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This week, the USD was generally weaker, especially after the FOMC meeting minutes were released. Interestingly though, the minutes focused on ending QE, which carries a hawkish tone. At the end of the week, we are seeing USD take back some of those losses. Let’s take a look at the USD/JPY, EUR/USD, GBP/USD.

The USD/JPY might start to find some short-term support as it closes in on 101, and the 100.75 2014-low. However, clues have been building up for a bearish breakout from 2014′s descending triangle. The EUR/USD has already been weak. It consolidated in June, but is looking at bearish continuation signals in different time-frames. The soft USD earlier in the week is now looking strong compared to the ailing euro. GBP/USD has been bullish, but it is also giving way to some USD-strength at the end of the week. Still, there is no bearish signal, and the GBP/USD is poised to continue hammering at the highs on the year around 1.7175.


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After the Bank of Italy, Three More Italian Institutes Question Bitcoin

By Forexminute - Deepak Tiwari | Bitcoin | Jul 13, 2014 10:44AM BST




Earlier in May this year, ForexMinute reported that the Bank of Italy had questioned Bitcoin and issued a warning to users; now, three Italian institutions have issued several warnings and asked for new legislation to eliminate loopholes and regulatory ambiguity. Like the Bank of Italy, they also believe that there is lack of any mechanism to regulate Bitcoin investments.

Money laundering and anonymity have been the two major issues that the government is worried about. According to a report on the Italian financial information system (FIU), the Bank of Italy believes that Bitcoin poses a potential risk as it can be employed to circumvent money laundering regulations or funnel funds to terrorist organizations.

According to the FIU which has been examining Bitcoin’s potential for illicit activities and looking at complaints involving suspect Bitcoin transactions, the organization believes that while transactions are recorded in an online database, it is hard to identify the parties involved; thus, there cannot be any action against those who are laundering money.

The views from the FIU are shared by Colonel Albert Reda of the Guardia di Finanza, Italy’s financial police authority. Currently, it’s the Guardia di Finanza which is has any authority and resources to deal with Bitcoin; however, it believes that there are some major risks involved in Bitcoin for investors.

Volatility, Anonymity and lack of Regulation are Major Concerns Say Italian Authorities
According to Reda Bitcoin’s volatility poses a risk for investors and that its anonymity allows Italian residents to hold and transfer wealth anonymously. He believes that the Guardia di Finanza which is involved in an ongoing investigation is looking out for the case of Bitcoin and come out with any official views soon.
However, he made it clear that the absence of any form of regulation makes the digital currency a potentially powerful tool for money laundering, drug trafficking and arms trafficking. Apart from the accusation that Bitcoin is being used for contraband activities, the digital currency is also being abused that as it is not regulated it has hefty risk for investors.

Expressing his views on Bitcoin regulation, attorney General of Rome, Luigi Ciampoli, warned that Bitcoin could be abused by criminals engaged in money laundering, financing of terrorism, or mafia activities. According to him Bitcoin regulation would allow authorities to trace and identify all persons involved in digital currency transactions.

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The Federal Reserve officials are currently debating whether to increase the interest rates earlier than planned due to the recent growth in the U.S. labor market.

Most of the regional bank presidents were categorical that interest rates should be increased next year, based on forecasts made just before the Labor Department announced on July 3 that unemployment rate plunged to 6.1 percent in June, reported the Wall Street Journal.

The Fed policymakers hadn’t projected the jobless rate to decline close to 6.1 percent until the final months of this year.

“We have made more progress toward our unemployment goals than we would have thought earlier this year,” said John Williams, the President of the San Francisco Federal Reserve, in an interview with the Wall Street Journal. He said that the report indicates that the Fed should begin the process of normalization earlier than expected.

However, he didn’t give the exact date over when the monetary policy tightening will begin, though he has in the past been quoted as saying that he forecasts that to occur in the second half of next year.

Williams’ remarks are noteworthy as he is deemed to belong to a group of Fed policymakers called “doves” who prefer to retain the low interest rates, compared to another camp called “hawks” who favor higher interest rates to check inflationary pressures. Williams still insists that there is still some slack in the U.S. economy that is keeping inflation low.

In the meantime, the Fed hawks are increasingly pushing for the interest rate hikes. Philadelphia Federal Reserve President Charles Plosser was quoted by the Journal as saying that the economy is already better than it previously was, and hence he sees having zero interest rates for so long as unnecessary or risky at this juncture.

The Federal Bank of St. Louis President James Bullard echoed Plosser’s sentiments, saying that the Fed policymakers had earlier expected the unemployment rate to hover around 7 percent by now and that the central bank would have phased out its monthly bond purchase program and mortgage purchases aimed at boosting investment and hiring.

