Daily Forex forecast analysis 10-27-2017 – 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 10-27-2017 include information on EURUSD, USDCHF, GBPUSD, USDJPY & AUDUSD
The euro slumped yesterday, after the ECB president Mario Draghi announced a reduction of the QE program, but he also mentioned that the program might be extended beyond September 2018, which triggered the selloff. We talked a few weeks ago of a head and shoulders pattern and yesterday the neckline had been breached, which could point towards a continuation lower in the following days, given the political situation in Catalonia as well.
Technically speaking, after the strong selling move that formed since yesterday, it is hard to say there will be a strong counter-trend move. Most likely, sellers will resume if the price will manage to reach the 1.1661 or 1.1673 level and even a breach above takes place, it should be limited.
On the downside, our next support area is located around 1.1610, followed by 1.1580. Below it, more room will be available for sellers towards the 1.1500 area.
- From US, a few important GDP figures are due to being released at 00:30 pm GMT.
Considering that the is a negative correlation with the EURUSD, dollar-swiss continued to advance higher at a fast pace, breaking above 0.9939, which was a previous weekly high and being located 50 pips above it at the time of writing. Also, as we mentioned yesterday, the EMA served as a good support area as we can see buying started around it, a few hours before the ECB press conference.
The price action is heading towards 0.9997 and 1.0018, where it could encounter some mild resistance, but the current price action points towards a further continuation and 1.0054 might also be reached soon.
On the other hand, a retracement lower, might bring up new buyers around the 0.9939 area and below it we have the 20 EMA, backed by the 0.9905 support level, which could also serve as a new entry point for buyers.
Cable had also been under pressure yesterday and all the gains that followed the release of the UK GDP where erased until the time of writing. Rumors that the Fed chairman Janet Yellen might be replaced next year had boosted the US dollar as the other candidates seem to be biased towards a more aggressive rate hike process. We expect the US GDP as well today, since it could influence the price strongly.
Thus far, the price action is located around the 1.3121-1.3102 support area, where we have seen a few rebound in the recent past. If the bulls will manage to cap the downside, a new leg up might emerge, if it will also be helped by weak GDP data from US.
If that will not take place and the figures will exceed expectations, then a breach below the support zone will happen and a continuation towards 1.3050 might take place, depending on the GDP data.
There are no important economic figures due from UK today.
The dollar-yen continues to float higher with each higher high getting closer to our key resistance area located around 114.34. Currently, the price is located 20 pips below it, so it should be reached in a short period of time. It will be interesting to see how the price will react there, since we had some strong impulsive selling moves emerging there in the past. US GDP should be a strong enough catalyzer for the future direction of price.
If the selling pressure will emerge again sharply around the 114.34 area, then we expect the 20 EMA to be reached again. If the US data will be poor, then further downside pressure could follow and we expect a deeper retracement.
On the other hand, good economic data will continue to support the dollar and a breakout higher + a continuation towards 115.00 area, at least, seems very likely.
The Aussie continued to weaken at a strong pace yesterday, since the US dollar managed to gain
ground against all majors. This is the sixth straight day of selling, which communicates the fact that there is a strong appetite for selling and also, that buyers are still unable to generate at least a short-term consolidation move. Taking that into consideration, the possibility of a strong market turn remains limited and we expect each significant bull move to be treated as a new opportunity to get short by the sellers.
From a technical point of view, the price is located around the 0.7639 support right now and if the selling pressure will be strong enough, then a continuation lower towards 0.7609 and 0.7572 seems very likely.
On the other hand, a retracement higher, supported by weak US data, could send the price towards 0.7676 or 0.7689 resistance, where selling might resume.