AUD/USD Forecast July 21, 2017, Technical Analysis

The Australian dollar initially fell during the day on Thursday, but turned around to reach towards the 0.7975 level. By doing so, we end up forming a very bullish looking candle, as it appears that we are going to press the 0.80 level above. A break above there would be significant, as the 0.80 level is massively important on longer-term charts, and a break above there could send this market much higher. Pay attention to gold, because it course has a knock-on effect in this market, but it looks currently as if the Australian dollar is going to be supported at the 0.79 handle, and that we may grind back and forth to build enough pressure to break out to the upside. Because of this, I believe that the market should continue to be choppy, but I recognize that the uptrend certainly seems to be what most traders are following, and with go looking bullish, I believe that it is only a matter of time before we go to the upside.
Buying short-term dips
I believe that buying short-term dips is probably going to be the best way to trade this market, because eventually we will get the break out that is so desperately needed. Once we do, I believe that the market becomes more of a “buy-and-hold” situation. The next target after the 0.80 level would be the 0.82 handle, which could be reached rather rapidly as this would be recognized as a massive breakout to the upside. If we did breakdown, I think the 0.7750 level will be tested for support, as it was a massive resistance barrier previously. Ultimately, I still believe in the upside, so I am much more confident in going long in shorting as we have seen so much bullish pressure over the last several weeks.

EUR/GBP Forecast July 21, 2017, Technical Analysis

The EUR/GBP pair broke out to the upside during the trading session on Thursday, as we cleared the 0.89 handle. The market looks very likely to reach towards the 0.90 level now, which I think is significant resistance. I believe the pullbacks are buying opportunities, that the market will continue the overall uptrend that we have seen for some time. Because of this, I believe that it’s only a matter of time before the buyers return, so I have no interest in shorting. I recognize that the 0.90 level will be resistance, but it’s only a matter of time before we break through that in my estimation. The move to the upside was so explosive that I think a lot of traders will be looking for buying opportunities and of course value.
Looking for support at 0.89
I believe that a pullback from here should find plenty of support at the 0.89 level, and that’s exactly what I’m looking for, an opportunity to find value underneath. I think if we can break above the 0.90 level, the market should continue to go even higher as I believe we will probably then reach towards the 0.92 level. The market is bullish, and therefore I don’t have any interest in selling, least not anytime soon as it appears that the Euro continues to enjoy strength against the British pound in general. Adding. Her full to the fire, the EUR/USD pair has broken out to the upside, which of course has a bit of a knock-on effect in this market, and should continue to push this pair much higher over the longer term. This type of move is very impulsive, and more importantly: obvious.

EUR/USD Forecast July 21, 2017, Technical Analysis

The EUR/USD pair shot through the roof during the day on Thursday, as news came out that investigators are expanding their search into Donald Trump’s global companies for collusion with Russia. Quite frankly, this announcement really wasn’t anything out of the norm, because quite frankly there are plenty of international companies that the man owns. They aren’t suggesting that they are found anything, just that they would consider these companies. As a result, the US dollar sold off rather rapidly, and we have seen an impulsive move to the upside. Nonetheless, this was a technically bullish market anyway, so the reason doesn’t really matter.
Buying pullbacks
I believe that buying pullbacks will be the way going forward, and that the 1.15 level is now the “floor” in the market, although to be honest I doubt we will reach that level anytime soon. The top of the current consolidation area on longer-term charts is closer to the 1.1850 level, so I feel that’s where were going to go looking. Buyers continued to push, and therefore I look at dips as opportunities to pick up value in a currency that has been undervalued for several years. The bond situation in Europe seems to favor the Europeans, at least over the Americans. That’s another reason this market should continue to go higher. I’m not looking for some type of massive moved to the upside, just a general and gradual moved to the upside. If we did breakdown below the 1.15 level, that would be a very negative sign, as it would show a complete capitulation of the most recent support level and of course an area where we had broken out of just a handful of sessions ago. Nonetheless, my base case scenario is that we continue to go higher.

GBP/JPY Forecast July 21, 2017, Technical Analysis

The GBP/JPY pair initially tried to rally during the day on Thursday but found enough resistance just above the 146 handle to sliced through the 145 handle. The daily close is going to be very important, and if we can break down below the 144.50 level, the market could drop significantly, perhaps reaching down to the 142.50 level next. Alternately, if we can bounce above the 145 handle, we could reach towards the 146 level in the short term. This pair is very volatile, and very sensitive to risk appetite overall. The British pound got sold off against most other currencies around the world, so it’s not a surprise that we sell this market slice to the downside. On top of that, the USD/JPY pair broke down, and that knock on effect of course saw this market drop.
Watch the GBP/USD
You should pay attention to the GBP/USD pair, because it will dictate what happens with the British pound overall. As I write this, it appears that we are starting to see a little bit of support just below the 145 handle, so a bounce could happen. However, the GBP/USD pair needs to hold as well, but the two do simultaneously, that could be a very significant sign for where the market goes next. The choppiness should continue, but being patient is probably going to be the best thing you can do with this market as it’s difficult to suggest that jumping in with both feet would be prudent.

