What can traders expect from the Cryptocurrency and the Forex market this week? NordFX expert has provided this May 25-29, 2020 forex and cryptocurrency forecast to guide you through the week.
May 25, 2020, | NordFX – As for the current economic indicators of the USA and the Eurozone, despite specific improvements, it is still very, very early to talk about their confident recovery. Although, according to Markit, the composite index of business activity in the manufacturing sector of the Eurozone in May rose from 13.6 to 30.5, consumer demand continues to fall. And the number of jobs continues to decline at a tremendous speed.
Besides, the United States announced the withdrawal from the “open skies” treaty, which could be a harbinger of a new arms race and reinforces the expectation of another round of geopolitical tensions.
Forex Forecast – EURUSD
The first forex pair to forecast is EURUSD. Tensions between the U.S. and China continue, which can not but affect the markets. President Trump said he would respond “very strongly” to Beijing’s legislative initiatives. It applies particularly to the desire of the PRC to strengthen control over Hong Kong. That has previously served as the cause of unrest in this country.
Donald Trump said on Thursday, May 21, he “will deal with this issue very decisively.” if China continues to take this path. Therefore, the U.S. administration continues to point to the Celestial Empire. As the source of the global coronavirus pandemic and requires appropriate compensation from it.
This situation of economic uncertainty both in the USA and in Europe does not allow investors to give preference to any of these currencies and has been holding the EUR/USD pair in the side corridor 1.0750-1.1000 for running the second month. So last week, the pair first rose to the upper border of this channel. Then sank into its central zone, completing the five days at around 1.0900.
Moreover, the NordFX expert forecast this forex pair has a lot of chances to stay within the side channel 1.0750-1.1000. However, further escalation of geopolitical tensions reinforced by the repeated outbreak of the COVID-19 pandemic. That the gloomy moods to the market return. Most likely, there will be no new panic, but interest in protective assets such as the U.S. dollar will begin to grow back. For this reason, most experts (70%) do not rule out a breakthrough of support 1.0750. And a decrease of the pair to the lows of March in the area of 1.0635. The possibility of raising the pair to the zone 1.1100-1.1240 in the medium term is considered only by 30% of analysts.
Among the events that should be noted in the coming week is the release on May 28 of data on orders for durable goods, unemployment, and US GDP, as well as, a day later, on May 29, data on the consumer market in the Eurozone.
Forex Forecast – GBPUSD Forecast
The second forex pair to forecast is GBPUSD. Despite some positive macroeconomic data, the overall situation in the British economy does not look very happy. And this may push the Bank of England to increase the quantitative easing (Q.E.) program by £100 billion and lower the key interest rate to negative values. All these factors continue to pressure the pound, especially as the head of the Federal Reserve, Jerome Powell, categorically stated that his organization is not considering the possibility of imposing negative rates on the U.S. dollar.
At the moment, 70% of analysts believe that the last week’s correction has finished, and the pair is expected to further decline first to the horizon of 1.2075, and then to support 1.2000. In the event of a breakout of this important level, the pair will rush to the lows of March: 1.1640 and 1.1400.
85% oscillators and 100% trend indicators on H4 and D1 side with the bears. And the remaining 15% of oscillators give signals that the pair is oversold, 30% of experts agree to this. In their opinion, the pair is expected to return first to the central zone of the channel 1.2165-1.2650, and then, possibly, rise to its upper boundary.
The compromise option offered by graphical analysis on D1, which draws first rise to 1.2350, and then a decrease by mid-June to 1.1400.
Forex Forecast – USDJPY Forecast
The third forex pair to forecast is USDJPY. A strong decline in activity in the Japanese economy (the second-largest economy in Asia and the third in the world after the economics of the USA and China) continues, and therefore inflation in the country will decrease. Production growth will slow down at least until early 2021.
The Bank of Japan has been trying for a long time to warm up inflation by launching various incentive programs and keeping key rates in the red zone. However, there is still no significant gain insight, and further steps in this direction will only increase the pressure on the yen.
The demand for the yen as for the haven-currency is on the opposite side of the scale, which will rise as the political and economic conflicts between the U.S. and the PRC escalate. But this factor is more likely to affect the cross-rates of the Japanese currency, as the investors also see the dollar as a protective asset, even stronger than the yen.
However, 65% of forex experts forecast the return of the USD/JPY pair to the minimum of May 06 in the 106.00 zones at the moment. Supports are 107.30, 106.80, and 106.20. Further growth of the pair is possible according to 35% of analysts. The targets are 107.85, 108.00, 108.50, and 109.25.
