First review of last week’s events:
EUR/USD. There is a saying: “the new broom sweeps clean.” If former U.S. President Donald Trump were now in the role of Joe Biden, he would probably call Fed chief Jerome Powell a “traitor” for literally lowering America’s stock markets in his speech on Thursday, February 4. Powell remained indifferent to the increase in the profitability of U.S. treasuries, which closed at an annual level. At the same time, he suggested the possibility of a premature tightening of monetary policy. And while the Fed chief stressed that the economy is far from overheating and does not yet see the need to raise interest rates, the market has had a trace of a possible change in monetary policy. In response, yields on 10-year Government bonds rose with the dollar and the stock market collapsed. The S&P500 lost more than 120 points and the Dow Jones Industrial Average lost more than 300 points. Falling stock prices are forcing investors to seek refuge in dollars. As a result, the dollar index DXY reached a three-month high of 91.83 on Thursday, its rise continued on Friday, March 5, and DXY was above 92.00 at the time of writing. Data from the U.S. labor market added optimism to investors. The number of new jobs outside the agricultural sector increased from 166K to 379K, with a forecast of 182K. As a result, the forecast for which the majority (70%) analysts voted last week, which turned out to be perfectly correct: the EUR/USD pair continued to move south, reaching the local bottom at 1.1895 and ending the week slightly higher at 1.1915; GBP/USD. A graphical analysis on the D1 suggested last week a sideways movement of 1.3860-1.4240. However, the channel turned out to be narrower: by Thursday it was trading in the range of 1.3860-1.4000. And then, thanks to a statement from US Federal Reserve chief Jerome Powell, the dollar started to rise in strength, and the GBP/USD pair that broke through the lower end of the channel fell to the horizon of 1.3775. The last five-day period was set at 1.3840. USD/JPY. The couple’s multi-month downward trend was halted on January 6, reversed and moved almost throughout 2021. When making a forecast on the twice the amount. However, not everything is as pink as it seems at first glance. We have already written that in 2021, regulators can (and most likely) become a major problem for digital content. U.S. Finance Minister Janet Yellen declared war on bitcoin, according to analyst Sven Henrich. Its announcement led to a huge profit taking by whales on February 21-23, and a sharp 23% drop in bitcoin listings. And now the North American Association of Securities Administrators (NASAA) has published an annual list of the most dangerous financial products, calling cryptocurrencies the biggest investment risk this year. As part of the struggle of states to control financial flows, we should not forget about the emergence of the digital yuan, which can deal a serious blow to bitcoin. The United States and many other countries also do not rule out the possibility of introducing their own digital currencies (CBDCs). Meanwhile, as we wrote above, the market is at a crossroads. Total market capitalization this week increased very slightly, from $1,410 billion to $1.444 billion. A Crypto Fear & Greed Index left the neutral zone (55) again and headed toward the overbought zone, reaching 77 points out of 100 possible.
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. Judging by the latest indicators, the U.S. economy is doing much better. Vaccination is in full swing, the labour market is recovering and GDP is poised to grow by almost 10% in the first quarter. According to Jerome Powell, consumer prices may even slightly exceed the 2% target this summer. However, there is still a long way to go to complete recovery. This weekend, March 6-7, the Senate will begin voting on amendments to the budget. And if lawmakers approve it, U.S. citizens will receive new unpaid assistance of $1,400 per person, and the overall stimulus package (QE) will be $1.9 trillion. This injection of nearly $2 trillion into the market could cause a severe weakening of the U.S. currency and a return of risk appetite for investors. In this case, the sale of the shares will be and stock indices will go up again. /> When making a forecast for the coming days, the majority of experts (60%) they do not exclude the continuation of the downward trend and the fall of the EUR/USD pair to the 1.1800 zone. But the remaining 25% already indicate that the couple is sold out. The picture changes dramatically with the transition to monthly and quarterly forecasts. Here, 70% of analysts expect the scales to tilt towards the euro after $1.9 trillion in aid appears in the U.S. market, and the pair will go up. Resistance levels are 1.2025, 1.2060, 1.2170, 1.2200 and 1.2270. As regards the events of the coming week, the release of GDP data in the euro area on Tuesday 09 March, statistics on the US consumer market on Wednesday 10 March and Germany on Friday 12 March, as well as the Decision of the European Central Bank on interest rates on Thursday 11 March. The rate is forecast to remain unchanged at zero. In this context, a press conference of the ECB’s management will be of greater