USD/JPY PRICE ANALYSIS: RETREATS FROM WEEKLY-TOPS TO 115.40S AMID A LIGHT CALENDAR

9 February 2022, 19:05

• Broad US dollar weakness across the board weighed on the USD/JPY pair.
• Falling US Treasury yields and demand for riskier assets keep the USD/JPY subdued.
• USD/JPY Technical Outlook: Remains upward biased ahead of the US CPI for January.

On Wednesday, the USD/JPY retreats from weekly highs ahead of the release of US inflation figures, alongside the slip of US Treasury yields. At the time of writing, the USD/JPY is trading at 115.44, down 0.08%.

Financial markets mood is positive, as shown by European and US equity indices printing gains. The US 10-year Treasury yield is dipping three basis points, to sit at 1.925%, while the US Dollar Index drops 0.20%, currently at 95.44.

USD/JPY Price Forecast: Technical outlook

In the overnight session for North American traders, the pair reached a daily high at 115.68, followed by a drop to the downslope one-month-old resistance/support trendline that passes around the 115.25-35 area. Even though the USD/JPY retreated to the abovementioned trendline, the pair remained above it, confirming the upward bias. 

That said, the USD/JPY first resistance would be 116.00. Breach of the latter could pave the way for further gains and expose a 24-year-old downslope trendline drawn from August 1998, swing highs that pass around 117.00. An upward break would expose the January 2017 swing high at 118.61.

BOC MACKLEM: SPEAKING LIVE, SAYS THERE IS EVIDENCE GLOBAL SUPPLY CHAIN PROBLEMS MAY HAVE PEAKED

9 February 2022, 19:16

Macklem is speaking live to the Canadian chamber of commerce.

Key comments

Covid recovery phase is chance to make long overdue gains in Canadian productivity.

Productivity growth is vital to economic growth, increasing wages without raising unit labour costs.

US capital has moved to higher-productivity sectors in larger amounts than in Canada, ‘has been more nimble’.

Expect that business investment will grow faster in Canada than in US.

Some evidence global supply chain problems may have peaked.

• Eyes on USD/CAD as BOC Governor Macklem responds to questions on economy

Watch live: BoC governor Macklem

Macklem speaks live to the Canadian chamber of commerce.

EUR/USD COULD BREAK OUT TOWARD A TEST OF 1.16 – SCOTIABANK

9 February 2022, 16:23

EUR/USD continues to trade in a narrow 1.1400-1.1450 channel. Analysts at Scotiabank spot a technical pattern that could imply a move towards the 1.16 level.

Support past 1.1400/90 is 1.1370

“EUR price action is forming a bullish flag pattern that could see it break out toward a test of 1.16.”

“Resistance past the mid-figure zone is 1.1484 followed by 1.1515/25 (the lows of Oct/Nov).”

“Support past 1.1400/90 is 1.1370, the mid-1.13s, and the 50-day MA at 1.1324.”

$3.6B in Bitcoin Linked to 2016 Bitfinex Hack Recovered

Cryptocurrency worth $3.6 billion has been recovered by the U.S. Justice Department — its biggest financial seizure on record.

The digital assets have been directly linked to the 2016 hack of Bitfinex, when coins now worth $4.5 billion were stolen.

Two people have been arrested in Manhattan on suspicion of attempting to launder the stolen funds.

Deputy Attorney General Lisa O. Monaco said the successful operation shows "cryptocurrency is not a safe haven for criminals," adding:

"In a futile effort to maintain digital anonymity, the defendants laundered stolen funds through a labyrinth of cryptocurrency transactions. Thanks to the meticulous work of law enforcement, the department once again showed how it can and will follow the money, no matter what form it takes."

Ilya Lichtenstein and his wife Heather Morgan are accused of conspiring to launder the proceeds of 119,754 BTC.

Court documents claimed that a hacker had managed to infiltrate Bitfinex's systems — initiating over 2,000 unauthorized transactions in the process. Stolen Bitcoin was subsequently sent to a digital wallet that Lichtenstein allegedly controlled.

An investigation suggests that 25,000 BTC was moved through a "complicated money laundering scheme" over the past five years — and some of the proceeds wound up in financial accounts that both Lichtenstein and Morgan controlled.

Court-authorized search warrants of their online accounts later uncovered private keys to the digital wallet where 94,000 BTC taken from Bitfinex all those years ago was stored.

'Criminals Always Leave Tracks'

Detectives described the defendants' techniques for laundering the crypto as "methodical and calculated." As well as relying on fictitious identities, funds were mixed through crypto exchanges and darknet markets — all with a view to obscuring transaction histories and throwing law enforcement agencies off the scent. Matthew M. Graves, U.S. Attorney for the District of Columbia, said in a news release:

"Cryptocurrency and the virtual currency exchanges trading in it comprise an expanding part of the U.S. financial system, but digital currency heists executed through complex money laundering schemes could undermine confidence in cryptocurrency."

The charges of conspiracy to commit money laundering and conspiracy to defraud the U.S. collectively carry a maximum sentence of 25 years behind bars.

About a week ago, WhaleAlert had detected that 94,643 BTC from the wallet linked to the Bitfinex hack had moved — in regular tranches of 10,000 BTC.

