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Foreign exchange and Cryptocurrencies Forecast for August 15 – 19, 2022 – Analytics & Forecasts – 13 August 2022


 

EUR/USD: Weak Inflation Weakens Greenback

 

EUR/USD has been transferring sideways within the 1.0100-1.0270 channel for greater than three weeks. Makes an attempt to interrupt by its higher or decrease border resulted in failure every time. Even very sturdy information on the US labor market, which got here out within the first week of August, didn’t assist the greenback. Recall that unemployment within the US has remained at 3.6% since March, which is an excellent indicator. And it turned even decrease in July, 3.5%. And such an essential indicator as NFP, the variety of new jobs created outdoors the agricultural sector, with a forecast of 250K, really reached 528K. And this even supposing it was 372K a month earlier.

● The sideways motion continued till Wednesday, August 10, when the pair moved sharply larger, turning the 1.0270 degree from resistance to assist. And the purpose right here is just not the strengthening of the euro, however the weakening of the greenback. The place of the American forex deteriorated after the discharge of the US inflation report. The patron worth index (CPI) with a forecast of 0.2% in July turned out to be on the degree of 0.0% (1.3% a month earlier). It decreased from 9.1% to eight.5% (forecast 8.7%) on an annualized foundation. As an alternative of the anticipated 0.5%, the bottom CPI grew by solely 0.3% in July (0.7% a month earlier).

All these figures point out clearly that inflation, the struggle in opposition to which the Fed launched, is declining. After all, this isn’t a last victory, however the success of the American Central Financial institution is clear. Due to this fact, it might soften its financial coverage considerably and never elevate rates of interest as aggressively because it has achieved prior to now two months.

● Talking on the finish of the July assembly of the FOMC (Federal Open Market Committee), Fed Chairman Jerome Powell tried to persuade everybody that the regulator remains to be hawkish. And that, if essential, the Fed is able to speed up the tempo of price hikes. Nevertheless, even then the markets didn’t imagine Powell and reacted by turning in the direction of the inventory market. And now the inflation information has turn into one other argument in favor of the truth that the FOMC might elevate the speed not by 0.75%, however solely by 0.50% in September, cease elevating charges altogether in November, and return to the quantitative easing program altogether in 2023.

After all, that is only a forecast to this point. Extra exactly, not even a forecast, however simply expectations. Nevertheless it was them that continued to push inventory indices S&P500, Dow Jones, Nasdaq up, and didn’t permit the EUR/USD pair to fall once more to the parity of 1.0000. Not but.

EUR/USD ended the previous week at 1.0260, returning to the medium-term sideways channel of 1.0100-1.0270. 45% of specialists vote for the truth that it would go additional down, and perhaps even break by the decrease border of the channel. 35% present it the best way to the north and 20% – to the east. As for the oscillators on D1, 40% are coloured crimson, 40% are inexperienced, and 20% are impartial grey. There’s full stability among the many pattern indicators: 50% look south and 50% look north.

The closest assist for the pair is the extent 1.0220, then there are zones 1.01500-1.0200 and 1.0095-1.0120. The bears’ major goal is, after all, 1.0000. If this key degree is damaged, the bears will goal the July 14 low at 0.9950, even decrease is the sturdy 2002 assist/resistance zone of 0.9900-0.9930. The following critical activity of the bulls shall be a breakout of the higher border of the channel 1.0270, then there’s a excessive of the previous week within the space of 1.0364-1.0368, the following goal is a return to the zone 1.0400-1.0450, then there are zones 1.0520-1.0600 and 1.0650-1.0750.

● The approaching week shall be stuffed with all types of financial statistics. Thus, the ZEW Financial Sentiment Index in Germany shall be revealed on Tuesday, August 16. there shall be preliminary information on Eurozone GDP (Q2) on Wednesday, August 17, in addition to information on retail gross sales within the US. The minutes of the final FOMC assembly shall be revealed on the identical day. We’re ready for information on European inflation (CPI) on Thursday, August 18, in addition to on the labor market, dwelling gross sales and manufacturing exercise in the US.

