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March 4, 2018

First, a review of last week’s forecast:

  • EUR/USD. Recall that almost 70% of experts, supported by an overwhelming majority of indicators, expected the pair to continue falling, naming the vicinity of 1.2165 as one of the targets. They were right - on 1 March, the pair found a local bottom at 1.2155. But then, thanks to the statements of the new Fed Chair, Jerome Powell, and US President Donald Trump, the dollar began to lose its hard-won positions. Trump's words about the intention to introduce import duties on steel and aluminium led to some talking about a new trade war, especially after the sharp and prompt reaction by the Head of the European Commission. As a result, the pair soared by 170 points and completed the week at 1.2320;    
  • As for GBP/USD, analysts' opinions split exactly halfway: 50% voted for the growth of the pair, and 50% for its fall. (In the medium term, the number of bears' supporters increased to 70%). The last forecast was absolutely correct, and the pair dropped to 1.3710. After that, there was a rebound, and it froze at 1.3797;
  • USD/JPY. 30% of analysts, considering the breakdown of the lower line of the mid-term side corridor 108.00-114.75 false, expected the pair to rise above 107.80. Starting on Monday, the pair did indeed go up, quickly reaching the height of 107.67. However, a U-turn followed and, as though under the orders of the expert majority (70%), the pair tested support at 105.54 and completed the week 20 points higher;

 As for the forecast for the coming week, summarizing the opinions of a number of analysts, as well as forecasts made on the basis of a variety of methods of technical and graphical analysis, we can say the following:

  • Almost 60% of experts are confident that a trade war is imminent, and that the dollar will therefore continue its decline. This means EUR/USD will go up at least to the highs of this year’s January-February at 1.2500-1.2555 in the next couple of weeks. The nearest resistance is 1.2400.
    Graphical analysis on D1 is even more resolute. According to its forecast, the pair’s northwards hike may even take it to the highs of spring-summer 2013 at 1.2755.
    As for the oscillators, they are set to buy on H4, but remain bearish on D1. It should be noted that the number of supporters of the fall of the pair increases from 40% to 55% among experts in the medium term.
    We must also consider that at the time of writing the results of the parliamentary elections in Italy - an event that could seriously affect the European currency - are not yet known. One should also pay attention to the results of the ECB meeting on Wednesday 7 March and to the US labour market data announcement on Friday 9 March;

  • GBP/USD. The indicators here are overwhelmingly (85%) painted red. As for analysts, the number of supporters of the fall of the pair is at 60%. The main goal is in the 1.3455-1.3600 range. Meanwhile, 40% of experts, 15% of oscillators, and graphical analysis on D1 are all bearish. The nearest targets are the resistance levels at 1.3855, followed by 1.4065 and 1.4145;
  • A press conference on the next decisions of the Bank of Japan should take place on Friday 9 March. However, experts do not expect it to offer any surprises. 70% of them, supported by trend indicators, look south, predicting the fall of USD/JPY to 102.75-104.30.
    As for the alternative point of view, the remaining 40% of analysts, supported by 15% of oscillators, see the pair as oversold. If these signals prove correct, the pair will still try to approach the lower boundary of the medium-term side corridor at 108.00. The nearest resistance is 106.40 and 107.65.
    Graphical analysis on both H4 and D1, however, shows a rare unity that suggests that the pair will initially decline to the support at 104.75, and then turn and rise to 106.40-107.15;

NordFX CY


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