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Weekly Forex Forecast for 4 – 8 July 2016

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Weekly Forex Forecast for 4 – 8 July 2016

Weekly Forex Forecast for 4 – 8 July 2016
July 04
10:00 2016

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

  • with regard to EUR / USD, those 20% of analysts, who spoke about the smooth growth of a pair, which was alike the growth of USD / CHF after the “Black Thursday” of 15 January 2015, turned out to be right. At least, for the past week the pair regained almost 150 points and finished the week in the zone of lows of the end of May – beginning of June;
  • predictions about the future of GBP / USD were as vague as forecasts regarding the future relations between the UK and the European Union. Last week the opinions of the analysts were split almost evenly: 30% – for the pair fall, 40% – for its growth and 30% – for the sideways trend. That’s exactly what happened: firstly, the pair slightly fell and then grew up. After that it went down again and the appeared at the low of June 24 – 1.3270, having satisfied all experts, including those that predicted the sideways trend;
  • giving a forecast for USD / JPY, 40% of experts and graphic analysis on H4 predicted the movement of this pair within the range of 101.00-104.00, which happened last week, with the amendment that the sideways channel was even narrower than predicted – 101.40-103.40;
  • as for the pair USD / CHF, 70% of the experts, supported by the majority of indicators, expected the pair to return to the Pivot Point of 2015-2016 at the level of 0.9800. The pair really quickly rose to a predetermined level, where it had been during the mid-week, then dropped to the same values it had started the week – to the area of 0.9730.

The forecast for the upcoming week:

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

  • it is likely that the consequences of the referendum in the UK will influence the state of the markets for a long time. And uncertainty as to how the Foggy Albion will be separated from the EU (and whether it will be separated at all), causes uncertainty in the forecasts of analysts. So, speaking about moving EUR / USD in the upcoming week, 45% of the experts insist on the growth of the pair, 45% – on its fall and the remaining 10% find a compromise in a sideways trend. The same discordance is being observed in the readings of indicators, but the graphical analysis on H4 draws a distinct side channel in the range of 1.1035-1.1180. At the same time we must remember that on Friday, July 8th we will see the release of the data on NFP – an important indicator of the state of the US economy, which usually lead to a spike in the exchange rate of the dollar. Unlike the fuzzy week forecast, medium-terms forecasts draw a much clearer picture: for example, more than 80% of analysts believe that in the next month or two the pair will go down first to the level of 1.0800, and then further – to the zone of 1.0500-1.0600;
  • with regard to GBP / USD, here we can see a unique picture – 100% of the experts with the full support of technical analysis suggest a sideways trend, which is certainly due to the uncertainty around Brexit. The level of 1.3300 is named as the pivot point, the lower boundary of the channel – 1.3070, the upper – 1.3550. If we speak about the forecast until the end of the month, here more than 55% of the experts tend to believe that the pair will fall below the level of 1.3000;
  • as for the future of USD / JPY, almost 70% of analysts with the support of 100% of indicators and graphical analysis on H4 voted for the drop of the pair to the area of 100.00-101.00. At the same time the area of 103.50 is indicated as the main resistance level. An alternative view, supported by the remaining experts and graphical analysis on D1, suggests a possible growth of the pair to the level of 106.30. At the same time, we should remember that USD / JPY is now at the Pivot Point level of the first half of 2014 year and, perhaps, it will move alongside this line for some time;
  • as for the last pair of our review – USD / CHF, then there is a strong likelihood that the pair will continue fluctuating around the Pivot Point of 0.9800, and at the same time it will maintain bullish aspirations to return to the landmark level of 1.0000.

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