The currency market is set to experience significant events in the upcoming week, with important meetings scheduled for Wednesday and Thursday. The Bank of Japan and the Federal Reserve’s FOMC will convene on Wednesday, 31 July, followed by the Bank of England’s meeting on Thursday, 01 August. Investors are eagerly waiting to hear the statements made by regulators at the subsequent press conferences to predict their next moves. In light of these events, the focus has shifted more towards the cryptocurrency market in this review, while still covering Forex.
Recent macroeconomic statistics have prompted a shift in positions between the US and Europe. The restrictive tariffs proposed by US President Donald Trump in the trade war with Beijing are expected to create new challenges for the Chinese economy, which will have a negative impact on Europe, particularly Germany. German business activity indicators have declined, with the recent Business Activity Index values falling below both previous figures and forecasts. This has dragged down overall European metrics, raising concerns about the Eurozone’s recovery.
On the other hand, the US economy is showing signs of slight slowing down, with the recent GDP data for Q2 2024 surpassing market expectations and confirming that the US economy is not heading towards a recession. The dollar has strengthened in the midst of market unrest, with the EUR/USD pair moving within a narrow range.
In the cryptocurrency market, recent geopolitical tensions and market turmoil have impacted the prices of bitcoin and ethereum. The launch of Ethereum spot ETFs in the US initially generated optimism, but the subsequent outflows from Grayscale’s Ethereum Trust ETF led to a sharp decline in ETH prices. The situation mirrors the experience with bitcoin ETFs, raising concerns about the long-term impact on newly established ETH-ETFs.
Looking ahead, analysts have differing forecasts for bitcoin and ethereum. Some predict a bullish rally for bitcoin, citing a bullish flag pattern and potential upward movement towards $90,000. Others, however, express skepticism about bitcoin surpassing key resistance levels and warn of a potential bearish trend. As for ethereum, predictions vary, with some expecting modest capital inflows into ETH-ETFs and a limited price increase, while others offer a more optimistic outlook with higher capital inflows and a significant price surge by the end of the year.
Overall, the upcoming week promises to be eventful and volatile, with key meetings and data releases that will likely impact the currency and cryptocurrency markets. Investors will closely monitor developments to make informed trading decisions amid the dynamic market conditions.