Tesla, led by Elon Musk, has stirred speculation in the cryptocurrency world by transferring nearly all of its bitcoin holdings—valued at approximately $765 million—to unknown wallets.
This action raises questions about whether the electric vehicle manufacturer is planning to sell its bitcoin.
On Tuesday, wallets associated with Tesla moved more than 11,500 bitcoin, leaving only about $6.65 in its original wallets, according to data from crypto analytics firm Arkham Intelligence.
The wallets receiving the transferred bitcoin appear to be new and are not linked to any known cryptocurrency exchanges, which does not immediately suggest a plan to liquidate these assets.
Tesla ranks as the fourth-largest corporate holder of bitcoin among publicly traded companies in the US, following MicroStrategy and the bitcoin mining firms MARA Holdings and Riot Platforms.
The company first acquired $1.5 billion worth of bitcoin in February 2021, at one point owning as much as $2.5 billion.
However, in early 2022, Tesla sold off approximately 75% of its holdings at a loss, capitalizing on market highs in November 2021 when bitcoin reached an all-time price of about $69,000.
At the time of its significant sell-off, bitcoin was valued around $24,000.
In July 2022, when Arkham Intelligence launched its bitcoin wallet tracking feature, Tesla’s remaining holdings were reported to consist of roughly 11,509 bitcoin, worth around $770 million.
Despite previously announcing intentions to accept bitcoin as payment for its vehicles, Tesla retracted this plan shortly after due to concerns regarding the environmental impact of bitcoin mining.
Musk has expressed a complex relationship with bitcoin, stating in a July YouTube interview that while he sees merit in bitcoin and other cryptocurrencies, his primary affection lies with Dogecoin (DOGE).
He has suggested that Tesla would reconsider accepting bitcoin for car purchases if a majority of bitcoin mining transitioned to renewable energy sources; however, the company has yet to resume bitcoin payments.
As the situation unfolds, the transfer of Tesla’s bitcoin has drawn considerable attention and analysis, leaving investors and cryptocurrency enthusiasts pondering the implications of Musk’s latest moves in the volatile crypto market.
The New Zealand dollar has dropped to its lowest value since August, driven by increased expectations of interest rate cuts in the country and growing apprehension regarding economic conditions in China.
On Wednesday, the kiwi fell by as much as 0.7% to 60.4 US cents, making it the worst-performing currency among developed markets this month.
This decline followed a report indicating a significant decrease in the annual inflation rate for the third quarter, which heightened speculation that the Reserve Bank of New Zealand (RBNZ) may adopt a more aggressive approach to easing monetary policy after recently implementing a half-percentage-point rate cut.
The currency’s decline is compounded by waning investor confidence in China, New Zealand’s primary trading partner.
The Chinese yuan, a key player in the regional foreign exchange market, also depreciated alongside mainland stocks this week, as Beijing’s fiscal stimulus measures failed to inspire investor confidence in the country’s economic recovery.
Imre Speizer, a strategist at Westpac Banking Corp in Auckland, told Bloomberg that the kiwi could dip below 60 US cents in the coming days due to widening interest rate differentials.
He indicated that if the RBNZ were to accelerate its rate cuts, the kiwi might even fall beneath 59 US cents.
To date, the kiwi has experienced a decline of over 4% this month, surpassing losses in all other Group-of-10 currencies.
The RBNZ is grappling with the challenge of rejuvenating an economy facing a potential second recession within two years, acknowledging that its previous tight monetary policy has negatively impacted economic activity.
In its latest meeting, the RBNZ accelerated the pace of rate cuts in response to rising unemployment, which has reached its highest level in over three years, alongside a prolonged downturn in house prices.
Recent data revealed that New Zealand’s annual inflation rate slowed to 2.2% in the third quarter, falling within the RBNZ’s target band for the first time in more than three years.
This prompted traders to briefly price in a greater than 40% likelihood that the central bank would implement a 75 basis point cut at its upcoming meeting on November 27, according to Bloomberg data.
In contrast, Bloomberg reported that traders have reduced expectations for a further half-percentage-point cut by the Federal Reserve, as the US economy continues to demonstrate surprising resilience.
