increased demand.
3. IntoTheBlock believes the Federal Reserve's tight stance on interest rates in 2022 laid the groundwork for a bear cycle not only in the crypto market but also across other risk assets. With inflation dropping from 10% to 3% by 2024, many anticipate a policy shift by the Federal Reserve towards cutting interest rates, likely driving the recent rally in both bitcoin and stocks. The expert notes that bitcoin's price movement has been more closely aligned with traditional assets recently, enhancing its correlation with the Nasdaq and S&P 500 to two-month highs.
4. The US presidential election, although current President Joe Biden is generally opposed to digital assets, the election campaigns tend to have a positive impact on the crypto market. IntoTheBlock's report states, "Polymarket currently gives Biden only a 33% chance of re-election, making Donald Trump, who is significantly more crypto-friendly, the most likely victor." However, to boost the incumbent's re-election chances, the Federal Reserve might adopt a more aggressive easing of its monetary policy, encouraging an influx of funds into both the stock and crypto markets.
5. Hedge funds are considered an unexpected growth driver by Outumuro. He recalls that when bitcoin recovered from the COVID-19 pandemic in 2020, traditional financial giants first acknowledged the cryptocurrency's potential. The introduction of spot bitcoin ETFs provided hedge funds with an opportunity to accumulate a new asset class, thus increasing demand from traditional investors and leading to greater adoption and acceptance of digital assets.
However, IntoTheBlock notes that these scenarios could change due to various factors. For instance, if the Federal Reserve does not ease its policy, bitcoin could face a 10% correction. The development of geopolitical conflicts could also negatively impact the price of digital gold. The experts do not rule out unexpected selling pressure in the event of major player bankruptcies.

– Analysts at investment bank Goldman Sachs have revised their forecast for the S&P 500 index after it surpassed 5,000 points. They have set a year-end target for the index at 5,200, indicating a 3.9% increase from its current level. As previously noted by IntoTheBlock observations, the correlation between bitcoin and the S&P 500 is increasing, suggesting that the coin's value will rise alongside the US stock market.

– According to the Financial Times, hackers linked to North Korea are increasingly turning to artificial intelligence to aid their efforts. In 2023, they launched 1.3 million attacks against South Korean companies and government agencies. Previously, their attempts often failed due to poor language skills and a lack of understanding of local social nuances. Now, North Korean hackers are leveraging artificial intelligence to enhance their effectiveness.
Erin Plante, Vice President of Research at Chainalysis, views this as a significant new threat. "North Korean hacking groups are creating trustworthy profiles on professional sites like LinkedIn. Generative neural networks help them communicate, send messages, create images, and new identities: everything needed to build close relationships with their victims," she explained. "They use detailed profiles on LinkedIn and other social networks to develop relationships over weeks and months." Plante described an instance where North Korean hackers deceived a senior engineer at a cryptocurrency exchange by posing as representatives of a Singaporean company. They asked the victim to perform a "technical test" by downloading software that turned out to be phishing malware.
Moreover, AI services like ChatGPT are assisting North Korean criminals in developing more complex and sophisticated forms of malicious software. The era of poorly worded emails with a "click this link" prompt is evolving into a more cunning approach to cybercrime.

– Dennis Liu, also known as Virtual Bacon, shared his bitcoin investment strategy, emphasizing the importance of identifying the optimal moment to sell an asset, which is as crucial as deciding to buy it. He outlined three elements designed to signal that the market might have reached its peak.
1. The first indicator to consider is the achievement of certain price milestones: $200,000 for bitcoin and $15,000 for Ethereum. Liu's assumption is based on historical cycles and diminishing returns. This is a clear, quantifiable indicator that eliminates guesswork when deciding to exit a position.
2. Liu's second benchmark is time-based. Regardless of the price dynamics of the assets, he plans to exit his positions by the end of 2025. This decision relies on the importance of historical patterns and is based on the analysis of halving cycles and the duration of bull markets.
3. The final element of Liu's methodology involves meticulous monitoring of price patterns, specifically the behaviour of BTC relative to its 200-day and 21-week exponential moving averages (EMAs). Falling below these support levels would signal the need to sell bitcoin.

– Analyst Gareth Soloway suggested that bitcoin could potentially retest the $30,000 mark, especially if the stock market undergoes a correction in the range of 20% to 30%. He referred to a new possible support level for bitcoin as the "line in the sand." "My main line in the sand is the level from $30,000 to $32,000. If we drop there, I will start buying quite large volumes of BTC," he stated.

– Investor and founder of MN Trading, Michael Van De Poppe, believes the main question for traders now is how the price of BTC will change in the coming months. The analyst expects a pullback in bitcoin could occur when it reaches the $53,000-$58,000 level. Therefore, investors should wait for a correction of 20-40% before entering the market. However, "if you buy bitcoin with the intention of holding it for two to three years, and if you believe that over this period bitcoin will grow to $150,000, then nothing should stop you from purchasing it at these [current] prices," Van De Poppe wrote.

– Recently, Erik Voorhees, CEO and founder of the cryptocurrency exchange Shapeshift, discreetly urged Apple to purchase several billion dollars' worth of BTC and to adopt the first cryptocurrency as a payment method in Apple Pay. He believes this move could instantly generate substantial profits for the company and contribute to the further spread of cryptocurrency. A similar idea was proposed in 2021 by Michael Saylor, co-founder of MicroStrategy. "If Apple added support for bitcoin to the iPhone and converted its treasury to the bitcoin standard, it would bring its shareholders at least one trillion dollars," he wrote at the time.
Chen Fang, Chief Operating Officer of BitGo, also spoke about Apple, suggesting that integrating BTC into Apple Pay and the new Apple Vision Pro headset would allow the company to dominate payments in the metaverse.
It's worth noting that Apple, the world's second-largest company by market capitalization, has had a complicated relationship with the emerging cryptocurrency sector. In the Apple App Store, applications related to bitcoin and other cryptocurrencies are regularly removed. Over time, apps like MetaMask, Coinbase Wallet, Trust Wallet, and Damus have faced sanctions. Meanwhile, Apple co-founder Steve Wozniak has called bitcoin a sensible investment choice, revealing that he once made significant investments in this digital asset.

– Over the past week, Ethereum has significantly outpaced bitcoin in terms of growth rate. According to Standard Chartered bank, the coin's price could rise to $4,000 in anticipation of the U.S. Securities and Exchange Commission (SEC) approving spot Ethereum ETFs. Bernstein analysts believe the likelihood of this happening is substantial: nearly 50% for a launch by May and almost 100% within the next 12 months. "Ethereum, with its dynamic yield rates, environmentally friendly design, and utility in creating new financial markets, has strong potential for widespread institutional adoption. It is likely the only digital asset alternative to bitcoin that could receive clear ETF approval from the SEC," Bernstein suggests. Analysts believe that officials may be influenced by the fact that participants in the traditional stock market are not only looking to launch spot ETFs on Ethereum similar to bitcoin ETFs but also intend to "build more transparent and open tokenized financial markets on the ETH network, where the utility goes beyond mere asset accumulation."


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

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

 

[Stan NordFX]

Forex and Cryptocurrencies Forecast for February 26 - March 01, 2024​

EUR/USD: ECB Rhetoric Against the Dollar

Data on consumer inflation (CPI) in the US, published on February 13, exceeded expectations. The Producer Price Index (PPI) also indicated a rise in industrial inflation in the country. However, despite this, the American currency failed to gain additional support. The Dollar Index (DXY) began to decline from February 14, while EUR/USD steadily climbed higher.

The minutes of the latest FOMC (Federal Open Market Committee) meeting of the US Federal Reserve were published on Wednesday, February 21, serving as a reminder that the American regulator might not be in a hurry to lower interest rates. However, market expectations still dominate that the Fed will begin to ease its monetary policy significantly earlier than the ECB. This factor exerts serious pressure on the dollar, especially as such expectations are constantly fuelled by statements from high-ranking European officials. ECB Executive Board member Isabel Schnabel stated that monetary policy must remain restrictive until the regulator is confident that inflation has sustainably returned to the medium-term target level of 2.0%.

A similar stance was taken by Schnabel's ECB colleague, Bundesbank President Joachim Nagel. On Friday, February 23, he stated that "it is still too early to cut rates, even if this step might seem tempting to some." According to Nagel, the price forecast is not clear enough yet, and key data on price pressure will only be received in Q2, which is when it might be appropriate to consider lowering interest rates.

The Bundesbank head believes that the period of rapid inflation decrease has ended, some setbacks are possible ahead, and in the coming months, inflation will remain noticeably above the target level of 2.0%. (According to the latest forecasts by MUFG Bank, CPI in the Eurozone is expected to be 2.7% in 2024).

EUR/USD surged to 1.0887 on Thursday February 22 and then fell to 1.0802, due to uneven business activity (PMI) data across various Eurozone countries. Preliminary estimates showed that France's manufacturing PMI jumped from 43.1 to 46.8 points, exceeding the expected 43.5. The services index rose from 45.4 to 48.0, surpassing the anticipated 45.7. Significantly exceeding expectations, these indicators ignited investor risk appetite, encompassing not only stock indices but also purchases of the common European currency against the dollar.

However, the joy of euro bulls was short-lived, halted by the publication of Germany's PMI. The manufacturing index of this powerhouse of the European economy plummeted from 45.5 to 42.3, against a forecast of 46.1. The Eurozone's manufacturing PMI dropped from 46.6 to 46.1, contrary to the expected rise to 47.0. It's important to note that all these indicators are below the key horizon of 50.0, indicating an economic downturn. Only the services sector reached this significant threshold of 50.0. Overall, the Eurozone's composite PMI increased to 48.9, the highest since June 2023, but it still remains in the negative zone for the seventh consecutive month.

Regarding the situation on the other side of the Atlantic, these indicators suggest economic growth in the US. Preliminary data showed that the business activity indicator in the services sector was 51.3 points, and in the manufacturing sector, 51.5. On Thursday, the traditional number of initial unemployment claims in the United States was also published, decreasing from 213K to 201K over the week (forecast was 217K), indicating a strengthening labour market.

EUR/USD closed the last week at 1.0820. According to some analysts, the recent macroeconomic data suggest that the dollar's weakening is a temporary phenomenon, and the DXY is expected to return to an upward trajectory. Only extraordinary events in the economy or politics could prevent this. As of the writing of this review, on the evening of Friday, February 23, 50% of experts voted for the strengthening of the dollar and the fall of the pair. 30% sided with the euro, while 20% took a neutral position. Among the oscillators on D1, only 10% are coloured red, 15% are in neutral grey, and 75% are green, with 20% of them in the overbought zone. The balance among trend indicators is different: 35% are red, and 65% are green. The nearest support for the pair is located in the 1.0800 zone, followed by 1.0725-1.0740, 1.0695, 1.0620, 1.0495-1.0515, 1.0450. Bulls will encounter resistance in the areas of 1.0840-1.0865, 1.0925, 1.0985-1.1015, 1.1050, 1.1110-1.1140, 1.1230-1.1275.

Key events to highlight for the upcoming week include Tuesday, February 27, when updates on US durable goods orders will be released. Preliminary data on the American GDP volume for Q4 2023 will follow the next day. Data on retail sales and consumer prices (CPI) in Germany will be published on Thursday, along with the Personal Consumption Expenditures Index and labour market statistics in the US. Significant volatility can be expected towards the end of the working week. On the first day of spring, the annual inflation rate (CPI) in the Eurozone and the final figures of the Business Activity Index (PMI) in the United States will be disclosed.

GBP/USD: UK Economy Gains Momentum

Alongside business activity data from the US and the Eurozone, preliminary indicators for the United Kingdom were also released on Thursday, February 22. The UK's manufacturing sector Business Activity Index (PMI), though slightly below the forecast of 47.5, showed a modest increase from 47.0 to 47.1 points. The services sector indicator remained steady at 54.3. However, the composite PMI reached 53.3, surpassing both the forecast and the previous value of 52.9. Values in the green zone above 50.0 clearly indicate an improvement in the outlook for the British economy. It seems that the technical recession experienced in the second half of 2023 has ended or is at least close to ending.

In a previous review, we cited economists from Scotiabank's forecast that, starting from a strong long-term support zone of 1.2500, GBP/USD would begin to rise towards 1.2700. This prediction came true on 22 February, following the publication of the British PMI, as the pair reached a peak of 1.2709, returning to the very centre of the medium-term sideways channel of 1.2600-1.2800.

