By Emily Fowler
The expert analysts at City Index have once again cast their practiced eyes over the current financial markets. Their authority forecasts are a beneficial insight into the current markets, and predict what we might need to know for an effective trading strategy in the coming months. Read on for a snapshot of their predictions for April 2015.
Ashraf Laidi, GBP/JPY, Bearish
The sharp sell-off of the British pound was largely caused by concern over references to deflationary risks made by the Bank of England Monetary Policy Committee members, as Ashraf Laidi discusses this month. With UK inflation hitting an all-time low of zero% in February 2015, the lowest comparable rate ever on record since 1989, will the market expectation that inflation will enter negative ground be correct?
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With May bringing the UK general election, it seems likely that another coalition government will be the result, and this uncertainty can only be of detriment to the pound. The possible strength of the JPY seems to stem from a stronger Japanese economy caused by factors that include more competitiveness in the export arena, but how will re-emerging instability in the field of global equities affect the JPY?
Joshua Raymond, EUR/JPY, Bearish
Moving away from the EUR/GBP because of concerns over what effect the UK general election will have, Joshua Raymond looks at the EUR/JPY. Agreeing with Ashraf Laidi when it comes to Japan’s strengthened economy, partly due to an increasing export competitiveness, he is confident in the strength of the JPY, but if an upside break of the Y131.50 barrier happens, could the outcome be different?
James Chen, EUR/USD, Bearish
James Chen correctly predicted the sharp decline of the EUR/USD pair for March, and this month he examines whether this entrenched free fall will continue into April. March brought a new 12-year low for the pair, when the target of 1.0500 was reached mid-month. The dropping of the USD in mid-March following the March 18 US FED meeting gave a high of 1.1037, but this soon retreated and we’re still seeing a weak EUR and signs of the USD ending the recent pullback. So, will we still have a bearish forecast for April?
James looks at the results of the EUR/USD trading under a major resistance area, and shares his views on the next major downside objective.
Kara Ordway, AUD/USD, Bearish
With the RBA rate decision due in April, Kara Ordway examines how much of a risk factor this is to AUD/USD this month. Although iron ore futures are still falling, will the speculative positioning and instability that the RBA decision brings pre-meeting be enough to enable a clear view on the currency pair?
Previous views on the pair were rethought following the recent reversal in the USD following the FOMC, and Kate looks at both the short-term positions, as well as longer-term predictions surrounding end of year forecasts.
Ken Odeluga, FTSE 100, Bullish
With a recent all-time high of 6930.2, Ken Odeluga predicts a continuation of momentum for the FTSE 100, with potential landings of 6837 and 6804-6809 suggesting regained support lying between 6702 and 6740. His simple studies of momentum make it clear whether or not the FTSE will be able to recoup recent losses in the month of April.
Despite the expectation of bearish views in the run up to the UK general election, is the expectation of a coalition government really still able to affect the market that much? Although the FTSE is likely to slow coming up to election date, the index may still hit at least 7065 before then.
Kelvin Wong, Nikkei 225, Bullish
Kelvin Wong looks at the market that has shown a terrible decline of 80% between a high of 39260 in January 1990 and a low of 7606 in April 2003. Since 2008, the Nikkei 225 has risen by an amazing 177%, and February 2015 saw a record high of 18865. But can this great improvement really be sustained?
Kelvin examines the possible outcomes, depending on whether the 19100 monthly pivotal support holds or not, and offers a bullish view as long as technical elements stay positive.
The monthly predictions for each of these markets in full can be found here.