This development makes the kiwi less attractive compared to the dollar, as the yield advantage over the greenback narrows.
Further undermining market confidence, the absence of a robust and detailed fiscal stimulus plan from China has raised concerns about the outlook for the world’s second-largest economy.
A slowdown in China could have repercussions for New Zealand, which is a significant exporter of consumer goods, particularly dairy products, to the Chinese market, according to Stats NZ data.
As discussions about a potential 75 basis point cut in New Zealand intensify, David Croy, a rates strategist at ANZ Group Holdings Ltd, told Bloomberg that the market anticipates the RBNZ will be proactive and unafraid to make bold moves.
He cautioned that amid speculation about a slower easing pace from the Fed, this scenario poses additional downside risks for the kiwi.
The EUR/USD and EUR/GBP exchange rates continued their downward trend ahead of the important European Central Bank (ECB) decision and inflation report. The EUR/GBP pair fell to 0.8330, its lowest point since Oct. 3, while the EUR/USD plunged to the two-month low of 1.0890.
ECB interest rate decision
The euro has weakened drastically against other currencies like the US dollar, Swiss franc, and the British pound as the bloc’s economic deterioration continued.
Reports released this week showed that inflation in key countries like France and Spain dropped below the ECB’s target of 2.0% in September.
In Sweden, the headline Consumer Price Index (CPI) fell from 1.9% in August to 1.6% in September. Similarly, in France and Spain, the headline figures dropped from 1.8% to 1.1%, and from 2.3% to 1.5%.
Inflation in other European countries has moved below the 2% target. Analysts expect the CPI data to be released on Thursday will show that the bloc’s inflation fell to 1.8% in September.
The ECB has won its battle against inflation, which peaked at 10.6% in 2022. Therefore, it needs to ensure that the bloc does not move to a deflation, which may affect consumer spending as they wait for prices to keep falling.
There are signs that the bloc’s economy is not doing well as key countries struggle. In a recent report, German researchers said that the economy will shrink this year before crawling back in 2025.
Many large German companies are struggling. For example, Volkswagen, one of the country’s top employers said that it may start to close factories for the first time in decades. Other companies like ThyssenKrupp and BASF have started cutting jobs in the country.
There are also concerns about the bloc’s jobs environment as the economic slowdown continues. The unemployment rate remains at 6.4%, while wage growth has stalled in the past few months.
Therefore, analysts expect the ECB to continue cutting interest rates on Thursday. The base case is that it will slash rates by 0.25%, and maintain a dovish tone. These rate cuts will help it increase liquidity in the bloc and lead to more growth in the near term.
UK inflation data ahead
The EUR/GBP exchange rate will react to the upcoming UK inflation data, scheduled for Wednesday.
Economists polled by Reuters expect the data to confirm that the UK inflation continued falling in September.
The headline CPI is expected to fall from 0.3% to 0.2%, and from 2.2% to 1.9% on a month-on-month and year-on-year basis.
Core inflation, which excludes the volatile food and energy prices, is expected to drop from 0.4% to 0.3% and from 3.6% to 3.4%.
As such, the bank will maintain its relatively dovish tone and possibly cut interest rates in the next meeting in November.
The BoE, under Andrew Bailey, has been fairly cautious when cutting rates such that it left them unchanged in the last meeting, which explains why the EUR to GBP pair has slumped.
EUR/GBP technical analysis
The EUR/GBP exchange rate has been in a strong downward trend this year. It peaked at 0.8765 in January and then fell to 0.8330 this week. Its attempts to rebound in September found a strong resistance at 0.8625.
The pair has formed a descending channel pattern and moved below the 50-day and 100-day Weighted Moving Averages (WMA).
Also, the MACD has moved below the zero line, while the Relative Strength Index (RSI) has crashed below the neutral point at 50.
Therefore, the path of the least resistance for the pair is bearish as the UK interest rates remain higher than those in the EU. A drop below the year-to-date low of 0.8312 will point to more drops in the near term.
