First review of last week’s events:EUR/USD. The dollar has periodically changed its status since the start of the COVID-19 pandemic, becoming a safe haven currency or a risky asset for investors. For example, the U.S. currency fell between November and December 2020. The index is now in an all-time high of 3,795. The DXY dollar index is also trading in the area of annual highs: 92.72. The main cause of this volatility in the USD is the coronaviral situation and the US government’s response to it. And the Fed threw in another conundrum last week. Recall that after the Open Market Committee (FOMC) meeting, it became clear that the US Federal Reserve does not intend to raise interest rates until at least 2023. Nor does the Fed intend to change other parameters of the Quantitative Easing (QE) programme. The bill signed by U.S. President Joe Biden on a new $1.9 trillion package, according to the Fed, is a fairly sufficient measure to stimulate the economy. Just days later, Fed President Jerome Powell announced that the regulator would phase out $120 billion in monthly asset purchases from the moment the U.S. economy nears full recovery. And that, according to forecasts by the Fed itself, could happen this summer. So it turns out that the government and the Senate can start a debate on the elimination of QE in the near future. But what about the news that the Biden administration is now discussing another new fiscal stimulus package for another $3.0 trillion? This time, the market “sided” with Jerome Powell, and the dollar continued to strengthen its position. According to the forecast, the main one voted for by the majority of analysts (65%), the EUR/USD fell, broke support for the 200-day SMA at 1.1825 and fell to the horizon of 1.1760. This was followed by a slight rebound and a finish of 1.1790; GBP/USD. After a two-week stay in the side channel of 1.3775-1.4000, the broadly strengthened dollar pulled the pair down. 55% of the experts were on the bear side and they were right. The GBP/USD pair hit a local low of 1.3670 on Thursday, March 25, before returning to the lower end of the channel which has changed from support to resistance. The last chord of the week sounded near it, at 1.3790; USD/JPY. On a large scale, the correction of steam to the south never happened. Just 50 points was enough for the pair: after falling to 108.40, he turned around and headed north again, after the dollar strengthened. The nearest bull target was set at 110.00, and the pair almost reached it: a week’s high of 109.85. It then fell slightly and ended the five-day working day at 109.67; cryptocurrencies. The forecast for the past week, which has been supported by most experts, was not the most optimistic for the bulls. It is assumed to stop growth, split the lower limit of the bitcoin channel up and its lateral movement in the range of 50,000-60,000 USD. Unfortunately for investors, this is exactly what happened. The BTC/USD pair was at $60,000 on March 20, but on Thursday, March 25, it found a local bottom of about $50,290. And if bitcoin’s decline was 16%, some of the top altcoins lost about 25% of the price. One of the few that won was ripple. Starting at $0.4652 seven days earlier, it reached $0.5955 on March 22 and was trading at $0.5450 by friday evening, March 26. In general, as we predicted, the cryptocurrency market turned out to be overheated. Elon Musk’s claim that bitcoins accepted as payment for Tesla cars will no longer be converted into dollars has not helped. such information may have pushed the market high not so long ago, but now they have given only a small short-term boost. According to Skybridge Capital CEO and former White House communications director Anthony Scaramucci, Tesla has about $1.5 billion in BTC at the moment. In total, Elon Musk owns just over $5 billion of bitcoins through Tesla, SpaceX and personally. Perhaps that’s no longer enough, and bitcoin needs more powerful locomotives than Tesla or MicroStrategy to move the market up. But just a few words from regulators like the U.S. Fed, enough to push it down. The head of the US Federal Reserve system, Jerome Powell, questioned the features of the first cryptocurrency as a saving and payment tool. During his speech at the virtual summit of the Settlement Bank Internationally, he pointed to the high volatility of assets, because of which, in his opinion, they are useless as a means of accumulation. “They are not supported by anything and are used more for speculation, so they are not particularly popular as a means of payment. Crypto assets are more likely to replace gold rather than the dollar,” Powell said. The decline in BTC/USD was clearly influenced by the decline of the S&P500, with which a risk component such as “digital gold” correlates more and more. Investors have closed about 240,000 positions in the past few days, and the total capitalization of the cryptocurrency market has decreased from $1,805 billion to $1,680 billion. The Crypto Fear & Greed Index moved from 71 to the central zone during the week and is at 54, which is flat. It is possible, however, that it is only a sleep before the storm.As for the forecast for the coming week, summarizing the opinions of many experts, as well as forecasts made on the basis of various methods of technical and graphic analysis, we can say the following: EUR / USD. On the U.S. currency side, there are three main factors. The first is the successful vaccination of the population, including not only the results already achieved, but also President Biden’s promise to vaccinate 200 million U.S. residents during the first 100 days of his time in the White House. The second factor is the increasing attractiveness of government bonds to foreign investors. The third factor is the strength of the U.S. economy, which is able to lift the economies of many other countries together with itself. Europe has none of these factors. ECB Vice-President Luis de Guindos said that if vaccinations in the euro area rise sharply by the summer, Europe will face rapid economic growth in q3 and IV. But these are just words. At the moment, 70% of experts expect the dollar to continue to strengthen and the EUR/USD pair to fall to 1.1640-1.1700. The ultimate target is the september and November 2020 lows of around 1.1600. This forecast is supported by 85% of trend indicators in H4 and 100% on D1, as well as 75% of oscillators on D1. The remaining 