AUD/USD Price Forecast January 18, 2018, Technical Analysis

The US dollar initially tried to rally towards the 0.80 level, an area that has been important for quite some time. A break above that level is a significant move, but it’s not until we break above the 0.80 level that the market is more of a “buy-and-hold” market. I think in the meantime, short-term pullbacks will continue to offer value the people are willing to take advantage of, and that will be especially true if the gold markets rally. Ultimately, I think pullbacks find plenty of support at the 0.7950 level, and most certainly at the 0.79 level.

With the volatility that we have seen during the day, I think that the market is trying to build up enough momentum to finally break out to the upside, and that pullbacks will probably offer value the people are willing to take advantage of. Gold markets a course have their influence on the Australian dollars well, as we have seen gold rally significantly, while simultaneously seeing the US dollar didn’t beat down. I believe that longer-term, the market will finally break out to the upside, and then reach towards the 0.85 handle. Adding on dips could probably continue to be the way going forward, so I think that we should continue to have plenty of reasons to go long. So be especially true if the “risk on” attitude of overall global markets continue. The market looks likely to be noisy, but ultimately it is a market that should continue to see value hunters come into the market on dips.

EUR/GBP Price Forecast January 18, 2018, Technical Analysis

The EUR/GBP pair initially tried to rally during the trading session on Wednesday, and as you can see it’s likely that the traders are starting to look at this as a slightly oversold condition based upon the stochastic oscillator that is crossing in the oversold condition on the one-hour chart. I think that we will probably bounce towards the 0.89 level, but I recognize there is a significant amount of resistance in that area. If we do break above there, the market then goes looking towards the 0.90 level, as it gives us an opportunity to fulfill the range of the longer-term consolidation that this pair has been in.

The negotiations between the European Union and United Kingdom should continue to be a major driver of volatility in this pair, but when I look at this market I recognize that it’s not until we break down below the 0.88 level that you get a massive selloff, just as it’s not until we break above the 0.90 level that we get a massive melt of. I think that a lot of back and forth and volatile trading is what you need to expect in this market, but that’s okay because of you employ some type of range bound trading strategy, you should do quite well. Remember, the 0.89 level is essentially “fair value” when it comes to the longer-term consolidation, so it will continue to be a massive area of noise.

EUR/USD Price Forecast January 18, 2018, Technical Analysis

The EUR/USD pair initially tried to rally during the trading session on Wednesday, but then broke down to reach towards the 1.22 handle underneath. I think that’s an area that should continue to be an area of interest, but quite frankly the more important support level underneath is the 1.21 handle, so even if we break down I’m not interested in selling quite yet. I look at pullbacks as an opportunity to take advantage of value. The market looks as if it is trying to catch its breath, so I think it makes sense that we are trying to solidify the recent gains.

If we can break to a fresh, new high, the market should then go to the 1.25 level next, but it won’t necessarily be the easiest moved to make. I suspect that the 1.25 level is going to be very difficult to break, so it may take several attempts. If we did breakdown below the 1.20 level, I think that would be enough psychological destruction to the uptrend to send this market much lower. I don’t think that’s going to happen, but you should always pay attention to the alternate scenario, because you cannot assume that your bias is always correct.

I anticipate that we will probably see a couple of days of grinding, and then an impulsive move towards the later part of the week. In the meantime, I retain an upward bias so therefore will position myself accordingly.

GBP/JPY Price Forecast January 18, 2018, Technical Analysis

The British pound was very noisy against the Japanese yen during the trading session on Wednesday, showing lots of choppiness during the day. The 153 level above is massive resistance, and we did pull back during the early American trading. However, I think there is a significant amount of support underneath, extending down to the 152 level. The 152 level is an area that has proven itself a couple of times recently, as the buyers are trying to build up the momentum to finally break out to the upside. Ultimately, once we do breakout to the upside, I think that the GBP/JPY pair will eventually go to the 160 handle over the longer term.

The 152-level underneath being broken to the downside would of course be a very negative turn of events, perhaps sending the market down to the 151 handle, and then after that, the most important support level on the chart: the 150 level. I think that a lot of movement in this market will be tied to risk appetite around the world, and of course the negotiations between the European Union and the United Kingdom. Ultimately though, if there is a big move up in the stock markets, typically the GBP/JPY pair will rally as well.

Ultimately, I think you will need to be able to deal with the volatility, so adding slowly might be the best way to go, perhaps adding as the market has been moving in the direction of your trade, giving an opportunity to potentially take advantage of a significant break out to the upside.