EUR/USD forecast
The EUR/USD pair has also slumped because US interest rates remain higher than those in Europe. It has also slumped because of the rising hopes that Donald Trump will win the US election in November.
In an interview with Bloomberg on Tuesday, Trump reiterated his threat to impose more tariffs, opening door to more global tensions.
On the daily chart, the pair formed a double-top pattern at 1.1200, and recently moved below its neckline at 1.100.
It has also crashed below the key support at 1.0980, its highest level in March 2024. The pair has moved below the 50-day and 100-day WMA, while the MACD and the RSI have pointed downwards.
Therefore, the pair will likely continue falling as traders target the next key support at 1.0800, which connects the lowest levels since October 2023. This is an important level since it connects the lowest swings since August.
The Turkish lira has strengthened slightly in the past few weeks as the country’s economy has improved, helped by the robust tourism sector. The GBP/TRY exchange rate has retreated from the year-to-date high of 45.97 to 44.70.
Similarly, the EUR/TRY pair has dropped from 38.57 to 37.30, while the USD/TRY rate has slipped slightly from 34.40 to 34.37.
Turkish economic growth
There are signs that the Turkish economy is doing well, helped by the robust tourism sector. Recent data shows that the country’s tourists rose by 15% in the second quarter, and the trend has continued. Tourist arrivals soared to a record high in July.
Tourists are taking advantage of Turkey’s historic and beautiful places and the weak local currency.
A weaker currency makes it easy for foreigners to spend in the country. The challenge, however, is that many businesses in Turkey charge their customers in foreign currencies like the US dollar and the euro.
The government hopes that the tourism sector will being in more money this year. Last year, the sector grew by 16.9%, bringing in over $54.3 billion, a substantial amount for a country with a GDP of almost $1 trillion.
However, while the services sector is booming, the key concern is the manufacturing industry. This sector should be doing well because of the weaker local currency. Data released earlier this month showed that the manufacturing PMI dropped to 44.30 in September from a peak of 50.3 earlier this year.
Meanwhile, there are signs that the inflation situation in the country is improving. Data by the statistics agency showed that the headline Consumer Price Index (CPI) dropped from 51.97% in September to 49.38% in October. It has been falling after peaking at 75% a few months ago.
Analysts expect that the trend will continue unless the central bank changes tune and starts cutting interest rates prematurely. The other risk is that service inflation may remain higher for longer.
Meanwhile, recent data showed that the country’s current account balance improved in August as the country recorded a $4.3 billion surplus. The closely watched 12-month rolling deficit has narrowed to about 0.9% of the GDP. It stood at $11.3 billion, the lowest reading in over two years.
CBRT interest rate decision
The next important catalyst for the USD/TRY, EUR/TRY, and GBP/TRY will be the Central Bank of the Republic of Turkey (CBRT) interest rate decision on Thursday.
Analysts, based on the previous guidance, expect the bank to maintain interest rates at 50%, where they have been in the past few months.
The bank will likely hint that rates will remain at an elevated level for a while until inflation shows that it is falling.
Analysts expect that the CBRT may decide to cut rates at the December meeting or in early next year. The ideal situation is where the bank holds rates steady for longer, a move that will make the lira more attractive than it is today.
The current scenario favors the lira than other currencies like the euro and sterling because investing in Turkish assets gives a positive return.
EUR/TRY analysis
The euro to TRY exchange rate will also react to the upcoming European Central Bank decision. Analysts expect that the bank will continue cutting interest rates to stimulate the economy.
That cut will lead to an improved carry trade opportunity. A carry trade happens when investors borrow a low-interest-rate currency to invest in a higher-yielding one.
On the daily chart, the EUR/TRY pair has formed a double–top chart pattern at 38.35. It has also moved below the neckline at 37.30, its lowest point on September 11. The EUR/TRY has crossed the 50-day moving average.
The pair has moved slightly below the 50-day moving average, while the MACD has pointed downwards. Therefore, the pair may continue falling as sellers target the key support at 36.
The GBP/TRY pair will replicate the euro’s performance, meaning that it could drop to the support at 44.
