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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

USD/JPY Price Forecast January 17, 2018, Technical Analysis

The US dollar has gone back and forth during the trading session on Tuesday, as Americans came back to work. I believe that the market is going to deal with the 111-level next, and that’s an area that could be a bit resistive. If we break above there, then the market goes looking towards the 112 level, which has been important in the past as well. I think though, it’s likely that we will see some downward pressure, and that could send the market looking towards the 110 level. I believe that the market should continue to be noisy in general, which makes sense considering that the global economic outlook is positive, but we also have a general sell off the greenback.

Because of this, I think we will continue to see a lot of volatility, and this market will course be a great place to find it as the pair tends to be volatile anyway. If we break down below the vital 110 level beneath us, the market probably goes down to the 108 level after that. I expect to see a lot of noise in this market going forward, as there are plenty of areas in the general vicinity, highlighted every 100 pips. This market has been very noisy, but I think that the overall attitude of this market is trying to rebound from what has been a rather significant pullback.

USD/CAD Price Forecast January 17, 2018, Technical Analysis

The US dollar went back and forth during the trading session on Tuesday, as we have seen the market use the 1.24 level as support. If we can break above the 1.2460 level, then I think the market probably goes to the 1.25 handle above. If we were to break past that level, then the next target would be a 1.2575 handle. In general, I don’t like trading this market right now, because there are so many external influences in this market, as there are serious concerns that the Americans could scrap NAFTA. Beyond that, the oil markets have their typical influence on this pair, while the housing bubble in Toronto also concerns traders.

We also have the Canadian economy that is heating up, so we have so many things going back and forth and pulling this market in several different directions that this pair is probably best traded from a range bound attitude, and in small bits and pieces. In fact, I suspect that this market is going to be very difficult over the next couple of weeks, at least until we get an idea as to what the Bank of Canada is going to do, as they have a lot of moving pieces to deal with. Expect volatility, so therefore small position sizing will be paramount when it comes to protecting your account if you choose to trade the Loonie.

NZD/USD Price Forecast January 17, 2018, Technical Analysis

The New Zealand dollar has drifted a bit lower during the trading session on Tuesday, as traders came back from the holiday. The 0.7250 level seems to be offering a slight bit of support, and considering that we are in a longer-term uptrend, it makes sense that people will be looking to take advantage of this as value, and serve buying the New Zealand dollar as it is cheaper than it was 24 hours ago. I think eventually we go looking towards the top of the overall consolidation, which is the 0.75 handle. That’s not to say that we are going to get there right away, but I believe that these gentle pullbacks continue to offer value the people are willing to take advantage of, as profit-taking occurs.

Pay attention to commodity markets, they are always crucial when it comes to the New Zealand dollar, just as the general “anti-US dollar bias” moves this market to the upside. I suspect that there is significant support at the 0.72 level, as well as the crucial 0.70 level. Whether we can break above the 0.75 level or not, there is still plenty of room between here and there to take advantage of this trend, so this point simply reaching there should be a good enough indication or target, depending on how you look at the charts.

If we do break down, I will not be selling but would rather look for opportunities to get involved in a market that has shown itself to be so clear-cut.

GBP/USD Price Forecast January 17, 2018, Technical Analysis

The British pound drifted a bit lower at the open on Tuesday, reaching down towards the 1.3750 level, an area that was resistance in the past. Because of this, I anticipate that the market will probably find buyers in this general vicinity, giving us an opportunity to go long sooner rather than later. However, if we were to break down below that level, I think the market probably will find plenty of support at the previous resistance barrier at the 1.3650 level. That’s an area that was the gap from the vote to leave the European Union, and now that we have cleared that area, it should offer plenty of support. In fact, I look at it as the “floor” in the market, and I believe that we will continue to see a lot of interest in this market, looking at pullbacks as value.

Keep in mind that the US dollar is falling overall, so when we get these days where the market moves towards the US dollar, and offers value from a longer-term standpoint. I believe that we are going to go looking towards the 1.40 level over time, so these opportunities present themselves to those who are willing to hang on to the trade. I think that it’s not until we break down below the 1.36 level that I would be comfortable selling, and it looks very unlikely to happen anytime soon. Because of this, I think adding on short-term pullbacks will continue to be the best way going forward.

GBP/JPY Price Forecast January 17, 2018, Technical Analysis

The British pound has fallen during the session on Tuesday, reaching down to the 152 level. This is an area that is important from not only a psychological standpoint, but a structural standpoint as well. We have bounced from there a couple of times, and it now looks as if we are going to go looking towards the 153 handle. A break above that level is very bullish and should send this market higher again. The British pound of course has been noisy as of late, but it looks likely that we are going to see a lot of buying pressure based upon value, and of course based upon the general attitude of traders around the world.