GBP/USD: GDP Falls, Forecasts Stay Gloomy

  GBP/USD reacted to the US inflation information launched on Wednesday, August 10, with a leap north by nearly 200 factors to the peak of 1.2276. True, it failed to remain there, and the final chord sounded at round 1.2135. Even the worldwide rise in danger sentiment didn’t assist the pound. The primary motive is the gloomy financial prospects for the UK economic system and no much less gloomy forecasts of the Financial institution of England.

● UK GDP information for each June and Q2 have been launched on Friday, August 12. The June contraction turned out to be lower than anticipated: -0.6%, whereas the forecast was -1.2%. The autumn in GDP in April-June amounted to -0.1% in opposition to the anticipated -0.2% and +0.8% in Q1. Accordingly, the annual determine was 2.9% in opposition to the forecasted 2.8% and eight.7% in Q1. All these information turned out to be barely higher than anticipated. However, regardless of this, the slide of the economic system into recession is an apparent reality, and the one query that continues to be is the depth and period of such a fall.

● In line with 55% of analysts, the final week didn’t carry something good to the pound, and due to this fact the pair will proceed its fall. The other viewpoint can be held by solely 15% of specialists, the remaining 30% stay impartial. The readings of the symptoms on D1 are as follows. As for the pattern indicators, the ratio is 85% to fifteen% in favor of the crimson ones. Solely 25% of the oscillators facet with the bears, 35% point out development, 40% have taken a impartial place.

The closest assist is situated at 1.2100, adopted by zones and ranges 1.2045-1.2065, 1.2000, 1.1875-1.1925 and 1.1800. Under is July 14 low of 1.1759, then 1.1650, 1.1535 and March 2020 lows within the zone 1.1400-1.1450. As for the bulls, they are going to meet resistance within the zones and on the ranges 1.2160-1.2200, 1.2275-1.2325 and 1.2400-1.2430.

● The primary occasion of the approaching week is prone to be the discharge of UK inflation information (CPI) on Wednesday August 17. Additionally noteworthy on the calendar is Tuesday August 16, when UK labor market information is available in, and Friday August 19, when July retail gross sales within the nation turn into identified.

   

USD/JPY: Yen: Hope for Higher however a Very Distant Future

● The dynamics of USD/JPY final week was much like the dynamics of EUR/USD reversed. (That is logical, since right here the greenback strikes from the place of the bottom forex to the place of the quote forex). Having began on Monday, August 8 from 135.00, the pair went down sharply on Wednesday, August 10 on the premise of US inflation information, reached the native backside at 131.72 on August 11, then reversed and completed at 133.45.

● Those that are able to open long-term positions will most likely have an interest within the forecast of analysts from Westpac, one of many largest banks in Australia, one of many Massive 4, and the second largest financial institution in New Zealand. They imagine that the present degree of USD/JPY may be justified. Japan is favored by financial development in Asia and the persevering with downward pattern in power costs. And given the doable easing of the financial coverage of the US Federal Reserve, based on Westpac strategists, the pair might fall to 123.00 by the top of 2023.

● The tip of 2023 is sort of far-off, greater than 16 months. As for the forecast for the close to future, the opinions of specialists are divided as follows. 45% of analysts anticipate the pair to rise, one other 25% hope for the strengthening of the yen and the continuation of the downtrend, the remaining 30% communicate of a facet hall. The readings of indicators on D1 give a bit totally different image. Development indicators have a ratio of 65% to 35% in favor of the crimson ones. Oscillators are 15% north, 40% south, and the remaining 45% east.

Helps for the pair are situated on the ranges and within the zones 133.00, 132.50-132.85, 131.75-132.00, 131.00, 130.40, 128.60 and 126.35-127.00. Resistances are 134.00, 134.40-134.60, 135.30-135.60, 136.35-137.00, 137.45, 137.90-138.40, 138.50-139.00, and at last the July 14 excessive at 139.38.

● As for the occasions of the upcoming week, it’s value being attentive to Monday, August 15, when the preliminary quantity of Japan’s GDP for Q2 2022 shall be identified. In line with forecasts, it might develop from damaging -0.1% to +0.6%. That is the primary macroeconomic indicator of market exercise, which assesses the speed of development or decline of the nation’s economic system. Its development is often a constructive, bullish, issue for the nationwide forex.