Favourable data on the UK economy and the recovery of global risk appetites should have a positive impact on the pound. In such a situation, strategists from the Japanese MUFG Bank write, "if the Fed and the ECB delay the timing of the first rate cut, then the Bank of England (BoE) will delay it as well." Recall that at the conclusion of the meeting that ended on February 1, the BoE announced it would keep the bank rate at its current level of 5.25%. The accompanying statement mentioned that "before lowering rates, more evidence is needed that the Consumer Price Index will fall to 2.0% and remain at this level." Market participants expect the first rate cut to occur in August. This expectation is already priced in and prevents GBP/USD from falling.

MUFG believes, "although the pound's correlation with global stocks has begun to weaken, it remains stronger than the dollar's correlation with risk. And if risk appetite persists, this could cause some strengthening of the pound." However, the bank's experts warn that some concerns about the growth of the British economy still remain, and this could restrain the growth of GBP.

GBP/USD closed the past week at 1.2670. As for the median forecast of analysts for the coming days, 65% voted for the pair's decline, while 35% supported its growth. Among the oscillators on D1, only 10% point south, 15% look east, and the remaining 75% point north, of which 10% signal overbought conditions. Trend indicators show a significant bias towards the British currency: 90% point north, with the remaining 10% pointing south. Should the pair move southward, it will encounter support levels and zones at 1.2635-1.2650, 1.2570, 1.2500-1.2535, 1.2450, 1.2370, 1.2330. In case of an increase, resistance will be met at levels 1.2695-1.2710, 1.2755-1.2775, 1.2825, 1.2880, 1.2940, 1.3000, and 1.3140-1.3150.

No significant macroeconomic data releases related to the UK economy are scheduled for the upcoming week.

continued below...

 

[Stan NordFX]

USD/JPY: To the Moon and Beyond, Mars is Next

The yield on 10-year US Treasury bonds, currently around 4.30%, continues to support the dollar against the yen, with its low yield and negative interest rates. USD/JPY once again rose above 150.00 last week and attempted to storm the 151.00 mark. Again, it was unsuccessful: the local maximum was recorded at 150.76, with the week closing at 150.52.

The caution of bulls on USD/JPY is largely due to the fact that the 150.00-152.00 zone was where the Ministry of Finance of Japan initiated currency interventions in October 2022 and November 2023. However, every trader knows that past results do not guarantee future performance. Thus, it is not certain that the Ministry of Finance and the Bank of Japan (BoJ) will follow the same path this time.

It should be noted that Japan's GDP has fallen for the last two quarters. A weak national currency supports exporters by making Japanese products more attractive and competitive in foreign markets, thereby stimulating the country's economy. This explains the reluctance of Japanese financial regulators to tighten monetary policy. According to Kazuo Ueda, the head of the BoJ, the question of maintaining or changing monetary policy, including the negative interest rate, will only be considered "when there is a chance of sustainable and stable achievement of the target price level."

As mentioned, the likelihood of a reversal in USD/JPY southward from the 151.00-152.00 zone is high, yet it remains less than 100%. Currently, the pair's rate is approximately 14% higher than a year ago. As some experts note, the financial authorities in Japan start to get nervous when this figure approaches 20% year-on-year. For now, they can feel relatively relaxed and comfortable, especially since the country's economy has already adapted to such an exchange rate over the past two years. Therefore, it's not entirely out of the question that instead of falling to 140.00 as expected by Danske Bank, we might see the pair reach heights of 160.00, as was the case 34 years ago in April 1990.

Regarding the near future, specialists at Singapore's United Overseas Bank believe that within one to three weeks, USD/JPY is likely to trade within the range of 148.70 to 150.90. However, UOB does not rule out that a breakthrough above 150.90 could trigger a rise to 152.00. At the time of writing this review, 40% of experts sided with the dollar, while the majority (60%) voted for the strengthening of the yen. Trend indicators and oscillators on D1 all point north, yet 10% of the latter are in the overbought zone. The nearest support level is located in the zone of 149.70-150.00, followed by 148.25-148.40, 147.65, 146.65-146.85, 144.90-145.30, 143.40-143.75, 142.20, 140.25-140.60. Resistance levels and zones are at 150.90, 151.70-152.05, and 153.15.

No significant events related to the Japanese economy are scheduled for the upcoming week.

continued below...

 

[Stan NordFX]

CRYPTOCURRENCIES: Five Reasons for the End of the Crypto Winter

Throughout the past week, there was a lull in the battle between bitcoin bears and bulls. Choosing $51,500 as the Pivot Point, BTC/USD moved sideways in a narrow corridor of $50,500-$52,500. Bulls' attempt to break through resistance on 20 February ended in failure, and the pair returned to its defined boundaries. However, as experience shows, any calm is not everlasting. It is inevitably replaced by thunder rolls, stormy winds, and squally showers, especially true for the highly volatile crypto market. So, what can we expect if the weather changes?

According to Lucas Outumuro, head of research at IntoTheBlock, there's an 85% likelihood that bitcoin will reach a new all-time high within the next six months, potentially surpassing $70,000. The analyst identified five factors that could catalyse this growth.

1. Halving in April: This will be the fourth halving event, reducing the block reward from 6.25 BTC to 3.125 BTC, leading to decreased selling pressure. Outumuro does not rule out the possibility of bitcoin reaching an all-time high (ATH) just a month after the halving.

2. Continued inflow into spot Bitcoin ETFs: While the duration of strong inflows remains uncertain, a stable inflow over time is expected to bolster the price of bitcoin by increasing demand.

3. Federal Reserve's interest rate policy: The Fed's stringent stance on interest rates in 2022 laid the groundwork for a bearish trend in risk assets, including the crypto market. With inflation dropping from 10% to 3% by 2024, many anticipate a policy shift by the Fed and the beginning of a rate-cutting cycle. "This expectation is likely the main driving force behind the recent rallies in both bitcoin and stocks... This time, bitcoin's price movement has been more closely linked with traditional assets, leading to its correlation with the Nasdaq and S&P 500 reaching two-month highs," explains Outumuro.

4. US Presidential Elections: Despite the current President Joe Biden's general opposition to digital assets, election campaigns positively impact the crypto market. "The prediction market Polymarket currently gives Biden just a 33% chance of re-election, making Donald Trump, who is significantly more crypto-friendly, the most likely victor," reports IntoTheBlock. The Fed may begin to ease its monetary policy more aggressively to increase the current US President's re-election chances, benefiting stock and cryptocurrency markets.

5. Hedge Funds: Outumuro points out that when bitcoin recovered after the COVID-19 pandemic in 2020, traditional financial giants first recognized cryptocurrency's potential. With the launch of spot Bitcoin ETFs, hedge funds have the opportunity to accumulate a new asset class, leading to increased adoption and acceptance of digital assets.

However, IntoTheBlock acknowledges that these scenarios could change due to several factors. For instance, if the Fed does not ease policy, bitcoin could face a 10% correction. Geopolitical conflicts also negatively impact digital gold's price. Unexpected selling pressure in the event of major player bankruptcies is not ruled out.

As mentioned (in point 3), the correlation between bitcoin and the S&P 500 is increasing, suggesting BTC could rise alongside the US stock market. Following the S&P 500 surpassing 5,000 points, investment bank Goldman Sachs revised its end-of-year forecast for the index to 5,200, potentially providing additional support for bitcoin.

Every trader knows that determining the optimal moment to sell an asset is just as important as the decision to buy it. Dennis Liu, also known as Virtual Bacon, shared his bitcoin investment methodology a few days ago, identifying three elements designed to signal that the market may have reached its peak.

1. Specific Price Milestones: The first sign to look out for is reaching certain price milestones: $200,000 for bitcoin and $15,000 for Ethereum. Liu's assumption is based on historical cycles and diminishing returns. This is a clear, quantifiable indicator that eliminates guesswork when deciding to exit a position.

2. Time-based Exit Strategy: The second benchmark Liu mentions is time-bound. Regardless of the asset's price dynamics, the trader plans to exit positions by the end of 2025. This decision is grounded in the importance of historical patterns and is based on the analysis of halving cycles and the duration of bull markets.

3. Monitoring Price Patterns: The last element of Liu's methodology involves closely monitoring price patterns, specifically BTC's behaviour relative to its 200-day and 21-week exponential moving averages (EMAs). A fall below these support levels would signal the need to sell bitcoin.

It's clear that $200,000 for bitcoin is a forecast, and moreover, a forecast for the relatively distant future. As for the near future, as we've noted, many on-chain indicators from Glassnode have already entered what's termed the "risk zone." They record a relatively low level of realized profit considering the active price growth in the last four weeks. According to Glassnode specialists' observations, a high risk indicator is usually seen in the early stages of a bull market. This is because, upon reaching a "significant level" of profitability, hodlers may begin to take profits, potentially leading to a sharp correction downwards.

Analyst Gareth Soloway suggested that bitcoin could potentially fall to the $30,000 mark, especially if the stock market undergoes a correction. The expert referred to the new potential support for bitcoin as the "line in the sand." "My main line in the sand is between $30,000 to $32,000. [...]. If we drop there, I'll start buying quite large volumes of BTC," he wrote.

Investor and founder of MN Trading, Michael Van De Poppe, also advises investors to wait for a 20-40% correction before entering the market. The specialist believes that a bitcoin pullback could occur upon reaching the $53,000-$58,000 zone. "However," adds Van De Poppe, "if you're buying bitcoin with the intention to hold it for two to three years, and if you believe it will rise to $150,000 during that period, then nothing should stop you from purchasing it at these [current] prices."

While the leading cryptocurrency has been in a flat trend over the last week (a 4% fluctuation for BTC is definitely considered flat), its main competitor, Ethereum, has been significantly more active. Recovering from the previous year, this altcoin has shown excellent dynamics since the end of January, growing by more than 35% and reaching a significant level of $3,000. This is related to both a revival in the DeFi sector and hopes for the launch of ETH-based ETFs in May this year. Although previous reviews have cited several leading experts' doubts about this, there are also many optimists. For instance, analysts at Bernstein believe that the likelihood of the US Securities and Exchange Commission (SEC) approving an ETH-ETF in May is almost 50%, and there is almost a 100% certainty of approval within the next 12 months.

"Ethereum, with its dynamic yield rates, environmentally friendly design, and utility in creating new financial markets, has good prospects for mass institutional adoption. It's probably the only digital asset alternative to bitcoin that could receive unequivocal ETF approval from the SEC," Bernstein analysts argue. They believe that officials might be influenced by the fact that participants in the traditional stock market not only want to launch spot ETH ETFs similar to bitcoin ETFs but also express the intention "to build more transparent and open tokenized financial markets on the ETH network, where utility goes beyond simple asset accumulation." According to Standard Chartered bank estimates, with the anticipation of ETH-ETF approval, the coin's price could rise to $4,000 in the near future.

As of the evening of February 23 when this review is written, BTC/USD is trading in the $51,000 zone, and ETH/USD is at $2,935. The total market capitalization of the crypto market has remained unchanged over the week, standing at $1.95 trillion. The Crypto Fear & Greed Index has risen to the lower boundary of the Extreme Greed zone at 76 points (up from 72 a week ago).


NordFX Analytical Group


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

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

 

[Stan NordFX]

NordFX Secures Its First 2024 Award as Best Crypto Broker in South East Asia

Finance Derivative magazine announced the 2024 Awards, among which brokerage firm NordFX emerged victorious in the "Best Crypto Broker South East Asia 2024" category.

Finance Derivative is a publication and magazine specializing in financial news, analysis, and reports on trends in finance, banking, technology, and investments. The magazine covers a wide range of topics, from macroeconomic issues to specific investment instruments and strategies, making it a valuable resource for professionals in the financial sector.

The Finance Derivative Awards are an annual accolade that recognizes the outstanding achievements of companies leading in banking, insurance, fintech, brokerage services, and other sectors of the finance industry. These awards not only acknowledge the laureates' achievements but also set standards and serve as an important indicator for all industry participants.

"We would like to congratulate you and extend our special recognition for your pursuit of excellence," states the letter from the Finance Derivative editorial team. "Highlighting your outstanding results, we are pleased to announce that NordFX has been named the 2024 winner in the 'Best Crypto Broker South East Asia' category. Commenting on this award, experts note NordFX's innovative approaches, wide range of cryptocurrency pairs, high level of order execution, and the opportunity for margin trading, which allows traders to significantly increase potential profits.


