Daily Forex forecast analysis 10-31-2017 – 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 10-31-2017 include information on EURUSD, USDCHF, GBPUSD, USDJPY & AUDUSD
The euro had been trading upward yesterday, despite the political situation in Catalonia, amid better than expected German and EU economic indicators. For the last few hours we’ve seen renewed selling pressure that started very close to the 1.1660 resistance level. Looking ahead, we expect the upside to be limited, but keep in mind that 1.1660 area should play a major key in determining the future direction of price.
As long as the price action will continue to head lower, we expect it to find support around last week low and 1.1586 level. A strong break below will confirm further selling might follow towards the 1.1486 support.
On the upside, we expect the 1.1660-1.1669 resistance area to play a major key and act as a barrier in front of the buyers. The upside should be limited above it, where we have the 1.1694 level as well.
- From EU, GDP figures, unemployment rate and CPI figures are due at 10:00 am GMT.
- From US, S&P/Case-Shiller Home Price Index and Chicago Purchasing Managers’ Index will come out at 01:00 pm and 01:45 pm, respectively.
The dollar had retreated lower against the swiss franc yesterday, but we see a decent rebound starting around the 0.9939 key level. However, the price action had been located below or around the 20 EMA, which shows that the bullish potential had been weak since the start of the week. If the selling pressure will resume around the EMA, then further downside will be seen later today. On the other hand, above the EMA the bulls are clearly favored.
Sellers should watch the 20 EMA and 0.9965 level, as it could bring new sellers into the market, while a break above that area should open more ground towards the 0.9987 and 1.0018, where we have seen decent selling interest in the last few days.
On the downside, 0.9939 key level, where the selling had been capped thus far, should act again as support, if reached, while a break below yesterday low could open more room for the sellers towards 0.9905.
Cable had been trading up since the start of the week, confirming that the market has high expectation with regards to this week BOE meeting, where most of the analysts expect a rate hike. Current inflation development and GDP performance support such a move, but the question remains if the BOE will be able to bring new rate increases in the next year. The meeting will have a strong impact on price, as it could bring new information.
In terms of price action structure, we now have the price located above the 20 EMA and one thing to notice is that most of the candles from the bull move are green, only one being red. That communicates that the appetite for buying had been high and a continuation towards the 1.3225 and 1.3278 might be seen.
On the other hand, in case we see a new breakout below the 20 EMA, that could confirm the sellers regained control over the order flow, and 1.3155 followed by 1.3121 support, could be reached again.
There are no important economic indicators due from UK today.
The US dollar had performed poorly against the yen since the week started and after the test of 114.34 key resistance area, we are now down by more than 100 pips. We can see that the interest to sell had been strong, since most of the candles closed red, only one tiny little green candle forming on the leg down. Looking ahead, there should be more downside pressure following, as long as the bulls won’t manage to have a clear response.
The price action managed to break below the 113.25 key support and thus far it has remained below it. If the bulls won’t manage to push the price above it, then further bearish gains could follow towards the 112.89 or even 112.59 support.
On the upside, 113.25 should act as resistance, but if the bulls will manage to push the price above it, then 113.48 and 113.72 might be next. Selling interest could resume around those levels.
The Aussie had continued to move up and reached the 20 EMA + 0.7695 resistance, an area that we’ve also mentioned in our yesterday daily forecast. So far, the sellers managed to cap the upside and we can see a small bearish pin bar that formed around the 20 EMA. That could communicate the sellers might want to start a new leg down. Or, if the bulls will manage to build up again, a break above yesterday high is not excluded.
If selling pressure will emerge again around the EMA and 0.7695, we expect the price action to head towards the 0.7639 and 0.7609, where bulls could try to absorb the selling orders. Lower we have the 0.7572, where stronger bullish interest should emerge.
On the other hand, if the bulls will manage to push the price above yesterday high, then 0.7711 and 0.7734 are next as resistance and we expect the upside to be short-lived.