AUD/USD Forecast September 25, 2017, Technical Analysis

The Australian dollar shot higher during the day on Friday, reaching towards the 0.7975 level. We have seen a significant amount of noise recently, and it now looks as if the gold markets may be trying to find some type of floor. If they do, I think that the Australian dollar will eventually break above the 0.80 level. Ultimately, I think that the pair will go much higher than that, but I recognize it will take a certain amount of work. If we can break above the 0.81 handle, the market will be free to go much higher. Ultimately, I think that the market should continue to move back and forth due to risk appetite in Asia, and of course the value of the US dollar on the whole. Given enough time, I think that we will continue to see buyers on these dips.
The value of 0.80
The 0.80 level has been important over the decades, and I believe that if we can clear that level, it’s likely that the market will continue to see people jump in as longer-term traders will be looking to reach towards the 0.90 level above, and then possibly even the parity level. It will be interesting to see how this plays out though, because the Federal Reserve of course is looking likely to clean up its balance sheet, which is good for the US dollar overall. The question now is whether there is a “risk on” trade coming. Ultimately, breakdown below the 0.79 level should send this market looking towards the 0.78 level underneath, because quite frankly that’s where we broke out from previously, and that is an area that by convention should offer support due to that previous barrier. This could be a very volatile market over the next several sessions.

EUR/GBP Forecast September 25, 2017, Technical Analysis

The EUR/GBP pair had a very choppy session on Friday as we continue to bang around just above the 0.88 level. This is a level that’s crucial, because it is significant support on longer-term charts. This was an area that was massively resistive for several months going back a couple of years, so I think that we will continue to see a lot of noise in this area. This will be especially true as the 2 economies discuss the breakup, and therefore headlines could move the markets in both directions. Technically speaking, I would anticipate the buyers are coming back into the market, but right now the action is less than impressive. A breakdown below the 0.8750 level would be very negative, and could send this market much lower. I believe that the market breaking above the 0.89 handle would be very bullish, and should send this market looking towards the 0.90 level next.
Remember, this pair has more value per tick than other currency pairs, so it won’t take as big of a move to make your money. I believe that the market will continue to see volatility, so therefore short-term range mounting strategies might be the best way to deal with this market. If we do break out in either direction, I am than willing to follow. If we were to break down, when I look at longer-term charts they suggest that we could go as low as the 0.83 level. If that happens, then I think the floodgates open. Currently, the uptrend certainly looks threatened but it is still intact if we can stay in this general vicinity. A break above the 0.90 level would only confirm that but obviously would take quite a bit of effort to get to.

EUR/USD Forecast September 25, 2017, Technical Analysis

The EUR/USD pair initially shot higher during the day on Friday, but found the 1.20 level to be too resistive to continue going higher. This area has continued to offer problems for the market, and I think that we may be running into an area that the market cannot overcome in the short term. I think a pullback is probable, but quite frankly I think it’s a buying opportunity for longer-term traders. When you look at the weekly chart, we have done a bit parabolic and I think that this suggests that the pullback will be necessary to find the proper momentum to finally smash through the 1.20 level. I do have a longer-term target of 1.25, but it’s going to take a while to get there and we have been relatively parabolic. Parabolic moves typically get significant pullbacks and in short order, but eventually tend to prove themselves to be correct. I think we are entering an area that could signal that we are pulling back looking for value.
Short-term selling only
I think that at best, you can sell this market for the short term, as there are a lot of support levels just below. Most notably for me is the 1.1850 level, which served as a bit of a floor a couple of days ago. If we were to break down below there, then we could pick up speed to the downside. I believe that the absolute “floor” in the market is closer to the 1.15 handle, so we could have a way to go before the buyers overwhelm again. Ultimately though, I think that this is a function of a market that has gotten ahead of itself, and simply needs to pull back to find enough people willing to take it seriously.

GBP/JPY Forecast September 25, 2017, Technical Analysis

The British pound initially fell during the day on Friday, but as you can see we are starting to find our footing at lower levels. That is a bullish sign, and I believe that the 150 level continues to be support. That is an area that was difficult to break above, but once we did, it’s likely that we will continue to go to the upside. The 150-level course has a certain amount of psychological importance to it, and I believe that the GBP/JPY pair will continue to go higher if we can stay above that level. Remember, this pair tends to react to the risk appetite of markets around the world, and I believe that right now it appears that stock markets look rather healthy. If that’s the case, this pair continues to grind to the upside.
Bank of England
Keep in mind, the Bank of England also is talking about raising interest rates rather soon, and that of course is bullish for the British pound overall. The Japanese yen of course has been saddled with the central bank that continues very loose monetary policy, so I think that the national proclivity of this market will be a “buy the dips” mentality. I think that if we did breakdown below the 150 level, that would be very negative, but I think there is plenty of support below to keep the market afloat over the longer term. A pullback should only and of being a buying opportunity, as the market has exploded in favor of the British pound against most currencies, not just the Japanese yen. I have a target of 155 over the next several weeks, and I believe that this market will continue to favor those who are willing to take risks.