Bullard expects the Fed to increase interest rates in the first quarter of next year, though he projects that to happen earlier should the economy strongly recover from the winter induced-slump in the first quarter of 2014.

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Coin Congress to Be Held on 23-24 July 2014

By Forexminute - Deepak Tiwari | Bitcoin | Jul 14, 2014 10:51AM BST




The ambitious two-day Coin Congress is going to be held on 23rd and 24th July and expected to bring in some celebrated Bitcoin experts to talk on the issues related to the digital currency. The organizers of the event have tight agenda wherein the speakers are expected to put their views on digital currency, monetization, integration, and user acquisition.

The panelists will also be discussing about the things that are holding Bitcoin back from going mainstream. They will analyze why in five years of existence, the ecosystem has grown tremendously with millions of users worldwide yet it is unable to go mainstream.
To promote the event and reach to maximum people, the organizers Coin Congress entered into partnership with several media organizations as well. Whereas they announced that Coin Telegraph is an official media partner, the Bitcoin Society will be doing live video coverage of all panel discussion to be held during the two-day event.

The announcement also came that Coin Congress is excited to partner with BitGive Foundation, an organization focusing on improving public health and the environment through Bitcoin for the two-day event.

Panelists and Experts to Share Their Valuable Views
To be held at Hilton Union Square, 333 O’Farrell Street, San Francisco, the event will began with an address by Alan Safahi who will be providing an overview of the state of Bitcoin, past, present and future. He will be discussing the roles and responsibilities of various players and how mass adoption for Bitcoin can be done.
In a tweet the organizers of the event said that they are excited to have Lee Fox, founder of PeerSpring enrich the ‘Battling Perception’ panel with her philanthropic nature. Lee, a youth culture expert focused the seismic shifts of popular culture and the digital revolution, will be putting her views on the digital currency and her experience running PeerSpring.

A self-described youthologist Lee will help the audience talking about what motivates people to give and how young people drive popular culture and mash-up new approaches to just about everything. As she shares the views of hundreds of Bitcoin supporters that emerging social finance vehicles such as Bitcoin will ultimately be used for social good, the organizers hope audience will benefit from listening to her.

Registration Open

For individuals entrance ticket has been kept at $350. Whereas those who get late registration will be charged $400, the persons buying onsite entrance ticket will be paying $450. Apart from credit cards, the event organizers also accepting digital currencies like Bitcoin, Dogecoin, and Litecoin.

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The EUR/JPY started the week rallying, up from a price consolidation that ended last week. However, as we get ready for the 7/15 trading session, we should consider some technical signs that point to an imminent bearish attempt. Even if this theory is wrong, the reward to risk is favorable.

EUR/JPY 1H Chart 7/14



Here are the reasons based on the 1H chart:
1) The prevailing trend in the short-term in bearish. Price has fallen at*the start of*July from 139.28 to a low of 137.50 last week.
2) There is a falling trendline coming down from July’s high of 139.28 connecting to a resistance pivot from last week at 138.76, and price is tagging that trendline.
3) Price touched the 200-hour SMA and is still trading below it.

Reward to Risk Consideration:

Reward: Since the trend is bearish in July, and before that as we will see later, we can expect a potential downswing to challenge the current low of 137.50, with no reason to believe it won’t break. But this is a short-term trade idea in the 1H chart, and we should deal with short-term expectations. Therefore, to be conservative let’s say 137.50 is the potential target for the short-term. An entry around 138.30 gives us a potential of 80 pips.

Risk: If price moves above 138.50, EUR/JPY will lose its bearish structure formed in July. If the RSI pushes above 70, we are also seeing some near-term bullish momentum that would suggest further consolidation against July’s downswing. With this in mind, for an intra-session trade, a stop might be placed above 138.50, ie. 138.65. Entry from 138.30 would risk a potential loss of 35 pips. We might want to give it some more elbow space because a break above 137.76 might be needed to suggest the end of July’s bearish trend swing. If we put the stop above that 138.76 pivot, let’s say 138.85. The risk would then be 55 pips.

The 80:55 reward to risk is not so attractive, but it does allow more elbow space to stay clear of some near-term volatility risk. We also know that even a break above 138.76 is not a guarantee our bearish continuation idea is dead. A clear-out is possible, but at least we would give that scenario some elbow space too.

