GBP/JPY Forecast December 18, 2017, Technical Analysis

The British pound broke down during the trading session on Friday, clearing the 150 level towards the end of the day. We have bounced back towards that area though, and are starting to see a bit of selling pressure. I think if we rollover below the 149.50 level, the market is likely to go down to the 148-handle underneath which is the next support level. I do believe that this market goes higher longer term, but this pullback is simply a return to the channel that we have been trading in over the last year. Remember, this pair is highly sensitive to risk appetite around the world, so keep that in mind as well. If stock markets rally, typically this pair will do the same thing. However, if there is a general run to safety, the Japanese yen is bid.

The 153 level above is the game changer for this pair, turning it into a “buy-and-hold” scenario. Because of this, I think that short-term trading is only can do right now, buying on dips as they show support to the upside, or if we break down below the 149.50 level, then selling and aiming for the 148 handle where I would expect to see a lot of noise and of course support. If we break down below 148, then were free to go to 145 but that’s the least likely of the scenarios I am looking at currently.

EUR/GBP Price Forecast December 18, 2017, Technical Analysis

The EUR/GBP pair has rallied significantly during the trading session on Friday, reaching towards the 0.8850 level. If we can clear this level cleanly, I believe that the market will then go looking towards the 0.90 level above, which has been the top of the overall consolidation area for the last several months. As we continue to go through negotiations between the European Union and the United Kingdom, I think that we will continue to get a lot of noise in this market. However, I do believe that the upside is more than likely going to be the best way to go, as stability in the European Union is probably going to be favored since we don’t know how things you can end up in the United Kingdom after the breakup. I think this is a natural reaction for most traders, as they prefer the known.

Because of this, we will more than likely eventually break out above the 0.90 handle, and once we do, we should go to the 0.93 handle. Ultimately, I believe that this pair could go to parity, but it’s going to take a while to get there. However, if we were to break down below the 0.88 handle, I think the market then could breakdown to the 0.86 level below which has been massively supportive. Ultimately, I think the noise in this in this market will continue, so keep being a small position and adding as we rally is probably the best way to go. Quite frankly, I would be a bit surprised if we break down and would not trust that move is much as I would a move to the upside.

AUD/USD Forecast December 18, 2017, Technical Analysis

The Australian dollar rallied initially during the trading session on Friday, but found the 0.77 area to be a bit too exhaustive, thereby turning around and falling towards the 0.7650 level. I think that the market forming a shooting star like candle for the day is of course a negative sign, but I also believe that the weekly candle shows just much bullish pressure there is underneath. Because of this, I think that the pullback at this point should be a nice buying opportunity, based upon a supportive candle or some type of bounce. If we break above the 0.77 level, I think we then go looking towards the 0.80 level above, which has been a very important level going back decades. At this point, I think the Australian dollar has changed its tune, as this past week has been so strong. If gold breaks above the $1300 level, that could be reason enough to send this market much higher as well.

As long as there’s a bit of a “risk on” attitude to the overall marketplace, I think that the Australian dollar will show signs of strength. The volatility will continue, but I believe that the longer-term uptrend line that is just below the 0.75 level has made its presence known, and that although things will be very noisy, I think we are looking at a positive couple of weeks at the very least. On a weekly close above the 0.80 level, this becomes a very bullish market.

GBP/USD Forecast December 18, 2017, Technical Analysis

The British pound fell during the trading session on Friday, slicing through the 1.3333 handle. The shooting star looks very likely to show that we are going to continue to go lower, but I think there is an uptrend line on the longer-term charts, mainly the weekly time frame, that should continue to be very supportive. Ultimately, I believe that the buyers will return, as the uptrend has been rather strong over the last year. I also believe that there are a lot of value hunters out there looking at the British pound as being undervalued longer-term, and historically speaking this is correct.

I think if we can break above the 1.35 handle, that is a sign that we continue to go much higher, reaching towards the 1.3650 level where we had seen a previous gap. A break above that level is a longer-term “buy-and-hold” scenario, something that I expect to see during 2018. In the meantime, headlines coming out of Brussels and London will continue to move this market, as we have seen so much uncertainty when it comes to how the divorce proceedings will in between the European Union and the kingdom. This market should continue to be bullish longer-term, but in the meantime, I think there is a lot of “scared money” willing to dump the British pound at the first sign of trouble. We also have the tax bill in the message, and that could put money back towards the US dollar, but I think longer-term that will be but a blip on the radar. It’s not until we break down below the 1.31 handle that I would be concerned.

NZD/USD Forecast December 18, 2017, Technical Analysis

The New Zealand dollar initially broke out above the 0.70 level during the day on Friday, but then pulled back as we reached the highs from the week, and then found the 0.70 level to be supportive, at least at the time of writing. If this area holds as support, this market should continue to go higher, and I would be the first to point out that we are in the oversold position on the stochastic oscillator, and crossing the moving averages. Because of this, I think that the New Zealand dollar will continue to go higher, as it has formed a very bullish candle for the week, and seems to have found the 0.68 level supportive yet again. When you look at the longer-term charts, the 0.68 level underneath is massively supportive, just as the 0.75 level above is massive resistance. This being the case, it’s likely that the market is simply continuing the overall long-term consolidation.

With that in mind, I think that the beginning of next year’s going to be very bullish for the New Zealand dollar, if you can hang on to the volatility. Adding slowly might be the best way to go as we are reaching towards a very thin time of year during the holidays. Then trading conditions can make the currency markets move rather rapidly, but in general I think we have made a serious statement as to where we are going in January. Short-term pullbacks continue to offer buying opportunities, and the New Zealand dollar seems to be telling us that the risk on attitude may be coming back.

USD/CAD Price Forecast December 18, 2017, Technical Analysis

The US dollar initially pulled back during the trading session on Friday, reaching down towards the 1.2750 level. That is an area that offered enough buying opportunities and pressure to turn the market around, and we have skyrocketed sense, gaining over 100 pips. By doing so, we had formed a bit of a “W pattern” on the hourly chart, and it looks likely that the buyers are going to continue to go to the upside and continue to put money behind the greenback as the Loonie continues to struggle due to oil markets that are less than impressive, so I believe that we will continue to see bullish pressure in this market, as oil is such a large contributor to Canadian dollar strength.

I believe that the impulsive move during the session on Friday suggests that we are going to continue to see nice buying pressure, and the weekly candle is a massive hammer. The hammer of course is a bullish sign, and I believe that we will try to break towards the 1.30 level given enough time. I think adding on dips going forward is the best way to go. I don’t like selling this pair, and I also believe that the housing bubble in Canada could be a massive issue. Overall, I think that it’s only a matter of time before we break above the 1.30 level, which would offer a “buy-and-hold” trading opportunity. Overall, I believe that the market is going to go looking towards the 1.35 handle during the next several weeks, if not months. Volatility will be the mainstay of this pair, but I think bullish pressure is taking over.

USD/JPY Forecast December 18, 2017, Technical Analysis

The US dollar initially dipped towards the 112 level during the Friday trading session, but we found enough buyers underneath to turn around and rally to the upside. The 112.75 level is an area that we targeted, and at this point I think it’s likely that we will continue to see buyers on short-term dips as the 112 level is rather important. This market is highly sensitive to risk appetite, so pay attention to stock markets as they can be a bit of a harbinger as to where the US dollar goes against the Japanese yen. Of special interest is the S&P 500, which has a very strong correlation with this currency pair. Overall, I do believe that we continue to break out to the upside, but there is going to be a lot of noise that could cause resistance.

I believe that the 114.50 level above is the beginning of massive resistance, and as we have pulled back significantly, this could be an attempt to build up the necessary momentum to break out to the upside. I believe that the 112 Level Giving Way to selling pressure could send this market to 111, which is the 50% Fibonacci retracement level of the recent rally. That would only make me more bullish. If we can break above the 114.50 level, and more importantly the 115 handle, the market could go much higher and it becomes more of an investment situation going forward. I believe that the market should then go to the 118-handle next, on our way to the 120 handle. This is a market that continues to be noisy, but positive.

EUR/USD Price Forecast December 18, 2017, Technical Analysis

The EUR/USD pair initially tried to rally during the trading session on Friday, but then rolled over again to form a less than impressive candle. Because of this, I think we will probably continue to go lower, but I also believe that there is a significant amount of support underneath, especially near the 1.17 handle. Alternately, if we break out to the upside, especially the 1.1850 level, the market should then go to the 1.20 level after that, possibly the 1.21 handle. If we can break above there, the market then is free to go in more of a “buy-and-hold” type of attitude. I believe that eventually is what happens, but as we approach the end of the year, we could have a bit of a lull in trading action. The volatility could either spike rather rapidly due to thin trading conditions, or sometimes we will simply sit still. It’s a little too early to make that decision, but certainly the sum year can be very interesting.

I believe that longer-term it is a market you should be buying, so I will more than likely ignore most sell signals, and sadly wait for buying opportunities based upon support and of course bounces. A break out to the upside also has me throwing money at the market, but in the meantime, I think that the market is likely to react to tax bills coming out of the United States, and of course the ECB economic forecast that was released early this week. I think a lot of noise is coming, but at the longer-term charts, we have a nice bullish flag forming.

AUD/USD Price Forecast December 15, 2017, Technical Analysis

I believe that the Australian dollar is going to continue to go higher after breaking above the 0.7650 level, but there are several areas above that will cause issues. The most obvious one for me is the 0.7750 level, an area that extends to the 0.78 handle. Beyond there, we have a very massive resistance barrier at the 0.80 level. I think the Australian dollar is going to continue to be very noisy, and quite frankly difficult to deal with. If gold markets rally though, that gives us an opportunity to pick up the Aussie dollar as the momentum should continue to the upside. Volatility will be an issue, but quite frankly I think that this offers quite a bit of a “buy the dips” attitude going forward, but in short doses.