GBP/USD Forecast July 20, 2017, Technical Analysis

The GBP/USD pair fell significantly during the day on Thursday, slicing through the 1.30 level. This is a very negative sign, and we have even tested the 1.30 level for resistive action and have found it on the hour timeframe. Ultimately, it’s likely that we will continue to see some negativity in this market, and it’s not until we would break above the 1.3050 level that I would feel comfortable buying. It appears that we are starting to see the market fall apart again, and perhaps reach back into the previous consolidation area. The British pound continues to be very difficult to trade, as we have seen so many different reactions. Most recently, we had the CPI numbers disappoint, and it looks as if that is putting a serious anchor around the neck of the British pound.
The 1.30 question
I believe that the 1.30 level is essentially the most important level on the chart, so depending on which side we are on from that level, is the direction I would be trading. I think that the market should continue to see markets trade with volatility, but ultimately, I believe that the 1.30 level will be the deciding factor for the next several handles. I suspect that most of you that have tried to trade the British pound recently have lost money, because quite frankly I can’t seem to make up its mind. Don’t worry, most of my trading friends are in the same boat.

NZD/USD Forecast July 21, 2017, Technical Analysis

The New Zealand dollar rallied during the day after initially falling on Thursday. The 0.7350 level seems to be an area where there is a significant amount of support, and the fact that we broke above to the upside and in an impulsive manner suggests that we are going to continue to reach towards the 0.75 handle. I think that a pullback offers value, and that traders will get involved every time we pull back based upon the volatility in the US dollar. I believe that the New Zealand dollar is going to go looking for the 0.75 handle, so pullbacks should offer nice entry points for traders to get involved, if we get them. I believe that the 0.7350 level should offer a significant amount of support. If we can break above the 0.75 level, the market can go much higher and I think probably will.
Buying dips
I believe that buying dips will be the best way to go, as we continue to see the uptrend in the New Zealand dollar show signs of strength. I believe the commodity markets will help, as the US dollar has been sold off anyway, so that’s likely the driver of higher commodity prices, and then by extension a higher New Zealand dollar. The market continues to look bullish longer-term as well, so I have no interest in shorting, least not until we would break down below the 0.73 level, which is very unlikely to happen anytime soon, but if it did, I suspect that the market would then go looking for the 0.72 level underneath. There will be volatility, but I still believe that most of the recent action favors the buyers, and therefore I think that the market should provide plenty of trading opportunities over the next several sessions.

USD/CAD Forecast July 21, 2017, Technical Analysis

The US dollar fell below the 1.26 level after initially tried to rally on Thursday. We found support below, and it now looks as if we are going to continue to “sell the rallies” in general. Because of this, I believe that the market should continue to be one that’s bearish, but I don’t necessarily think that we are going to see a massive move in one fell swoop. Quite frankly, the oil markets rolled over, and that give us a little bit of support in this market, but I believe the market will continue to look towards the 1.25 level as it is a much more interesting level. I have no interest in buying this market until we would break well above the 1.28 handle, so likely selling pressure will continue in my eyes. I believe that the 1.25 level below will be massively supportive though, because of the psychological nature.
Selling rallies
I believe that rallies are to be sold, and short-term trading opportunities will continue to present themselves. I think the you can pick up 30 or 40 pips at a time, and because of this you may want to look to the hourly charts to make your trading decisions going forward. The market should continue to see volatility, but I certainly think that there is more bearish pressure than bullish, as we have been in a reasonably reliable downtrend sends the tank of Canada has decided to raise interest rates. The bond market trade continues to favor the Canadians as well, so I think it’s only a matter of time before we fall on every rally as the market seems all but resigned to at least the 1.25 handle, if not lower levels than that. For now, it seems that the housing crisis in Canada is being ignored.