The hack has gone down in history as one of the biggest to affect a crypto exchange — and at the time, Bitcoin's value plunged from $600 to $400.

Back in the summer of 2020, Bitfinex had announced that it was willing to offer up to $400 million if the funds were returned — and even said that it would allow the hackers to keep 25% of the stolen property as long as they returned the rest.

In a statement on Tuesday, Bitfinex said:

"We are pleased that the U.S. Department of Justice has today announced that it has recovered a significant portion of the Bitcoin stolen during the August 2016 security breach. We have been cooperating extensively with the DoJ since its investigation began and will continue to do so."

It now plans to "follow appropriate legal processes to establish our rights to a return of the stolen Bitcoin."

Will Paraguay Adopt Bitcoin as Legal Tender?

The topic of who will join El Salvador's lead in adopting Bitcoin as the country's legal tender is one that many are debating. The question of whether or not 2022 will be the year when other countries follow the crypto legalization trend is still up in the air.

Without a doubt, 2021 was a watershed moment in Bitcoin's history and journey, with the entire globe watching as a sovereign country adopted BTC as its legal tender.

The crypto community expected other countries, particularly small ones, to follow El Salvador's lead; in fact, the prominent JPMorgan bank argued at the time that there may be a "domino effect" once Bitcoin became a legal currency in El Salvador.

However, four months have passed and no other country has joined the hall of fame yet, despite the fact that certain countries, such as Tonga, have shown clear intentions of copying the Salvadoran model.

Recently, however, an announcement from the ‘CEO’ of El-Salvador (as he calls himself) has sparked a debate of whether Paraguay is set to become the second country to accept Bitcoin.

The tweet does mention two countries, however, for now, the majority of the crypto analysts are pointing towards Paraguay to be the second country in the race of accepting cryptocurrencies.

Here are some reasons why the Paraguayan crypto dream could become a reality in 2022:

1. The Boss Man Said It

The tweet shared above by the President of El-Salvador, Nayib Bukele, is no joke. This is because his authority and the level of connections he has in the political and crypto world are second to none. Many crypto developments promised by El-Salvador’s CEO have come to fruition in 2021, including the legalization of Bitcoin.

Another reason why Nayib might be right is that El-Salvador is a part of Latin America, along with Paraguay and other countries. Nayib’s decision of legalizing Bitcoin in 2021 had a big impact on the world and more so in its surrounding countries. Paraguay may very well be on its way to legalizing Bitcoin in 2022, and this takes us to a much stronger reason why this could happen.

2. Official Cryptocurrency Bill Passed in Paraguay’s Parliament

In December 2021, the Senate of Paraguay enacted a law aimed at regulating Bitcoin and cryptocurrency trading and mining in the country.

Senator Fernando Silva Facetti, a bill co-author, said on Twitter that the law will be debated in the Chamber of Deputies of Paraguay in 2022. The bill in Paraguay does not make bitcoin legal tender. However, it does hint at tighter regulation from the country's officials when it comes to bitcoin mining, as well as an overarching goal of protecting investors from businesses that provide bitcoin services.

Paraguayan Congressman Carlitos Rejala told Bitcoin Magazine: “With this we want to welcome the innovation of cryptocurrencies in Paraguay to the world”

“This is the result of a very strong and arduous teamwork of many experts in the field, both local and foreign.”

“While El Salvador’s final bill was just a few pages of text representing easily the most favorable, accommodating Bitcoin legalese ever passed, the early draft of Paraguay’s legislation set a different tone”

3. Adoption of Cryptocurrencies in Latin America

Since the acceptance of Bitcoin in El-Salvador as legal tender, a tsunami of cryptocurrency acceptance has been witnessed in the world, especially in Latin America. Countries like Brazil and Tongo are also on the verge of accepting Bitcoin as legal tender.

According to one of Tonga's former MPs, the Polynesian island is preparing to make Bitcoin an official tender.

In a series of tweets, Lord Fusitu described the probable move, saying that a ruling very comparable to the El Salvador bill was being worked on.

He unveiled a five-point strategy that saw Bitcoin become legal tender by November.

Tonga's government and financial leaders have yet to officially discuss any plans for incorporating digital assets into the country’s economic model, but Fusitu'a's weight of influence in the area commands enough international recognition for his remarks to be taken seriously.

Several ministers, including Fusitu'a, are crypto fans, which has fueled speculation about Tonga's plans to make Bitcoin legal tender in 2022.

The proposal is similar to El Salvador's move last year when President Nayib Bukele took his country to the brink of Bitcoin adoption by making it legal tender alongside the US dollar.

In addition to Tonga, Brazil is seen as the core hub of cryptocurrencies by major exchanges like Coinbase, Binance and others. Binance told Coindesk: “It is a key strategic market for Binance, for sure. It is the largest market in Latin America in all metrics and with enormous potential; and it is also very important for the company globally,”

Considering this increased interest in the crypto craze in the region of Latin America, Paraguay might be making Bitcoin legal tender in 2022.

Final Verdict: Will Paraguay Accept Bitcoin as Legal Tender?

The answer to this question depends on world politics and decisions made in Congress when the bill will be debated again in 2022. However, at present, the majority of economists have predicted this bill to pass due to the reasons discussed in this article.