First, a few words about the events of the past week:
- EUR / USD. The annual economic symposium in Jackson Hole traditionally serves to provide investors with an understanding of which will move monetary policy of the US. That is why the markets were looking forward to speaking at the event manager Fed Jerome Powell.
On the other hand, even at a time when the head of the Fed was Alan Greenspan, there was another tradition - to answer, let in as much fog as possible in order not to be bound by any specific promises.
He did so in Jackson Hole on Friday, August 23 Powell. He did not give a clear signal of the Fed's interest rate in the future, explaining that there is no precedent, which could serve as the basis for a definitive answer. But he said the Fed is ready to provide more stimulus if slowing economic growth.
Powell also has not done without a hint of the fact that trade wars, which is the US president, deliver a lot of headaches to the US central bank.
Speaking of wars. In the depths of the EU had a plan to counterattack trade tariffs imposed by Trump. By as much as 173 pages described in detail retaliation scheme, as the main objectives for which elected to the American giant hi-tech - Apple, Amazon, Facebook, Google. Counterattack can also include the unilateral imposition of duties on US goods. Parallel invited to invest about € 100 billion in shares of European companies in order to increase their competitiveness compared with the United States and China companies.
Returning to Powell, despite the vagueness of its wording, as well as the discordance with the other members of the Fed, many market participants are still waiting for one or two (or even three) cuts the base rate until the end of 2019. Moreover, the reduction of the near could be announced on 18 September.
Of course, this mood of the market could not affect the share prices, and on Friday night the pair came close to an altitude of 1.1150;
- GBP / USD. On Friday, August 23, in addition to the head of the Fed, and also made the Bank of England Governor Mark Carney. However, incomparably greater impression on the market made said on the eve of a few words of German Chancellor Angela Merkel that the EU and the UK have until October 31 to come to an agreement on Brexit. Of course this is only an intention, but it really helped the pound - because of these words, the British currency hit a three-week high, rising on Thursday 22 August to the level of 1.2272. This was followed by a rollback, but after a speech by Fed bulls have the upper hand again, holding up the end quotes the weekly session to the level of 1.2285;
- USD / JPY. There is no doubt that investors continue to strongly disturb the events occurring on the markets. Against this background, it is natural that the best currency of the G10 not only in August, but also turned out to be the Japanese yen, which serves as a safe haven amid clattering around trade and financial wars during the past months in 2019. The experts, supported by graphical analysis on the H4, it is assumed that last week the pair take a breather and will move in a sideways channel 105.00-107.00. Until Friday night the way it was. Moreover, the hall was even longer than expected - only 50 points, the limited horizons of 106.20 and 106.70.
Powell's speech on Friday evening August 23 pushed the pair sharply down, however, she was never able to reach the level of 105.00, completing the five-day period at the level of 105.40;
- cryptocurrency. In the last forecast, we wrote that the index of fear and greed Bitcoin (Crypto Fear & Greed Index) is at the level of «Fear» - «Fear". And it is this fear leads to a continuous decrease in volatility (remember, again, triangular "pennant" in the graph of the previous week, the edges of which converge in the area of $ 10,400-10,500).
This prediction proved to be absolutely true, and all sevenday pair BTC / USD has not gone beyond the boundaries of $ 9,785-10,980, which indicates the consolidation at the level of $ 10.385. Also within 11-13% oscillate and tops altkoyny - laytkoyn (LTC / USD), ripple (XRP / USD) and Ethereum (ETH / USD).
Only one conclusion - the market is in a state of uncertainty, and the players, and the bulls and the bears, afraid to take risks, frozen in anticipation of any clear-cut signal.
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. Among the rest of the summer events - a meeting of leaders of the G7 24-24 of August. It can not be ignore. However, it is unlikely the results of these negotiations, the heads of the Group of Seven countries will set any definite trends in the currency market. Most likely, the leaders simply call upon the heads of their central banks to actively respond to internal and external economic threats. Investors more concerned about the announced for September, lowering the interest rate on euro and revival of the European Central Bank QE program, as well as when and in what amount will lower the interest rate the US Fed.