 

CRYPTOCURRENCIES: August 26: a Horrible Day on the Calendar

● The crypto group continues to marvel if the crypto market has bottomed out or if a brand new worth collapse awaits us. Earlier than transferring on to the following batch of forecasts, let’s begin with some statistics.

So, the worth of bitcoin fell to $17,597 on June 18, which is in keeping with the extent of December 2020 and nearly 75% beneath the all-time excessive of $68,918. If we measure from the start of 2022, the primary cryptocurrency began at $47,572 on January 01, and its fall was 63% by June 18. After that, BTC/USD crept up slowly, demonstrating a sequence of rising lows and highs over 8 weeks. Nevertheless, because the chart reveals, bearish resistance sharply elevated above $24,000 and the upward momentum started to fade quickly. So, the weekly most was at a top of $24.264 on July 20, $24.435 on July 29, and, lastly, $24.891 on August 11. That’s, development was solely about 2.5% over the previous 3 weeks. 

● On the time of this writing, Friday night, August 12, the full capitalization of the crypto market is $1.155 trillion ($1.089 trillion every week in the past), and the Crypto Concern & Greed Index remains to be within the concern zone, at a degree of 42 factors (31 weeks in the past).  BTC/USD is buying and selling at $24,100, about 50% decrease than in the beginning of the yr.

Regardless of this worth discount, the variety of addresses with a stability of 1 BTC has grown by 9.4% for the reason that starting of 2022. The indicator reached a historic excessive of 891.009 on the finish of July. The scenario is much more pronounced with addresses with a stability of greater than 1 ETH, the variety of which has grown by 15.7% over seven months. This pattern signifies the will of buyers to build up. For instance, based on the analytical useful resource The Stability, 39% of US buyers started to speculate extra in cryptocurrencies, wanting to maintain their financial savings.

● Is it value shopping for the flagship cryptocurrency now? Bloomberg Intelligence Senior Strategist Mike McGlone believes bitcoin is at present buying and selling at a big low cost in a sustained bull market. “The primary cryptocurrency hit an all-time low in July in comparison with its 100-week transferring common,” the professional defined.

Mark Yusko, managing companion of Morgan Creek Digital, additionally says that the present worth of the primary cryptocurrency is unfair, and needs to be round $30,000. And based on Anthony Scaramucci, CEO of SkyBridge Capital, the “honest worth” of BTC ought to now be round $40,000. PlanB, the creator of the once-popular Inventory-to-Move mannequin, has the bar even larger at $55,000.

All these influencers have their very own fashions and their very own justifications. Nevertheless, one should take into account that “honest worth” is a relatively relative idea. And maybe the fairest is the present market worth. That’s, how a lot sellers are able to promote now, and consumers are prepared to purchase a specific asset for.

● Some on-chain indicators signaled the passing of the capitulation interval and an enchancment in investor sentiment in July. That is said in an analytical report by ForkLog. In opposition to the background of consolidation and the following clean restoration of the worth of bitcoin, the Puell A number of indicator started to exit the deep oversold zone. The Web Unrealized Revenue/Loss (NUPL) metric has moved into the hope/concern zone and is heading in the direction of optimism. The MVRV Z-Rating crossed the higher boundary of the deep oversold zone at 0.1 on July 28. That is one other sign concerning the passage of the “backside” of the market cycle.

● In line with Sam Bankman-Fried, CEO of the FTX crypto change, crypto winter might be coming to an finish, and spring is simply across the nook. “I feel we have seen the worst already,” mentioned the multi-billionaire, higher often known as SBF. “Some bitcoin miners may need some extra issues, however I feel we’re speaking about just a few hundred million {dollars} in complete ache, not billions.”

Nevertheless, SBF’s crypto spring forecast was not with no “however”: “If Nasdaq is left to fall one other 25%, and if Fed rates of interest do rise to 7%, and if we’re in recession for 2 and a half years […] , bitcoin may fall to $15,000 or $10,000,” mentioned the CEO of FTX.

● Mike McGlone of Bloomberg Intelligence additionally seems to be cautiously in the direction of the US Central Financial institution. The analyst emphasizes the important thing function of the US Federal Reserve, which is pursuing aggressive price hikes in 2022. This might doubtlessly create limitations to dangerous belongings, together with cryptocurrencies and shares. On the similar time, Mike McGlone urges to not attempt to struggle the Fed.

