First, a few words about the events of the past week:
- EUR / USD . Euro falls again over the past five days he lost dollar another 70 points. The reasons for this are two - koronovirusnoy infection epidemic in China and is very cautious new ECB head Christine Lagarde.
It is well known that the Eurozone economy is strongly correlated with the economy of China, which recently demonstrated a trade war. And if China's economy is sick, and the European, too, is experiencing severe malaise. In 2003 pandemic in China killed more than 700 people and has led to a drop in retail sales almost doubled. But despite the fact that the new virus is considered to be less dangerous, now it can spread much faster than in the beginning of the century. This stems from the infrastructure of China, which in the meantime has become much more advanced. The first to react to the new attack on oil prices, but also the foreign exchange market does not have to wait long.
As for Ms. Lagarde, she frankly disappointed investors by saying that the revision of the ECB's strategy - a long process that will be completed only by the end of 2020. Moreover, amid warnings the president of the United States Trump about the possible introduction of high duties on goods of European exports, Lagarde considered that "the risks for the Eurozone are still skewed to the downside of the economy." And that is why the European regulator will have to save Extra-approach to its monetary policy.
Against the background of such statements of the ECB and the Chinese epidemic did not help the euro, even favorable data on business activity in Germany (PMI), and by the end of the week the EUR / USD fell to the 1.1020 mark. The fact that it will attack the level of 1.1000, last week warned the 40% of the experts, as well as the vast majority of indicators. Among such oscillators H4 was 75%, and D1 - 65%, among trend indicators pointed south 100% for H4 and 90% for D1;
- GBP / USD . Due to the growth of business activity (PMI) on Friday January 24 the British currency reached a two-week high at 1.3172, but then again gone down. Drop in expectations contributed to lower interest rates at the meeting of the Bank of England on 30 January as well as all the same notorious Chinese coronavirus.
The dynamics of the movement of the pair GBP / USD most accurately predicted on the graphical analysis of last week. As regards the final chord, the pair completed trading session at 1.3080 slightly adjusting Pivot Point medium zone upward - to a range of 1.3050-1.3085;
- USD / JPY . According to some experts, the extremely low volatility of the EUR / USD pair says that between these two major currencies established a balance. And now, the euro and the dollar balance on the one hand, and emerging market currencies and equities - on the other. And these some markets, particularly neighboring countries, may have a particularly strong influence of the crisis caused by the spread of Chinese coronavirus.
As it turned out, on such alarming but vague expectations the yen benefited the most, being a safe haven, able to shelter capital investors from unexpected financial storms. Third of the experts who voted for the fall of the pair, and even more oscillators' signals about its overbought, could not have known about the pandemic coronavirus, but, nevertheless, gave a correct prediction. The pair quickly enough 109.65-109.70 support turned into resistance, then found the local bottom at around 109.17. As for the end of the trading session, then it has completed its just down the road - at the level of 109.27;
- cryptocurrency. If someone wanted to cryptocurrency, as an independent and free of state control of the financial system, he can forget about it. Just one example. The Minister of Finance announced that the State Financial Monitoring Service will Figuring out where citizens came cryptocurrency this country. According to Ms. Minister, at the disposal of the organization tools let you set as the origin of digital assets, and what the money was spent. Moreover, the service has the authority to block kriptokoshelkov and confiscation of illegally obtained assets of the citizens of Ukraine.
It is understood that this news is not promoted Bitcoin fall, but the fact remains - the reference cryptocurrency have not been able to gain a foothold above $ 9,000 on Friday January 24 fell to $ 8,250-8,450 zone.
According to some experts, is to blame for this fall ... Chinese New Year. Comparing the results of trading in the period of the past few years, they pointed out that the danger of subsidence of the primary coin is present even in the background of the general growth dynamics. According to their calculations, in Asia about 10 percent of the population have savings in cryptocurrency. But before the New Year, they are beginning to cash assets and spend money on gifts and holiday parties.
