Daily Forex forecast analysis 12-05-2017 – we analyzed the upcoming currency pairs and events of the day that could impact the Forex market. These analyses are published here each day.
Forex Forecast Analysis 12-05-2017 includes information on EURUSD, USDCHF, GBPUSD, USDJPY & AUDUSD.
The pair gapped lower yesterday at the open, as the investors tried to price in the tax cut vote that took place over the weekend in the US. The price action continued on the downside but found support around an ascending trend line that goes back to the beginning of November. After a brief break below it, the price action resumed the upside and it is currently located back above it again.
We expect to see if the trend line will hold today. Some selling interest could be seen around the EMA, but if the bulls resume and break above current daily high, 1.1910 and 1.1943, could follow as resistance on the upside.
On the downside, a break below the trend will expose yesterday low and 1.1825, where bulls emerged last week as well. 1.1774 is our next support if a strong bearish break will take place then.
- Markit Services PMI and Markit PMI Composite for Germany are due at 08:55 am and for the EU at 09:00 am. Also, Retail Sales figures for the EU are due at 10:00 am.
- The same PMI indicators will be published in the US as well, at 02:45 pm GMT, followed by ISM Non-Manufacturing PMI at 03:00 pm.
Following the Friday dip, dollar-swiss rebounded sharply on the upside yesterday and managed to cover the entire bearish candle. We’ve mentioned in our last forecast that it could be an exhausted type move and the price action development for the last 24 hours confirms that. Looking ahead, as long as the price will stay above the 4h chart 20 EMA we expect the bulls to continue to head upwards.
They will first face a tougher resistance around the 0.9874 level. A break on the upside will open more upside ground towards 0.9920 and 0.9945 levels, where stronger selling pressure could emerge.
On the downside, the EMA, followed by 0.9817 are expected to provide support in case the sellers resume again. We’ll see if the optimism generated by the US tax cuts vote will continue or will fade quickly.
Cable had a choppy performance yesterday, after a gap lower at the open. The price had been reacting to both US tax cuts and the meeting between EU and UK officials. The Brexit negotiations are entering a delicate phase and even though we’ve seen sterling rallying due to optimism, now it seems like a retracement lower will take place since there is still much work to be done and the time is running out.
At the time of writing the price is headed downwards, having reached the 1.3447 support level. A continuation below that point will open more ground towards yesterday low at 1.3413. A breach of that level will expose 1.3383 as well.
On the upside, the sellers managed to cap the upside around the 1h chart 20 EMA and 1.3479 resistance level. We expect that area to generate selling pressure if it will be reached again. An upside break will mean bulls will put pressure on 1.3511.
- From the UK, Markit Services PMI will be published at 09:30 am.
Dollar-yen also gapped higher on the open, supported by optimism that followed to vote on the US tax cuts. The price managed to reach the broken trend line, but as we mentioned in our yesterday forecast, selling pressure emerged around it. So far, the price managed to find support around the 20 EMA during the Asian session and it is currently heading towards the trend line again.
On the way up, before reaching the trend line, we expect short-term resistance around 112.71 and 112.95, A break above the trend line will mean 113.29 resistance will follow, but breaking above the yesterday high will be a strong bullish sign.
On the downside, is sellers resume, we expect the EMA and 112.38 generate some bullish pressure. A strong break below that area will mean sellers could head towards 112.15 or 111.85.
The Aussie gapped lower at the opening of the week but managed to find support around the trend and surged above last week high today during the Asian session, followed the RBA meeting. It seems like the market took as positive for the Australian dollar the latest comments from the central bank and also, given the fact a break above last week high took place that is another strong sign the bulls are now in control.
The price is currently consolidating lower and we expect support to follow around the 0.7638 level. A breach below it will expose 0.7620. As long as the bulls manage to hold the price above the trend line, the bias is on the upside.
A continuation higher could head into 0.7663 or 0.7686 resistance level. Following the strong surge from the Asian session, some further consolidation could be the likely scenario in the short-term.