Weekly Forex Forecast for 01 – 05 August 2016
First, a few words about the forecast for the previous week:
- GBP / USD. The forces of bulls and bears were still nearly equal here, and for the second week in a row the pair had been moving within 1.3070-1.3290 with the pivot point of 1.3200. It was expected that the market would be dominated by the bearish tone, but the news from the USA played a role here, too; as the result, the pair grew up a little and moved from the lower to the upper half of the sideways channels;
- With regard to EUR / USD, one option of the forecast suggested the sideways movement of the pair with the support of 1.0955 and Pivot Point of 1.1000. It was also anticipated that the trend would be changed by the US Federal Reserve decision on the interest rate and relevant comments on Wednesday night, as happened: the miracle did not happen to the disappointment of investors, the interest rate remained unchanged at 0.5%, as a result the dollar fell against the euro by about 200 points;
- the forecast for USD / JPY assumed that the correction had ended and, breaking through the support of 105.50, the pair would go to the south to the next support area of 103.50. But a reservation, declaring that the Bank of Japan could make some adjustments on the decision on the interest rate, was also made there. And as it turned out to be higher than expected (-0.1% instead of -0.2%), the yen had further strengthened its position in relation to the US dollar, reaching the mark of 102.00 by the end of the week;
- USD / CHF – as expected, the pair maintained a bullish tone to the middle of the week and went up to the level of 0.9950. And then, as often happened during the release of important news, it mirrored the behavior of EUR / USD, and, breaking the support of 0.9840 and 0.9800, went down, finishing the week at 0.9700 – the area of the third support, indicated by experts.
The forecast for the upcoming week:
Summarizing the views of several dozen analysts from the world’s 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:
- The situation around Brexit remains ambiguous, that is why 75% of the experts supported by graphical analysis and indicators on D1, believe that the GBP / USD pair will continue to move in a horizontal channel of 1.3050-1.3335 with the pivot point of 1.3200. And only 15% of the analysts do not exclude the possibility that it will try to retest July lows in the area of 1.2800. NFP data, the ECB meeting on Wednesday as well as a series of important news from the Bank of England, going to be released on Thursday, August 04, can influence the formation of a new trend.
- With regard to EUR / USD, the experts’ opinion has split in half. 50% of them supported by graphical analysis on H1 and 90% of indicators on H4 and D1 tend to believe that the pair will continue to grow and will try to consolidate in the area of 1.1250-1.1300. As for the second half of the experts, in their view, the pair is now at the upper boundary of the channel of 1.0955-1.1190, rebounding from which it must start its move to the south. At the same time, we must remember that on Friday, August 5th we will get the data on NFP – an important indicator of the state of the US economy, which usually leads to a sudden jump of the dollar. According to some forecasts, this month NFP can fall from 287k to 175k.
- Speaking about the future of USD / JPY, 30% of analysts in accordance with the 100% indicators believe that the pair will try to go down to the level of 100.00 in the near future. Almost 40% of the experts and graphical analysis on H4 and D1 don’t agree with this version. In their opinion, the level of 101.50 will become a strong support for the pair, and, based on it, the pair will try to reach the resistance of 103.60 and in case of the breakdown – the area of 106.50. Finally, the third scenario is offered by the remaining 30% of analysts who vote for the sideways movement along the Pivot Point of 102.50;
- As for the last pair of our review – USD / CHF, here the experts together with the graphical analysis on H4 suggest that for some time the pair will be moving in a sideways channel of 0.9660-0.9720, then it will go down to the support of 0.9500.
Such a scenario will be more likely if the forecast regarding the change in NFP turns out to be true.