Cryptocurrencies That Could Take the Lead: from New Source Code to Unlimited Opportunities

Apart from their major goal, which is creating a new digital coin, cryptocurrency developers have a few minor ones, too. Those could be creating a whole new transaction processing model with high-speed execution and minimum fees, or a higher level of payment security, regardless of the amount. This could also be financial transaction privacy, being a very important feature for investors nowadays. Every such minor goal deserves special attention.

When it comes to promising cryptocurrencies, the key factor is innovation, that being a new technology or a unique approach that is not typical for the money market. The return one can get with such cryptocurrencies has not arrived in the maximum yet, as the potential is still quite high, although one has got to take a broad-minded approach to see that potential.

Since digital currencies are closely related to IT development, let’s talk tech innovation first. In this regard, the best example is Monero. It is not a carbon copy of Bitcoin, being an independent cryptocurrency, while its developers also focus on privacy and anonymity. All transactions run based on the CryptoNote protocol, with the code using one-time keys and ring signatures. Monero is already used as a virtual currency on the web, which is a substantial advantage.

Another good example is IOTA. Its developers’ goal was to create a whole new space on the web, the one they called the Internet of Things. IOTA code enables deeper communication on the web through various devices. The digital currency itself serves as ‘crypto token’ that enables transactions on the Internet of Things. The source code is based on Tangle, which both accelerates payment processing and allows users to avoid paying fees or commissions.

Cryptocurrency code may be both closed source and open source. This does not mean that open source digital currencies are not secure, this is just yet another approach to it. NEM, a Japanese cryptocurrency, can serve as a good example here, as its open source may enable various kinds of useful modifications going forward. NEM is based on the Proof Of Importance(POI) algorithm, which is among the top three. This is quite a new algorithm at the same time, allowing you to leverage new methods to protect the system from hacks and unauthorized blockchain changes.

All the above cryptocurrencies can, of course, take the lead in the future. Their price ranges from $47 per unit (Monero) to $0.70 and $1.20 in case of NEM and IOTA. With more innovative development, the demand for these digital coins will be going up.

Cryptocurrency developers are also quite focused on payment processing models. This is actually how Ripple was introduced. Ripple is not just yet another digital coin, being a whole-new fully functional payment system. It is based on a unique transaction processing protocol that enhances security, enables instant conversion with a low commission, and facilitates nearly unlimited transaction volume. Ripple also leverages distribution registers, which means a lot of room for development for this algorithm. Global banks have already taken notice on Ripple, which means this digital currency is not just promising, but a lot more.

The above cryptocurrencies are just starting to gain popularity. Their price is not that high, although their potential, both regarding the technology they are based on and the approach towards financial transactions they use, is great. There will be no wonder if we witness these coins skyrocket sometime in the future. However, we cannot ignore digital currencies that are taking the lead right now, such as Bitcoin and Ethereum, that have been, until recently, the only ones known to the general public.

Bitcoin was introduced in 2009 as an alternative to regular money. The traditional financial system has a big drawback, as it is managed according to the interests of big players. This is how all central banks work. Bitcoin has become one of the first steps to change this, as it is decentralized, unregulated, and does not suffer from inflation. Does it have even more potential for the future? Of course, it does.

However, Ethereum is even more promising than Bitcoin. Ether is open source, which simplifies the way the blockchain works, while the information it provides cannot be used for legal purposes. An alternative ‘smart contract’ legal model is in place here, which actually could also be used in other areas, not only in cryptocurrencies.

Even if we assume the cryptocurrency market is a bubble that, when overinflated, will burst, we cannot deny the obvious. The amazing technologies developed recently, from great throughput of 3,000 transactions a second all the way to the utmost security and whole new data storing solutions, will be here to stay.

RoboForex is a group of companies that offers brokerage services to clients in various countries over the world. The group provides traders from the Forex and stock markets with access to its proprietary trading platforms. 

Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

The Oil “Bulls” Still Have Strengths

This week, the oil market will try to get higher. At least, the fundamental background allows counting on that. On Tuesday, Brent costs 57.85 USD; the instrument is slowly growing. WTI crude oil is growing faster, its price is 52.27 USD (+0.73%) at time of writing.

The latest Baker Hughes Rig Count report published last Friday showed that the indicator has been falling for the third consecutive week. On October 20th, the indicator lost 15 units and was 913. Oil Rigs decreased by 7. On YoY, the indicator is still increasing (+360 units).

News from the OPEC technical committee, which had a meeting earlier, also provides support to oil ”bulls”. The committee concluded that the member countries of the oil extraction suspension agreement satisfied the agreement by 120% in September. By the way, in August, this number was 116% and investors were very positive in their response to another record-breaking reading.

Meanwhile, the excess of the oil supply in the world, according to OPEC, is still very significant. This number is 159B barrels for the OPEC countries, but it is slowly decreasing and bringing hope that the oil market may strike a balance soon.

The meeting at the end of November in Vienna will be very important for OPEC. Investors believe that the organization will inform them about possible ways to extent of change the current agreement between the petroleum exporting countries. OPEC has no plan “B”, and largest member countries are sure that the agreement has to be extended.