USD/TRY technical analysis
The USD/TRY exchange rate peaked at 34.30, where it has struggled to move below in the past few months. It has remained above the 50-day moving average.
Most importantly, the MACD and the Relative Strength Index have formed a bearish divergence chart pattern.
Therefore, a combination of a strong top at 34.30 and the divergence patterns means that the USD/TRY pair may have a big bearish breakout. If this happens, the pair will likely drop and retest the crucial support level at 34. This view will be confirmed if the pair drops below the 50-day moving average at 33.87. It will become invalid if it crosses the key resistance level at 34.30.
Argentine President Javier Milei has provided fresh insights into his government’s currency strategy, signaling a move toward a flexible exchange rate for the peso as the country prepares to lift its longstanding capital controls.
In his keynote speech at the Central Bank’s annual conference, Milei emphasized the importance of adopting a more flexible currency policy as part of his broader economic reforms.
Milei, who assumed office in December, inherited strict capital controls, referred to locally as the “cepo,” that have been in place since 2019.
These controls were originally implemented to prevent capital flight amid growing economic instability.
However, Milei has made it clear that dismantling these controls and allowing the peso to float more freely is essential for Argentina’s economic recovery, although no specific timeline for lifting the restrictions has been provided.
A move toward flexibility
During his speech, Milei underscored that Argentina’s move toward a flexible exchange rate would occur even before the country has accumulated sufficient foreign reserves.
“If there’s no excess supply of pesos, I can liberate controls, even when I don’t have dollars, because I am going toward a flexible exchange rate,” he explained.
The shift to a flexible interest rate policy is seen as a step toward a more orthodox currency framework that will allow Argentina to better manage its economic challenges, including triple-digit inflation and a $44 billion debt to the International Monetary Fund (IMF).
A flexible exchange rate system would give Argentina more control over its monetary policy, enabling it to adjust to external shocks and fluctuations in global markets more effectively.
Economy Minister Luis Caputo previously indicated that Argentina could return to international capital markets by 2026, suggesting a timeframe for when the country might begin to fully lift its capital controls.
Managing inflation and debt
One of the key challenges for Milei’s government will be managing Argentina’s rampant inflation, which has reached triple digits.
The president outlined his approach, noting that inflation must converge with what he calls “induced inflation,” which is influenced by international factors, the gradual devaluation of the peso, and the capital controls that have been in place.
The removal of these controls and the shift to a flexible exchange rate are seen as critical steps in tackling inflation, as well as in creating an environment that is more conducive to foreign investment.
Milei’s administration is under pressure to stabilize the currency and restore investor confidence, especially as it moves forward with repaying its IMF debt.
A history of capital controls
Argentina’s relationship with capital controls has been fraught with challenges over the past decade.
The country previously had a free-floating exchange rate from 2015 to 2019, but election volatility and a subsequent run on the peso forced the government to reintroduce controls.
Since then, Milei’s predecessor, Alberto Fernandez, further tightened restrictions, leaving Argentina in a precarious economic situation.
Milei’s decision to dismantle these controls is seen as a bold move, but one that is necessary if Argentina is to return to the global capital markets.
By 2026, when Caputo has indicated that Argentina may re-enter these markets, the country will need to demonstrate that it has stabilized its currency, reduced inflation, and restored foreign reserves.
A path to recovery
As Argentina moves toward a flexible exchange rate system, there is cautious optimism that the country’s economy can recover.
However, there are significant risks involved, particularly if foreign reserves remain low and inflation continues to soar.
The success of Milei’s policies will depend on how well his government manages the transition, particularly in ensuring that the peso does not suffer from further devaluation.
President Milei’s reforms have sparked debate within Argentina, with some viewing the shift toward flexibility as a necessary step toward economic stability, while others are concerned about the potential for short-term economic pain.
What is clear, however, is that Argentina’s economic future will hinge on how effectively it can navigate this complex and delicate transition.
Gold prices have climbed in the last few sessions to trade near its all-time high on Wednesday.
Prices have been supported as traders maintained bets that the Federal Reserve will cut interest rates further.