On the other hand, if we break down below the 0.76 handle, then I think we will give back the gains, and continue to go much lower. The reality is that the Australian dollar is sensitive the risk appetite overall, so pay attention to that. If markets go higher in value over all, the Australian dollar typically will benefit. Beyond that, we should pay attention to what the US dollar is doing in general, as it is of course half of this equation. I think that the market is going to be very difficult at times, so therefore keeping a position size relatively small is probably the best thing that you can do as we fight through the significant amount of noise just above current levels.

EUR/GBP Price Forecast December 15, 2017, Technical Analysis

The market continues to be very choppy, and I believe at this point the 0.88 level is likely to be the median at which the market is pivoting. I think that if we rally from here, we will probably have a significant amount of resistance at the 0.850 level, but if we can break above that level, it’s likely that we will continue to go much higher, perhaps reaching towards the 0.90 level above. In general, I think that the pair should continue to find plenty of buyers underneath, because of the longer-term aspect of the United Kingdom leaving the European Union. While I don’t think it’s catastrophic, and certainly the United Kingdom will survive, the reality is that traders like the stability of the EU over the unknowns coming out of the United Kingdom.

I think if we can break above the 0.90 level above, that then freezes market to go to the 0.93 handle after that. I think that the 0.8750 level below will be massively supportive, so if we were to break down below there I think the sellers would overwhelm the market. Currently though, even with the very soft Euro during the trading session on Tuesday, I think we will eventually find buyers to pick this market up yet again, as we continue to find plenty of resiliency in the uptrend that has been in effect for quite some time. In general, the volatility will continue based upon headlines, but longer-term I still believe in the upside overall.

EUR/USD Price Forecast December 15, 2017, Technical Analysis

Unless the longer-term outlook for the pair has changed, the volatility that we have seen during the trading session on Thursday should be a buying opportunity by the time everything is said and done. Because of this, I believe that the support area near the 1.1775 level could be an area where value comes back into play. This has been a rather significant move, but if we can break above the 1.18 handle, I believe that the market will continue to go to the upside, and when I look at the weekly chart I recognize that we are in the middle of a bullish flag, or at least trying to form it. That bullish flag could lead this market looking to the 1.32 level above, but that’s obviously a longer-term call.

In the meantime, I believe that if we can stay above the 1.17 handle, the market is fine, and that the buyers will eventually return. The Federal Reserve is already known to be in a tightening cycle, but it looks like the market has already taken it in stride. I think that given enough time, this market will rally, based upon growth in the European Union, and the inflation outlook in the European Union being reasonably strong over the next several years. We are well above the 2% mandate that the ECB follows, so a tightening of monetary policy is probably coming. Having said that, it’s likely that the buyers are waiting for the market to settle down, and they will then step in.

GBP/JPY Price Forecast December 15, 2017, Technical Analysis

The British pound initially rally during the session on Thursday, but turned around to show signs of weakness, reaching down towards the 151 handle. A breakdown below that level will have the British pound looking towards 150 below, and perhaps set up for a stronger move. I think if we can break above the 153 handle, then it becomes a longer-term “buy-and-hold” situation. I think that given enough time, we will do so, and then reach towards the 155 handle. A break above the 155 handle sends this market towards the 160 handle.

The volatility of course will continue, because there are a lot of concerns around the world when it comes to financial markets. This is a market that tends to be very volatile, so pay attention the stock markets around the world, as when they rise this pair tends to rally as well, but then again, when they fall that puts downward pressure as money goes running towards the Japanese yen. The volatility is one of the biggest issues with the market, so I think that using small position size is probably the best way to go. Having said that, if we break down below the 150 handle, I think we will see this market reach towards the 147.50 level rather quickly. Geopolitical concerns can also come into play, but let us not forget that the British are discussing leaving the European Union with the Europeans, and those headlines of course can jump into the fray and cause issues for the British pound itself.

GBP/USD Price Forecast December 15, 2017, Technical Analysis

The British pound has fallen significantly during the trading session after initially tried to rally. However, after the Bank of England announcement, it seems as if the Americans were willing to pick up the ball again, especially near the 1.34 handle. Because of this, I think that the market is going to go to the 1.35 handle above, which is a large, round, psychologically significant number. If we can break above that level, then I think we go looking towards the 1.3650 level above, which is a massive gap and therefore a major target from what I see. If we can break above that level, then it becomes a “buy-and-hold” situation. The market has been jumping around significantly, and of course there are a lot of headlines the can move the British pound currently, as we continue the discussions between the European Union and the United Kingdom. Because of this, the pair will be somewhat headline driven, but wanting to pay attention to is that inflation and the United Kingdom has been rising rapidly. In fact, we just hit a six-year high. This is typically good for interest rates going higher, which of course is good for the British pound.

I believe that the floor in the market is close to the 1.3333 handle, and if we can stay above there, the market is essentially going to be a “buy on the dip” type of situation. If we were to break down significantly below that level, then I think we could go to the 1.31 handle, but that seems very unlikely based upon the reaction of the British pound over the last couple of sessions.

NZD/USD Price Forecast December 15, 2017, Technical Analysis

The New Zealand dollar fell significantly during the trading session on Thursday, but it looks as if it is starting to find support just below the psychologically important 0.70 level. A move above that level is a very bullish sign, and I think that we will then go looking towards the upside, perhaps trying to reach as high as the 0.75 level longer-term, as it is the top of the longer-term consolidation area. However, if we were to roll over from here and continue to go lower, I think a break below the 0.69 level would be very disastrous for the New Zealand dollar. Expect volatility, that’s typically the case with the New Zealand dollar anyway, so keep that in mind.

Starting out with a small position and then adding slowly might be the best way to deal with the New Zealand dollar over the next several days, and especially as we get closer to the holidays with liquidity becoming an issue. That issue is likely to be a major problem later on, but right now it certainly looks as if the upside is favored. If we were to break above the 0.75 handle, that becomes a longer-term investment just waiting to happen. A lot of pundits are suggesting that the commodity space is an area that you should be looking towards in 2018, and of course the New Zealand dollar would benefit from that move. Because of this, I’m keeping a close eye on this pair as it looks like it is trying to rebound from the massive negativity it had seen recently.

USD/CAD Price Forecast December 15, 2017, Technical Analysis


The US dollar rallied a bit during the trading session on Thursday, spiking to the 1.2870 level, before pulling back again. I think that the epicenter of the market is the 1.2850 handle, and if we can break above the 1.29 level, the market can go much higher. There is the usual correlation to crude oil, so if it starts falling rather hard, this pair will of course take off to the upside. Beyond that, there is also the specter of higher interest rates in the United States as compared to Canada, so I think it’s only a matter of time before this market does rally. If we do break down from here, I think that the 1.27 level would be massively supportive. In fact, I do not believe that the market can be sold easily until we break down below the 1.25 handle, which would be a complete capitulation of the recent bullish pressure.

The Canadian economy also is dealing with a massive housing bubble in the Ontario province, most specifically around the Toronto area. This is a massive amount of the value of the Canadian economy, so this of course will be a situation that people were paying attention to. Overall, the market will remain volatile and choppy, but I believe that the buyers will continue to jump into this market, as there are far too many questions when it comes to the Canadian economy, and of course crude oil which will have its influence as per usual. Longer-term, I anticipate that we are looking at a move towards the 1.30 level.

USD/JPY Price Forecast December 15, 2017, Technical Analysis

Looking at the US dollar, you can see that we have been rather choppy over the last 24 hours, as the Japanese yen has found a lot of action near the 112.50 level. I think that we are either forming a bearish flag, or trying to find support. At this point, it’s very difficult to tell, and quite frankly a lot of this will come down to risk appetite overall. I think that the market breaking below the 112.40 level is a signal that we are going to go to the 112 handle next. On the other hand, if we can break above the 113 level, the market should continue to go much higher, perhaps reaching towards the 113.50 level above. At that point, I anticipate that we are going to see the markets reach towards the 114.50 level after that.

If we did manage breakdown below the 112 level, then the market will probably go much lower, perhaps reaching down to the 111 handle. The volatility should continue either way, but keep in mind that this pair is highly sensitive to risk appetite, so we need to see stock markets rally a bit, and the general “feel good” attitude as well for this pair to continue to go higher. Overall, I think that longer-term we will see buyers, especially considering that the interest rates look to go higher in the United States, while at the same time the Bank of Japan is light years away from cutting any type of quantitative easing. Lots of noise will more than likely be the main factor.

EUR/USD Price Forecast December 14, 2017, Technical Analysis

The EUR/USD pair continues to be very noisy, but it looks as if we are trying to form some type of supportive area in this region. On the weekly chart, I can make an argument for a significant bullish flag, and that should send this pair much higher over the longer term. If the Federal Reserve sounds more dovish than anticipated during the interest rate statement, it’s very likely that this pair will skyrocket to the upside as the ECB is going to step away, or at least cut back on, some of the quantitative easing fairly soon. Markets tend to look into the future, and that is the biggest argument for the buyers in this pair that I can see. Beyond that, during the session on Wednesday Senator Jeff Flake suggested that he may not sign the tax reform bill, and that could cause a little bit of concern with the US dollar as well.

If the central bank in America is much more hawkish than anticipated, that could turn this market around. Therefore, I believe that waiting until we break above the 1.18 level is probably the way to go in this market, as it would show a clear break above significant resistance. That break could lead to much higher levels, perhaps the 1.20 level next, and then eventually the 1.21 level which was massive resistance. For what it’s worth, the potential bullish flag that we are forming on the weekly chart measures for a move to the 1.32 handle, but that’s obviously looking way out into the future, and not today. A breakdown would more than likely have this market looking for the 1.15 handle.

EUR/GBP Price Forecast December 14, 2017, Technical Analysis

The EUR fell a bit during the trading session on Wednesday, but continues to find buyers just below the 0.88 handle. I think we are trying to form a bit of a base and possibly even a “floor” in the market heading into the later part of this week. If we can break above the 0.8850 level, the market should then go much higher, perhaps reaching towards the 0.90 level after that. That’s an area that has offered a significant amount of resistance in the past, so it will take a certain amount of momentum to break above there. Once we do, the market should go to the 0.93 level next. However, that’s not to say it will be easy, because there are a lot of noisy headlines just waiting to come out.

