AUD/USD Price Forecast November 20, 2017, Technical Analysis

The Australian dollar has fallen a bit during the day on Friday, showing signs of struggle against the US dollar you again. The 0.7550 level underneath has been supportive in the past, and is the beginning of massive support at the 0.75 handle. If we were to break down below there, I think that the market come on routing go looking towards the 0.7350 level after that. However, right now looks as if we are starting to bounce a bit, and I think that were going to find resistance near the 0.76 level above. That’s an area that could cause a bit of trouble, extending towards the 0.7650 level. Overall, I think it’s not until gold markets rally that the Australian dollar can pick up any major strength, so I think that it’s only a matter of time before we do roll over. I think that continues to be very choppy and volatile, but most certainly negative in general.
Remember that the Australian dollars highly sensitive to risk appetite as well, so if the stock markets roll over or the commodity market selloff, it’s likely that the Aussie will fall as well. Markets have been selling off the US dollar in general, but the Aussie has not been able to rally against it. This tells me most of what I need to know, that the Australian dollar is inherently soft currently, and that is likely to continue to be the case going forward. All things being equal, I’m looking for opportunities to pick up the greenback “on the cheap” when it comes to commodity currencies in general. With commodities going lower, and looks as if we are going to continue to see trouble with the commodity currencies. The gold markets certainly aren’t looking likely to break out, so I remain negative.

EUR/GBP Price Forecast November 20, 2017, Technical Analysis

The EUR/GBP pair has been very volatile over the course of the last 24 hours, hanging about the 0.89 level. This market has been consolidating between the 0.88 level on the bottom, and the 0.90 level above. As we are in the middle of that area, we are essentially at “fair value.” I believe that given enough time, the market should continue to go higher though, as traders will continue to favor the European Union over the United Kingdom as the two economies split. I believe that a break above the 0.90 level would be a very bullish sign, and the market should then go to the 0.93 handle after that. I think that pullbacks continue to be buying opportunities, and although I think that the bearish pressure to the British pound has been overdone, the reality is the traders prefer stability and trade away from uncertainty, something that the United Kingdom is full of.
I think that we will continue to be very susceptible to headlines coming out of both London and Brussels, and that causes a lot of trouble. I think that the 0.88 level should be a hard “floor” though, and I would be surprised to see this market break down below there. Dips continue to be buying opportunities, but I also recognize that the noise will continue to be extreme. The one remedy for this is to trade to the upside only, but in small portions. Remember, this pair is almost double the value of most other ones per tech, so that comes into play as well. Once we break to a fresh, new high, then I’m willing to throw more money into the market to the upside. If we were to break down below the 0.88 level, I would not be a seller immediately, I would have to rethink the entire situation.

EUR/USD Price Forecast November 20, 2017, Technical Analysis

The EUR/USD pair has been choppy during the trading session on Friday, rallying a bit, breaking above the 1.18 level. However, we roll over from there and it looks as if were going to settle on an almost unchanged day. Breaking above the 1.17 level was rather significant, and I think that should be paid attention to. This was the previous neckline from the head and shoulders pattern on the daily chart that had been broken to the downside, and the fact that we turned around and broke above it is a very powerful signal for the strength of the EUR. I believe that one of the biggest drivers of this move has been the lack of a tax bill coming out of the U.S. Congress, and if they keep dragging their feet, it’s likely that we will continue to see buyers jump into this market place. However, keep in mind that the ECB is looking to extend quantitative easing, so therefore although tax bills continue to play the US dollar, there is still a little bit of heaviness to the EUR.
If we break out to the upside, the market should then go looking towards the 1.20 level, and then eventually the 1.21 level after that. Pullbacks to the 1.17 level should find plenty of support, and I believe that if we can stay above that level, the market is very healthy. If we break down below the 1.1650 level, the market should then go to the 1.13 level below, which is the 50% Fibonacci retracement level from the larger move. I believe that paying attention to these couple of levels is crucial to what we do with this market. One thing I think you can count on is volatility.

GBP/JPY Price Forecast November 20, 2017, Technical Analysis

The British pound was very volatile during the trading session on Friday, initially tried to rally, but then broke down significantly against the Japanese yen, testing the 148 handle. That’s an area that has been important in the past, so it doesn’t surprise me at all that we are stalling a bit here, but if we break down significantly below the 148 handle, that opens the door to the 145 level. The market has been making a series of “lower highs”, and that of course signifies that there is building downward pressure. I have no interest in buying this pair, because every time it rallies it seems like the sellers are willing to come back in full force. However, if we were to break above the 149.50 level, that would signify a massive shift of attitude, and perhaps an attempt to break above the 150 level after that.
In general, I believe that the market will continue to be very choppy, and I believe that a lot of risk on attitude will continue to be bullish, while a risk off would be negative. In general, the markets will continue to be very noisy, so using a smaller position is probably the best way to go, as the volatility can be very dangerous for your trading account. However, I think that we still should air on the side of caution, meaning that we should sell and not buy in general. The market is one that is highly sensitive to stock markets in general, so pay attention to the S&P 500, the FTSE 100, and the Nikkei. I think that if they get a bit of a boost, this market could rally. However, if they sell off, and they are all overextended, that could send this market much lower.