Lower interest rates bode well for gold as it is a non-yielding asset unlike bonds. Also, lower interest rates increase liquidity in the economy and bring down the borrowing costs for the public.
Additionally, geopolitical tensions continue to simmer in the Middle East, which has kept the safe-haven demand intact for the precious metal.
Prices remain near record highs
At the time of writing, the most-active gold contract on COMEX was at $2,691.60 per ounce, up 0.5% from the previous close. Prices had hit a record high of $2,696.90 an ounce in September.
In the last couple of weeks, gold prices had mostly traded rangebound near its record highs. Even as geopolitical tensions and hopes of further interest rate cuts by the US Fed were bullish factors for gold, a strong dollar created headwinds for further upside.
Moreover, at the beginning of October, the market was expecting a further 75-basis-points of rate cuts by the end of this year. However, those expectations have been scaled back due to hotter inflation in the US and a resilient labour market.
Carsten Fritsch, commodity analyst at Commerzbank AG said in a report:
The fact that the gold price came under pressure only briefly and has since recovered most of its losses is likely due to the increased geopolitical risks in the Middle East.
Traders have priced in a 91.1% chance of the Fed cutting rates by 25 basis points in November, according to CME Fedwatch. At the September meeting, the Fed had cut interest rates by 50 bps, surprising the investors and traders.
Outlook for gold prices
Gold prices have breached the immediate resistance of $2,685 per ounce, and looks poised to rise to its record high of $2,700 an ounce.
Haresh Menghani, editor at Fxstreet.com, said in a report:
This is closely followed by the $2,700 round-figure mark, which if cleared decisively will set the stage for an extension of a well-established multi-month-old uptrend amid positive oscillators on the daily chart.
On the lower side, gold prices have support near $2,650 per ounce level. If gold falls below this level, prices could decline towards $2,632 an ounce, according to Fxstreet.com.
“Any further decline is likely to attract some buyers and remain limited near the $2,600 round-figure mark,” Menghani said.
Upside depends on geopolitical risks
According to Commerzbank AG, gold is currently buoyed by expectations of further rate cuts and geopolitical risks.
The ongoing conflict in the Middle East between Iran and Israel has increased safe-haven demand for the precious metal.
On October 1, Iran had fired ballistic missiles towards Israel. Safe-haven demand for gold increased as the market waited for Israel’s response to Iran’s attack.
However, since Iran’s attack, there have not been any retaliation from Israel. Reports claimed that Israel may not attack oil facilities of Iran, and instead strike military targets.
Commerzbank’s Fritsch said:
Should the media reports prove to be true and Israel spare Iran’s oil and nuclear facilities in the expected retaliatory strike, geopolitical risks would decrease and support for the gold price from this side would also fade.
“We therefore see slight downside risks for the gold price and expect the gold price to be 2,600 USD at the end of the year,” he added.
In a groundbreaking initiative, Google is set to enhance its energy portfolio by collaborating with Kairos Power to develop seven small nuclear reactors across the United States.
This partnership marks a significant milestone as the first of its kind in the tech industry.
The inaugural reactor is anticipated to be operational by 2030, with additional units expected to come online by 2035.
Collectively, this project aims to supply 500 megawatts of power, sufficient to energize a midsize city, specifically to support the company’s AI technologies.
In a recent blog post, Google emphasized the benefits of nuclear energy, stating:
Nuclear solutions offer a clean, round-the-clock power source that can help us reliably meet electricity demands with carbon-free energy every hour of every day.
The tech giant expressed its commitment to advancing these power sources in collaboration with local communities to facilitate the global decarbonization of electricity grids.
Kairos Power, a startup focused on nuclear energy, is developing these smaller reactors, which differ significantly from the traditional large nuclear towers commonly associated with nuclear power.
The company’s innovative design utilizes a molten salt cooling system, allowing operations at lower pressure levels.
Earlier this year, Kairos Power began construction on a demonstration reactor in Tennessee, which will initially be unpowered.
Details regarding the financial aspects of the partnership, including the overall cost, remain undisclosed, and specific project sites have yet to be identified.
