As usual, let us start with a few words regarding our forecast for last week. We had then regarded with suspicion the analysts’ opinions, who unanimously predicted growth for all four pairs. “This does not happen!” we exclaimed and turned out to be right. And so:
- for the EUR/USD pair, having remembered about graphical analysis and that the “inverted hat” figure was almost complete, we assumed that having drawn the second rim of this hat, the pair will sharply go downwards to the 1.1070 mark, which is what happened;
- the forecast for the GBP/USD pair was also fulfilled by 100%: the pair obediently bounced off the top boundary of the corridor and finished near the corridor’s lowest mark – 1.5500;
- the last few months we have talked a lot about USD/JPY striving to reach the height of 122.00, but all that time the pair could not pass the level of 120.50. Finally, the long awaited breakthrough came, and the pair almost reached the coveted peak, finishing the week on the 121.55 mark;
- when discussing the behaviour of the USD/CHF pair, we predicted its growth to at least the zone of 0.9290÷0.9380. The pair quickly completed the set task and between Tuesday and Friday it remained in the set corridor. Only at the end of the week did the pair move further up, following the US Consumer Price Index.
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Now regarding the forecast for the coming week. Generalizing the opinions of 35 analysts from world leading banks and broker companies, as well as forecasts based on different methods of technical and graphical analysis, the following can be said:
- for the EUR/USD pair the scenario with the second rim of the fallen “hat” may not yet be over, and, judging by the opinions of the experts (↑ - 42%, → - 6%, ↓- 52%), its movement upwards is not excluded, although the indicators almost unanimously point towards its fall (↑ - 9%, → - 9%, ↓- 82%). The level of 1.1000 may become a very strong support for the pair, from which it will move upwards. If the pair manages to overcome the resistance in the zone of 1.1110, it will go into a sideways trend of 1.1110÷1.1400, continuing to draw the “hat”. If, however, the indicators turn out to be right and EUR/USD, having broken through support at 1.1000, goes downwards, it may quite possibly reach the zone of 1.0660÷1.0800;
- GBP/USD also seems to have reached a strong support level of 1.5500. The analysts each have their own opinion (↑ - 38%, → - 32%, ↓- 30%), and the indicators too: on the H4 timeframe, the consensus is for downwards movement, on D1 – on the contrary, upwards. Thus, we will be brave enough to assume that in the next few days the pair will fluctuate in the range of 1.5500÷1.5800;
- regarding the future of the USD/JPY pair, the opinions of the experts also diverge (↑ - 38%, → - 12%, ↓- 50%), the indicators however (↑ - 91%, → - 9%, ↓- 0%) are clearly on the side of the “bulls”, which, with a high probability, relying on the support of 120.70, will push the pair up to the height of 122.00. The second strong support level will be 120.20;
- USD/CHF. Its strong negative correlation with EUR/USD has been noted repeatedly, which is why there are two possible scenarios for this pair: the first is growth to the very strong resistance level of 0.9500, and only after that, a rebound downwards; the second is a fall starting already on Monday. In this case the support will be on the levels of 0.9370 (weak) and 0.9300 (the main).
Roman Butko, NordFX & Sergey Ershov