If we take a look at the weekly charts of Brent and WTI, we can see that they are pretty the same. However, the key aspect of the Brent chart is that the instrument may break its multi-months’ high any confirm investors’ intentions to push the price towards the target at 70.00.

Brent Weekly Chart
Brent Weekly Chart
WTI Crude Oil Weekly Chart
WTI Crude Oil Weekly Chart

On the daily charts, both instruments are trading in a quite similar way, only the short-term upside targets are different. For Brent, it’s 62.00, for WTI – 55.73.

Brent Daily Chart
Brent Daily Chart
WTI Daily Chart
WTI Daily Chart

RoboForex is a group of companies that offers brokerage services to clients in various countries over the world. The group provides traders from the Forex and stock markets with access to its proprietary trading platforms. 

Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Bitcoin Price: Market Law and a Bit of Sentiment

Cryptocurrency market is a highly volatile one. This is one of its key features that lures so many new investors to the digital currency world. How is a digital coin priced? This is a question asked by any a cryptocurrency newcomer. To answer this question, however, you should first and foremost remember that digital currencies are ‘virtual’, they are not backed by any material assets and not regulated by any authority.

In fact, the only thing Bitcoin price depends on is supply and demand. This market law is king here, and it always governs the cryptocurrency price. The more attention is driven towards the digital currency market, the more Bitcoin is spread as an asset or payment option, and the higher goes its price.

Digital coins are as much volatile as they lack transparency. Nobody has a clue of the total amount of Bitcoins in the market and who they belong to. This is critical, as a few pumpers (investors who hold a large amount of an asset) agreeing upon a few actions could be sufficient to artificially create any market trend. As for the high risk, traders get large earning opportunities as a reward in case the market follows their direction.

There are, however, some secondary factors influencing digital coin prices. These are, for instance, increased financial awareness among general public and free access to cryptocurrency market news and events. The more attention digital assets get, again, the more is the demand, and the higher the price. Cryptocurrency infrastructure improvements, such as adding more deposit options, ways of making transaction, converting options, etc, also have some positive influence on cryptocurrencies demand. The easier you can enter and exit the market, the better for you.

With an in-depth approach, we can find yet another digital currency price driver, although its influence is more indirect. This is inflation rate in ‘traditional’ economy. Bitcoin, Litecoin and other digital coins price depend on how many coins have already been issued. A digital coin is a sort of finite resource, as the source code would allow issuing a limited number of course. However, Bitcoin is not connected to inflation in any way, as it is not backed by anything. Thus, cryptocurrency is becoming a kind of safe haven for investors who want to avoid inflation-related losses.

There are many more secondary factors influencing digital currencies, such as geopolitical events, number of active buyers and sellers, total cryptocurrency volume, speculators’ sentiment, etc. The political factor can be easily traced when comparing digital currency price with emerging markets currencies, such as Mexican Peso, Turkish Lira, or Russian Ruble.

Speculative market players do deserve some special attention. The digital currency market has just started developing, with its volume constantly growing, but intraday values still allowing speculators to artificially create an ascending or descending trend. We have already mentioned that above: a few investors with large amounts of cryptocurrency can make the price rise or fall.

The sentiment is another factor that should not be underrated. Market panic or hype may both cause the prices to fall and make the skyrocket. Everything here depends on market reactions to specific events at some point in time. In case the sentiment is positive and the investors are inclined to buy an asset, the price of such asset will be going up.

Anyway, when you invest in cryptocurrencies you should always remember that past performance does not guarantee future results, while the risks will be growing as long as the cryptocurrency market becomes more and more volatile.

RoboForex is a group of companies that offers brokerage services to clients in various countries over the world. The group provides traders from the Forex and stock markets with access to its proprietary trading platforms. 

Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

The Pound’s Fate Depends on Politicians

The Pound is doing well so far, but the third week of October may change a lot for the British currency. We’re talking not only about the statistical reports, a lot of which are going to be published this week. It’s also about the problems that are in slumber right now but may wake up at any moment.

After the last week, when the Pound was falling in response to the news about possible failures in the Brexit negotiations, the GBP/USD pair had time to recover. Another piece of news, this time related to a possible two-year transition period after the Brexit, helped the pair to rise a bit again. This period may provide enough time to negotiate and agree on all key documents one by one and start living outside the European Union without any unnecessary stresses.

This week, investors are focused on the speech of Mark Carney, the BoE Governor, in the parliament. The main topics are the current approach to the monetary policy and possible reasons to increase the key rate. Carney has already brought investors some hope: his comments about the rate hike were pretty confident, so they convinced investors that the BoE was ready to change its monetary approach in the nearest future. The statistics that were published promoted this idea: the market players thought that the British economy could afford an opportunity not only to exit the trade-economic and political alliance but to tighten its monetary policy as well.

For the Pound, too many things right now depend on politicians and their opinions. The current Pound prices imply that investors are confident in the stability of the British economy and sure that everything will be alright after all. Of course, it will, the only question is when exactly.

The technical chart shows that the GBP/USD pair is still trading inside the ascending channel. However, the truth is that the price hasn’t tested the support level. Not yet.

