Important DisclaimersThe content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party’s services, and does not assume responsibility for your use of any such third party’s website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.Risk DisclaimersThis website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.

Wage negotitiaons in Japan continue, with traders and the Bank of Japan looking on for signs of wage hikes that may in turn lead to the BoJ tightening policy.

The latest dribble of news is that Toyota did not
respond to its union’s 2024 wage hike demands at the third round
of pay negotiations on Wednesday.

The company said it will make the
formal response on March 13.

USD/JPY is not doing much, waiting for Powell later:

The SEC move came shortly after the SEC v Debt Box debacle, leading to the SEC dropping all charges. In the SEC v Debt Box case, the court ordered, “the SEC to show cause why it should not be sanctioned for making false and misleading representations to the court.”

The SEC responded by filing a Motion to Dismiss rather than face further scrutiny.

Significantly, the Motion to Dismiss did not go unnoticed on Capitol Hill. In February, US Senators co-signed a letter to SEC Chair Gary Gensler, threatening the SEC with more scrutiny.

Bad faith practices could also come to light in the SEC v Ripple case. Last month, US Government Watch Dog Empower Oversight announced the Office of Inspector General (OIG) was nearing an end to investigations into crypto conflicts of interest within the SEC.

The conflicts of interest relate to former SEC Director William Hinman.

SEC: Conflicts of Interest and Coinbase Battle

Hinman guided the SEC crypto regulation framework while allegedly receiving millions of dollars from former employer Simpson Thacher. Simpson Thacher forms part of a group promoting Enterprise Ethereum. The Hinman-related documents, disclosed during the SEC v Ripple case, highlighted that Hinman continued meeting with Simpson Thacher despite warnings from the SEC ethics department.

Findings of conflicts of interest could end SEC plans to appeal against the Programmatic Sales of XRP ruling. In July 2023, Judge Analisa Torres ruled programmatic sales of XRP did not satisfy the third prong of the Howey Test.

As investors await the outcome of the investigation, a ruling from the SEC v Coinbase (COIN) case could be more pivotal. Coinbase filed a Motion to Dismiss (MTD) in August 2023, arguing the SEC lacked the statutory authority to regulate exchanges.

Judge Katherine Failla heard oral arguments in January 2023. If Judge Failla grants the MTD, the courts could force the SEC to end its regimen of regulation through enforcement.

Amicus Curiae attorney, CryptoLaw US founder, and candidate for US Senate (Massachusetts) believes the SEC would settle the case against Ripple if the court grants the Coinbase MTD. A settlement would end SEC plans to appeal the Programmatic Sales ruling, a boon for XRP and the broader crypto market.

A court ruling on the MTD could arrive at any time.

XRP Price Action

Historical context

Satoshi Nakamoto, a mysterious figure, introduced Bitcoin 15 years ago with the help of a small group. In early 2009, Nakamoto released the Bitcoin software and communicated with users via email, never by phone or in person. As the technology gained attention in 2011, Nakamoto disappeared, leaving behind growing speculation and intrigue.

Australian computer scientist Craig Wright has claimed to be Nakamoto since 2016, sparking disputes and lawsuits. Testifying against Wright were Adam Back, Mike Hearn, Martti Malmi and Zooko Wilcox-O’Hearn, all contributors to Bitcoin’s early development.

Adam Back developed Hashcash, which became the base for Bitcoin’s mining process. Martti Malmi managed Bitcoin.org, Mike Hearn contributed code, and Zooko Wilcox-O’Hearn promoted Bitcoin through blogging.

Recently, 120 pages of correspondence between Satoshi Nakamoto and his early collaborator Martti Malmi was released publicly as part of a lawsuit. These emails, available on GitHub, provide new avenues for research and offer insight into Nakamoto’s character as well as Bitcoin’s crucial issues.

Trust is everything

According to Nakamoto, the fundamental issue with traditional currency is the need for trust in centralized institutions like central banks and banks, which often breach that trust through currency devaluation and risky lending practices. Additionally, these institutions require trust with our privacy and financial security, making micropayments difficult due to high overhead costs.

Nakamoto compares this to the trust required in early computer systems before strong encryption, where users relied on system administrators to protect their privacy. However, with the advent of strong encryption, trust became unnecessary as data could be secured from unauthorized access.

Likewise, Nakamoto argues for a similar solution for money with e-currency based on cryptographic proof. This eliminates the need for trust in third-party intermediaries, ensuring security and effortless transactions.

Anonymity issues

Nakamoto recognized early on that Bitcoin was not fully anonymous. While it could be pseudonymous with proper precautions, maintaining privacy was challenging. He advised against emphasizing anonymity to prevent misleading users and suggested users carefully consider privacy implications.

Nakamoto contemplated describing Bitcoin as private but recognized the need to avoid misleading users or fostering distrust. He suggested de-emphasizing the anonymous aspect, believing that those who desire anonymity would understand it without explicit promotion.

Energy consumption

One key insight from Nakamoto’s correspondence is his awareness of Bitcoin’s energy consumption due to its proof-of-work (PoW) consensus mechanism. While PoW is vital for security, it requires significant computing power, raising environmental concerns.

Nakamoto acknowledged these concerns but argued that traditional banking systems’ inefficiencies far outweigh Bitcoin’s energy use. He envisioned Bitcoin replacing resource-intensive infrastructure and billions of dollars in banking fees with a more efficient system.

He emphasized Bitcoin’s potential to be truly peer-to-peer without a trusted third party, unlike centralized electronic money attempts. Nakamoto believed that even if Bitcoin consumed significant energy, it would still be less wasteful than conventional banking activities it aimed to replace.

