Daily Forex forecast analysis 10-16-2017 – 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 10-16-2017 include information on EURUSD, USDCHF, GBPUSD, USDJPY & AUDUSD
The euro managed to spike higher on Friday, following weaker than expected US data, but as you can see from the chart, the bullish momentum had been short lived, the price action ending the day towards the lows. Most likely this is due to the fact that Catalonia officials must inform until Monday if they truly declared independence. Market participants probably wanted to not be exposed to an unexpected decision over weekend.
Looking ahead, from a technical point of view, the head and shoulders pattern is still building up and the price action could still head towards the 1.1900 area, where the shoulder line is located. We expect the sellers to step in around that area.
On the downside, so far the price action managed to find support around the 20 EMA, but if a breach below Friday low will take place, that could open more selling room towards 1.1787 and 1.1715 support levels.
- From EU, Trade Balance figures are due at 09:00 am GMT. Keep an eye also on news related to Catalonia independence.
Dollar-swiss had an opposed fluctuation to the EURUSD, the price slumping after the weak Retail Sales and inflation figures were released, but the buyers managed to recover around half of the losses until the end of Friday. Looking ahead, the price action had a pretty choppy performance, so we expect to see if it will have a clearer direction at the beginning of the week. If the Catalonia situation will be clearer, the price will most likely be influenced by EURUSD swings.
Thus far, the price action seems to be reacting around the 1h chart 20 EMA, communicating that there is selling interest around it. A break above the 0.9755 resistance however, will open more ground for the buyers towards Friday high and 0.9784.
If another selling leg will start around the EMA, 0.9733 and 0.9716 will follow as support. In case the price action won’t be supported enough around those levels, the selling pressure might intensify and more losses might follow.
Cable had been also favored by the weak inflation from the US, considering that this weak UK inflation will follow and the expectations are positive for those numbers. The price appreciated on Friday, following the release of the numbers, but we’ve seen it rejecting towards the end of the day, most likely due to technical reasons. We have a pretty strong resistance area located around 1.3290 and sellers have seen it as a new opportunity to get short.
Looking ahead, if the 1.3287 level will turn out to be a pivoting point and further selling pressure might follow, 1.3266 and a continuation towards the EMA will follow. 1.3221 and 1.3199 stand below the EMA and could generate new buying pressure.
On the upside, the price action will first need to overcome the 1.3287 and 1.3314 levels in order to confirm that the sellers want to put pressure on the Friday high and reach 1.3342 resistance area.
There is no significant data due to being released from UK.
The dollar-yen had a bad performance as well on Friday, since the US data weighted on the US dollar. The price action extended below the 4h chart 20 EMA and it seems to be heading towards a broken long-term bearish trend line. That suggests the buyers are not able to keep the price above the trend line and if the price action will break below it again, that will signal further dollar weakness will follow.
The price ended last week around the 111.80 support, without managing to recover significant ground as it was the case for the other pairs. If the selling pressure will break below Friday low, a continuation towards 111.53 and the broke trend line will follow.
If the buyers manage to rebound higher, 111.99 and the 112.22 resistance, backed by the 4h chart 20 EMA could cap the upside and potentially serve as new entry points for sellers who want to rejoin the selling leg.
The Australian Dollar had been one of the best performing currencies on Friday, and it managed to gain 80 pips against the US dollar. The price action managed to break above the 0.7875 key resistance level and ended the weak above it, which communicated that the sellers were unable to drive the order flow, even though the price action had reached an area where selling pressure could have been high.
Since the breakout occurred, the price could continue on its way up and head towards 0.7906 and 0.7938, where sellers could attempt to stop the bullish momentum and balance the order flow.
In case the selling pressure resumes and the price breaks back below the 0.7875 key level, renewed selling pressure might follow towards 0.7834 and the 4h chart 20 EMA, which managed to cap the downside last week.