The 80:35 reward to risk ratio is favorable as it is better than 2:1, which means, if you are wrong half the time, you will have a profitable trading performance with enough trades. However, given the trade less elbow space means exposing the trade to more near-term volatility risk. It is a trade-off as always between your assumed reward to risk, to assumed probability of the trade working.

Without over thinking it, you can juggle between these two trade-offs.
Now let’s just take a look at the bigger picture to make sure we are not in the middle of a bullish trend planning for a bearish trade.

EUR/JPY 4H Chart 7/14



The 4H chart shows a market that has been consolidating during a downtrend. Here are some observations:
1) There was a failed rally attempt in June, where price popped up to 139.28, but failed to establish a price bottom against the prevailing bearish trend in the 4H chart. This can be considered a clear-out because the prevailing*trend was bearish, and the price action after the pop made a new low at 137.50.
2) The RSI has tagged 30 many times, but failed to pop up to 70, which suggests bearish but choppy momentum.
3) If we look at the market since the end of June, we are seeing bearish development as the RSI dipped to 30 but has failed to climb back above 60.
4) And price has simply made lower highs and lower lows.
5) Price action also shows a break below a rising trendline, and now a pullback that is still able to confirm the bearish outlook if it comes back down below that line.

Final word: The 4H chart basically shows that this is also a breakout/pullback trade idea. A break below 138.20 can kick start the next bearish swing, so look out for that in the 7/15 session.

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In the wake of the recent theft of millions of VeriCoins from cryptocurrency exchange MintPal, Litecoin creator Charles Lee recently took Reddit to convey his views on the matter. The celebrated developer eventually went against the idea of hardforking the entire VeriCoin network, as proposed and implemented collaboratively by MintPal and VRC developers.

“It is not in our rights to decide which coins belong to whom,” quoted Lee while explaining how such rules are set forth since the genesis block, and should not be changed at any cost. “If a theft happens on top of the network, the developers will not fork the coin to reverse any transactions. It is up to the market to decide on how to handle the theft,” he added later.

Lee meanwhile also proclaimed Litecoin as one such cryptocurrency that will never see such a day, in which it is need to be hard forked under the pressure of some theft. He also took the responsibility of securing the Litecoin network, while ensuring its user-friendliness and efficiency as well.

He also didn’t miss a chance to take a pot-shot at Proof of Stake system, saying that the thief probably had a lot of stakes in the VeriCoin network before he breached MintPal. “So the VeriCoin [developers] almost had to do this to prevent future attacks on the coin,” he added. “This is why I don’t believe PoS [to be] a viable alternative to PoW.”

And the man indeed pointed out a strong void in the securities of PoS based cryptocurrencies. PoS only coins are unsecured because they choose energy efficiency over security. The coins’ developers should make this their duty to educate people about the pros and cons of PoS coins. Otherwise, we would definitely be seeing a lot of such incidences in future, embarked first with VeriCoin.

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KCG Announces Trading Results for June, ITG Releases Liquidity Estimation App

By Forexminute - Yashu Gola | Forex Industry News | Jul 15, 2014 11:09PM BST




KCG Holdings Inc. published trade volumes for the month of June on Tuesday.In terms of market making, KCG posted an average of $23.5 billion in transaction volumes, which is 8.2 billion shares and 3.4 million transactions per day in US stocks, a notable decline from the volumes recorded in May.

The company recorded $0.6 billion more, totalling $24.1 billion, singling out KCG as one of the few companies that posted poor results contrary to its peers in the institutional and retail electronic trading who posted higher transaction volumes in June.

KCG BondPoint on average stood at $129.4 million daily in fixed income par value, much lower than May’s reading of $130.7 million daily. In June as a whole, the consolidated U.S. stock volume on average stood at $227.3 billion and 5.8 billion stocks traded each day.

In the meantime, leading research and execution brokerage ITG launched its ITG FX Trading Cost Index Application on Tuesday. The app, which is targeted at portfolio managers and forex traders, is updated on a daily basis. The ITG FX Trading Cost Index approximates the cost of liquidity for twenty currency pairs, considering the notional trade value and the intended trading time.

“The ITG FX Trading Cost Index Application is the first of its kind in the foreign exchange space, leveraging the power of ITG’s industry-leading FX transaction cost database,” Ian Domowitz, ITG Managing Director and Head of Analytics, said in a press release. “The app is a free and easily accessible reference tool for investors who want to quickly check estimated FX trading costs.”

The index will also provide users with dealer and ECN estimates using historical costs and smoothened out for implied volatility and recent trends in costs.

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A North Texas city council on Wednesday refused to enact a ban on hydraulic fracturing in the city after holding an eight-hour public hearing.

