November 19, 2017
First, a review of last week’s forecast:
- Recall that, when giving the forecast for the EUR/USD, the overwhelming majority of experts (65%) supported the growth of this pair. In their opinion, having beaten off strong support/resistance level 1.1665, the pair should go up - first to the height of 1.1725, and then another 100 points higher.
This is exactly what happened - on Monday and part of Tuesday the pair moved in the side corridor along the horizon 1.1665, and then, rushing upwards, on Wednesday it reached the height of 1.1860. The reason for such a rapid spurt was the statistics of the Eurozone, whose GDP has been growing for the fifth consecutive month. In addition, the index of economic sentiment from ZEW was better than expected - 30.9 against 29.3.
Then the pair sharply turned to the south, which again was caused by the positive statistics, which this time came from the United States. Data on inflation and the consumer market supported the dollar, and it was able to win back about 70 points from the euro and completed the week in zone 1.1790;
- GBP/USD. More than 60% of analysts gave a negative forecast for this pair, naming horizon 1.3035 as support. The pair really immediately rushed down, however, not reaching the goal of some 25 points, changed the trend to ascendant and on Friday, it almost touched the mark 1.3260. Then, here again, the dollar managed to win back several tens of points, and the pair returned to the marks of the beginning of the week at 1.3200;
- 70% of experts and about half of the trend indicators and oscillators voted for the downtrend for the USD/JPY. Pivot Point of the mid-term side channel 108.00-114.50 in the area of 111.70 was named as target. Considering that in reality Pivot Point is not a line, but a corridor of a certain range, we can assume that this forecast came true all 100%, the pair went to the south about 175 points and reached the local bottom at the level of 111.95 during the week;
- The forecast was correct for the USD/CHF as well. As predicted by 65% of experts, supported by indicators on H4, by mid-week the pair fell to the level of 0.9845, after which the rebound up by 100 points followed.
It should be noted that such a fracture had been calculated quite precisely by graphical analysis, which had indicated first the fall of the pair to the level of 0.9860, and then its rise.
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. It is quite difficult to determine the weekly trend for this pair this time, since exactly a half of the experts vote for its fall, and the second half are for its growth. In this regard, most promising is the forecast, which is given by graphical analysis. According to its readings on H4, the pair will move in the side corridor in the range from 1.1700 to 1.1860 for a while. At this, first the pair is expected to go down to the lower border of the given channel, and then to bounce up.
Graphical analysis on D1 draws a wider range of oscillations - reduction to support 1.1600, and subsequent retreat to the height of 1.2050.
It should also be noted that throughout the coming week, data on the state of both the European economy and the economies of the United States, Japan, Germany and Switzerland will be published. However, volatility in the market is likely to be caused by the ECB head M. Draghi's speeches on Monday, November 20 and the Fed Chair J. Yellen on Wednesday, November 22, as well as the hearing of the inflation report in the UK, the ECB's monetary policy meeting and the publication of the minutes of the meeting of the Board of Governors of the US Federal Reserve;
- it seems that the GBP/USD will continue to move in a fairly wide medium-range lateral channel, which began in late September - early October this year. The lower boundary of the channel is 1.3035, the upper boundary is 1.3320. 40% of experts, supported by almost 90% of indicators and graphical analysis on D1, believe that the pair, in an attempt to break the upper limit, will move to the north. However, most analysts (60%) tend to believe that it will stay for a while in the central zone of the channel, moving west in the range of 1.3100-1.3235;
- The USD/JPY also continues to fluctuate within the channel 108.00-114.50. At the same time, 75% of experts believe that in the coming days it will once again test the support in the Pivot Point zone of this channel 111.70. 60% of analysts are sure that it will not be able to overcome it, and it will once again rush to the height of 114.50.
Indicators also support such a scenario. At the moment, 90% of them are painted red, with a quarter of the oscillators pointing the pair is oversold, which is a fairly accurate signal for the trend to reverse;
- USD/CHF. 60% of experts and 75% of indicators point to the south, the nearest target is 0.9800, the next - 0.9715. An alternative point of view is represented by 40% of analysts and graphical analysis on D1, according to which the bulls have not yet fully exhausted their potential, and the pair is expected to grow, at least, to mark 1.0100. The nearest resistance is 0.9940, which, after the breakdown, will become the main support.
Roman Butko, NordFX