Daily Forex forecast analysis 12-18-2017 – 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 12-18-2017 includes information on EURUSD, USDCHF, GBPUSD, USDJPY & AUDUSD.
The euro had been under pressure on Friday and ended last week lower as the optimism around the US tax cuts vote had been looming. The highlights over the weekend suggest that plan has high changes to get an approval. That is why we expect the US dollar to perform well in the next few days. Only some bad rumors about the vote could bring some dollar bears. Until that does not happen, the American currency will be favored.
On late Friday, the price action managed to break below 1.1765 support level and closed around the daily high. That communicates there was no profit taking. Since the sellers did not rush to get out, the expectations are for a continuation lower. That is why we expect the price action to advance towards 1.1735 or 1.1718 support levels.
On the upside, buyers should have limited impact. The previous support around 1.1765 is now expected to act as resistance. The 20 EMA and 1.1792 located above should be watched very closely by the sellers.
- From the EU, CPI figures are due at 10:00 am GMT.
- From the US, NAHB Housing Market Index will be published at 03:00 pm GMT.
The US dollar rebounded sharply against the swiss franc as well on Friday. The price action spiked higher towards the end of the week only to resume the downside for the last few hours. Since a strong break above the 20 EMA took place, we expect buyers to continue to dominate the order flow short-term. Only a strong break back below the EMA should signal sellers had gained momentum.
Last week the price action closed above the 20 EMA. Because of that, we expect the bulls to try to break again above the 0.9921 or 0.9932 resistance levels. If the buyers will manage to drive the price above last week high, then the psychological level around 1.0000 is next.
On the downside, we expect the 0.9889 support level and the 20 EMA to act together as a barrier in front of the sellers. In case a break lower takes place, 0.9872 or even 0.9855 could follow as support.
Cable ended under pressure last week. Due to the Friday slump, all weekly gains had been erased and the pair ended on the negative. The price action structure points towards a weakening of the bullish trend. Although we are in a downside consolidation structure, the sellers are gaining stronger momentum with each leg. Each selling wave had been stronger than the previous one, which confirms our assumption.
Since the price action ended last week slightly above the 1.3300 weekly low, we believe there is room for some short-term consolidation higher. We expect 1.3353 or 1.3377 to act as resistance on the upside.
On the downside, sellers will need to break below 1.33 level in order to drive the price action towards 1.3277. The US dollar could be favored further due to rising optimism generated by the tax cuts plan.
- From the UK, CBI Industrial Trends Survey will be published at 11:00 am GMT.
Dollar-yen found support around the 112.06 level. After testing it twice, the price action rebounded stronger on the upside, reaching the 20 EMA. Looking at the 4h chart we can see a strong bull candle, with very short wicks. That communicates there was a strong commitment from the bulls to push the price higher. Some profit taking can be seen towards the end of the week, but we expect a new leg up to follow.
Thus far, the 112.68 and the 20 EMA acted as a resistance area. If buyers will manage to break it we expect further gains towards 112.96 and 113.13 resistance.
On the downside, sellers should have limited impact on the price action. Since the bulls resumed strongly, the appetite for selling should be weak. 112.45 support, should cap the downside if there are some sellers eager to drive the market.
Similar to the other currencies, the Aussie had also been under pressure on Friday, following a week of significant gains. The price action is still located above the 20 EMA and more importantly above the trend line. However, the last wave of selling looks impulsive enough to suggest a follow-through is next. We expect further price weakness during Monday as will be interesting to watch if the trend line will hold.
Until the price reaches the trend line, the 20 EMA and 0.7619 should act as support levels. A break below the trend line will communicate the selling pressure resumed stronger than anticipated.
On the upside, 0.7654, a previous weekly high should act as resistance. A breach above it will open more room towards last week high.