GBP/USD Price Forecast November 20, 2017, Technical Analysis

The British pound has been very volatile during the trading session on Friday, testing the 1.3250 level but failing. However, I think that eventually we will break above there as the British pound is going to continue to strengthen as it is historically cheap. Looking at the longer-term charts, we are forming a hammer on the weekly timeframe, and that of course is a very bullish sign as well. Ultimately, this is a market that I think continues to grind its way to the upside, in a methodical manner. A break above the 1.3250 level should send this market looking towards the 1.35 handle above, and then eventually the 1.3650 level. That is the scene of the gap lower after the Brexit vote, and that means that we will continue to see a lot of interest paid to that area. If we were to break above there, the market could go much higher, perhaps the 1.40 level over the longer term.
I think that there are a lot of concerns when it comes to headlines coming out of the negotiation between the United Kingdom and the European Union, and that of course will continue to cause issues with the British pound overall. However, I think that there is a longer-term argument to be made for going higher, so I believe that investors are starting to buy the British pound. The US dollar has been strengthening in general, but at these extraordinarily low levels, it makes sense that this pair rallies. Remember, it was just a few years ago that we were trading at 2.00 in this market. Because of this, I believe that the market should continue to be very difficult to manage, but I believe in the value of the cheap British pound.

NZD/USD Price Forecast November 20, 2017, Technical Analysis

The Kiwi dollar has broken below the 0.68 handle during the session on Friday, but did bounce a bit to pop above that level again. Ultimately though, this is a very negative candle that we are forming for the day, and I think that it’s only a matter of time before the sellers get into the market, as the New Zealand dollar is awfully soft, and of course the commodity markets aren’t helping either. The 0.69 level above should be a bit of a “ceiling”, and quite frankly I don’t think we are going to getting rid near there. Look at this chart from a longer-term standpoint, breakdown below the 0.68 level signifies that we are ready to make a move lower. The US dollar course has continued to be bid of as we are expecting tax reform to eventually come out of Washington DC, and that should continue to have people buying the greenback against commodity currencies.
If we can make a fresh, new low, the market then should go looking towards the 0.65 handle next. I believe that the New Zealand dollar is in a massive downtrend that should continue, so selling rallies continues to be the best way. If we did somehow break above the 0.69 level, then I think the 0.70 level above would be targeted next. It’s not until we break above there that I would consider buying this pair, so being patient and waiting for and exhaustive candle is my plan of attack, as I believe that the New Zealand dollar continues to struggle going into the next several weeks, and possibly even the beginning of next year. With the negativity, it’s a most impossible to fight this type of momentum. Therefore, I won’t.

USD/CAD Price Forecast November 20, 2017, Technical Analysis

The US dollar has been very volatile against the Canadian dollar during the trading session on Friday, initially dipping down towards the 1.2715 level, and then exploding to the upside, reaching as high as 1.2830. We then rolled over a bit, and it now looks as if the market is simply going to bang around in this area as we are trying to pick up the upside, and turn things around from a longer-term perspective. I believe that the 1.27 level is a major support barrier, and until we break down below there on a weekly chart, I think that the buyers are probably going to continue to run the show, although they will more than likely have a significant amount of trouble doing so. That means choppy conditions, and of course the crude oil markets will make their presence known as well, as the Canadian dollar is so highly influenced by those crude oil markets.
The volatility will only pick up, because we have the interest rate differential going back and forth as the bond trade has been a major driver of this pair, but we also have the Canadian housing bubble, and of course the tax bill in the United States. There are a lot of moving pieces, but I think at the end of the day it will be oil that makes the biggest effect on this market. In general, this pair I believe is trying to get to the 1.30 handle, so I look at this as a “buy on the dips” opportunity on signs of support. I believe longer-term, the Canadian dollar will continue to fall as eventually the price of oil will, due to the oversupply of petroleum around the world. That being the case, it’s going to be very bumpy trading.

USD/JPY Price Forecast November 20, 2017, Technical Analysis

The US dollar fell significantly during the trading session on Friday, and then bounced slightly to only roll over again. We have tested the 112 level, and if we can continue to go lower from here, the market will probably break down to the 108 level after that. That is the bottom of a longer-term consolidation area during the past year, and that is something to pay attention to. If we break down from here, I believe that area will offer a significant amount of support. That level is the “bottom” of the market as far as I can see, and quite frankly I think one of the biggest drivers of this move lower has been the lack of the ability for the United States Congress to pass a tax bill. Because of this, I think that it’s only a matter of time before the market rallies, because politically speaking, the Republicans absolutely need to pass this bill before the midterm election.
Because of this, I think that the breakdown will be an opportunity to pick up value in a market that should rally significantly after that bill is passed. Because of this, I think that the market will continue to be softer several weeks, and therefore a breakdown would not be surprising. However, I’m also looking for an opportunity to turn things around and take advantage of a longer-term move. If we break above the 113 level in the short term, then I consider that this market is going to rally and continue to break out to the upside as well. Either way, it’s can be volatile, but anything involving the Japanese yen typically is. The noisy trading conditions should keep traders trading with small position size due to potential damages.