February 29, 2016
First, a review of last week’s forecast:
- the vast majority of the analysts and graphical analysis on D1 predicted a fall for EUR/USD, which happened, and the pair shed more than 200 points during the week;
- the prediction of 40% of the experts and graphical analysis that GBP/USD should bounce down from resistance at 1.4400 proved right. However, under the influence of the news about the UK’s EU membership referendum, instead of entering a sideways trend, the pair easily broke support at 1.4200 and crashed, finishing the week around the lows of 2001 and 2009;
- the forecast for USD/JPY panned out almost 100%. According to it, the pair was supposed to go down to support at 110.70, then shoot up to 112.55 and then even higher, ultimately targeting 115.00. In reality, the pair fell to 111.04, reversed upward, tested resistance at 112.55, broke through it on the second try, turning it into support, and soared up to 114.00;
- graphical analysis on H4 and the indicators on H4 and D1 were right about USD/CHF moving in a sideways channel for some time. At the same time, in line with the general trend to regain its position above 1.0000, the pair made several attempts to break through the top boundary of the channel, and it was able to consolidate just above 0.9960 by Friday evening.
Forecast for Coming Week
Generalizing the opinions of several dozen analysts from leading banks and broker companies as well as forecasts based on various methods of technical and graphical analysis, the following can be said:
- the forecast for EUR/USD for March remains unchanged – first, the pair should break through support at 1.0800 and then at 1.0700, reach the bottom around 1.0500 and try to recover losses by returning to the current level of 1.0930. This scenario is supported by 54% of the experts, 90% of the indicators and graphical analysis on D1. As for the coming week, 70% of the analysts expect the pair to bounce up and temporarily return to 1.1066-1.1150. The remaining experts are split evenly – 15% for a fall and 15% for a sideways trend;
- all the indicators on H4 and D1 point downward for GBP/USD. The analysts’ opinions are divided, with the bulls having an edge – 50% vote for a rise and 40% for a drop. According to graphical analysis on H4 and D1, in the next few weeks, the pair will still try to reach the low of 2009 at 1.3500, after which it will return to resistance at 1.4080. With this said, graphical analysis on H1 elaborates that before going downward, the pair may rise a bit and reach 1.3910;
- in their attempt to predict USD/JPY’s movement, both experts and indicators are quite neutral, with somewhat bullish sentiment. Graphical analysis agrees with them overall – USD/JPY should first rise to 114.50 (or even to 115.00) and only then go down to support at 112.55;
- as for USD/CHF, 65% of the experts tend to believe that after reaching the key level of 1.0000, the pair will rebound to another strong level of 0.9800 and only then move up again to 1.0200-1.0300. This is echoed by the indicators and graphical analysis, the latter drawing support 100 points higher at 0.9900.
Roman Butko, NordFX