First, a few words about the events of the past week:
- EUR / USD. The main topic of last week was undoubtedly Brexit. The new prime minister Boris Johnson has managed to reach a compromise with Brussels, and on Thursday 17 October summit of the European Union approved the agreement on the terms of the UK exit from the EU and its date - November 1. This event, as well as the reduction of political and commercial risks in Europe, Asia and America, "flavored" weak statistics from the US, has opened the way to the north of the bulls.
The vast majority of experts (70%) as the main target pointed to a mark 1.1160, and this prediction turned out to be absolutely true - the evening of Friday, the pair was able to rise to this height, where completed week session;
- GBP / USD. Starting from October 08, the British currency gained nearly 800 points, or about 6%. And all thanks to the hope for a speedy successful completion of the "show" called Brexit, which lasts 3.5 years and order all tired. At the height of optimism on Thursday, Oct. 17 lb marked at a height of 1.2990, which was followed by a correction and finish at 1.2940;
- USD / JPY. Recall that in the expert opinion against the yen last week were evenly divided: one third voted for the pair, one third - for its fall and a third - for a sideways trend. And they were right. First pair dropped slightly - to the level of 108.02. Then rose slightly - to the level of 108.90 and then moved sideways and almost finished in the same place where there was a week ago - in the area of Pivot Point 108.40-108.45;
- cryptocurrency. Twitter users is estimated that over the last ten years, the price of the main cryptocurrency increased by 838,078,685%. But it seems like cosmic ups should not expect more. Not so long ago bitcoin news pushed up the launch of large projects, such as the Libra on Facebook and TON of the Telegram. (Although it is not clear why. That it started both of these coins, they would constitute a strong competition Bitcoin). But Facebook turned against the project, many governments and regulators as well as general Telegram has postponed the launch of TON on the background of the problems with the US legislation. Thus, both of these drivers if not disappeared completely, then at least greatly diminished. And this could not affect the kriptorynke. Over the last ten days of its capitalization fell from $ 236 billion to $ 224 billion, and the price of Bitcoin,
Ethereum (ETH / USD) and laytkoyn (LTC / USD) dutifully followed to the south in the wake of the main cryptocurrency. But as Ripley (XRP / USD), the last four weeks, he shows obstinate character. During this time, the coin price rose by 40%, returning to a strong medium-term support / resistance level in the area of 0.30. Most likely, this is caused by the rise of a number of positive news, directly related to the company.
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:
- GBP / USD. We put this before a couple of euro / dollar, because all that will happen to the pound in the week, will have a powerful impact on the rest of the quotes of leading currencies.
In fact, a new agreement on Brexit for the most part - the same text, which is three times unsuccessfully tried to "push through" through the British Parliament the previous prime minister Theresa May. And now, on Saturday, October 19 is the attempt to make the current Prime Minister - Boris Johnson. And do not take place without the approval of Parliament deal with the EU.
The main difference between versions Johnson is the absence in it of so-called "Irish bekstopa", because of which the UK risked to remain in the European customs union. But finally close this border breach Johnson failed and Northern Ireland still will have to obey EU trade rules. And this, many see the threat of the disintegration of the United Kingdom. Unhappy and Democratic Unionist Party in Northern Ireland. "We do not intend to vote in favor of this project, - said the head of DUP Arlene Foster. - This is not the end. It is not even the beginning of the end! "
So, for the first time since the 1982 Falklands war, the deputies canceled their plans for the weekend, and will gather for an emergency meeting. When writing this prediction, we still do not know what the outcome of "Super Saturday". But a simple calculation shows that Johnson may not have more votes, and voting will fail and will return the old Brexit uncertainty about the outcome.
In any case, a lot of chances that on Monday October 21 markets will open with a large gap. Almost 20% of the oscillators already indicates overbought British currency. And in case of defeat Johnson we are waiting for a powerful counteroffensive bears and a pair of return to the lows of the first decade of October in the area of 1.2200. (Support 1.2515, 1.2380 and 1.2280). In the case of approval of the Agreement, the pound has a lot of chances to exceed the maximum of this year, at a height of 1.3380.
If we move from weekly to forecast medium-term, it is clear that even in the case of regulated Brexit, the pound will still be under pressure. Accustomed to work within the EU, the UK economy, left alone, probably will start to experience serious difficulties, forcing the Bank of England to reduce interest rate and take some serious steps to mitigate the monetary policy. In this situation, the pound is very much likely to revert from the highs and return to the 1.3100 zone;
- EUR / USD. At the upcoming week will be known the decision on the interest rate of the People's Bank of China on Monday, Oct. 21, and the ECB on Thursday, October 24th. And if the euro rate is likely to remain unchanged, Beijing can give the markets a little surprise. Also of interest are the data on business activity in Germany, which also will be launched next Thursday. But, as already stated, the underlying trend will ask pound pair that either pulls euros for an up or overturn it on a couple of hundred points. bears goal - lows of September-October 1.0850-1.0925, bulls - 1.1250-1.1350.
At the moment, the majority of experts (80%) expect that Boris Johnson will get a parliamentary majority vote, and only 20% predict a fall in the pair. It is interesting that during the transition to the medium-term forecast, the balance of power is changing mirror, and here 80% waiting for the end of the year of decrease in pair to 1.0800-1.0900 area;
- USD / JPY. Objectives for the yen remained unchanged. Support zone - 107.00, 106.65 and 105.70, resistance - 109.00 and 109.85. Only changed the mood of the experts. If the growth of the pair in the coming week voted 60% of them, and 40% - for the fall, in the mid-range all the way around - 40% growth and 60% for the fall.
Unity among the indicators is also no. If H4 80% oscillators painted red, and 20% indicate oversold pair, on the D1 80% have changed color to green, and 20% believe that the pair is oversold.
Total sums discordance graphical analysis on D1, which draws the first drop to the level of 107.50, and then rise to the height of 109.00;
- cryptocurrency. The hallway $ 7,795-8,700 with Pivot Point $ 8,300 pair of BTC / USD moves almost a month, starting from 25 September. The same thing happened from mid-May to mid-June. But then, if you follow the Elliott wave theory, it was a respite (or correctional wave №4) between the impulse waves №3 and №5 uptrend (which is clearly seen in the W1 timeframe). Now the picture is reversed, and follow all the same Elliott, we are witnessing the end of wave №5 been on a downward trend. In theory, one should expect correction pair up, especially as the MFI indicator in H4, W1, and D1 is the lower, the critical zone and MACD to H4 and D1 indicates a divergence. But I have noticed that when it comes to cryptocurrency, graphics and technical analysis is often stalled. Of far greater importance is played by the news background and manipulation of large speculators.
Pessimistic support and 60% of the experts waiting breakthrough lower limits and fall BTC / USD pair to $ 7,000-7,400 zone. The remaining 40% of the analysts also expect the Bitcoin space takeoff. According to them, the upcoming week cryptocurrency reference will be traded in the range of $ 8,300-8,700 for 1 coin.
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.