GBP/USD Daily Chart
GBP/USD Daily Chart

As we can see at the H1 chart, the pair is testing the support level of the mid-term ascending channel. If this level is broken, the price may move towards 1.3125. After completing this scenario, the instrument may rebound and grow to reach 1.3400 or even 1.3590.

GBP/USD 4H Chart
GBP/USD 4H Chart

RoboForex is a group of companies that offers brokerage services to clients in various countries over the world. The group provides traders from the Forex and stock markets with access to its proprietary trading platforms. 

Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

The Pound Relies on Theresa May

The British Pound is recovering, but right now it’s hard to tell how fast the correction will be. There are still a lot of speculations around Theresa May, the British Prime Minister and the key player in the Brexit procedure, but not as many as earlier. The reason why the Pound plummeted last week was investors’ fears that Theresa May may be forced to resign from her position and leave the Brexit negotiations in the care of her party fellows. The story is not over yet.

In the beginning, everything was pretty quiet. The Conservative party had its conference in early October, where they made very clear why the party was not satisfied with the United Kingdom’s stance of the Brexit procedure. Theresa May tried to reply to this challenge, but her attempts “went down in flames”: her speech wasn’t very convincing and resulted in more sales for the Pound. Taking into account all possible peculiarities and nuances of the procedure, the Brexit is 18 months away, but this time is barely enough to make a new legislation. If May resigns in the midway of the Brexit and the European Union has to deal with new representatives of the UK, no one can guarantee that they will be able to continue the current negotiations instead of starting new ones.

At the moment, there are four possible scenarios. The first scenario, a neutral one, implies that May keeps the position and tries to enhance her stature and reputation, which has been imploded a lot recently. The second scenario suggests that May resigns from the position. It will make a fuss among British politicians, who want to take charge of the Brexit procedure, and while they are “fighting for the chair”, the negotiations stop. Europe will be disappointed and the Pound will plummet. According to the third scenario, May resigns, but hands over her powers to David Davis, the Secretary of State for Exiting the European Union. Davis is a persistent person and knows the process from A to Z – he will not “scare” Europe and may “release” some pressure from the Pound. And the fourth scenario. The British Labor Party takes over and drags out the negotiations only because they want to use the Brexit to gain as much as possible out of it. In this case, the national currency will fall.

As a result, it would be better for the currency market to get off the May’s back. That way, the Pound may be stable on the inside and stop being so volatile at the outside.

The long-term scenario for the GBP/USD pair is still “bullish”. After failing to reach its “bottom” and the support level at 1.30 earlier, the price is trying to reverse. The local resistance is at 1.3657. The upside target is at 1.40, but the instrument may try to grow and reach 1.4390.

GBP/USD Daily Chart
GBP/USD Daily Chart

From the point of view of technical analysis, the short-term scenario implies that the pair may test the upside border of the descending channel and grow to reach 1.3325. After the uptrend becomes more stable, the price may continue moving upwards with the target at 1.3515.

GBP/USD 4H Chart
GBP/USD 4H Chart

RoboForex is a group of companies that offers brokerage services to clients in various countries over the world. The group provides traders from the Forex and stock markets with access to its proprietary trading platforms. 

Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Buying Bitcoin: From Wallet to Exchange

Before buying any digital coin, you should sign up for a wallet it will be stored in, this wallet is as much virtual as the currency itself. The first thing you must remember once and for all is that the more complicated and sophisticated the sign in process is, the better. The second one is that you can’t reset your PIN. In case you forget it or lose it, you will no longer be able to access your cryptocurrency wallet.

You can find a lot of services on the web that can be used to create a cryptocurrency wallet. In order to do so, you will, as a rule, be required to verify your identity first: you’ll get a message asking you to send some copies of identification docs, and once you get verified you will be able to sign up for a wallet. The e-wallet interface loos pretty much similar to any online banking option, everything is simple and intuitive, so you will hardly have any questions while using it.

You can also create a real or physical wallet, print out all access data and store them in a safe place. Besides, you can buy a separate device that will emulate a virtual wallet. In fact, it could just be a hard case with your wallet public code inside. Actually, you can easily do without it.

Now that you have created your wallet and know its address, you can start buying cryptocurrencies. However, before you do so, you’ll have to sign up for an account in an exchange, too. Once you’re registered, you’ll be able to access current Bitcoin and other cryptocurrencies bid and ask prices. Some exchange will allow you to buy cryptocurrencies while staying anonymous, while others will require you to send docs. Basically, the process is simple: if you are happy with the price offered, you contact the seller and run your transaction. Finding a seller is not that difficult either, as long as you spend a little time and do a research on seller ratings and reviews. This is, however, the easiest digital coin buying option called ‘over the counter’. The risks are quite high, as there’s no guarantee you will receive your cryptocurrency. The bright side is that you can avoid all fees and commissions.

There are also some other options to buy Bitcoin. One of them is registering a WebMoney e-wallet and buying digital coins there. This could be done both through WebMoney service and through special Exchange Service. In both cases, you will have to pay fees. Another way to buy Bitcoin is finding an exchange desk, which is of course located online. Such services work pretty much the same as local exchange shops do, as they just convert your funds into Bitcoin, and vice versa. These options are good for those who are not ready to use specialized exchanges.

