Forex forecast for September 24, 2018 – 28.09.2018 – Forex
Forex. Euro/dollar forecast (EUR/USD)
The quotations of the euro/dollar pair rose significantly last week, overcame the resistance level of 1.1700 and reached the maximum value since June this year at 1.1803. By the end of the week session, the pair had fallen to 1.1743.
U.S. President Donald Trump has imposed new duties of 10% on imports from China amounting to 200 billion dollars. The new tariffs will come into force on September 24, and by the beginning of 2019 they may increase to 25%. In addition, the Trump administration has said that if China retaliates, the U.S. reserves the right to impose additional duties. Taking into account previous increases, almost half of Chinese imports, totaling about $505 billion, are currently subject to duties. China, for its part, said it would retaliate in response to U.S. actions from the same date. Thus, the Chinese government is ready for further development of the trade war.
The dollar index lost about 1% of its value last week amid rising global risks of a decline in the global and American economies. The U.S. currency fell against most other assets. U.S. government bond yields rose to a 10-year high amid expectations of an interest rate hike next week.
The main event of the coming week will be the next meeting of the Fed. Markets are almost certain that the U.S. regulator will raise the interest rate, and the most interesting will be the Rhetoric of the Fed about another increase in December. Forecasts for the growth of the U.S. economy for the third quarter remain high, and inflation stays above the target of 2%. At the last meeting, the Fed said it planned to stick to the current interest rate increase plan, which implies a quarterly increase. While it is unclear how much the trade conflict with China can actually affect the regulator's decision, it is certainly clear that the topic of escalating trade war will be the most important for investors in the accompanying statement of the Fed. It is the forecasts of further rate changes in December that will have the greatest impact on the dollar. Most hedge funds still retain a large volume of long positions on the dollar. If the euro/dollar quotes overcome the level of 1.1800, it can cause a mass closure of positions for purchase and strengthen the upward momentum of the pair.
Another important factor that could affect the euro/dollar pair exchange rate will be the beginning of the budget aryin of the new Italian government in the coming week. Recent comments by government officials have confirmed that the planned budget growth is likely to be more moderate in 2019 than previously thought.
In our forecast for the coming week, we expect the euro/dollar pair to rise to resistance levels of 1.1760 and 1.1800, after which we expect a reversal and a decline in quotations to support at the levels of 1.1740, 1.1700 and 1.1655.
Forex. Pound/dollar currency pair forecast (GBP/USD)
The pound/dollar pair strengthened for much of the week on the back of a positive news background related to a possible compromise by Brexit negotiators and an agreement between the EU and the UK. Thanks to the optimism of the media, the pair reached the highest value since July 2018 at 1.3298. However, on Friday the mood vector shifted sharply towards the negative, which led to the collapse of quotations by more than two hundred points to the level of 1.3056.
An informal EU summit in Salzburg was held at the end of last week. Few expected the parties to reach a full agreement, but at least expected progress on the status of the Irish border. The result of the meeting was close to a failure. At the summit, European leaders rejected the British prime minister's proposed plan for relations between London and the European Union, primarily in the area of future economic cooperation and the solution of the border between Northern Ireland and Ireland. French President Emmanuel Macron said he expects new proposals from London on the single European market and the Irish border by October. Macron said London's current proposals were completely unacceptable because they did not take into account the integrity of the single market and said the EU would never accept an agreement with the UK if it was detrimental to EU interests.
On Friday, British Prime Minister Theresa May said talks between London and Brussels on Brexit were deadlocked. In May's view, at the current stage of the negotiations it is unacceptable to simply reject the position of the other party without detailed explanations and counter-proposals. In addition, the Prime Minister said that under no circumstances would it accept such a decision, when Northern Ireland, if the negotiations fail, will remain in the EU single market, which will lead to the creation of a border between the two parts of the UK. After the summit, May was criticised in British newspapers for the prime minister's inability to persuade her European counterparts to accept London's offer. The failed outcome of the summit weakened May's position ahead of the Conservative Party conference at the end of September, which could lead to internal divisions and a political crisis in the UK.