The Denton City Council voted 5-2 against the proposal, sending it to the November ballot that now leaves its fate on voters.

Fracking or hydraulic fracturing is a method of oil and natural gas extraction that involves pumping a mixture of sand, water and chemicals deep into the underground rocks at high pressure in order to free the trapped resource. Environmentalists have been up in arms against the technique, saying that it pollutes underground water supplies as well as air quality, reported Fox News.

Since Denton City sits on top of a huge underground natural gas reservoir, state regulators and energy firms said the ban will be opposed in courts and also massively affect Denton’s economy. Denton sits atop the Barnett Shale, which is estimated to have one of the largest natural gas deposits in the United States.

Tom Phillips, a former Texas Supreme Court chief justice, who spoke on behalf of the influential Texas Oil and Gas Association, said that its members will file lawsuits if the ban is approved.

Barry Smitherman, the Chair of Railroad Commission, which regulates the oil and gas industry in Texas, said in a letter sent to Denton’s city council and mayor last week that the ban will make America more reliant on foreign oil and natural gas imports.

The threats of lawsuits seemed to affect the voting pattern, with Councilman Greg Johnson expressing concern that the litigation from mineral holders and the state may send Denton City into bankruptcy. About 500 people showed up at Denton City Hall for the hearing.

The environmental group Earthworks, which had mobilized 1,900 signatures from locals to force the council to vote on the ban on Wednesday, said that it had proposed a ban as a last resort after energy firms disobeyed city rules such as the one on flaring.


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AUD/JPY Forex Support at Rising Channel Holding – July 17, 2014

By Forexminute - Samuel Rae | Technical Outlook | Jul 17, 2014 11:24AM BST




AUD/JPY looks ready to make a stronger bounce off forex support at the rising channel on its long-term time frame. Price is bottoming out on the weekly time frame and appears to have made a complex double bottom pattern, with price currently testing the neckline.

The bottom of the rising range is in line with the 100 SMA (simple moving average), which is still moving above the 200 SMA and reflecting an uptrend. However, stochastic is already indicating overbought conditions, which means that price could head back down to the channel support.

Going long at current levels with a wide stop below the channel and the 200 SMA could yield a high return on risk if one aims for the top of the channel at the 106.00 area. However, it would be prudent to adjust the stop to entry once price
tests the 100.00 major psychological level.

Forex Support Bounce or Break?

Data from Australia has somewhat improved, but what’s really lifting the Aussie for now is the pickup in China’s manufacturing sector. Bear in mind that Australia is China’s number one trade partner, so any improvement in the world’s second largest economy could also be positive for the Australian economy.

If this keeps up, AUD/JPY might be able to climb from its current levels until the 100.00 area, with further rallies dependent on risk sentiment. The recent news on the US sanctions and Russia’s plans for counter action might weigh on risk taking in the coming days though.

In that case, AUD/JPY could make another test of the channel support at the 93.00-94.00 levels. Another bounce could lead to a more prolonged rally but there could still be a chance of a breakdown. After all, the BOJ has recently emphasized that the economy doesn’t need additional stimulus since it is recovering moderately.

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Last week bitcoin was in a falling wedge pattern. As we started this week, there was a strong bullish breakout. However, the rally stalled at the 640 support/resistance pivot and fell, invalidating the bullish breakout, and suggesting further consolidation.

BTCUSD 4H Chart 7/17





Today, price at first continued to consolidate but ended with a strong upward*push that engulfed the previous session’s price action, as you can see in the 4H chart. This push can be a sign that bulls are indeed taking over, albeit not enough yet to break out of the overall consolidation that has been evolving throughout the month.

Although price is still stuck between the moving averages in the 4H chart, as well as a the consolidation channel, there are a few signs the market is ready to take off.
1) Today’s low respected the 200-period SMA in the 4H chart and stayed above last week’s low. This suggests that bears are no longer confident.
2) At the first half of consolidation, the bearish you saw some strong bearish 4H candles with mostly indecisive bullish ones. This week, there have been stronger bullish candles than bearish ones. This suggests bulls are starting to enter the market with force, and this might break BTCUSD to the upside.
3) The RSI has tagged 70, and has held up above 40 for the most part in July. This reflects the fact that bullish momentum is still in play.

We might still need one more push to gather more confidence in the BTC-bulls. A break above 631 should clear the falling channel resistance as well as the 100-period SMA in the 4H chart.
Failure to push above 631 would maintain the current consolidation mode. In this consolidation mode, there is downside risk towards 600. Even then, the overall trend since June would be valid, so watch out for buyers if BTCUSD does approach 600.

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