First, a few words about the events of the past week:
- EUR / USD . Flights pair last week can be compared with the figures of aerobatics - at first almost vertical rise of up to 630 points, followed by a vertical height of 860, and now a new leap up to 445 points.
The reason for the sharp falling dollar steel several factors. The main - actions of the US Fed, which lowered interest rates to 0.25% and has launched a number of programs to support the US economy, pouring billions of dollars there and handing out money to its citizens. As a result of the Fed's balance sheet exceeded a record 4.5 trillion dollars, and economists estimate could even reach 6 trillion. As a result, US stock indexes flew up, S & P500 soared by as much as 20%, pulling for each other and a pair of EUR / USD - Investors reacted positively to undertaken by the leadership of the United States steps and began to turn away from the dollar as of the safe-haven asset, preferring more attractive to the time of assets.
It has helped the European currency and the associated coronavirus ECB decision. Earlier in the framework of the program of quantitative easing (QE) the ECB could buy no more than a third of the public debt of a country, it is now the bank has removed the restriction that had a favorable effect on the yield of eurobonds and contributed to the growth of the euro.
It should be noted that 60% of the experts expect that the pair will return to the 1.1000-1.1240 area in a month, and during the quarter - 75%. But, as practice shows, COVID-19 coronavirus pandemic serves as a powerful catalyst or driver, repeatedly accelerating market processes. It happened at this time - the pair has reached the intended target is not in the quarter, or even a month, but only for some five days, put the final point on Friday, March 27 at the level of 1.1140;
- GBP / USD . These macro-economic indicators such as PMI (PMI), indicate a decrease in the UK economy, for the protection of which the last two months the Bank of England lowered interest rates twice and increased by £ 200 billion the amount of bond purchases. However, at the last meeting of the leaders of this regulator unanimously voted against further reducing the rate and save it to the level of 0.1%. It was also decided to leave the same at the level of £ 645 billion., And the amount of bond purchases. This suggests that the Bank of England considers the measures taken at this stage sufficient.
The consequences of stroke caused by a coronavirus on the UK economy, will become more apparent after we learn the results of the first quarter of 2020. In the meantime, the situation here looks a little better than in the EU and the US. Support the pound also now has the opportunity and the Government of the country to print money, without any coordination with the EU.
Bouncing pair GBP / USD up on last week is even more impressive than the growth of EUR / USD - British Pound Dollar took away more than 830 points. On March 20, he fell to the lowest level in the last 230 years (!), And from 70% to 80% of the analysts expected that during April and May, repulsed from this bottom, the pound can return to the zone 1.2725-1.3025. While this prediction is justified - five days the pair has completed the path to the desired goal - at the level of 1.2470;
- USD / JPY . End of March turned out to be favorable for the Japanese currency, which quotes, as usual, depends on the risk appetite of investors in oil prices and the yield of government bonds United States.
Forecast, which is supported by most of the experts found faithful if not 100%, then 99.9%. According thereto, the pair was should turn south and head to the zone 107.00-107.70. This actually happened - made several attempts to break the resistance of 111.60, bulls surrendered, and bears very quickly dropped a couple of 385 points - to the level of 107.75, near which - at around 107.95 - she finished the trading session;
- cryptocurrency. In the previous forecast, we suggested that Bitcoin quotation can be used as a leading indicator for the outlook for buoyant dollar pairs. The basic idea was that the lull in kriptorynke during financial storms may be a harbinger of a trend change or a strong correction of EUR / USD. According voiced by theory, the transition pairs BTC / USD in to the flat state in the face of continued sverhvolatilnosti other markets may indicate that the dollar reached a critical value, and large speculators do not know what to do - whether to increase the dollar-denominated assets by selling The BTC, whether Conversely, translate Fiat in cryptocurrency.
Of course, this is only a theory, with many reservations, but last week it was confirmed - on the charts we see the flat in the crypto-market and predicted a sharp change of trend on the EUR / USD.
Over the past seven days bitcoin rose less than 9%, ripple (XRP / USD) - 10% laytkoyn (LTC / USD) - 3%, and increase Ethereum (ETH / USD) was generally less than 1%.
By the way, co-founder Ethereum Acne Buterin recently presented a roadmap ETH development for the next 5-10 years. In addition, it called for the development of decentralized bridges between Ethereum and other cryptocurrency and the creation of a "real" Distributed Exchange (DEX) for BTC and ETH exchange. However, judging by the quotations Ethereum, his ideas have not yet found a response in the hearts and wallets of investors.
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 . After playing 50% of the losses of the previous two weeks, the pair finally returned again to the Pivot Point 1.1100 zone, around which for many months starting from the end of July 2019. This suggests that the market does not represent, what else can you expect from a coronavirus and governments that joined with him in the fight.
On the one hand, one can observe an avalanche increase in the number of diseases in the United States, and it is unknown whether there is enough Trump President and his administration, strength and ability not just to take control, and significantly improve the situation. Much of the money that the Federal Reserve flooded the economy, it is the payment of unemployment benefits and one-off payments to individuals who ... are in quarantine and are unable to spend. As a result of these funds in the near future will not reach the real economy. US Treasury Secretary Steven Mnuchin is optimistic, saying that the current situation is not yet a financial crisis. However, the head of the Federal Reserve Jerome Powell have agreed that the US economy "could very well be in a recession", and agenda are now dictating the virus. And it is possible,
On the other hand, in Europe the situation is no better. The results of the past on Thursday 26 March EU summit, some analysts have called "just horrible." There is no consensus representatives of the countries have not managed to achieve, the idea of European "koronobondov" buried (at least temporarily), and the ECB with great difficulty managed to maintain stability in the euro area. In the opinion of several experts, such fragmentation of the EU member countries severely limits the opportunities to strengthen the European currency.