The better that stock markets in general do, the better that this pair does. Obviously, this works in both ways, so if we start you to sell off of risk appetite around the world, that will be bearish when it comes to this market. If we were to break down below the 152 handle, I think at that point we go looking towards the 150 handle. A break above the 153 level has the market first attacking the 153.50 level, and then going to 160 longer term. This is my longer-term outlook for this market, but I recognize that we have a lot of work to do to break out above what has been significant resistance as of late.

EUR/USD Price Forecast January 17, 2018, Technical Analysis

The EUR/USD pair has drifted a bit lower during the trading session on Tuesday, reaching down towards the 1.22 handle. Ultimately, I think that the market should continue to go higher based upon the 1.21 level breaking, which was a massive resistance barrier. I now believe that the EUR/USD pair is going to go looking for the 1.24 level above, and then eventually 1.25. The US dollar is in a lot of trouble overall, and I think that the market will continue to go higher, as it’s likely that these dips will be buying opportunities given enough time. I think that the markets will continue to be very negative towards the greenback in general.

Is not until we break down below the 1.20 level that I would be concerned, and I think with the ECB looking likely a step away from quantitative easing, the markets trying to front run that potential move. Beyond that, I think that global growth will be negative for the US dollar, as people are starting to throw money into other markets around the world to pick up a bit of alpha. The market will course be rather noisy, but quite frankly that’s what you expect when you start to see a longer-term move to the upside. I believe this is the beginning of the longer-term trend, so therefore I am essentially “buy only” at this point.

EUR/GBP Price Forecast January 17, 2018, Technical Analysis

The EUR/GBP pair has struggled significantly during the day on Tuesday, as we have bounced around rather radically. The market looks likely to continue to be very choppy and difficult to navigate, which of course makes quite a bit of sense as the European Union and the United Kingdom negotiate the exit of the UK from the EU. Because of this, there are going to be a lot of potential headlines that could cross the wires and make it very difficult. I think that the market is going to continue to be very tight, so look for range bound trading strategies to play this market.

The stochastic oscillator is a perfect indicator for this situation, so if we get some type of oversold condition where the moving averages cross, we could be short-term buyers. Of course, the opposite is true as well, as the 0.920 level above is significant resistance. I believe that the market continues to be very noisy, and I think that given enough time, the markets will offer opportunities in both directions. I think that the larger consolidation area must be paid attention to as well, with the 0.88 level offering a “floor” in the market, and then resistance at the 0.90 level, offering a bit of a “ceiling.”

By being patient, you can take advantage of this type of trading, but expect in a large move is almost impossible, as we have a significant amount of potential inertia build up in this market, but it needs certainty out of the negotiations before can break free.

AUD/USD Price Forecast January 17, 2018, Technical Analysis

The Australian dollar drifted a little bit lower during the trading session on Tuesday as the Americans came back to work from the holiday. Ultimately, the market looks as if it is bullish though, but I also recognize that the 0.80 level above is very important. Typically, these areas take several attempts to finally break above, so it’s not surprising to see that we have pulled back. I believe the people will be looking at this market as one that is offering an opportunity to pick up value, but you need to be very patient as this market is going to be struggling just above. I also recognize that there is a significant amount of resistance extending to the 0.81 handle, and that is an area that continues to be crucial.

The 0.80 level is an area that has been massive in its importance, as the market has essentially used it as a pivot point going back decades. On a move above the 0.81 level, we have cleared a lot of resistance, and I think it becomes more of a “buy-and-hold” scenario, and then the traders will be looking to pick up and add to their position on short-term dips. At that point, the 0.80 level will be the “floor” in the trend, and therefore should continue to attract a lot of attention.

In the meantime, I expect dips to offer opportunities to get involved, as the market tries to build up the momentum to smash through this important barrier. Gold markets can break out simultaneously, that will be even better, as it gives us the opportunity to have fundamentals pushing the Aussie higher as well.

AUD/USD Price Forecast January 16, 2018, Technical Analysis

The Australian dollar has rallied significantly during the Monday trading session, reaching towards the 0.7950 level as I record this. However, the 0.80 level above is a significant barrier to overcome, and that area as one that has continued to be important over the longer-term charts. The 0.80 level goes back decades, so I believe it will take something special to break above there, but if we can clear the 0.81 level, I think the Australian dollar can continue to go much higher, perhaps even as high as the 0.85 over the next several weeks. I will be rather volatile and noisy, so it’s likely that will take a certain amount of momentum building to do this.

Look to the gold markets for directionality, because they are the pure “anti-US dollar play” for traders, and have a knock-on effect when it comes to the Australian dollar. I believe that if the gold markets can continue to show strength, the Aussie will eventually make a major breakout that a lot of people were waiting on. At that point, becomes more of a “buy-and-hold” scenario, but until then we will probably see a lot of noise going forward. I believe that ultimately, the one thing that you should count on his volatility, but I certainly believe that we are looking at a definite upward bias, so I’m not looking to sell at all. In fact, I don’t have a scenario in which a willing to short the Aussie right now.

