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Bitcoin tags $40k

JPN225– Weekly Candlesticks
Source: GKFX / MT4 (January 14, 2020)

JPN225 has exploded since bottoming in March last year with a breakout above 3-year resistance near 24,000 and is now closing in on the next big round number 30,000.  A correction is well overdue and could happen near the 30k level.
 

TAKEAWAYS


•    Joe Biden plans $1.9 billion COVID relief with $1600 top-up checks
•    Bitcoin surges back over $40k then pulls back
•    China reports record trade surplus
•    Russell 2000 jumps 2% in an anticipation of stimulus 
•    Dollar mixed after Powell says no plan for rate hike while inflation is low
•    Italian bond yields spike as government coalition falls apart
•    WTI crude oil pops, gold edges back under $1850
•    Trial shows Johnson & Johnson’s covid vaccine is safe and generates immune response
•    DAY AHEAD: Biden stimulus reaction, US retail sales
 

GURU WISDOM


“I don’t know the word ‘quit.’ Either I never did, or I have abolished it.” – Susan Butcher
 

MARKETS


*Daily closing price
↘ EUR/USD    1.2155        (-0.02%)
↗ GBP/USD    1.3688        (+0.37%)
↘ USD/JPY    103.82        (-0.03%)
↘ S&P 500    3795.54    (-0.38%)
↗ Hang Seng    28,496.86    (+0.93%)
↘ Gold        1846.20    (-0.47%)
↗ Oil (Brent)    44.96        (+0.68%)
↗ Bitcoin    38,569        (+3.19%)
 

NEWS

 

Biden’s plan


The details of Biden’s suggested covid relief plan are now out. Democrats controlling the House and Senate means the bill is likely to pass, though a small risk remains from ‘centrist’ Democrats uneasy with the heavy spending. There is a little disappointment that stimulus checks (now known as ‘stimmy’ checks!) will only top up the previous $600 payment to $2000 rather than be a fresh payment in itself. Stocks closed lower and the dollar was mixed, however Treasury yields moved higher on the news.
 

Italian politics


Yet another Italian government coalition has broken down with former Prime Minister Matteo Renzi quitting over disagreements on how to spend EU rescue funds. Italian bond yields spiked amid the rising political uncertainty but the euro was little moved on the news.
 

Bitcoin tags $40k


We referenced the $40k round number in yesterday’s note as the second of two possible upside targets following a short-term breakout. The crypto hit the big level before some disappointment around Biden’s stimulus and profit-taking saw it erase some of the day’s gains.
 

DAY AHEAD


*Times in GMT
07:00 – UK Industrial Production (MoM)(Nov) [0.5% Exp vs. 1.3 % Prev]
07:00 – UK Goods Trade Balance(Nov) [£-10.175 B Exp vs. £-11.999 B]
N/A – China FDI - Foreign Direct Investment (YTD) (YoY)(Dec) [6.9 % Exp vs. 6.3 % Prev]
13:30 – US Retail Sales (MoM)(Dec) [0 % Exp vs.     -1.1 % Prev] 
15:00 - Michigan Consumer Sentiment Index(Jan) Prel  [80 Exp vs. 80.7 Prev] 
 

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