GBP/USD Forecast September 25, 2017, Technical Analysis

The British pound went sideways initially during the session on Friday, but pulled back towards the 1.35 handle. That’s an area that offered a certain amount of support, as it has during most of the week. I believe that we may get a little bit of a pullback from here, but given enough time I think that the buyers will return. I think that the 1.3650 level above is massively resistive, as it is the scene of a gap from the reaction to the vote for the United Kingdom to leave the European Union. That of course is a significant amount reason to think that the market will continue to show intense volume in this area, but I believe that after the reaction we have seen over the last several weeks, we will probably break out to the upside given enough time. This is due to the Bank of England suggesting that interest rates are going higher over the longer term. That of course is good for the British pound, while the US dollar continues to soften.
Pullbacks are buying opportunities. That’s the bluntest way I can think of putting this market and perspective, as the strength that we have seen lately has been extraordinary. I think that a break above the 1.3650 level census market looking for the 1.40 level next. Ultimately, I think that pullbacks offer value if you are willing to wait for signs of support or impulsivity. I have no interest in shorting this market, least not until we clear the 1.30 level underneath which is over 5 handles below. Because of this, I think that we are simply trying to build up enough momentum to finally smash through that considerable barrier above. This could take a while, but once that happens it should be explosive.

NZD/USD Forecast September 25, 2017, Technical Analysis

The New Zealand dollar initially fell on Friday, but bounced a bit to show signs of support again. Because of this, I think that the market is going to continue to try to grind its way to the upside, but obviously with a certain amount of volatility. Ultimately, this is a market that I think will be highly influenced by the overall risk appetite of the world. The tensions between North Korea and the United States continue to flare up, and that could have people selling this pair. Alternately though, if the commodity markets look healthy, this market should continue to go higher. Remember, the New Zealand dollar is highly influenced by commodity markets, and that should continue to be one of the major driving forces of this market. Because of this, I think that we will get a certain amount of volatility but I think that the markets will look at the longer-term attitude of markets.
Ultimately, I believe that the 0.74 level above is the target if the buyers get away, but on the other hand, if we break down from here I think the market should then go to the 0.72 handle. I believe that the overall uptrend is still very much intact, but we have certainly seen a significant amount of trouble as of late. With the Federal Reserve looking likely to clean its balance sheet out, that does put a bit of bullish pressure on the US dollar, but ultimately, I think that as markets digest this news in a positive light, eventually the New Zealand dollar will come into vogue yet again. Pay attention to the New Zealand elections over the weekend, that could influence this currency as well. Because of this, I think we will continue to see choppiness but I still favor the upside in general.

USD/CAD Forecast September 25, 2017, Technical Analysis

The US dollar fell against the Canadian dollar initially on Friday but found support as the Canadian CPI numbers came out less than anticipated. This works against the Loonie overall, and therefore we rallied back towards the 1.2350 level. The market is currently pressing the bottom of the uptrend line from the weekly chart, so it’ll be interesting to see if the resistance can hold. If it does, then we should roll over and go much lower. At the beginning of the day, that’s exactly what it looked like was going to happens and therefore I was prepared to start selling. However, we have seen a turnaround again so I think that the volatility continues.
If we can break above the 1.25 level, then I feel that the market will probably go much higher as it would be a complete reversal of the breakdown through the uptrend line. Alternately, if we roll through the 1.2250 level, then I would be much more comfortable shorting this pair. In the meantime, I would be a bit cautious because we not only have those levels to worry about, but we have conflicting signals coming out of Ottawa. Beyond that, the oil markets course has an influence on the Canadian dollar, so I continue to be cautious about this market, and believe that perhaps staying on the sidelines might be the best way to approach this market into the next couple of sessions. Once we get some type of impulsive move, then I would be much more comfortable either buying or selling. In the meantime, I would anticipate that we are going to see choppiness and probably nothing more extensive than that. The next couple of sessions could be very telling as to where we go next in this market.