EUR/GBP Price Forecast January 16, 2018, Technical Analysis

The EUR/GBP pair was very noisy during the trading session on Monday, bouncing around the 0.89 level. I think if we can break above there significantly, then the market will probably go to the top of the recent consolidation area, the 0.90 level. That’s an area that is massive resistance, and I think it will be difficult for this. A break above there until we get some type of resolution from the negotiations between the United Kingdom and the European Union. Over the last several months, it’s been good money just waiting to happen based upon the 0.88 level on the bottom, and of course the 0.90 level on the top.

I believe that this market will continue to be very noisy, so as we are essentially at “fair value”, it’s probably best to leave this market alone until we get some type of overbought or oversold condition that we can take advantage of. Ultimately, this is a market that will be one of the noisiest currency pairs out there, as we see so many different reasons to think that the market will move around. Both currencies are doing well against the US dollar, secant necessarily use the EUR/USD or GBP/USD markets as indicators right now either. In other words, I’m waiting to get to the outside of the consolidation area, and then trade in the opposite direction. Until then, it’s probably best to simply observe.

EUR/USD Price Forecast January 16, 2018, Technical Analysis

The EUR/USD pair broke above the 1.2275 level during the day, and reached towards the 1.23 level above. Ultimately, if we pull back from here, I think it will offer value that we can take advantage of. The market is most certainly bullish now, as we have broken above major resistance in the form of the 1.21 handle. Longer-term, I anticipate that the market is going to go to the 1.24 level, and then eventually the 1.25 level. I think that the market should continue to see volatility, but most certainly will be to the upside.

I believe that the “floor” is the 1.20 level underneath, as it is the bottom of the “zone” that begins at the 1.21 handle. Longer-term, we should go to the 1.25 level, and then beyond that. I think that the Euro will continue to be a beneficiary of the pummeling of the US dollar. I think this is going to be the overall attitude for 2018, so this continues to be a “buy on the dips” market going forward. I would anticipate that the 1.24 area begins a significant resistance to the 1.25 level, based upon longer-term charts. However, when we pull back it will be the market trying to build up the momentum to finally break out. I fully anticipate that we go much higher over the next several months, if not years.

If we did manage to break below the 1.20 level underneath, that would be an extraordinarily negative sign, but considering that we are 250 pips away from there as I record this, I don’t think it’s happening.

GBP/JPY Price Forecast January 16, 2018, Technical Analysis

The British pound has significantly rally during the day overall, and the market has been very bullish on Friday as well. Because of this, I think it’s likely that we continue to see momentum building exercises present themselves, and I think that short-term pullbacks are buying opportunities as we should then try to break above the 153 handle. Once we do, that is a major barrier that the market had recently cleared for the short term. If we can finally make a fresh, new high, that signifies that this pair probably goes to the 163 handle later.

In the meantime, I think that pullbacks are buying opportunities, as the 150 level has offered a major support barrier. That is the area that of course was always going to offer a significant amount of support based upon the large, round, psychologically significant number. In fact, it’s not until we break down below the 150 level that I would consider selling. I think that pullbacks offer value, as the British pound has been showing significant strength over the last year, especially as the US dollar. This market breaking above to a fresh, new high signifies that there would be more of a “risk on” attitude in the markets in general, and that’s almost always good for this pair. The 153 level will probably offer a bit of noise, so if you do go long between now and a breakout of that level, I would add slowly, and then become more aggressive once we reach the fresh, new high.

GBP/USD Price Forecast January 16, 2018, Technical Analysis

The British pound rallied significantly during the trading session on Monday, and what would have been somewhat thin trading in America as the Martin Luther King Junior holiday was being celebrated. I believe that the 1.3740 level is significant support as well, so I think that it’s only a matter of time before we go higher. Eventually, we will break above the 1.38 level, and that should be a sign that we will go looking towards the 1.40 level above.

The 1.3650 level should now be massively supportive, as it was massive resistance. I believe that the US dollar is in serious trouble, and the British pound is going to be one of the major benefactors of this movement. I think that it is not until we break down below the 1.3650 level that we could be sellers. I think that the 1.40 level above is where we see the next major resistance, but I believe that this is the beginning of a major turnaround for the British pound longer term as well. In fact, I have some friends who are larger traders that are in a “buy-and-hold mode” already. If the British can get some type of decent exit agreement with the European Union, I think that the British pound will explode to the upside as it has been oversold for quite some time.

NZD/USD Price Forecast January 16, 2018, Technical Analysis

The New Zealand dollar initially gapped lower at the open on Monday, but turned around to rally towards the 0.73 handle above. With it being Martin Luther King Jr Day in America, volume was very thin once the Americans came on board, but at the end of the day it looks as if there has been a significant “anti-US dollar” bias in the marketplace. This lifted most commodities, and that of course had a beneficial effect on the New Zealand dollar as it is so highly leveraged of those commodities.

