Weekly Forex Forecast for 6 – 10 June 2016
First, a few words about the forecast for the previous week:
- the forecast for the pair EUR / USD said that the pair might rise initially to the level of 1.1170 and then to 1.1240, and after that it would reverse and start moving to the south. This scenario takes into account the fact that, according to many authoritative sources, the most important indicator of the state of the US economy – Nonfarm payrolls (non-farm employment change) – would show its smooth growth. Until Friday, the pair had been moving strictly in accordance with this forecast.
- on Tuesday it reached the first resistance of 1.1173, rebounded, on Wednesday the pair broke through it, reached the second resistance at 1.1220, then it reversed and moved decisively to the south. However, the publication of the US data on Friday drastically changed the situation – the actual value of the NFP has appeared 4 times less than it was forecasted, as a result the dollar fell by almost 250 points (!);
- as to GBP / USD, in the last few weeks, the level of 1.4500 was seen as a medium-term Pivot Point for this pair. That is why, according to the readings of graphical analysis, the support zone was supposed to coincide with this line. However, nervousness and increased volatility in anticipation of Brexit allowed the pair to fall below it by 115 points. But, then it returned to the above-mentioned Pivot Point and completed a five-day period at the level of 1.4514;
- a sideways trend with a major resistance in the area of 111.00 and support at 108.50 was named as the most likely scenario for the USD / JPY. As in the case of EUR / USD, the pair first had been moving within the predetermined range, however, over several hours the unexpected NFP data dropped the pair to the lows of a month ago;
- the forecast, given by the graphical analysis for the pair USD / CHF, anticipated its return to the zone of 0.9700 and it proved to be absolutely true – the pair finished the week at the level of 0.9754 –which is 200 points lower than the level of its beginning.
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 clear that, speaking about the future of EUR / USD, 100% of indicators are looking up. However, the vast majority of experts (80%) continue to insist on the reduction of the pair at least to the level of 1.1100. As for the forecast for the summer, in their opinion, during this period, the pair could drop even lower – to the level of 1.1000. Graphical analysis gives more restrained forecasts. Thus, according to its readings on H4 and D1, the pair may initially decrease to the support of 1.1283 (the next support- 1.1200), and then it will go up dramatically – to the high of 1.1450. Then, it will move to the south, approaching a local bottom in the area of 1.1130;
- with regard to the behavior of GBP / USD, the analysts’ opinions are divided almost equally – 45%- for the fall of the pair, 45% – for its growth, and 10% – for a sideways trend. 75% of the indicators on D1 along with graphical analysis also vote for the sideways movement of the pair that seems to be the most likely for the upcoming week. Pivot Point, as before, is at the level of 1.4500, the support is in area of 1.4455, 1.4400, 1.4330, the resistance – 1.4535, 1.4600 and 1.4740;
- analysts’ views on the future of USD / JPY differ ; the first half is for the growth (50%) and the other half is for a sideways trend. No one is speaking about the fall this week. Of course, the pair can try to reach its May low of 105.50. However, this movement will be short-term, and its main trend is to the north – in the zone with Pivot Point of 110.00;
- as for the last pair of our review – USD / CHF, here, once again, the opinions of experts and technical analysis differ. 90% of indicators are pointing downwards, but 60% of analysts talk about the rise to the level of 0.9850. Graphical analysis does not exclude such a small short-term growth, however, the analysis on H4 and D1 continue to insist that there may be a strong fall to the support of 0.9500. As for the medium-term outlook, it also remains unchanged – despite it fluctuations, the pair has to reach the landmark level of 1.0000.