First, a few words about the events of the past week:
- EUR / USD. What to expect, and what happened - Wednesday 30 October the US Federal Reserve to lower interest rates on the dollar from 2.0% to 1.75%. Naturally, the US currency began to fall, the pair went up, but the movement was rather modest - the market has long been ready for this decision of the Federal Reserve. As a result, the pair somehow reached only to the level of 1.1175, having returned to the medium-term support / resistance lines, which was launched in March of this year.
Not really helped the dollar and key data on the US economy, which came out on Friday, 1 November. The number of new jobs outside the agricultural sector (the NFP) in October was more than predicted (128K vs. 89K), but much smaller values in September 180K. index of business activity in the manufacturing sector ISM was also less than expected (48.3 instead of 48.9). As a result, an attempt to push the pair down bears ended in a fiasco, and, reaching 1.1127, she turned around, went back upstairs and closed the week at 1.1165;
- GBP / USD. For long-running TV series called Brexit decided dosnyat a few episodes. Britain from the EU did not come out. The main hero of the series - Prime Minister Boris Johnson promised to "die in a ditch" if Brexit not take place on October 31 die reconsidered. The European Union has provided the UK another postponement, and now December 12 to wait for the early parliamentary elections.
Nearest episode will be devoted to the adoption by Parliament of amendments to the electoral law. And depending on which way the ship will head the British legislation, it depends on whether the Prime Johnson will remain at the helm.
Deferred again Brexit and the weakening dollar have allowed the pound to strengthen its position somewhat by mid-Thursday, October 31 GBP / USD pair rose by 150 pips, and then moved to the horizontal movement in the corridor 1.2925-1.2975 and finished at 1.2937;
- USD / JPY. As we expected, the Bank of Japan left interest rates unchanged - at the level of -0.1%. The growth of the yen last week was due to three main factors - the weakening of the US Fed interest rate, once slippage in the preparation of the US-China trade agreement and possibly associated with this strong growth in long-term US Treasury bonds. According to Bloomberg, the Chinese side may want to enter into any serious trade deal with the "unreliable president of Trump." Trump, on the other hand, is unlikely to want to aggravate relations with China, so as not to harm the US economy before the presidential election. So on this front we can expect a long lull.
Against this background, the result of the week was the strengthening of the Japanese yen to the level of 107.88. However, then there was a slight rebound, which resulted in the final chord of the week the pair put on a mark of 108.16;
- cryptocurrency. Co-founder and analyst Fundstrat Tom Lee confident that the stock market has a direct impact on the quotations of Bitcoin. "On Friday, October 25 S & P 500 index began to grow rapidly due to the increasing value of the shares of a number of large technology companies. Then bitcoin also significantly strengthened. Many complained about the speech Xi Jinping, but in reality it could fit in the stock market ", - said Lee. However, for some reason he did not consider that the growth of technology stocks could be due to it a statement the head of China regarding the popularization of digital currencies and blokcheyna.
Whatever it was, according to the report submitted by Google Trends, thanks to the rally Bitcoins, the number of online queries on cryptocurrency last week increased by 30 percent. But if the growth of Bitcoin has caused the growth of requests, queries growth had no effect on Bitcoin. As we expected, after a shake-up the market has moved in the calm stage, volatility gradually came to naught, and quotes, consolidating in the area of $ 9,250, drawn figure, known in technical analysis as "pennant".
Following the main cryptocurrency (BTC / USD), the same thing done, and such top altkoyny like Ethereum (ETH / USD), Ripple (XRP / USD) and laytkoyn (LTC / USD). Not the exception, which is logical, and has become a total market capitalization kriptorynka whose volume is gradually decreased during the week from $ 257 billion to $ 239 billion.
As for the forecast for the coming week, then, summing up the views of several experts, as well as the forecasts made on the basis of a wide variety of technical and graphical analysis methods, we can say the following:
- EUR / USD. On November 1, the ECB began buying market assets in the amount of 20 billion euros per month. On the same day at the head of the bank, Mario Draghi, has replaced the former head of the IMF Christine Lagarde. When it according to some experts, the monetary policy of the European regulator will be softer. That, as a result, will cause a depreciation of the euro against the dollar.
