First, last week's review:
The European currency has been growing all week, despite weak statistics on the Eurozone economy. The pair was helped to break the upper boundary of the 1.0750-1.1000 corridor and rise to the top of 1.1145 by news regarding the EU's recovery measures, including the EU's plans to expand its budget. The Swiss bank, which buys the euro against its national currency, also gave support to the euro.
By the end of the week, the activity of the bulls had been tempered somewhat by Donald Trump's statement regarding new US actions against China. Usually, the euro falls every time, as soon as another exacerbation begins between Washington and Beijing, because this is a clear signal of new economic problems in Europe. But, according to a number of analysts, the prices of the European currency have already fallen so low that giant efforts of the bears are needed for their serious move to the south. As a result, the pair sank slightly below the center of the ascending four-day channel and finished near the 1.1100 level.
GBP / USD
Last week, the dollar fell not only due to the onslaught of the euro, but also in pairs with the pound and the yen. The British currency strengthened its position even despite the "cautious" comments of a member of the Bank of England's Monetary Policy Committee, Michael Saunders. This turn of events was expected by 30% of analysts, according to whom the pair should return to the central zone of the 1.2165-1.2650 channel. The most accurate forecast was provided by the graphical analysis on D1, which tracked the pair's rise to the top of 1.2350. In this area the British pound remained for most of the trading session, setting the final chord.
USD / JPY
Most experts (65%) expected a return of the USD/JPY pair to the May 06 low in the 106.00 area. By the beginning of Friday, May 29, the price had fallen to only 107.07. Thus, the weekly volatility of the pair was less than 90 pips. And this despite the fact that two months ago it rose more easily by ten times in five days.
Yes, the situation with the COVID-19 pandemic is gradually returning to normal. But besides this, the difference in regulatory conditions between the major currencies is gradually disappearing. Just look at the G3 key rates. Thus, the volatility of the Japanese currency against the US is no longer the same as it was in March.
If we talk about the results of the week, the pair once again found itself inside the very narrow side corridor at 107.30-108.00, setting the end point at 107.80
Let's start with the scariest news. Twitter user MasterChangz, who is trying to hack crypto wallets - by capturing private keys - said Bitcoin's days are numbered. According to him, the token of the main digital currency will be cracked by him within 5 years. "Now I sort through 600 million keys per second, but every two years the selection speed increases by about 10 times due to technological updates in computer technology," MasterChangz wrote.
But it turns out that everything is not so scary, and Bitcoin will live for some time. “Technically, a private key can be obtained. However, it will take a lot of time,” says Bitcoin Core developer Luke Dashzhr. According to his calculations, it would take about 38593493520073954175290747912192 years to crack a simple old Bitcoin wallet using mid-tier video cards.
Danny Dekrueger, the developer of the Cash app, also expressed doubts about the plan's success. He believes that even if MasterChangz could increase the technology's computing power a billion times and capture the keys for 100 years, the chance of finding a suitable key to hack the wallet would be 0.00000000000000000000000000000000000000001%.
Now that we've calmed down, let's move on to the forecasts that experts gave for the previous week. Their votes were roughly evenly distributed in the $8,400 to $10,000 range. The same thing actually happened, only in a slightly narrower scope. Initially, bitcoin prices fell, reaching a local low of $8,600 on May 25. This was followed by a trend reversal, and the BTC/USD pair overcame the resistance at $9,600 on Friday, May 29. As some analysts believe, this growth was facilitated by a large whale transaction: 11,660 BTC (worth over $111 million) were transferred between two unknown wallets, according to WhaleAlert.
On the evening of Friday, May 29, Bitcoin prices are in the $9,400 region. The total capitalization of the crypto market increased in seven days from $246 billion to $265 billion (+7.7%), and the Crypto Fear & Greed Index rose 6 points - from 42 to 48.