I believe that buying the dips continues to be the best way to deal with this market, and that we should eventually find plenty of reasons to go higher longer-term, as the stability and the European Union will be favored over the United Kingdom, although I think there is a strong argument to be made for investing in the United Kingdom in general. Overall, I believe that the buyers are very interested in this market, but there are a lot of headline risks in the short term that keep money somewhat stagnant. Building a position slowly is probably the best way to go.

AUD/USD Price Forecast December 14, 2017, Technical Analysis

The Australian dollar initially dipped during the day on Thursday, but found enough support to turn around Anna rally significantly, mainly upon the idea that tax reform may not get done in the United States. As we await the Federal Reserve Statement, the Wednesday session is tentatively bullish, but an overly hawkish Federal Reserve will send this market much lower, perhaps reaching towards the 0.75 level. Essentially, what we are looking at right now is whether the commodity currencies are starting the bottom? A breakdown below the 0.75 level would be catastrophic for the Australian dollar, sending us much lower. If we rally from here again, there is a lot of noise near the 0.7650 level, and most certainly at the 0.78 handle. Because of this, I think that we will remain choppy, even if we are somewhat bullish in the short term.

I would much rather trade the New Zealand dollar than the Australian dollar, as the 2 currencies tend to move in the same direction longer-term, but it seems as if the New Zealand dollar is a much clearer chart right now. Because of this, I would probably avoid this pair unless of course gold breaks out. Quite frankly, I like the idea of shorting AUD/NZD more than plain either one of these currencies against the US dollar. Overall though, I think the one thing you can count on is a lot of volatility, and by the time we get to the Thursday session, the Federal Reserve could have turned this entire thing around and we could be falling back towards the very important 0.75 handle.

GBP/JPY Price Forecast December 14, 2017, Technical Analysis

The British pound went back and forth during the trading session, as we continue to see a lot of volatility. I believe that the 151.50 level above is resistance, but if we break above there, the market should continue to go towards the 153 level above, which is massive resistance. If we can break above there, the market should continue to go much higher, perhaps reaching towards the 155 handle over the longer term. In the meantime, I expect that the 150-handle underneath is massively supportive. The 150 handle being broken to the downside would be very negative, but right now it looks to me as if the market is trying to form a bit of a rounded bottom, building up support going forward. Pay attention to the risk appetite of the global markets, because if it goes higher in general, especially in stock markets, it’s likely that the market should continue to go much higher. This market is especially sensitive to all things Great Britain related, as we have seen a lot of headlines coming out of the negotiations between the EU and the UK that have moved the GBP in general.

I believe that eventually we will get some type of momentum to break out of this 300-point range, but in the meantime, I think that it is a general building pattern for the next move. Once we get the next move, I think it could be brutal and sudden. Because of this, caution will be needed but eventually this could be one of the best trades for 2018 as we have been beaten down for so long that one would have to think there’s a lot of inertia.

GBP/USD Price Forecast December 14, 2017, Technical Analysis

The British pound has been very noisy over the last several months, as we have negotiated a break away from the European Union. The 1.3333 handle has been very important, and as I await the Federal Reserve statement, is very likely that this level and of course this session, could cause the next move just waiting to happen. If we can break out to the upside, it’s likely that we could go to the 1.35 handle above. In general, I believe that the British pound is trying to form some type of uptrend longer-term, and with the recent higher than expected inflation coming out of the United Kingdom, we could see the Bank of England raise rates again.

However, in the short term it’s all about the US dollar, so we will have to see whether the Federal Reserve is more hawkish or dovish than anticipated. If there’s no surprise, then I think we can focus on Great Britain again. Otherwise, this will be about the US dollar and where it goes overall. If we break down below the 1.33 handle, then the market should go down to the 1.31 handle next. Otherwise, if we can break above the 1.34 handle, the market goes looking for the 1.35 handle, and then eventually the important 1.3650 level after that. Either way, it’s good to be volatile so keep your position size small, and await the daily close to tell you which direction the market is trying to go.

NZD/USD Price Forecast December 14, 2017, Technical Analysis

The New Zealand dollar was initially choppy during the trading session on Wednesday, as we await the Federal Reserve announcement, and more importantly the statement. We have a started to rally towards the 0.70 level, an area that is massively resistive. Most of this reaction would have been due to Senator Flake suggesting that he was still questioning whether to sign the tax bill in the United States, putting tax reform in real jeopardy. Much of the US dollar rally has been due to the idea of tax reform, and therefore we could see a complete reversal of the trend if it does not happen. If we can close above the 0.70 level on the daily chart, the New Zealand dollar would break out of this short-term consolidation, and perhaps go looking towards the top of the longer-term consolidation which is near the 0.75 handle.

However, if we roll over from here, and find ourselves below the 0.6950 level, then the market will probably continue to go much lower. At that point, the 0.68 level underneath is massive support, and of course the bottom of the short-term consolidation. A breakdown below there, perhaps with an overly hawkish Federal Reserve statement, could send this market much lower. However, it looks as if the New Zealand dollar is trying to form a longer-term bottom, much to the dismay of US dollar bulls. By the time we get to midday on Thursday, we should have more clarity for the next move, but right now it looks like the 0.70 level is going to be the deciding factor for the next several sessions.

USD/CAD Price Forecast December 14, 2017, Technical Analysis

The US dollar has been sideways during the Wednesday session as we await the Federal Reserve statement, but any signs of hawkishness out of the Federal Reserve will more than likely send this pair towards the 1.30 level given enough time. I think if we break down below the 1.28 level, mainly in reaction to a slightly dovish Federal Reserve, then we will try to find support at the 1.27 handle.

Unlike many other currencies, there are a lot of concerns when it comes to the Canadian dollar the go beyond the Federal Reserve or even tax reform in the United States. Oil of course has its major influence as it typically does, but at the end of the day it’s likely to also have some kind of problem with the Canadian housing bubble, which is becoming bigger by the day. With this in mind, I believe that eventually we break out above the 1.30 level and go much higher. However, do not underestimate the ability of Congress to drop the ball on tax reform, and that could change things drastically. I believe that short-term pullbacks are buying opportunities in this market, and it’s not until we break down below the 1.25 level that I would be concerned about any type of uptrend that we may be trying to form. If that’s the case, it will probably come in a general US dollar selloff anyway, so by then I will probably be short of the US dollar another pairs.

USD/JPY Price Forecast December 14, 2017, Technical Analysis

The US dollar has fallen a bit during the trading session on Wednesday, reaching down to the important 113 handle. However, as the Federal Reserve statement comes out, we could get a bit of volatility in this pair. This is because people will be waiting to see whether the Federal Reserve is more hawkish or dovish going into the statement. The 112 level below should be a bit of a support barrier, and I think that we would be hard-pressed to break down below there unless the Federal Reserve becomes overly dovish. I don’t see that happening, because quite frankly at this point the Federal Reserve is starting to lose credibility with a lot of investors as they have been threatening to raise interest rates for quite some time.

Because of this, I think that we will probably turn around and reach towards the 114.50 level above, but it will take some time to get there. If we can break above the 115 handle, it then becomes a buy-and-hold scenario, but we are a long way away from that. In fact, I suspect it’s going to take the tax bill passing to get over that hurdle and continue to go higher for the longer-term. In the meantime, we will pay attention to the central bank, but we will also need to see tax reform for the rally to be sustained for any length of time.

AUD/USD Price Forecast December 13, 2017, Technical Analysis

The Australian dollar has rallied initially during the trading session on Tuesday, but has a negative look to it later in the day as the CPI figures came out stronger than anticipated, and a favorite of course money flowing into the United States. If we can break down from here, I think we will go looking towards the 0.75 support level which should be massively supportive. The market should continue to be very volatile, but I think that given enough time we will break down. A breakdown below the 0.75 level should send this market down to the 0.7350 level, an area that has been supportive in the past.
Ultimately, we could rally from here, but I think that will have a lot to do with the Federal Reserve, and what its attitude is as far as interest rate hikes are concerned going forward. If we are more hawkish than anticipated, that could be the death knell for the Australian dollar and the short-term, but having said that I think that the Federal Reserve being dovish could send this market to the upside. However, the 0.7650 level above is massive resistance, so I think that the upside will be somewhat limited and less of course the Federal Reserve shocks the market and flat-out states they will not be raising interest rates. In general, I think that this rally will end up being and I selling opportunity, as gold is not helping either.

EUR/GBP Price Forecast December 13, 2017, Technical Analysis

The EUR/GBP pair initially went sideways on Tuesday, and then went back and forth in a violent move that brought the market back down to the 0.88 handle. This is an area that has been supportive in the past, so it makes sense that we should continue to see buyers in this general vicinity. I think that the recent repudiation of the downward pressure should eventually have enough confidence in her the market to the upside. If we can break above the 0.8850 level, the market should then go looking towards the vital 0.90 level above. I think that given enough time we will get to that level, but if we were to break down to a fresh, new low, it’s likely that we will break down to the 0.86 handle, which has been supportive in the past.
With the massive amount of headline risk that is out there, expect violent moves from time to time in this pair, as the entire break away from the European Union is still measured. I think that the next question will be whether the ECB can taper significantly from the QE program, and if it does, that could send this market much higher. Inflation is rising in the United Kingdom ironically, so the British pound does have buyers out there. However, the longer-term move continues to look somewhat bullish and what I think will be one of the choppier markets over the next 12 months. Because of this, I think small positions are necessary, but I do favor the upside in general as the market has continued to find buyers over the longer term.