25% gives signals that the pair is sold out. It should be noted that the graphical analysis indicates that the euro may rise to 1.1880 in the coming days in both time frameworks, and the pair will go south only after that. It is also important to note that when switching from weekly to already 60% of analysts who vote for an increase in the EUR/USD pair. Targets are 1.2000 and 1.2200. As regards the events of the coming week, consideration should be given to the publication of consumer market data in Germany on 30 March and the euro area on 31 March, as well as data on the US labour market on Wednesday 31 March (ADP report) and Friday 02 April (NFP). Also interesting is us President Joe Biden’s speech on March 31. Markets will wait for signals from him about the steps his administration will take to accelerate the recovery of the country’s economy;GBP/USD. On Wednesday, the last day of March, we will receive UK GDP figures for Q4 2020. The rate is projected to remain at the previous level of 1%. It is unlikely to add optimism to investors, but it will not upset them. Therefore, 50% of them vote for the side trend, 40% for the strengthening of the dollar and only 10% for the strengthening of the British pound. The technical analysis readings are as follows. On H4: 50% of oscillators point north, 50% to the south. Trend indicators have a similar pattern. D1 is dominated by red. 65% of oscillators and 70% of trend indicators are colored red. The closest support levels are 1.3760, 1.3700, 1.3670, resistance levels are 1.3820, 1.3900, 1.3960. The targets are 1.4000 and 1.3600 respectively; USD/JPY. The pair reached a nine-month high of 109.85 last week, showing an impressive increase of almost 730 points in the past three months. This suggests that such traditional safe havens, such as the yen, are currently of little interest to investors. The Tankan index is unlikely to have a major impact on market sentiment. Published by the Bank of Japan, this index reflects the general business conditions for large manufacturing companies. Tankan is an economic indicator of Japan, which is heavily dependent on an export-oriented industry. An index value above 0 is positive for the yen, a value below 0, respectively, is a negative factor. However, according to forecasts, the value of the index, which will be published on Thursday, April 1, will not be higher or lower, but equal to 0. This is a neutral value. Although it is possible that it will support the Japanese currency, as the Tankan was at minus 10 a quarter earlier. But it could only be a small USD/JPY in the south. Overall, the majority of analysts (60%) expectation that it will consolidate above horizon 110.00. Targets are 111.70 and 112.20. 100% of trend indicators and 75% of oscillators agree with this scenario. The remaining 25% gives signals that the couple is overbought. The remaining 40% of experts, supported by graphic analysis, still hope for a long-awaited correction in the South. At the same time, moving on to monthly and quarterly forecasts, their number increases to 75%. Support levels for pairs falling are 109.00, 108.60, 108.40, 106.65. The goal is zone 106.00; cryptocurrencies. It was noted that not only plants begin to grow in the spring, but also bitcoin quotes. Thus, the BTC/USD pair increased by an average of 40% in April over the past three years. This means that this time it should be somewhere in the area of $70,000-$75,000 by the end of April. April 30 connection options show similar expectations. These are now open at $ price of $80,000 on derivatives exchanges totaling $240,000,000. Its active withdrawal to cold wallets continues in anticipation of a new growth cycle for the main cryptocurrency. We have already talked more than once about a $1.9 trillion support package for the US economy, of which, according to a study by Mizuho Securities, US citizens can spend $20-25 billion to buy cryptocurrency. After that anti-Covid package, another is possible, amounting to $3.0 trillion. And if adopted, it will also benefit the crypto market. But all this is in the future. Meanwhile, 60% of analysts believe the BTC/USD pair will move along the $50,000 trading point for the next one or two weeks, fluctuating in the range of $46,500-$56,000. If we talk about the long-term forecast, according to co-founder and former BTCC cryptocurrency exchange CEO Bobby Lee, the price of bitcoin could rise to $300,000, after which growth will be replaced by a long-term decline. “Bitcoin cycles in the bull market occur every four years, and the current one is a big cycle. I think bitcoin could rise to $100,000 this summer,” he said. However, after reaching a record high of $300,000, even a slight decrease will cause the bubble to collapse. Lee suggested that the new winter crypto would last two to three years, and “investors should be prepared for the fact that the value of bitcoin could fall by 80-90% from its historic peak.” And at the end of the review we present to you another “miracle device” in our micro-headline “Crypto Life Hacks”. WiseMining recently introduced the Sato ASIC mining boiler, which allows water to be heated by mining bitcoin. The intermediate coolant of the boiler is a special dielectric coolant. The liquid is boiled and evaporated in the ASIC cooling unit, steam rises into the tank coil and condenses, giving off heat into the water. Condensation flows back into the miner’s cooling unit. The developers provided the possibility of connecting this water heater to the main heating system of the room. Sales of Sato will begin as early as April this year. And one more “life hack”, from the criminal world. According to a new study by analytics firm Elliptic, the largest darknet market, Hydra, has a new way to exchange cryptocurrency for fiat money. The treasure packed in a vacuum with money is buried “5-20 cm underground”, and the exact GPS coordinates are passed on to the buyer. The same method has long been used to sell illegal substances such as drugs. However, this is quite risky, because bandits sometimes track down customers and take “packages”. The consequences in this case are unpredictable.NordFX Analytical Group Note: These materials are not investment recommendations or guidelines for working in the financial markets and are for informational purposes only. Trading on the financial markets is risky and can result in a complete loss of deposited funds.
03 Apr