Market Forecast 2 nd Quarter 2017

Check out our expert market forecasts for the second quarter of 2016 from our research analyst Luqman Otunugi. Find out what is provided and what to prepare.

EURUSD

At the beginning of the 1st quarter, the euro / US dollar is comfortable trading in a wide range, with the strength of the euro and the dollar pulled a couple in different directions. Investors still take a wait as growing expectations that the European Central Bank will take further stimulus measures. Meanwhile, the growing optimism earlier about the possibility of the four interest rate hikes by the Federal Reserve System in 2016 remained the hope of achieving a couple of euro / dollar parity.

Meanwhile, Q1 was quite unstable, while the euro zone data followed the negative trajectory, and increased concerns about the state of the world economy was subjected to the US economy downward risks. In early February, the weak US data renewed concerns about a possible economic downturn, prompting investors to restrain their expectations regarding the amount of interest rate hikes this year. As a result, the US dollar fell against the euro, and the euro / dollar rose to 1.1200

Due to stable low inflation in the eurozone in March, the ECB has taken decisive steps by launching aggressive stimulus measures in an attempt to support economic growth in the euro area. In response to the lowering of the ECB interest rates on deposits, investors, putting on a decline in the euro first strengthened their positions, but when expectations of further rate cuts weakened buyers took advantage of this opportunity, pushing a couple of euro / dollar to the level of 1.120, which was the resistance. If this disappointment was not enough to destroy the dream of achieving parity pair in 2016, the recent events, namely the reduction in the Fed’s forecast for the number of rate increases this year from four to two, could give to investors, which puts on the pair EUR / USD, needed encouragement to push it to 1.143. Bulls in the euro ended the 1st quarter on solid positions, and as rapidly reduced expectations that the Fed will raise rates two more times this year, the euro / US dollar may be prone to further growth.

It began the 2nd quarter, and there is a strong likelihood that the weakness of the US dollar will remain the main theme in the markets, as the expectations of the increase in US interest rates in the near future are falling rapidly against the background of global uncertainty. The European Central Bank may further reduce the interest rate on deposits in the 2nd quarter, in an attempt to support both borrowing and inflation, but it can produce a negative effect, as investors believe these actions are a manifestation of despair. This combination of potential growth in the euro and the dollar weakness makes a couple of euro / dollar is prone to rise at the beginning of the 2nd quarter, while it may even achieve a strong resistance at 1.150.

From a technical perspective, the euro showed a positive trend in almost all timeframes, with the euro / dollar broke through solid resistance 1.120 before fell to the support 1.107. While on the monthly chart the pair for a long time traded in a range, the upper limit of which is the level of 1.138, on the weekly and daily charts it continues to reach higher highs and higher lows, which strengthens the emerging positive outlook. If you start from the analysis of many-time (MTFA), a pair of break above 1,120 just opened the way to 1.138, which may contribute to the growth of the waves on the weekly and daily charts.

Lagging indicators such as moving averages or convergence / divergence moving averages (MACD) indicator, have already begun to point to the growth of the pair, while three consecutive bullish candles on the weekly chart indicates that the resistance of 1.1380 weakens. Former resistance 1.1070 could be a mobile support, which will give a couple the opportunity to return to the 1.120 or climb even higher. Confident closing the pair above 1.1380 for the week could open her way to the annual resistance 1.1500. While dollar weakness may become more widespread, and concerns about the inability of the ECB to revive the economic growth of the eurozone persist, reinforcing the position of investors that put on the growth of the euro pairs / dollar, the dream of achieving parity becomes more distant.

Disclaimer: The content of this article reflects the personal opinion and should not be construed as a personal and / or other investment advice and / or offer and / or solicitation to conduct transactions with financial instruments and / or interest and / or prognosis future events. BidAsko Company (BidAsko), its partners, agents, directors or employees do not guarantee the accuracy, validity, timeliness or completeness of any information or data available and will not be liable for any loss arising from any investment based on such data or information.

Risk Warning: Trading Forex and CFD currency carries a high level of risk and can result in the loss of your invested capital. Make sure that you are aware of these risks and do not invest more than you can afford to lose. Trade with leverage may not be suitable for all investors. Before taking part in the trade, objectively evaluate and consider the level of professionalism and investment objectives. If necessary, consult an independent expert.

GBPUSD

GBP / USD came under heavy pressure at the beginning of 2016. The British pound, in general, are not in demand among investors. Re weakened market expectations regarding the increase of the Bank of England interest rates, a weak overall inflation, continuing a long time, coupled with signs of a slowdown in economic momentum and the forthcoming referendum on the UK’s membership of the EU, scheduled for June, threaten large-scale fall in the pound. Previously, we thought that the pair GBP / USD may fall to 1.40 in the 1st quarter, but its decline accelerated, and it has reached nearly seven-year low 1.38 by the end of February.

