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April 13, 2019

First, a review of last week’s events:

  • EUR/USD. Many traders complain of low volatility in the market. But even despite the pessimism of Mario Draghi shown by him after the ECB meeting on Wednesday 10 April, the euro managed to win back about 100 pips from the dollar over the past week and return to the very strong support/resistance zone of 1.1300, around which the pair started moving back in January 2015. The reason for this is most likely the delay in Brexit.
    As a result, the forecast which was given by 40% of analysts, supported by 20% of oscillators signaling that the pair was oversold, turned out to be correct. According to them, having pushed off support in the 1.1200 zone, the pair had to go up to resistance 1.1255 and, in case of a breakthrough, reach the height of 1.1300. And this actually happened;
  • GBP/USD. The overwhelming majority of analysts (65%) expected the strengthening of the British currency. Their forecast was based on the fact that an extraordinary meeting of the European Council would support a long extension of the Brexit procedure, and that the UK would not withdraw from the EU without a deal on April 12. That is exactly what happened. The British Parliament passed a law prohibiting a no-deal withdrawal, and the European Council delayed Brexit for up to six months. They would have given a longer delay if it were not for Macron, the president of France, who cannot wait to take the second place in the EU, after Germany, after the departure of the islanders.
    Graphical analysis on D 1 indicated a level of 1.3120 as the main resistance zone, which the pair reached on Tuesday, April 9, but failed to overcome it after 3 attempts. And in the end it finished the week at 1.3070;
  • USD/JPY. 85% of the experts were confident that the pair would necessarily test the upper limit of the medium-term channel 109.70-112.15. And on Friday, April 12, it almost reached the target, rising to the height of 112.09. However, before that, the pair dropped to the center line of this channel and, only pushing away from it, showed an impressive rise of 115 points. Such a rise of the pair and the strengthening of the dollar against the yen were caused, according to analysts, primarily by the increase in the yield of long-term US bonds in the last two working days of the week;

As for the forecast for the coming week, summarizing the opinions of a number of analysts, as well as forecasts made on the basis of a variety of methods of technical and graphical analysis, we can say the following:

  • EUR/USD. If 60% of the trend indicators on D1 are still painted green, the oscillators show a completely different picture: a third of them have acquired a neutral gray color, and another third already signals the pair is overbought. 65% of experts also expect that if not immediately, then by the end of the month, the pair will go down, trying to test again, first the April 2 low - 1.1183, and then the March 07 low, 1.1175. The nearest support is 1.1250;
    At the same time, graphical analysis on H4 suggests that before heading south, the pair may rise for a while above the level of 1.1300, reaching the height of 1.1350. The next target of the bulls is 1.1420;

  • GBP/USD. Experts believe that the euphoria caused by the Brexit delay will quickly subside, and the pair will stay in a side trend for some time, moving within 1.2985-1.3150. The nearest support is 1.3050, the resistance is 1.3120. However, in the transition to the medium-term forecast, it is already 60% of analysts who have sided with the bulls, expecting the strengthening of the British pound and the pair’s transition to the 1.3200 -1.3350 zone. But the accuracy of this forecast again depends on what will happen around Brexit. There remains a risk of a second referendum, which may entail both a refusal of Brexit in general and, conversely, a British exit from the EU without an agreement. Any news and rumors on this subject can quickly turn the trend in one direction or another, but for now the demand for British currency remains very weak;
  • USD/JPY. The bull scenario remains a priority: 70% of the experts, supported by 100% of the trend indicators, look to the north. According to them, if the yield on 10-year US Treasury bonds continues to grow, the pair, relying on support around 112.00, can rise to the area of 113.00-114.20.
    However, since at the moment the pair is in the reversal zone near the upper boundary of the medium-term channel 109.70-112.15, a downward rebound of the pair is not excluded, as evidenced by signals from 25% of oscillators indicating it is overbought. Support levels are 110.85, 110.35 and the lower boundary of the channel is 109.70. USD/JPY quotes can also be affected by US-Japanese trade negotiations at the beginning of the upcoming week;
  • Among other events to which attention should be paid are the following publications: data on the UK labor market and the index of business sentiment ZEW (Germany) on Tuesday, April 16; China's GDP, the UK Consumer Price Index and the Eurozone Inflation Report on Wednesday April 17; UK and US retail sales data on Thursday, April 18; and finally, Japan's consumer price index on Friday, April 19;

NordFX EU


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