What Does the Future Hold for Currency Markets?

The financial sector has been turbulent in 2017, to say the least. Both traditional and cryptocurrency markets have been shaken by unexpected twists and turns, which led plenty of small-time investors to call it quits. Still, two major power players, one old and one new, shaped themselves as being the stars of the show last year.

They are the euro, Europe’s most widely used currency, and Bitcoin, everyone’s crypto dream. However, while the latter already experienced a plunge in value, the former soon will too, according to the latest trading predictions. Let’s see what those are.

The Euro’s Reversal

Perhaps the most unexpected economic event of last year was the crash of the dollar. When Donald Trump was inaugurated as President of the United States of America on January 20th, 2017, the entire world thought that the country’s famous green bill would become the most powerful global currency once more.

However, the President Elect’s failure to fulfill his campaign promises regarding the strengthening of the US financial sector quickly led to its sharpest downfall yet. And thus, the euro regained power. This growth was also politically dictated, as the major power players in the European Union successfully navigated tense elections.

Neither France nor the Netherlands gave the reins to destabilizing eurosceptics. While the former is now led by Emmanuel Macron, an energetic centrist, the latter held out its status quo by not electing an extremist majority. In Italy, the entire country transitioned successfully to the new Gentolini government, while Spain nipped Catalonian separation in the bud.

Even Britain managed to pave its way to a softer Brexit and regain the pound’s economic stability. But according to Nasdaq, the euro is vulnerable and might see a sharp reversal very soon, followed by a flourishing recovery of the US dollar. This will be due to the spotlight coming back to the European Central Bank as political pitfalls have come and passed.

Due to a return to monetary policy and with the ECB setting fixed QE rates for 2018, Europe’s favorite currency doesn’t hold a promising future.

One way to predict such a reversal is through harmonic trading, which uses the alignment of Fibonacci ratios together with specific price patterns to determine which the highly probable points for this are in a market. And things are looking up for the euro from this point of view.

Cryptocurrency in 2018

In the case of everyone’s favorite trading field in 2017, namely cryptocurrency, the future is uncertain. A lot of important analysts and investors have expressed their opinion on the future of Bitcoin and other cryptos, and it’s not an optimistic one. In fact, world-famous investor Warren Buffett famously predicted that this entire market will come to a bad ending soon enough.

And to add insult to injury, Nobel prize laureate economist Robert Shiller, the one who predicted the downfall of dotcom and housing, said well before the cryptocurrency bloodbath of late December 2017 that Bitcoin will soon collapse and be forgotten by everyone. He even went as far as to liken the situation in this sector with the tulipmania of 1630s’ Holland.

In Schiller’s words, just like those tulips, BTC is an item with no real value; its perceived worth is something the public gave it themselves, and they will soon take it away and cryptocurrencies will disappear.

Still, CNBC predicts that the price for cryptos will stabilize in 2018  as more regulations are imposed and things finally settle down. This market will remain wild and volatile for a bit longer, but soon enough trading on it will be safer than ever.

Final Thoughts

While 2017 was a successful year for both the euro and Bitcoin, predictions for 2018 look grim in the case of both of these. Their values will drop, but at least in the case of BTC and other cryptos, this will bring a wave of stability along with it. So, it’s up to you to put your money where you think it’s worth it this year.