Cryptocurrency Market Outlook
After the forex market forecast, let’s start the cryptocurrency market outlook with secrets and mysteries. For the first time in a year, unknown people transferred more than 28 BTC ($258 thousand) to an anonymous address from the wallet where the bitcoins stolen from the Bitfinex exchange were stored. But this is not a sensation, but a topic for the police investigation. The impression is that Bitcoins, possibly belonging to Satoshi Nakamoto himself, also began to move! The crypto community always has an interest in coins mined at the origin of the network. Now 50 BTC, which had to lie dead weight since 2009, is in motion.
According to some analysts, these and other processes are directly related to the consequences of halving. Against the background of the falling hashrate in the last recalculation, the complexity of bitcoin mining also decreased. But this has not helped to normalize the situation so far. Despite the best efforts of the bulls, the BTC/USD pair never managed to break the key level of $10,000. But, as you know, what does not grow, falls. After the halving not waiting for the long-awaited jerk up, traders began to eliminate their long positions and take profits. As a result of that, the quotes of the leading cryptocurrency fell by about 10% to the level of $9,000.
As a result of the sell-off, the total capitalization of the crypto market fell from a May 18 high of $273 billion to $246 billion on May 21, but the value of the Crypto Fear & Greed Index is about the same level as a week ago, 42 vs. 44.
Despite the small drawdown of BTC/USD, the profitability of bitcoin, this year was far ahead of gold. The precious metal has risen in value by 12% since January, while bitcoin increased by about 30%. The advantage of the leading cryptocurrency over the stock market looks much more impressive. For example, JPMorgan quotes fell by 37.2%. As a result of that BTC bypassed this bank in terms of market value growth by more than 200%.
But the most impressive result was not bitcoin at all. But Ethereum has “grown fat” by almost 55% since the beginning of the year. According to a number of experts, ETH has very good prospects as its network becomes increasingly active. The launches of DeFi reduced the circulation of coins through creating an effect similar to the BTC halving.
The main altcoin supported by the author of the Harry Potter series of novels, J.K. Rowling. Previously, she tried to figure out bitcoin. Then she stated that she was only trolling bitcoin in the hope of increasing her significant ethereum assets. This turned out to be a joke, but additional P.R. to ETH coins was provided.
At the moment, apologists for the leading cryptocurrency do not consider ETH a competitor. The shares of bitcoin in the market are 65% comparing to 8.4% for ethereum. In the middle of June 2017, these coins were close to parity 38% and 31%.
Cryptocurrency Forecast for May 25 – 29, 2020
Traditionally, first about the medium – and long-term forecasts of well-known crypto enthusiasts. Simon Peters said that within the next 18 months, bitcoin would be able to break above $20,000. If the U.S. and many other states move to negative rates, the capital investment of bitcoin will start to multiply. After that, they are taking a mark of at least $20,000 will be inevitable. And the appearance of BTC/USD near the height of $ 50,000 does not rule out.
A smoother takeoff drew by the entrepreneur and author of the bestseller “Rich Dad, Poor Dad” Robert Kiyosaki. The intention of the U.S. authorities pouring trillions of dollars into saving the pension plans will kill the economy of this country. And it will cause the price of bitcoin to grow to $75,000 in three years.
Kiyosaki measured the future of BTC by three years. Besides, renowned trader Tone Vays capped his forecast to just three days. He said live on ForkLog that “Bitcoin could rise very seriously. How high? Somewhere up to $12,000,” Vays said. He added: “If we get stuck now and start falling to $9,000, I will expect us to fall below $8,000. Three days have passed; bitcoin is stuck at $9,000. According to Vays’s forecast, should we wait for its further collapse?
For the coming week, the votes of experts evenly distributed in the range of $8,400-10,000. Moving to a longer-term forecast, 80% of analysts assured that by the end of June, bitcoin would able to gain a foothold above the $10,000 horizon. However, some pessimists remind recently between two “bad” dates February 13 and March 13. Just a month away, bitcoin collapsed from $10,480 to $3,845, making one think of its ultimate collapse.
This cryptocurrency and forex forecast should not deem a recommendation for investment or guidance for working on financial markets. They are for informative purposes only. Trading in financial markets is risky and can result in a complete loss of deposited funds. If you want to start trading on a demo account, visit the NordFX Analytical Group for more information.
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