This is, however, the most engaging option, as an exchange platform will give you many more opportunities than an exchange shop or an e-wallet. With all the tools you’ve got there, you can fully participate in the trading process by placing buy and sell orders at a particular price. To make a transaction, you need to place your order in your Member Area. The fees are among the lowest in the market, although deposit options are somewhat limited.

If you go with a large exchange, you may encounter limits when both depositing and withdrawing your funds. Besides, you should know that cryptocurrency exchanges are often hacked because of its great liquidity flow, so you’d better not keep large amounts on your account there.

Trading cryptocurrencies with a broker is something that is more interesting than using an exchange shop, but also easier than trading on an advanced digital currency exchange. This balanced approach allows you to use leverage and an intuitive trading platform, while paying quite competitive fees.

As you see, the range of cryptocurrency buying options is just as wide as it is for any other financial instrument. Finally, we would like to remind again that any financial transaction carries risks, both direct and implied risks, so before you invest your funds you should carefully study the theory behind it and then prudently assess all its advantages and disadvantages.

RoboForex is a group of companies that offers brokerage services to clients in various countries over the world. The group provides traders from the Forex and stock markets with access to its proprietary trading platforms. 

Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

The Australian Dollar is Ready to Fight off Sellers’ Attacks

It is quite possible that the Australian Dollar may resume falling in the nearest future. This might be true for both short and long-term, on the basis of the fundamental background. At the same time, the mid-term period, from a week to a month, looks very vague.

During the RBA meeting at the beginning of October, the regulator paid special attention to the Australian Dollar rate. It happens sometimes: the RBA authorities think that any strengthening of the national currency frustrates their efforts to boost the country’s economy. In some way, they are right, because the RBA doesn’t believe in an aggressive approach to its monetary policy and most of the time allows the economy to be regulated and controlled by itself. And sometimes the burst of the currency activity may really interfere.

This time, investors’ response to such comments was quite visible – they started selling the AUD/USD pair. The comments once again made investors doubt the Aussie’s stability in the future: when the Federal Reserve starts selling assets on its balance sheet, the US Department of the Treasury will launch the national debt increase program and the US Dollar will get stronger. It means that the Aussie may get under significant fundamental pressure in the middle of autumn regardless what the technical indicators show.

Not only its own statistics counts against the Aussie. The Chinese statistics matters as well, and the worse reports from China are, the more influence they have on the Australian currency. For instance, the latest reading of the Caixin/Markit Services PMI, which showed that the indicator decreased from 52.7 points in August to 50.6 points in September, although it was expected to expand up to 53.1 points.

The Services PMI is growing, but slower than before. The components of the report show that both new orders and employment rose at a slower pace. The statistics aren’t likely to have a great impact on the Chinese GDP in the third quarter but may provide a lot of causes for doubts and further analysis.

AUD/USD 4H Chart
AUD/USD 4H Chart

The technical picture of the AUD/USD pair is looking quite logical and balanced. After reversing, the instrument started falling slowly and reaching new lows. However, at the moment the price is trading close to the support level of the descending channel. One of the possible scenarios implies that the pair may be rebound from this level and start growing towards the resistance one at 0.7875. after breaking it, the instrument may continue rising to reach 0.8040.

RoboForex is a group of companies that offers brokerage services to clients in various countries over the world. The group provides traders from the Forex and stock markets with access to its proprietary trading platforms. 

Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Oil is Ready to Reverse

In the nearest future, the oil market will have to decide on its mid-term perspectives. The effect of the hurricanes that raged through the Gulf of Mexico is getting weaker and the seasonal factor is stepping forward. Everyone is worried about the future OPEC agreement.

The oil market started signaling about its readiness to get stabilized in the middle of the last week. The USA published the report on the Crude Oil Inventories, which showed that the indicator was slowly decreasing. According to the same report, the demand for gasoline was falling as well. Later, the Baker Hughes stats confirmed that extractive industries were back to business: last week, the number of rigs increased for the first time in six weeks. All is very confusing.

Several factors will be in the spotlight of oil investors in the short term. The first one is seasonal. When the US population’s demand for gasoline is falling, the oil stock, particularly in Cushing, Oklahoma, is increasing. The “season” will last from October 2017 to May 2018. The second factor is that oil refineries will be stopped for scheduled maintenance. It’s not a surprise but may yet put some more pressure on oil prices. And the third factor is the confidence in OPEC, which is not very high at the moment. The organization has no plan B and it’s still not quite clear what is going to happen to the agreement on the oil extraction suspension. Instead, the other thing is pretty clear: petroleum exporting countries want to make more money and will look for any “loophole” in agreements to continue doing that.

In this light, one should take a look at the Saudi Arabia economy, where the GDP has been falling for the second quarter in a row. The economy of one of the main OPEC+ agreement initiators is obviously “hurt” by the current oil prices. It means that in October and November the Saudis, together with their supporters, will make the oil market nervous by their announcements and ideas about the relations between countries after March 2018, when the OPEC+ agreement expires.

