Q2 2014: The Big Banks’ Forex Price Forecasts

We’re a few weeks into the second quarter of 2014 and my, does time fly fast when you’re catching pips! Here’s what the big financial institutions are predicting for forex price action in Q2:

Q2 2014 Forex Price Forecasts

Just as in Q1, these big dawgs are still pretty bullish on the U.S. dollar! And who could blame them? The Fed is pushing through with its taper schedule of reducing asset purchases by $10 billion monthly while Yellen hinted that a rate hike might take place around six months after easing ends. The latest FOMC minutes may have revealed that not all policymakers agree with her rate forecast, but the Fed is still one of the major central banks moving closer to tightening!

Another observation from these estimates is that financial institutions seem to be bearish on the Japanese yen. After all, the Japanese government recently implemented its sales tax hike, which is expected to weigh on spending and overall growth. Although the BOJ has mentioned that the economy is performing well so far, they did leave the door open for further easing should a slowdown take place.

Before I let y’all go back to your pip-catching though, a quick disclaimer: these forecasts are merely educated guesses and that nothing is ever set in stone in the forex market. Even the most well-funded, smartest researchers in the world cannot accurately predict where price will be three months from now. Just take a look at this review of Q1 2014 forex estimates!

What this implies is that you should not base your trades solely on these forecasts. Instead, use the forecasts as a guide to understanding the big market players‘ sentiment to supplement to your own analysis. By the end of the quarter, I’ll run a quick review of these predictions so y’all better stay tuned!