The last possibility of an agreement between the UK and the EU will be an emergency EU summit dedicated to negotiations on the UK's withdrawal from the community, which will be held on November 17-18 at the initiative of the head of the European Council Donald Tusk. Negotiators have about two months to find a compromise on key issues.
Economic factors have long been sidelined amid the importance of Brexit negotiations. Retail sales rose 3.3% year-on-year in August in the UK. The figures are well above the low reached in November 2017, which may indirectly indicate a possible recovery of the British economy.
In our forecast for the coming week we expect a further decline in the quotations of the pound/dollar pair to the support levels of 1.3030, 1.3000, 1.2975, 1.2950 and 1.2920.
Forex. Gold price forecast
The pound/dollar pair strengthened for much of the week on the back of a positive news background related to a possible compromise by Brexit negotiators and an agreement between the EU and the UK. Thanks to the optimism of the media, the pair reached the highest value since July 2018 at 1.3298. However, on Friday the mood vector shifted sharply towards the negative, which led to the collapse of quotations by more than two hundred points to the level of 1.3056.
An informal EU summit in Salzburg was held at the end of last week. Few expected the parties to reach a full agreement, but at least expected progress on the status of the Irish border. The result of the meeting was close to a failure. At the summit, European leaders rejected the British prime minister's proposed plan for relations between London and the European Union, primarily in the area of future economic cooperation and the solution of the border between Northern Ireland and Ireland. French President Emmanuel Macron said he expects new proposals from London on the single European market and the Irish border by October. Macron said London's current proposals were completely unacceptable because they did not take into account the integrity of the single market and said the EU would never accept an agreement with the UK if it was detrimental to EU interests.
On Friday, British Prime Minister Theresa May said talks between London and Brussels on Brexit were deadlocked. In May's view, at the current stage of the negotiations it is unacceptable to simply reject the position of the other party without detailed explanations and counter-proposals. In addition, the Prime Minister said that under no circumstances would it accept such a decision, when Northern Ireland, if the negotiations fail, will remain in the EU single market, which will lead to the creation of a border between the two parts of the UK. After the summit, May was criticised in British newspapers for the prime minister's inability to persuade her European counterparts to accept London's offer. The failed outcome of the summit weakened May's position ahead of the Conservative Party conference at the end of September, which could lead to internal divisions and a political crisis in the UK.
The last possibility of an agreement between the UK and the EU will be an emergency EU summit dedicated to negotiations on the UK's withdrawal from the community, which will be held on November 17-18 at the initiative of the head of the European Council Donald Tusk. Negotiators have about two months to find a compromise on key issues.
Economic factors have long been sidelined amid the importance of Brexit negotiations. Retail sales rose 3.3% year-on-year in August in the UK. The figures are well above the low reached in November 2017, which may indirectly indicate a possible recovery of the British economy.
In our forecast for the coming week we expect a further decline in the quotations of the pound/dollar pair to the support levels of 1.3030, 1.3000, 1.2975, 1.2950 and 1.2920.
Forex. North American Oil Forecast (WTI)
The pound/dollar pair strengthened for much of the week on the back of a positive news background related to a possible compromise by Brexit negotiators and an agreement between the EU and the UK. Thanks to the optimism of the media, the pair reached the highest value since July 2018 at 1.3298. However, on Friday the mood vector shifted sharply towards the negative, which led to the collapse of quotations by more than two hundred points to the level of 1.3056.
An informal EU summit in Salzburg was held at the end of last week. Few expected the parties to reach a full agreement, but at least expected progress on the status of the Irish border. The result of the meeting was close to a failure. At the summit, European leaders rejected the British prime minister's proposed plan for relations between London and the European Union, primarily in the area of future economic cooperation and the solution of the border between Northern Ireland and Ireland. French President Emmanuel Macron said he expects new proposals from London on the single European market and the Irish border by October. Macron said London's current proposals were completely unacceptable because they did not take into account the integrity of the single market and said the EU would never accept an agreement with the UK if it was detrimental to EU interests.