Also, one shouldn’t disregard the fact that the oil is pretty expensive right now in comparison with August or September. There might be a lot of those willing to sell it from the peaks unless there are suppositions that the tendency might reverse. However, at the moment the daily chart of the instrument is still showing investors’ will to buy it.

From the technical point of view, the Brent price is still trading inside the ascending channel. We should also take into account that after reaching the highs and testing the resistance level of the current channel, the instrument started the correction to the downside towards the support level at 54.10.

Brent Oil Daily Chart
Brent Oil Daily Chart

After the price tests this level, we may reevaluate market players’ sentiment. The most probable scenario implies that the instrument may rebound from the support level and resume growing to reach 61.30.

RoboForex is a group of companies that offers brokerage services to clients in various countries over the world. The group provides traders from the Forex and stock markets with access to its proprietary trading platforms. 

Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Make Your own Cryptocurrency: Not Difficult, But Expensive

It’s not very difficult to buy cryptocurrencies. I would say it’s a piece of cake. But what about making a virtual monetary unit by yourself?

All information about this can be found on the Internet comes down to the “think-buy-apply” scheme, but in reality, there might be several ways to implement. For example, one can start with a source code. It’s not necessary to write it “from scratch”, you can borrow one that was written before. It will be an underlying code, which will be edited later and customized as required. From the technical point of view, one will also require a special files library to make the code work correctly.

The longest period of time in making a new cryptocurrency is the editing of the source code. One will have to change a lot of parameters integrated into the software taken from the Internet, including the cryptocurrency name, and optimize the technical aspect of the code (program and customize network ports, specify addresses, and adjust the cryptocurrency generation algorithm). The cryptocurrency will have its own key system to provide its security and safety for the users, who work with it. The first byte of the keys is written exactly when the source code is being edited. Then, the images are edited – icons, which can be created using different graphics software. When everything is ready, the cryptocurrency can be released.

Of course, the way described above is suitable for advanced users only. Surely, it can be done easier: there’s no reason why one shouldn’t use the cryptocurrency emission center or create it via Monetas, which develops customized payment systems. Needless to say that these services will cost a lot of money.

After the new cryptocurrency is created and generates the first profit, one will probably want to go on. Most likely, the person, who own their personal cryptocurrency, will pay attention to the ICO. What is ICO? Practically, it’s a mechanism similar to the IPO. The ICO (Initial Coin Offering) is an initial offer of the cryptocurrency as an asset for attracting investments. The project that has never been known before can earn a lot of money within several hours or days, if particular conditions are met. At first, the ICO was considered as a “goldmine” of the cryptocurrency market, but later the situation became more complicated after the global regulators decided to establish control over unregulated cash flows.

So, for the ICO one requires a lot of spare cash, something like from 250,000 to 500,000 USD, to hire professional consultants and place the asset for the first time. In case everything goes okay, you’ll get your money back very quickly. For example, the ICO of Gnosis generated $12.7 million expressed in Ethereum and about $4 million expressed in other virtual currencies.

However, the ICO needs the idea in the first place. The concept investors will follow. Apart from this, you will need development staff and specialists guiding the project. These are the expenses that consume the money mentioned earlier. As a rule, the preparatory phase takes 5-6 months and the placement – from 2 to 4 weeks. The project staff will have to take care of documentation, marketing, SMM and other legal aspects, including the company official registration. Special focus should be on the website and its technical capabilities, which have to match up-to-date safety standards and successfully withstand cyber attacks, especially during the ICO, because it’s a period of time when your internet portal is the most attractive to cyber-crooks.

Well, are there any real prospects in all this? The first cryptocurrency created by Satoshi Nakamoto appeared in 2009. At that time, it was a code, which connected several computers together and allowed to make transactions within this network. This is the way how the bitcoin “was born”. Nowadays, its popularity is skyrocketing, but other new cryptocurrencies are also developing pretty fast – the technologies are advancing, so there is enough room for development.

RoboForex is a group of companies that offers brokerage services to clients in various countries over the world. The group provides traders from the Forex and stock markets with access to its proprietary trading platforms. 

Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Everyone is Afraid of the Brexit, But the Pound isn’t

Capital markets are once again focused on the Brexit. Attention to this issue was revived by Theresa May, the British Prime Minister, who spoke a lot about the Brexit last week in Florence, Italy. Many things she said made investors if not seriously consider the situation, then take risks into account in the long-term.

May confirmed that the United Kingdom would exit the European Union in March 2019, just as it had been planned, but the country would require two more years to transform the general legislation into the individual one taking into account its own requirements relating to changing standards and conditions without sacrificing international rules. London has already faced problems with implementation and now it’s quite clear that the process won’t be very quick because no one is experienced enough for this.

The United Kingdom will fulfill its budgetary commitments that were undertaken when the country was interested in cooperation with the European Union and try to find the most convenient way of dealing with the Union in the future. Over and over again, London is sending the EU a message that it is ready to make arrangements and continue the Brexit negotiations, but the Union is behaving as though it listens but doesn’t hear.

