First, a few words about the forecast for the previous week:
■ the behaviour of the EUR/USD once again showed that the opinion of the majority may be wrong. "Bullish" mood of the pair had been supported by only 25% of experts and graphical analysis on D1, but it is them who turned up to be right - straight from the opening of markets, the pair sharply went up, and then, as they had predicted, as abruptly collapsed down returning almost to the level of the start of the week;
■ but as for GBP/USD, the third of the experts talked about the growth of the pair to a height of 1.4550, and another third - about its transition into a sideways trend in the range of 1.4120 to 1.4330.
If you look at the weekly chart, it becomes obvious that both were right - all five days the pair stayed in this corridor, occasionally attempting to break its upper border and reach the desired height. However, none of these attempts succeeded and, just similar to EUR/USD, the pair finished five days not far from the level of the start of the week;
■ there are times when all the forecasts, including alternative, are incorrect. This is what happened due to the unexpected decision of the Bank of Japan, which, for the first time, introduced negative interest rates on deposit accounts, resulting to the yen fall to all 16 major currencies. As for USD/JPY, the pair needed just 1 day - January 29 - to return to the level around which it revolved all the past year;
■ when we spoke of the future of USD/CHF two weeks ago, we named the growth of the pair to a height of 1.0250 as an immediate goal. Last week, the graphical analysis made its task easier, lowering the goal to level 1.0210. However, as it turned out, it was wrong - on Friday, the pair easily reached a height of 1.0255, proving that one should not rush to change forecasts.
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Forecast for the coming week:
Summarizing the views of several dozen analysts from leading banks and brokerage firms, as well as the forecasts made basing on different methods of technical and graphical analysis, we can say the following:
■ opinion on the behaviour of EUR/USD once again turned out to be more or less unanimous - 60% of analysts, 100% of indicators on all time frames and graphical analysis at D1 vote for the pair falling at least to the level of 1.0700. It is not excluded that at first the pair will rebound to the resistance 1.0990, then return to the support 1.0800, breaking which it will rush down - first to the level of 1.0700, and then further down to the support of 1.0560;
■ speaking of GBP/USD, it is clear that 100% of the indicators look strictly south. However, the analysts' opinions vary. The indicators' readings are supported by only 12% of analysts and graphical analysis on H4. In their view, the pair will decline quite smoothly and gently to support of 1.4120. 38% of experts speak about a sideways trend. As for the graphical analysis on D1 and the remaining 50% of the experts, in their view, the pair will continue to rebound, trying to reach a height of 1.4630. This graphical analysis insists that after the rebound, the pair will return to the current level of 1.4240 by the end of February;
■ following the decision of the Japanese Central Bank both graphical analysis and the majority of experts are at a loss. At the same time 25% of experts and 90% of indicators insist on continuation of the pair's growth to the zone of 122.30 ÷ 123.00, and only one analyst believes that the pair will return to the main January support of 116.50;
■ and finally, the last pair of our review - USD/CHF. Most experts and graphical analysis on H4 believe that the pair will move in a sideways channel 1.0200 ÷ 1.0310 for some time. However, graphical analysis at D1 insists that the pair should go down to the 0.9920 support, then move to the sideway corridor 0.9920 ÷ 1.0080. If we look to a more distant future, 40% of analysts believe that the height of 1.0310 - is not the limit, and the pair may rise to the level of 1.0500.
Roman Butko, NordFX & Sergey Ershov