And some statistics. According to payment firm Revolut, after trading volume fell 52% in March, the number of clients trading cryptocurrency increased by 68% in April. By the end of the month, the amount of digital assets each had purchased had increased by an average of 57%. During these months, 51% of all transactions were in Bitcoin (BTC/USD), Ripple (XRP/USD) – 20% and Ethereum (ETH/USD) – another 14%. Litecoin (LTC/USD) is in fourth place with 8% of all transactions.
The demand for Ripple is somewhat surprising because its price has fallen by almost 60 percent over the past twelve months, while Bitcoin, despite all its twists and turns, remains at zero, ending, as at the end of May 2019, in the region of $9000 . And this is despite the fact that XRP has only reached 30% of the maximum coin volume, as opposed to 87.5% for BTC. Although the active Ripple buying is probably due to the fact that investors consider this altcoin to be undervalued and anticipate its explosive rapid growth.
Next week's forecast:
It is clear that at the end of last week 90% to 100% of the indicators on H4 and D1 are looking to rise. Only 10% of the oscillators are giving signals that this pair is overbought. But almost half of analysts have doubts about the possibility of further growth of the euro. Market risk appetites are fading, and if the US continues to attack in the Chinese direction, EUR/USD may once again turn south. It should be noted that the strengthening of the dollar in the week period is expected by only 45% of experts, but when moving to the monthly time frame their number increases to 70%. The immediate task for the bears is the return of the pair inside the channel 1.0750-1.1000, the support - 1.1065, 1.1000 and the central line of the channel 1.0900. Resistance is located at 1.1145 and 1.1240.
Among the events to watch out for in the coming week are the publication of data on business activity in the US (ISM) - in the manufacturing sector on June 01 and in the service sector - on June 03, data from German employment and the European Union on Wednesday, June 03, and the Central Bank meeting European press conference on Thursday, June 4, and data from the US labor market (including the NFP) - traditionally on the first Friday of the month, June 05.
If there is a certain buzz in the index readings characterizing the sideways movement of the pair, then the analysts' preferences seem to be more specific. 25% of them support a sideways trend, another 25% support an increase in the pound, and 50% support a downside. The latter is supported by graphical analysis on D1. In addition to problems in the economy, uncertainty about Brexit continues to weigh on the British currency. Therefore, speaking in the European Parliament, Phil Hogan said the UK may have decided that the terms of an agreement with the EU are now absent. Although he did not rule out that the situation will become clearer after the resumption of negotiations next week.
At the moment, the support levels are 1.2245, 1.2165 and 1.2075 and the resistance levels are 1.2365, 1.2465 and 1.2650
USD / JPY
As mentioned above, the market risk appetite has again fallen dramatically. And if US President Trump goes to further aggravate the situation with China, the dollar may start to rise sharply again. But not with respect to the yen. Investor demand for safe havens will either improve the Japanese currency's position against the US (especially if the protective bond yield falls towards new lows) or keep it at the same level, as it has in the past two months.
The results of analyst analyzes and index readings also look similar: a third looks north, a third looks south, and a third crosses. The levels of support / resistance are the same: from the bottom - 107.30, 106.80 and 106.20, from the top - 108.00, 108.50 and 109.25
Only 30% of analysts expect that it will not only be able to break the key level of $10,000 in the coming days, but also gain a foothold above it. They believe that the harbinger of this is the increased interest in BTC futures, which is driving the value of the coin higher. The remaining 70% believe that the BTC/USD pair will continue to move in the $ range of 8,600-9,600, although they do not rule out attempts to break in one direction or another.
As for the predictions of crypto experts, as usual, everyone is waiting for the beginning of a new leap to unseen heights. Alexis Ohanian said that the current situation in the digital asset market is like a full-blown crypto spring. He said that not only does the relatively stable value of bitcoin play an important role, but also its growth after the failure in early March. So far, the growth trend has been observed with a certain frequency, but an important barrier in the form of the Bitcoin halving has been overcome. “We need to survive its minor consequences and continue to develop the industry.”