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Old 28-02-2021, 07:58
StanNordFX StanNordFX is offline
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Forex Forecast and Cryptocurrencies Forecast for March 01-05, 2021


First, a review of last week’s events:

- EUR/USD. As we expected, the speech by the head of the Fed turned out to be quite interesting. Jerome Powell presented to Congress a semi-annual report on monetary policy, from which it followed that not everything is as good as we would like as far as the recovery of the US economy is concerned. The surge in economic activity in the summer of 2020 was followed by the slowsown of the growth rate. The decline in unemployment has slowed down, and household expenditures are not growing either.
After the unrest and turmoil of 2020, a lot of attention is paid to socio-demographic differentiation, but the picture is not the rosiest either. Unemployment among "white" Americans, according to the Fed, is 5.7%, while among Hispanics - 8.6%, and among African Americans it is even higher - 9.2%. There is also discrimination based on gender: for the last month of 2020, men gained 16,000 new jobs, while women, on the contrary, lost 140,000.
All of the above raises certain doubts about the early recovery of the American economy, leads to a decrease in risk sentiment, and strikes a blow on the stock market and the US dollar. Investors are shifting attention to long-term government bonds. Since the beginning of 2021, the yield on 10-year treasuries has jumped from 0.91% to 1.56%, and their growth has become especially noticeable recently. As for stock indices (especially stocks of technology companies), they, accordingly, go down sharply. For example, the S&P500 was losing up to 3.8% in just two days - February 25-26, while the Nasdaq Composite was sinking by more than 3%. The DXY dollar index is also gradually approaching 2018 lows, losing about 9% this year.
In such a situation, most analysts (65%) expected the dollar to weaken and rise to the 1.2200-1.2300 zone, which happened: at the week's high, February 25, the EUR/USD pair was approaching 1.2245. However, then it seems that investors changed their minds and began to realize that the growing yield of long-term Treasury securities directly affects the growth of rates on current consumer lending. And that immediately brings to mind the 2008 mortgage crisis, which marked the beginning of a series of major bankruptcies. As a result, the dollar strengthened a little and the EUR/USD pair dropped to the zone 1.2070-1.2100 - the place where it has already been several times since last December. This can only say about one thing: the confusion of the market and the lack of clarity about the prospects of the European and American economies;

- GBP/USD. As predicted, Prime Minister Boris Johnson's speech on Monday 22 February, as well as the expectation of positive data from the UK labour market on Tuesday 23 February, continued to push the pair GBP/USD to the highs of 2018, raising it to the height of 1.4240.
And of course, the dynamics of the pair could not but be affected by what was happening in the United States. Therefore, repeating the EUR/USD parabola, the GBP/USD pair went south on Thursday February 25, especially since it was overbought, and some reason was simply needed to take profit on the pound.
On Friday, having lost 355 points, the pair found a local bottom at 1.3885. This was followed by a rebound and a finish at 1.3930;

- USD/JPY. It was said last week that this pair was moving within the medium-term side channel 102.60-107.00. Only 35% of experts believed then that the pair had not yet completed its movement to the upper border of this trading range. True, 75% of oscillators and 80% of trend indicators on D1 were on their side, which gave additional weight to this forecast, which turned out to be absolutely correct. The USD/JPY pair recorded a 26-week high at 106.70 on the second half of Friday, February 26. As for the final chord, it sounded at the height of 106.55;

- cryptocurrencies. We have repeatedly written that the presence of large institutional investors in the crypto market is a double-edged sword. On the one hand, they can strongly push the market up, and on the other hand, they can crash the quotes if they fix profits. In addition, the actions and sentiments of such institutions are highly dependent on the actions and sentiments of regulators and other government agencies. We felt all this in full last week.
After bitcoin hit an all-time high of $58,275 on February 21, investors were looking forward to taking the $60,000 high. However, there was a sudden reversal and a sharp drop of 23% to $44,985. Then the rebound to $50,000, and a fall again - to $44,000.
According to many experts, the trigger of the massive profit fixation by "whales" was the statement of the former head of the Fed and now the US Treasury Secretary Janet Yellen on the speculative nature of cryptocurrency and the possibility of using it for money laundering. According to analyst Sven Henrich, the head of the Ministry of Finance has actually declared war on bitcoin.
“Digital currencies can provide faster and cheaper payments. But there are many issues to be explored, including consumer protection and money laundering,” Janet Yelen said, also mentioning the possibility of launching the Central Bank's own digital currency (CBDC).
The fall in bitcoin could also have been facilitated by the fall in global indexes of technology companies and the beginning of large-scale vaccinations against coronavirus, but the main thing is the position of the US Government.
According to Bloomberg, against the background of the decline in the bitcoin rate, the head of Tesla and SpaceX, Elon Musk, lost the first place in the ranking of the richest people on the planet. Tesla shares fell by 8.6%, as a result of which Musk lost $15.2 billion. At the same time, the fall in bitcoin, according to Bloomberg, may be partly due to the statement of Musk himself, who called the prices of cryptocurrencies too high. It is not for nothing that they say that a word is silver, and silence is gold. Musk would be better off keeping his mouth shut ?.
Of course, someone loses, and someone finds. Thus, for example, due to technical failures, some customers of the Philippine crypto exchange PDAX were able to buy bitcoin almost 10 times cheaper than the market price, Bitpinas reports. One of the users admitted that he bought bitcoins for 300,000 pesos ($6,150), while the average market price of BTC was about $50,000, after which he transferred the cryptocurrency to his wallet. A day later, PDAX sent him a letter demanding the return of the bitcoins, but the buyer's lawyer claims that "the transaction was legitimate, in accordance with applicable laws, and PDAX cannot withdraw transactions unilaterally."
Another client of this crypto exchange unexpectedly found 40 billion Philippine pesos or about 820 million dollars in his account. It is not reported whether he was able to withdraw this "gift" from PDAX.
In general, the reliability of crypto exchanges is still a rather painful topic. According to BDCenter Digital agency, Kraken, Coinbase and Binance are the safest exchanges. The brokerage company NordFX can also be noted here, whose clients can also make transactions and store deposits in cryptocurrencies. In the 13 years of this broker, it has not had a single hack and not a single penny of client funds has been lost.
On Friday evening, February 26, the BTC/USD pair is trading in the $46,000 zone. The total market capitalization fell over the week from $1,625 billion to $1,410 billion. AND The Crypto Fear & Greed Index has finally come out of strong overbought zone to neutral levels, dropping from 93 to 55.
When it comes to altcoins, there is both good news and bad news. For example, the largest developer of GPUs - American technology company Nvidia announced plans to release a series of graphics cards specifically for mining Ethereum. According to CNBC, they can be expected to appear on sale this March.
But it looks like the hard times will not end for Ripple. One of the world's largest money transfer services, MoneyGram, refused to use the product based on the XRP token due to the claims of the US Securities and Exchange Commission (SEC) against Ripple. Against the backdrop of SEC claims, in addition to MoneyGram, Coinbase and OKCoin, Galaxy Digital, Bitstamp, B2C2, eToro and Kraken have already refused to support the XRP token. Asset management company Grayscale Investments announced the liquidation of an XRP-based investment trust, and 21Shares has removed the Ripple token from its exchange-traded products. As a result, the Ripple lost up to 45% of its value last week, and the XRP/USD pair was trading at $0.42 on the evening of February 26.


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