Daily Forex forecast analysis 12-22-2017 – 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 12-22-2017 includes information on EURUSD, USDCHF, GBPUSD, USDJPY & AUDUSD.
The euro slumped today during the Asian session as the Catalon election took the markets by surprise. The separatists have won 70 seats out of 135 available. That gives them a good majority and things are not going well for the central government in Madrid. The markets expect to see how the situation will evolve. If the majority will decide to further negotiate the bond with the central government, the tensions could ease. However, if they will go further with the independence declaration, some further weakness is expected.
The price action rebounded following the slump, due to thin liquidity. We expect it to remain below the 20 EMA and 1.1861 resistance level. Only a break above the lather could spark some further buying towards 1.1876.
On the downside, if the selling resumes we expect 1.1833 and then 1.1815, current daily low, to be under pressure. A break lower will need the broker trend line will be tested again.
- From Germany, Import Prices and Consumer Confidence figures will come out at 07:00 am GMT.
- From the US, Personal Consumption Expenditures, Personal Spending and Durable Goods Orders are due at 01:30 pm GMT.
Even though the US GDP figures came little below expectations yesterday, the price action still is biased towards the upside. The EURUSD weakness supports dollar-swiss and we could see continuation higher. At this point, the 20 EMA acts as a dynamic support area and since there had been no breach below it, we expect the leg up to extend. Looking ahead, new Catalonia highlights and economic figure from US are expected to drive the markets today.
Support should emerge around the EMA if selling resumes. A breach below the EMA will mean 0.9878 support is next. Breaking lower will mean a weakening of the bullish momentum took place and 0.9861 is next on our list.
On the upside, if buyers continue to push the price action higher, we expect 0.9903 and then the yesterday high to be under pressure. A breakout above them will open more room towards 0.9927.
Cable had no directional bias during the last few days. The end of this trading week is expected to catch the pair still undecided. Keep in mind that the Christmas holiday is near and liquidity and volatility should be reduced today. Only if important events will take place, we could see some greater market moves. From the UK, we have some economic figures due, so the price could become energetic around the release.
Currently, the price action is located around the 1h chart 20 EMA and 1.3377 resistance level. Although an upside break took place, there is no follow through. That is why we expect a new leg down towards 1.3353 to follow.
On the upside, if the bulls will manage to keep the price above the EMA, some further gains towards 1.3405 will follow. The descending trend line will be the next strong resistance above it.
- From the UK, GDP figures will be published at 09:30 am GMT.
Dollar-yen traded in a very narrow range for the last 24 hours. Overall, the US dollar banked significant gains this week and we expect to see if the bulls will manage to hold the ground until the end of the week. Since we believe the price could pick up steam during the US session, when there are some economic figures pending, you could focus on that period, if you really want to trade before holidays.
On the upside, resistance will follow around 113.44 and then around yesterday high. If buyers break on the upside, 113.68 should manage to cap the upside, since we have strong resistance there.
On the downside, the 4h chart 20 EMA and 113.09 should act as a support area. Only a strong break below it could trigger further selling towards 112.88 or 112.72, where buyers could rebound again.
The Aussie found support around the 4h chart 20 EMA yesterday and started to trend higher again. The price action broke strongly above the 0.7693 resistance level and it is now heading towards 0.7719-0.7730 key area. We expect that zone to cap the upside and the price action will not end the week above it. Since liquidity is thin, we do not think buyers have enough power to keep the price action above that zone.
Judging by the latest price action development, we expect our key resistance area to be reached shortly. Selling pressure is expected to emerge around it.
On the downside, if selling pressure will start around our key area, then a retracement lower, towards the previously broken resistance around 0.7693 should follow.