USD/JPY Forecast July 21, 2017, Technical Analysis

The USD/JPY pair initially tried to rally during the day, but found enough resistance near the 112.32 level to turn around and drop significantly. However, by the end of the day we are starting to find support near the 50% Fibonacci retracement level from the most recent major move, so I think that the market will continue to be very choppy. Simply put, if we can break down below the 111.50 level, I feel that the downtrend continues, perhaps down to the 111 level, and possibly even the 110 level. Alternately, if we break above the highs from the session, that would be a very bullish sign and should send this market to the upside, reaching towards 113, and then eventually the 114.50 level. I think the one thing you can count on is a significant amount of volatility, so ultimately this is a market that continues to see a significant amount of trouble.
Donald Trump
A lot of this noise during the day was due to announcements that investigators are considering the various global companies that Donald Trump owns, for collusion with Russia. While they did not say that they found anything, this seems to have scared several traders, and we had the US dollar selloff drastically during the day. I believe that given enough time it’s likely to turn around, but the question now is whether we can turn around here, or at lower levels.

USD/JPY Forecast July 24, 2017, Technical Analysis

The US dollar fell significantly during the Friday session against the Japanese yen, slicing below the 111.50 level. Because of this, the market then fell towards the 111 handle, which of course has a certain amount of psychological significance. However, I believe that the real support is probably closer to the 110 handle, so rallies of this point in time should be and I selling opportunity. The 110 level will be massively supportive as it is a large, round, psychologically significant number, but given enough time I think that we do need to test the that area first. This pair does tend to be somewhat risk sensitive, but I think a lot of this comes down to what the Federal Reserve is doing.
Federal Reserve expectations
From traders around the world, they are starting to expect the Federal Reserve to be very slow to raise interest rates. Janet Yellen does a lot to boost that case as she spoke in front of Congress recently, suggesting that perhaps things would be data dependent yet again, but if the Federal Reserve looks likely to hike rates just as quickly as once thought, that will turn this market around completely. It looks to me as if the 110 level is an excellent area to find support, so I would anticipate a bit of bullish pressure in that area, and that will be supercharged by any statements coming out of her or major players coming out of the Federal Reserve. I think that the market is probably going to be bearish for the next several sessions, but the downward pressure is probably somewhat limited as far as where it can go. If we break down below the 109 level, then I think we fall apart completely.

USD/CAD Forecast July 24, 2017, Technical Analysis

The US dollar fell again against the Canadian dollar during the session on Friday, as we reached towards the 1.25 handle. That’s an area that should cause a bit of support, but when you look at the hourly chart, you can see that clearly every time we rally, the sellers come back. In fact, I have drawn a nice descending channel in this market, and when I look at the longer-term charts the first major significant uptrend line isn’t until we get closer to the 1.24 handle. Because of this, I remain bearish in this market place.
Oil markets
If you been trading currencies for any length of time, you know that oil is a bit of an influence on the Canadian dollar, so if it rolls over significantly we could see a bounce. However, I think most of the bounce will come from the fact that the 1.25 level is such a large, round, psychologically significant number. I also believe that given enough time people will ignore that and we will go lower looking for the larger uptrend line. If we broke above the 1.26 handle though, I think at that point we could start to see bullish pressure coming into the market, and perhaps try to change the trend, albeit for the short term. There continues to be a great trade in the bond markets were people are buying Canadian in shorting American, and that continues to work against this currency pair overall.

NZD/USD Forecast July 24, 2017, Technical Analysis

The New Zealand dollar rallied during the day on Friday, as we continue to follow the 24-hour exponential moving average. The market tested the 0.7450 level, and it now looks as if pullbacks will be buying opportunities. I think that the market should continue to reach towards the 0.75 level above, which is very important on longer-term charts. I think that pullbacks offer value the traders will be taken advantage of as the New Zealand dollar should continue to favor over the US dollar due to the swap rate. People are starting to suspect that the Federal Reserve is likely going to be slow to raise interest rates, so that should continue to favor the New Zealand dollar and its higher-paying yield.
Buying dips
I believe that every 50 pips, you can find support that will jump into the market and start to pick up the New Zealand dollar because it is “cheap.” With that being the case, I look at a buy on the dips type of mentality in the market, and I believe that the New Zealand dollar will continue to be valued. I don’t have any interest in shorting this market, because quite frankly the New Zealand dollar has been so resilient. We will get pullbacks of time to time obviously, but those should be short and shallow in nature.