When it comes to the Brexit, Europe is holding the following position: you decided to exit, you pay; if you decide to stay, you pay. The United Kingdom is ready to pay for its citizens’ decision, but the money the EU wants is too big. For instance, it’s still not quite clear how the UK and the EU are going to trade when the economies divide. Amounts of fees and how these fees will be calculated are also unknown. The boundaries of financial and credit relations aren’t defined. All these factors force the EU to take a long break to think about its priorities, although the time is running out.

Meanwhile, no “corporate panic” is seen in the British statistics. There are some signs of slower capital movements on factories and enterprises due to optimization of orders and goods at stocks, but right now the strategic outlook doesn’t really frighten many people. The British Pound sank a bit when investors started analyzing May’s speech, but this correction didn’t take much time. Domestic statistics and assurance of the British government that everything is going well, although slowly, provides support to the Pound.

GBP/USD Daily Chart
GBP/USD Daily Chart

The technical picture of the Pound movement against other global currencies may be seen on the GBP/USD pair chart. The instrument is growing inside the uptrend channel; it has tested the channel’s upside border, which means that it may start a new correction very soon. The targets of this correction may be close to the downside border at 1.3070. We should also note the level of the previous fractal resistance at 1.3270, which may be the short-term target of this correction as well. Also, the pair may break the current resistance level. If the price breaks the local high and fixes above the resistance level, “bulls” will push the Pound towards the psychologically-crucial level at 1.4000. But the more “ambitious” upside target may be at 1.4550.

RoboForex is a group of companies that offers brokerage services to clients in various countries over the world. The group provides traders from the Forex and stock markets with access to its proprietary trading platforms. 

Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

The Golden Potential

Gold prices got stabilized by the middle of September. Now is when this precious metal is not used by investors as a shield protecting from market risks. This fact helps the prices to “get into the equilibrium”. By the end of the second decade of the month, the troy ounce of Gold costs $1321, which is right in the middle of the mid-term trading range. Political calmness allows Gold to fall a bit deeper, towards $1310-$1315, but the metal is very unlikely to go any lower.

It’s interesting that the decline of the interest to Gold as a “safe haven asset” tallied with the time when another geopolitical tension arose. Several days before that, North Korea flight-tested ballistic missiles, which crashed into the sea far from the Japanese coast. However, such pieces of news no longer surprised anybody. The world’s leaders are in fierce debates what side to choose when it comes to their attitude to the North Korean situation and demonstrative aggression from this country. So far, they haven’t come to a consensus. In that case, the demand for “safe haven assets” decreased for a while.

The short-term weakness of the US Dollar may yet provide support to Gold. This week, the US Federal Reserve is going to have another meeting and investors expect the regulator to make some decisions relating to its monetary policy and the key rate. However, the market is interested in something else. According to the latest CME future, investors’ expectations about the Fed rate increase in December were 56%. It’s more than the week before, but still not enough to make any conclusions.

At first, expectations were as follows: since the inflation is the USA came close to the Fed’s target of 2%, then the regulator had an excellent opportunity to increase the rate. But the statistical reports on retail sales and industrial production that followed really disappointed. The numbers were so mixed that the key rate increase might do much harm to the country’s economy, which was growing irregularly.

Also, one shouldn’t ignore the consequences of the hurricanes that “torture” the USA and may require a lot of money from the budget to rebuild towns, cities, and seaside. In this light, it’s important to read the regulator’s comments after the meeting. it is quite possible that the minutes will contain some specific opinions about this.

So, the market is not ready to include geopolitical risks into the Gold prices. However, if the US Dollar gets weaker again this week, the troy ounce cost may go higher.

From the point of view of the technical analysis, Gold is moving inside the mid-term ascending channel. But at the same time, one should note that right now the price is getting closer to the downside border of the channel with the key level at 1310. At the moment, this area is a support level, where traders and investors may try to open long positions. If the “bulls” are active and their demand is high, the instrument may grow towards the upside border at 1350. This is a short-term outlook.

In order to rebound from the current support level at 1310, the market has to confirm this scenario by breaking the upside border of the short-term descending channel and fix below 1325. The target specified earlier, 1350, maybe a mid-term resistance area. If the price breaks it, the uptrend may continue towards 1400.

Gold 4H Chart
Gold 4H Chart

But breaking the current support level at 1310 may allow the instrument to move to the downside. The target of this decline may the at 1275. This level is the border of the support area and a mid-term put-up demand. Testing this area may define future mid-term trends.

RoboForex is a group of companies that offers brokerage services to clients in various countries over the world. The group provides traders from the Forex and stock markets with access to its proprietary trading platforms. 

Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Cryptocurrencies: When Security and Risk Merge

Digital technologies became ingrained in our everyday lives. For a long time, the world has been evolving toward various gadgets and using technological solutions for productive use only. The latest global financial crisis forced the technological and financial world draw its focus toward something new: cryptocurrencies. Cryptocurrencies are financial units, which are beyond the control of any of the global regulators. The absence of intentional risks has already attracted a lot of users to the world of virtual currencies and this number is rising fast.

