Forex Forecast for EURUSD, GBPUSD, USDJPY and USDCHF for October 16 - 20, 2017
First, a review of last
week’s forecast:
- Recall that an overwhelming majority of
experts expected a minor strengthening of the dollar. According to their forecasts, EUR/USD would fall to
support 1.1660. This did not happen, however, and the minimum of the week was
fixed 60 points higher, at the level of 1.1720. The forecast which was given by graphical analysis,
supported by indicators on H4 and only 15% of analysts, turned out to be
correct. According to this
scenario, the pair was expecting a trend reversal and a move to the north,
first to resistance 1.1835, and in the event of its breakdown, even higher, to
1.2035. This scenario was indeed
the one that played out; however, the pair was unable to settle above the aforementioned
resistance and completed the week near 1.1820;
- Speaking about the future of GBP/USD, 45%
of analysts assured that the pair would be unable to break through the strong
medium-term support in the 1.3000-1.3045 zone and, like EUR/USD, it would go
up. About a third of the
oscillators on H4 and D1 which signaled that the pair was oversold, agreed with
this. The height 1.3250 was named
as the final goal, which the pair reached in the first half of Thursday, after
which it collapsed 140 points down. However, the bears’ joy was premature, and the
bulls quickly won back losses. As
a result, the pair met the weekend at the level of 1.3282;
- One of the scenarios, supported by a third
of experts and most of the indicators on H4, suggested that before continuing
northward, USD/JPY would test the local bottom in the 111.75-112.00 vicinity. This is what happened: the pair lost about 80
points over the course of the week and froze at around 111.83;
- USD/CHF. The readings of most indicators
and graphical analysis indicated that this pair would first try to once again
reach the high of the previous week at 0.9835, before returning to the support at
0.9770. It would then try to break it and, if successful, drop to the level of
0.9685. These actions did all occur, although the pair’s movement
was somewhat less volatile than expected: at
first the pair rose to the level of 0.9806, then returned to support 0.9770,
broke it and found the local bottom at the level of 0.9700. The pair met the end of the week session in the
zone of October Pivot Point 0.9745.
***
As for the forecast for the
coming week, summarizing the opinions of analysts from several 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. Tensions with North Korea,
statements about the US withdrawal from the nuclear agreement with Iran,
fighting in Syria, the possible rise in oil prices, the change in the Fed
leadership, the extraordinary EU economic summit: all this and much more makes
the economic situation so uncertain that experts are unable to formulate any
consensus regarding either the near future or the medium term. 45% of them vote
for the growth of the pair, 45% for its fall, and 10% merely shrug their
shoulders.
As for the indicators, they repeat the discord
of the analysts on H4. But on D1,
the situation is more certain: 80% of them are painted green. However, 20% of the oscillators have already turned
red, signaling the pair is overbought.
Finally, graphical analysis: summarizing its
readings on H4 and D1, it is possible to draw support lines at the levels
1.1750, 1.1685 and 1.1600, and resistance lines at 1.1920 and 1.2030;
- The situation with GBP/USD looks clear
relative to EUR/USD, albeit by a small extent. Here, 55% of analysts, as well as graphical
analysis on D1, sided with the bears, forecasting the pair’s fall to support
1.3150, and, in the event of its breakdown, 110 points lower: to the level of
1.3040.
The remaining 45% of experts and the
overwhelming majority (85%) of the indicators believe that the last week's
trend will continue, and the pair will rise at least to the resistance of
1.3450. The next resistance is
1.3600. However, in this case in
the beginning of the week a certain downward correction is possible, since a
quarter of the oscillators are already in the overbought zone;
- USD/JPY. Here, a quarter of the oscillators
on both H4 and D1 indicate that this pair is oversold. This is confirmed by the opinion of most experts
that the pair is on the way to the upper boundary of the mid-term side channel
108.00-114.50 and should be expected to jump upwards.
However, it is worth considering that the
pair is in the Pivot Point zone of this channel now, and therefore can still
move along this line for a while, oscillating in the range of 110.65-112.20;
- And, finally, the last pair of our review:
USD/CHF. Graphical analysis, trend indicators and oscillators have taken a
neutral position. A slight bullish
overweight can only be noticed in the readings of graphical analysis on H4,
according to which the pair is striving to the 0.9800-0.9835 area.
As far as experts are concerned, 75% of them
vote for the fall of the pair. The support levels are at 0.9700, 0.9670 and 0.9560.
Roman
Butko, NordFX & Sergey Ershov
https://nordfx.com/
Notice:
These materials should not be deemed a recommendation for investment or
guidance for working on financial markets: they are for informative purposes
only. Trading on financial markets is risky and can lead to a loss of money
deposited.