This announcement follows closely on the heels of Microsoft’s recent collaboration with Constellation Energy, which aims to reactivate an undamaged reactor at the Three Mile Island facility—historically known for the worst nuclear accident in US history—to supply power for Microsoft’s AI data centers.
As per report by Reuters, experts have raised concerns about the potential strain on the US power grid due to the increasing energy demands of data centers.
A recent nine-year growth forecast for North America suggests a doubling of energy requirements compared to the previous year.
Last year, Grid Strategies projected a growth rate of 2.6% over five years, a figure that has since surged to 4.7%. This surge implies a projected peak demand increase of 38 gigawatts, enough to power approximately 12.7 million homes.
India and Canada’s diplomatic ties took another hit when Canada suggested that India was involved in the killing of Khalistani terrorist Hardeep Singh Nijjar.
This accusation led to a rapid escalation, with India expelling Canadian envoys and recalling its high commissioner from Ottawa.
While the political relationship between the two nations has become increasingly strained, the economic impact is still unfolding.
Experts warn that prolonged tensions could result in significant consequences for the bilateral trade relationship between these two nations.
Despite the political discord, India and Canada have maintained a robust economic relationship.
The Global Trade Research Initiative (GTRI) reported that the current diplomatic tension has not yet had a major impact on the trade in goods between the two countries.
The bilateral merchandise trade between India and Canada experienced slight growth, from $8.3 billion in 2022-23 to $8.4 billion in 2023-24.
India’s imports from Canada increased to $4.6 billion, while exports to Canada fell marginally to $3.8 billion during the same period.
In the first 10 months of 2023, bilateral trade in goods reached $7.65 billion, with Indian exports accounting for $4.7 billion and imports standing at $2.95 billion.
This steady flow of trade highlights the resilience of the economic partnership amidst the political upheaval.
Canadian investments in India: a key pillar of the economic relationship
Canadian investments in India have also been significant, with Canada contributing $4 billion in foreign direct investment (FDI) from April 2000 to June 2024.
This flow of capital has helped fuel multiple sectors in the Indian economy.
A large portion of this investment comes from Canadian pension funds, which have collectively poured over $75 billion into India, primarily due to the country’s growth potential and favourable business climate.
This makes Canada one of the largest foreign investors in India, with over 600 Canadian companies currently operating in the Indian market.
Furthermore, more than 1,000 Canadian firms are actively exploring business opportunities across various sectors, including information technology, natural resources, and financial services.
What India imports and exports to Canada
India’s export portfolio to Canada is diverse, ranging from gems and jewellery to pharmaceutical products and ready-made garments.
Other major exports include organic chemicals, light engineering goods, and iron and steel articles.
On the other hand, India imports essential commodities such as pulses, newsprint, wood pulp, asbestos, and potash from Canada.
The trade also includes industrial chemicals, minerals, and metal scraps.
These varied trade flows reflect the deep economic integration between the two countries, which has so far managed to stay insulated from political fallout.
How political tensions could disrupt economic stability
The diplomatic row between India and Canada could, however, become a threat to their longstanding economic ties.
GTRI founder Ajay Srivastava noted that while trade relations have been resilient so far, they are not immune to political instability.
The current situation demands careful diplomacy to ensure that the economic partnership remains intact.
Ajay Srivastava warned,
If the dispute escalates further, the economic fallout could be substantial.
Both governments must prioritise maintaining the stability of their trade and investment relations to prevent wider damage to the economy. Srivastava highlighted that managing this crisis without disrupting economic ties will be a key challenge in the coming months.
Can the India-Canada relationship recover?
Looking ahead, much will depend on how both countries navigate the ongoing diplomatic conflict.
If relations continue to deteriorate, it could hamper not only trade but also affect Canadian investment in India.
With billions of dollars in investments at stake, particularly from Canadian pension funds, maintaining a stable business environment will be crucial for both nations.
The fact that the economic relationship has so far withstood the test of political upheaval offers a silver lining.
Both countries have significant economic incentives to preserve their trade and investment ties, even as their diplomatic relations continue to face turbulence.