At the moment, the safety standard of each cryptocurrency is the number of its users. These are the people, who believe that the virtual monetary unit has a potential and prospects and, thus, push its price to the upside. If the user base of some cryptocurrency is constantly expanding during a particular period of time, it is pretty safe to invest in it. This is the most important thing to pay attention to. Right now, there are two cryptocurrencies that fit this description, Bitcoin and Ethereum. The first one is probably known even to those, who have nothing to do with the economy and finance. If a user wants to buy a cryptocurrency, they buy Bitcoin and only after that they look closer and find out that there are others. In fact, at the moment Bitcoin is some kind of a “reserve currency”, which none of the global regulators have been able to get their hands on. This is why it is growing so fast – it’s a reward for risks and prospects if there will be any, of course.

Ethereum has a more advanced programming platform, and although there are tough market competitors, this cryptocurrency is pretty safe in the nearest future. Most of the new blockchain projects are launched on the Ethereum platform.

These two assets, Bitcoin and Ethereum, are the safest on the cryptocurrency market right now, considering the fact that a few people heard about their competitors. Are they stable? If we’re talking about the cryptocurrency market volatility, then yes. It means that their prices may rise or fall by 10-20% during the trading session, but it’s impossible for them to get, for example, ten times cheaper over the same period of time. The high volatility of the cryptocurrency market is the payment for the sector growth rate, which is unequaled anywhere in the world.

A bit later, in 6 to 12 months, those who buy the Bitcoin will slowly “migrate” into other cryptocurrencies. After the financial world starts seeing the cryptocurrency as a legal payment instrument (Japanese are ahead of the curve, they’ve already done this), people’s trust in the virtual currency will increase. However, there is a risk that the number of users may stop expanding at some moment of time or start decreasing, which is even worse. No one can guarantee that it is not going to happen. So, this risk is also included into the cryptocurrency volatility. In other words, high profits at one point of time don’t guarantee the same in the future. This is a very important thing to consider when one starts investing into cryptocurrencies.

RoboForex is a group of companies that offers brokerage services to clients in various countries over the world. The group provides traders from the Forex and stock markets with access to its proprietary trading platforms. 

Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

The Pound is Not Afraid of Negative News, Sterling Continues to Rise

Over the course of time, the British Pound built up a specific tolerance to bad or really bad news. If earlier investors started selling the Pound each time any information about the Brexit appeared, then now they’ve learned to analyze the news and find what’s the most important.

In the first decade of September, the British parliament started debating a bill concerning the UK’s exiting the European Union. It was the first parliamentary hearing about this and it is very interesting how it will end. David Davis, the Secretary of State for Exiting the European Union, will afford anyone an opportunity to express their point of view.

Basically, they will talk about legislative nuances. There hasn’t been such experience throughout the European Union existence yet, that’s why Europe is learning “in process”. Everyone knows that one of the most important tasks for London is not only the independence of its political and economic processes but the control over the country’s laws as well. Most likely, this is exactly what the debates will be about: the United Kingdom doesn’t deny the all-European legal system but wants to create even more advanced legislation. To do this, there must be a unanimous resolution on this issue, at least.

However, there hasn’t been any progress in negotiations between the UK and the EU recently. Partly, due to the legislative recess that took place in August, partly – due to the absence of clear vision what to do next.

The latest published statistics show that the growth rate of the British economy is slowing down. And the reason is not the Brexit because it hasn’t even started yet. Maybe, it’s due to the fact that companies and enterprises take preventive steps in order to decrease risks, or maybe due to some external factors. One way or another, the real estate market is in drawdown, the tertiary industry in August was weaker than in any other period of time. The all-European decline in consumption has finally reached the United Kingdom and may influence the country’s GDP.

However, the Pound continues rising and doesn’t seem to stop.

If one takes a look at the GBP/USD chart from the point of view of the technical analysis, it can be seen that right now the British currency is more confident in comparison with the USD. Since May 2017, the GBP/USD pair has been trading inside the ascending channel, slowly moving from the support level to the resistance one and so on and so on. However, if the Elliott Wave Theory is applied, one can see that it’s probably not the ascending channel, but the “bearish” phase of the mid-term life cycle and the current ascending movement is just an internal “bullish” correction. Still, if both these methods are taken together to show the overall picture, one may assume that the current support level of the ascending channel is the strong area of the buyers’ interest. After breaking this level downwards, the pair may fall to reach 1.2588, at least. But right now the market isn’t even trying to test this area and, on the contrary, is rising to reach new highs.

GBP/USD 4H Chart
GBP/USD 4H Chart

The short-term picture for the instrument is the following: the pair may test the upside border of the short-term ascending channel and one of the most probable scenarios implies that it may fall towards the downside border at 1.2970. However, one shouldn’t ignore another scenario, according to which the price may break the upside border. This scenario will simply express the market’s desire to move towards new mid-term and long-term highs.

RoboForex is a group of companies that offers brokerage services to clients in various countries over the world. The group provides traders from the Forex and stock markets with access to its proprietary trading platforms. 

Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Investing in Cryptocurrencies Now or It’s Too Late?

A worldwide Bitcoin “fever” is gaining momentum. Daily traded value of cryptocurrencies are enormous and continue to increase. Is it time to join cryptocurrency enthusiasts or maybe it’s too late?