Bitcoin scaling

Nakamoto expressed confidence in Bitcoin’s scalability, asserting that it could surpass existing payment networks like Visa in transaction capacity. He believed Moore’s Law would ensure the network’s ability to handle growth, contradicting common criticisms today.

Nakamoto highlighted Bitcoin’s potential to scale much larger than Visa’s network with existing hardware and at a fraction of the cost. He emphasized that Bitcoin’s scalability would not hit a ceiling and discussed how it could cope with extreme size. He also anticipated that hardware speed advancements would outpace transaction growth, even under rapid adoption rates.

Security

Nakamoto emphasized the security of the Bitcoin network, stating that its robustness increases with network growth. He acknowledged initial vulnerabilities but argued that the network’s design inherently discourages theft through its economic model.

Nakamoto highlighted that Bitcoin’s security grows alongside its size and the value it protects. While acknowledging initial vulnerability when the network is small, he noted that the effort required to steal outweighs potential gains.

“A key aspect of Bitcoin is that the security of the network grows as the size of the network and the amount of value that needs to be protected grows,” Nakamoto writes. “The down side is that it’s vulnerable at the beginning when it’s small, although the value that could be stolen should always be smaller than the amount of effort required to steal it. If someone has other motives to prove a point, they’ll just be proving a point I already concede.”

For legal reasons, not investment

In Bitcoin’s early days, it was the only cryptocurrency recognized as a commodity by U.S. regulators due to its decentralized nature. Nakamoto, mindful of U.S. regulations, avoided promoting Bitcoin as an investment, preferring users to come to that conclusion independently.

“I would be surprised if 10 years from now we’re not using electronic currency in some way, now that we know a way to do it that won’t inevitably get dumbed down when the trusted third party gets cold feet,” he writes in one of his emails.

Future use cases

Nakamoto gives his early thoughts on ways of the technology’s possible implantation in the current financial system. In one of the emails, he introduces the concept of selling paysafecards for Bitcoins, either through online delivery or physical delivery. These cards, known as Gift Cards in some countries, are often used by individuals without credit history to pay for items that require a credit card.

Later on, Nakamoto gives some ideas for potential use cases:

• Consider positioning it as an intermediate credit for micropayments for virtual goods.
• Explore the concept of one-way payments where only buying Bitcoins and sending money out could be beneficial for pegging the currency.
• Payment for computer time could be another potential use case.
• Avoid discussing the idea of returning money to customers’ credit cards, as credit card companies generally disapprove.
• Any payment processor will likely require you to sell something tangible.

One of the key fragments gives a crucial point in understanding cryptocurrencies’ novelty as opposed to fiat money.

Unlike traditional commodities, Nakamoto claims, digital currencies like Bitcoin offer the possibility of trading over the internet without relying on trusted intermediaries.

Australian Q4 2023 GDP +% q/q

• expected +0.3%, prior +0.2%

For the y/y its up 1.5%

• expected 1.4%, prior 2.1%

The ‘Chain price index’ is an inflation indication, it rose 2.0% y/y.

More:

• the household savings ratio increased to 3.2%, from 1.9% previously, for the first time since Q3 2021, which is likely reflecting a degree of heightened risk aversion

—

The +0.2% q/q is pathetic growth. If it weren’t for a rising population (immigration is rocketing higher) GDP would have been negative. GDP itself is the total market value of all final goods and services produced within a country in a given period. By dividing this total by the population, GDP per capita provides a per person average. When you hear the analysts talking about a ‘per capita’ recession this, slow growth and rising population, is what they are talking about, in a nutshell. Per capita GDP came in at -0.3% q/q and -1% y/y.

This pic is not encouraging:

US Economic Calendar: Labor Market and Fed Chair Powell in Focus

ADP employment change and JOLTs Job Openings will warrant investor attention on Wednesday. The ISM Services PMI for February signaled a decline in service sector jobs. Weaker-than-expected numbers could fuel bets on a June Fed rate cut and fear of a hard landing.

A softer labor market may impact wage growth and disposable income. Downward trends in disposable income and labor market uncertainty could curb consumer spending.

Economists forecast the ADP to report a 150k increase in employment in February, up from 107k in December. However, economists expect JOLTs Job Openings to fall from 9.026 million to 8.900 million in January. Investors must also consider quit rates. Workers are less likely to leave their jobs in a deteriorating labor market environment.

While the numbers will influence the buyer appetite for the AUD/USD, Fed Chair Powell will have the final say. The Fed Chair will give testimony on Capitol Hill. Inflation, the economic outlook, and timelines for interest rate cuts will garner investor interest.

Short-Term Forecast

Near-term AUD/USD trends will hinge on Australian GDP numbers, US labor market data, and Fed Chair Powell. A tighter US labor market, a hawkish Fed Chair, and weaker Australian economic growth would impact the AUD/USD. However, updates from the NPC also need consideration.

AUD/USD Price Action

Daily Chart

The AUD/USD hovered below the 50-day and 200-day EMAs, affirming bearish price signals.

An Aussie dollar move to the $0.65500 handle and the 50-day would give the bulls a run at the 200-day EMA. A breakout from the 200-day EMA would bring the $0.66162 resistance level into play.

NPC-related news, Q4 GDP numbers from Australia, US labor market data, and Fed Chair Powell need consideration.

However, a break below the $0.64900 support level could signal a drop to the trend line and the $0.63853 support level.

A 14-period Daily RSI reading of 42.39 suggests an AUD/USD fall to the trend line before entering oversold territory.