EUR/USD Price Forecast December 13, 2017, Technical Analysis

The EUR/USD pair has been slightly negative during the trading session on Tuesday, but quite frankly with the Federal Reserve releasing an interest rate announcement, and more importantly a statement later today, it’s likely that this pair will be quiet between now and then. The European Central Bank looks likely to cut back on quantitative easing in 2018, so now the question will be whether the Federal Reserve is going to sound hawkish or dovish? This will come in the form of the statement, because quite frankly I think that an interest rate hike is all but a given, and when the market swings in one direction that violently, the Federal Reserve typically will do as suggested.
The question now is where do we go from here? I think that a break above the 1.18 level is a sign that the market is ready to go higher, it becomes more of a “buy-and-hold” scenario. Alternately, if we break down below the 1.17 level, it is more than likely due to the Federal Reserve sounding more hawkish than anticipated, and a re-pricing of the greenback will be necessary. Look at the weekly chart, it does in fact look likely that we are going to see a move to the upside, but it’s not until the statement comes out that I think we can make the move. If we do breakout to the upside as I anticipated, the market will go looking towards the 1.20 level, the 1.21 level after that, and then longer-term the 1.32 handle over the course of the next year or so. Either way, I think today will be important.

GBP/JPY Price Forecast December 13, 2017, Technical Analysis

The British pound went back and forth during the trading session on Tuesday, hovering around the 151.50 region. If we can break above the 151.85 level, I think the market should then go to the 153 handle above. That is an area that is massively resistive, and if we can get a break above that level on the daily chart, I think that the GBP/JPY pair will continue to go much higher. Because of this, it’s likely that we will continue to see the market reach towards the 155 handle above, which of course is a large, round, psychologically significant number. Pullbacks from here should continue to find plenty of buyers, especially near the 150-handle underneath, because the structural support has been reliable. I think if we were to break down below the 150 handle, the market could drop to the 147.50 level after that.
Expect volatility, and keep in mind that this pair tends to often mimic risk appetite around the world, especially stock markets. If they continue to rally, eventually this pair will climb, as people move away from the Japanese yen, willing to take on more risk. I believe that eventually we will break out to the upside, but right now it looks as if the market is relatively stagnant, so way for some type of impulsive move to put money to work when it comes to the GBP/JPY market. Once we get that move, I believe there will be a significant amount of follow-through on that move, because it will show that we have impulsively moved, and that there is a lot of momentum building up in the market.

GBP/USD Price Forecast December 13, 2017, Technical Analysis

The British pound was choppy and volatile during the trading session on Tuesday, and tested the 1.3333 handle more than once. I think that we will continue to consolidate, but if we do break down from here, there is a significant amount of support at the 1.32 handle underneath. I believe that if we were to turn around and break above the 1.34 handle, then the market is ready to go to the 1.35 handle after that. I believe that this market continues to be very choppy and noisy in general, and with this being the case it’s likely that we continue to be cautious in this market place, at least until the Federal Reserve comes out with an announcement. We will see whether the Federal Reserve looks likely to raise interest rates going forward, and if it does, that could change the overall pattern of this trading pair. If they are dovish, that will send this market right back around and the buyers will flood into the pair, pushing it to the upside.
A breakdown from here should continue to attract more trading capital, but I still think that the uptrend line below that coincides with roughly 1.31 will be the “floor” in the market. A breakdown below there has the entire marketplace rolling over. The longer-term target for me is the 1.3650 level, which was a gap from a major move lower, but we need to get the Federal Reserve announcement out of the way to see where the US dollar should go, which of course is half of the equation.

NZD/USD Price Forecast December 13, 2017, Technical Analysis

The New Zealand dollar has a significant amount of support at the 0.69 level underneath, and therefore I think it will be a fight to get through there. I am still bearish of the New Zealand dollar though, because I believe that until we break above the 0.70 level, we are still very low in the overall consolidated move, and let us not forget that we had recently pulled back to the 100% Fibonacci retracement level from the previous rally. With the Federal Reserve having an interest rate statement coming out during the trading session today, it will be interesting to see how the market reacts to that statement. If it is a bit more dovish than anticipated, that will send the New Zealand dollar higher.
However, New Zealand has its own issues, so if the Federal Reserve sounds more hawkish than anticipated, that should send this market looking down to the 0.69 level, and perhaps even breaking down below there. If we break down below that level, then I think the market goes down to the 0.68 handle below which has been massive support. If we break down below there, then the bottom has just fallen out of the New Zealand dollar, and we can go much lower, perhaps as low as the 0.6350 level over the longer term. While I don’t know that’s going to happen today, I still favor the downside as a stronger than anticipated CPI number has killed over half of the rally that we had seen previously during the Tuesday session.

USD/CAD Price Forecast December 13, 2017, Technical Analysis

The US dollar initially fell during the trading session on Tuesday, reaching down towards the 1.28 level underneath, where we have seen buyers. A breakout above the 1.2875 level has happened late in the trading session, and it looks as if we are trying to reach towards the 1.29 handle, and then eventually the 1.30 level which of course is a large, round, psychologically significant number. I think the dips continue to be buying opportunities as the Canadian economy is somewhat soft, and of course we have the massive housing bubble in the Greater Toronto Area that is a major issue for the Canadian government.
I think selling this pair is almost impossible, least not until we break down below the 1.28 handle, but I also recognize that the 1.27 level underneath is even more supportive. I believe that the Federal Reserve meeting today will have a massive influence on this market as the Bank of Canada has already suggested that it is going to be on hold, and if the Federal Reserve sounds hawkish, that could be very bullish for this pair, as it gives a perfect dichotomy between the central banks that traders can trade upon. Alternately, if the Federal Reserve is dovish in their statement, then it’s likely we will see this market pull back. Longer-term, I think oil will have its influence as per usual, but in general I think there is a significant amount of buying pressure that needs to be expressed.

USD/JPY Price Forecast December 13, 2017, Technical Analysis

The US dollar has gone sideways in general, but Saul buyers jump into the marketplace after the CPI figures came out higher than anticipated in the United States. This suggests that the Federal Reserve will be more hawkish than dovish during the statement today, and that of course is good for the US dollar longer term. I recognize that there is a significant amount of resistance at the 114.50 level above, stretching to the 115 handle. If we were to clear that level, the market could go much higher, perhaps reaching towards the 120-level next year. It’ll be interesting to see what the Federal Reserve has to say, because if they are more hawkish than anticipated, that will change the outlook for a lot of currency pairs, stock markets, and of course bonds.
Alternately, if the market roles over based upon a dummy statement, that could change everything in this pair, and we can find the market looking towards the 112-level underneath, which is massively supportive. The volatility in this market will be rather strong, as these interest rate statements have a massive effect on the pair typically, and of course we are trying to form a base in a potential trend change. That is always a noisy affair, so I think that regardless, we will see choppiness but as things look right now, it appears that the buyers are trying to flex their muscles. However, by midafternoon New York time tomorrow, we will have more clarity.

AUD/USD Price Forecast December 12, 2017, Technical Analysis

With the Australian dollar rallied a bit during the day on Monday, we reached towards the 0.7550 region. We are starting to roll over a little bit as I record this, and we are most certainly in a negative market overall. Because of this, I think that if we can break down below the 0.75 level, this will only accelerate the move to the downside, as I believe that the Australian dollar will continue to struggle, especially if Chinese economic numbers this week are softer than anticipated. Beyond that, markets have been exactly exploded to the upside and with the Federal Reserve having a key interest rate height coming this week, most of the action will probably be predicated upon the statement and tone. If the Federal Reserve sounds hawkish, I think that might be enough to send this market to the downside and pilot breakdown. If we do break down below that level, I believe that the 0.7250 level underneath is massive in its importance. However, we probably go even lower than that and reach towards the 0.70 level after that.
As far as buying is concerned, I need to see gold rally as well. I think this probably won’t happen until the Federal Reserve announcement, and will only happen if the Federal Reserve somehow disappoints the market. If it does, then gold markets will probably take off, and that could be reason enough to start buying the Aussie dollar. Until then, I’m looking for exhaustion to start selling as the downtrend has been quite impressive over the last several weeks.

EUR/GBP Price Forecast December 12, 2017, Technical Analysis

When you look at the totality of the previous 3 sessions, I think we are essentially looking at a fractal that should send this market to the upside. A break above the 0.8850 level sends the market looking towards the top of the longer-term consolidation area, which is the 0.90 level above. If we can break above there, then it’s very likely that we will continue towards the 0.93 level which was the highs previously. The market continues to be very noisy, as there are a lot of headlines that will push us pair round as we are trying to figure out the world after a UK exit from the European Union.
I think that eventually this pair does break out to the upside, because traders prefer certainty, which you will get more of in the European Union, as compared to the United Kingdom. I think that this market will be more of a “buy on the dips” attitude, and that given enough time we will not only reach the highs, but perhaps even parity. While I do think that the death of the United Kingdom being announced was a bit premature, I think that there are a lot of concerns as to how things play out. The trend is certainly to the upside, so that’s reason enough to look at pullbacks as value. If we were to break down below the lows of the Friday session, then I think the market probably drops down to the 0.86 level after that.

EUR/USD Price Forecast December 12, 2017, Technical Analysis

The EUR/USD pair rallied a bit during the trading session on Monday, but it looks likely that we are going to struggle a bit to get to the upside. If we can break above the 1.1825 level, it’s likely that the market should continue to reach towards the 1.1870 level. Longer-term, I do believe that the pair goes looking to the upside, and most of this is due to the idea of the hammer that formed on the weekly chart that we are trying to break above. Given enough time, I expect that this market goes higher, this will be especially true if Wednesday we get a statement after the Federal Reserve interest rate decision that is less bullish than anticipated. That could send money flooding into the pair to the upside. In general, I believe that the market will go looking towards the 1.20 level, and then eventually the 1.21 handle.
I believe that the 1.17 level underneath continues to be very important, and essentially massive support that the buyers need to hold. If we were to break down below there, then I think the market roles over significantly and down to the 1.15 handle after that. In general, I think that the ECB cutting back on quantitative easing in 2018 has been a major driver of this pair to the upside, and a break above the previously mentioned 1.21 handle has this market looking for a “buy-and-hold” attitude. The General volatility will probably continue, but in the end, I think that the buyers have much more momentum.