Over the last 8 months, the bitcoin has more than doubled its price. This quick growth was exactly the thing that attracted a lot of attention from the people, who are “miles away” from investing or trading on the stock exchange. The media hype spread and, as a result, quotes became much more volatile. The demand for computer hardware has been increasing ever since: those, who wish to earn, buy graphics cards and other hardware to set up “farms” and ”mine“ cryptocurrency.

However, the more people are getting involved in this process, the more doubtful it is that all participants of the process will earn the same amount of money as they did before. It’s very expensive: in order to “mine” cryptocurrency, one requires powerful graphics cards. Apart from hardware expenses, one should also take into account electricity prices. But if you don’t have a possibility to generate your own cryptocurrency, you can buy one on the stock exchange.

The risk of working with the bitcoin is that the programming source code implies that there is a finite amount of the mined cryptocurrency. Obviously, apart from the most popular and significant “digital brand”, there are others, such as the Ethereum or, for example, the Litecoin, and a lot more. New cryptocurrencies emerge every day, but what may happen next?

The future outlook will brighten when countries and governments accept cryptocurrencies as official means of payment. So far, it has been done only by Japan. Australia weighs options. Vietnam is ready to redeem bitcoins in real money starting 2018. The USA and Canada applied serious requirements to stock exchanges that provide the Initial Coin Offering (ICO). In fact, they will be the same as to the Initial Public Offering (IPO). In addition to that, the regulators’ requirements to the stock exchanges, which trade tokens, are also toughened. The more it spreads, the higher the fraud risk: global regulators understand this and try to take control over these processes since they can’t completely control cryptocurrency itself.

In the meantime, each new high only heighten investors’ interest to cryptocurrency. At the end of August and the beginning of September, the Bitcoin reached another new peak and the chances are high that until the end of the year this digital rally may continue. However, the “entry” price right now is too high and it would be better to weigh up all options before “catching up this train”.

There is no absolute answer to the question whether it is time to open long positions in cryptocurrencies or it is too late. The other day, it became known that the largest Chinese bank had banned the ICO. In reply, the market plummeted and there is no guarantee that it will recover very quickly. They say when “the crowd is heading to the same door”, it a signal to close positions in the asset. When it comes to cryptocurrencies, it happens every day, but earlier the Bitcoin quotes recovered without any problems no matter how severe the stress was.

When buying the asset at its highs, one should remember about all associated risks. Cryptocurrencies yet have a lot of reasons to update its prices, but what might happen to the world when faith in the virtual currency fades away? That’s right, the market will be flooded with massive sales.

RoboForex is a group of companies that offers brokerage services to clients in various countries over the world. The group provides traders from the Forex and stock markets with access to its proprietary trading platforms. 

Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Gold Preserves an Opportunity to Grow

By the end of August 2017, Gold has risen to the highs reached in November 2016 due to the weakness of the US Dollar. This fact, no matter which way you look at it, is the main reason why the price of the precious metal accelerated so fast. The highest level of August is $1331.90, and the fundamental picture suggests that it might be only the beginning. Gold has not changed direction so far in September and continues to rise to trade at $1340.

The reputation of the American currency developed over the last 9 months is counting against it. After investors realized that Trump’s electoral campaign had nothing to do with the reality, their attitude and sympathies to the US Dollar “faded away”. The US Dollar was supposed to get stronger based on the tightening of the Federal Reserve’s monetary policy (the policy was tightened, but it didn’t work), the decreasing the Fed’s assets (no one still knows when this process is going to start, but it may work), and political and economic reforms implemented by Trump’s Executive Office (the most unlikely factor with bare possibility to get real). Moreover, the gap between the real numbers of macroeconomic indicators, such as the inflation, and expectations make the Fed’s plans to increase the key rate in 2018 look very skeptical. If earlier everyone thought it was going to happen in March, then now it is expected to happen in June.

However, the worse for the Dollar, the better for Gold. This market rule is truly like nothing else.

Apart from the correlation described above, there is a demand for Gold. The world’s largest Central Banks’ demand for Gold increased in spring, then got stabilized in summer, and may increase and support the prices again in autumn, when the weak spots of the global economies expose.

From the point of view of the technical analysis, Gold has been trading in the uptrend for the last couple of years. If the first micro cycle of this uptrend ended in December 2016, then right now the price is forming another bullish impulse. In the mid-term, the target of this uptrend may be the high of the previous cycle at 1375.13. In the long-term, the upside target may be a very psychologically-crucial level, 1500 USD for the troy ounce of the “sunny” metal.

Gold Weekly Chart
Gold Weekly Chart

In the short-term, the technical chart of the XAU may be described as a stable ascending tendency. After breaking this year’s previous significant highs and reaching a new one, the pair may start a correction. The closest support level and the target of the short-term correction may the previous high at 1296.06. If the market gets more pessimistic or some new information appear, the correction may become deeper and reach the support level of the mid-term ascending channel at 1233.14. A significant target on the resistance level of this channel may be at 1360, which will be an intermediate mid-term upside target.

Gold Daily Chart
Gold Daily Chart

RoboForex is a group of companies that offers brokerage services to clients in various countries over the world. The group provides traders from the Forex and stock markets with access to its proprietary trading platforms. 

Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.