August 6, 2017
First, a review of last week’s forecast:
- 60% of experts called the 2015 maximum at the height of 1.1870 as the nearest target for EUR/USD, the pair reached it on Wednesday. As for a longer-term forecast, 80% of specialists expected the trend to reverse to the south and the pair to start falling. That is what happened on Friday, thanks to the positive data from the US labor market. The NFP indicator rose to 209K instead of the expected 187K, and the unemployment rate fell to 4.3% in July. Taking advantage of this occasion, the bears could drop the pair by 150 points, and it returned to the values of the beginning of the week;
- The dollar strengthened its position to a certain extent in relation to the British currency as well. At the beginning of the week, as predicted by 70% of analysts and the clear majority of indicators, the pair showed growth, having reached the height of 1.3265. But then, thanks to the Bank of England and the data from the United States that we already mentioned, the dollar gained nearly 250 points from the British pound, returning to the medium-term support/resistance level in the zone of 1.3030;
- The basic forecast for the USD/JPY claimed that the pair should finally break through the horizon of 110.60 and go one level below. This forecast came true by 100%, and the level of 110.60 turned from support into Pivot Point of the past two weeks;
- USD/CHF. Recall that, after an impressive breakthrough of this pair up, the opinions of experts were divided almost equally - 55% sided with bears, 45% were on the side of bulls. As for graphical analysis, it was it that, having suggested a compromise option - first the pair's decline, and then its growth to the height of 0.9770, - was the closest thing to reality - having declined to 0.9630, the pair reversed and, having overcome resistance 0.9700, reached the height of 0.9763 on Friday.
As for the forecast for the coming week, summarizing the opinions of analysts from a number of banks and broker companies, as well as forecasts made on the basis of a variety of methods of technical and graphical analysis, we can say the following:
- EUR/USD. After the fall of the pair last Friday, about half of oscillators and trend indicators on H4 turned red, but the green still dominates on D1, strongly recommending to buy. 75% of experts are thinking of the pair's growth, calling the zone 1.1900-1.2000 as the target. Another 15% of analysts speak of a sideways trend, and only 10% of them turn their eyes to the south. Graphical analysis on H4 and D1 shows solidarity with this bearish minority as well. The support levels in this case are 1.1670, 1.1400 and 1.1200;
- GBP/USD. The overwhelming majority of analysts (75%) with the support of graphical analysis and indicators on D1, speak about the sideways movement of the pair within the limits of the previous week - from 1.3000 to 1.3270. A third of the oscillators on H4 agree with this scenario, signaling the pair is oversold. As for the remaining indicators, they side with those 25% of experts who expect the continuation of the downtrend, believing that the pair will first fall to support 1.2950, and then even lower - to the horizon 1.2810;
- the D1 chart clearly shows that the USD/JPY is once again descending from the upper border of the mid-term side corridor (114.50) to its lower border in the zone 108.10-108.80. And to reach it, the pair must go about 200 points to the south. That is why almost 80% of experts side with the bears. The remaining 20% of analysts, with the support of graphical analysis on H4, do not exclude a correction upwards, as a result of which the pair can rise to the zone of 111.30-111.75;
- Bearish sentiment prevails in the forecasts for USD/CHF as well. 65% of experts, supported by graphical analysis on D1 and a quarter of oscillators, expect the pair to fall to the level of 0.9600, and then another 100 points lower. An alternative point of view is represented by 35% of analysts and the overwhelming majority of indicators, according to which the pair will be able to gain a foothold above the 0.9765 mark, then rush to resistance 0.9900.
Roman Butko, NordFX