March 11, 2018
First, a review of last week’s forecast:
- EUR/USD. Most experts (60%) had expected the growth of the euro first to 1.2400, and then even higher to the highs of past January-February at 1.2500-1.2555. In the first half of the week, the pair did go up, but the bulls’ efforts were enough to raise it only to 1.2445, after which the bears played back all the losses, and the pair finished almost at the same place where it started the week, namely 1.2305;
- As for GBP/USD, the volatility of this pair was not as strong as expected, and the pair stayed within the 1.3765-1.3930 range and did not reach any of the set goals. As a result, its movement can be described as a lateral trend with Pivot Point 1.3850;
- USD/JPY. 40% of analysts talked about the pair’s upward ambitions to the resistance of 106.40 and possibly even higher to 107.65. This forecast was supported by the 15% of oscillators which signalled it was oversold. As for graphical analysis, it suggested that the pair would rise to 106.40-107.15, which actually happened: the weekly maximum was fixed at the altitude of 107.05, and the week ended at around 106.80;
- We now reach cryptocurrencies: an extremely difficult asset to forecast due to their incredibly high volatility. The trends we suggested proved 100% correct: a slight initial rise followed by a sharp fall. For BTC/USD, we had predicted growth at the beginning of the week (it did go up to 11.670), followed by a fall (it fell by almost 30% to the level of 8.320). For ETH/USD, we predicted its decline by the end of the week to the 900-940 zone. However, Ethereum’s collapse exceeded expectations, and the pair recorded the weekly low at 635. The forecast for LTC/USD was as follows: a rise to 240 (ended up being 217.30) followed by a fall to 180-200 (in reality, 157.50). As for XRP/USD, which moved in a very narrow range at the end of February, the advent of spring marked its exit from hibernation. First, Ripple sharply gained weight to 1.025 per coin, and then lost almost 35%, dropping to 0.670.
As for the forecast for the coming week, summarizing the opinions of a number of analysts, as well as forecasts made on the basis of a variety of methods of technical and graphical analysis, we can say the following:
- Almost 55% of experts are sure that President Trump’s introduction of import duties on steel and aluminium will increase the attractiveness of the dollar, as a result of which EUR/USD will drop to at least 1.2000. However, a fairly large number of analysts believe that the pair will remain in the side channel 1.2150-1.2550 for some time, along which it has been moving since mid-January.
As for the medium-term forecast, the opinion of experts and the readings of graphical analysis are diametrically opposite. The former expect that the pair will fall to the level of 1.1900, whilst the graphs suggest upwards ambitions to 1.2800. The oscillator readings do not give clear signals either. On H4, 85% look down, and 15% signal that the pair is oversold. As for D1, there are even fewer clear benchmarks: one third of the oscillators suggest a fall, one third are neutral and one third predict the growth of the pair;
- GBP/USD. The indicators here are also indecisive, with some coloured red, some yellow, some green. But analysts, for the most part (80%), predict the continuation of the downward trend that began on 25 January. Supports are 1.3760 and 1.3585.
An alternative point of view is represented by 20% of experts and graphical analysis on D1, according to whose forecast the pair should try to break through the resistance at 1.4065. Te support is in the 1.3710-1.3760 zone;
- we should not rely on oscillators and, especially, on trend indicators in giving a forecast for USD / JPY this week. It is impossible to designate any obvious tendencies there. The opinions of experts are divided equally as well: 33% side with the bulls, 33% join the bears, and the remaining ones freeze in the middle.
As for graphical analysis, it draws a lateral trend on H4 within 105.25-107.65. Further developments can be seen on the D1 chart, where the pair breaks the lower boundary of this channel and descends to the 103.00 horizon;
- as for basic cryptocurrency pairs, experts expect the continuation of the downtrend. Thus, BTC/USD may go down to 8.320, and, in the event of a break through this level, fall to 7.740. Nothing good is predicted by analysts for Ethereum, Litecoin and Ripple either, which, according to their forecast, can lose another 10% to 20% of their value.
We should stress here that even the smallest events can influence the trends and volatility of cryptocurrencies. Therefore, we strongly suggest that you pay attention to smart money management, which, combined with leverage of 1: 1000, will significantly reduce your trading risks. After all, in order to buy 10 Bitcoins, 100 Ethereums, 500 Litecoins or 100,000 Ripples, with such leverage you will only need $100, and you can keep the rest of your money in reserve.
Roman Butko, NordFX