But there is a reverse scenario. He suggests that the pressure Trump on the US Federal Reserve will cut interest rates to zero. This will solve the problem with liquidity and the dollar, providing the US market with cheap money, help Trump re-election for a second term. Already, the US national debt, according to the US Treasury, reached a record $ 23 trillion. A further printing of fiat money nothing can significantly weaken the dollar. Contribute to the US currency may fall and an election Trump intention to reduce the payroll tax.
This situation makes the global players to be more cautious, resulting in monthly volatility in the EUR / USD pair dropped to 4.5%. This was only twice - in 2007. and in 2014.
If we talk about the very near future, the euro dollar and falling growth in the coming week we expect 60% of analysts, supported by 90% of oscillators and trend indicators on H4 and D1. The immediate objective - the rise and consolidation of the pair in an echelon 1.1200-1.1250. The next goal - 1.1350 and 1.1410.
For the depreciation of the euro have voted 40% of experts, supported by graphical analysis and 10% oscillators feed signals about overbought European currencies. When implementing this scenario, the most likely movement of the pair in the side channel 1.1075-1.1175. A case of breaking the lower border - decline to 1.1000 support zone.
The formation of local trends can affect change ISM business activity index in the services sector, the value of which will be known on Tuesday, November 5. According to the forecasts, it can grow from 52.6 to 53.2, in the short term the dollar will strengthen;
- GBP / USD. Thursday 7 November will be dedicated to the UK. On this day, the Bank of England will announce its interest rate decision, as well as the planned amount of asset purchases. It is very likely these numbers will remain unchanged. Therefore, of great interest to the speech of the Bank of Mark Carney, in which investors will look for an answer to the question of how to behave in the case of control of one or another outcome of the early parliamentary elections. While here, Carney may be limited to vague, as the London weather, phrases.
At the moment, the vast majority of indicators is colored in green. 65% of the experts also expect that, following in the wake of the euro, the pound will improve its position against the dollar. Near term resistance is 1.3015, the goal - the height of 1.3125.
The remaining 35%, along with graphical analysis on H4 and D1 is believed that the pair GBP / USD hold out laterally corridor 1.2790-1.3015. A break is the lower boundary of the next support at 1.2700 area;
- USD / JPY. From the meeting of the Committee on Monetary Policy Bank of Japan on Monday, November 6 is also hardly expect surprises. Especially that last week the regulator not only confirmed its unswerving course, but also removed the time limits for him. Now this is not "2020", and "how much will be needed." Rather, on the yen will affect Tuesday's ISM index of business activity in the US service sector.
At the moment, experts' opinions were distributed as follows: 65%, with the support of 75% of the indicators, voted in favor of a further decrease in pair, 30%, supported by 25% of the indicators, stood on the side of the bulls. Support levels are 107.50 and 106.65, resistance - 108.50, 109.00, 109.30 and 110.70;
- cryptocurrency. Professor of Economics at Stanford University Darryl Duffy believes that within 10 years bitcoin and other cryptocurrency can completely replace the usual banking system. A pressure regulator on Libra and other long-term projects is a big mistake. "Regulators will regret that they could not find a common language with Zuckerberg and other developers. Shadow cryptocurrency with extensive community (Facebook) can easily bring down the financial system in a matter of months, "-" threatened "Duffy.
However, when passing from a 10-year timeframe to 7-day, appetite Most analysts are much more modest. Thus, 50% of them are waiting for the continuation of the sideways trend of consolidation along the line in the hallway $ 9,000-9,500. 25% believe that the BTC / USD pair may reach the zone of $ 9,700-10,000, and the remaining 25%, on the contrary, expect to see it at around $ 8,100-8,500.
As for the medium-term forecast, 80% of experts believe that the advent of 2020 the pair will meet in the area of $ 10,500-11,000.
Roman Butko, NordFX
Disclaimer: These materials are not a recommendation to invest or guidance on working in the financial markets and are purely exploratory in nature. Trading on the financial markets is risky and can lead to complete loss of funds contributed.