Daily Forex forecast analysis 10-02-2017 – 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 10-02-2017 include information on EURUSD, USDCHF, GBPUSD, USDJPY & AUDUSD
Even though the euro managed to break on the upside on Friday, last week, today it gapped lower and the selloff continues at the time of writing, due to the political events that are developing in Spain. The Madrid government considers the Catalonia referendum unconstitutional and it had sent troops yesterday to stop the voting process. It looks like the event had put pressure on the euro thus far and it could continue to weaken.
So far, the price action is heading towards the 1.1757 support area and given the current momentum of the bears, we expect a breach lower and a continuation towards 1.1712 and 1.1677, in case the first one fails.
The upside should be limited and we expect sellers to resume around the 4h chart 20 EMA if the buyers manage to push the price on the upside. Above the EMA, 1.1825 resistance area and 1.1860 will follow.
- German Markit Manufacturing PMI is due at 07:55am, while the same figure for the EU will follow at 08:00am.
- From the US, we have the ISM Prices Paid and ISM Manufacturing PMI at 02:00pm GMT.
As opposed to the EURUSD the dollar-swiss pair managed to resume on the upside, due to the negative correlation between the pairs. Even though we’ve seen the price consolidating lower at the end of last week, it seems like the bullish momentum is picking up again around the 4h chart 20 EMA, suggesting that there is still upside room for the dollar. We expect the price to continue upward towards last month high.
At the time of writing, the price is located little above the 4h chart 20 EMA, but so far we see no reaction from the sellers. If the bullish momentum will continue to increase, we expect the price to reach 0.9743 resistance, followed by 0.9767 figure.
On the downside, selling activity should be subdued, but in case a strong breakout below the 4h chart 20 EMA will take place, we expect the price to head towards 0.9668 and 0.9641, where buyers could react in the short-term.
- From Switzerland, Real Retail Sales are scheduled to be released at 07:15am GMT.
Cable seems to respond nicely around the 4h chart 20 EMA, as we see renewed selling pressure around the line. Today the price gapped lower and after the market managed to fill the gap, the selling pressure resumed again. At this point it time it looks like the sellers will put pressure on last week low and since we had not seen any significant bullish response thus far, we expect a breakout lower in the short-term.
If that will be the case and last week low will be breached, 1.3331 support area will stand in front of the sellers while if it will fail to do that, a continuation towards 1.3261 will most likely follow then.
On the upside, sellers should cap the bullish momentum by stopping the price each time it reaches the 20 EMA. In case the buyers breach above it, 1.3450 and 1.3482 will follow then on the upside. However, we believe the buyers will have a reduce impact on price.
- From UK, Markit Manufacturing PMI will be published at 08:30am GMT.
The US dollar had been favored against the yen as well during the Asian session today and it looks like the price had bottomed out around the 1h chart 20 EMA. So far, sellers did not manage to have a significant response and as long as the buyers will continue to dominate to order flow we expect last week high to be under pressure soon. The long-term picture, points towards a continuation of the bullish trend.
We expect the 1h chart 20 EMA to act as a pivoting point and new buyers to step in around it. On the upside, 113.18 resistance, were we’ve seen two rejections last week, could be hit again. A breakout above last week high will open more space towards 113.89 level.
On the downside, 112.70 and the 1h chart 20 EMA should act as a support zone and cap the downside in case sellers will drive the price lower. A strong breakout below the EMA and Friday low as well, will be needed to open more downside room towards 111.86.
The Aussie had been under pressure as well at the beginning of this week and as you can see from our chart, the price continues to trade below the 4h chart 20 EMA, without even touching it for several days in a row. From an order flow perspective, that usually suggests that the sellers are heavily in control and thus a continuation lower is suitable in the short-term horizon. Since we do not see any major bullish leg up, that could most likely happen.
If the price will continue lower from the current point, we expect 0.7807 and last week low to come under heavy selling pressure and if they will fail to support the price, a continuation towards 0.7777 and 0.7743 will follow.
On the other hand, if buyers will manage to push the price on the upside, we expect 0.7834 and the EMA to act as a resistance zone, both being backed by the 0.7859 level. Only a strong break above the lather could open further upside potential towards 0.7907.