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

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

 

[Stan NordFX]

CryptoNews of the Week

– Donald Trump, the former (and possibly future) president of the United States and leader of the Republican Party, stated in a conversation with Fox News that the current development of bitcoin will require regulatory intervention from the authorities. He mentioned that bitcoin has "come into its own life," adding, "Many people are accepting it. I see an increasing number of people wanting to pay with bitcoin, which is interesting. Probably, some regulation will be needed. But I think I could coexist with that." However, Trump has not yet leaned towards adopting bitcoin as a means of payment in the US. "I have always liked having one currency... I like the dollar," he said.

– In an interview with CNBC, Tom Lee, co-founder of analytics firm Fundstrat, predicted that the price of bitcoin could reach $150,000 in 2024. He cited several factors bolstering his forecast: ETFs boosting demand, the halving event reducing supply, and the expected relaxation of monetary policy, all of which favour risk assets like bitcoin. Lee also suggested that the crypto market is unlikely to see a correction anytime soon. Looking ahead, he reaffirmed his January prediction that bitcoin could hit $500,000 within the next five years, lauding it as a reliable form of money that has proven its utility. "It's an excellent store of value and a good risky asset, which is also incredibly secure," Lee added, underscoring the cryptocurrency's appeal.

– Contrary to the views of Tom Lee and Donald Trump, experts at the European Central Bank (ECB) maintain that the fair value of bitcoin is still zero, even amidst the approval of spot bitcoin ETFs in the US and the current price rally. In November 2022, ECB experts published an article titled "Bitcoin's Last Stand," in which they described the stabilization of the cryptocurrency's price as an artificially induced final gasp before its journey to ultimate obsolescence. Since then, the price of what's often referred to as digital gold has risen from ~$17,000 to ~$59,000. However, this increase has not swayed the bank's specialists to change their opinion. In a new essay titled "ETF Approval – The Emperor's New Clothes," they stated that their core arguments from over a year ago have proven to be correct. Firstly, bitcoin has failed as a global decentralized digital currency for payments. Secondly, the cryptocurrency has not become a viable investment asset, one that would inevitably appreciate in value.
"Bitcoin remains unsuitable as an investment," the essay reads. "It does not generate any cash flows (like real estate) or dividends (like stocks), cannot be productively used (like commodities), offers no social benefits (like gold jewellery), or subjective value based on exceptional skills (like works of art)," conclude the ECB experts.

– Renowned writer and investor Robert Kiyosaki has announced his intention to accumulate bitcoin and silver amid the escalating banking crisis. "Please be careful," he warned. "The banking crisis is intensifying. Central banks will push for CBDCs, central bank digital currencies, to monitor us." Kiyosaki revealed his strategy, stating, "I plan to acquire more bitcoin and silver coins. I will use them as a means of payment instead of counterfeit US dollars.".

– Nikolaos Panigirtzoglou, a senior analyst at JPMorgan, highlights that the activity of retail investors has been one of the main drivers behind the growth of bitcoin, ethereum, and other popular cryptocurrencies. Despite the recent introduction of spot BTC-ETFs, purchases by retail crypto investors, who often invest relatively small amounts, significantly exceed the cash flows from large corporations. (According to a recent JPMorgan survey, institutional investors have become less confident in the blockchain's potential: their numbers dropped to 7% in 2024).
"An increase in retail investor activity in February reflects the emergence of three key growth catalysts for the crypto market in the coming months: the reduction of BTC mining rewards, a major Ethereum network upgrade – Dencun, and the potential approval of spot ETH-ETFs in May," JPMorgan believes. The bank's analysts think that the first two catalysts are largely priced in, so they are unlikely to have a significant impact on the crypto market's dynamics. As for the approval of Ethereum-based exchange-traded funds, the likelihood is only 50%. Therefore, despite the upcoming positive events, caution is advised.

– ChatGPT-4 was asked to predict the price of bitcoin following the halving in April 2024. The artificial intelligence noted that "looking at historical trends, it's evident that the price of bitcoin usually experiences significant growth within a year after such an event." Based on this observation, the AI suggested that a similar increase could occur this time as well. Consequently, by August 2025, the price of BTC could reach $179,000.
Alongside this prediction, ChatGPT-4 acknowledged the difficulty of making accurate forecasts due to the influence of various economic, regulatory, and technological factors. Therefore, "it's important to bear in mind that these figures are speculative and depend on a wide range of unpredictable factors."

– After breaking through the $56,000 level, legendary trader, analyst, and head of Factor LLC, Peter Brandt, revised his forecast for the price of the leading cryptocurrency in 2025 from $120,000 to $200,000. The expert raised the bar because bitcoin had breached the upper boundary of resistance in a 15-month channel (on the BTC/USD chart, these are trend lines that connect the lows of November 2022 and September 2023, as well as the highs of April 2023 and January 2024). According to Brandt, the current bullish cycle will conclude in August-September 2025, by which time the quotes of digital gold are expected to reach the stated target.
Regarding the point of exiting the position, Brandt, half-jokingly or seriously, stated that he would use laser eyes on the X network as a "contrary indicator," just as in 2021. "So, folks," he urged, "if you want bitcoin to maintain a strong trend, please do not post laser eyes on your social media profile pictures. Too many laser eyes signal a time to sell."

– On January 25, malefactors gained control over the MicroStrategy company account on the X network and posted malicious links to a fake "token giveaway" for MSTR tokens. Following the link in the post, users were prompted to connect their wallet and request a bogus AirDrop, enabling hackers to take control over the victims' addresses. It's worth noting that some market participants pointed out the clear deception, as MicroStrategy, a company exclusively focused on bitcoin, would unlikely launch a token on Ethereum. Nevertheless, there were still those who fell for the scammers' tricks. According to on-chain detective ZachXBT, the estimated losses of the victims amounted to about $440,000.

– Investor, Heisenberg Capital founder, and Keiser Report host Max Keiser has likened investing in bitcoin to buying shares of Warren Buffett's Berkshire Hathaway in March 1985, when they were priced at $1,500 each. Since then, the value of these shares has increased to $629,000. According to Keiser, bitcoin could potentially see an increase of more than 41,000%. If the leading cryptocurrency were to experience such explosive growth, each coin would be valued at over $21,000,000. In this scenario, the market capitalization of the digital asset would surpass $450 trillion, greatly exceeding the valuations of the world's largest corporations. For comparison, the current market capitalization of Apple Inc. is $2.82 trillion, positioning it as one of the most valuable companies globally. Following are Microsoft with a valuation of $2.0 trillion, Alphabet with $1.77 trillion, and Amazon with $1.6 trillion.
Additionally, Max Keiser has issued a warning to traders and investors about a potential significant downturn in the US stock market akin to the crash of 1987. He stated, "A crash like in 1987 is coming. bitcoin is the perfect safe haven, with its price possibly soaring above $500,000."
Analysts at investment firm ARK Invest have also ventured a bold prediction that bitcoin's price could escalate to $2.3 million per coin. However, realizing such a scenario would necessitate a significant shift in the redistribution of global assets towards the premier cryptocurrency.


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

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

 

[Stan NordFX]

February 2024 Results: NordFX Top 3 Traders and New Unique Bonus

NordFX, a brokerage firm, has summarized the trading performance of its clients for February 2024. The effectiveness of social trading services, PAMM and CopyTrading, as well as the profits earned by the company's IB partners, were also evaluated.

- The best result in February was achieved by a trader from Southeast Asia, account number 1745XXX, who made a profit of 70,757 USD through transactions with gold (XAU/USD).
- The gold pair XAU/USD, along with the British pound (GBP/USD), assisted a client from Western Asia, account number 1704XXX, in securing the second spot on the podium with earnings of 45,303 USD.
- Third place went to another trader from Southeast Asia, the owner of account number 1748XXX. Utilising the same instrument, XAU/USD, they managed to gain a profit of 25,570 USD.

The following situation has emerged in the passive investment services of NordFX:

The PAMM service at NordFX continues to attract investors' attention to the "Trade and earn" account, which opened in March 2022. After four months of dormancy, it reactivated in November of the same year. For a long time, its maximum drawdown did not exceed 17%. However, at the end of 2023, the account manager made a significant mistake, and within a few days, the drawdown neared a risky 60%. Fortunately, the manager was able to rectify the situation, resulting in a sharp increase in profitability, exceeding 477% over 16 months of operation.

In our last review, we also highlighted a startup named Kikos2. A month later, it remains showcased in the PAMM service, boasting a profit of 394% within 101 days of its existence, despite a significant maximum drawdown of around 60%. Therefore, in this and all other cases, investors must exercise maximum caution and be prepared for both profits and losses.

Those familiar with NordFX's passive investment services will likely know the accounts named KennyFXPRO, the oldest of which has been operating for over three years. This time, we want to highlight two new accounts created by this manager. The first, KennyFXPRO - The CAD Bank, has shown a profit of 7% in 87 days with a very low maximum drawdown of less than 5%. The profitability of the second, KennyFXPRO - Road to 250, was nearly 15% over 89 days, with a drawdown of less than 7%.

In CopyTrading, we continue to monitor the yahmat-forex signal, which has shown a return of 372% over 251 days, with a maximum drawdown of 37%. Among the startups, it's worth noting the FxBro Tradings account, which has demonstrated a return of 26% in just 23 days, with a maximum drawdown of less than 8%.

Among the IB partners of the brokerage firm NordFX, the top 3 are as follows:
- The largest commission reward in February was credited to a partner from Southeast Asia, account number 1743XXX, amounting to 10,975 USD.
- Following them is their colleague from Western Asia, account number 1645XXX, who earned 6,137 USD for the month.
- Finally, completing the top three leaders is another partner from Southeast Asia, account number 1516XXX, who received a commission of 5,535 USD.

***

Attention! Starting from February 20, clients of the brokerage firm NordFX have been given the opportunity to participate in a new accumulation program called the Margin Call Bonus. The program's uniqueness lies in the fact that traders earn bonus funds for themselves: the more actively they deposit into their account and the more actively they trade, the larger the amount they can receive when a Margin Call occurs.


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

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

 

[Stan NordFX]

Forex and Cryptocurrencies Forecast for March 04 - 08, 2024​

EUR/USD: Weak Bulls vs. Weak Bears

Throughout the past week, EUR/USD has been trading within a narrow channel. News favouring the euro pushed it towards the resistance level at 1.0865, while positive developments for the dollar brought it back to the support level at 1.0800. However, neither the bulls nor the bears had enough strength to break through these defence lines.

The preliminary GDP data for the US in Q4 2023, released on Wednesday, 28 February, put pressure on the American currency as it fell short of both forecasts and the previous figure – 3.2% against 3.3% and 4.9%, respectively. However, the dollar managed to recover its losses the following day. This rebound was related to the Personal Consumption Expenditures (PCE) Index in the US, a measure used by the Federal Reserve to calculate inflation levels and a crucial factor in determining the regulator's future actions.

The US Bureau of Economic Analysis report, released on 29 February, revealed that the Core PCE, which excludes volatile food and energy prices, stood at 2.8% year-on-year in January. This was slightly below the previous value of 2.9% but matched analysts' forecasts precisely. On a monthly basis, the PCE increased from 0.1% to 0.4%. Market participants were immediately reminded of previously published data on consumer (CPI) and producer (PPI) inflation, which were higher than expected. This convinced them that, despite the GDP decline, the regulator might continue to postpone the start of easing its monetary policy. (Currently, the market expects the Fed to begin a rate-cutting cycle in June).

Hawkish comments from Federal Reserve officials, following the PCE publication, supported the American currency. Mary Daly, head of the Federal Reserve Bank of San Francisco, stated that lowering rates too quickly could lead to inflation stagnation. Meanwhile, her colleague, Raphael Bostic, president of the Federal Reserve Bank of Atlanta, suggested that it might be appropriate to start cutting rates in the summer.

The sellers of the single European currency were also influenced by relatively weak statistics from the Eurozone, where the volume of consumer lending in January showed the slowest growth since 2016. This indicator increased by only 0.3%. Experts cite the pressure on consumers from the high interest rates of the European Central Bank (ECB) as the main reason for this trend, which could become an additional argument for lowering them.