The EUR/USD and EUR/GBP exchange rates continued their downward trend ahead of the important European Central Bank (ECB) decision and inflation report. The EUR/GBP pair fell to 0.8330, its lowest point since Oct. 3, while the EUR/USD plunged to the two-month low of 1.0890.
ECB interest rate decision
The euro has weakened drastically against other currencies like the US dollar, Swiss franc, and the British pound as the bloc’s economic deterioration continued.
Reports released this week showed that inflation in key countries like France and Spain dropped below the ECB’s target of 2.0% in September.
In Sweden, the headline Consumer Price Index (CPI) fell from 1.9% in August to 1.6% in September. Similarly, in France and Spain, the headline figures dropped from 1.8% to 1.1%, and from 2.3% to 1.5%.
Inflation in other European countries has moved below the 2% target. Analysts expect the CPI data to be released on Thursday will show that the bloc’s inflation fell to 1.8% in September.
The ECB has won its battle against inflation, which peaked at 10.6% in 2022. Therefore, it needs to ensure that the bloc does not move to a deflation, which may affect consumer spending as they wait for prices to keep falling.
There are signs that the bloc’s economy is not doing well as key countries struggle. In a recent report, German researchers said that the economy will shrink this year before crawling back in 2025.
Many large German companies are struggling. For example, Volkswagen, one of the country’s top employers said that it may start to close factories for the first time in decades. Other companies like ThyssenKrupp and BASF have started cutting jobs in the country.
There are also concerns about the bloc’s jobs environment as the economic slowdown continues. The unemployment rate remains at 6.4%, while wage growth has stalled in the past few months.
Therefore, analysts expect the ECB to continue cutting interest rates on Thursday. The base case is that it will slash rates by 0.25%, and maintain a dovish tone. These rate cuts will help it increase liquidity in the bloc and lead to more growth in the near term.
UK inflation data ahead
The EUR/GBP exchange rate will react to the upcoming UK inflation data, scheduled for Wednesday.
Economists polled by Reuters expect the data to confirm that the UK inflation continued falling in September.
The headline CPI is expected to fall from 0.3% to 0.2%, and from 2.2% to 1.9% on a month-on-month and year-on-year basis.
Core inflation, which excludes the volatile food and energy prices, is expected to drop from 0.4% to 0.3% and from 3.6% to 3.4%.
As such, the bank will maintain its relatively dovish tone and possibly cut interest rates in the next meeting in November.
The BoE, under Andrew Bailey, has been fairly cautious when cutting rates such that it left them unchanged in the last meeting, which explains why the EUR to GBP pair has slumped.
EUR/GBP technical analysis
The EUR/GBP exchange rate has been in a strong downward trend this year. It peaked at 0.8765 in January and then fell to 0.8330 this week. Its attempts to rebound in September found a strong resistance at 0.8625.
The pair has formed a descending channel pattern and moved below the 50-day and 100-day Weighted Moving Averages (WMA).
Also, the MACD has moved below the zero line, while the Relative Strength Index (RSI) has crashed below the neutral point at 50.
Therefore, the path of the least resistance for the pair is bearish as the UK interest rates remain higher than those in the EU. A drop below the year-to-date low of 0.8312 will point to more drops in the near term.
EUR/USD forecast
The EUR/USD pair has also slumped because US interest rates remain higher than those in Europe. It has also slumped because of the rising hopes that Donald Trump will win the US election in November.
In an interview with Bloomberg on Tuesday, Trump reiterated his threat to impose more tariffs, opening door to more global tensions.
On the daily chart, the pair formed a double-top pattern at 1.1200, and recently moved below its neckline at 1.100.
It has also crashed below the key support at 1.0980, its highest level in March 2024. The pair has moved below the 50-day and 100-day WMA, while the MACD and the RSI have pointed downwards.
Therefore, the pair will likely continue falling as traders target the next key support at 1.0800, which connects the lowest levels since October 2023. This is an important level since it connects the lowest swings since August.
Cryptocurrency prices bounced back this week, with Bitcoin surging to over $67,000, and the crypto fear and greed index approaching the greed area of 60. Bitcoin is approaching the important resistance point at $70,000, raising the possibility that it will retest the all-time high of $73,800.