Given all this, many people hit the pace of recovery in the pound when the 1st quarter came to an end – the pair GBP / USD managed to regain lost ground and return to the mark of 1.45. The main reason for the recovery was Pound weakening of the US dollar and the decline in expectations about the Fed raising interest rates. The growth of the pair GBP / USD has nothing to do with the improvement of relations of market participants to the British currency.

Since the beginning of the 2nd quarter, we see a high probability of increased market volatility to bear, given the upcoming referendum. Investors that put on the pounds reduction, it should be possible to push the pair down. Personally, we believe that any recovery of the pair GBP / USD can be seen as facilitating the growth, followed by another deeper fall in the graphs. Now mark of 1.45, in our opinion, is a psychologically important level for the pair, and if she could not close above it on the weekly chart, investors are likely to take the opportunity to push the pair down.

With regard to the technical indicators, the pair GBP / USD is experiencing strong pressure and tends to reduce all time frames. On the monthly chart is visible sequence of lower lows and highs, and the third candle on the March chart shows a potential bearish engulfing. Level 1.4500 is a psychologically important resistance for now, and from a technical point of view, you need a break above it, the pair continued to recover. While the pair closes above 1.45 on the weekly chart, it could still fall in the medium term.

Technical lagging indicators such as moving averages on the daily, weekly and monthly charts indicates that the pair pound / dollar still tends to decrease, and the MACD is below the neutral level. On the daily chart the pair GBP / USD is trading in a downward channel and a break below 1.41 will probably open her way to 1.40 or even lower. In our opinion, the pair break below 1.41 will be a major technological change and can be a catalyst for another larger fall to critical lows around 1.38, as indicated by the many-analysis (MTFA).

Disclaimer: The content of this article reflects the personal opinion and should not be construed as a personal and / or other investment advice and / or offer and / or solicitation to conduct transactions with financial instruments and / or interest and / or prognosis future events. BidAsko Company (BidAsko), its partners, agents, directors or employees do not guarantee the accuracy, validity, timeliness or completeness of any information or data available and will not be liable for any loss arising from any investment based on such data or information.

Risk Warning: Trading Forex and CFD currency carries a high level of risk and can result in the loss of your invested capital. Make sure that you are aware of these risks and do not invest more than you can afford to lose. Trade with leverage may not be suitable for all investors. Before taking part in the trade, objectively evaluate and consider the level of professionalism and investment objectives. If necessary, consult an independent expert.

AUDUSD

The pair AUD / USD continued its unexpected growth in the middle of the 1st quarter, when it jumped above 0.71, to make a breakthrough on a clear downward trend, which is observed since the break important support in 2015.

One of the reasons of such dynamics of the Australian dollar is its positive correlation with gold prices, which were included in a bullish market and showed an impressive growth in the 1st quarter. Another reason for the growth of the Australian currency was current expectations as to what the RBA kept interest rates unchanged (at 2%), as well as GDP growth has stabilized to the beginning of the 2nd quarter. Australia held a strong position in the 1st quarter, despite its direct trade relations with China, which is surrounded by considerable economic downside risks.

Since the beginning of the 2nd quarter of the pair AUD / USD may continue to grow, at the same time possible to achieve the level of 0.80, as the continued weakness of the US dollar provides support for the pair, and the recovery in commodity prices is another positive factor. The pair may become prone to growth from a technical point of view, and it is waiting for further growth, as risk aversion promotes the growth of demand for gold, which is considered an asset of refuge, which, in turn, strengthens the Australian economy and allows the bulls to gain control of a pair .

AUD / USD has shown impressive growth, which allowed her to escape from the week downtrend channel, and now she checks on the strength of the upper limit of the downward channel month. It tends to grow on the daily chart, taking into account the sequence of higher highs and higher lows while the Stochastic indicates a potential for further growth. While the level of 0.7600 is some obstacle to the bulls on the way to 0.7850, but as long as the pair holds above 0.7400, the bulls should be no problem with the overcoming of the sustained resistance. MTFA analysis indicates that 0.7400 former resistance may be a mobile support on the daily chart, which will allow the pair break above 0.7600.

A break above 0.7600 pair should open the way to 0.8100 and if this level is broken, the pair will officially become prone to an increase in the monthly chart.