Regarding consumer inflation, the figures in Europe were quite mixed. Data published at the beginning of the last week from Spain and France came out stronger than forecasts. Meanwhile, in Germany, the CPI fell from 3.1% to 2.7% year-on-year, aligning with market expectations. The dynamics of EUR/USD could have been influenced by the Eurozone's overall figures, which were published on the first day of spring. The preliminary report from Eurostat showed that the Consumer Price Index (CPI) increased by 2.6% year-on-year in February, lower than the 2.8% growth in January but above the 2.5% forecast. Core inflation for the month decreased to 3.1% year-on-year compared to the previous figure of 3.3%, but it exceeded expectations of 2.9%. While inflation fell on a yearly basis, it sharply rose on a monthly basis, from a negative -0.4% to +0.6%.

At the very end of the working week, the final values of the Manufacturing Sector Purchasing Managers' Index (PMI) in the United States were released, somewhat disappointing market participants. The PMI for February fell from 49.1 to 47.8 points, despite being expected to rise to 49.5. As a result, after rebounding from the support level at 1.0800, EUR/USD once again moved upward, closing the week at 1.0839. As for the near-term forecast, as of the evening of Friday, 1 March, 45% of experts voted for the dollar's strengthening and the pair's decline. 30% sided with the euro, while 25% held a neutral position. Among the oscillators on D1, only 20% are coloured red, another 20% are in neutral grey, and the remaining 60% are green, with 10% of them in the overbought zone. Among the trend indicators: 20% are red, and 80% green. The nearest support levels for the pair are found at 1.0800, followed by 1.0725-1.0740, 1.0680-1.0695, 1.0620, 1.0495-1.0515, and 1.0450. Resistance zones are located at 1.0845-1.0865, 1.0925, 1.0985-1.1015, 1.1050, 1.1110-1.1140, and 1.1230-1.1275.

As for the upcoming week, the value of the Services Sector Purchasing Managers' Index (PMI) in the US will be announced on Tuesday, 5 March. Wednesday and Thursday are set to bring a batch of data from the US labour market, with Federal Reserve Chairman Jerome Powell scheduled to speak in Congress on the same days. The main event of the week will be the European Central Bank (ECB) meeting on Thursday, 7 March. Market participants expect the pan-European regulator to leave the interest rate unchanged at 4.50%, so the subsequent press conference by the central bank's leadership and their comments on future monetary policy will be of particular interest. The end of the week could also prove to be quite volatile. On Friday, 8 March, we will first receive data on the Eurozone's GDP for Q4 2023, followed by a batch of very important statistics from the American labour market, including the unemployment rate, average wage level, and the number of new jobs created outside the agricultural sector (Non-Farm Payrolls, NFP).

GBP/USD: Will the Budget Bolster the Pound?

With the European Central Bank (ECB) meeting just a few days away, the Federal Reserve (Fed) and the Bank of England (BoE) meetings are not due for a while: on 20 and 21 March, respectively. The nearest key event for the sterling pound in the coming week will be the announcement of the budget by the UK Government on Wednesday, 6 March. This budget is pre-election, and therefore, according to strategists at the Dutch Rabobank, it could have a significant impact on the British currency, which in 2024 is the second most successful G10 currency after the US dollar.

It's worth noting that, according to current rules, general elections in the UK must take place no later than 28 January 2025. According to The Guardian, Prime Minister Rishi Sunak is leaning towards holding them in the second half of 2024. However, The Daily Telegraph reports that elections for the lower house of the British Parliament could occur even earlier: as soon as this spring.

Economists at Rabobank anticipate that the pre-election budget will include fiscal incentives, which could serve as a new stimulus for strengthening the pound. This entails a moderate easing of fiscal policy, potentially involving changes more in national insurance than in income tax. Any reforms that could boost incentives to work or changes in regulation that might enhance investment incentives will be of particular interest to the market. An increase in the labour force would contribute to economic growth and, therefore, could be seen as a favourable factor for the British pound.

Both Rabobank and the Japanese MUFG Bank believe that the extent of potential fiscal incentives is unlikely to be sufficient to significantly improve the metrics of the British economy. However, even a small number of such stimuli is likely to reinforce the general view that the Bank of England will not be in a hurry to cut interest rates and will not do so either in May or June.

Let's recall that at its meeting on 1 February, the Bank of England (BoE) maintained the rate at the previous level of 5.25%. The accompanying statement mentioned that "more evidence is needed that the Consumer Price Index will fall to 2.0% and remain at this level before cutting rates." Market participants are anticipating the first rate cut to occur in August. This expectation has already been factored into prices and prevents GBP/USD from declining.

However, if inflation remained unchanged at 4.0% in February and the country's GDP contracted by -0.3%, it seems the Government intends to bolster the economy with new fiscal incentives. Nonetheless, if these measures do not lead to GDP growth, discussions may once again turn towards an imminent rate cut, which would exert pressure on the pound.

GBP/USD concluded the past week at the level of 1.2652, failing to break out of the medium-term sideways channel of 1.2600-1.2800. Regarding the analysts' forecast for the near future, their opinions were evenly divided: a third voted for the pair's decline, a third for its rise, and a third remained neutral. Among the oscillators on D1, 25% point south, 40% look north, and the remaining 35% are pointing east. Trend indicators, as a week ago, show a significant bias towards the British currency – 80% indicating north and 20% south. Should the pair move southward, it will encounter support levels and zones at 1.2575-1.2600, 1.2500-1.2535, 1.2450, 1.2375, and 1.2330. In the event of a rise, it will meet resistance at levels 1.2695-1.2710, 1.2785-1.2815, 1.2880, 1.2940, 1.3000, and 1.3140.

Besides the announcement of the country's budget on 6 March, no significant macroeconomic statistics regarding the economy of the United Kingdom are scheduled for release in the coming week.

continued below...

 

[Stan NordFX]

USD/JPY: Petal Predictions

There's an ancient method of fortune-telling with a flower. A girl takes a flower in her hand and plucks the petals one by one: the first one means someone will love her, the second means they won't, the third means love, the fourth means no love, and so on until the petals run out. The fate declared by the last petal is believed to come true. This method of fortune-telling can quite aptly be applied to the Bank of Japan (BoJ): will change its monetary policy, won't change, will change, won't change...

Low interest rates make the yen cheap, which in turn stimulates exports, making Japanese goods competitive in foreign markets. However, on the flip side, it creates problems for the national industry as it makes imports more expensive, primarily the import of raw materials and energy resources.

In January, the trade balance was sharply negative. If in December the balance was in favour of imports (+69 billion yen), in January, it collapsed to minus 1758 billion yen. Looking at the balance for the entire year of 2023, imports often lost to exports. Industrial production decreased by -7.5% in January, which is worse than the previous growth of +1.4% and the forecast of -6.7%. Thus, Japanese officials, like with the flower method, wonder what is better and more important – supporting the economy or fighting inflation. Meanwhile, the BoJ does not take any concrete steps but limits itself to vague statements, often very contradictory.

On 29 February, following hawkish comments from Bank of Japan (BoJ) Board member Hajime Takata, the yield on Japanese government bonds rose from 0.68% to 0.71%, and USD/JPY plummeted from 150.14 to 149.20. This high-ranking official stated that the BoJ should consider the possibility of adopting flexible countermeasures, including moving away from monetary easing policies, which investors interpreted as a signal for a rate hike.

However, just a day later, Kazuo Ueda, the head of the Bank of Japan, stated that the country's economy would continue to recover gradually, and the GDP decline in the fourth quarter was somewhat of a correction after the strong growth spurred by the economic restart post-COVID pandemic. According to Ueda, inflation is decreasing at a faster pace than expected, without any rate hikes. Following this, USD/JPY reversed direction, heading north and rising to 150.70.

The main advantage of the yen right now is that while the major G10 central banks are considering easing their policies, the Bank of Japan can only contemplate tightening its policy. It is clear that it will not lower its already negative interest rate of -0.10%. Commerzbank still does not rule out the possibility that the BoJ may decide to take initial steps towards normalizing its monetary policy soon. "However, we expect this to be limited in nature," write the bank's economists. "As in 2000 and 2006, the first interest rate hikes are likely to slow inflation. After that, there will be no further normalization." As a result, Commerzbank forecasts a gradual decline in USD/JPY to 142.00 by December this year, followed by a steady rise to 146.00 by the end of 2025.

Last week concluded at 150.10 for the pair, following the release of weak PMI data in the US manufacturing sector. Looking ahead, the analysts' median forecast positions 60% in favor of the bears for the USD/JPY pair, 20% for the bulls, and 20% remain indecisive. On the D1 oscillators, 65% are green (with 10% in the overbought zone), and the remaining 35% display a neutral-grey color. Similarly, 65% of the trend indicators are green, with 35% red. The nearest support level is at 149.60, followed by 149.20, 148.25-148.40, 147.65, 146.65-146.85, 144.90-145.30, 143.40-143.75, 142.20, and 140.25-140.60. Resistance levels and zones are at 150.90, 151.70-152.05, and 153.15.

In the upcoming week's calendar, Tuesday, 5 March, is notable for the announcement of the Consumer Price Index (CPI) in the Tokyo region. There are no other significant events related to the Japanese economy scheduled for the near future.

continued below...

 

[Stan NordFX]

CRYPTOCURRENCIES: New Records for the "Naked King"

Last week, bitcoin set historical highs against local currencies in many countries. Now, the leading cryptocurrency is aiming to test and possibly surpass its all-time high of $68,917, reached on 10 November 2021. At least, the current dynamics suggest this goal: starting from $50,894 on Monday, 26 February, BTC/USD soared to $63,925 by Wednesday, gaining more than 25% in just three days. At this point, the Bitcoin Fear & Greed Index jumped to 82 points, entering the Extreme Greed zone. As Matt Simpson, a senior market analyst at City Index, wrote, "If this were any other market, it would probably be classified as 'peak overheating – stay away from this bubble.' But bitcoin has entered a parabolic rally phase, and there are no immediate signs of a peak forming.".

Let's recall that on 1 February, BTC was trading at $41,877. Thus, in 29 days, the digital gold gained approximately 50%, making this past February the most successful month for investors in the last three years. We thoroughly examined the five reasons behind the ongoing bull rally in our previous review, ranging from the most to the least important. Large investments in spot Bitcoin ETFs acted as a catalyst for the frenzied demand for bitcoin. However, as noted by JPMorgan, purchases by retail crypto investors with relatively small amounts have even surpassed the cash flows from large companies at this point.

Glassnode analysts believe that the current situation resembles the boom observed in 2020–2021. The dynamics of capital flows, exchange activity, leverage in crypto derivatives, and demand from both institutional and retail speculators all indicate an explosion in investors' risk appetite. Signs of speculative sentiment have also emerged in the derivatives market. The total open interest (OI) in bitcoin futures reached $21 billion and is also approaching the euphoria levels of 2021. Only in 7% of trading days was the OI value higher. The substantial increase in the liquidation of short positions on bitcoin acted as an additional trigger.

Investor, founder of Heisenberg Capital, and host of the Keiser Report, Max Keiser, compared investing in the leading cryptocurrency to buying shares of Warren Buffett's Berkshire Hathaway in March 1985, when they were priced at $1,500 each. Since then, the price of these shares has risen to $629,000. According to Keiser, bitcoin has the potential to increase by more than 41,000%. If the leading cryptocurrency experiences such rapid growth, each coin would be worth over $21,000,000, and the digital asset's market capitalization would exceed $450 trillion. (For comparison, the current market capitalization of Apple Inc. is $2.82 trillion, making it one of the most valuable companies in the world, followed by Microsoft at $2.0 trillion, Alphabet at $1.77 trillion, and Amazon at $1.6 trillion).

Furthermore, Max Keiser warned traders and investors of a potential major crash in the US stock market. He stated, "A crash akin to 1987 is coming. Bitcoin is the perfect safe haven, whose price will soar above $500,000." It should be noted that bitcoin has completely "decoupled" from such risk assets as stocks, and its correlation with stock indices such as the S&P500, Dow Jones, and Nasdaq has virtually dropped to zero.

After BTC/USD broke through the $56,000 level on 27 February, legendary trader, analyst, and head of Factor LLC, Peter Brandt, revised his forecast for the first cryptocurrency's rate in 2025 from $120,000 to $200,000. The expert raised the bar as bitcoin overcame the upper boundary of resistance of a 15-month channel (on the BTC/USD chart, these are the trend lines that connect the lows of November 2022 and September 2023, as well as the highs of April 2023 and January 2024). According to Brandt, the current bullish cycle will conclude in August-September 2025. By that time, the quotes of the digital gold should reach the stated goal.

