Weekly Forex Forecast for 08 – 12 August 2016
First, a few words about the forecast for the previous week:
- With regard to EUR / USD, the pair met expectations of that half of the experts that had voted for its rise to the area of 1.1250, and the one that was speaking about the beginning of its movement to the south. So, at the beginning of the week the pair went up sharply, reaching the mark of 1.1235 on Tuesday, after which it turned around and showed a rather sharp decline. We were surprised by the behavior of the pair on Friday while the data release from the United States. As a reminder, the forecast assumed that the NFP could fall from 287k to 175k. The actual value (255k) indeed was below the previous one, but not enough to meet the market expectations. As a result, instead of weakening, the dollar strengthened its position, having won back more than 100 points versus the euro. However, then the pair returned to the level of pivot point of last six weeks – 1.1090;
- GBP / USD. The uncertain situation with Brexit seems to balance the powers of bulls and bears for long. That is why 75% of the experts with the support of technical analysis suggested that the pair would continue to move in a horizontal channel of 1.3050-1.3335. This is exactly what happened. Neither ECB meeting, which was held on Wednesday, nor news from the Bank of England released on Thursday, nor NFP data released on Friday, could drive the pair out of this channel. As a result, the pair finished the week almost at the lower boundary of the sideways channel – in the area of 1.3060;
- Giving a forecast for USD / JPY, the experts were not able to generate any consensus – 30% of analysts believed that the couple would try to go down to the level of 100.00, 40% believed that it was not able to overcome the support of 101.50, and finally, the remaining 30% voted in favor of its sideways movement.In fact, from the second attempt the pair was able to break the level of 101.50, and turning it into the resistance, it turned over to the sideways trend, where it stayed until the date of the publication on the NFP data due to which the pair returned to the area where it had begun the week – 102.00;
- USD / CHF – as expected at the beginning of the week the pair was moving in a sideways channel of 0.9660-0.9720 and then went down. However, it failed the attempt to achieve the support of 0.9500 – bouncing from the low of the previous week, it turned and, supported by the news from Europe and the United States, went up, having finished the week around the key level of the past two years – 0.9800.
The forecast for the upcoming week:
Summarizing the views of several dozen analysts from 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:
- With regard to EUR / USD, the majority of experts agree that the downward trend which began on August 2 will be continued, and the next target for the pair will be the support in the area of 1.0950-1.1000. 85% of indicators on H4 and D1 as well as graphical analysis on H1 and H4 agree with this. This graphical analysis makes clear that at the beginning of the week the pair may grow up to the upper boundary of the descending channel at 1.1130, having bounced from which, it will drop to the support of 1.1035 and then to 1.0950. In case of breaking through the resistance of 1.1130, the pair may rise up to the next resistance – 1.1170, which is at the upper border of the three-month downtrend channel, which began on May 3.The third resistance – 1.1220;
- 70% of the experts expect the pair GBP / USD to rebound upwards from the bottom of the horizontal channel of1.3050-1.3335, where, in their opinion, it will stay for a few more days. The remaining 30% of analysts, supported by the graphical analysis on D1, believe that the increased volatility of the pair will let it expand the channel to the levels of 1.2800 and 1.3500. In this case, the upwards rebound should be expected already from the lower limit of this channel – 1.2800.At the beginning of the week it will become clear which of these scenarios will be realized, however, it should be noted that 100% of the experts believe that during August the price have to retest the bottom in the area of 1.2700-1.2800;
- Speaking about the future of USD / JPY, the majority of experts agree that the downtrend of the entire 2016 has not finished yet, and the pair should be expected to go down first to the support of 100.00, and then further down to 98.90. At the same time, according to the graphical analysis on H4, it is possible that before the fall the pair at first will try to reach the upper limit of the long-term downtrend channel (it is clearly visible on D1), which is located in the area of 103.50-104.00;
- As for the last pair of our review – USD / CHF, the half of the experts suggests that the pair will try to consolidate above the level of 0.9800. 95% of indicators on H4 and 80% on D1 agree with this. The remaining 50% of analysts, supported by the graphical analysis on H4, consider that the level of 0.9800 will become rather a pivot point, along which the pair will be moving in the range of 0.9735-0.9900, but not a support.