AUD/USD Price Forecast March 22, 2018, Technical Analysis

The Australian dollar has drifted a bit lower during trading on Wednesday, as we await the monetary policy statement coming out of the Federal Reserve. Obviously, the biggest question now is going to be whether there are 3 or 4 interest rate hikes coming this year. This will make a huge difference as to what happens with the US dollar, but from a technical analysis standpoint, it’s obvious that we have broken down below a significant support level in the form of 0.77, and of course have broken below the 61.8% Fibonacci retracement level. Because of this, I think we will go looking towards the uptrend line below, somewhere near the 0.76 level, which is the bottom of a daily uptrend channel that has been in effect for quite some time. If we were to break down below there, then we go to the 100% Fibonacci retracement level, the psychologically important 0.75 handle.

If the Federal Reserve surprises with a significantly dovish tone, or perhaps even comes out and states that there are only 3 interest rate hikes coming, the Aussie could get a bit of a pickup at that point, reaching towards the 0.7750 level, and then eventually 0.78 and the next couple of sessions. I think it will be choppy, and of course you need to pay attention to gold as it will also be very sensitive to what happens with the monetary policy. In general, I think that the sellers are still in control, but things could change rapidly.

EUR/GBP Price Forecast March 22, 2018, Technical Analysis

The EUR/GBP pair has broken below the 0.88 level a couple of days ago, and the action on Wednesday suggests that we are going to continue to see a bit of downward pressure. This does not signify that we are going to see some type of melt down, rather that we will probably go looking towards the 0.87 level, and then eventually the 0.86 level which is massively supportive on longer-term charts. Obviously, this pair does tend to be very choppy in general, and with the negotiations going on between the economies, there’s likely to be a lot of headline risk. However, you don’t need this pair to move as far as other pairs, because the pip value is so strong.

I believe in selling the rallies will continue to be the way forward, unless we manage to break above the 0.88 level, which would be very positive for the market, obviously. At that point, I suspect that the buyers will come back in. In the meantime, I would anticipate a lot of choppiness with an overall downward proclivity, at least to the 0.86 level, where I think there’s an even bigger fight just waiting to happen. Headline risk of course is still going to be a major problem with this market, as politicians can and will say anything it any given time without regard to what happens in the financial markets. I think that some of the bullishness for the British pound continues, mainly because we have signs that progress is being made in the negotiations. Longer-term though, I think this pair probably find buyers.

EUR/USD Price Forecast March 22, 2018, Technical Analysis

The EUR/USD pair has rallied during the trading session on Monday, going into the monetary policy statement. I think that we have a lot of potential trouble coming out of the monetary policy statement, but I believe that the end of the day will see some type of significant decision made as to where the US dollar goes. If the statement is very hawkish, it could see the EUR/USD pair rollover rather significantly in go down towards the 1.22 handle, perhaps down to the 1.21 level after that. There’s also a major uptrend line that should continue to keep this market going higher. Ultimately, I believe that the monetary policy statement being more dummy should send this market to the upside, perhaps reaching towards the 1.24 level. Longer-term, we have seen the EUR/USD pair rally significantly, but I also recognize that this type of volatility is going to come into focus for the marketplace, as the ECB has to deal with less than stellar German economic figures.

Ultimately, I think that the market will try to go to the 1.25 level above, and perhaps even try to break above there and go to the 1.32 handle, based upon the bullish flag on the weekly chart being broken to the upside. I have no interest in shorting this market, least not until we break down below the 1.21 handle. Ultimately, this is a market that I think eventually will offer a longer-term move, but ultimately the EUR/USD pair will continue to be extraordinarily choppy.

GBP/JPY Price Forecast March 22, 2018, Technical Analysis

As you can tell from the intro paragraph, I believe that the 150 level is crucial when it comes to trading this market. It does look as if we are trying to build a bullish pressure and go higher, and an argument could be made for a bit of an ascending triangle being built just below the previous uptrend line on the daily chart. If that gets triggered, it suggests that we could go to the 150.75 level, but I think the 150 level needs to be cleared by the bullish traders for you to feel comfortable going long. I think there is far too much risk out there, and of course this pair does tend to be very sensitive to risk appetite. If we have trouble in the stock markets again, that could sell this market hard.

If we break down, I anticipate seeing significant support at the 148.50 level, and then again at the 147 handle. This is a market that does tend to be very noisy, so any type of action like that shouldn’t be much of a surprise. I would be small initially with my trading position, but if we can get some type of upward momentum, I would become much more aggressive on dips and try to build a longer-term position. As far as selling is concerned, a clearance of the 147-level underneath would break the back of the buyers and send this market much lower over the longer term. Currently though, it seems like people are willing to pick up risk, which means eventually this pair should rally.

GBP/USD Price Forecast March 22, 2018, Technical Analysis

The British pound has rallied a bit during trading on Wednesday, using the 1.40 level as support. Breaking above that level was important from a technical standpoint, because not only did we break above a downtrend line, but we also broke above a major round number. Because of this, I do think that the proclivity is to the upside but if the Federal Reserve seems to be overly hawkish in its monetary policy statement, that could change things and send the market lower. At this point, I still believe that if we can stay above the 1.39 level, there are plenty of reasons to go long.

Alternately, if we break down below that level, it’s likely to send this market down to the 1.38 level, and then eventually the 1.3650 level. Ultimately, I believe that the British pound is going to find buyers, but the question is whether we can find the buyers here or find them at lower levels. If we get a massive hawkish statement of the Federal Reserve, it’s likely that we could breakdown rather significantly. I believe that there is plenty of reason to think that eventually will go higher, because quite frankly we have seen a tenacity with British pound traders over the last several months, so I think we will find a reason to go higher regardless of the situation, given enough time. It might take patience, and most certainly will probably take a smaller trading position to protect your trading capital, but it does appear that the uptrend is still very much intact going into this announcement.