After the speech the evening of August 23 Jerome Powell and a sharp rise pairs, of course, the graphical analysis, the majority of indicators on the H4 are looking up. However, on the D1 picture is quite different - 70% of trend indicators turned red, and among the oscillators dominated by either a red or gray neutral color. Thus 10% of them are fed signals overbought.
Strengthening of the dollar and the return of the pair to lows in August and expect 1.1025-1.1050 65% of analysts. An alternative view is represented by the remaining 35% of the experts, who believe that the pair could easily reach the zone 1.1200-1.1250. The next goal - to 100 points higher;
- GBP / USD. No less active than Brexit, the world is discussing the fact that during the meeting with the prime minister of France Emmanuel Macron the new British Prime Minister, Boris Johnson put his feet up on the coffee table. Macron has been and remains one of the most consistent supporters of the EU's tough stance in relations with Britain. And maybe his British colleague would thus show that the French position is his, as if it mildly ... not really care?
Of course, Merkel and Macron, and Johnson continued contacts during the G7 meeting, but also after their exit from the EU the UK without the likelihood of the agreement remains as high as ever. That is why 70% of the experts, in full compliance with the graphic analysis on the D1 and H4, expect the downtrend to continue and to reduce to a minimum the pair 12 August - 1.2015. The nearest resistance 1.2280-1.2320 area, the support in the areas of 1.2180-1.2200 and 1.2075-1.2100.
30% of analysts continue to remain on the side of the bulls, believing that the good news of the agreement on Brexit not over yet, and the couple will still be able to rise to 1.2415-1.2520 area. Support this scenario and more than 70% of indicators. However, 15% oscillators already D1 signal of overbought;
- USD / JPY. Waiting experts (70%) and relatively stronger dollar yen. Despite the fact that the Japanese currency remains, along with the Swiss franc, the most popular currency of refuge, many large investors are beginning to record short positions, the transfer of capital into gold.
We played against the yen and the words of the representative of the Bank of Japan's Sayuri Shiraya that on Thursday August 22, said that in order to confront the looming recession, the Bank allows further reduction of the interest rate, which is already negative and amounts to minus 0.1%.
Immediate objective bulls - returning the zone 106.20-106.70, then the sample and binding levels above 107.00. As bears (30%), they are supported by 90% of the indicators D1 to try to break through the bottom in the zone and to move the pair 105.00 minimized March 2018. 104.60;
- cryptocurrency. In general, the news background quite favorable: Bank of America plans to patent a system for the safe storage of digital assets. Another US bank, Silvergate, has announced plans to launch a new product - loans secured cryptocurrency. A study Nobl Insurance Company has shown that the market cryptocurrency for the period from 2018 to 2019 increased by 48% and will continue to expand over the next 12 months.
There is another interesting news. According to a statement from the US economist Jim Rickards, Russia and China are working together to develop their own cryptocurrency, which will be linked to gold. And that is why, in his opinion, they are as active the past few years buying the precious metal.
With Rickards is debatable. Firstly, why Russia and China together produce cryptocurrency? These countries may well let each his own. And secondly, they replenish their gold reserves, most likely, not for the release of some digital coins, but in order to reduce its dependence on the US dollar.
As for the outlook, the crypto enthusiasts, as usual, are making every effort to push up bitcoin. This time with a prophetic prediction made famous trader Alex Krueger. According to him, the value of Bitcoins will soon begin to rise and will reach 50 thousand dollars before the end of 2021. But while Kruger added that this will happen only if you ... Now coin hold positions above 10 thousand dollars. Well what can we say to that?
fear and greed index Bitcoin (Crypto Fear & Greed Index) has recently dropped to the level of "extreme fear". 70% analysts looking south, but the threshold drop accurately represent $ 9,000-9,500 area. It is not excluded that rebounding from this support, bitcoin will begin a new rise to the level of $ 12,000 and $ 20,000. But now to talk about it early and have to wait for clear signals.
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.