Disclaimer: The content of this article reflects the personal opinion and should not be construed as a personal and / or other investment advice and / or offer and / or solicitation to conduct transactions with financial instruments and / or interest and / or prognosis future events. BidAsko Company (BidAsko), its partners, agents, directors or employees do not guarantee the accuracy, validity, timeliness or completeness of any information or data available and will not be liable for any loss arising from any investment based on such data or information.

Risk Warning: Trading Forex and CFD currency carries a high level of risk and can result in the loss of your invested capital. Make sure that you are aware of these risks and do not invest more than you can afford to lose. Trade with leverage may not be suitable for all investors. Before taking part in the trade, objectively evaluate and consider the level of professionalism and investment objectives. If necessary, consult an independent expert.

USDJPY

We have a very positive outlook for the Japanese yen at the beginning of the 2nd quarter, but it is not associated with an improvement in market sentiment in the Japanese economy, which is now struggling with deflation. the risk of hostility remains the main driving force which boosted demand for the yen, which is a safe haven, in the 1st quarter, and, given the intensifying fears of a further slowdown in global economic growth in the 2nd quarter, investors are putting on the yen’s rise, have yet More inspire and push the pair dollar / yen to levels below 110.00, which was last seen in September 2014.

The Japanese economy is heavily damaged in the 1st quarter of the strengthening of the yen, to reduce the competitiveness of Japanese exports. Meanwhile, growing concerns about the global economy exposed Japan new downside risks. In late January, when the pressure became unbearable, the Bank of Japan introduced a negative interest rates in a desperate attempt to weaken the yen, but the market reaction was reversed, and the yen rose against other currencies. Japan was in a painful position, when the potential central bank intervention and the growing risk aversion create the conditions for growth of the yen. This leads to increased inflation concerns.

Not so long ago started the 2nd quarter, and we can expect further growth of the yen, as the growing financial instability increases the risk aversion that motivates them to give preference to safe-haven assets. The Bank of Japan has signaled that it is possible an even greater reduction of interest rates, which are already negative, to revive the weakening of the Japanese economy, but such a development could easily support the yen. From a fundamental point of view, the dollar / yen pair is prone to decrease. Taking into account the weakening of expectations that the Fed will raise rates more than doubled in 2016, the pair may continue to fall most of the 2nd quarter

From a technical point of view, according to the chart, the dollar / yen should now be a negative trajectory, which is a dream merchants. It is very prone to reduction in the daily chart, and the current correction can give sellers the opportunity to push the pair to the support at 112.00. We see successive lower lows, while weekly and monthly uplinks were punctured. A break below the double bottom pair 111.00 could open her way to the level of 100.00, which was last recorded in 2013.

We are dealing with a bear market, and bulls will be very difficult to regain control of the pair on the background of the strong bearish momentum. Investors should be aware that the fragile global economic conditions again caused risk aversion, which will inevitably lead to an increase in the yen, which means it will keep the pair dollar / yen under pressure.

Disclaimer: The content of this article reflects the personal opinion and should not be construed as a personal and / or other investment advice and / or offer and / or solicitation to conduct transactions with financial instruments and / or interest and / or prognosis future events. BidAsko Company (BidAsko), its partners, agents, directors or employees do not guarantee the accuracy, validity, timeliness or completeness of any information or data available and will not be liable for any loss arising from any investment based on such data or information.

Risk Warning: Trading Forex and CFD currency carries a high level of risk and can result in the loss of your invested capital. Make sure that you are aware of these risks and do not invest more than you can afford to lose. Trade with leverage may not be suitable for all investors. Before taking part in the trade, objectively evaluate and consider the level of professionalism and investment objectives. If necessary, consult an independent expert.

Gold

Gold prices fell in late 2015, came under strong pressure due to increased investors’ expectations about four increases by the US Federal Reserve’s interest rates in 2016. Meanwhile, the US dollar’s rise prompted bears to push gold prices down at every opportunity. But with the beginning of the 1st quarter the dynamics of the price of gold has become the opposite amid growing concerns about the global economy, which led to an increase in the attractiveness of gold as a safe-haven asset. Bulls in the gold market were further encouraged by the relentless fall in oil prices, which has weakened confidence in the world economy and caused investors to shun riskier assets.

The main factor holding gold under pressure for most of 2015, have increased expectations for increasing the Fed interest rates, but these expectations have fallen sharply in the 1st quarter of 2016, and the obstacles in the way of the bulls disappeared, paving the way for a rise in prices. In fact, the US Federal Reserve plans are key to the dynamics of the gold price, and as it becomes increasingly clear that US interest rates may not rise in the near future, this year could be gold for one of the best in a decade.

