Daily Forex forecast analysis 04-04-2017 – we analyzed the upcoming currency pairs and events of the day that could impact the Forex market, These analysis are published here each day.
Forex Forecast Analysis 04-04-2017 include information on EURUSD, USDCHF, GBPUSD, USDJPY & AUDUSD
After testing Friday lows, the price rebounded for a few hours, but still there was not a sign that the bulls stepped in aggressively. So far it looks like a very mild consolidation phase and it seems like the bearish trend will continue lower. The price action is very biased to the sell side, looking at the 4h chart, we can’t spot a single strong green candle in the entire bearish leg down.
Looking at the technical context, the buyers would need to overcome 1.0671 in order to be able to drive the price towards 1.0694 area. Above it 1.0719 follows but we expect the sellers to reenter the market on any leg up, considering that we had such an impulsive move in the last four days.
Below, 1.0639 would be the first area the sellers would need to break in order to open further room towards 1.0599 and 1.0522, key support area. As long as no significant bullish leg up does not form, we keep our bearish bias.
- From US, Trade Balance is due at 00:30pm GMT. Later, Factory Orders will be published at 02:00pm.
The market keeps consolidating above 1.0002 area that we’ve mentioned yesterday and as long that continues to happen the bullish trend will remain intact. Also, looking at the price structure we can see the market continuing to form higher lows and higher highs, another indication that the bulls are in control of the market right now and that they will very likely continue to push the price higher.
If that really happens, our first target is located around 1.0059. If the buyers manage to overcome it, then 1.0090 follows. There is the spot where the selloff following Fed Rate Statement started and we could see some stronger sellers emerging at that point. If not, the trend would continue towards 1.0125.
On the downside, 1.0002 is the first important support area that sellers would need to break in order to drive the price lower towards 0.9959-0.9943 area. There, we expect the buyers to reenter the market, considering that it is an important swing point.
There are no important headlines due to being published from Switzerland today.
The sellers managed to drive the market lower yesterday, breaking our ascending short term trend line. Considering that the price keeps trading below the trend line and so far no significant buying leg up managed to form, it is possible that the selloff will continue to extend further in the short term. The calendar is very thin today, but any new information regarding Brexit negotiations could impact the sterling.
The price managed to enter a consolidation phase after testing 1.2476 area. If the selloff starts again and that level is breached, further slides will follow towards 1.2433 area. Below it, 1.2402 stands next as our support area.
On the upside, if the bulls manage to extend higher the consolidation move that is in play, the broken trend line could be tested again. Also 1.2523 resistance area is located near it. A breakout above Friday highs would be needed to open further room towards 1.2581 area.
- From UK, PMI Construction will be published at 08:30am GMT.
As we mentioned in our yesterday market commentary, a false break setup formed around 111.57-111.68 area. The price closed below it last Friday and after testing it yesterday, the selling pressure resumed, the market losing around 100 pips until the time of writing. So far, it looks like the downside trend could move lower, as long as the price stays below our area.
Considering that the market broke below 110.72 swing point, we expect the selling leg to extend towards 110.19 area, where the price found support last week. We expect a decent reaction from the buyers at that point, but if a breakout below would occur, further slides could follow towards 108.57 in the medium term.
The upside could be capped by either 110.72 or 111.11. If both fail to do that, a new retest of 111.57-111.68 resistance area would follow.
The selling continued and the market tested twice 0.7591 area that we’ve mentioned yesterday. So far, the upside had been limited and as long that is still happening, we believe the sellers are in control and a potential breakout below the level would take place. We have the RBA Rate decision shortly and that would very likely spark volatility in the short term.
If the price breaks below 0.9591, as we anticipate, that would most likely open further ground towards 0.7541 area. Considering that it is a significant swing point, we expect some reaction from the buyers, but if a breakout below it takes place then 0.7497 would follow.
On the upside, we expect the sellers to step in again if the price reaches 0.7634 resistance area. A breakout above it, would very likely expose 0.7662.
RBA Interest Rate and Rate Statement are due at 04:30am GMT.