Generalized Forex Forecast for 02 - 06 May 2016

Generalized Forex Forecast for 02 - 06 May 2016

30 April 2016, 13:11
Sergey Ershov

First, a few words about the forecast for the previous week:

■ if we talk about the forecast for EUR/USD, graphical analysis and indicators on D1 have demonstrated 100 per cent implementation. According to their predictions, the pair was to rebound from the support 1.1200 and move to the resistance 1.1450. That is what happened: having started on Monday from the mark of 1.1217, the pair completed the five-day period at the level of 1.1451;

■ with regard to GBP/USD, contrary to the forecasts of most analysts, who insisted for the whole of last month on the pursuit of the pair to lows of February, the pair continued its roll to the north and, breaking through the 1.4450 resistance, rapidly approached the February maximum at the level of 1.4670;

■ but the USD/JPY has fully met the expectations of graphical analysis and analysts, who believed that, having repulsed from the resistance in the zone of 112.00, the pair had to go down - to the support of 110.60, and then even further - to 107.70. Due to the decisions of the US Federal Reserve and the Bank of Japan on interest rates, the pair not only fulfilled but also exceeded this task seriously, being just a little short of the 2014 side channel area - 100.90 ÷ 105.30;

■ USD/CHF. Predicting the behaviour of this pair, graphical analysis on D1 claimed that the level of 0.9800 would become an insurmountable resistance for it, rebounding off which it would go down - to support 0.9500. That is what happened - the pair aggressively moved to the south for all the past five days, reaching the weekly bottom by Friday at 0.9567.


Forecast for the coming week:

Summarizing the views of several dozen analysts from leading banks and brokerage firms, as well as the forecasts made based on different methods of technical and graphical analysis, we can say the following:

■ expert opinions on the future of EUR / USD are almost equally divided - 45% are for the growth of the pair to the zone of 1.1550 ÷ 1.1650, 45% are for its fall to the levels of 1.1200 ÷ 1.1300, and the remaining 10% are for staying in a sideways trend. If we talk about graphical analysis on the time-frames W1 and MN, it can be clearly seen that the pair is at the top horizontal border of the channel where it has been moving since last year's January. Thus, the zone 1.1450 may become strong resistance for the pair, having repulsed from which it will move to the centre line of the channel, which is at the level of 1.1000. It should be borne in mind that the coming week is full of important economic events, including the publication of employment data in the US, which can seriously affect the mood of virtually all dollar pairs;

■ similar split of opinions can be observed among analysts regarding behaviour of GBP/USD - 40% are for the fall, 40% are for the growth to the level of 1.5000 and 20%, supported by graphical analysis on H4 are for lateral trend within 1.4500 ÷ 1.4660. If you talk about a longer-term outlook, 75% of the experts are inclined to see the pair's fall. Here graphical analysis clarifies that the main support in this case will take place at the level of 1.4200;

■ there is no consensus among experts about the future of USD/JPY either. As for the indicators, it is clear that after such a rapid fall, 100% of them are directed downwards. However, if you focus on reading graphical analysis on D1, we should expect the pair to rebound to the zone 109.00 ÷ 110.00, and then to attempt to reach the bottom at the level of 105.00;

■ as for the last pair of our review - USD/CHF, about 60% of the experts, together with graphical analysis on D1, believe that the pair should attempt once again to gain a foothold above the level of 0.9800. The main resistance in this case will be the level of 0.9900. However, according to the graphical analysis on H4, this can only occur after the pair rebounds from the support in the 0.9520÷0.9500 zone.


Roman Butko, NordFX & Sergey Ershov

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