Daily Forex forecast analysis 04-17-2017 – 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 04-17-2017 include information on EURUSD, USDCHF, GBPUSD, USDJPY & AUDUSD
Even though the price managed to bounce several times off the ascending trend line, it closed very close to it, erasing almost all the gains until Friday. The price action structure suggests that a breakout below the trend line could take place in the near future as uncertainty rises over the French Presidential Election that is due on April 23rd. Investors should adopt a cautious approach ahead of the event, as the last provided too much surprises(Brexit vote and US election).
Technically speaking a breakout below the trend line would open further room towards 1.0599. If it won’t manage to provide enough support, 1.0579 and 1.0569 could follow then.
On the upside, if the trend line continues to hold, we expect a rebound towards 1.0629. Buyers would need to overcome that area in order to be able to drive the price towards 1.0666 again.
As a whole, we have a slightly bearish approach and we believe the downside is favored at this point. Considering that it is the Easter Monday, we expect low volatility throughout the day.
Also, there are no important economic indicators due to being released today.
The market went very sideways on Friday, having no directional bias, but on a weekly basis, it ended slightly lower, the descending trend line managing to cap the upside. However, the rejections off the line were not as impulsive as we expected and each bearish impulsive move was followed by a bullish one, the price ending the week not too far from the trend line. We take that as a confirmation that the selling power is not too strong and the bulls manage to maintain the price high.
Considering that, we expect a breakout above the trend line to take place in the near future as the dollar seems more favored due to political uncertainty in Syria and North Korea.
To draw our technical picture, the if the price continues to climb, it should encounter resistance around 1.0064 where the descending trend line is also located. If the sellers do not manage to cap the upside, we believe there is room for further gains towards 1.0107 area.
If the sellers manage to keep the price below the trend line, the price could head towards 1.0026 area, while a breakout below it would open further room towards 1.0008.
Even though a breakout above the triangle pattern formation took place last Wednesday, the price development that followed does not suggests that a stronger bull move could follow next. As you can see from our chart, the price retreated towards the broken line and after touching it the buyers were not able to drive it too much higher. Taking that into consideration + the fact that the US dollar is more favored in the short term + the CFTC report that showed the sterling shorts remained around all time high, with very little short covering in play, we believe the price could reenter the triangle formation and head towards the bottom line of it.
The trend line is located around 1.2605 and a breakout below it could open further room towards 1.2481 support area. If the sellers manage to hold the price inside the triangle structure, more slides could follow towards 1.2448 and 1.2418.
On the upside, if the top line provides enough buying power, the price could rebound again, heading towards 1.2549 and 1.2574.
There are no important headlines coming due from UK today.
The 111.55 level proved again it is a key resistance point as it generated a strong bearish impulsive move last week. Looking at the daily chart, four out of the last five candles closed red confirming that the sellers were in control of the market. So far, the buyers were very mild, every shallow pullback being treated as a selling opportunity by the market participants. If the political uncertainty continues to increase and the conflict between the US and North Korea intensifies, we believe the yen would continue to be attractive for investors, that driving the dollar-yen lower.
Zooming to the 4h chart, the price closed little below 108.60 support area. If it manages to rebound, 108.72 follows very close to it as resistance. A breakout above it, could signal that further gains could follow towards 109.33, where the price started to head down on Thursday. Above it, 110.08 stands next and we expect the sellers to react strongly around it.
On the downside, if the selling pressure continues below 108.60, we expect an extension towards 107.61 area to take place in the following days.
At the beginning of last week we mentioned that a leg up above 0.7491 could form as the price could not manage to close below that level on a weekly basis. As you can see from our chart that actually happened, boosted by President Trump comments regarding how a strong dollar could affect the economic development of the country + better than expected employment data that was released on Thursday. However, even though the move had been very impulsive, we keep a neutral stance as the risks are on both sides.
On the downside, if the price heads lower, we expect it to encounter buyers around 0.7544 swing point. If that fails, more slides could follow towards 0.7514 and 0.7491 area.
On the upside, the buyers should overcome 0.7586 and 0.7603 levels in order to be able to drive the price higher towards 0.7637 and 0.7662.