First, a few words about the events of the past week:
- EUR / USD. Recall that the majority (65%) of the experts expect further strengthening of the dollar and the decline of the pair to 1.1150-1.1200 area. And a couple of really went down, reaching at night from 16 to 17 July the mark 1.1200. However, this bears the forces exhausted and, two days later, the bulls returned a couple of back to where it started on Monday 15th July - at the level of 1.1285. Thus, the second consecutive week the pair remains in a narrow sideways channel, limiting its volatility level 1.1190 and 1.1285. The reason for this calm (perhaps before the storm) is not summer vacation investors, and the expectation of the ECB meeting on Thursday, July 25, on which the European regulator may decide to lower the interest rate;
- GBP / USD. If you look at the graph of D1, we can say that last week the pound has experienced another technical correction. The reason for this was the strong data on wages and retail sales in the UK. But in general, everything developed exactly as expected, most (60%) of experts. Being in a downtrend since mid-March, a pair of first re-tested support in the area of 1.2440, then breaking it reached a low of 3 January 2019. - 1.2405, then dropped by 25 points, and bottomed at 1.2380, turned upwards. As part of the correction the pair has risen almost 180 points and finished the week at 1.2500 area;
- USD / JPY. In general, the dynamics of a pair of matched analysts' forecasts. However, volatility was slightly lower than expected. So, against the background of strong growth in Dow Jones Industrial Average index, a third expert was waiting for the pair in the early weeks of recovery before the 108.50-109.00 zone. However, the bulls managed to pick it up only to a height of 108.37. After that, the initiative passed to the bears and, as predicted 70% of the analysts, the couple went to the south - to the June lows near 106.75-107.00. But here she nedotyanul to target some 20 points. The fall has stopped at the level of 107.20. This was followed by another reversal of the trend, and the end of five days the pair met at the level of 107.70;
- cryptocurrency. US authorities are literally up in arms against Facebook's intentions to launch its cryptocurrency Libra. Moreover, the Committee on Financial Services of the House of Representatives, a bill to ban the release of their cryptocurrency not only Facebook, but also any other large companies with annual revenues above $ 25 billion (eg Google). If Trump sign this law, violators will pay a fine of $ 1 million. Per day. Although Facebook profit of Libra may be higher than this amount, the company may abandon the project, not wanting to aggravate relations with the authorities.
Against this background, bitcoin continued to fall, reaching a four-week low at $ 9.080. True then followed up the rebound, which resulted in the loss of BTC / USD pair decreased and amounted to seven days, about 11%.
Also gone down Ethereum (ETH / USD) and Ripple (XRP / USD). But laytkoyn (LTC / USD) in the second half of the week was able to return to their original values, - on the eve of halvinga in August, investors considered the altkoin undervalued and start buying.
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. Markets continue to rule the expectations of fast reducing US Fed and ECB interest rates. As mentioned, the market does not exclude that the European regulator will announce it as early as next Thursday - 25 July. Although many experts believe that up to the end of September, the rate will remain at the same level, that is, zero. In the first case, the couple can get away sharply down. In the second - sharp fluctuations, probably not worth the wait. Especially because, despite the economic slowdown, currently in the euro area is not so bad - producer prices continued to grow, and the current account surplus amounted to almost € 30 billion (compared with € 22.5 billion in April, June, ). This is despite the trade war!
I wonder what they would do in such a situation, the United States? President Trump was troubled in his Twitter that the policy of quantitative easing, QE from the ECB and the depreciation of the euro against the dollar would allow the EU "unfair easier to compete with the United States." "Europe is getting away with it for years - along with China and others!" - wrote Trump, which reinforced investors' expectations regarding the dollar devaluation and the reduction by the Fed rate.
In which side, the euro or the dollar, will swing the balance? There is more questions than answers. Moreover, that statement by the US Treasury Stephen Mnuchina diametrically opposed to what he says and says Trump. So, recently, after the G7 finance ministers' meeting in France, Mnuchin assured journalists that the strong dollar policy at the moment there is no change.
So far, the vast majority of experts - 75%! - expect pair growth to a height of 1.1350-1.1415. The nearest resistance - 1.1285.
With them disagree analysts remaining 25% and 90% and 100% oscillator trend indicators to D1. All of them are expected to reduce the pair to lows of spring in the region of 1.1100-1.1115 this year.
Of the events that may affect the formation of the short-term trend in the coming week, you can celebrate the release of the following data: July 23 - the results of the bank lending to the study of the Eurozone, on July 24 - indicators Markit index of business activity in Germany and the euro area, and annual data on US GDP, which will be launched on Friday, July 26th.
- GBP / USD. On Tuesday, the minutes of the meeting of the Committee on the financial policy of Great Britain will be published. However, this rather important document is unlikely to be seen by the market against the backdrop of another event that just happens to this day. July 23 British Conservative Party, after the counting of votes, will announce the name of the new prime minister. Recall that this position two candidates: former Mayor of London and the former Foreign Minister Boris Johnson, and acting Foreign Minister Jeremy Hunt. And on which of them will take the post, the fate Brexit - how to exit from the EU process will take, whether it will be brought to an end, and on what terms.
Most analysts (65%) of expected growth and strengthening pound pair to 1.2650-1.2750 zone. The nearest resistance - 1.2575. The remaining 35% of the experts believe that before you go up, the couple must still return once again to the zone 1.2380-1.2405. Even more radical position takes the graphical analysis on D1. According to its forecast, within two weeks of steam can penetrate 1.2400 support zone and further down to about 200 points;
- USD / JPY. For this pair graphical analysis on D1 draws the first movement range 106.75-108.35, and then rising to a height of 109.00. However, agree with this prediction, only 40% of experts, whose opinion is based on the recently published macroeconomic statistics.
Recall that the purpose of the Bank of Japan - the rate of inflation of 2%. However, on her achievement can only dream of. Inflation in June 2019. It turned out to be exactly the same as a year ago, and accounted for only 0.7%. In this situation, the Japanese regulator can begin to think about reducing the interest rate, as it has already done his colleagues in the Asia-Pacific region - Australia, India, Indonesia and South Korea.
The remaining 60% of analysts believe the Bank of Japan this step is unlikely. According to them, much more likely to reduce the rate of the dollar on the US Federal Reserve meeting on 31 July. In this case the couple can not just go down to the horizon 106.75, but breaking through it, to aspire to the low of January 2019. in the zone of 105.00. On the bears side oscillators are 90% and 100% on the indicators D1;
- cryptocurrency. At the end of Friday, July 19 steam BTC / USD was in the area of the four-strong level of support (and now the resistance) $ 10,500. And although at the moment it is impossible to formulate any particular opinion, the transition to the medium-term forecast of the vast majority of experts (65%) voted for the pair.
On Bitcoin hand in this case, the problem may play Facebook, Google and other large companies to release their own altkoynov. In contrast to the same the Libra, bitcoin - cryptocurrency decentralized, and because the claims regarding its issuance and regulation of the US government to show no one will. Moreover, the newly emerged conspiracy theories that Bitcoin patron is none other than the US Treasury, which will do everything possible to eliminate the competition of the reference digital asset.
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.