Weekly Forex Forecast for 17 – 21 October 2016
Firstly, a few words about the forecast for the previous week:
- Speaking about the future of the pair EUR / USD, the vast majority of experts (90%) predicted the pair decline to the area of 1.1000, which really happened. By Thursday the pair had overcome 220 points with one jerk, and stopped at the level of 1.0985. Then there was a rebound by 70 points, as a result of which many traders, using average positions, were able to get rid of a deep drawdown and breathe easy. Then the pair turned back to the south, and on Friday night it made the second attempt to fix below 1.1000, finishing the week at the level of 1.0970;
- What about the future of GBP / USD, the graphical analysis on H4 proved to be right, which clearly pointed at the continuation of the downward trend, which had begun on September 6. 1.2340 and 1.2120 were mentioned as the levels of the support. This scenario was realized almost entirely. On Tuesday, during the Asian session, the pair easily overcame the first support, turning it into resistance, and sharply went further down. The inertia of the fall was so strong that the pair could even go down by 30 points below the support of 1.2120, but then it sharply went back up to the specified resistance zone. Throughout the second half of the week the pair was trying to overcome the newly formed resistance of 1.2165, and eventually finished the five-day period at the level of 1.2185;
- USD / JPY. It should be mentioned that the expert’s opinion regarding this case has divided almost evenly: a little less than a half of them voted for the growth of the pair, a little more – for its fall. And here, as in the case of the pair GBP / USD, the graphical analysis proved to be right, which indicated the superiority of the bullish sentiment and the growth of the pair. But with regard to the ultimate goal of the recovery, the forecast coincided with the reality. The graphical analysis on H4 predicted that the pair would go up to the resistance of 103.70-103.90, and the one on D1 – up to 106.40. In reality, the pair reached the level somewhere in between the specified highs – at the level of 104.65.The end of the week coincided with the high of October 6 – 104,155;
- The medium-term outlook of the pair USD / CHF begins to slowly but surely come true. The strength of the bulls begins to outweigh the forces; due to this the pair is getting closer and closer to a predetermined target – 1.0100. Last week, it was able to fix above the level of 0.9800, but the resistance of 0.9900 became an insurmountable obstacle on its path, and the pair was not able to rise above the level of 0.9910.
The forecast for the upcoming week:
Summarizing the views of several dozen analysts from leading world’s banks and brokerage companies 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 after the impressive fall of the pair EUR / USD, 100% of the indicators on H4 and D1 point to the south. What about the analysts, only half of them agree with this opinion. They call the support of 1.0900 as a short-term goal. The alternative point of view provides the return of the pair to the level of 1.1100, the next resistance will be 1.1200. As for the indication of the graphical analysis on H4, according to it, the pair should first decline to the level of 1.0940, and then go to the sideways movement within 1.0940-1.1000. In the longer term the number of supporters of the fall is growing, and more than 60% of the experts talk about the decline of the pair to the lows of February-March, which was 1.0800-1.0825;
- GBP / USD. Here, about 70% of analysts, supported by the graphical analysis on H4, and only 5% of the indicators believe that in the nearest future the pair will not drop below the level of 1.2100 and will move in a sideways channel of 1.2100-1.2330, and then may return to the level of 1.3000. The graphical analysis on D1 strongly disagrees with this scenario; according to its readings the pair may fall to the zone of 1.1850. It should be considered that the formation of the given trend will still be dependent not only on the performance of the UK economy, but on the statements of politicians about the terms and conditions of the United Kingdom withdrawal from the European Union;
- USD / JPY. For the third consecutive week the opinion of experts about the future of this pair has been divided almost equally: one half, supported by the graphical analysis on H4, predicts the growth of the pair to the high of 105.00, the second one forecasts its fall to the level of 102.80 and then – to the zone of 102.00. Every graphical analysis on D1 votes for the fall and the transition to the sideways trend in the range of 102.80-104.30;
- As for to the forecast for the pair USD / CHF, about 60% of analysts and graphic analysis on H4 are sure that the bulls have been exhausted, and the pair is waiting for a temporary pullback to the area of 0.9700-0.9800. The remaining 40% of the experts believe that the upward trend has not ended yet, and the pair will be able to rise by 50 basis points – up to the high of 0.9950. The medium-term goal remains unchanged – 1.0100, while the number of the supporters of this scenario has declined from 80% to 65% compared to the previous week.