This website uses cookies to provide you with full functionality and the best possible user experience. By continuing to use this website you agree to our cookies policy. Find out more. Close

Market analyst predictions for March 2015

by Ashraf Laidi

Each month, we collate expert and analyst opinion for a short to medium-term snapshot of the financial markets. Gain valuable insight and shape your trading strategy with our monthly predictions.

Analyst Market Bias 1st target 2nd target
Ashraf Laidi GBP/USD Bullish $1.5580 $1.5685

After my bullish call on GBP/USD in February, I’m sticking to my forecast for more advances for this currency pair due to a constructive combination of both technical and fundamental dynamics. Read my full article here.

Analyst Market Bias 1st target 2nd target
Joshua Raymond EUR/GBP Bearish £0.7255 £0.7180

The last eight weeks has seen the currency pair finish lower on the week seven times and it could be dangerous to trade against the definitive medium term trend. Read my full article here.

Analyst Market Bias 1st target 2nd target
James Chen EUR/USD Bearish $1.1100 $1.0800

The inverse USD-gold relation continues to be challenged. Read my full article here.

Analyst Market Bias 1st target 2nd target
Kelvin Wong US SP 500 Bearish 1980 1920

The multi-month uptrend for the S&P 500 is coming close to a key resistance at 2140/2170 and current technical elements are advocating for a potential decline. Read my full article here.

Analyst Market Bias 1st target 2nd target
Kara Ordway GBP/CAD Bullish 1.9380 1.9470

US Dollar pairs currently look crowed. EUR/USD still holds a significant number of speculative shorts and AUD/USD has plenty of bad news already priced in at this point. I like GBP/CAD higher as a disguised and less crowded USD play... Read my full article here.

Ashraf Laidi – GBP/USD, bullish

Following my bullish GBP/USD prediction for February, I stick with my forecast for advances in the pair due to a constructive combination of technical and fundamental dynamics.

Technically, having remained above the two-week upward channel, GBP/USD eyes its next objective of $1.5575—coinciding with the 100-day moving average for the first time in seven months, which could pave the way for way for its fourth rising week over the last five weeks. In addition to converging momentum positivity across the daily, weekly and monthly time frames, GBP/USD is increasingly drawn towards $1.5810 — the 38% retracement of the decline from last year’s high to the January low.

Fundamentally, aside from improving UK dynamics (neutral BoE, expanding services, manufacturing and construction PMIs, improved budget balance and relative safe haven status from Eurozone woes and Swiss negative rates) GBP/USD is boosted by Fed Chair Yellen’s reiteration for the Fed to remain patient, thereby delaying any signal for higher interest rates. USD bulls will have to wait for the March FOMC for whether the Fed will drop its patient forward guidance, which will be largely dependent on the latest inflation figures (negative) and jobs data (requiring more positive momentum to overcome low inflation).

See chart below

MP_AL_GBPUSD

Joshua Raymond - EUR/GBP, bearish

The fundamental and technical case for this forex pair is firmly aligned. The strong data turn for the UK economy, which includes services, manufacturing and jobs convinces that the Bank of England’s hawkish monetary policy path remains actively trodden. Asses this against the struggling Eurozone economy, trampled by the recent Grexit fears and a central bank (ECB) that is attempting to stimulate the region through QE – which I continue to believe the ECB left no ceiling to.

The last eight weeks has seen the currency pair finish lower on the week seven times and it could be dangerous to trade against the definitive medium term trend. The definitive break out below 0.78 was a break out many traders had been waiting for over the previous six months and whilst I do not discount the potential for short covering induced rally, the percentage play here convinces the likelihood is of more downside.

One footnote to this however is the UK budget speech on 17th March. I expect the Chancellor George Osborne to sway the UK’s economic fiscal spending towards more UK growth friendly investment and re-align the government as pro-business to distance itself from Labour’s current stance. The danger here to sterling is any dramatic escalation in UK borrowing and a big downgrade to UK growth forecasts, which could push interest rate hikes out further and weaken the pound sterling in the interim. Trading around this event could be volatile and it may be best to stay clear.

James Chen – EUR/USD, bearish

EUR/USD spent much of the month of February in a relatively tight consolidation just off the new eleven-year low of $1.1100 that was hit in late January. On a rebound from that low extreme, early February saw the currency pair hit a high of $1.1533 before retreating and spending the rest of the month essentially range trading.