We can expect further growth of gold prices, which had already exceeded the mark of 1283 dollars per ounce, as risk aversion made investors anxious to give preference to gold, which is considered a safe haven. Naturally, as expectations of rate hikes in the US weakened the US dollar is expected to decline, and it will give the bulls an opportunity to start another round of purchases, which can last for most of the 2nd quarter. Futures on interest rates Fed indicate a very low probability of action by the central bank during the quarter, and this should encourage the bulls to build long positions on gold.

From a technical perspective, gold prices showed a long wave of growth up to 1285 dollars per ounce, before sellers pushed prices back to the support level of $ 1210 per ounce. Gold remains prone to growth, and the continuing difficulties in the world, which increased risk aversion in the markets are likely to give an opportunity to the bulls push prices to 1285 dollars per ounce. While the daily chart begins to give negative signals, bulls firmly in control the prices of both the weekly and monthly charts on until the level of 1190 dollars is well protected.

Closing of gold at the end of the week prices above 1,285 dollars per ounce can give the necessary impetus to the bulls to test for the level of 1308 USD strength, and if it is broken, prices may show continued growth.

It should again be noted that one of the main causes of the recent fall in gold prices have been strengthened expectations about the Fed raising interest rates in April, despite the unstable financial conditions.

Disclaimer: The content of this article reflects the personal opinion and should not be construed as a personal and / or other investment advice and / or offer and / or solicitation to conduct transactions with financial instruments and / or interest and / or prognosis future events. BidAsko Company (BidAsko), its partners, agents, directors or employees do not guarantee the accuracy, validity, timeliness or completeness of any information or data available and will not be liable for any loss arising from any investment based on such data or information.

Disclaimer: The content of this article reflects the personal opinion and should not be construed as a personal and / or other investment advice and / or offer and / or solicitation to conduct transactions with financial instruments and / or interest and / or prognosis future events. BidAsko Company (BidAsko), its partners, agents, directors or employees do not guarantee the accuracy, validity, timeliness or completeness of any information or data available and will not be liable for any loss arising from any investment based on such data or information.

WTI Oil

For most of the 1st quarter of WTI crude oil has been the victim of relentless selling, as concerns about oversupply in the oil market encouraged the bears push prices down. The price of this commodity has fallen more than 80% from the peak in the second quarter we can expect further reduction in prices, as there is no visible deceleration of negative momentum. The dangerous combination of factors such as excess supply and weakening demand, has caused such a massive drop in prices. In February, oil prices reached 13-year lows at $ 26 per barrel level.

Fundamentals, namely the continued oversupply, lower investor demand for oil, which undermines any recovery in prices. Meanwhile, the Organization of Petroleum Exporting Countries in the 1st quarter benefited from increased volatility, to support prices, triggering a result of growth in the relief, which could be followed stronger fall. Discussions among countries about the possible freeze of production, which have supported the WTI crude oil may come to naught, because Iran is still seeking to increase production by at least 4 million barrels a day.

Oil prices may continue to decline, as lingering concerns about global economic growth raise concerns about a possible weakening demand and excess oil on the world market will keep prices under pressure. Prices for the raw product could fall to $ 25 a barrel, that will shake the world markets and will force the cartel really to cooperate in order to reduce supply on the market.

From a technical point of view, WTI oil prices tend to decrease, and this situation may persist until investors have concerns about oversupply in the world oil market. Despite the increase in relief, a strong resistance at 41.10 a dollar to restrain further price increases and the ability to give the bears to push prices back to the level of support at $ 35.

Bears still control prices on the monthly chart, given the sequence of lower lows and highs. Meanwhile, on the weekly chart we see strong resistance at 41.40 dollars. Impulse can begin to grow when the intraday ascending channel is broken, and this oil must close below $ 38. Weekly lagging indicators such as MACD and moving averages indicate a potential price drop to $ 26, but first you need to break the mark price of $ 38.

Disclaimer: The content of this article reflects the personal opinion and should not be construed as a personal and / or other investment advice and / or offer and / or solicitation to conduct transactions with financial instruments and / or interest and / or prognosis future events. BidAsko Company (BidAsko), its partners, agents, directors or employees do not guarantee the accuracy, validity, timeliness or completeness of any information or data available and will not be liable for any loss arising from any investment based on such information or data

Risk Warning: Trading Forex and CFD currency carries a high level of risk and can result in the loss of your invested capital. Make sure that you are aware of these risks and do not invest more than you can afford to lose. Trade with leverage may not be suitable for all investors. Before taking part in the trade, objectively evaluate and consider the level of professionalism and investment objectives. If necessary, consult an independent expert.

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