Daily Forex forecast analysis 04-06-2017 – 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 04-06-2017 include information on EURUSD, USDCHF, GBPUSD, USDJPY & AUDUSD
The price continues to trade inside the range structure between 1.0680 and 1.0641. We expect the range to break to the upside in the short term as a reversal might be signals by a 1h bullish engulfing bar. Looking at our chart, you can see the strong bull candle that formed after the FOMC Minutes where released yesterday. We expect the dollar to weaken further as uncertainty rules ahead of Trump – Xi-Jinping Meeting. Also, the fact that the Fed kept a caution tone regarding raising interest rates faster, could also increase the appetite for the euro.
Technically speaking, the price is located around the top of the range, having tested it twice in the last eight hours. The rejection off it was smaller and we suspect the price would advance higher today. If that happens, 1.0697 and 1.0719 follow as our next resistance areas.
On the downside, if the sellers manage to defend 1.0680 area, the selling pressure might resume, sending the price lower towards 1.0641. A breakout below it would further room towards 1.0599.
- The calendar for today is very thin, we have Factory Orders from Germany due to being released at 06:00am GMT.
- Later, from the US, Initial Jobless Claims will come out at 00:30pm.
After reaching 1.0075, resistance area, the price rebounded sharply, backed by a cautious tone from the FOMC Minutes. The price action structure suggests that a reversal of trend might be taking place, as the large bearish engulfing bar on the 1h chart supports that view. If the buyers do not manage to drive the price higher we might see an extension lower today.
Our first support area is located around 1.0029, the top of the previously broken range structure. The price already tested it once but considering the fact that the rejection had been very mild around, we expect the selling pressure to resume and the price to move below the area, targeting 1.0007, the low of that range, Below, 0.9979 and 0.9951 follow.
The buyers would need to keep the price above 1.0029 in order to maintain a bullish tone and the upside trend intact. If they manage to do that, we might see the price heading towards 1.0057 and 1.0075, very close to yesterday high.
- From Switzerland, two Consumer Price Index figures are due to being released at 07:15am.
Cable jumped higher yesterday, after positive data from the UK was released. The price rebounded sharply after testing several times 1.2433 area, reached 1.2489 resistance and then entered in a consolidation phase that is still in play at the time of writing. So far is difficult to speculate the medium term direction of price as the calendar is packed will a lot of data tomorrow.
However, we expect the price to extend a little higher, above 1.2489 towards 1.2523 area. Around that point, we expect the sellers to react strongly, but if that does not happen, further gains towards 1.2548 will follow.
On the downside, the sellers would need to overcome 1.2465 area in order to open further room towards 1.2432, where the price rebounded yesterday. A breakout below would expose 1.2402 area.
There are no important headlines due to being released from UK today.
The dollar lost ground yesterday, in late US session after the FOMC Minutes were released, erasing all the daily gains and testing Tuesday low. For the last few hours the pair entered in a consolidation phase but looking at this point, more downside would follow in the short term, as long as the buyers do not manage to drive the price higher impulsively.
The sellers would need to overcome 110.27, Tuesday low, in order to open further ground towards 110.10, last week low. A breakout below that area, would mean the sellers regained control of the market and further selloff would follow towards 109.69 and 108.70.
As long as the price stays above 110.10, we expect further consolidation of price to the upside, 110.72, being our first resistance level. If the buyers manage to drive the price above it, 111.11 will follow next.
After consolidating almost all the day, yesterday, the price resumed the downside today, during the Asian session, reaching our support around 0.7541. Looking at the price action structure, the price tested 0.7581 key level then resumed the downside, so a very nice breakout pullback setup. Considering that lower lows and lower highs are generated as the price unfolds, we expect the downside trend to extend further in the short and medium term.
For that to happen, a clear break below 0.7541 area would be the first condition. We believe further slides would follow towards 0.7497 if the sellers manage to hold the price below our support. We expect a decent reaction from the buyers around 0.7497, but if that level is breached, the bearish trend will extend further towards 0.7448.
We expect the upside to be limited, a consolidation structure might occur if the buyers manage to hold the price above 0.7541 area. Above it, 0.7558, yesterday swing low, followed by 0.7586, where the selloff started, could be potential selling areas.