Altkoyny - Ethereum (ETH / USD), laytkoyn (LTC / USD) and Ripple (XRP / USD) - as usual, proceeded to the wake behind the main cryptocurrency. Kriptorynka total capitalization declined from $ 251 to $ 236 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 . As already mentioned, the ECB is now rather weak euro strong. Realizing this, the bulls do not want to risk making the European currency even weaker. Nearest its purpose in a downward trend - the level of 1.1000, following it - 1.0960. This is followed by a minimum of 1 October 2019. - 1.0880. For the fact that the decline will continue, today voted 55% of analysts , supported by 85% of oscillators and trend indicators 100% not only in the D1 and H4, but also on W1.
The opposite view is held by 45% of experts and 15% of the oscillators are in oversold zone. Moreover, during the transition from weekly to monthly forecast of the number of bulls supporters increases to 70%. The immediate task - to overcome the strong resistance zone at 1.1065, followed by 1.1100 and 1.1175 resistance.
As for the Fed's decision on interest rates on January 29, most likely, it will leave at the same level - 1.75%, and little impact on the dynamics of couples this meeting will not;
- GBP / USD . Finally! Here it is, the day X - Friday January 31, followed by a farewell to UK with the European Union. Brexit, of which all have been said, we can be considered valid. However, we think, at the moment this event will have on the market rather moral pressure - relatively smooth exit from the EU process significantly reduces the investment risk. Moreover, the current low rate of the pound in many ways helps the UK economy, increasing its competitiveness in foreign markets.
If by Brexit will not have any unexpected surprises, the pound may feel relatively calm. And it is not excluded a certain growth, not only against the euro but also the dollar. Thus, 65% of the experts expect his movements to the north - to the first resistance 1.3160, and then to a height of 1.3200.
An alternative forecast is given 35% of the experts, who believe that a pair GBP / USD is expected to further drop. Especially likely such a scenario, if at a meeting of the Bank of England on Thursday, January 30 sound even a hint of a possible lowering of interest rates. In this case, the British currency has all chances to continue the journey to the south, which, breaking the support 1.3040, 1.3000 and 1.2960, it could reach the lows of December last year in the area of 1.2900. Actively supports the development graphical analysis on the D1;
- USD / JPY . Among the indicators there is a certain confusion, but already 10% oscillators fed distinct signals pereprodannosti this pair. They believe that it is enough to fall, and 60% of analysts, supported by graphical analysis on D1. Goal - to climb up to the 110.20-110.30 zone. Next resistance - at the level of 110.80.
On the side of the bears are the remaining 40% of the experts who believe that the downward trend of the last week will continue. The Dow Jones is committed to 30,000, and the USD / JPY pair has to break the mark 109, which will lead to further losses for all associated with the Japanese currency cross pairs. The main support at 108.40, the next 60 points below;
- cryptocurrency. Together with the fall of the main bit cryptocurrency rolled down, from 54 to 40, and fear and greed bitcoin Index (Crypto Fear & Greed Index). This is not the fear of the market, but also a special thrust to the opening of long positions by investors is no longer observed.
Even some of the crypto-prophets have moderated their appetite. For example, in a recent tweet trader and cryptanalyst Reydzher Josh (Josh Rager) expressed the view that, as in other markets, for the Bitcoin has a "law of diminishing rates of return," which is a decrease of its profitability in each cycle. "The next maximum Bitcoin is not as high as most people think. Someone points to a $ 100,000, $ 300,000 and $ 1 million. It should be taken into account and a decrease in the rate of return of about 20% per cycle. So I think the next maximum will be in the range of $ 75,000 to $ 85,000, "- he wrote the analyst. Reydzhera position in this matter and supported kriptovalyutnaya analyst firm ByteTree.
If we talk about forecasts for the near future, they are not as optimistic. 50% of the experts expect pair falling BTC / USD $ 7,500-8,000 to zone, 30% voted for sideways and only 20% - a pair of lifting above the horizon $ 9,000. However, at the transition to the monthly forecast kriptooptimistov number increases to 70%.
Roman Butko, 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.