From a technical analysis standpoint, the 24-hour exponential moving average looks good on the hourly chart, as it has offered a significant amount of support. When I look at the longer-term charts, I recognize that there is a consolidation area between the 0.68 level on the bottom, and the 0.75 level on the top. Because of this, I suspect that we are going to go looking towards the 0.75 level over the longer term, and the pullback should continue to offer buying opportunities. I recognize that there is a general negativity floating around the US dollar in the Forex world right now, and therefore I don’t have any interest in buying that currency. In fact, it looks as if simply picking a currency against the US dollar is all it takes right now, with perhaps the exception being the Canadian dollar, as Canada has its own bundle of issues to worry about.

USD/CAD Price Forecast January 16, 2018, Technical Analysis

The United States dollar drifted a little bit lower against the Canadian dollar, breaking below the 1.2450 level. By doing so, it looks likely that we will go hunting the 1.24 level underneath, and then possibly the 1.2350 level. A fresh, new low is a very negative sign and should send this market down to the 1.20 level. Alternately, if we can break above the 1.25 handle, then I think the market will make another attempt to rally. However, I think that this pair is going to be difficult to trade, because we have several different moving pieces at the same time.

The Canadian economy is heating up, but at the same time there is a major housing bubble in the Greater Toronto Area. That is a disaster just waiting to happen, and could be negative for the Canadian dollar. At the same time, Canada has a strong economy but need to worry about whether NAFTA will exist soon. Alternately, the US dollar has been falling drastically, but at the same time oil markets – although bullish – look vulnerable to downward pressure, especially considering that Russia is talking about leaving the OPEC production cuts. In other words, I think this is probably going to be one of the noisiest pairs over the next couple of months. I would believe that it’s probably easy to short rallies on smaller time frames, but beyond that this is can be a difficult market.

USD/JPY Price Forecast January 16, 2018, Technical Analysis

The US dollar has drifted below the 111 level, and reached towards the 110.50 level below where we found a little bit of bullish pressure. The support I think extends down to the 110-level underneath, which is a large, round, psychologically significant number. It is the 61.8% Fibonacci retracement level from the longer-term, and therefore I would expect to see buyers attracted to not only that round number, but the Fibonacci trading signal as well. Because of this, if we break down below the 110 level, I think at that point the market is likely to breakdown rather significantly. In the meantime, I think there’s a lot of volatility that is just waiting to happen, so I like selling rallies in the short term, at least until we break above the 111.70 level.

Overall, I think that we will eventually find buyers underneath, but the 110 level needs to prove itself on a daily chart for me to consider going long. A breakdown below that level will more than likely send the signal much lower, to at least the 108 level. I would become aggressively short of this market at that point, but in the meantime, I think you’re going to see a lot of short-term back and forth trading going forward, and I think that given enough time we will probably see sellers return every time there is a short moved to the upside. I think that the market will continue to be very noisy.

AUD/USD Price Forecast January 15, 2018, Technical Analysis

The Australian dollar initially fell during the trading session on Friday, but found enough support near the 0.7850 level underneath, showing signs of resiliency. I believe that the US dollar falling against most currencies will continue to help the Australian dollar as well, not to mention that the US dollar falling typically lifts the gold markets as well, a major driver of the Australian dollar. I think that if we can break above the 0.79 level, the market is likely to go to the 0.80 level above, which has been a major area of contention for longer-term traders.

Dips continue to offer value, and I think that using them to pick up value is probably the way to go. Although I recognize that the area between the 0.79 level and the 0.80 level above is going to be difficult to break above, certainly I don’t have any interest in shorting, mainly because that means buying the US dollar. In other words, this is a one-way market by default, because of the inherent weakness in the greenback. I believe that the market breaking above the 0.80 level should send this market much higher, as it is a major barrier going back at least 20 years that I am aware of. At that point, it becomes more of a “buy-and-hold” type of situation. That should correspond with an obvious break out in the gold market, and therefore it will become an obvious trade.

EUR/GBP Price Forecast January 15, 2018, Technical Analysis

The EUR/GBP pair initially tried to break significantly above the 0.89 level, but has offered more than enough resistance to turn around and break down. We had reached towards the 0.8850 level, an area that has been supportive in the past, as well as resistive. I think we will eventually see buyers get involved in this market, but we will probably find them a little closer to the 0.88 handle, which is the bottom of the longer-term consolidation. If we were to break down below there, that would be very negative, but at the moment, the Euro and the Pound have both exploded to the upside against the US dollar, breaking major barriers. In other words, this is a fight between 2 very strong currencies.

Adding to the noise is the fact that we have the negotiations going on between the European Union and the United Kingdom, and that will continue to cause issues. If we can break above the 0.90 level above, the market should continue to go even higher, reaching towards the 0.93 level. The volatility continues, but given enough time I think we will see buyers jump in as it is probably a much more stable environment to trade in Europe as opposed the United Kingdom which will have a lot of things to prove after the breakup. Buying dips and trading short-term is the way to go going forward, but I believe that buying is probably the easiest way to go. I do like this market for the 0.93 level, but obviously it’s got a lot of work to do.

