First, a review of last week’s forecast:
- EUR/USD. Since the opinions of the analysts were divided equally, we suggested to focus on the readings of the graphical analysis; both H4 and D1 indicated that the upward trend, which began in January, would continue. The target was the height of 1.2150, which the pair nearly missed, having turned around near the level of 1.2100, subsequently rolling down 70 points and finishing the week at 1.2035;
- Graphical analysis turned out to be right concerning the future of GBP/USD. Supported by 45% of analysts and 80% of indicators, it pointed to its growth to 1.3115. However, unlike EUR / USD, which did not reach the stated goal, GBP / USD, on the contrary, exceeded it, having fixed the maximum of the week at 1.3222;
- the US dollar also fell against the Japanese yen. The forecast for the USD/JPY said that the pair would once again try to test the bottom of the mid-term side channel 108.12-114.50. This was exactly what happened. Moreover, the pair tried to break through this support and descended to the level of 107.30. It will be clear in the near future whether this test has been successful or not;
- The forecast for USD/CHF turned out to be absolutely accurate. Here, the majority of analysts (about 60%), graphical analysis and more than half of the oscillators on D1 expected that it would again fall to the August 29 minimum at 0.9426. That's exactly what happened, and on Friday, September 8. the pair reached the local bottom at 0.9420.
As for the forecast for the coming week, summarizing the opinions of analysts from a number of banks and brokerages, as well as forecasts made on the basis of a variety of methods of technical and graphical analysis, we can say the following:
– EUR/USD. Forecasting the future of this pair, most analysts (60%), as well as graphical analysis and an absolute majority of indicators, voted for the continuation of the upwards trend of the pair, foreseeing a growth to 1.2150. The following target is 1.2325. Meanwhile, graphical analysis in H4, the quarter of oscillators on D1 signalling that the pair is oversold, and 40% of experts offer an alternative viewpoint. They suggest that the pair will transition to a sideways movement in the 1.1885-1.2070 channel.
As for the longer-term forecast, over 60% of analysts remain bearish in the expectation of the pair’s eventual return to 1.1600;
– Experts’ opinions regarding the future of GBP/USD have split almost equally: 30% support the growth of the pair, an equivalent amount believes in a sideways trend, and 40% believe that the pair will fall. 100% of trend indicators and graphical analysis on D1 look northwards, whilst 20% of oscillators are already expecting a southwards reversal. The support levels are at1.2930, 1.3040 and 1.3100. The resistance levels are 1.3265 and 1.3370. The bulls’ final target is 1.3440;
– USD/JPY. Here 85% of experts believe that once the pair penetrates the lower border of the intermediate-term sideways channel it will journey southwards, aiming to settle in the 106.00-107.00 area. The remaining 15% of analysts expect a correction and the pair’s return to the resistance at 108.80. The third of oscillators on D1 that indicate the pair is oversold support this scenario;
– “South and only south” summarises the view of the 90% of analysts who maintain that USD/CHF will continue to mirror the behaviour of EUR/USD and strive to the 0.9250-09.300 area.10% of experts, 20% of oscillators and graphical analysis on D1 disagree: they suggest that the pair has nearly reached its minimum (0.9425) and is now waiting to rebound up to the resistance at 0.9540. In the event it penetrates this resistance, they suggest the pair will rise even higher to 0.9260;
– In conclusion, we offer a summary of the major events that may influence the directions of the trends and the volatility of the currency pairs discussed above. Starting on Tuesday, 12 September and through to the end of the week, we will observe a continuous release of data on the US consumer market. On Thursday, 14th September the central banks of Switzerland and England will announce their rate decisions: most likely these rates will remain unchanged.
Roman Butko, NordFX