GBP/USD Forecast July 24, 2017, Technical Analysis

The British pound initially rose during the day on Friday but found enough resistance at the 1.30 level to roll over and it now looks as if we are going to continue the move lower. I think there is support at the 1.2950 region, but eventually will probably try to break down below there. I think that the 1.28 level underneath is massively supportive, and I do recognize that in the longer-term charts we have been rising for some time. However, that rise has also been very choppy which of course suggests that there are going to be a lot of pullbacks. That’s what we are seeing right now, a simple pull back.
Noisy negotiations
Part of what we have seen has been noise from negotiations, as the first day of true negotiations ended in a stalemate. However, that’s not a huge surprise as the United Kingdom leaving the European Union is a very complex issue. It was never going to be solved in one day, so I don’t worry too much about headlines, least not from a longer-term standpoint. Yes, it will cause sudden shifts in one direction or the other, but the real profits are to be made in longer-term moves. I believe that longer-term traders are still looking to pick up the British pound on the cheap, but right now it certainly looks as if the short-term traders are pushing lower, trying to offer value for traders to get involved. If we break down below the 1.28 handle, then the market will probably go much lower.

GBP/JPY Forecast July 24, 2017, Technical Analysis

The British pound went sideways initially on Friday, hovering above the 145 handle. However, later in the day we break down below that level and reached towards the 144 level. The market looks very bearish, and based upon longer-term charts I believe that we have farther to go. Nonetheless, I think that it will be somewhat limited, so I believe that the next couple of sessions might be bearish in general, but I don’t think it goes much longer than that. Market participants continue to fear the British pound in general, and I think that has more to do with this than anything else. There are a lot of headlines coming out of the negotiations with the European Union that of course can cause volatility, but given enough time I think that this market will bounce. In the short term, I believe in selling rallies, because quite frankly this is a market that should continue to find volatility to be the name of the game.
If we can break above 145.25
If we can break above the 145.25 handle, the market should continue to go much higher. That being the case, if we break out to the upside I believe that buying dips will be the way going forward, as we should continue the bullish pressure that we have seen on longer-term charts. I think that given enough time we should continue to see the market reach towards the 148.50 handle. A break above there then has the market going to the 150 handle. Alternately, if we do continue to break down, I believe that the market should then go down to the 142.50 level. That’s an area where I expect to see a significant amount of support, and therefore I think that the longer-term buyers will jump back into this market.

EUR/USD Forecast July 24, 2017, Technical Analysis

The EUR/USD pair initially went sideways on Friday, but then spiked higher. The 1.1650 level offered enough resistance to turn the market around, but as I record this it looks as if we are continuing to go higher. I believe that the market will eventually go looking towards the 1.1850 level, and the pullbacks continue to offer nice buying opportunities. The bullish move on Thursday is certainly something that will continue to see momentum going towards the upside after that type of move, so I think that every time we pull back, there are going to be buyers waiting to pick up any type of value.
Buying dips
Buying dips will continue to be the way to handle this market, because quite frankly the break out was so stringent. I believe that the 1.15 level continues to be the “floor” in the market, but I would be surprised if we saw that level again. This is a market that I think will continue to be choppy, but nonetheless it will continue to find plenty of value on those pullbacks. I suspect that the 1.17 level above will be the next target, but I would be surprised if it offered any significant amount of resistance. I think that a pullback from there will only attract more attention, as the US dollar is certainly being sold off in expectation of a more dovish Federal Reserve than originally thought. I think that might be a bit of a mistake, but between now and October, when the ECB is expected to suggest its tapering program, I believe that the Euro continues to be favored over the US dollar at the very least. The one caveat of course will be the negotiations between the European Union and the United Kingdom.

EUR/GBP Forecast July 24, 2017, Technical Analysis

The EUR/GBP pair went sideways initially during the day on Friday but found the 24-hour exponential moving average strong enough to cause a bit of dynamic support as the market when looking for the 0.90 level. That is a large, round, psychologically significant number, and of course an area that has seen a lot of interest previously. I think if we can break above there, the market then goes to the 0.92 level after that. Between now and then, I would expect the pullbacks offer buying opportunities as we have seen a significant amount of bullish pressure on Thursday, and of course we still have the negotiations between the United Kingdom and the European Union which tends to favor the European Union, at least as far as the market see it currently.
The 0.89 level
I believe that the 0.89 level below will be a bit of a “floor” in the market, as we continue to see quite a bit of interest in that area. A pull back to there would have me becoming very aggressive in my buying of the EUR, as I believe that the British pound still has a bit to pull back in order to find enough value against the US dollar, which of course is a main measurement. Breaking above the 0.90 level will be difficult, but once it happens, I believe that the buyers will come flooding into this market as it is such an obvious area to pay attention to. We could go as high as parity, but that will be very difficult to achieve anytime soon, it will probably be a long and drawn out process over the next several years as this pair does not tend to move very quickly as history shows.
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