GBP/USD Price Forecast January 18, 2018, Technical Analysis

The British pound went back and forth during the trading session on Wednesday, trading against the US dollar in a consolidated move. I think given enough time, we go higher though, and I believe that a break above the 1.3650 level was very important. I believe that we will probably go looking towards the 1.40 level, as it is the next large, round, psychologically significant handle on the chart. I think that the 1.3650 level underneath continues to offer support, so it’s not until we break down below there that I would be concerned about the British pound. A breakdown below there would be rather negative, sending the market down to the 1.35 handle next.

There has been a lot of negativity around the US dollar, and I think that should continue to be a theme in this pair, at least for the near term. At the 1.40 level, we will of course have a significant amount of resistance based upon not only structural resistance, but psychological resistance. I suspect that the volatility will probably pick up, but there is still most certainly a bullish bias when it comes to not only this market, but anything that has a quote price in US dollars.

Longer-term, I anticipate that we will go looking for the 1.50 level, but the attitude of market participants continues to be very short-term thinking, but with a positive spin overall. On dips, look at the markets as offering value, and be willing to take advantage of the market when it offers that type of opportunity.

NZD/USD Price Forecast January 18, 2018, Technical Analysis

The New Zealand dollar has fallen initially during the trading session on Wednesday, but found enough support underneath to turn things around and show signs of strength again. On the one-hour chart, we are crossing over in the overbought position, which of course is a negative sign, so don’t be surprised if we get a little bit of a pullback. However, if we reach above the 0.73 level, then I think the market continues to go much higher, perhaps reaching towards the top of the longer-term consolidation area, which is the 0.75 handle.

One thing I think you can count on is a lot of volatility, and the market will continue to be just that – volatile. If we break down below the 0.7233 level, then the market probably goes down to the 0.72 handle next, perhaps even lower than that. That would coincide with the major “risk off” event though, so at this point I think that if consolidation typically leads to continuation, it makes sense that the uptrend will continue. Beyond that, we have the commodity markets to pay attention to, as if they are going up, that typically drives demand for the New Zealand dollar to the upside as well. The US dollar seems to be moving in the same general direction, and I believe that the market will probably continue to be the same: showing the US dollar as moving in one direction against almost all currencies around the world. Pay attention to the US Dollar Index, because if it starts to fall again, this pair should rally.

USD/CAD Price Forecast January 18, 2018, Technical Analysis

The US dollar rallied a bit during the session on Wednesday, reaching towards the 1.2450 level, before dropping about 50 pips. The market looks likely to continue to be very noisy, and that makes sense considering that the economies are so intertwined. Pay attention to the oil markets, they always have their say when it comes to the value of the Canadian dollar, as the Canadian dollar is considered to be a proxy for the market. I look at the 1.25 level above as significant resistance, but if we can break above there it would be a very good sign that we are going to try to reach towards the 1.26 level next.

Ultimately, if we break down below the 1.24 level, I think that it’s only a matter of time before we go down to the 1.21 handle, followed by the 1.20 level after that. The market participants continue to be very jittery, as there are concerns about the NAFTA agreement going forward as well. I think that the market participants will continue to be very easily influenced, and I think that the market is going to continue to be more of a short-term type of situation.

I believe that the market continues to offer trades on the one-hour chart, but if you tried to hang onto a trade for more than a day or two, you’re going to run into trouble. That might be the theme going forward, at least until we get some type of large move in the oil market or clarity coming out of the NAFTA negotiations.

USD/JPY Price Forecast January 18, 2018, Technical Analysis

The US dollar initially fell against the Japanese yen, but then bounced significantly later in the day. I think at this point, the 61.8% Fibonacci retracement level is probably causing traders to be interested in going long, especially considering that the 110 level is just below. A break above the 111 level is a very bullish sign, sending this market the much higher levels. At that point, I would expect the market to go looking towards the 113 level. However, there is also a significant “floor” in the market underneath that should continue to be a major player in this market.

I think if we do break below the 110 level, we will probably wipe out the entire move, which should send this market down to the 107.50 level underneath. That’s typical Fibonacci trading, as breaking below the 61.8% level should send this market looking to take out everything. Remember, this pair is highly sensitive to risk appetite around the world, so pay attention to stock markets and how they perform. If they do better, typically this pair will rally as well. However, the recent selloff has been rather vicious, and there are multiple shooting stars just above in the middle of that fall. I think that the market will continue to be noisy, but ultimately, we have a serious decision to make rather soon. I suspect, and would be willing to put money on it, that if we do fall towards the bottom of the entire move, there will probably be massive amount of support positions out there, perhaps offer in a nice longer-term opportunity. In the meantime, though, it looks as if we are trying to rally before we even have to ask that question.

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