EUR/USD Price Forecast January 15, 2018, Technical Analysis

The EUR/USD pair has gone sideways initially during the trading session on Friday, and then broke out above the vital 1.21 handle. We have made a fresh new high, and that shows the market ready to go much higher. I think that the 1.24 level above will be a target, and obviously the 1.25 level as it is a large, round, psychologically significant number. Every time we pull back, I’ll be looking to buy, and I think that the 1.20 level underneath will be the hard floor that keeps the market higher. This is a market that continues to see a lot of volatility, but quite frankly with the US dollar getting pummeled so drastically over the last couple of sessions, it’s likely that we will continue to see the reason enough to go long. It’s not until we break down below the 1.20 level that I would be concerned.

The overall attitude to this market is one that attracts a lot of frequent traders, as well as high-frequency traders. The ECB looks likely to continue to ease up on the quantitative easing, showing the way forward. The US economy missing noneconomic numbers over the last couple of days is helping as well. I like the idea of taking advantage of value when it appears, but you should be careful about jumping in with both feet. I think that the markets will continue to be one that you can add on dips, building up a larger position for what almost undoubtedly will be a large move.

GBP/JPY Price Forecast January 15, 2018, Technical Analysis

The British pound has exploded to the upside during the trading session on Friday, slicing through the 152 handle like it wasn’t even there. We have drifted a little bit lower, finding buyers underneath, and I think it’s only a matter of time before the buyers get involved. If we did breakdown below the 152 handle, it’s likely that the market would go looking for support at the 151.50 level, and the 151 handle. Ultimately, I think that the market is trying to reach above the 153 handle, as the weekly candle has been very bullish. Move above the 153 handle could send this market into a longer-term “buy-and-hold” trade, which is exactly what I expect to see next week.

I’m buying on dips, this will be especially true if stock markets continue to rally, as it gives you an idea of the risk appetite around the world. The higher the risk appetite, the higher this pair goes. More importantly, the GBP/USD pair has broken above the gap lower from the vote to leave the European Union, showing that money is willing to flow back to the British pound again. I believe this market continues to offer plenty of opportunities, and that dips are to be pounced upon, especially considering how we have seen so much in the way of explosive movement. I think that the market is going to offer plenty of opportunities, by simply waiting for signs of support and being patient.

GBP/USD Price Forecast January 15, 2018, Technical Analysis

The British pound has exploded to the upside, slicing through the 1.3650 level. That’s an area that was important due to the vote to leave the European Union and the resulting gap, and that shows that we have seen an extreme amount of bullish pressure jump into the fray. Because of that, I believe that this is starting to become more of a “buy-and-hold” market, as we are more than likely going to go looking towards the 1.45 level above. This wipes out the gap from the vote to leave, and that is a very significant turn of events.

At this point, I believe that pullbacks are buying opportunities, and that the 1.3650 level will probably be a bit of a floor, although a soft one. I think that there are plenty of reasons to think that this market continues, as the US dollar has been getting pummeled against almost everything. The British pound has been oversold for some time, and now that the markets are getting over the shock of the United Kingdom leaving the European Union, it makes sense that we see more believe in the pound, expressed by the purchasing of the market. The 1.40 level is the next obvious target, but I think at this point we will probably break above there and eventually go to the 1.4250 level, and then longer-term the previously mentioned 1.45 handle. This will take several months in my estimation, but certainly it seems that buying is the only thing possible

NZD/USD Price Forecast January 15, 2018, Technical Analysis

The New Zealand dollar drifted lower on Friday of course is a negative sign, but quite frankly it’s not that surprising considering that we had extended recently. However, I think that this pullback should be a buying opportunity and therefore we should continue to reach towards the 0.73 handle, and then eventually the top of the overall consolidation that we have seen over the last several months, meaning that we will target the 0.75 level above. If we break down below the 0.72 handle, the market should then go to the 0.71 level underneath. Below there, it’s the 0.70 level. I think it’s only a matter of time before the buyers come back, and that being the case it’s likely that we will continue to find plenty of volatility, but I think that we will find opportunities.

Looking at the marketplace, I believe that every time we pull back, it is essentially the kiwi going on sale, as the greenback has been breaking down over the last several sessions. I think that given enough time, it’s likely that the 0.75 level will be targeted, and if we can break above there becomes more of a longer-term “buy-and-hold” situation. The stochastic oscillator has crossed on a dip, suggesting that perhaps the buyers are getting involved, but it is not necessarily in the oversold condition, so that in and of itself isn’t a trading signal. It does show the proclivity for buyers to jump into the market though, and ultimately, I believe it’s yet another positive sign.

