First, a few words about the events of the past week:
- EUR / USD. Coronavirus pandemic continues to manage the global markets. Nervousness add oil wars between Saudi Arabia and Russia, which, of course, can not do without the active intervention of the United States. This country, where oil shale is a further object of attacks from Russia may now perform a mediator in the price battle between the Saudis and Russians.
Covid-19 was hit hard on the US economy but the economies of other countries are even greater losses. Starting Thursday March 18 the situation was somewhat stabilized, oil prices of Brent crude, as well as the indices NASDAQ and S & P500 showed little growth. As for the dollar, it is continually growing two weeks in a row, and this period can be called the best for him since the 2008 crisis. Starting on March 09, the US currency strengthened against the euro by more than 800 points, while the dollar index rose more than 3.3%. US Federal Reserve, on Monday downgraded the interest rate from 1.25% to 0.25%, starting from Thursday reopened swap lines to the central banks of many countries, which together with a mediation mission in the oil war should somewhat reassure the markets. Although, to give here any guarantees hardly anyone will undertake.
Analyze the situation is now very difficult, almost standard methods do not work, but the majority of experts (55%), supported by 85% of oscillators and trend indicators on the H4, given last week a sure forecast predicting a further fall in the pair EUR / USD. However, the reality has surpassed all expectations: the ultimate goal of the experts called the low of February 1.0750, but the drop was even deeper and the local pair reached the bottom at 100 points lower, and completed the five-day week at around 1.0695;
- GBP / USD . So low the British pound did not fall yet never! 230 years ago, in 1791., A pound gave $ 4,555 in 1900. - $ 4,864 in 2000 - $ 1.515, March 20, 2020. - total $ 1,141. Designating as a target fall of the pound to the level of 1.1960, we were warned that it might not the limit, and they were right. Week low was recorded at the level of 1.1409. And if the 23 June 2016. on the results of the referendum on Brexit pound lost nearly 1,900 points over the past two weeks, the pair GBP / USD fell almost 1,800 points. Last leap down contributed to the news that the Bank of England reduced the rate from 0.25% to 0.10% and extends the quantitative easing program at £ 200 billion As for the final chord of the last week, it was made at the level of 1.1635.;
- USD / JPY . The outlook on this pair as a whole also proved correct. Here, almost 70% voted for analysts that the Japanese currency will hand over their positions, the pair like a knife through butter, pass through the zone 108.30-109.75 and 112.00-112.40 reach echelon. As the term experts have called the next 1-2 months, but the main part of the way the pair took just one week, reaching at a maximum height of 111.50 and closed the trading session on the horizon 110.70;
- cryptocurrency. If the last few weeks the movement of EUR / USD is almost one to one repeats the movement of Brent charts, NASDAQ or S & P500, then the pair BTC / USD lives, seemingly quite independent life. When the week of February 24 to March 1 dollar plummeted, bitcoin fell with him. With 02 to March 8 the dollar continued to fall, bitcoin, in contrast, behaved quite calmly and even showed a slight increase. Then, in the period from 09 to 15 March the currency trend turned around 180 degrees, the dollar began at least to grow rapidly, while the price of Bitcoin crumbled down, which could be explained by the fact that in the conditions of the intensifying crisis, people throw cryptocurrency, translating them into real currency assets . And a week from 16 to 22 March - the dollar still continues to grow, and bitcoin first enters into a flat and then even shows a slight increase.
About what it can speak?
about BTC option as a safe haven, which is so actively promoted various crypto guru, we sweep aside. Just one month, from 12 February to 13 March the main cryptocurrency lost in value 58%, dropping from $ 10.340 to $ 4,300. In some markets the drop was even greater - up to $ 3,815 and reached 63%. Only for one day from 12 to 13 March bitcoin lost half of its value, dragging to the bottom and all the crypto-market, including top marketing altkoyny as like Ethereum (ETH / USD), laytkoyn (LTC / USD) and Ripple (XRP / USD). What here the shelter!
But the use of BTC / USD pair as a leading indicator worth considering. Of course, while this is only a theory, but it has some merit. Going BTC / USD in to the flat state in the face of continued over-volatility in other markets suggests that the big players do not know what to do at this time - to buy or sell their crypto-assets, and this may be a warning sign of a possible change in trend (or strong correction) on EUR / USD and other dollar pairs majeure.
As for last week, the local minimum for the Bitcoin was fixed at $ 4,465, and the maximum - $ 6,900 per coin. At the end of Friday, March 20 the market capitalization of Bitcoin grew from $ 91,459 to $ 103,590 billion billion, while quotes couples Bed and TC / USD are found at the level of $ 6.140.