On Friday, British Prime Minister Theresa May said talks between London and Brussels on Brexit were deadlocked. In May's view, at the current stage of the negotiations it is unacceptable to simply reject the position of the other party without detailed explanations and counter-proposals. In addition, the Prime Minister said that under no circumstances would it accept such a decision, when Northern Ireland, if the negotiations fail, will remain in the EU single market, which will lead to the creation of a border between the two parts of the UK. After the summit, May was criticised in British newspapers for the prime minister's inability to persuade her European counterparts to accept London's offer. The failed outcome of the summit weakened May's position ahead of the Conservative Party conference at the end of September, which could lead to internal divisions and a political crisis in the UK.
The last possibility of an agreement between the UK and the EU will be an emergency EU summit dedicated to negotiations on the UK's withdrawal from the community, which will be held on November 17-18 at the initiative of the head of the European Council Donald Tusk. Negotiators have about two months to find a compromise on key issues.
Economic factors have long been sidelined amid the importance of Brexit negotiations. Retail sales rose 3.3% year-on-year in August in the UK. The figures are well above the low reached in November 2017, which may indirectly indicate a possible recovery of the British economy.
In our forecast for the coming week we expect a further decline in the quotations of the pound/dollar pair to the support levels of 1.3030, 1.3000, 1.2975, 1.2950 and 1.2920.
Forex. Cryptocurrency forecast
The pound/dollar pair strengthened for much of the week on the back of a positive news background related to a possible compromise by Brexit negotiators and an agreement between the EU and the UK. Thanks to the optimism of the media, the pair reached the highest value since July 2018 at 1.3298. However, on Friday the mood vector shifted sharply towards the negative, which led to the collapse of quotations by more than two hundred points to the level of 1.3056.
An informal EU summit in Salzburg was held at the end of last week. Few expected the parties to reach a full agreement, but at least expected progress on the status of the Irish border. The result of the meeting was close to a failure. At the summit, European leaders rejected the British prime minister's proposed plan for relations between London and the European Union, primarily in the area of future economic cooperation and the solution of the border between Northern Ireland and Ireland. French President Emmanuel Macron said he expects new proposals from London on the single European market and the Irish border by October. Macron said London's current proposals were completely unacceptable because they did not take into account the integrity of the single market and said the EU would never accept an agreement with the UK if it was detrimental to EU interests.
On Friday, British Prime Minister Theresa May said talks between London and Brussels on Brexit were deadlocked. In May's view, at the current stage of the negotiations it is unacceptable to simply reject the position of the other party without detailed explanations and counter-proposals. In addition, the Prime Minister said that under no circumstances would it accept such a decision, when Northern Ireland, if the negotiations fail, will remain in the EU single market, which will lead to the creation of a border between the two parts of the UK. After the summit, May was criticised in British newspapers for the prime minister's inability to persuade her European counterparts to accept London's offer. The failed outcome of the summit weakened May's position ahead of the Conservative Party conference at the end of September, which could lead to internal divisions and a political crisis in the UK.
The last possibility of an agreement between the UK and the EU will be an emergency EU summit dedicated to negotiations on the UK's withdrawal from the community, which will be held on November 17-18 at the initiative of the head of the European Council Donald Tusk. Negotiators have about two months to find a compromise on key issues.
Economic factors have long been sidelined amid the importance of Brexit negotiations. Retail sales rose 3.3% year-on-year in August in the UK. The figures are well above the low reached in November 2017, which may indirectly indicate a possible recovery of the British economy.
In our forecast for the coming week we expect a further decline in the quotations of the pound/dollar pair to the support levels of 1.3030, 1.3000, 1.2975, 1.2950 and 1.2920.