December 7, 2015
First, a review of last week’s forecast:
- as for EUR/USD, the past week showed vividly that fundamental events can refute all forecasts of technical analysis. Thus, the ECB’s decision on key interest rates stopped the falling trend on Thursday and brought the pair to 1-month-old values;
- the GBP/USD pair managed to fulfil the forecast before Thursday, according to which the pair was supposed to fall to 1.4890. The pair reached this support mid-week and then, on the ECB’s decisions, went up, returning to last week’s average values;
- opinions differed regarding USD/JPY last week. Most experts insisted on the pair’s transition to around 123.00-124.00 while graphical analysis, on the opposite, foresaw a fall to support at 121.50 and then a return to the 122.80 pivot point. The indicators on D1 also voted for the continuation of the sideways trend. The pair ended up going both up to 123.70 and down to 122.30. Ultimately, USD/JPY returned to the average values of the past 4 weeks, confirming the forecast about a further sideways trend;
- graphical analysis on D1 warned that USD/CHF could easily drop to 0.9850 during the week. It turned out that the pair just needed a pretext to go for it. The ECB’s decisions announced by Mario Draghi served as such, and the pair plunged by almost 400 points but then bounced back to the key level of 1.0000.
Forecast for the upcoming week.
Summing up the opinions of several dozen analysts from world leading banks and broker companies as well as forecasts based on various methods of technical and graphical analysis, the following can be suggested:
- the indicators are at a loss about EUR/USD, which makes sense after Mario Draghi’s speech: on the H4 timeframe, 85% of them vote for a rise; it’s already 58% on D1 while the number dwindles to 16% on W1. As for the analysts, 70% of them believe that the pair will still continue to move upwards in an effort to reach 1.1000-1.1100;
- the experts, the indicators on H4 and graphical analysis on H4 almost unanimously predict that GBP/USD will rise to 1.5200. The next resistance is at 1.5270. At the same time, graphical analysis on H1 indicates that before rising, the pair may go down to support around 1.5055;
- the analysts and all tools of technical and graphical analysis almost as one suggest that USD/JPY will continue its sideways trend in the same channel where it started to move 6 November. The pivot point is 122.95, support is 122.20, and resistance is 123.75. Only one expert doesn’t rule out that the pair will rise to 125.00;
- the forecast for USD/CHF isn’t so clear-cut. If most experts and graphical analysis on H4 predict a rise to 1.1000, the indicators on H4 and D1 are more inclined to see the pair go down. By the way, graphical analysis on D1 also indicates that before USD/CHF soars up to the said level, it should first fall to support around 0.9765.
Roman Butko, NordFX