Regarding the exit point from the position, Brandt, half-jokingly, half-seriously, wrote that he would use laser eyes on the X network as a "contrarian indicator," just as in 2021. "So, folks," he urged, "if you want bitcoin to maintain a strong trend, please do not post laser eyes on your social media profile picture. Too many laser eyes are a sell signal."

A similar figure was mentioned by ChatGPT-4. According to this Artificial Intelligence, by August 2025, the price of BTC could reach $179,000. However, ChatGPT-4 acknowledged the difficulty of precise forecasting and warned that "these calculations are speculative and depend on a wide range of unpredictable economic, regulatory, and technological factors.".

Regarding the current year, 2024, the price of the first cryptocurrency could reach $150,000 in the next 10 months. This opinion was expressed by Tom Lee, co-founder of the analytical firm Fundstrat, in an interview with CNBC. "ETFs increase demand, halving reduces supply, and the expected easing of monetary policy all support risk assets and bitcoin," he explained. At the same time, the expert believes that a correction in the crypto market should not be expected in the near future. In the long-term perspective, Lee reiterated his January forecast of bitcoin reaching $500,000 within five years. "It's sound money, I think it's proving its utility. It's a great store of value, a good risk asset, and also incredibly safe," added the Fundstrat co-founder.

As of the review's writing on the evening of Friday, 1 March, BTC/USD is trading in the vicinity of $62,500. The total market capitalization of the crypto market has surpassed an important threshold of $2 trillion and reached $2.34 trillion (up from $1.95 trillion a week ago). The Crypto Fear & Greed Index has risen from 76 to 80 points and is in the Extreme Greed zone.

And finally, a fly in the ointment amidst the general rejoicing. Contrary to numerous bitcoin enthusiasts, experts at the European Central Bank believe that the fair value of BTC is... zero. And this is despite the approval of spot bitcoin ETFs in the US and the current price rally.

In November 2022, ECB experts published an article titled "Bitcoin's Last Stand". There, they referred to the stabilization of the cryptocurrency's quotes as "an artificially induced last gasp before the road to ultimate irrelevance". Since then, the price of digital gold has risen from ~$17,000 to ~$60,000. However, this has not caused the bank's specialists to change their opinion. In a new essay titled "ETF Approval - New Clothes for the Naked King", they stated that they were right in their main arguments more than a year ago. Firstly, bitcoin has failed as a global decentralized digital currency for payments. Secondly, the cryptocurrency has not become a suitable investment asset whose value will inevitably increase.

"Bitcoin is still not suitable as an investment," the essay states. "It does not generate any cash flows (like real estate) or dividends (like stocks), cannot be productively used (like commodities), does not offer any social benefits (like gold jewellery), or subjective value based on outstanding abilities (like works of art)," believe ECB experts. It would be interesting to see what they would say if, for example, Max Keiser's forecast comes true, and the "naked king" is worth $21 million per coin.


NordFX Analytical Group


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

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

 

[Stan NordFX]

CryptoNews of the Week

– Bitcoin appreciated by about 10% in less than a day on March 4, reaching a new all-time high of $69,016. The previous record was $68,917, set on November 10, 2021. The market capitalisation of the leading cryptocurrency exceeded $1.3 trillion. Most of the top 10 crypto assets also saw a 10-30% increase in value over the week.

– The surge in bitcoin on March 4 is reportedly due to purchases by a certain billionaire from Qatar, who flew to Madeira on his private jet for the three-day Bitcoin Atlantis conference. Robert Rodin, CEO of Keychainx, mentioned seeing something at Madeira airport that "could change bitcoin forever." Meanwhile, BTC maximalist Max Keiser shared a video in which El Salvador's President Nayib Bukele greets the Emir of Qatar with the words "It's happening!"
This has sparked discussions about Qatar adding bitcoin to its balance sheet. The validity of such claims remains unproven, but social media is rife with speculation on the matter. It's worth noting that rumours have been circulating for several months about one or two sovereign wealth funds or investment companies from the Middle East secretly buying up bitcoin. There's also the mysterious Mr. 100BTC, who, according to rumours, has been consistently buying 100 bitcoins every day since November 2022. This individual has never emerged from the shadows, but if he does indeed exist, he would have amassed about 60,000 coins to date.

– "We have entered the era of the bitcoin gold rush. It started in January 2024 and will last approximately until November 2034," declared Michael Saylor, the founder of MicroStrategy, speaking at Bitcoin Atlantis. According to his calculations, by that time miners will have extracted 99% of all coins, marking the beginning of the "growth phase." (Currently, 93.5% have already been mined, according to BitcoinTreasuries data).
Saylor believes that at present, only 10-20% of asset managers are interested in spot BTC-ETFs. In the future, as existing barriers are removed, this figure is expected to approach 100%. "When they [the managers] can buy BTC through a bank, a platform, or a prime broker, they'll spend $50 million in an hour," he stated. The MicroStrategy founder is also confident that "the day will come when bitcoin surpasses gold and will be traded more than the S&P 500 ETFs."

– Since its network launch in 2009, bitcoin has repeatedly proven its viability. Over the years, the cryptocurrency has managed to surpass many traditional currencies. Currently, BTC has outperformed the Russian rouble in market capitalisation and occupies the fourteenth position in the overall ranking of the world's largest currencies. Its nearest competitor is the Swiss franc. (Following the news that bitcoin surpassed the rouble, the internet was flooded with jokes suggesting that Vladimir Putin is Satoshi Nakamoto).
In the overall ranking of the most capitalised assets, which includes precious metals and companies, bitcoin has taken the tenth place. It surpassed Berkshire Hathaway, the company of well-known cryptocurrency critic billionaire Warren Buffett, but fell short of Meta. The top three positions are currently held by gold, Microsoft, and Apple. Additionally, bitcoin's market capitalisation ($1.3 trillion) has reached the GDP levels of many countries. For instance, the Gross Domestic Product of Saudi Arabia is $1.108 trillion, and Indonesia's is $1.319 trillion.
Following bitcoin, Ethereum is positioned at twenty-eighth in the overall ranking of the most capitalised currencies. ETH's result was better than that of the Chilean peso but worse than the Turkish lira.

– Anthony Scaramucci, the founder of Skybridge and former White House Communications Director, asserts that US President Joe Biden has a positive impact on cryptocurrency and the financial markets at large. To support his statement, Scaramucci cited Biden's legislative proposals related to digital assets.
According to the Skybridge chief, the current president's commitment to the rule of law will expedite the establishment of regulations for the crypto industry. "While these rules may not please everyone," Scaramucci writes, "having clear guiding principles will provide a solid foundation for legal arguments in court. [Thanks to this,] we will continue to win against the Biden administration in the United States judicial system."

– Robert F. Kennedy Jr, a contender in the US presidential race, admitted last year that he bought bitcoins for his children. The politician believes that BTC is the best alternative to central bank digital currencies (CBDCs) because it offers financial freedom to people.
In a recent interview with CNBC, Robert Kennedy reiterated his view of BTC as the superior currency, emphasizing that it allows Americans to transfer funds anywhere with minimal costs and complete anonymity. "Banks are trying to destroy digital currency and hinder the development of its infrastructure. However, the process of integrating cryptocurrency cannot be stopped anymore, and the repressive measures of the authorities against this instrument only increase its popularity," stated the presidential candidate.

 

[Stan NordFX]

– According to Professor of Physics Giovanni Santostasi, bitcoin could appreciate 64 times in the next 15 years, reaching $10.63 million. This forecast is based on a power-law model.
A power-law relationship is a mathematical connection between two quantities where a relative change in one quantity leads to a proportional relative change in the other, regardless of the initial values of these quantities. The relationship between one quantity and another represents a power function. This law is observable in a wide range of natural phenomena, from the frequency of earthquakes to the dynamics of stock market changes.
Santostasi stated that this model provides a clear and predictable scenario for the price change of the first cryptocurrency over long periods. However, over shorter spans, which the media primarily focuses on, the quotations behave chaotically.
According to the professor, unlike the well-known S2F (Stock-to-Flow) model by the analyst known as PlanB, the power law is logarithmic, not exponential. In other words, the price of bitcoin is not expected to rise continuously over time. According to Santostasi's calculations, the digital gold will peak at $210,000 in January 2026, then drop to $60,000, and after that, it will continue its wavy growth to $10.63 million.

– Experts at JPMorgan suggest that the upcoming bitcoin halving in April could trigger a significant drop in the price of the first cryptocurrency. The algorithmically mandated reduction of the mining reward from 6.25 BTC to 3.125 BTC will decrease mining profitability. Based on this, economists at JPMorgan, led by senior analyst Nikolaos Panigirtzoglou, predict that the price will fall to $42,000 after the halving.
"The cost of mining bitcoin empirically acts as a price floor," their report states. "Currently, the cost of mining is $26,500. After the halving, this figure will be $42,000." "This is also the level towards which we believe the price will gravitate once the post-halving euphoria subsides in April," JPMorgan notes.
The experts also considered the possibility of a 20% drop in the bitcoin network's hash rate, primarily due to the mass disconnection of low-efficiency equipment. Consequently, the capacity may concentrate among large cryptocurrency miners who have taken measures to reduce costs and maintain efficiency. "There might also be some horizontal integration through mergers and acquisitions among miners in different regions to take advantage of synergies in their business," concluded the specialists.

– Trader Gareth Soloway has identified a critical factor that could propel bitcoin's price to another historical high of $100,000. The expert pointed to a dilemma in the US Federal Reserve's monetary policy management amidst approximately 3% inflation. He emphasized that the institution's reluctance to aggressively cut rates could sustain high inflation, potentially contributing to bitcoin's upward trend. "If we see an increase in liquidity (which is bound to happen), then bitcoin will rise to $100,000 in 2024," writes Soloway. On the way to the mentioned round figure, like the JPMorgan experts, the trader does not exclude a short-term bearish correction. However, in his opinion, the upcoming halving in itself does not guarantee the digital gold's rise to the specified amount.

– Researchers from the University of Texas in the USA have discovered that over four years, cryptocurrency scammers utilizing the "pig butchering" scheme could have stolen more than $75 billion. The "pig butchering" scheme is a fraudulent attack where cybercriminals convince unsuspecting people to invest in a doomed or non-existent business. Once the victim believes and hands over their money, the scammers immediately disappear.
According to the study, from January 2020 to February 2024, such criminals duped at least 4,000 people. The illegal operations predominantly took place in Southeast Asia. The researchers found that tracked transactions amounting to $15 billion out of the reported $75 billion led to five cryptocurrency exchanges: Binance, Coinbase, OKX, Crypto.com, and HTX (formerly Huobi). The favorite asset among criminals was the stablecoin Tether (USDT), with more than 84% of the total transaction volume attributed to this popular coin.
Paolo Ardoino, CEO of Tether's issuer, stated that the report is rather misleading. "Every Tether transaction occurs online, so any action can be tracked, assets can be confiscated, and the criminal caught. This is why we cooperate with law enforcement agencies," he commented to Bloomberg. It's noteworthy that the United Nations (UN) has also previously stated that USDT is one of the most popular means of payment among criminal groups in Southeast Asia. Representatives of the issuer then questioned the accuracy of such data.

– In the summer of 2022, it would have been the 110th birthday of Milton Friedman, the great economist and Nobel Prize laureate, often called "the most influential economist of the second half of the 20th century." Back in 1999, Friedman gave an interview in which he predicted the emergence of digital currencies. He described a system where transactions are conducted electronically, and the parties involved do not need to know each other's identities. In his forecast, Friedman highlighted the potential of digital currencies to provide unprecedented privacy and efficiency in financial transactions, marking a significant departure from traditional banking systems.
"I think that the internet is going to be one of the major forces for reducing the role of government," said the distinguished scientist at the time. "The one thing that’s missing but will soon be developed is reliable electronic cash, a method whereby on the Internet you can transfer funds from A to B without A knowing B or B knowing A."


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

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

 

[Stan NordFX]

NordFX's New Mega Super Lottery: 202+4 Prizes in 2024

The new mega super lottery by brokerage firm NordFX kicked off on 8 March this year, featuring a multitude of cash prizes ranging from $250 to $5,000, amounting to a total of $100,000.

The Super Lottery with a prize pool of $100,000 has become a tradition, as NordFX has been hosting it for the fourth consecutive year. Over this time, more than 500 clients of this broker have emerged as winners. Unlike traders' contests, the lottery's undeniable advantage is that both experienced professionals and newcomers have completely equal chances of winning. Another benefit is that lottery winners receive their prizes in real money, not bonuses, which they can either use for further trading or withdraw without any restrictions.