GBP/JPY Price Forecast December 12, 2017, Technical Analysis

The British pound drift a little bit lower against the Japanese yen during the trading session on Monday, reaching towards the 151.25 level as I record this. I think there is a significant amount of support at the 151 handle, and even more importantly, the 150-level underneath there is essentially the bottom of the uptrend. Market participants will be looking at pullbacks as value propositions, and I think that the market will offer opportunities to get involved. I think that the market breaking below the 150 handle of course is going to be quite a bit different. In the meantime, I think that a “buy on the dips” mentality should continue, as we have seen so much in the way of bullish pressure over the longer term.
You’ll notice on the chart that I have the 153-level marked in a blue line, and that for me signifies that we should continue to go much higher, and the breakout should have the market looking for the 155 handle, and then eventually the 160 handle. The pullbacks like this that we have seen over the last couple of sessions for me represent value as we have made a higher high, but have not managed to build up the momentum necessary to continue the move and follow-through. That’s to be expected though, the 153 level is important on longer-term charts. If we break down below 150, then I will step back and let the market stabilize a bit before placing any type of trade. I guess in a sense, I am essentially “long only”, at least in the short term.

GBP/USD Price Forecast December 12, 2017, Technical Analysis

The British pound has fallen a bit during the trading session on Monday, reaching to lower levels. However, the 1.3333 level underneath continues to be important, an area that has been previously resistive, but also supportive recently as well. Because of this, I think that buyers are going to come back into this market place, and start picking up value in the British pound, perhaps making a run back towards the top of the consolidation area, at the 1.35 handle above. This is a market that continues to be very choppy, but I think that the upward momentum continues to be the biggest  driver in this market, and although there are a lot of concerns about how the United Kingdom will perform after leaving the European Union, at the end of the day I think that as we get more certainty with the future the United Kingdom, that should help the British pound against the US dollar which has been so oversold for so long.
A breakdown below the 1.3333 handle has this market looking towards the 1.32 level after that, which is the next support level. At this point though, it looks like a simple return to consolidation and a return to the mean is probably the best way to look at this market. I also recommend that perhaps using a smaller than usual trading position might be the best way to go, as this type of choppiness and headline driven volatility can suddenly spike in one direction or another. This continues to build up momentum to perhaps get a breakout above, and enter a “buy-and-hold” situation.

NZD/USD Price Forecast December 12, 2017, Technical Analysis

With the appointment of a new board member to the RBNZ, a Mister Adrian Orr, currency traders started to buy the kiwi dollar again, as a little bit of certainty has entered the market. We have broken above the 0.69 handle, which is a minor victory, but given enough time it’s likely that we will find plenty of resistance above, and Chinese economic numbers coming out this week could have an influence on where the New Zealand dollar goes next. Any type of negativity in the commodity markets could turn things around, perhaps sending this market down to the 0.68 level underneath which has been massive support level. I think a breakdown below the 0.68 level should send this market looking for the 0.65 handle after that. Ultimately, if we can break above the 0.70 level above, then the New Zealand dollar will have turned around effectively enough to perhaps reach towards the top of the longer-term consolidation area, which is as high as 0.75 over the last couple of years.
Regardless, I think we are going to see quite a bit of volatility as per usual with the kiwi dollar, and I think that the market participants are going to be trading more on news than structural levels, but I think that the overall downtrend is probably going to continue, as there are far too many concerns around the world, and of course rising interest rates in the United States. Because of this, it’s likely that the exhaustion will present to us a nice opportunity. If we can break down below the 0.69 level, then I think we will give back the gains.

USD/CAD Price Forecast December 12, 2017, Technical Analysis

The US dollar continues to go sideways against the Canadian dollar, after rallying so hard during the previous week. The market will more than likely continue to tread water over the next couple of sessions, as the Federal Reserve interest rate announcement during the Wednesday session should be vital as to where we go next. It’s not so much whether we get an interest rate hike, most people believe we will, but it’s more about the statement afterwards, and whether it sounds hawkish or dovish. If it sounds hawkish at all, that should send this market through the 1.29 handle, and looking at the 1.30 level longer term. The 1.30 level should be resistive, so breakout above there would be very important.
Pullbacks of this point should be buying opportunities, unless of course the Federal Reserve either doesn’t hike interest rates, or sounds very dovish. I doubt that’s going to be the case, so I think it’s only a matter of time before the uptrend continues that we had seen previously. If the oil markets continue to show signs of exhaustion, that could also be a nice buying opportunity in this pair as well. I believe that the 1.27 level below is support, so pullbacks towards that area will probably bring in value hunters. The noise should continue, as the economies are so highly intertwined, but at the end of the day this is about the Federal Reserve and the crude oil markets. I believe we are starting to form a nice longer-term uptrend again.

USD/JPY Price Forecast December 12, 2017, Technical Analysis

The US dollar drifted a little bit lower during the trading session on Monday, but continues to find support just below. I think that the 113 level is going to be supportive, so it’s not until we break down below there that I must reassess the situation. Given enough time, I think that we go looking towards the 114.50 level, which is an area that begins extensive resistance to the 115 handle. I believe that the volatility will continue, but the Wednesday announcement coming out of the Federal Reserve will be the biggest driver of this pair this week. I believe that if the Federal Reserve tightens interest rates, and more importantly suggests that we are going to continue to do so going forward, this pair will take off to the upside and it might give the market the wherewithal to break out above the 115 handle.
Short-term pullback should offer buying opportunities, and I believe that the “floor” is the 112-level underneath. Even though I think that the 113 level should hold as support, I think that longer-term, the 112 level is even more important, so if we were to break down below there I think that the market probably drop significantly. I suspect that this will be due to the Federal Reserve sounding dovish if it happens, but right now I do not think they are willing to do that. The volatility of course will continue, but I still believe that the upward momentum will be the main driver of things going forward.

AUD/USD Price Forecast December 11, 2017, Technical Analysis

The Australian dollar has tried to rally during the trading session on Friday, but roll over as the jobs number in the United States added 225,000 for November. If we can break down below the 0.75 handle for a significant amount of time, I think that the Aussie will roll over and go looking towards the 0.7350 level after that. In general, the market should pay attention to gold as well, as it hasn’t done much lately in the way of positivity. The $1300 level above needs to be broken for the Australian dollar to start to rally significantly. However, if we close below the 0.75 handle on a daily chart, I think that the gold markets will fall as well, as the 2 markets tend to move in congruence.
Overall, I look at rallies as a selling opportunity, and at the first signs of exhaustion it’s an opportunity to go short. I believe that the 0.7560 level above should offer an area of selling pressure. I think that the market should of course be noisy, but breaking down below the 0.75 handle has me very aggressive. I have no interest in buying, least not until we break above the $1300 level in the gold market, something that doesn’t look very likely to happen. The volatility in the Aussie will continue, and I believe that the interest rate statement coming out of the United States this month will dictate where we go next, and if the Federal Reserve looks very hawkish, that could be the fuel to send this market to the downside.

EUR/GBP Price Forecast December 11, 2017, Technical Analysis

The EUR/GBP pair initially drifted a bit lower during the day on Friday, but has turned around and reached towards the 0.88 handle. Because of this, I believe that we are seen a significant amount of support in a market that needed to see it at this area. A break above the 0.8850 level should send this market towards the 0.90 level, which would be a simple return to the previous consolidation area that we have seen for quite some time. Because of this, and the fact that the negotiation seem to be chugging along, I think that the market is ready to find itself in this area again, meaning that it’s likely we will see buying pressure. I don’t have any interest in shorting this market, as the recent pullback and bounce has been a repudiation of that move.
For what it’s worth, the weekly candle is going to look very much like a hammer, and that of course is a bullish sign. However, that 0.90 level has been a very tough nut to crack, and this time year does not necessarily bode itself for massive breakouts. However, if we were to break above the 0.90 level, the market should then go looking towards the 0.93 handle after that. A breakdown below the lows of the trading session on Friday would be a very negative sign though, and perhaps change things drastically. All things being equal, my base case scenario is that the buyers finally take the initiative again, as we have seen so much in the way of resiliency. Large positions are not advised until we can clear the 0.8850 level.

EUR/USD Price Forecast December 11, 2017, Technical Analysis

The EUR/USD pair was slightly negative during the trading session on Friday, reaching down towards the 1.1733 level. I believe that we are consolidating between the 1.17 level underneath, and the 1.18 level above. I think that eventually we will break above the 1.18 level, sending this market to the much higher, perhaps finally breaking towards the 1.21. In general, I believe that this is a market that should be bullish, especially considering that the weekly chart looks to be forming a massive bullish candle. I think pullbacks offer value, and given enough time we can eventually find buyers to jump in. We have seen a significant amount of bullish pressure over the year, and I think that the market should continue to be one that suffers from volatility.
It is because of that I am waiting for a move above the 1.18 level to start putting money to work. I would be interested at the 1.17 level if we get some type of significant bounce, so at this point I have no interest in shorting. I think that the 1.18 level being broken to the upside would show a significant amount of momentum building up in a market that I think will be the story of most of the next year. A break above the 1.21 handle is a “buy-and-hold” trade, which I think we are currently trying to build our way up to. Be patient, and look for buying opportunities as selling doesn’t seem to be much of a thought for larger players. The pullback that we have seen over the last several weeks hasn’t been impressive when you look at the longer-term charts.