In the course of February’s trading range, EUR/USD has formed a clear consolidation pattern within a steep, ten-month bearish trend. This downtrend has pushed the currency pair dramatically lower by more than 20% from its long-term high just short of $1.4000 in May of 2014 down to the noted $1.1100 low in late January.

The current consolidation has formed a rough triangle or pennant pattern near the long-term lows. Coupled with EUR/USD’s continuing downside trend pressure, this pattern hints that the currency pair could well have significantly further to fall in the near future.

With continued euro weakness and only a relatively modest respite in US dollar strength as we near the end of February, bearish pressure continues to weigh on the EUR/USD pair.

The month of March should likely see either an extension of the current consolidation pattern or a clear breakdown below the long-term lows. In the event of the former scenario, major upside resistance on any further drift higher within the consolidation stands firmly around the key $1.1650 level. In the latter setup, any sustained breakdown below the noted $1.1100 support level could see a further decline and trend continuation targeting the key 1.0800 objective to the downside.

Kelvin Wong – US SP 500, bearish

S&P 500 – Limited upside potential below 2140/2170 resistance

MP_KW_USP_Monthly MP_KW_USP_Weekly MP_KW_USP_Daily

Key elements

  • The upper and lower boundaries of the long-term ascending channel (in light blue) in place since 02 October 2011 now stands at 2140/2170 and 1920/1900 respectively (see weekly chart).
  • The pull-back support (in green) of the former long-term ascending channel in place since March 2009 is now at 1975 (see weekly chart).
  • The 1920/1900 support also corresponds closely with the 23.6% Fibonacci retracement from the October 2011 low to the current February 2015 high (see weekly chart).
  • The 2140/2170 long-term resistance also confluences with a Fibonacci cluster.
  • The long-term RSI oscillator has continued to flash a bearish divergence signal and still has “room” for further downside potential before reaching its horizontal support (see weekly chart).
  • Since early December 2014, the Index is evolving within an “Expanding Wedge” (in dotted purple) configuration with lower limit at 1980/1975 (see daily chart).
  • The 200-day Moving Average (also the 50-week Moving Average) is acting as a support at 1980 (see daily chart).
  • The intermediate term Stochastic has reached its “extreme” overbought level (see daily chart).
  • The 2335 level is the potential bullish exit target of the former 13 years of range configuration in place since Mar 2000 high (see monthly chart).

Key levels (1 to 3 months)

Pivot (key resistance): 2140/2170

Support: 1980/1975 & 1920/1900

Next resistance: 2240 & 2335

Conclusion

The multi-month uptrend for the S&P 500 is coming close to a key resistance at 2140/2170 and current technical elements are advocating for a potential decline towards 1980/1975 with a maximum limit set at 1920/1900 within a long-term bullish trend in place since March 2009.

However a clear break above 2170 may invalidate the bearish scenario to see a further upside movement towards 2240 before 2335.

Kara Ordway – GBP/CAD, bullish

While Greece dominates the headlines it will also be a busy week for US data releases. And after 3 weeks of consolidation, the US Dollar is about to resume its general bullish run. US 10yr yields have turned medium term bullish to bearish which could indicate a turning point for not only the greenback but also US equities.

So where can we take advantage of this shift?

US Dollar pairs currently look crowed. EUR/USD still holds a significant number of speculative shorts and AUD/USD has plenty of bad news already priced in at this point. I like GBP/CAD higher as a disguised and less crowded USD play. The Bank of England will eventually follow in the Federal Reserve’s footsteps and there is some clear cyclical strength in the UK economy. Recently we saw better than expected employment figures and second estimate GDP confirmed that Q4 growth was 0.5%.

The Canadian Dollar has come under significant pressure from the lower oil price. As the 6th largest exporter of crude oil, Canada’s economy has been hit by these deflationary pressures. The Bank of Canada highlighted these concerns when they cut rates last month. Moreover I think the CAD trade eventually evolves from an oil trade to a domestic trade, as housing softens and the economy struggles with a stream of poor data (including the retail sales figures that were released last week).

GBP/CAD currently sits near June 2009 highs of 1.9311, so this should act as a reasonably good resistance level. However a close above here may lead the way for 1.9380 and a push towards 1.9470. If this level is broken we could head towards 1.9700.

From time to time, GAIN Capital UK Limited’s (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

Don't have an account?

Open a trading account with us and start trading forex.

Create an account

Got some trading ideas?

Make the most of any trading opportunity

Log in and Trade

Contact us: