GENERALIZED FOREX-FORECAST FOR 31 August- 4 September 2015

The significant events that have affected global markets recently are the cause of bursts of great volatility. However, practice shows that everything falls back into place eventually and forecasts, which initially seemed to be destined for the dustbin of history end up actually being correct. Last week was exactly that type of case:

- thus, practically all indicators had predicted that EUR/USD would grow, with experts talking about a peak at 1.1460. The real life showed us that over the previous weak this peak was tossed between the bulls and the bears several times, resulting in it alternating between being a resistance level and a support level. Having contradicted all analyst forecasts at the start of the week, the pair regained control and finished the week at the predicted point, in the area of the lower boundary of the week’s corridor, 1.1150.  

- Regarding GBP/USD, our prediction of a continuation of the upward trend towards 1.5800 proved correct. Having tested this level on Monday and Tuesday, the pair rebounded towards the lower boundary of the said corridor on Wednesday. After several attempts to penetrate it, it fell to a significantly lower level than the key support level. The pair spent just a few hours in the 1.5550 zone, after which it reached the minimum of this July.

- The behaviour of USD/JPY on Monday 24 August was reminiscent of a kamikaze pilot. As had been foreseen, the pair gently descended towards the 120.20 area, after which, in the space of just one hour (!), it fell by almost as much as 400 points, reaching the nadir of this January. Experts should be proud that, just as they had predicted, the fall was short-term, as the pair decided to regain 550 points upwards very soon.

- As for USD/CHF, as has been observed repeatedly, the pair demonstrated an inverse correlation with its older sister EUR/USD. As a result, it missed the predicted level of 0.9700 by a meager 30 points.

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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 and indicators converge on the view that next week’s Pivot Point will be at 1.1200. Meanwhile, graphical analysis on the H4 time frame suggests that the pair will rise to 1.1255 at the start of the week, before falling to 1.1000. After that its volatility should be confined within the 1.1000÷1.1150 boundaries. However, an alternative viewpoint that is supported by graphical analysis on H1 and 25% of experts suggests that the initial rise will be much larger, perhaps taking the pair up to the 1.1480 mark.

- As for GBP/USD, a minimum level within the 1.5330÷1.5350 range cannot be excluded at the start of the week, after which the pair should rise and regain a lion’s share of what it lost last week. The resistance levels are 1.5550 and 1.5640 and this viewpoint is supported by 65% of analysts and graphical analysis.

- In predicting the future of USD/JPY 45% of analysts and 71% of indicators talk about high bull activity, which will push the pair up to 123.30. As a result, the pair should reach at least the 122.20÷122.50 area, which will become the resistance for the sideways trend that will follow. The main support will be at 119.50, with the next being at 118.00;

- Concerning the future of USD/CHF, all indicators (H1, H4 and D1) insist that the pair will rise. As for the forecasts of experts and graphical analysis, we see a 50-50 split in opinion. For instance, graphical analysis on Н4 suggests that the pair should fall to the support in the 0.9390 area at the start of the week, and only then rebound upwards to the 0.9560 resistance. If we believe analysis on D1, on the other hand, then we should see a steady rise to 0.9900 in the coming week, and further on to 1.0000 in September.

Roman Butko, NordFX & Sergey Ershov