USD/JPY Forecast September 25, 2017, Technical Analysis

The USD/JPY pair fell a bit during the session on Friday, but looks to be finding support near the 112 level. Because of this, I believe that the market will continue to find buyers as the Federal Reserve looks likely to clean up its balance sheet. This is a market that is influenced by a “risk on” factor, and of course the overall interest rate outlook for both central banks. I believe that the Federal Reserve is light years ahead of the Bank of Japan when it comes interest rate hikes, so I think it makes sense that we continue to go to the upside. I have no interest in shorting, I believe pullbacks will be buying opportunities and when I look at the longer-term weekly chart, I see that we are consolidating between the 108 level on the bottom, and the 114.50 level on the top. In fact, the 114.50 level is my target and I believe the dips offer value. We may get some noise from time to time, mainly due to “risk off” incidents around the world, such as North Korea. However, long-term fundamentals I believe dictate that this market goes to the upside, especially of stock markets continue to rally.
I believe that adding incrementally and building up a larger position is probably the way to go, as it gives you the opportunity to profit from what looks to be a slightly upward yet range bound move. If we can break above the 115 handle, then it becomes more of a “buy-and-hold” scenario, but I think we are several weeks away from doing so, if not months. In the meantime, I like this is a short-term buyers’ market, taking advantage of pyramiding to build up equity in your trading account.

EUR/GBP Forecast September 22, 2017, Technical Analysis

The EUR/GBP pair continues to grind around just above the 0.88 handle, an area that has been important over the longer term. Because of this, I think that the market will continue to find a lot of interest in this general vicinity, but I do recognize that if we break down below the 0.8785 handle, the market will break down significantly. This is a market that continues to be choppy and volatile, and of course continues to be influenced by headlights coming out from the Brexit negotiations. It appears that the Bank of England is probably going to be raising interest rates quicker than many other central banks, and that of course has been one of the main reasons for the bearish pressure in this market.

EUR/USD Forecast September 22, 2017, Technical Analysis

The EUR/USD pair has rallied a bit during the day, bouncing from an uptrend line that we have seen on the daily chart. This is important, because it will define whether we stay in the uptrend or not. So far, it looks as if we are starting to see buyers jump into this market but given enough time we will probably see the market go looking towards the 1.20 level if the buyers can continue. Alternately, if we break down below the 1.1850 level, then I think the market goes looking for the 1.1750 level, and then possibly even the 1.15 level after that. This being said, I expect you will see a lot of noise, and I think that the next couple of sessions will probably be extraordinarily volatile. Because of this, small positions will probably be necessary, but I suspect that looking at the short-term charts will probably be the best way to trade in the meantime.
I believe that being patient is probably what it will take to make money in this market, but even with the selloff that we had seen during the session on Wednesday, we are still technically in an uptrend so until we break down below the uptrend line, I would have to say that I’m probably more comfortable with long positions. However, if the market tells me that it’s time to start selling, then I will not hesitate to do so because certainly I am not going to be fighting that type of move as it would show a significant change of attitude. I think that it is going to be difficult to break above the 1.20 level though, so I’m not looking for that to happen in the short term. Ultimately, volatility is here to stay.

GBP/JPY Forecast September 22, 2017, Technical Analysis

The GBP/JPY pair was choppy during the session on Thursday, but continues to show positivity in general. Because of this, I think that the longer-term uptrend is going to continue, especially with the bank of England looking very likely to raise interest rates. I think that the market will look at dips as buying opportunities and if the stock markets can remain reasonably stable, that should facilitate the “risk on” trade that helps this move higher. I believe that we will probably go looking towards the 155-handle given enough time, as the British pound is exploding to the upside and of course the Japanese yen is considered to be the “safe” currency in the equation. With the Bank of Japan looking very loose monetarily policy speaking, I think that this market should continue to find plenty of buyers on dips. Ultimately, I think the 155 handle is just the first target, and that we should probably go much higher than that.
I believe that the “floor” in the market is closer to the 150 handle, and if we can stay above there we should continue to grind our way much higher. The market should continue to find value every time we pull back, and it’s not until we break down below 150 that I would become remotely concerned about the uptrend. Even then, I think there’s plenty of support at the 140.50 level to keep the market in a bullish time. In fact, it’s not unless we get some type of massive “risk off” event that this pair will struggle. That being said, I am bullish, and I do recognize that value is to be had by hanging onto a bullish position. Adding on short-term dips is how I plan on tackling this market going forward.

