Weekly Forex Forecast for 10 – 14 October 2016
First, a few words about the forecast for the previous week:
- We remind that speaking about the future of the EUR / USD, most experts pointed to the south. It was expected that the NFP (the number of new jobs in the USA, non-farm) would grow from 151K to 170K-176K. Taking advantage of this outlook, the whole second half of the week the bears had been confidently pushing the pair down to the support given by experts – 1.1120. However, the US Bureau of Labor Statistics made a surprise. First, it adjusted its data for August – 151K instead of 167K, and then announced that the NFP figure was 156K in September. As a result, instead of the expected growth, we saw the fall, and as a result the pair EUR / USD quickly came back to Pivot Point of the last month – to the level of 1.1200;
- Last week, we predicted the fall of the pair GBP / USD to the level of 1.2850 or perhaps even lower – up to a minimum of 6 July- 1.2795. But nobody expected the thing that happened on Friday, – during the Asian trading, the British pound fell to its lowest level since March 1985. Having started with a mark of 1.2615, in just 3 minutes (!) it fell down to 1.1840 at average. (The decline was stopped at the level of 1.1940 at some brokers, at others – 450 points lower – at around 1.1490). At the time of this review writing, analysts have not been able to reach a consensus about the causes of the collapse. So, Bloomberg cited as many as six versions, and The Wall Street Journal reduced them to two ones, calling the robots traders and the French President Francois Hollande, who said that the United Kingdom would seriously suffer from the exit from the EU, to be the main “suspects”. After that, the pound broke through technical support levels, which dramatically increased the sales of the currency by robots traders. The result of that these soulless computer programs can cause is, as they say, obvious. However, then, with the assistance of people, the pound went back up, but it is not easy to win back losses of almost 1,000 points, and the pair GBP / USD finished the week at the level of 1.2430;
- With regard to USD / JPY, it is the most accurate forecast given by the graphic analysis on D1. As a reminder, it clearly pointed out to the superiority of the bullish sentiment and the growth of the pair to the level of 104.00. And that exactly what happened – progressively moving up, on Thursday the pair reached the high of 104.15, then the bears regained 125 points, and the pair froze in the area of the support of 102.90;
- USD / CHF. As expected, the pair continued the consolidation in the area of 0.9700-0.9800. Supporting the bullish mood, on Friday it tried to break through the main resistance of 0.9810, but quickly returned to the area that had been specified by experts, and met the weekend at 0.9775.
The forecast for the coming 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:
- As EUR / USD is in the medium-term Pivot area – the level of 1.1200, the indicators on H4 and D1 have taken a neutral stance. As for analysts, 90% of them believe that the pair is waiting for a decrease to the support of 1.1100 and then down to the area of 1.1000. The main resistance is at the level of 1.1280. It should be kept in mind that the formation of short-term trends may be affected by the Minutes of the Fed Open Market Committee meeting (Wednesday, October 12th), the outcome of the EU Extraordinary Economic Summit (Thursday, 13 October) as well as the data on the US economy and the speech of the Federal Reserve Chair Janet Yellen on Friday, October 14;
- GBP / USD. It is clear that after the events of last Friday, the experts are at a loss. In such a situation the indications of the graphical analysis are interesting; the one on D1 predicts the return to the pair to the resistance of 1.2700 first and then even higher – to the area of 1.2850. The thing, which happened to the pair USD / CHF after the January 2015 crisis, also votes in favor of the fairness of this forecast. As a reminder, then the market very quickly overcame the panic, and the pair had regained almost all losses just in two months. As for an alternative version for GBP / USD, it is represented by the graphical analysis on H4. According to its readings, the pair may continue the downward trend, which began on September 6. In this case, it will drop to the support of 1.2340 and then down to the level of 1.2120;
- USD / JPY. Here, just like last week, the experts’ opinion has been divided almost evenly: a little less than half of them voted for the pair’s growth, just over half – for its fall. As for the graphical analysis on H4, it predicts that at the beginning of the week the pair will grow to the resistance of 103.70-103.90 and then it will fall – first to the support of 102.70, then –to 101.75. The bottom will be at the level of 100.75. If we talk about the graphic analysis on D1, then, according to its version, this week the pair can reach a high of 106.40, and only then it will turn to the south and look for the support of 101.75;
- the forecast of USD / CHF can be made with the help of copy paste for some weeks. As before, drawing a triangular pennant, the pair continues the smooth consolidation to the area of 0.9700-0.9800. The main resistance is 0.9810, support – in the area of 0.9640-0.9660. At the same time almost 80% of the experts believe that the bulls will win in the long term, and the pair will make up a breakthrough, reaching a high of 1.0100.