GBP/JPY Price Forecast December 11, 2017, Technical Analysis

The British pound continues to be very volatile, especially against the Japanese yen. We reached towards the vital 153 handle during the trading session on Friday, an area that has been massively resistive. If we can break above the highs of the day, then I think that the market goes much higher, perhaps even looking for the 160 handle over the longer term. A break out from that level should send this market looking for much higher levels in rather short order, because this pair does tend to move very rapidly. However, we could pull back from here and I think that would only offer more value closer to the 150 level as it is a very psychologically important level.
In general, I believe that the markets continue to be very noisy, but keep in mind that this is a bit of a “risk on” type of environment when we go higher. If that’s the case, and there’s a lot of bullish sentiment around the world, it’s probably only a matter of time before this pair rallies. Keep your position size small though, is probably the best way to protect yourself as there is so much in the way of damage that can be done in this pair, and in short order. However, once we make a “higher high”, it’s possible to add to your position slowly so that you can benefit from a much longer-term move. If we were to break down below the 150 handle, that would change the medium-term outlook and have me reassessing the entire situation.

GBP/USD Price Forecast December 11, 2017, Technical Analysis

The British pound initially tried to rally during the trading session on Friday, but found the 1.35 level to be far too resistive to continue. The jobs number coming out with an addition of 220,000 was bullish enough for the US dollar to send this market lower. I believe that the 1.3333 handle continues to be massively supportive though, and it does in fact look like the market is going to respect that level. Because of this, I believe that the short-term buying opportunity has just presented itself, and that we should go back towards the 1.35 handle given enough time. A break above there then sends the market looking to the 1.3650 level, where we should see a massive amount of resistance due to a major gap on the charts.
If we did breakdown below the 1.3333 handle, the market been probably drops to the 1.32 handle. That’s an area where we have seen a significant amount of noise, but I think if we do reach down to that area is probably going to break away and go looking towards the 1.31 handle underneath. This is a market that continues to build up momentum every time we pull back, and I don’t think that’s going to change anytime soon. I am a buyer of the dips, but recognize that there are headlines out there that can change things rather rapidly, and therefore you need to be careful. The volatility continues to be an issue, but this can easily be dampened by a smaller than usual position, therefore keeping your risk limited in a market that could be very difficult.

NZD/USD Price Forecast December 11, 2017, Technical Analysis

The New Zealand dollar rallied initially during the trading session, looking exhaustive near the 0.6875 handle, but then rolled over to reach towards the 0.6840 level. I think that the most important level on this chart is the 0.68 handle, and if we can break down below there the New Zealand dollar could unwind to reach down towards the 0.66 handle in the short term. I think rallies continue to be selling opportunities, especially at the first signs of exhaustion. Keep in mind that the New Zealand dollar is highly influenced by the commodity markets in general, so if we can roll over in those markets, it’s likely that the New Zealand dollar will follow. However, I think one of the biggest influences on this market will be the interest rate statement coming out the Federal Reserve, and if hawkish enough it will send this market lower.
The 0.69 level above is resistance, and that is an area where I would be concerned about buying. I think that some type of exhaustion in that area would be an excellent selling opportunity, and it’s not until we break above the 0.70 level above that I would be a buyer. In general, I think that the overall “lower lows” will continue to be a sign of the weakness. I think that market participants continue to punish the New Zealand dollar due to the increased spending coming out of the country, with the election of the Labour Party. The overall attitude of this market is noisy and negative. Once we break down below the 0.68 level, I become aggressively short and in large size.

USD/CAD Price Forecast December 11, 2017, Technical Analysis

The US dollar went sideways initially during the trading session on Friday, but then dropped towards the 1.28 level underneath. That level offered enough support to turn things around and cause a bounce, and we have now gone positive for the trading session. I believe that the US dollar continues to strengthen against the Canadian dollar, and for several different reasons. Not only do we have the higher interest rates coming in the United States, and of course the strengthening economy, the crude oil markets are starting to struggle again, and that’s always bad for the Canadian dollar. Beyond that, we have a housing crisis getting ready to happen in Canada, as we have been in a bubble for some time.
The Bank of Canada was cautious during the week during its interest rate statement, and that of course is very negative for the Loonie as well. All things being equal, I think if the Federal Reserve sounds even remotely hawkish during his statement this month, that should supercharge this pair to go much higher. That doesn’t mean that is going to be easy, but I do believe that the longer-term attitude of the market continues to be very bullish, so I look at pullbacks as value, and not selling opportunities as we have seen the market be very willing to start buying on these dips. I believe there is a “floor” in this pair near the 1.27 level, so it’s not until we break down below there significantly that I would be concerned with the bullish attitude. A break above the 1.30 level should send this market much higher for the longer-term.

USD/JPY Price Forecast December 11, 2017, Technical Analysis

The US dollar continue to go higher during the trading session on Friday, as the job number continues to show signs of life. It looks likely that the 113.50 level is going to offer short-term resistance, but these pullbacks should continue to be buying opportunities, especially if we can find the 113 level supportive. The 114.50 level above is a target, and the resistance should extend to the 115 handle. In general, this is a market that continues to be noisy in general, and therefore I think that the prudent action is to take small positions, but typically this time year we have the so-called “Santa Claus rally”, which lifts stock markets. By extension, that quite often will lift this pair as well.
I think that the interest rate statement coming out the Federal Reserve this month will be vital as well, as the outlook for the US dollar will probably strengthen due to the hawkish sentiment. Overall, I believe that the market is a “buy on the dips” type of situation. The market continues to look likely to be noisy, so adding every time you get a move in your direction is probably the best way to deal with, but doing so in small increments would make quite a bit of sense. If we were to break down below the 113 handle, I think then we go looking towards the 112 level for support, which it has most certainly founded there recently. The Japanese yen of course is the safety currency in this pair, so as long as the markets are reasonably healthy, this market should continue to go higher.

AUD/USD Price Forecast December 6, 2017, Technical Analysis

The Australian dollar rallied significantly during the trading session on Tuesday, but found the 0.7650 level to be resistance, as it was once support. By doing so, the market rolled over from there and reach down towards the 0.76 level underneath. That’s an area that of course will attract a lot of attention as it is a large, round, psychologically significant number. But a break down below that level should send the market to the 0.75 level next. A breakdown below that level should send this market much lower. Ultimately, this is a market that will remain very volatile, because quite frankly the gold markets have quite a bit of bearish pressure in them as well, which of course is bearish for the Australian dollar.
If we do breakout to the upside, I suspect that the 0.7650 level will of course cause offer resistance, but if we can break above that level, the market then goes to the 0.7750 level next, which is even more resistant. Ultimately, a breakdown below the 0.75 level would probably accompany a breakdown in the gold markets as well. I think we continue to see a lot of noise, because there are concerns coming out of Asia, and of course gold hasn’t exactly been on fire as of late either. The US Congress looks likely to pass tax reform, so it’s going to be positive for the US dollar longer-term against the Aussie, assuming that it is a good bill. Alternately, if they do not it’s likely that the pair will go much higher. Expect choppiness, and quite frankly I would not put a lot of money to work until we get clarity.

EUR/GBP Price Forecast December 6, 2017, Technical Analysis

The Euro initially rallied against the British pound during the trading session on Tuesday, reaching as high as 0.8860, and then pulling back towards the 0.88 level. Now that we are starting to see support again at the 0.88 handle, I think we will eventually rally, but I recognize it is going to be very difficult and noisy in the meantime. Once we do get the rally, I think we will eventually go looking towards the 0.90 level above, which is the top of the recent consolidation, and has been an area of significant selling pressure. The market of course is going to be very noisy as headlines come out of both London and Brussels involving the negotiations for the United Kingdom leaving the European Union, and during the session we had a lack of agreement coming out of those negotiations, but in the end Teresa May also suggested that perhaps we were close. In other words, this is a market that will continue to be very noisy, and although difficult to navigate, I recognize that we look likely to be forming a higher low, which is a very bullish sign, following a higher high. It’s going to be very noisy, but I believe that the buyers will eventually take over.
If we were to move below the low during the session on Monday, that should send this market looking for the 0.86 level underneath, which has been supportive in the past and has been historically important in both directions, meaning that there should be a significant amount of order flow just waiting to happen, thereby making an attractive place for both sides of the market to be interested.

EUR/USD Price Forecast December 6, 2017, Technical Analysis

The EUR/USD pair rolled over a bit during the trading session on Tuesday, as we went looking towards the 1.18 level underneath. This is an area that has been supportive in the past several sessions, and therefore it makes sense that we should continue to find people interested in trading this market at these levels. Buying a bounce is how I plan on playing the market, as we should then go higher and try to fill the gap at the 1.19 region. Even if we were to break down below the 1.18 handle, I think that there is plenty of support underneath, and that we should probably find even more buying pressure near the 1.17 level. Because of this, short-term traders may be able to short the pair underneath the 1.18 handle, but I would be very careful about doing so, as there is so much in the way of order flow there.
Ultimately, I believe that we are going to go looking towards the 1.21 handle above, and breaking above there opens up the “buy-and-hold” trade. A breakdown below the 1.17 level should send this market down to the 1.15 handle underneath, which of course is a large, round, psychologically significant number that will attract a lot of attention. Currently, I believe that we are simply waiting for the results of the tax bill in the United States, but longer-term I think that traders continue to favor this market. The market will continue to be very volatile, because quite frankly the news flow continues to be very disruptive as we negotiate the exit of the United Kingdom from the European Union.

GBP/JPY Price Forecast December 6, 2017, Technical Analysis

The British pound initially fell during the trading session on Tuesday, but found enough support near the 150.50 level to turn around and bounce significantly. The daily candle at this point would be a hammer, which of course is a very bullish sign. The break out above the 150 level was significant, but as I look at the chart I recognize that the 153 level is even more resistive. A break above there is a very bullish sign, and sends this market to at least the 155 handle, perhaps even higher than that.
I think pullbacks offer value, if we can stay above 150. A breakdown below the 150 level would be very negative, but in general I think that the markets continue to show signs of volatility that give us an opportunity to pick up the British pound at a cheap level. However, if we get some type of “risk off” event, the market could break down below the previously mentioned 150 handle, and then perhaps go looking as low as 148 below. Longer-term though, I believe that we are bullish, and when I look at the hourly chart I can even make a bit of an artistic interpretation of the recent action as a bullish flag. If that’s the case, then we could go looking towards the 160 handle longer term. That makes sense, because it has been resistance in the past on longer-term charts, and therefore it makes a perfect target for the longer-term traders to get involved. Keep your position size small though, because this pair does tend to be rather volatile, and therefore losses could come quickly if you are not careful.