GBP/USD Forecast September 22, 2017, Technical Analysis

The GBP/USD pair continues to be very volatile, as we have gone sideways in a tight range during the day on Thursday, testing the 1.35 level. I believe that the market should continue to be choppy, and I recognize that the noise that we see in this market is due to the Federal Reserve, and of course the outlook for the British pound and the interest rate outlook for Great Britain. Ultimately, this market should continue to be one that goes back and forth, and I think that short-term trading is probably the best way to go. However, if we broke above the 1.3650 level on a daily close, the market should continue to go much higher. That is a break above the gap from the Brexit vote, and of course is a significant turn of events and should continue to point towards higher levels.
Buying dips
I think that overall, most traders are looking to buy dips when it comes to the British pound as the Bank of England has suggested recently that it was only a matter of time before they would have to raise interest rates. In fact, it’s likely that the markets will continue to favor the GBP, as although there is tightening coming for the Federal Reserve, the reality is that the “normalization” of interest rates is going to be at lower levels than previous economic cycles. Because of this, I think that it is only a matter of time before we see the longer-term uptrend and the British pound continue, and I think the given enough time we could be looking towards the 1.50 level above. Ultimately, any type of dip will more than likely be looked at as value that traders will be taking advantage of in the future.

NZD/USD Forecast September 22, 2017, Technical Analysis

The New Zealand dollar has been volatile lately, but it looks as if we are going to try to roll over again. The market has been decidedly bearish after the Federal Reserve suggested that perhaps it was going to step away from quantitative easing much quicker than people anticipated, which is odd considering that they essentially stated the same thing that they have in the past. There were a lot of people in the marketplace that considered the disaster hurricanes hitting the United States to be reason enough for the Federal Reserve to step away. However, they certainly don’t seem to be too concerned about that and therefore is likely that we will proceed. If that’s the case, the US dollar can strengthen a bit, and we could continue to go much lower in this pair. Alternately, if we were to break to a fresh, new high then I think it’s all but assure that we will be testing the 0.75 handle above which of course has a certain amount of psychological and structural resistance built in.
Volatility should continue
No matter what happens, I think volatility will continue this market as it is a highly influenced by commodities. It has been a choppy affair over the last several hours on the chart, but certainly we have turned a bit of a corner as the market has rolled over significantly. With the type of negativity, the jump into the market during the session on Wednesday, it’s hard to believe that it could be a “one-off”, and therefore I think that the market is probably trying to tell us something, that perhaps we will have to go looking for the 0.72 level below. Again though, if we were to rally I’m not going to argue with this market, I will simply follow.

USD/CAD Forecast September 22, 2017, Technical Analysis

The US dollar has been slightly positive against the Canadian dollar during the trading session on Thursday, testing the underneath of an uptrend line that had been broken previously as the Bank of Canada raised interest rates. The 1.24 level is where we fell from after that announcement, so if we break above that level, I think that the trend will start to head towards the upside. If we get some type pullback from here, it could be a continuation of the downward pressure that we have seen previously, and of course if oil markets continue to rally that could help as well. Currently, it appears that people are focusing more on the Federal Reserve suggesting that the US dollar may strengthen. However, I think that if we can wipe out the impulsive candle on the hourly chart from the session on Wednesday, that would be a sign that we are rolling over and ready to go much lower. This has been a very volatile market as of late, and I don’t know that it’s going to change anytime soon.
Ultimately, smaller positions will be needed
I think with the type of choppiness that we are seeing in this currency pair, smaller positions will probably be needed to protect your account. It’s not until we get some type of clarity on the longer-term charts that it’s a market that I’m willing to put serious money in, but I do recognize that we are looking at a very serious inflection point when it comes to this market. Because of that, I think that the pair will be very interesting to watch, and perhaps one to build up a larger longer-term position. However, I’m going to let the market tell me what to do first before getting overly exposed.

AUD/USD Forecast September 22, 2017, Technical Analysis

The Australian dollar fell precipitously against the US dollar during the session on Thursday, as it appears that the Aussie has run out of steam. On the daily charts, we formed a massive shooting star for the session, and have now fulfilled the promise of bearish pricing. It now looks as if we are going to go lower, and I now think that the market will probably try to break down below the 0.79 handle. If we do, that should bring in more bearish pressure. If we try to rally from here, I suspect that there will be more than enough pressure above to keep putting the market in a lower trajectory. I’m not looking for some type of massive meltdown, I just recognize that perhaps the market has run out of reasons to try to rally in the short term. After all, the United States looks likely to taper away from quantitative easing, and the Australian dollar is highly influenced by gold which of course was negatively impacted by that news.
Longer-term outlook
The longer-term outlook for the Aussie is probably reasonably strong, but I think that a pullback has been necessary for a while, and we may be seeing the beginning of that. If we were to break out to the upside and above the 0.80 level, at that point I think you would have to start thinking about going long regardless. It would be all but unknown quantity that the buyers had come back into the market and were willing to push as hard as a possibly had to. Currently though, I’m looking to sell rallies on short-term charts and take advantage of the markets in that sense. I will reevaluate this every 24 hours as I typically do, but right now it certainly looks bearish.