Dangerous belongings should cross the following critical take a look at on the finish of August. An analyst with the nickname Man famous that the discharge of financial information anticipated this month may have a big influence on the crypto markets. In line with him, 3 essential components can interrupt the present uptrend. The primary is the US Private Consumption Expenditure Index (PCE). “PCE information for July shall be launched on August 26. On condition that PCE is the Fed’s favourite inflation indicator, a excessive worth may result in markets collapse in anticipation of an aggressive price hike.”

The second issue is the US gross home product for the second quarter: “Revised GDP information for the second quarter will even be revealed on August 26. Take note of them. If these figures are revised upwards, that’s, actually, the US will not be in a technical recession, this will likely push the Fed to lift rates of interest much more.”

And at last, the third issue is the annual financial symposium in Jackson Gap, the place US monetary authorities focus on world financial issues. The symposium will happen from August 25 to 27, which coincides with the discharge dates of the 2 above-mentioned statistics.

These components may affect the selections of Fed Chairman Jerome Powell, which may have a cascading impact on the crypto market. “If the statistics change into unimportant, and Powell is just not in the most effective temper, then the crypto market may have a nasty time. Though there are possibilities that he’ll preserve his ideas to himself lengthy sufficient for the cryptocurrency market to proceed its restoration rally.”

● A latest Cumberland Institutional Investor Survey discovered that almost all of respondents anticipate bitcoin to rise to $32,000 by the top of the yr. Mike Novogratz, CEO of Galaxy Digital funding firm, named a barely smaller determine. In his opinion, the coin is unlikely to rise above the $30,000 degree within the close to future. The billionaire himself “could be joyful” if BTC stopped for some time within the vary of $20,000 to $30,000.

● Essentially the most optimistic forecast this time was given by a well-liked analyst below the nickname InvestAnswers. The American cryptocurrency change Coinbase and the most important funding firm BlackRock entered right into a partnership settlement final week. BlackRock manages over $10 trillion in belongings in the mean time. Primarily based on this, InvestAnswers believes that the inflow of funds in cryptocurrencies from BlackRock purchasers may push the BTC worth to $773,000.

“If BlackRock locations 0.5% of its belongings in BTC, then, bearing in mind the leverage, the capitalization of bitcoin will enhance by $1.05 trillion, which suggests the worth will rise to $75,000. And this, I feel, may be very possible. If BlackRock purchasers stake 1% of their holdings, then the capitalization will enhance by $2.1 trillion, and bitcoin will attain $173,000. And if BlackRock locations 5% of its belongings, the bitcoin price will attain $773,000. Though I feel that is too aggressive, it might be doable inside 3-5 years,” the analyst wrote. (It needs to be famous right here that InvestAnswers calculations are right just for investments with a leverage of 1:21 or extra).

● And in conclusion of the assessment, just a few phrases about the primary altcoin, ethereum, which is recovering a lot sooner than bitcoin. The BTC/USD pair has risen by about 40% over the previous eight weeks, whereas ETH/ USD has grown by nearly 120%. Most specialists attribute this bull rally to the upcoming change within the consensus algorithm from Proof-of-Work (PoW) to Proof-of-Stake (PoS), which is predicted on the finish of September. The top of Galaxy Digital, Mike Novogratz, believes that the altcoin can attain the $2,200 mark even earlier than this occasion. However based on ethereum co-founder Vitalik Buterin, the most effective is but to come back, after the community transitions to Proof-of-Stake. “As soon as the merger really occurs, I anticipate investor sentiment to enhance,” he mentioned. “In my view, […] the primary influence on the ETH price shall be offered after the completion of the merger course of.”

 

NordFX Analytical Group

  https://nordfx.com/

 

  Discover: These supplies are usually not funding suggestions or tips for working in monetary markets and are supposed for informational functions solely. Buying and selling in monetary markets is dangerous and can lead to a whole lack of deposited funds.

  #eurusd #gbpusd #usdjpy #Foreign exchange #forex_forecast #signals_forex #cryptocurrency #bitcoin #nordfx

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