NZD/USD Price Forecast December 6, 2017, Technical Analysis

The New Zealand dollar rallied significantly during the trading session on Tuesday, slamming into the 0.69 resistance barrier. That’s an area that has been massively resistive recently, and by doing so it shows just how choppy this market remains. The New Zealand dollar is the epitome of a risk asset when it comes to Forex trading, while the US dollar remains a beacon of stability. However, one of the things that is coming into play is the excess spending that is expected out of New Zealand after electing Labour, and of course the tax reform bill coming out of the United States which in theory should have the exact opposite effect as it is stimulative for the US economy.
Because of this, I think that we will eventually see sellers every time we approach the 0.69 handle, and even if we break above that level I think that the 0.70 level above is even more resistant. The market continues to be very noisy, but I think favors the downside in general. If we managed to break down to the 0.68 handle, remove below there should send this market to much lower levels, perhaps the 0.65 handle. A break above the 0.70 level would negate the downtrend, and perhaps send the market looking towards the top of the overall consolidation over the last several months, meaning that we could rise as much as the 0.7250 level, possibly even the 0.750 level after that. However, I believe there is much more momentum to the downside in this market as global growth seems to be taking a bit of a hit.

GBP/USD Price Forecast December 6, 2017, Technical Analysis

The British pound continues to be very volatile, dropping after Teresa May said that there was no agreement between the UK and the EU yet. However, she remained upbeat, and eventually they will make some type of decision. On the other side of the Atlantic Ocean, we have the likelihood of tax reform which helps the US dollar, so it makes sense that we had to pull back a little bit during the session. However, longer-term I do believe that the buyers are going to jump into this market, and reach towards the 1.35 handle again. Because of this, I like the idea of buying these pullbacks slowly, and building up a larger position as we go looking towards the 1.3650 level over the longer term. The market has been very noisy lately, but that makes sense as we are trying to figure out where the UK goes from here.
I believe that the 1.3333 level is a bit of a “floor”, and should keep this market supported. Ultimately, if we break down below there it would disrupt the entire thesis of the British pound breaking out eventually. I think that this will be a volatile couple of months, but if we get an agreement between the United Kingdom and the EU, unless it’s horrific for the United Kingdom, it should send the value of the pound much higher as it offers the one thing traders desperately one: certainty. A breakdown below the 1.3333 handle would of course be the opposite, perhaps send in the market down to the 1.30 level. My base case scenario is that we will eventually break above the 1.3650 level, and become a “buy-and-hold” market.

USD/CAD Price Forecast December 6, 2017, Technical Analysis

The US dollar has been very noisy during the session on Tuesday, reaching down as low as the 1.26 handle. Now that we have seen a move to the upside, looks likely that we will make a run towards the 1.2725 level. A break above there should send this market much higher, perhaps reaching towards the 1.2850 level. The oil markets of course are going to be important for the value of the Canadian dollar, as they always are, and this pair will move inversely over the longer term. If we do rally from here, I suspect that we will not only reach the 1.2850 level above, but will then continue to go much higher, perhaps reaching towards the 1.30 level next.
The marketplace continues to be very noisy, but that’s not necessarily uncommon when it comes to this pair, as the 2 economies are so highly intertwined. If we were to break down below the 1.26 handle, at that point I think we would go looking towards the 1.25 level, which of course is psychologically important. A breakdown below there could send this market as low as the 1.20 level after that. Ultimately though, I believe that the US dollar rallies based upon several things, not the least of which will be tax reform in the United States, and higher interest rates coming soon. On the other side of the equation, oil markets are going to continue to be very noisy and difficult to deal with, so I think it will weigh upon the Canadian dollar and of course the housing issues in Toronto could flareup at any moment, causing more concerns with the Canadian dollar.

USD/JPY Price Forecast December 6, 2017, Technical Analysis

The US dollar rallied against the Japanese yen was perhaps in reaction to the US Congress looking likely to pass tax reform. That of course will be good for the United States economy, and of course the potential interest rate hikes coming should be good for the US dollars well. The interest rate differential between the 2 economies will continue to favor the upside, and if we can get more of a “risk on” stock market, that could be reason for this market to go higher also. A break above the 113 handle sends this market looking for the 114.50 level above, which is the beginning of resistance extending to the 115 handle. Once we finally clear that level, the market is more of a “buy-and-hold” situation. In the meantime, I like buying dips, if we can stay above the 112 level.
A breakdown below the 112 level probably sends the market looking towards the 111-level underneath, which has been rather supportive and of course is the 50% Fibonacci retracement level from the recent move higher. The volatility is to be expected, as this pair is volatile under the best of circumstances. I don’t have any interest in shorting, least not anytime soon as I think that there is more than enough reason to think that the US dollar should climb, either due to the interest rates, tax bill, or perhaps even quantitative easing coming out of the Bank of Japan. I don’t have any interest in putting a large position on though, so adding slowly as the trade goes in your favor would probably be the best way to go.

AUD/USD Price Forecast December 5, 2017, Technical Analysis

The Australian dollar gap lower at the open on Monday, signaling that traders were starting to become a bit more excited about tax reform in the United States, but since then we have bounced to fill the gap, and now we are simply awaiting the RBA statement. I think that given enough time, the market will need to decide what it wants to do, and with the various influences on this pair, I think there will be very little in the way of clarity over the next 24 hours. When you look at this chart, we have to wonder about tax reform, the RBA statement, and of course gold markets all with the same time. That type of noise can be very choppy, and of course make trading very difficult to do.
The 0.7650 level above has been resistive in the past, and unless the RBA is overly hawkish or does the unthinkable, raising interest rates, I don’t think that we will break above that level. The one caveat could be the US Congress blowing up tax reform, which we can never rule out as they are very unpredictable these days. Ultimately, I think that you are probably better off sitting on the sidelines for the next 24 hours, at least until we get some type of clarity. Gold markets really aren’t helping the Aussie there, so I suspect that this will be a coordinated effort that is based around the US dollar, and not so much the Aussie.

EUR/GBP Price Forecast December 5, 2017, Technical Analysis

The EUR/GBP pair has initially fallen during the trading session on Monday, but then bounced enough to reach towards the 0.8830 level, which has been resistive over the last several sessions. We have rolled over from there and broken down significantly, and although this is a very negative turn of events, when I look at this chart I am not convinced of a complete breakdown until we get below the 0.8750 level that I am willing to sell. I have certainly been paying attention to this market over the last several hours, so therefore a move below the 0.8750 level is a sell signal for me that sends this market looking towards the 0.86 handle which is massively supportive. The volatility is going to continue, but I believe that if we break above the 0.88 handle, then eventually the buyers will jump into this market and reach towards the 0.8950 level.
Keep in mind that this pair is going to move on headlines coming out of the negotiations between the EU and the UK, so we will continue to see a lot of noise. This is a market that will be the epicenter of the Brexit obviously, so that being the case small positions might be the best way to trade this market, because it would only take a quick headline or comment from a political leader in that region of the world to turn the move around. In general, I believe that the longer-term uptrend continues, as the certainty in the European Union is probably much more appealing for longer-term traders than the UK.

EUR/USD Price Forecast December 5, 2017, Technical Analysis

As we opened the trading session on Monday, we obviously gapped lower in favor the US dollar during Asian trading, perhaps in reaction to the tax bill making significant gains through the US Senate. Ultimately, the question then becomes where do we go from here? I think that the move to the upside it’s very likely that we will continue to see the pair rise. In fact, I believe that the 1.17 level underneath is massively supportive, and it’s not until we break down below there that I would be thinking about selling. That being said, I do recognize that there is a lot of noise above, and the 1.21 level is a massively resistant level, and that being broke and could lead us into more of an investment, and less of a trade. I think eventually that’s what happens, especially if inflationary pressures can pick up in the European Union.
If we were to break down below the 1.17 level underneath, I think the market probably goes looking towards the 1.15 handle underneath. That would throw the market into a bit of disarray, and I think that the overall momentum will continue though, so it’s difficult to imagine selling this market for any length of time. Also, when I look at the hourly chart I see that we are starting to see support again at the 1.18 level underneath, and therefore if we can bounce, I think we will fill the gap from the open, and then eventually go towards the 1.1950 level next. In general, I’m a buyer but I recognize volatility is ahead of us.

GBP/JPY Price Forecast December 5, 2017, Technical Analysis

The British pound gapped higher at the open on Monday, initially reaching towards the 152.25 handle. We pulled back a bit and towards the 151.50 level, where we find buyers yet again. By reaching to a fresh, new high, we have tested the 153 level above, which is the recent high on the weekly chart. The fact that we formed a shooting star on the hourly chart is a negative sign, but it appears that we are not ready to pull back significantly. Because of this, I believe that we will eventually break above the top of that shooting star, and by extension the 153 handle, and that of course is a sign to start buying again. The next significant level would be the 155 handle, as it is a large, round, psychologically significant number. However, structurally we look quite a bit different. On a breakout, we could go as high as 160 over the next several weeks. In other words, a break above the 153 level for a significant amount of time could be a “buy-and-hold” trade.
That being said, it’s likely that we could find a pullback in the short term if for no other reason than to build up enough momentum to go higher. The 151-level underneath should be a floor at the moment, because it was the scene of the gap. If we can stay above that level, I remain bullish of this pair, but I also recognize that it will be noisy yet again, as it typically is. Longer-term though, I do think that we rally and break out for a large move.

