Daily Forex forecast analysis 10-26-2017 – 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 10-26-2017 include information on EURUSD, USDCHF, GBPUSD, USDJPY & AUDUSD
The euro had resumed the upside quite impulsively, even though there were some good economic indicators released from the US. It seems like the market participants had already begun to speculate on today ECB meeting announcements, where a tapering of the assets purchases program could be announced. Will be interesting to see what tone Mario Draghi will have, as that could influence the euro heavily.
Technically speaking, the price action is heading towards a short-term descending trend line that managed to cap the upside two times already. If the euro will manage to breach it, further gains will follow towards 1.1856 and 1.1874.
On the downside, as long as the trend line will manage to cap the upside again, there could be room for a retracement lower and the support levels to watch will be 1.1816 and 1.1800. A strong selling wave could mean there is room for more downside.
- ECB Interest Rate Decision will be out at 11:45 am GMT, followed by Mario Draghi’s Press Conference at 00:30 pm GMT.
- From US, Continuing Jobless Claims and Initial Jobless Claims are due at 00:30 pm, followed by Pending Home Sales figures at 02:00 pm.
The Dollar managed to gain more ground against the swiss franc in the first part of the day, but as you can see from our chart, the upside had been capped by the 0.9939 resistance level, where a pin bar had formed. Following the formation of the pin bar, the sellers managed to drive the price towards the 20 EMA, where we can see consolidation taking place until the time of writing. There should be a tough of war going on there for a while.
As we also mentioned in our yesterday daily forecast, the 4h chart had acted as support for a decent amount of time and we expect it and also 0.9862 level to generate new buying orders. Below that zone, 0.9837 and our ascending trend line will follow next.
If the bullish pressure will resume around the EMA, then 0.9905 will be the first short-term resistance level to overcome, while above it, yesterday high and 0.9953 level will be next, from our point of view.
After the release of better than expected GDP figures, cable surged more than 100 pips as enthusiasm sparked again and speculation over a rake hike at the next November BOE meeting where revived. The price action is back above the EMA and so far we do not see any significant bearish influence, thus we expect the bullish momentum to continue to push the price higher, in the short-term horizon.
Currently, the price action is located around the 1.3266-1.3287 resistance area, where we have seen some selling interest emerging in the past. If the bulls will manage to break it, then 1.3341 resistance will follow, where stronger selling could prevail.
On the downside, if selling pressure will start to generate a retracement lower, 1.3227 support, where the buyers had also reacted nicely yesterday, could be reached again. Below it, we expect the EMA + 1.3183 to act as support and absorb the selling orders.
Dollar-yen had also resumed the downside, after a bearish confirmation signal had formed around the 113.89-114.08 resistance area. We mentioned yesterday that as the price continues to head higher, stronger selling interest will emerge as we get closer to 114.34 resistance. The selling had begun 15 pips lower and so far it is quite significant, given the fact that the price is trending below the 20 EMA.
Looking ahead, as long as the sellers will keep the price below the EMA, there is room for more downside gains, towards 113.25 and 112.98. We also recommend caution as choppy trading could lie ahead, given the fact that we had a strong bullish trend in play for a good while.
On the upside, 113.52 and the EMA should act as resistance in case the bulls will resume, while above, the resistance area mentioned at the beginning will be next. Keep in mind that we expect the price to continue to trade below the 114.34. A break above that level and close on a daily basis will mean the bullish trend will continue.
- From Japan, CPI figures are due at 11:30 pm GMT.
The Aussie had been consolidating higher for the last 20 hours, approximately, but the upside had been very limited compared to the other pairs like the EURUSD and GBPUSD. That communicates the market participants are not eager to buy the Australian dollar and as long as we won’t see the price breaking impulsively above the previous weekly low, located at 0.7732, we believe there could be room for more downside pressure.
Currently, the price action is located around the 0.7711 area and above that we have the 0.7732, previous weekly low and 0.7747, backed by the EMA, which could act as resistance if the price action will reach them.
On the downside, a break below current weekly low will mean sellers will manage to reach the 0.7680 support and probably 0.7639, too.