Most altcoins are doing well, with the total market cap of all meme coins tracked by CoinGecko surging to over $58 billion. This article looks at some of the top trending tokens like Avalanche (AVAX), Sei (SEI), Shiba Inu (SHIB), and Turbo (TURBO).
Avalanche price forecast
Avalanche is one of the leading blockchains in the crypto industry. It is a popular chain that hosts dApps like Benqi, AAVE, GMX, and GoGoPool.
Avalanche’s DeFi ecosystem has over $1.06 billion in assets and over $2.40 billion in stablecoin market cap.
Recently, however, Avalanche has lost market share from the likes of Base Blockchain, Sui, and Arbitrum.
The network has made headlines recently after announcing a $40 million grant program for Avalanche L1 networks. This program aims to help continue growing the ecosystem and regaining market share. The AVAX token is also in the spotlight as the Avalanche Summit continues.
Retro9000: Up to $40m in retroactive grants for Avalanche L1s 🔺
This new grant program aims to reward developers who contribute to the testnet and launch their project on mainnet, empowering developers to do what they do best–innovate and build.
Turning to the daily chart, we see that the Avalanche price bottomed at $17.18 in August, and has bounced back to $27. It has moved above the 50-day moving average and is hovering slightly below the 61.8% Fibonacci Retracement point.
Avalanche has moved above the 50-day moving average and has formed an inverse head and shoulders pattern. Therefore, the token will likely have a bullish breakout as investors target the next key resistance point at $33.10, its highest point on July 22.
Sei is another fast-growing layer-1 network launched on the Binance Launchpool last year. It has fast speeds and low transaction costs, making it a good alternative to popular layer-1 networks like Ethereum and Solana.
Sei’s network has achieved a TVL of over $178 million, with some of the most notable dApps being Yei Finance, SiloStake, and Dragon Swap.
The network is also seeing some traction in the gaming industry. For example, FishWarOfficial, a fast-growing Web3 game with over 1 million players, deployed in Sei this week. Sei has also had one of the fastest growth in terms of daily active wallets in the L1 space.
Sei token has rebounded from the August low of $0.2038 to a high of $0.50, helped by the ongoing crypto recovery. It has also moved to the 61.8% retracement point and is above the 50-day moving average.
However, it has also formed a small double-top chart pattern, a popular bearish view. Therefore, the token will likely have a bearish breakout in the coming days as sellers target the key support at $0.3700.
Shiba Inu token has struggled in the past few months as investors moved to other popular meme coins like Pepe, Bonk, Dogwifhat, and Book of Meme. For example, its 24-hour volume was over $754 million, while WIF had over $1.2 billion. SHIB’s volume was also lower than other smaller tokens like Neiro and Turbo.
Shiba Inu price also struggled as the Shibarium network saw weak growth, with the number of transactions falling.
Like other tokens, the SHIB token has rebounded in the past few days. This rebound happened after it formed a falling wedge chart pattern. In price analysis, this is one of the most bullish signs in the market.
The token has moved above the 50-day moving average and is between the 61.8% and 78.2% retracement levels. Also, the MACD indicator has jumped above the neutral point of 50.
Therefore, SHIB will likely remain in this range for a while. More upside will be confirmed if the token rises above the key resistance point at $0.00002175, its highest point on September 27.
Turbo is one of the fastest-growing meme coins in the industry. Launched in 2023 on the Ethereum network, it has surged and achieved a market cap of over $800 million. This makes it bigger than some well-known companies like Beyond Meat, The RealReal, and GoPro.
The Turbo token has been one of the best-performing coins in the market. It has surged from the year-to-date low of $0.00036 to $0.013 on Tuesday.
On the daily chart, it has moved above the crucial resistance level at $0.010, its highest point on May 28.
The token has remained above the 50-day and 200-day Exponential Moving Averages (EMA), meaning that bulls are in control.
Therefore, it will likely drop and retest the key support at $0.010, and then resume the uptrend. More gains will be confirmed if the price rises above the year-to-date high of $0.013.
