Daily Forex forecast analysis 12-07-2017 – 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 12-07-2017 includes information on EURUSD, USDCHF, GBPUSD, USDJPY & AUDUSD.
The price action is still located below the 20 EMA and trend line and also, the corrective move that formed during the Asian session is very weak. The US dollar is still the favored currency, but from a political point of view, things could get worse from tomorrow, as a government shutdown will occur, if there won’t be a deal to extend funding for the short-term. It is not the first time a shutdown takes place and the market did not react violently a few years ago.
Technically speaking, the price broke below 1.1825 and 1.1808 support levels and thus far the bulls did not manage to generate a counter move strong enough. A continuation on the downside will open more room towards 1.1751 and 1.1721.
On the upside, the 1.1825 and 1.1808 level should act as resistance, now that a break below them took place. The EMA is also an important area to watch, as we’ve seen selling emerging there on Tuesday.
- GDP figures for the EU will be published at 10:00 am GMT
- From the US, Initial Jobless Claims and Continuing Jobless Claims are due at 01:30 pm.
Dollar-swiss continued to advance higher yesterday as the tax cuts vote continues to be priced in. The market participants now expect a faster monetary policy normalization and for 2018 4 rate hikes are being expected. Economic activity and inflation will most likely pick up starting from next year, which could favor the US dollar. Technically speaking, the price action continues to float above the 4h chart 20 EMA, confirming the interest from the bull side.
A breakout and retest of 0.9874-0.9886 resistance area took place and since the selling pressure is very weak we expect a continuation towards 0.9920 or even higher towards 0.9944.
On the downside, the above-mentioned area should act as support and the 20 EMA is also located below it. The sellers have limited room thus far and we expect the bulls to dominate the order flow.
- From Switzerland, Unemployment Rate will come out at 06:45 am GMT.
Very similar to the EURUSD, cable had been trending lower and made a new weekly low yesterday, before starting a consolidation that is still currently in play. The bullish candles are smaller, which confirms the bulls are being squeezed by the sellers and we should see further downside pressure. There is no sign of buying thus far, so going with the flow is the best decision.
On the downside, we expect support around 1.3359 level, where the price action started to consolidate yesterday. The price is not far away from that level at the time of writing, so a breakout lower seems very likely and below we will look at 1.3336 and 1.3289 for support from the buy side.
Sellers could watch at 1.3386 and 1.3413 to get short again if the price action manages to rebound. The 20 EMA should also generate some selling pressure and we do not expect a strong break above it.
- From the UK, Halifax House Prices are due at 08:30 am GMT.
It looks like the dollar-yen found support around the 112.15 area and since our last daily forecast, the upside had been favored. The price action is a few pips below the 4h chart 20 EMA at the time of writing, but given the fact we have 6 consecutive green candles we assume that the bulls are eager to push the price on the upside further. We expect to see if the area around the EMA will generate selling pressure.
If that will happen, we expect the 112.15 support to be under pressure again and a break below yesterday low will open more room towards 111.88, where support could emerge again.
On the upside, a continuation above the EMA will mean 112.71 and 112.95 short-term resistance levels could be reached, followed by the broker ascending trend line, where selling pressure had emerged impulsively at the start of the week.
The Aussie continues to be under pressure and since it managed to break below the 0.7555 support, we assume the 0.7520 area, where some weekly lows are located could soon be under pressure. The downside leg is very impulsive, with just 3 small green candles that could barely cover a few pips. There is no bullish sing at this point and the market is not expected to rebound anytime soon.
Sellers will most likely put pressure on the 0.7535 support level and the weekly lows below it. A breakout lower will mean a continuation towards 0.7521-0.7514 will follow then and support could also emerge there.
On the upside, the broker 0.7555 level is expected to act as resistance, now that a break below it took place. If the bulls manage to push the price above a continuation towards 0.757 and the 20 EMA should follow.