There's also a third advantage: becoming a lottery participant and getting a chance to win one or even several prizes is very straightforward. You just need to have a Pro account with NordFX (or register and open a new one), fund it with $200, and simply trade. By making a trade turnover of just 2 lots in Forex currency pairs or gold (or 4 lots in silver), a trader automatically receives a virtual lottery ticket. The number of tickets per participant is unlimited. The more deposits and the higher the turnover, the more lottery tickets a participant will have, and the greater their chances of becoming one of the winners. The Super Lottery from NordFX is an excellent opportunity for traders not only to try their luck in winning cash prizes but also to increase their trading activity and possibly discover new trading strategies.

The slogan of this year's lottery, "Your 202+4 Chances to Win in 2024," makes it clear there will be plenty of prizes. This year, winners will receive 202 prizes (140 of $250, 30 of $500, 20 of $750, and 12 of $1,250) plus an additional 4 super prizes of $5,000 each. The total prize pool of $100,000 is divided into three parts: $20,000 will be played out in both the summer and autumn draws, and the third, New Year's, and most significant draw will have $60,000 in prizes.

For more details, visit NordFX's website. You can become a participant of the Mega Super Lottery 2024 and start receiving lottery tickets right now.


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

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

 

[Stan NordFX]

Forex and Cryptocurrencies Forecast for March 11 - 15, 2024​

EUR/USD: A Bad Week for the Dollar

The past week was dominated by the European Central Bank (ECB)'s meeting on Thursday, 7 March. As anticipated, the pan-European regulator decided to maintain its current monetary policy, leaving the interest rate unchanged at 4.50%. This move reaffirmed its commitment to steering inflation into the desired range. The ECB aims to be absolutely certain that inflation is consistently moving towards its 2.0% target, which currently stands at 2.6%.

According to analysis from ANZ Bank, a reduction in euro rates is expected in Q2. "Our interpretation of current ECB official guidance is that hawks are on the rise and prefer to wait for more detailed wage growth data before initiating a rate cut. We believe a consensus will be reached in June," ANZ economists wrote.

This expectation was echoed by Gediminas Šimkus, a member of the ECB Governing Council and head of Lithuania's central bank, on Friday, 8 March. He stated that "all conditions are set for a transition to a less stringent monetary policy, with a rate cut in June being very likely. While a cut in April cannot be ruled out, the likelihood is low." He added that there is no reason to reduce the rate by more than 25 basis points in one go.

It's important to note that the Federal Reserve usually acts more aggressively than the ECB, changing its rate more frequently and with greater amplitude. To see this, one only needs to look at the statistics from the last 10 years. According to analysts at Commerzbank, this means that if both central banks start their easing cycles at the same time, the dollar rate could very quickly fall below the euro rate, which would support an increase in the EUR/USD exchange rate.

However, what the cycles will look like this time remains unclear. The CME FedWatch Tool estimates a 56% probability of a Federal Reserve rate cut in June. Yet, speaking to the US Congress on 6-7 March, Fed Chair Jerome Powell only vaguely stated that the regulator would ease monetary policy "at some point this year".

A statement by Loretta Mester, president of the Federal Reserve Bank of Cleveland, proved to be more interesting. Speaking at the European Centre for Economics and Finance, she expressed concerns about the continued steady decrease in inflation throughout the year. Therefore, in Mester's view, it would be appropriate to keep the rate at its current level of 5.50%. The head of the Federal Reserve Bank of Cleveland also suggested that if economic conditions align with forecasts, the likelihood of a rate cut towards the end of the year might increase.

Regarding the macroeconomic statistics released last week, Eurostat's final assessment showed that the Eurozone economy grew by 0% in quarterly terms over the last three months of 2023. Year-on-year, GDP increased by 0.1%. Both figures matched preliminary estimates and market expectations, thus having no impact on the exchange rates.

Throughout the week, the dollar was under pressure, and not just due to Jerome Powell's "dull" Congressional testimony. US macroeconomic reports appeared relatively weak. For instance, the ISM Services Sector Business Activity Index for February fell from 53.4 points to 52.6 points. Manufacturing orders in January also dropped by 3.6%, which was worse than the 2.9% forecast. The number of job openings (JOLTS) in the US last month was 8.863 million, down from 8.889 million the previous month, and initial unemployment claims for the week ending on 2 March rose to 217K, exceeding the 215K forecast. All these factors together led to the EUR/USD pair moving out of the narrow range of 1.0800-1.0865, in which it had been trading since 20 February, and rising to the 1.0900 mark.

Labour market statistics released on Friday, 8 March, could have supported the dollar, but this did not happen, even though the market's reaction was somewhat puzzling. On one hand, the number of new jobs created outside of the agricultural sector (NonFarm Payrolls) was 275K, significantly exceeding both the previous figure of 229K and the forecast of 198K. Typically, such indicators would push the EUR/USD pair down. However, this time, it sharply rose instead. This likely relates to the unemployment rate increasing from 3.7% to 3.9% (with a forecast of 3.7%) and the average hourly earnings showing a sharp drop from 0.5% (month-over-month) to 0.1% (against a forecast of 0.2%). It seems the last two indicators outweighed the positive effect from the NFP. Market participants decided that these would be additional arguments in favour of a more imminent interest rate cut, resulting in EUR/USD soaring to 1.0980.

Subsequently, the excitement settled, and EUR/USD closed at 1.0937. As for the short-term outlook, as of the evening of Friday, 8 March, 35% of experts were in favour of the dollar strengthening and the pair falling, while 65% sided with the euro. Trend indicators and oscillators on the D1 chart are 100% coloured in green, with a quarter of the latter in the overbought zone. The nearest support levels for the pair are situated in the 1.0845-1.0865 zone, followed by 1.0800, then 1.0725, 1.0680-1.0695, 1.0620, 1.0495-1.0515, and 1.0450. Resistance zones are located around 1.0970-1.1015, 1.1050, and 1.1100-1.1140, up to 1.1230-1.1275.

The upcoming week is expected to be quite tumultuous. Significant volatility can be anticipated on Tuesday, 12 March, with the release of consumer inflation (CPI) data in Germany and the USA. On Thursday, 14 March, retail sales statistics and the Producer Price Index (PPI) in the United States will be announced. The week will conclude with the publication of the University of Michigan Consumer Sentiment Index on Friday, 15 March.

GBP/USD: A Good Week for the Pound

Starting the week at 1.2652, GBP/USD recorded a local high of 1.2893 on Friday, gaining 241 points and breaking out of the medium-term sideways channel of 1.2600-1.2800. The first reason for such dynamics is the weakness of the dollar, as mentioned earlier. The second reason is the positive economic statistics from the UK: the Construction PMI increased from 48.8 to 49.7. This indicates that the real estate sector is almost overcoming a period of stagnation, which, in turn, will eventually provide significant support to the country's economy.

There's also a third reason. In our last review, we warned that a key event for the pound sterling last week would be the announcement of the UK Government's budget on Wednesday, 6 March. This pre-election budget could significantly impact the British currency, which in 2024 is the second most successful G10 currency after the US dollar.

Finance Minister Jeremy Hunt, presenting the spring government budget, called it a plan for long-term growth. Hunt announced various benefits and subsidies amounting to £1.8 billion, as well as an allocation of £360 million for funding research and development in the biomedical sector, car manufacturing, and aerospace production. The government will also assist British households by partially reducing taxes. Moreover, it will actively stimulate economic growth to ensure the prosperity of the country's citizens. Specifically, the temporary reduction in duties on fuel and alcohol will continue.

Hunt also stated that inflation could fall to 2.0% by the end of the year, and the UK's GDP this year would grow by 0.8%. Overall, the finance minister's figures and promises, as is customary before elections, were quite impressive, allowing the pound to strongly challenge the dollar.

But will this boost of strength last for the British currency? Economists at HSBC note that the UK still faces a challenging combination of inflation and growth. This limits the Bank of England (BoE)'s ability to maintain a maximally hawkish stance compared to other central banks. As it becomes more dovish, the pound may face significant downward pressure in the coming months.

GBP/USD concluded last week at 1.2858. Analysts' opinions on its near-term behaviour are divided: a majority (60%) predict a decline, 20% anticipate growth, and 20% remain neutral. Among trend indicators and oscillators on the D1 chart, the situation mirrors that of EUR/USD: all point north, although 25% of oscillators signal the pair is overbought. Should the pair move southward, it will encounter support levels and zones at 1.2800-1.2815, 1.2750, 1.2695-1.2710, 1.2575-1.2610, 1.2500-1.2535, 1.2450, 1.2375, and 1.2330. In the event of an upward trend, resistance will be met at levels 1.2880-1.2900, 1.2940, 1.3000, and 1.3140.

On Wednesday, 13 March, the UK's GDP data for January 2024 will be released. The country's economy is expected to show growth of 0.2%, reversing a decline of -0.1% in December, which would confirm Jeremy Hunt's optimism. No other significant macroeconomic statistics regarding the UK economy are scheduled for release next week.

continued below...

 

[Stan NordFX]

USD/JPY: A Great Week for the Yen

If the past week was very good for the pound, it was simply great for the Japanese yen. USD/JPY reached a local minimum of 146.47 on the evening of Friday, 8 March, meaning the yen reclaimed more than 360 points from the dollar.

In addition to the weakening of the dollar, the yen was bolstered by rumours that the Bank of Japan (BoJ) may soon decide to normalize its monetary policy. Citing informed sources, Reuters reported that "if the results of the spring wage negotiations [on 13 March] are strong, the Bank of Japan may not have to wait until April" to exit its negative interest rate policy, and that the BoJ "is leaning towards ending negative rates as early as March."

Another report by Jiji News mentioned that "the Bank of Japan is considering a new quantitative framework for its monetary policy, which will outline the prospects for future government bond purchases." "The Bank of Japan," Jiji continues, "will review its Yield Curve Control (YCC) as part of considering a new quantitative policy.".

Thus, Wednesday, 13 March, could become a significant day for the Japanese currency, as could 19 March, when the next meeting of the Bank of Japan is scheduled. It's possible the regulator might increase the interest rate on this day for the first time since 2016. However, analysts at the French Natixis Bank believe that if there is an increase, it would be very slight. "In reality, the depreciation of the yen is beneficial for the Japanese economy," the bank's analysts write. "It helps to bring inflation back to the 2% target and stimulates exports. Since Japan has very significant net foreign assets, primarily in dollars and euros, a depreciation of the yen leads to a capital gain in yen value of these external assets." "As a result," Natixis concludes, "one should not expect Japan to move to a tighter monetary policy. At most, a symbolic increase in the base rate can be expected."

Commerzbank holds a similar position, believing that the yen's potential is limited, and a strong appreciation, especially in the medium and long term, should not be expected. According to Commerzbank economists, this is due to the Bank of Japan's lack of capacity for a pronounced normalization of interest rates.

USD/JPY concluded last week at 147.06. As for the near future, it's impossible to come to a consensus: 20% sided with the bears, an equal 20% with the bulls, and 60% remained undecided. Among the oscillators on the D1 chart, only 15% are coloured in green, while the remaining 85% are in red, with 40% indicating an oversold condition. The distribution of strength among trend indicators is exactly the same: 85% to 15% in favour of the reds. The nearest support levels are found at 146.50, 145.90, 144.90-145.30, 143.40-143.75, 142.20, and 140.25-140.60. Resistance levels and zones are located at 147.65, 148.25-148.40, 149.20, 150.00, 150.85, 151.55-152.00, and 153.15.

In the upcoming week's calendar, noteworthy events include the announcement of Japan's Q4 2023 GDP volume on Monday, 11 March. Additionally, as previously mentioned, the wage negotiations on 13 March are of significant interest. No other major events related to the Japanese economy are planned for the near future.

continued below...

 

[Stan NordFX]

CRYPTOCURRENCIES: Two Historic Records in One Week

In less than 24 hours on 4 March, bitcoin appreciated by approximately 10% and reached the mark of $69,016. This was a new (but not the last) historical record, surpassing the previous one of $68,917 set on 10 November 2021. Most top-10 crypto assets also saw a 10-30% increase in value over the week.