NZD/USD Price Forecast March 22, 2018, Technical Analysis

The Federal Reserve will release an interest rate policy decision during the day on Wednesday, and then will have a press conference. By the time we get into trading today, we will have had a significant decision as to the future the US dollar over the next several months. I suspect that traders will parse the statement and trying to figure out if there is going to be 3 or 4 interest rate hikes this year, as it is the most important question. If it appears that the Federal Reserve has not gotten more hawkish, that could lead traders to believe the 3 interest rate hikes will be the regiment, and that could send this market looking for the 0.7250 level. A clearance of the 0.72 level should suggest this is about to happen.

Alternately, if the market roles over, I think then we go looking towards the 0.70 level which of course is a large, round, psychologically significant number, but it is not the bottom of the overall consolidation that this pair has been in for months now. That honor falls to the 0.68 level underneath, so I think that could be a longer-term target if we get sudden US dollar strength. Remember, the currency markets will be very difficult to deal with for several hours after the announcement, so I would be very small in my trading position. However, the New Zealand dollar does tend to trend for long ranges, so this could give us a nice place to put a currency trade on. At this point, it becomes a question of where the US dollar is going, and much less a question of where the New Zealand dollar is going.

USD/CAD Price Forecast March 22, 2018, Technical Analysis

The US dollar has initially tried to rally during the day on Wednesday but rolled over significantly at the 1.3050 level to break down. This I believe is in reaction to the upcoming announcement, and perhaps people willing to step away from the market so that they don’t get burned by a surprise reaction. The question will be whether there are 3 or 4 interest rate hikes this year, and although the Federal Reserve more than likely won’t say specifically which path they are going to take, there will be people reading the statement with anticipation and trying to figure out what it means. This will cause a lot of volatility, and quite frankly will make currency trading a bit difficult. I believe that if the Federal Reserve sounds somewhat hawkish, that will send this market straight up through the ceiling. At that point, I would be looking for the 1.35 handle. If it seems to be very dovish, or at least not overly hawkish, that could send this market lower.

I believe that given enough time, we should see buyers looking for value, but the question remains as to when they will jump in? I think it’s probably best to step away from this market in the short term, but longer-term I still believe that the buyers will push this market to the upside, perhaps reaching towards the 1.35 level over the next several weeks. Obviously, things can change after the statement, so caution is the better part of valor and stand on the sidelines may not be the worst choice.

USD/JPY Price Forecast March 22, 2018, Technical Analysis

The US dollar has fallen during the day on Wednesday, reaching towards the 106 level. That’s an area that has a bit of psychological importance, but at the end of the day it’s not a major level. I think the 105.50 level is much more supportive underneath, and that will be where value hunters could return to the marketplace. The 105-level underneath is even more supportive, so I think it’s more of a zone that we are looking at, and less of a level. If we were to break down below that 105 level, that would be extraordinarily negative for the US dollar, sending it down to 100.

The alternate scenario of course is that we get bullish pressure and it looks likely that we will reach towards the 107.50 level, but obviously this is going to take some help from the Federal Reserve. I believe that the next 24 hours will be very rocky and noisy but could give us some form of clarity as to where we are going next. In general, I believe that we will find value hunters eventually, but it’s going to take a bit of help. The next 24 hours could very well determine where this pair goes for the next several months. Because of this, be very cautious and you small position sizing until the market proves you correct.

AUD/USD Price Forecast March 21, 2018, Technical Analysis

The Australian dollar has initially fell during the trading session on Tuesday, but you can see is starting to bounce a bit on the chart. I think that the 0.77 level is going to continue to be a fulcrum for price, at least until we get the announcement coming out of the Federal Reserve suggesting how many interest rate hikes there are going to be for the rest of the year. Do not be surprised if they don’t bother being very clear with their statement, it seems to be that’s been the game for the last several years. However, if we do get some clarity that could greatly influence where this market goes next.

If we get a potential 3 interest rate hikes for the rest of the year, then this pair should rally. However, if we expect for interest rate hikes for the rest of the year, it’s likely that we would see this pair fall significantly, perhaps towards the 0.76 line initially, which is the uptrend on the daily chart of the of trending channel, and possibly even below there to the 0.75 level. Expect a lot of volatility regardless what happens, and as per usual, pay attention to what gold does as it is a major driver of the Australian dollar. The volatility should continue to be a major issue, so keep your position size small until we get a significant and impulsive move.

EUR/GBP Price Forecast March 21, 2018, Technical Analysis

The EUR/GBP pair has been decidedly negative for some time, and now that we got the basic outline of an agreement between the economies as to how Great Britain will leave the European Union, this could continue to favor the British pound, although I think there’s a lot of support underneath that comes into play. After all, longer-term problems could still present themselves, especially considering that the British are venturing into somewhat unknown territory. Traders could very well prefer the safety and known quantities of the European Union going forward, and this could continue to be what will drive this market in the future.

However, in the short term it’s not until we break above the 0.88 level that I think the market will be able to be bought with any type of confidence, as there is most certainly an area of concern in that region. I think that ultimately, the markets breaking above there could send in fresh money, but I think it might take some momentum building to make that happen. The market continues to be very noisy, and of course will move quite a bit on headlines, so keep that in mind as well. Ultimately, I think that the 0.86 level underneath could be the target if we make a fresh new low, so keep that in mind if momentum continues to reach towards the British pound.

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