At the moment, a graphical analysis points to the north, the vast majority of indicators look in the same direction, and only 15% oscillators H4 and signals D1 serves overbought EUR / USD.
Among experts the majority (60%) is also configured for continued growth pair of drop voted for the remaining 40%. Resistance Levels (taking into account the current volatility) - 1.1240, 1.1365 and 1.1500, support - 1.1000, 1.0850, 1.0775 and 1.0635. Well, two seemingly unattainable goal (although, at present all possible): Bull - 1.1800, bearish - 1.0550.
As for the release of macroeconomic indicators, on Monday March 30 and Tuesday March 31 will be known data on unemployment and consumer markets in Germany and the Eurozone as a whole. The second half of the week will bring us an avalanche of data on the US labor market. Just say that in all cases the forecasts are disappointing. For example, it is expected that the number of jobs created is a / x US sector (NFP), plus drop from 273K to 123K minus;
- GBP / USD . Assessing the prospects for the British economy, the chief economist of the agency IHS Markit Chris Williamson, almost repeated what Dzh.Paeull said about the US. "The onset of a recession unprecedented in the modern history of the scale is becoming increasingly likely," - sounds like that prophecy Williamson. Even the UK out of the EU does not have such a negative impact on the economy as COVID-19.
In this context, despite the medium-term forecast for the coming week analysts expect 60% reversal trend downward and starting a new phase pound fall. If we talk about technical analysis, the timeframe H4 is dominated by green, but 20% of the oscillators are already in the overbought zone. The signals of the oscillators and trend indicators to D1 can be characterized as mixed.
Graphical analysis on both time frames support the bearish outlook, however, admits that before abruptly walk away down a couple for some time will stay in the range of 1.2250-1.2600.
Levels of resistance - 1.2600, 1.2750, 1.3025, 1.3200 and 1.3515. support levels - 1.2250, 1.2200, 1.1800 and 1.1450;
- USD / JPY . Last week the pair finished near the strong support / resistance level 108.00, and the majority of analysts (60%), as well as in the case of EUR / USD and GBP / USD, expects a trend reversal and subsequent strengthening of the dollar. If this happens, then the pair has a lot of chances to still overcome the barrier of 111.60-112.00 and go up another 100 points higher. Strong resistance in the near zone 109.70-110.00.
The remaining 40% of experts, supported by graphical analysis on the H4, took the side of the bears. Support in the areas of 106.70-107.25 and 104.70-105.00, further goals - and a minimum of 103.00 on March 9 in the area of 101.00;
- cryptocurrency . Fear and greed index Bitcoin (Crypto Fear & Greed Index) for the week moved by only 3 points, from 9 to 12, and still indicates a strong fear in the market. The number of requests for the word "bitcoin" in the search engine Baidu and Google in the last month has increased seriously, and is mainly interested in buying cryptocurrency users. For example, increased by 138%, and according to Google Trends the increase was 57% of the search engine Baidu search volume last month.
As usual, the growth of the reference cryptocurrency predict all sorts of crypto guru, especially now that they have a powerful ally in the person of coronavirus COVID-19. The well-known analyst Joseph Yang expressed confidence in the positive impact on the bitcoin taken by the US Fed measures to stimulate the US economy. "The Fed endlessly printing money to pump market - it's good for Bitcoin. The devaluation of the dollar in the long run - good for Bitcoin. Short-term prospects are bleak for this cryptocurrency, but the long-term remain very bright, "- he said.
I agree with Yang and founder of Galaxy Digital Mike Novogratz. He was confident that triggered the pandemic coronavirus global economic crisis will eventually break Bitcoin. "Bitcoin will remain volatile even the next few months, but the macroeconomic environment - is something for which it was created. This year should be and will be the year BTC », - said the billionaire.
I joined this chorus and COO of service Genesis Mining Philip Salter. He is convinced that the deepening economic crisis will lead to an increase in the popularity of bitcoin as a hedge the risks of the banking system. "If the development of the economic crisis will be able to prevent, from the Bitcoin no serious changes. However, if there will be a real collapse, the interest in the first cryptocurrency fly. The more skeptical about the old economy, the greater the interest in bitcoin "- shared his thoughts a top manager of the popular service cloud of mining.
As for the next projections, then a well-known trader Tone Weiss is confident that with current prices Bitcoin probability of falling below the recent low of $ 3800 is 20-25%. Even less likely collapse similar to the marks will be in the first cryptocurrency in case of overcoming the level of $ 6800 - only 15%. "The output above the level of $ 6800 will give me a 85% certainty that we will not go below this level", - says Weiss. In general, 55% of the experts expect that over the BTC / USD pair next week will necessarily reach $ 7,500-8,000 zone. The remaining 45% of analysts, by contrast, predict a fall in the pair. In their view, BTC / USD once again try to test the support of $ 5,700 and, if successful, will again be at the level of $ 5,000.
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.