interest on the same day; GBP/USD. Bank of England Governor Andrew Bailey is due to speak on Monday, March 8, where he intends to outline the main parameters of the country’s monetary policy as he seeks to deal with the financial damage caused by the COVID-19 pandemic. According to ING analysts, “overall, fiscal support should highlight the constructive outlook for sterling in the second quarter of 2021. Further fiscal assistance will contribute to the economic recovery and make sterling a leader in the G10 currency market.” But until that happens, 50% of analysts expect the GBP/USD pair to break through support in the region of 1.3775-1.3800 and rush to the 1.3600-1.3760 zone. This forecast is supported by 85% of trend indicators and 100% of oscillators on H4, but only 65% of their “colleagues” on D1. 25% of experts, supported by graphical analysis in both time intervals, expect the pair to increase and another 25% to take a neutral position. At the same time, as with the EUR/USD and for the same reasons, the number of bull ers increases to 60% after switching to the monthly forecast. Resistance levels are 1.3900, 1.3950, 1.4000, 1.4085 and 1.4185, target is February 24, a high of 1.4240;
USD/JPY. After the pair literally rose 215 points last week and reached eight-month highs, it is clear that 100% of trend indicators are colored green. But when it comes to oscillators, 35% already fully indicate that it is bought out. Graphical analysis also points south. Many traders are afraid to open both long and short positions in such a situation. As for the experts, the scales have already begun to tilt in favor of downward adjustment: there are 50% of bear supporters now. 25% expect the USD/JPY pair to continue to rise and another 25% to remain neutral. In the transition from a weekly to a monthly forecast, 80% of analysts already expect the pair to fall and return to the 105.00 zone. Support levels are 108.00, 106.70, 106.10 and 105.70; Resistance – 109.80; kryptocurrencies. Glassnode’s research has shown that only 4 million bitcoins are in free float on the market. The third half in May 2020 halved the miners’ reward for the mined block from BTC 12.5 to BTC 6.25. In addition, it increases the shortage of coins on the market. And as you know, this is a limited issue of bitcoin, which is one of its main advantages over the currencies of gold and fiat. “Suddenly, buying bitcoin is no longer irrelevant or risky,” wrote Mike Novogratz, head of cryptocurrency bank Galaxy Digital. On the contrary, it has become risky not to put BTC in the portfolio while central banks continue to print money. We don’t have enough time to hire sales managers to reach all institutional customers who want to understand and participate in the market.” Even a gold supporter like Euro Pacific Capital President Peter Schiff supported Novogratz. Recently, this bitcoin skeptic called bitcoin the biggest bubble in history and unflabbled talked about the mental abilities of cryptocurrency investors. And now he has admitted his mistake. “When I first heard about bitcoin, I didn’t think smart traders would be stupid enough to buy bitcoin. I was wrong,” Schiff wrote. Returning to galaxy digital boss Mike Novogratz, it should be noted that he radically changed the forecast for the BTC rate at the end of 2021 upwards. “We feel like,” says the banker, “we’ll stay at a little between $42,000 and $60,000, and then see the next big jump to $100,000. I won’t be surprised if we reach this mark by the end of this year.” The unexpected conspiracy forecast was given by a competitive intelligence expert. He believes that creating and supporting the bitcoin hype for years is no accident. If the US financial elite manages to convince its creditors that bitcoin ownership is better than dollars, it can transfer all US external debt to the cryptocurrency over time. “As soon as this happens, the cryptocurrency will only have to collapse, and America’s gigantic debt will actually be reset,” the expert wonders. Time will tell whether this is true or not. In the meantime, events on the US stock exchange play one of the main roles in influencing bitcoin. Recall that about a year ago the fall in the stock market due to panic around the COVID-19 pandemic caused the collapse of the cryptocurrency market. And in conclusion, another funny crypto life hack. We have already talked about the American fortune teller, who predicts bitcoin rates by observing the movement of the planets. There was also the story of another Resident of the United States who placed a mining farm in the trunk of his BMW. The farm receives energy from the car’s battery, to which it is connected using a DC inverter, which allows the owner to mine the cryptocurrency when the car is moving. And now known became a gaming enthusiast and crypto from China named Yifan Gu. He managed to bypass the technical restrictions for cryptocurrency mining set in Sony PlayStation 5, and customize this game console for Ethereum mining, gaining about $50 a week. Earlier, Yifan Gu adapted his MacBook Air to the Apple M1 chip to extract this leading altcoin. However, at the current ETH rate, you can only earn $0.14 in one day on your MacBook Air.
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.