Daily Forex forecast analysis 12-04-2017 – 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 12-04-2017 include information on EURUSD, USDCHF, GBPUSD, USDJPY & AUDUSD
The euro had been consolidating lower on a weekly basis, but still the upside trend is intact and thus far we do not see any major downside treat. During the weekend the US Senate finally passed the tax cuts bill and now the market expects a final version, combined with the one voted by the House of Representatives. We also have a deadline for the Brexit talks on December 4th, so the market activity could be quite intense in the next few days.
The price action closed little above the 4h chart 20 EMA, after a spike in late Friday US session, generate by hot news regarding Michael Flynn’s decision to cooperate with the FBI, with regards to ties with Russia. If the bulls will continue to edge higher, we expect stronger resistance around 1.1943 and 1.1960.
On the downside, if the selling will resume, the EMA and 1.1861 are expected to act as short-term support levels.
- EU Producer Price Index figures will be published at 10:00 am GMT.
- From US, Factory Orders will come out at 03:00 pm GMT.
Dollar-swiss traded lower last week and we can see a huge bearish candle on the 4h chart that formed in late Friday, following headlines regarding Flynn’s decision to speak about the involvement of Russia in US politics. We’ll see if the move will continue, since the latest news suggest that there nothing about an involvement in the presidential election. Any surge in political risks could help the swiss franc further.
It that will be the case, 0.9746 and 0.9728 are expected to act as support, while a break below them will open more ground to the downside. However, since we suspect an exhausted selling took place and a consolidation higher is expected.
On the upside, 0.9777 act as resistance on Friday and sellers resumed around that spot. Buyers will need to break above that level in order to be able to reach 0.9794 or 0.9816, where the 4h chart is also located.
Cable closed last week with significant gains, as the optimism around the Brexit negotiations had been at high levels. We’ve seen a small correction on the downside on Friday, but so far the price action is still above the 20 EMA and the selling structure pales in comparison to the strong bullish leg prior to it. December 4th is a key date since there is a meeting between EU and UK officials, so watch the news closely.
Getting back to the technical analysis, we can see that the 1.3447 level managed to cap the downside and the bulls resumed exactly around it in late Friday session. That level and the EMA should provide support, if selling resumes.
On the upside, 1.3511 and 1.3549, where the upside had been capped last week, should provide resistance if the bulls will resume and put pressure on last week high.
- From UK, PMI Construction indicator will be out at 09:30 am GMT.
The US dollar managed to recover against the yen last week, following the breakout below the trend line, but selling resumed on Friday, following headlines regarding the cooperation of Michael Flynn with the FBI. We can see that the spike had been big in size, covering more than 100 pips in about an hour. However, sudden dips are not selling opportunities, so smart traders will wait for a pullback higher before thinking to sell.
The price action ended the week little above the 20 EMA, recovering more than half of the losses. On the upside, we expect resistance to emerge around 112.38 and 112.71, right below the trend line location.
On the downside, if the selling pressure resumes, 111.88 and 111.39, where bottom point of the spike lower is located, should follow as support. We expect the market to cool off, since it is just the beginning of a new week and it takes some time for liquidity to get back to normal.
The Aussie spiked higher, breaking above the trend line, favored by a weaker dollar on Friday. At the current location, going long is not advised, since the sellers could take into account the tax cuts that have been voted on Saturday, after the market closed. Anyway, as long as the price will trend above the trend line, we expect more upside gains to follow. A breach below the line again will suggests a continuation of the bearish trend will follow.
On the upside, 0.7620 and 0.7638, where the selling pressure resumed on Friday, should act as resistance levels if the bulls resume. A break above them will open more ground for buyers towards the 0.7663.
Renewed selling pressure could drive the price action towards the trend line and a breach lower could expose the 0.7555 support level, where the bulls bottomed out last week.