Firstly, a few words about the forecast for the previous week:
- For the EUR/USD pair a descent to the 1.1035 level had been predicted for the start of the week, which is what ended up happening, with the pair falling to the assigned level on 18th August. Rebounding from that it ascended to the called 1.1280 target, where it stayed for most of Friday.
- The forecast for the GBP/USD pair can also be considered successful. Just as we had said, the pair first reached 1.5690, after which it sharply descended into the 1.5550 area (1.5560 to be precise). The predicted bounce towards the upper boundary of the ascending trend (1.5690) occurred on Tuesday, and the pair finished the working week at precisely that level.
- The sideways trend that we had predicted for USD/JPY, however, lasted for only the first half of the week, after which the USA and China decided to refuse the bears a bearish treatment. This caused the bears to drag the pair to hibernate into their cave, which in this case was located 250.0 points below the week’s starting level.
- We observed a similar situation with USD/CHF. As with the Japanese Yen on Wednesday, the bears decided to wave the indicators and experts goodbye with their paws, letting the pair slide in the process. Only the extraordinarily strong support level of 0.9840 proved to be capable of pretending this catastrophic fall. The pair has been attempting to breach this level since spring.
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The forecast for the upcoming week:
Generalizing the opinions of 35 analysts from the world’s leading banks and brokerage firms, as well as forecasts that are based on the largest possible variety of technical and graphical analysis, the following can be said:
- Regarding the future of EUR/USD, the majority of analysts think that once the pair reaches the strong resistance level of 1.1460, it will maintain a sideways trend that would rest on the support at 1.1150 for some time. An alternative viewpoint suggests that the pair will descend to 1.0840 after the current correction. We need not linger on the showings of indicators, as H1, H4 and D1 all point exclusively upwards. Even W1 decided to reach a compromise by showing a sideways trend. Graphical analysis on H1, however, insists on the pair’s decline at the start of the week to at least 1.1290.
- For GBP/USD 80% of experts and 85% of indicators predict a continuation of an upwards trend with a target of at least 1.5800. This forecast is supported by graphical analysis using the ТF of Н4. If we go down to the H1 time frame, however, we will be able to see a continuation of the short-term sideways trend within the 1.5650÷1.5715 boundaries at the start of the week. In the case of a downwards breakthrough, however, 1.5550 should become the key support level.
- As for USD/JPY, 78% of experts agree in their forecasts that the pair’s fall will end in the 122.00 area, after which we will be able to see a bounce right towards the 124.60 resistance. In the case of a breakthrough of the support at 122.00, the pair will have every chance of going down to 120.20. Interestingly, graphical analysis supports a very similar scenario: a short-term descent into the 120.40÷121.20 area, followed by a rebound towards the 124.60 mark.
- Regarding the future of USD/CHF, both experts and graphical analysis think that 0.9400 will be the level from which the pair will start its ascent into the 0.9700÷0.9750 zone. At the same time, graphical analysis does not do away the possibility that the pair’s rise will start immediately on Monday. As for a longer-term forecast for the coming months, the pair may fall to the 0.9100 level, and then turn around and reach the meaningful 1.0000 mark.
Roman Butko, NordFX & Sergey Ershov
