Nataly Kambur
As you probably know, the market value of major currencies is the result of a huge number of several factors influencing the situation at the same time. Currency exchange rates affect numerous processes. Making use of an unbiased forecast helps traders and investors take advantage of the current situation to gain from their major activities the max profit possible. However, sometimes they may have a hard time coming up with such predictions.
That's why NordFX is back with yet another consensus forecast for the trading week. The forecast reveals the most likely market scenarios for the next 5 days. To start with, the forecast is based on a number of opinions by all kinds of experts with all kinds of trading approaches. The current forecast is effective from January 28 to February 1, 2019.
EURUSD. The key driver is expected to be the US-China trade talks. The talks are scheduled to take place in Washington over the last two days of January. Experts believe the talks have all chances to succeed. The employment stats from the USA are scheduled for February 1st. Previously, Trump's economic advisor has dumped some of the key information. In particular, for now we know that the stats have grown considerably, given the relatively low amount of jobless claims for the reporting period.
On top of that, on Tuesday, the market is expecting a Eurozone GDP report. Most likely, the stats will turn out to be poor. If that's the case, the stats will definitely back a stronger dollar. 60% of the experts anticipate this scenario. Since they expect the U.S. Dollar to rise against the common European currency, they actually predict EUR/USD to drop down to 1.1300, and then further down to 1.1270 and 1.1215.
On the other hand, it should be taken into account that the Fed is definitely going to be done with its monetary toughening sooner or later, and that's something that the market is already tarting to take into account. That's why the experts recommend paying attention to something beyond the Fed's interest rate decision announced on January 30, especially as the interest rate has all chances to stay unchanged at 2.5%. The Fed's comments related to their plans for the rest of the year promise to be fairly interesting as well.
A weaker dollar is a likely scenario in case the information related to the amount of interest rate hikes will disappoint investors. Chances are, the dollar weakness may turn into a long-term trend. If that's the case, 40% of the experts assume that the currency pair is likely to hit 1.1500, only to touch 1.1580. On top of that, we should keep in mind the forthcoming Brexit voting in the British parliament, which is actually capable of influencing the EUR/USD market behavior.
GBP/USD. When evaluating the market situation, we should keep in mind that Theresa May is expected to announce her backup Brexit plan in the parliament on January 29. The Laborists cannot decide on their next move, which reduces the likelihood of another referendum or reelections. The Telegraph observers are currently discussing a range of amendments that can be put to the vote in the parliament. However, we will learn the final decision only on Tuesday. With that being said, the experts are at odds over their predictions. 50% of the experts anticipate a move down while 40% count on another rally. The remaining 10% are having a hard time specifying the expected direction of the next price move. Support levels: 1.3070, 1.2900, 1.2820, 1.2700, and 1.2660. Resistance levels: 1.3250, 1.3300, 1.3360, and 1.3555.
USDJPY. As opposed to British parliamentarians, the participants of the BoJ meeting scheduled for January 28 aren't expected to come up with an unexpected decision. So, the info coming from the USA is expected to have the prevailing effect on the currency pair. Once again, we are talking about the interest rate decision and the results of the US-China trade talks. It seems like President Trump needs the talks to end up with a resolution, and he seems to need it badly. If the parties do compromise, USD/JPY may well go up to 110.00 and above. 70% of the experts, backed by the D1 chart analysis, indicated 111.55 as a realy strong level of resistance. The remaining 30% of the experts say the currency pair is overbought, and that's backed by 15% of the oscillators on D1. If USD/JPY starts going down, the closest levels of support will be located at 109.15, 108.70, and 107.75.
Cryptocurrencies. The market has been almost indifferent to the news that could have triggered major price moves just 12 months ago. According to international analysts, the crypto market has been getting closer to the Forex market in terms of behavior and reaction, which is the result of even the biggest fans getting sober and the world's major financial regulators getting more and more serious in their attempts to regulate the market.
This time, the Bank of England has decided to take care of investors. The regulator is planning to split cryptocurrencies into 3 categories and come up with a set of laws regulating their circulation. It seems like the big institutional players aren't joining the crypto game, which is something that small investors have been hoping for all this time.
As you probably know, big-scale players are never in a hurry to get quick returns on their investments. They are long-term players willing to sacrifice bigger profits for lower risks. So, they can wait for years or even decades. So, today's major cryptocurrency pairs have been flat for a while. However, the bears' strength is now starting to build. for instance, the Pivot line, which BTC/USD has been moving around, has dropped 20 points down over the last 2 weeks. In the meantime, Ripple (XRP/USD) and Ethereum (ETH/USD) have dropped by 5% and 8% respectively. However, this can be treated either as an insignificant move or as a signal indicating the direction of the next big move. For now, 70% of the experts expect Bitcoin to yield to the increasing downward pressure and eventually drop down to the low of 2018 around 3,200-3,250, only to continue its way down to 2,400. 20% of the experts anticipate a rally up to 3,850-4,215. The remaining 10% expect the flat market to go on in the near future.
Nataly Kambur