NZD/USD Price Forecast December 5, 2017, Technical Analysis

With the NZD/USD pair gapped lower at the open on Monday, then reaching even lower than that, I think this shows just how bearish this market is longer term. I believe that signs of exhaustion on rallies will be nice selling opportunities, reaching down to the 0.68 support level below. If we can break down below there, the market should then go down to the 0.66 handle and then possibly even the 0.65 level after that. On the other hand, if we break above the 0.69 level, then I think that the market will first test the 0.6950 level, and then the 0.70 level after that. The 0.70 level is massively important, and a break above there could be a longer-term buy signal. Until then, I think that we always have the threat of a roll over, or some type of exhaustion.
If we do get significant tax reform, the market will more than likely breakdown below the 0.68 handle, and continue to roll over as the US dollar should strengthen against most currencies. The New Zealand dollar has its own issues anyway, with Labour Party being elected recently suggesting that there is probably going to be more spending in New Zealand than previously. That’s not to say that it’s the end of the world for the New Zealanders, just that there are concerns about quantitative easing. If we do rally, that’s probably more of an anti-US dollar play than anything else. The noise continues to be difficult in this pair, so by all means be careful.

GBP/USD Price Forecast December 5, 2017, Technical Analysis


The GBP/USD pair initially gapped lower at the open on Monday, and then bounced enough to slam into the 1.35 handle. We pulled back from there to test the 1.3425 level underneath, and then exploded to the upside again. Now that we are over the 1.35 handle for the second time during the session, I suspect that it’s only a matter of time before we get enough momentum to break out. I think once we do break to a fresh, new high, we will more than likely make a significant test of the 1.3650 level above, which was a gap lower from the surprise vote coming out of the UK. A break above that turns the British pound into an investment, and not a trade anymore. In other words, it’s a “buy-and-hold” situation just waiting to happen.
Ultimately, when we pull back I’m looking for buying opportunities in this pair, as the British pound certainly seems to be doing quite well. That doesn’t mean that we won’t get the sudden volatile moves in both directions, so because of this I would keep my trading positions relatively small, because headlines will certainly be moving this pair occasionally. I think that the 1.3333 handle underneath now becomes the “floor” in the market, and you will be forced to pay attention to the longer-term outlook for this market, and maybe not so much the short-term noise. The US dollar will of course have its influence as well, but I think for the most part we are basically paying attention to the British pound when it comes to this market.

USD/CAD Price Forecast December 5, 2017, Technical Analysis

The US dollar fell slightly against the Canadian dollar during the Monday session, but as we are in an area that has been supportive in the past, one has to think whether we are starting to see support again, and if we can break above the 1.2733 level sends this market to the upside, perhaps reaching the 1.2870 level. Alternately, if we break down below the 1.2650 level for a couple of hours, that could send this market looking for the 1.25 handle underneath. That of course would be a negative sign, but I think that the 1.25 level is probably even more supportive than the area that we find ourselves in.
The crude oil markets of course will always have their influence on the Canadian dollar, but I believe that the noise in the market will continue to be very difficult, and that of course will have its influence. Because of that, I would expect a lot of sudden moves, but that’s not uncommon in this pair as the economies are so intertwined. Beyond that, I’m keeping an eye on the Greater Toronto Area, and the housing bubble that is basically out of control at this point. That will eventually work against the Canadian dollar, but so far it seems like most of the damage has been contained.
The massive selloff during the Friday session is probably a bit overdone, but it’s not until we break out above the 1.2733 level that I am confident enough to start buying as the market could turn around very quickly. If we do manage to break down below the 1.25 handle, the market probably makes a beeline for the 1.20 level.

USD/JPY Price Forecast December 5, 2017, Technical Analysis

By gapping initially on the Monday session, this signified what I had been suspecting all along: that the US dollar is moving mainly upon tax reform expectations, and nowhere with this be more important than the USD/JPY pair as it has a lot to do with the overall attitude and flow of money between the 2 economies. I believe that the markets will rally significantly from here, but we probably need to pull back to fill the gap, or at least reached towards that area. A move above the 113 handle for more than a few hours signals that this market is ready to go to the 114.50 level above, which is the next major resistance barrier, which of course extends to the 115 handle as well.
I believe that the 112 level absolutely must hold as support if the buyers are to finally get their hands around this market. I also believe that with the tax reform votes coming up in the U.S. House of Representatives, we could get more volatility ahead. Nonetheless, it does look like the buyers are trying to extend the gains, and I think that overall, it’s probably best to think of this as a bullish yet choppy market
If we were to break down below the 112 level, this would start to look very bearish, especially considering how bullish we have been over the last week. Expect more noise, but longer-term I suspect that the buyers will get their way.

EUR/USD Price Forecast December 4, 2017, Technical Analysis

The EUR/USD pair initially fell during the trading session on Friday, reaching down towards the 1.1850 level before bouncing significantly. As we are approaching the end of the trading session for Europe, the market is rallying significantly, and looking very likely to go towards the 1.20 level above. The 1.21 level after that is even more significant, and a break above there could send this pair much higher over the longer term. That is my thesis given enough time, but I also recognize that there is a lot to work through. Most of this news is due to General Flynn suggesting that he would work with prosecutors against the White House, and therefore people were getting concerned about the US dollar. In general though, I think that these things have a way of correcting themselves, so this knee-jerk reaction could very well pull back. That pullback should be a buying opportunity, and that should be the better trade to take as the last few minutes has seen a move of over 60 pips.
I believe that the 1.18 level underneath is going to continue to be a bit of a floor, and given enough time we will continue to go much higher. I don’t think that the markets are going to break above the 1.21 handle during the session on Friday, and I think it will take a certain amount of strength to do so. The potential of a constitutional crisis has people reacting first, and thinking later. There is a long way to go in this scenario, so with this being the case it’s likely that the markets will correct given enough time.

AUD/USD Price Forecast December 4, 2017, Technical Analysis

The Australian dollar initially went sideways during the session on Friday, reaching towards the 0.76 level before pulling back. However, we then found quite a bit of bullish pressure as General Flynn suggested that he was willing to testify against the White House in the Russian probe, and that of course is a driver of people away from the US dollar. Ultimately, I think that pullbacks will be buying opportunities for short-term traders, but as we head into the weekend, I think a lot of people will be concerned about holding onto a position with such a fluid scenario right now. The volatility will continue, and I think gold markets need to rally significantly to drive the Aussie higher for a longer move.
Ultimately, I think the volatility continues, and I think that if we can break above the 0.7650 level, the market will probably go looking towards the 0.7750 level next. Alternately, some type of rollover probably sends this market back down to the 0.7550 level next. There is a lot of noise and trouble just waiting to happen this market, so this is a situation that will be fluid but eventually we should get some type of confirmation given enough time. In the meantime, it’s probably better off to stay on the sidelines as there are easier currency trades to trade currently, and therefore think that given enough time we should get some type of clarity, but until then there’s no point in taking risk in a market that looks very tight in both directions, and seemed to be driven mainly upon news headlines involving things not even involving the Australian dollar.

EUR/GBP Price Forecast December 4, 2017, Technical Analysis

The EUR/GBP pair initially rallied on Friday, but found enough resistance near the 0.8850 level to roll over and fall towards the 0.88 handle again. As I write this, we are starting to see a significant rally in the EUR in general, so we could see a move above the vital 0.8850 level. At that point, I would be a buyer as I think it would be a confirmation of the supportive area just below, in the form of the 0.88 handle. I think that the market continues to be one that you can trade to the upside overall, but it’s likely that it will be choppy, and it also is likely that short-term pullbacks will occur quite often. This pullback could be thought of as opportunities to add to your position, but keep in mind that there will be a lot of choppiness as we get headlines coming from both London and Brussels that will move this market.
If we were to break down below the 0.8750 level, I think it would let the market reach towards the 0.86 level under that, which is an area that is massively supportive as well. That being said, I am a buyer in general and I think that given enough time will probably go looking towards the 0.90 level again, all we need at this point is some type of catalyst. Take your time, and add to your position as it works out in your favor. This pair tends to move rather slowly at times, but then again that’s part of what makes it a great pair to trade for those with less experience.

GBP/JPY Price Forecast December 4, 2017, Technical Analysis

The British pound initially tried to go sideways during the session on Friday, but perhaps a bit of profit-taking ahead of the weekend helped the market drift a little bit lower. Later in the day, we got news that General Flynn in the United States was willing to testify against the White House in the Russian probe, and that had a lot of people selling off risk assets around the world, which of course has a massive effect on the GBP/JPY pair. With this being the case, we of course had to fall as this pair is so sensitive to stock markets and the like. However, the 150-level underneath should continue to be rather supportive, and it’s not until we break down below that level that I would be concerned. Quite frankly, as I’m recording this video it looks as if a lot of people are thinking that this could be a nice buying opportunity. The British pound has done quite well for some time, not only against the Japanese yen but also against other currencies.
I think that the market continues to be one that will be noisy, but these dips should continue to offer opportunities to take advantage of value. If we were to break down below the 150 handle, I think we would probably go looking towards the 149 level after that, perhaps even the 148 handle. Pay attention to risk appetite around the world, that should tell you pretty much everything you need to know in this pair, as stock markets around the world rally, we will more than likely see money flow back into this pair.

GBP/USD Price Forecast December 4, 2017, Technical Analysis

The GBP/USD pair initially fell during the trading session on Friday, reaching below the 1.35 handle again. Quite frankly, I liked seeing this, as a give us an opportunity to pick up a little bit of value. We were in an uptrend anyway, so when we pull back, unless it’s a complete change in trend, it’s a value proposition. I think that a break above the top of the range for the day should be a buying opportunity as well, and given enough time we could reach towards the 1.3650 level above. That is an area that is massively resistive, so if we can break above that level it’s likely that we will continue a longer-term “buy-and-hold” type of move.
I think in general, we will get that longer-term move, but there’ll obviously be a lot of noise in between now and then. I think that the 1.3333 level underneath is massively supportive, and if we can stay above there I don’t have any interest in shorting. That’s not to say that this is going to be the easiest trade to take, only that we will go higher over the longer term. Because of this, a small position might be the best way to play this market, as you can deal with the volatility in the market, and add as things go in your favor. Because of this, I am “long only” at least for the time being. Longer-term, I suspect that the longer-term downtrend in the British pound may be over soon.