First, a few words about last week’s forecast:
- Regarding the EUR/USD pair, our predictions ended up being correct. We talked about the continuation of the sideways trend along with a certain advantage for the “bears”, which had to have pushed the pair down to the 1.1035 support level. Everything happened exactly as the above describes; even the rather intimidating weekend gap did not prevent those predictions from being fulfilled. After it the pair recovered, returned to its initial position and started strictly following our instructions: under pressure from the “bears” it descended to the 1.1032 support level and then, confirming the prediction regarding the sideways trend, slowly continued upward towards last month’s determinations.
- As for the future of GBP/USD, analysts, as can be said, fell into a puddle. In the first half of the week the pair, as had been predicted, tried to continue within the sideways corridor, but then sharply fell downwards, finishing at a strong support level in the 1.5550 zone.
- USD/JPY. Concerning the future of this pair both experts and indicators had agreed that the “bulls” would have the advantage and would push the pair upwards. Had there not been a gap in the weekend this is what would have happened. In reality, however, the “bulls” had to eliminate the consequences of this fall and, it has to be noted, they succeeded in doing so: by the middle of the week the pair had returned to a sideways corridor, which it has maintained since the beginning of June;
- Regarding USD/CHF , the pair has, albeit with a certain delay, remembered our forecast and, with millimetre accuracy, finished at the predicted level of 0.9400.
***
The forecast for the upcoming week:
We can say with absolute certainty that this week the results of the Greek referendum would have the final say on currency fluctuations. Precisely because of that it would be wise to focus our attention on the opinions of analysts from the world’s leading banks and brokerage firms, rather than on indicator showings:
- 64% of experts do not anticipate a bright future for the euro, thinking that the EUR/USD pair will fall at the very least by 100-200 points. Only 18% of analysts claim that the euro would rise to the 1.1250 level. Interestingly, amongst those 18% there is also an expert from Greece. But even his short-term optimism is overshadowed by the long-term forecast, which claims that by the end of the summer the pair should arrive at the1.0500÷1.0700 level;
- Regarding the GBP/USD pair the opinions of analysts like those of Greek citizens have split practically into two: 44% argue for its descent, 44% for its rise and 12% remain undecided. Based on graphical analysis the pair should descend to the 1.5430÷1.5500 zone by the end of the week, and then return to the 1.5550÷1.5616 area;
- Concerning USD/JPY experts, technical indicators and graphical analysis all unanimously continue to claim that the pair’s Pivot Point is at the 124.00 level, meaning that the pair is now anticipating a leap upwards to 125.00. We can identify 122.00 as a support level.
- Concerning the behaviour of the USD/CHF pair, a continuing descent, this time to 0.9330 and possible even lower to 0.9280 is expected.
In conclusion, we should repeat that the accuracy of this forecast this week largely depends on this rather small country called Greece. Precisely because of this, we strongly advise you to wait not only for the results of the referendum, but also for the reaction to them in financial markets.
Roman Butko, NordFX & Sergey Ershov