USD/CAD Price Forecast January 15, 2018, Technical Analysis

The US dollar has gone sideways during the trading session on Friday, as we hover above the 1.25 handle. This is an area that of course attract a lot of attention as it is a large, round, psychologically significant number, and therefore I think there will be buyers occasionally as we go forward. I think short-term traders will probably be attracted to this market, as there are a lot of crosswinds when it comes to the marketplace. After all, the Canadian dollar must worry about the Toronto housing market, which is in a massive bubble. Also, oil markets have been rallying so that works in the opposite direction. At the same time, I think that we are seeing is a general move of money from North America to Europe, based upon both the EUR/USD and GBP USD currency pairs.

In general, I believe that this market will continue to be very choppy, and I think that we will have a lot of back and forth trading. Even if we break down below the 1.25 handle, the market probably goes looking towards the 1.2450 level underneath that is going to be supportive based upon previous action. Alternately, if we break above from here, we probably go to the 1.29 level if we get enough of a move. I think that this market is probably one that’s best left alone, unless of course you can trade from very short-term charts. Otherwise, I think we will need to see some type of momentum to get involved with a significant amount of money.

USD/JPY Price Forecast January 15, 2018, Technical Analysis

The US dollar has been very noisy over the course of the last 24 hours, hovering above the 111 level. The market should continue to be very noisy, but I think given enough time it’s likely that the marketplace will find buyers based upon value. The market continues to be noisy based upon the US dollar   selling off against most currencies, but at the same time the stock markets rallying gives a bit of a boost in this market. I think that the trading in this pair is going to be very difficult to deal with, but I recognize that a breakdown below the 111 level is rather drastic, as it slices through the 50% Fibonacci retracement level of the most recent move.

The market breaking below that level should send traders looking for the 110 level, which is the 61.8% Fibonacci retracement level. Otherwise, I think we go back and forth in a short-term move, and I look at the immediate area as potential value. The marketplace has been very noisy, and I think that is going to continue to be the case, as we have so many conflicting pressures. The market looks likely to be difficult, but if you can trade short-term charts, this might be an excellent opportunity. As far as longer-term traders are concerned, this is a market that is full of losses just waiting to happen, and I think that the markets will continue to see volatility as day traders and scalpers will come flocking to it.

AUD/USD Price Forecast January 12, 2018, Technical Analysis

The Australian dollar has rallied a bit during the trading session on Thursday, as it looks likely we are going to continue to go higher. Gold markets can break out, that should send the Aussie much higher, and more of a buy-and-hold market of sorts.

I think that pullbacks continue to offer value, and I believe that the 0.78 level is going to be a bit of a “floor” in the market, and I think that traders will continue to be interested in this currency as it represents not only gold, but growth in Asia. If there is going to be strong global growth, then the Australian dollar should do well. After all, Australia is a major contributor of commodities for half of the world, and that of course represents construction and global expansion. The US dollar is on its back foot, so it’s likely that the Aussie will gain because of that fact as well. I recommend adding on dips going forward to the upside, but I also recognize that breaking above the 0.80 level is going to take a significant amount of momentum, so it may take several attempts to occur.

If we were to break down below the 0.78 level, the market could go looking towards the 0.75 handle, which has been massively supportive in the past. I think that a breakdown below that level would be catastrophic for the Aussie dollar. However, I suspect that has about a 10% chance of happening at this point.

EUR/GBP Price Forecast January 12, 2018, Technical Analysis

This pair has been reasonably reliable over the last several weeks, as we continue to negotiate the exit of the United Kingdom from the European Union. Because of this, there have been a lot of headline shocks from time to time that will move this market in both directions. I believe that the market is simply treading water and waiting to see how things turn out, but the longer-term attitude of this market is most certainly bullish. I look at pullbacks as buying opportunities, as I believe that eventually once things settle, people will look at the European Union is a safer place to be than the United Kingdom based upon the stability of the you. After all, the United Kingdom is going into the great unknown, but I think it’s a bit ridiculous to think that the UK is going to fall apart.

In general, I think that the market will remain volatile, but it just seems much easier to go long, although if you are quick enough you could short this market, but I would be much more careful doing that on signs of exhaustion. I believe the traders will preferred the stability of the EU longer term, so it makes sense that once we finally do get the major breakout, it will probably be to the upside and less of course the British can pull some type of coup at the negotiations.

EUR/USD Price Forecast January 12, 2018, Technical Analysis

The EUR/USD pair broke out to the upside during the trading session on Thursday, breaking above the 1.20 level above, which of course is a large, round, psychologically significant figure. By breaking above that level, it looks as if the market is ready to go back towards the highs of the 1.21 handle again. This being the case, I believe that pullbacks offer short-term buying opportunities, but I also recognize that this pair will continue to be very noisy.

