Daily Forex forecast analysis 04-05-2017 – 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 04-05-2017 include information on EURUSD, USDCHF, GBPUSD, USDJPY & AUDUSD
For the third day in a row, the price trades in a narrow range between 1.0641 and 1.0680. This could be due to profit taking after last week strong selloff and also because the market awaits the employment data that’s due to being released from US on Friday. If the figures would be strong as in the previous months that would increase the probability of a Fed rate hike in June, boosting the appetite for the US dollar.
Technically speaking, a breakout above 1.0680 would mean the price could test 1.0697. Above it, 1.0719 stands next, We expect the upside to be limited and every significant bull move should be treated as a selling opportunity.
On the downside, if the price starts to head south, the bottom of the range would come into play. A breakout below it would suggests that the selling pressure resumed and further slides towards 1.0599 could follow. Below it, 1.0522, a key support level, is next.
- From EU, a few PMI indicators are due to being released at 07:55am and 08:00am.
- From US, ADP Employment Change will be published at 00:15pm followed by Markit Services PMI at 01:45pm. Later we have the FOMC Minutes that will be released at 06:00pm.
Giving the fact that there is a negative strong correlation with EURUSD, dollar-swiss had also been ranging for the last few days between 1.0007 and 1.0029. Also, it could suggests some profit taking after last week strong bull move, but the fact is that at this point in time the price action structure suggests further upside will follow considering that the sellers did not manage to drive the price too low.
On the downside, we expect 1.0007 to act as support if the price touches it, in case a breakout below it takes place, 0.9979 and 0.9951 will follow. We expect the downside to be limited, any selling leg being treated as a buying opportunity.
On the upside, a breakout above 1.0029 would mean further gains will follow towards 1.0059 area. Above it, 1.0090 follows.
So far, the dollar seems to be favored and that could continue if the economic data continues to come at high levels.
Sterling has been slightly under pressure yesterday, the pair managing to break below 1.2476 area and reaching 1.2433. Even though a corrective structure started to develop after that, we expect the price the price to continue to move lower, as the market does not seem confident to buy cable. That could be reinforced by positive data from the US, boosting the demand for the dollar.
From a technical point of view, as long as the price stays below last week highs around 1.2560 we maintain our bearish bias. At the time of writing, the price is located around 1.2445 and a breakout below 1.2433 support, would open further room towards 1.2402. If the buyers do not manage to support the price at that point, we expect last week low to fade and the price to reach 1.2348 area.
On the upside, the bulls would need to drive the price above 1.2476 area in order to open further room towards 1.2523. We expect a stronger reaction from the sellers at this point, but if that does not happen, the buying pressure could drive the price towards 1.2581 area.
From the UK, Markit Services PMI will be published at 08:30am.
The price managed to rebound a bit yesterday, during the US session, after reaching 110.26, very close to our support located around 110.19. So far, the bullish leg had not been too convincing and we expect a new retest of yesterday low and 110.19 in the short term. Would be interesting to watch how the market would react at that point. The fundamentals will drive the order flow for the next few days as we have key data due to being released from the US.
Technically speaking, the price seems to be poised for a new retest of 110.19 area. If that will fade, we expect the selling pressure to intensify and the pair to head towards 109.69 and 108.70 area.
If, however, the bulls manage to control the price, we expect a new leg up towards 111.11 area. If the sellers don’t enter aggressively at that point, there could be room for a retest of 111.57-111.68 key resistance area.
The sellers continued to gain ground yesterday after the RBA released it’s Interest Rate decision. The appetite for AUD remained low after the central bank decided to remain on hold. We expect further dollar strength as the attention shifts to be US as we have some key employment data + FOMC Minutes due to being released this week. If the figures come better than expected, the dollar would advance further in relation to other currencies, including aussie.
Looking at the price action structure, considering that a breakout below 0.7588 we maintain our view and suggest that the price could reach 0.7541 in the short term. Yesterday, it rejected a little above it. If a breakout below that level occurs, then further slides towards 0.7497 would follow.
On the upside, the buyers would need to drive the price above 0.7588 and 0.7603 in order to open further room towards 0.7632. As long as the price stays below 0.7680, we maintain our bearish bias. Only a daily close above that level could swift our view.