This surge in bitcoin is attributed to purchases by a supposed billionaire from Qatar, who flew in on his private jet to Madeira for the three-day Bitcoin Atlantis conference. Keychainx CEO Robert Rodin wrote that he saw something at Madeira airport that "could forever change bitcoin." BTC maximalist Max Keiser, in turn, shared a video in which the President of El Salvador, Nayib Bukele, greets the Emir of Qatar with the words "It's happening!"

What exactly Rodin and Bukele meant is unknown. However, this was enough to fuel discussions about Qatar adding bitcoins to its balance sheet. The accuracy of such claims is unproven, but social networks are abuzz with speculation on this matter. It's worth noting that rumours about one or two sovereign wealth funds or investment companies from the Middle East secretly buying up bitcoins have been circulating for several months.

Following the update of its historical high, bitcoin then plunged, dropping to $59,107 on 5 March, with forced liquidations on the futures market reaching $1 billion. However, this dip was short-lived as whales bought up much of the supply, not only returning the market to its previous dynamics but also setting a new record: on 8 March, the leading cryptocurrency reached $69,972. This is largely because most market participants anticipate its continued growth, surpassing at least the $100,000 mark.

According to trader Gareth Soloway, the upcoming bitcoin halving in April does not guarantee by itself that the digital gold will reach the mentioned size. Soloway identifies the monetary policy of the US Federal Reserve as the deciding factor. The Fed's reluctance to aggressively cut interest rates could support high inflation, potentially contributing to bitcoin's upward trend. "If we see an increase in liquidity (which will definitely happen), then bitcoin will rise to $100,000 in 2024," writes Soloway. However, on its way to this round figure, the trader does not rule out a short-term bearish correction.

Experts at JPMorgan also discuss the possibility that the halving could trigger a sharp decrease in the price of the first cryptocurrency. The algorithmic reduction of the reward from 6.25 BTC to 3.125 BTC will decrease mining profitability. Based on this, economists at JPMorgan, led by senior analyst Nikolaos Panigirtzoglou, predict that the price will fall to $42,000 after the halving. "The cost of mining bitcoin empirically acts as a floor for its price," their report states. "After the halving, this metric will be $42,000." "This is also the level towards which, in our view, the price will gravitate once the post-halving euphoria subsides in April," note JPMorgan's experts.

According to the well-known Stock-to-Flow (S2F) model, the primary cryptocurrency has transitioned from the accumulation phase to the growth phase. The accumulation phase is characterized by a relatively smooth price increase, low volatility, and moderate corrections, with the maximum drawdown in the concluded cycle not exceeding 22%. The growth phase presents a different picture. Historical data shows that during movements towards new highs, drawdowns ranged from 36% to 71%. JPMorgan has predicted a drop in bitcoin to $42,000. At the current price, this correction would be approximately 36-40%, aligning with the lower end of the specified range. A 70% correction, however, could lead to a significantly deeper fall.

How could this happen? Initially, to stay afloat, miners, whose incomes will be halved, will begin to sell off their stocks. Then, institutional and short-term speculators, looking to lock in profits, will join in. Concurrently, stop orders will start to trigger, leading to an avalanche-like plunge in quotations. And if investors who have put their money into spot BTC-ETFs also join this "crypto-fall", the depth of the drop could be hard to imagine. It's worth noting that in January-February, BTC-ETFs attracted 75% of all investments in the main cryptocurrency, and there are no guarantees that panic sentiment won't affect the depositors of these funds.

However deep the correction might be, bitcoin, in the opinion of many experts, will still remain within the long-term upward trend. "We have entered the era of the bitcoin gold rush. It started in January 2024 and will last approximately until November 2034," believes MicroStrategy's founder Michael Saylor. According to his calculations, by that time, miners will have extracted 99% of all coins, marking the beginning of the "growth phase." (According to BitcoinTreasuries, 93.5% has already been mined as of now).

Saylor believes that currently, only 10-20% of asset managers are interested in spot BTC-ETFs. In the future, as existing barriers are removed, this figure will approach 100%. "When they [managers] can buy BTC through a bank, platform, or prime broker, they'll spend $50 million in an hour," he stated. The founder of MicroStrategy also expressed confidence that "there will come a day when bitcoin will surpass gold and will be traded more than the S&P 500 ETFs."

In the next 15 years, bitcoin could appreciate 64 times to reach $10.63 million. This forecast was made by Professor Giovanni Santostasi based on a power-law model. According to the scientist, this model provides a clear and predictable scenario for the price change of the first cryptocurrency over long periods. However, over shorter spans, which the media primarily focus on, the quotations behave chaotically. Unlike the S2F model by the analyst known as PlanB, the power law is logarithmic, not exponential. In other words, the price of bitcoin is not expected to constantly increase over time. According to Santostasi's calculations, digital gold will peak at $210,000 in January 2026, then drop to $60,000, and after that, it will continue its wave-like growth to $10.63 million.

(For reference: A power-law relationship is a mathematical relationship between two quantities where a relative change in one quantity leads to a proportional relative change in the other, regardless of the initial values of those quantities. The manifestation of this law can be found across a wide range of natural phenomena, from the frequency of earthquakes to the dynamics of stock market changes.).

As of the evening of Friday, 8 March, BTC/USD is trading at around $68,100. The Crypto Fear & Greed Index has slightly risen from 80 to 81 points, entering the Extreme Greed zone. The total market capitalization of cryptocurrencies stands at $2.60 trillion (up from $2.34 trillion a week ago), with the main cryptocurrency's dominance index at nearly 52%, and its capitalization exceeding $1.35 trillion. This surpasses the fiat currency market capitalizations of Malaysia, Indonesia, Vietnam, Thailand, the UAE, Mexico, and many other countries. A few days ago, BTC surpassed the Russian ruble in capitalization, taking the 14th spot in the overall ranking of the largest currencies, with the Swiss franc as its nearest competitor. Amid news that bitcoin exceeded the rouble, jokes flooded the internet suggesting Vladimir Putin is Satoshi Nakamoto. Ethereum ranked 28th, performing better than the Chilean peso but not as well as the Turkish lira.

In the overall ranking of the most capitalized assets, which includes precious metals and companies, bitcoin secured the 10th place. It surpassed Berkshire Hathaway, the company of well-known cryptocurrency critic billionaire Warren Buffett, but did not reach Meta. The top 3 are currently occupied by gold, Microsoft, and Apple.


NordFX Analytical Group


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

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

 

[Stan NordFX]

CryptoNews of the Week

– In a CNBC interview, former US President and Republican Party leader Donald Trump highlighted the importance of the American national currency and compared moving away from the dollar standard to a defeat. At the same time, he stated that he does not plan to obstruct the use of bitcoin or other cryptocurrencies if he wins the election in November. "If you think about it, it's an additional form of currency," Trump remarked. "Bitcoin is widely used, and I'm not sure I would want to give it up right now," the politician added. However, when asked by the interviewer if he himself invests in cryptocurrency, the former (and possibly future) president responded negatively.

– Balaji Srinivasan, former CTO of Coinbase and a general partner at a16z, has declared we are in the phase of treasury plunder amidst an empire's collapse. Bitcoin, he asserts, is the only available salvation from inflation and the potential confiscation of assets in the US, which could result from the unsustainable trajectory of government spending. According to his calculations, the US national debt has reached a record $34.5 trillion, having increased by 25% since 2020, and continues to grow by $1 trillion every 90 days. The US government spends $10 billion more daily than it receives. Based on this, Srinivasan did not rule out that, as we approach a "financial reckoning" for such behaviour, the "insatiable state" might consider the confiscation of private assets.
"Private property will not be protected by the state in a bankrupt blue (Democratic) America. Any blockchain under Washington's control is vulnerable. Fortunately, we have digital gold that is independent of the state and cannot be confiscated. Bitcoin maximalism will triumph. It will save us from state budgeting," believes the former CTO of Coinbase. Although he refrained from specifying when the "reckoning" would occur, he reminded that the inevitability of such a scenario had previously been mentioned by Ray Dalio, Elon Musk, Larry Fink, and Stanley Druckenmiller.

– Jamie Dimon, CEO of JPMorgan, has urged the US Federal Reserve to postpone cutting interest rates until June and shared his views on the first cryptocurrency, as reported by CNBC citing the businessman's speech at the Australian Financial Review summit. "I don't know what bitcoin is for, but just as with the right to smoke a cigarette, I'll support your right to buy bitcoin. Personally, however, I would never buy it," he stated, adding that the use of digital assets is often associated with illegal activities, including human trafficking, fraud, and terrorism.

– William Ackman, CEO of Pershing Square Capital, has attributed bitcoin mining as one of the causes for inflation increase and the fall of the US dollar. "The rise in bitcoin prices leads to an increase in mining and energy consumption, raising the latter's cost, thus causing inflation to rise and the dollar to decline. This stimulates demand for bitcoin, its mining, and energy consumption. The cycle continues, bitcoin goes into infinity, energy prices skyrocket, and the economy collapses," the billionaire described his scenario, adding that this relationship "works in reverse as well."
"Wondering if I should buy bitcoin in such a situation?" Ackman pondered, to which another billionaire, MicroStrategy founder Michael Saylor, replied, "You should buy some bitcoin, but not for the reasons mentioned above. Most bitcoin miners actually help to reduce the cost of electricity for other consumers, not the other way around. Let me know if you want to discuss this issue one-on-one," he wrote.

– Michael Saylor believes that bitcoin will "eat" gold in the future, becoming a more valuable asset because it possesses all the advantages of gold while being free from its disadvantages. Saylor pointed out that precious metal cannot be moved quickly, whereas bitcoin can be transferred to a new owner instantly.
The appearance of the first cryptocurrency in various investment products is a sign of the asset's future dominance, according to the MicroStrategy co-founder. The digital asset will also begin to take market share from other risky investment products, with Saylor naming the S&P 500 ETF fund as one of the potential "victims."
It is noteworthy that bitcoin, having risen above $72,000 per coin, surpassed silver in market capitalization on March 11, 2024. The first cryptocurrency moved to the eighth position in the ranking of the largest assets by this indicator, overcoming the $1.4 trillion mark.

– Pierre Rochard, Vice President of Research at his company, evaluated the US budget for 2025 proposed by Joe Biden's team. The researcher's conclusion is that the Democrats anticipate BTC reaching $250,000 within a decade: by 2034-2035. This is inferred from the taxes laid out by the White House in the budget. However, the expert clarified that there are no direct indications of this price in the budget. Conclusions are drawn based on the assessment of potential profits from taxes and the regulation of the cryptocurrency market.
Rochard draws another conclusion from the White House documents. According to his analysis, the mining industry in the US could experience exponential growth. This could be due to the active development of the US market and an excess of electrical energy, leading to a tenfold increase in this industry.

– Following the approval of spot bitcoin ETFs in the US earlier this year, demand for the flagship crypto asset significantly exceeded the daily supply of bitcoin mined by miners, and the halving scheduled for the third decade of April will only intensify this imbalance. As a result, many analysts believe that the price of bitcoin is in the early stages of a super-cycle, fuelled by institutional investors and issues in the global macroeconomy.
At the time of writing this overview, the maximum price of bitcoin was recorded at $73,556. Analysts at Matrixport are optimistic about the coin's global future. However, according to them, a risk-reward analysis suggests that the coin's quotes may soon adjust. "This bull market still has legs," Matrixport believes, "but the divergence between the decreasing RSI and high BTC prices may signal that bitcoin needs to consolidate before it can start increasing in price again."
Investor and founder of MN Trading, Michael Van De Poppe, believes that a market retracement of 20-30% is quite possible in the near future. He also noted that he expects a lot from altcoins, which have not yet reached record levels.

– Raoul Pal, the founder of investment firm Real Vision, has forecasted the targets BTC, ETH, and SOL could reach in the near future. He suggested that the target mark for bitcoin in the near term is $250,000 per coin. Moreover, the first cryptocurrency might exceed this projected level due to the high demand for spot bitcoin ETFs. The upcoming April halving is also expected to boost demand for this cryptocurrency.
Raoul Pal is also bullish on Ethereum, predicting its value could rise to between $17,000 and $20,000, thanks to the utility of smart contracts. Currently, ETH is trading around $4,000, but unlike bitcoin, it has yet to surpass its record: in November 2021, Ethereum reached a level of $4,856. The Real Vision founder believes that the altcoin's growth could be influenced by its strong correlation with bitcoin, anticipation of the launch of spot ETH ETFs, and the Dencun update.
Pal forecasts that the price of Solana could range from $700 to $1,000, as the blockchain's high performance will increase demand for this coin. In early November 2021, SOL reached its peak at $260, indicating the coin still has plenty of growth potential.