If we can break above the 1.21 level, the market should continue to go to the upside based upon the longer-term charts. We had recently broken above the top of the bullish flag on the weekly chart, and now it looks likely that we are getting ready to go higher. I think that pullbacks offer value the people will be willing to take advantage of, as the US dollar looks very vulnerable for 2018. Because of this, I believe that this market will eventually go looking towards the 1.25 handle, probably sometime this summer. In the meantime, looking at pullbacks as value is probably the best way to go, and adding slowly on your way higher is probably the best trading strategy.

I believe that the 1.19 level underneath is massively supportive, but if we break down below there I think there’s even more support at the 1.18 handle underneath, as it is a market that has seen several important levels broken in the past to the upside. It’s going to be volatile, but that’s because this is the realm of high-frequency trading.

GBP/JPY Price Forecast January 12, 2018, Technical Analysis

This pair has been very volatile over the last couple of days, as it appears that the Japanese government suggested that quantitative easing has the potential to be lowered. I don’t think that’s going to happen, and I believe that value hunters underneath is starting to look for an opportunity to go long. The 150-level course is psychologically supportive, although we have broken below an uptrend line recently. The reality of the market is that it’s very difficult, but I think that if we can break above the 152-handle level, this is a market that continues to go much higher, and recently breaking above the 153 level was a very bullish sign. However, the last action has been very difficult to gauge, and I think that this market will continue to be very difficult to trade. Because of this, no matter what you do you should use a small trading position.

If we break down below the 150 handle, the market probably goes looking towards the 147.50 level after that. Otherwise, if we break above the 152 handle, we go looking at the 153 handle again for a longer-term “buy-and-hold” situation. In the meantime, is can be very dangerous to trade this market, so although I suspect that we are going to see a bit of buying pressure, I recommend staying away from this market as there will be easier trades to take in the Forex world right now. The British pound has been a bit oversold recently, and that may be part of what we are well.

GBP/USD Price Forecast January 12, 2018, Technical Analysis

The British pound as you can see has broken down initially during the trading session on Thursday, but then turned around at the 1.3450 level to find a significant amount of buying pressure and ended up slicing through the 1.35 level. Now that we have done that, it looks likely that the market will continue to find buyers, and short-term pullbacks should offer value in a marketplace that continues to bang against the upside. The 1.3650 level above is massive resistance, as it was a significant gap lower. That is a sign that the longer-term “buy-and-hold” traders will come back into play, and because of this the markets continue to see attempts to break out to the upside.

Ultimately, if we do break down to a fresh, new low, then I go looking for more support at the 1.3333 handle, and of course the uptrend line that has been so crucial. Longer-term, I anticipate that the British pound will go looking for the 1.40 level above, and then the 1.50 level. Longer-term traders are probably looking at these opportunities as investments, for the longer-term move that almost undoubtedly is trying to form. After all, Forex markets tend to move in 3 to 5-year cycles, and we are at the long in of those moves to the downside. Remember, the British pound started falling long before the vote to leave the EU, and now I think that we are starting to see the pushback from the longer-term large players.

NZD/USD Price Forecast January 12, 2018, Technical Analysis

The New Zealand dollar initially dipped during the trading session on Thursday, but found enough buying pressure to turn the market higher and likely to reach towards the top of the overall consolidation area from the longer term. The 0.75 level above is the top of a longer-term consolidation area, and I think that the market will be attracted to that level. Ultimately, I think that pullbacks continue to offer buying opportunities, with the 0.68 level being the bottom of that consolidation. I think that there are a lot of opportunities in this market, as the New Zealand dollar is so highly sensitive to risk appetite. Remember, commodity markets have a great influence on the kiwi dollar, as when they go up people tend to buy the kiwi itself. The opposite of course is true, so I think that paying attention to the CRB Index and other such markets might be the best way to go.

In general, there is a negative bias towards the US dollar overall, so I think that this market will probably gain simply because of that. The marketplace should continue to go hunting towards the 0.75 level, but if we can break above there, the market should go much higher, perhaps reaching towards the 0.80 level over the longer term. Market participants should wait for short-term pullbacks in the market that offer value that you can take advantage of. Think of the kiwi dollar as being “on sale.”

USD/CAD Price Forecast January 12, 2018, Technical Analysis

The US dollar has gone sideways in general during the trading session on Thursday, and I believe that the 1.25 level underneath is massive support. Since we have broken above that area, I think that a fresh, new highs should send this market much higher, perhaps reaching towards the vital resistance level at the 1.29 level that extends to the 1.30 level after that. The volatility in this market could continue, because quite frankly the Canadian dollar is highly sensitive to the crude oil markets. But the one thing that I would point out is that we have completely taken back the gains that the Canadian dollar picked up after the jobs reports on Friday. That massive candle has been completely wiped out, and that of course is a very strong sign for this pair.

I believe that the Canadian dollar will be highly leveraged to crude oil going forward, just as it always has been. I think that if oil roles over, we will probably go looking towards the 1.29 level, but I think breaking above the 1.30 level will be very difficult to occur. If it does happen, it becomes more of a “buy-and-hold” situation. Volatility aside, I think there’s a lot of concerns in Canada about the housing market, which is the great open secret that nobody’s talking about. Toronto is an absolute mess when it comes to housing bubbles, and I think that will rear its ugly head soon.

