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Bitcoin smashes through 20k!

Bitcoin – Daily Candlesticks
Source: GKFX / MT4 (December 16, 2020)

The strong breakout over 20k followed the weekend gap above a falling trendline. After a brief consolidation near recent peaks, the price broke out forcibly. Now 20,000 flips from resistance to support on any pullbacks. 
 

TAKEAWAYS


•    Bitcoin flies through 20k to reach 20,700 in 6% daily gain
•    Fed makes bond buying contingent on employment
•    US labels Switzerland a currency manipulator
•    PREVIEW: SNB
•    PREVIEW: BOE
•    DAY AHEAD: Australian unemployment, SNB meeting, Eurozone CPI, BOE meeting
 

GURU WISDOM


“Lost time is never found again.” – Benjamin Franklin
 

MARKETS


*Daily closing price
↗ EUR/USD    1.2184        (+0.27%)
↗ GBP/USD    1.3490        (+0.22%)
↘ USD/JPY    103.49        (-0.16%)
↗ S&P 500    3702.00    (+0.20%)
↗ Hang Seng    26,421        (+0.97%)
↗ Gold        1864.14    (+0.58%)
↗ Oil (Brent)    51.00        (+0.47%)
↗ Bitcoin    20,779        (+6.78%)
 

NEWS

Bitcoin

The 20k hurdle has been a long one coming for Bitcoin. It was this level that Bitcoin fell just short of in 2017 before plummeting around 80%. The latest gains put Bitcoin up over 200% this year alone. The surge was triggered by more proof of institutional interest in Bitcoin as an asset class. Reuters reported on Wednesday that Ruffers Investment Management moved $675 million in client assets into the leading cryptocurrency. Two days ago hedge fund Micro Strategy raised $650 million in a bond sale in order to invest into Bitcoin.
 

Fed


The Fed delivered the ‘outcome-based’ forward guidance markets had been looking for, saying it would continue to buy at least $120 billion in bonds each month until employment goals had been almost met. This adds to a previous commitment not to raise interest rates until inflation hits 2%. The Fed did not however extend the duration of the bond purchases as we mentioned was a possibility in yesterday’s update. The dollar initially gained but eventually gave way to the weaker overall trend after the press conference from Chairman Jerome Powell. 
 

SNB


The Swiss National Bank has responded to the US Treasury saying that Switzerland does not engage in any form of currency manipulation. The US Treasury formally accused Vietnam and Switzerland of being ‘currency manipulators’ on Wednesday. The Swiss franc has been left little changed by the news since the SNB reiterated its commitment to continue intervening where needed. We can expect to hear more elaboration in the SNB policy decision today where interest rates are expected to remain at -0.75%, the lowest in the world.  
 

BOE


No change in policy from the Bank of England is expected this close to the end of Brexit negotiations nor is any further hint about a cut into negative interest rates expected. NIRP could become a reality next year if a WTO-style Brexit causes economic difficulties but looks unlikely beforehand. The trend in the pound continues to be positive, which is derived entirely from optimism over EU trade talks where a deal makes extra BOE stimulus less likely. 
 

DAY AHEAD 


*Times in GMT
00:30    AUD    Employment Change s.a.(Nov)     50 K    178.8 K
08:30    CHF    SNB Interest Rate Decision(Dec 18)     -0.75 %    -0.75 %
10:00    EUR    Consumer Price Index (YoY)(Nov)     -0.3 %    -0.3 %
12:00    GBP    BoE Interest Rate Decision         0.1 %    0.1 %
13:30    USD    Initial Jobless Claims(Dec 11)         800 K    853 K
 

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