May 16, 2016
First, a review of last week’s forecast:
- as to the forecast for EUR/USD, as it often happens, graphical analysis turned out to be the most accurate, it predicted the return of the pair to the pivot point of February - May at the level of 1.1280. The pair reached that very level of - 1.1282 on Friday and, after several unsuccessful attempts to break through this support, it completed the week at around 1.1310;
- as to GBP/USD, having returned to the benchmark support/resistance zone for the whole year of 2016at around 1.4400 - 1.4500, the pair had been fluctuating around pivot point of 1.4440 throughout nearly the whole week. However, at the end of the week, it thought back that most analysts and all tools of technical analysis had unanimously voted for continuation of its fall. As a result, showing a bearish trend, the pair moved downwards and therefore marked its weekly low at 1.4340;
- forecast for USD/JPY turned out to be only partly correct. Earlier this week the pair had been expected to move upwards to the resistance of 108.00 and it obediently did so. But then, instead of showing a downward rebound, the pair broke this level and moved in a sideway channel of 108.25 - 109.40;
- predicting the behaviour of USD/CHF, the majority of experts along with technical and graphical analysis continued to insist on an attempt of the pair to consolidate above the level of 0.9800. The pair indeed made several desperate attempts to reach this significant level, however, the maximum result it managed to achieve for the whole week, was the high of 0.9774, which is just 26 points below the cherished top.
Forecast for the Upcoming Week:
Summing up the opinions of several dozen analysts from world leading banks and broker companies as well as forecasts based on different methods of technical and graphical analysis, the following can be suggested:
- throughout May experts failed to form any consensus on the future of EUR/USD. The same thing happened this time: 45% of them with the support of 100% of indicators on H4 vote for pair falling to the level of 1.1200, 20% of analysts - for the sideways trend, and 35% - for the pair's rise to the high of 1.1380. Graphical analysis on H4 and D1 agrees with the latter, its readings say that the pair must demonstrate a gradual bounce off the support level of 1.1280. As regards to a longer term forecast, the opinion of the majority of experts (70%) remains the same - decline of the pair to the zone of 1.1000 - 1.1100;
- as to the behaviour of GBP/USD, the forecast remains virtually the same as last week’s one- a continuation of the pair's fall to the area of 1.4250 - 1.4300, which should be followed by a bounce off to the resistance of 1.4500. 65% of analysts, and graphical analysis on D1 agree to this scenario;
- USD/JPY - here, according to experts’ opinion, indicators and graphical analysis, we should expect the pair moving in the sideways channel of 107.00 - 109.50 within next days. Therewith the pair is very likely to demonstrate a bearish bias, which will result in an attempt to break through the support of 105.50 and go down to the lows of early May - to the area of 105.50 - 106.00;
- as for the last pair of our review - USD/CHF - everything is just as it was - 60% of the experts, 100% of indicators on H4 and D1 and 65% of indicators continue to insist that the pair should reach the level of 0.9800. Therewith the graphical analysis on D1 warns that after a few days of holding onto this area, a mighty downward rebound may occur, as a result of which, as it had happened in March and April, the pair will drop to the lower boundary of the sideways channel of 2016- to the area of0.9500 - 0.9585. The nearest support is at the level of 0.9650.
Roman Butko, NordFX