– Bernstein analysts believe that shares of mining companies remain the best proxy investments in bitcoin as the cryptocurrency moves towards a target mark of $150,000. In a note to clients, they point out that historically, miners' stock prices have almost always outperformed bitcoin in terms of growth rate during a bull market. As we are in the middle of the current cycle, every "weakness window" for miners of digital gold is, in experts' opinion, an opportunity to buy their shares.
Bernstein asserts that the segment is currently dominated by retail investors, while institutional investors mostly avoid "bitcoin-proxy" investments due to their ongoing scepticism towards cryptocurrencies. However, as the asset grows to new highs, analysts expect this category of investors' interest in miners' stocks to awaken, making them the primary beneficiaries of capital inflow.


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

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

 

[Stan NordFX]

Forex and Cryptocurrencies Forecast for March 18 - 22, 2024​

EUR/USD: Stubborn Inflation Refuses to Back Down

Market participants last week were keenly focused on inflation data from the US. The FOMC (Federal Open Market Committee) meeting of the Federal Reserve is scheduled for Wednesday, 20 March, and these figures will undoubtedly influence the Committee's decision on interest rates. Federal Reserve Chairman Jerome Powell recently stated that more evidence of a sustainable slowdown in inflation would be necessary to start cutting rates. However, it appears that such evidence is lacking. Data released on Tuesday, 12 March, showed that prices, instead of decreasing, have been on the rise.

The Consumer Price Index (CPI), excluding food and energy, was expected to increase by 0.3% but actually rose by 0.4% month-on-month. Year-on-year, inflation in February increased by 3.8%, slightly above the forecast of 3.7%. The overall CPI showed a monthly increase of 0.4% and an annual rise of 3.2%. Thus, the overall CPI has increased by 4.2% on an annual basis over the last three months, marking the highest level since June of the previous year. Certainly, this surge in inflation is not a cause for panic, but it is too early to declare a complete victory over it, for which the Fed raised rates to the highest level in 40 years.

Additional arguments for the Federal Reserve to refrain from hastily cutting rates emerged on Thursday, 14 March. It was found that industrial inflation, measured by the Producer Price Index (PPI), increased from 0.3% to 0.6% month-on-month, against market expectations of 0.3%. Against this backdrop, the yield on 10-year US Treasury bonds sharply increased, providing support to the dollar.

Beyond CPI and PPI, there's a third argument in favour of maintaining the Federal Reserve's tight monetary policy: the labour market, which remains relatively robust. Despite the highest unemployment rate increase in two years (from 3.7% to 3.9%), the number of new jobs created outside of the agricultural sector (NonFarm Payrolls) reached 275K, significantly exceeding both the previous figure of 229K and the forecast of 198K. Additionally, real wages continued to grow year-on-year in February.

Against the backdrop mentioned above, the euro faced pressure last week. Moderately dovish statements from officials at the European Central Bank (ECB) did not provide any relief. On Thursday, the bank's chief economist, Philip Lane, in an interview with CNBC, stated that wages are moving in the right direction. However, he added, the EU's monetary authorities avoid giving clear forecasts regarding further steps and must make decisions at each specific meeting.

According to Peter Kazimir, a member of the ECB's Governing Council and head of the National Bank of Slovakia, it would be wise to wait until June for the first rate cut. "Rushing this step is unwise and disadvantageous," he said. "Upside risks to inflation are alive and well. More convincing data on inflation prospects are needed. [And] only in June will we reach the threshold of confidence in this matter." "But the discussion on easing should start now," added the head of the National Bank of Slovakia.

Olli Rehn, a member of the ECB's Governing Council and head of the Bank of Finland, spoke similarly. He confirmed the start of discussions on reducing the restrictive aspect of the bank's monetary policy. When asked about the appropriate time to begin rate cuts, he carefully replied, "If inflation continues to decline, it would be possible to gradually start lifting the foot off the monetary policy brake pedal."

The preliminary Michigan Consumer Sentiment Index, published on 15 March, showed a slight decrease to 76.5 from the previous value and forecast of 76.9. Following this, EUR/USD ended the working week at 1.0886. As for the near-term outlook, as of the evening of Friday, 15 March, 75% of experts voted for a strengthening dollar and a decline in the pair, with 15% siding with the euro and 10% taking a neutral stance. Oscillator readings on the D1 are evenly distributed: one-third are coloured green, one-third red, and one-third neutral grey. Trend indicators' force ratio is such: 35% recommend selling the pair, while 65% recommend buying it. The nearest support for the pair is located in the zone of 1.0845-1.0865, followed by 1.0800, then 1.0725, 1.0680-1.0695, 1.0620, 1.0495-1.0515, and 1.0450. Resistance zones are found at 1.0920, 1.0965-1.0980, 1.1015, 1.1050, 1.1100-1.1140, and 1.1230-1.1275.

In the coming week, the Consumer Price Index (CPI) value for the Eurozone will be released on Monday, 18 March. However, as the ECB meeting has already taken place, this indicator is unlikely to provoke a strong market reaction. The main event of the week, as mentioned, will be the Federal Reserve's FOMC meeting on Wednesday, 20 March. It is expected to be the fifth consecutive meeting where the federal funds rate remains unchanged at 5.50%. The greatest interest for economists and investors will likely lie in the subsequent Federal Reserve leadership press conference, where they hope to hear hints about the start date for monetary policy easing. Currently, according to CME FedWatch, there is a 40% chance that the reduction will begin in June.

Apart from these events, a comprehensive package of data on business activity (PMI) across various sectors of the economy in the US, Germany, and the Eurozone, set to be released on Thursday, 21 March, also presents interest. On the same day, traditional data on the number of initial unemployment claims in the US will be published.

GBP/USD: More Negatives than Positives for the Pound

Last week, the dollar was recovering from the losses it suffered in the first ten days of March. On one hand, GBP/USD was pressured by rising inflation in the US, and on the other hand, by weak macroeconomic statistics from the United Kingdom. Data published on Tuesday, 12 March, confirmed the cooling of the country's labour market. In January, employment decreased by 21K (against a forecasted increase of 10K), and the unemployment rate rose from 3.8% to 3.9% (forecasted at 3.8%). Additionally, the number of claims for unemployment benefits sharply increased from 3.1K in January to 16.8K in February. Meanwhile, the wage growth of UK workers slowed down, marking the slowest pace since 2022.

Market participants' pessimism increased on Wednesday, 13 March. It was revealed that although the country's GDP grew by 0.2% in January, industrial production fell from +0.6% to -0.2% month-on-month and from +0.6% to +0.5% year-on-year. The manufacturing sector saw an even sharper decline, from +0.8% to 0.0% month-on-month and from +2.3% to +2.0% year-on-year.

All these data strengthen the likelihood of the Bank of England (BoE) soon shifting to a more dovish monetary policy. Some estimates suggest this could happen as early as May. If data from the United Kingdom continue to worsen, the probability of a pound interest rate cut in the coming months will only increase, pushing GBP/USD further down.

"GBP/USD could fall as the UK continues to stagnate and the Bank of England finally begins to cut rates," analysts at the French bank Societe Generale believe. Economists at the Dutch Rabobank also see potential for significant strengthening of the dollar against the British currency over a 1 to 3-month horizon. However, Rabobank forecasts that the interest rate differential, signs of improvement in the UK's economic outlook, combined with the prospect of uneventful elections in the country and a relatively stable political backdrop, should provide moderate support to the pound. "We believe," the bank's economists write, "that over a 12-month perspective, GBP/USD will recover to the 1.3000 area.".

The pair closed the week at 1.2734. Analyst opinions on its near-term direction were divided as follows: a majority (65%) voted for a decline, 20% for an increase, and 15% remained neutral. Among the D1 oscillators, 40% point north, only 10% south, and 50% east. Trend indicators have 65% looking upwards and 35% in the opposite direction. Should the pair move southward, it will encounter support levels and zones at 1.2695-1.2710, 1.2575-1.2610, 1.2500-1.2535, 1.2450, 1.2375, and 1.2330. In the event of an upward move, resistance will be met at levels 1.2755, 1.2820, 1.2880-1.2900, 1.2940, 1.3000, and 1.3140.

In addition to the Federal Reserve's FOMC meeting, the upcoming week will also feature a meeting of the Bank of England, scheduled for Thursday, 21 March. The day before, we will learn about the inflation situation (CPI) in the United Kingdom, and just before the BoE meeting, preliminary data on business activity (PMI) in the country will be released. The workweek will conclude with the publication of retail sales data in the United Kingdom.

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[Stan NordFX]

USD/JPY: What to Expect from the Bank of Japan

The upcoming week, on Tuesday, 19 March, will also see a meeting of the Bank of Japan (BoJ). Consequently, speculation regarding an imminent shift in the regulator's monetary policy is mounting. Analysts at TD Securities have shifted their forecast for a yen rate hike from April to March. "Following a positive round of wage negotiations, we believe the Bank of Japan has the necessary information to raise the rate at next week's meeting," they write. TD Securities expects that if the rate is increased, such a move away from NIRP could easily push USD/JPY to 145.00. However, if the BoJ does not do so but attempts to sound hawkish, hinting at the possibility of a policy reversal in April, the pair might rise, but only slightly – to 150.00.

Rabobank analysts also discussed the potential tone of the Bank of Japan's statements. "If the Bank of Japan exits its negative interest rate policy on 19 March, it is likely that rates will only be raised by 10 or 15 basis points (bps)," the Rabobank experts believe. "Furthermore, at best, the Bank of Japan's guidance next week will be cautiously optimistic. It is important to note that even after the negative rate is relegated to economic history, Japan's monetary policy settings will likely remain accommodative." Rabobank does not rule out that a very cautious tone from the BoJ regarding further changes may increase the risk of a "sell the fact" reaction post-19 March. "Nevertheless, despite the risk of a short-term increase in the pair, we continue to see the possibility of USD/JPY declining to 146.00 in a three-month perspective," conclude the Rabobank economists.

Strategists at Standard Chartered echo similar sentiments. Like many of their peers, they anticipate that the Bank of Japan will end its ultra-loose policy in March rather than April. However, in their view, the expected policy adjustment is unlikely to signal the start of an aggressive rate-hiking cycle. The abolition of the negative interest rate policy (NIRP) will not alter the negative yield differential with other countries. Nonetheless, the potential cessation of yield curve control (YCC) should ultimately be positive for the yen, especially if the Federal Reserve and the ECB start cutting rates from June. In this scenario, Standard Chartered strategists believe that by the end of Q2 2024, USD/JPY could fall to 145.00.

Economists at ING, the largest banking group in the Netherlands, have repeatedly emphasized that a sustainable rally in the yen is more dependent on cuts in the Federal Reserve's rates than on rate hikes by the Bank of Japan. "We still believe that it will be difficult for the yen to sustainably strengthen beyond the volatility surrounding the rate hike until rates in the US are reduced. This remains our base scenario for this year," they write.

Societe Generale analysts are notably optimistic about the Japanese yen in their forecasts. They believe the yen is the only G7 currency likely to significantly appreciate against the US dollar this year. Even if the Bank of Japan's steps away from negative interest rates and yield curve control on 19 March are fairly symbolic, the yen is still expected to strengthen, as it is currently considered undervalued.

Throughout the past week, USD/JPY, buoyed by a strengthening dollar, rose and concluded at 149.05. Looking ahead, whereas a majority of analysts sided with the dollar in EUR/USD and GBP/USD, the situation here is reversed – in anticipation of a historic move by the Bank of Japan, 65% of experts leaned towards the bearish side for the pair, with 35% remaining undecided. No votes were cast in favour of the American currency. Technical analysis tools seem unaware of the Bank of Japan's meeting, which is why only 35% of D1 oscillators favoured the yen, 25% favoured the dollar, and 40% remained neutral. Trend indicators show a clear advantage for the dollar – 90% are coloured green, and only 10% red. The nearest support levels are located at 148.40, 147.60, 146.50, 145.90, 144.90-145.30, 143.40-143.75, 142.20, 140.25-140.60. Resistance levels and zones are at 150.00, 150.85, 151.55-152.00, 153.15.

Apart from the Bank of Japan meeting, no other significant events related to the Japanese economy are scheduled for the coming days. Traders should also note that Wednesday, 20 March, is a public holiday in Japan: the country observes the Vernal Equinox Day.

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