Forecast Analysis 12-21-2017

Daily Forex forecast analysis 12-21-2017 – 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 12-21-2017 includes information on EURUSD, USDCHF, GBPUSD, USDJPY & AUDUSD.

EURUSD Forecast

The pair continued to break higher and managed to break above last week high. We can see a bullish spike on the 4h chart, followed by consolidation lower during the Asian session. Looking ahead, today we have an election in Catalonia and the outcome can be extremely important. As the latest pool show, neither side will manage to win a majority, so political instability should continue.

From a technical point of view, the price should find support around the 1.1661 level. We have the last week high there and since it was breached, it should be an entry point for buyers. If it won’t be, further downside towards 1.1847 and 1.1833 could follow.

On the upside, short-term resistance is expected around 1.1882. If buyers resume and break it, we expect the yesterday high to be under pressure.

Economic calendar

  • From the US, the GDP figures which are due at 01:30 pm represent the key event of the day. At the same time, Continuing Jobless Claims and Initial Jobless Claims will be published as well.


USDCHF Forecast

The US dollar slumped against the Swiss franc as well, even though the US tax cuts plan are due to being signed by the US President this week. It seems like the event had already been priced in and a massive profit-taking has been in play. Also, there are worries of a temporary US government shutdown, which could take place starting from this Friday. From a technical point of view, the price action made a new weekly low, but buyers resumed quickly.

As you can see from our chart, the price action briefly broke below 0.9845 and made a new weekly low. The buyers resumed and drove the price above the level. If they will continue to push the price up, resistance is expected around 0.9878 or 0.9889.

On the downside, if selling pressure resumes, support is expected again around 0.9845. A break below will put pressure on yesterday low.

Economic calendar

  • From Switzerland, Imports, Exports, and Trade Balance are due to being released at 07:00 am.


GBPUSD Forecast

Cable found sellers above the 4h chart 20 EMA and currently the price action is again located below the EMA. Since a breach below took place, we assume the sellers are in control of the order flow short-term. We expect to see if the move will continue lower. If buyers will resume the upside, the momentum should be capped by our descending trend line, located above the yesterday high.

Currently, the price action sits a few pips above the 1.3353 support. A break below will open more room towards Tuesday low, located at 1.3329. A continuation on the downside will mean 1.3301 support will follow.

On the upside, buyers will need to break back above the 20 EMA in order to be able to put pressure on yesterday high. Only a break above that point will mean the trend line will be tested again.

Economic calendar

  • From the UK, Public Sector Net Borrowing will be released at 09:30 am GMT.


USDJPY Forecast

Dollar-yen continued to ascend higher and seems to be the only one favored by the US tax cuts vote. The prospects of higher inflation in the US due to forecasted economic expansion, combined with lower inflation in Japan are favoring the US dollar. Most likely, the Fed will be forced to raise rates at a faster pace, if the economy and inflation will exceed expectations. There are no significant signs of selling interest thus far.

The price action broke higher yesterday and found resistance around 113.44. The downside had been short-lived since the price is currently heading towards the level. A breakout higher seems imminent at this point. If it will materialize, then a continuation towards 113.68 and possibly to 113.90 could follow.

On the downside, if selling pressure resumes, we expect the price action to head towards 113.09 swing point. Below it we have the 20 EMA closely, which should also be a new entry point for buyers.


AUDUSD Forecast

Following last week impressive bull run, it seems like the Aussie took a break this week. The price action is consolidating little above the 4h chart 20 EMA at this point. Judging by the latest developments, we can say that there is little buying interest around the EMA since the bounces are weaker. If a break below the EMA will take place, we expect the price action to head towards the current weekly low.

Until then, the EMA and 0.7653 support level will stand in the way of the sellers. A breach below them will then expose the 0.7639 key level.

On the upside, buyers will need to break above yesterday high in order to confirm they have resumed strongly. We expect stronger resistance around the 0.7687 level.


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