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 . In the context of a truly universal crisis of the dollar it showed that it was he, and not the euro and the yen, is the most attractive for investors defensive asset. Whether he will retain that status, and whether to continue to grow?
On the one hand, lowering the rate to 0.25%, flooding the market with cheap liquidity and lending to banks on a weekly basis to $ 1.42 trillion, the US Fed has greatly narrowed its room for maneuver. Puts pressure on the dollar and the rise in unemployment - instead of 9K forecast the number of new applications for allowance increased to 70K. California, Texas, New York and Pennsylvania have closed all the secondary businesses, and in the aggregate, these states provide up to 35% of US GDP. Strike on the US currency can and coordinated action the G7 countries and the central banks of other states if they both start to get rid of the dollar supply.
On the other hand, it remains a stimulus package President Donald Trump measures, which are more likely to receive the support of Congress. And, most importantly, in other countries the economic situation is worse than in the US.
If you look at the graphs on Thursday and Friday of the first half, we can decide what markets began to calm down, the EUR / USD reached the bottom, and there comes a time to open long positions on it. But here's the ending of the work week for the bulls dealt another blow - in half a day the euro surrendered all to play the position, returned to weekly lows. And it makes us think that dollar rates have not yet reached its peak and the downward trend of the pair can be continued.
Here again, much depends on the success in the fight against coronavirus. In the meantime, 100% of trend indicators and oscillators 85% on H4 and D1 painted red. The remaining 15% of the oscillators are in oversold zone.
As for the predictions of analysts, then gather their views on any specific forecast could not be for the next week. But the transition to the larger time frames supporters bulls get enough weighty advantage of the growth is expected in 60% of the experts within a month, and during the quarter - 75%. The goal - to return to 1.1000-1.1240 area , the nearest resistance - in the area of 1.0800.
The closest support level, of course, is in the area of 1.0600, the next one - 100 points lower. The main target for the bears - at least 2016-17g.g. at the level of 1.0350, after which it will open the way for the dollar and the euro parity of 1.0000;
- GBP / USD . In contrast to the euro since March 18, the British pound has stabilized in the side channel 1.1450-1.1800 and moves along the Pivot Point 1.1625. Channel width is 350 points to someone may seem too much, but in these times, when the daily volatility of the pair exceed 500-600 points, it is not so much.
The bulk of analysts (65%) hopes that next week there will be nothing extraordinary, and pound hold out in the designated channel above. At the same time from 70% to 80% of them expect that during April and May lb be able to return to the zone 1.2725-1.3025. resistance zone 1.1800, 1.1875, 1.2125, 1.2325 and 1.2625. Supports are located in areas of 1.1425, 1.1300 and 1.1200, but these levels are conventional enough, as we recall, the British pound has never in the past 230 years did not fall so low;
- USD / JPY . Now the movement of the pair depend, primarily, not on the yen and the dollar. Where is he, there and vapor. The main factors that could affect the US currency quotes have been described above. As long as the pair played all that was lost in the period from February 24 to March 9, and now the score is tied - in two weeks 1,000 points down, then, just two weeks, 1,000 points back. And now, 55% of brokers are waiting for next week trend reversal and reduction pair at least until the 108.50-110.00 zone. In the transition to the monthly time frame, the number of supporters of bears increases to 65%. Next target zone - 107.00-107.70.
We supporters of the US currency the opposite goal - to raise the first pair to the level of 112.25 yen per dollar, and then 100 points higher. The goal - a maximum of 114.55 in 2018;
- cryptocurrency . Fear and greed index Bitcoin (Crypto Fear & Greed Index) is almost the same place where he was a week ago - at around 9 points out of 100 possible. On the one hand, it is bad and suggests that investors are in a state of extreme fear. On the other hand, maybe it's good, because the light is not dropped to zero, and stood in the same place - suddenly "Lion" is preparing for the jump, and soon we will see impressive growth this cryptocurrency?
This is possible because, on the one hand, thanks to the leniency (QE) of the Federal Reserve the US, the market is the excess dollar liquidity, on the other - the interest rates on the dollar is now close to zero. And the players, jackpot on a dollar increase in the last two weeks, it can translate part of the cash in the crypto assets.
With this development agreed 45% of the experts expect to see a couple of BTC / USD in the area of $ 7,500. The same number of analysts expect the pair to decline tier $ 5,000-5,500. The remaining 10% were unable to determine its outlook, citing the unpredictability of the situation with the coronavirus Covid-19.
Analytical group NordFX
Disclaimer: This material is 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.