USD/JPY Price Forecast January 12, 2018, Technical Analysis

By initially tried to rally, but then turning around to form a bit of a shooting star, this shows that the US dollar is ready to continue going lower. I think that the 111 level will be the first target, and then possibly the 110 level after that. This is a market that had a major breakdown after it was suggested that the Bank of Japan may step away from quantitative easing a bit, and now with poor PPI numbers as well as other announcements coming out of America, the US dollar has been pummeled again. I think a break below the 111 level almost certainly send this market looking towards the psychologically important 110 level, which is just below the 61.8% Fibonacci retracement level of the recent move. If that happens, I would expect that value hunters will appear in that general vicinity, as we could see the market continue to try and consolidate.

I suspect that you can probably buy in that area, but right now it looks as if we are certainly going to try to go to the downside. Alternately, if we were to somehow break above the 112 level, then I think the market goes towards 113. Expect a lot of volatility, because quite frankly this pair tends to be volatile, but it is also very risk sensitive, and ties in quite nicely with the S&P 500 and other stock indices around the world. Pay attention to the overall attitude of markets and whether people are willing to buy things, because if they are typically we will see buyers jump in here as well.

USD/JPY Price Forecast January 11, 2018, Technical Analysis

The US dollar broke down significantly during the trading session on Wednesday, slicing below the bottom of the symmetrical triangle, and then free fell from there. I believe that the Japanese yen is starting to significantly strengthen overall in the Forex world, mainly because there are concerns and suspicions that the Bank of Japan is going to stand away from the massive quantitative easing that we have seen over the last several years. Historically, the Bank of Japan is always loose with its monetary policy, least since the 1980s, so it’s likely that the attitude will continue longer term, so although we have broken down rather significantly, I believe that it’s only a matter of time before the buyers return.

The 111 level offers a significant amount of support, and I think that if we can stay above that level, the market will probably go looking towards the 112 level again, and then eventually the 113 level. The markets continue to be very volatile, but that’s typical with this pair. I would be very cautious about jumping into the market, but I would do so very slowly because there is so much in the way of volatility just waiting to happen. If we do break down, I believe that the 110 level will be the next support level, which is even more supportive. I think that a lot of this is based upon the idea of guessing where the BOJ goes next.

USD/CAD Price Forecast January 11, 2018, Technical Analysis

The US dollar was very volatile during the trading session on Wednesday, ultimately settling on testing the 1.25 level above. If we can break above the 1.2525 handle, the market could go much higher, perhaps turn around and rally towards the 1.29 level. However, I think that it is very difficult to imagine a scenario where it will be easy to do that. We will need to see the oil markets roll over in my estimation to have that move. Otherwise, if we get some type of exhaustive candle, we will probably break down from there and go towards the 1.2350 level.

I think that the US dollar could be in trouble for 2018, and this pair could be one of the more interesting places to trade it, as it is so highly leveraged to the crude oil market, which of course is very volatile. I believe that the market will continue to be choppy, but in this current environment I think that the 1.25 region will be the most important level to pay attention to. Once the market makes its next move obvious, then you can simply follow. We have obvious targets, and we have an obvious launching pad in the form of the 1.25 handle. By being patient, you should be able to figure out where the true momentum presents itself.

NZD/USD Price Forecast January 11, 2018, Technical Analysis

The New Zealand dollar has rallied significantly during the trading session, but pulled back a bit to show signs of exhaustion. I believe that the market underneath has plenty of support as well, and then eventually we should find plenty of people willing to get involved to push the New Zealand dollar to the top of the overall consolidated area, the 0.75 handle. Longer-term, this is an area that has been a magnet for price, but has also been far too strong to break out above.

I believe that this market will continue to be noisy, but that’s nothing new as the New Zealand dollar is the least liquid of the major currencies. I think that you should pay attention to commodity markets in general, as they give us a general idea as to the risk appetite, which of course then has a significant effect on the kiwi dollar. Beyond that, the US dollar is also part of the equation, so if the US dollar starts to soften against other currencies, that will show itself in this pair as well. I believe that the 0.71 level underneath is supportive, and that is followed by even more support at the large, round, number 0.70 below. I suspect that this is going to be very noisy market, but adding slowly as you pull back a bit, the market allows you to build a larger position towards the upside.

GBP/USD Price Forecast January 11, 2018, Technical Analysis

The British pound had gone back and forth during most of the session on Wednesday, as we await some support in this general area to continue to go higher. I think that in the short term, we are going to consolidate between the 1.35 level on the bottom, and the 1.36 level on the top. Overall, I believe that we will see plenty of buyers coming into this market given enough time, but the 1.3650 level above is massive resistance. There’s been a significant gap lower, and that is an area that I think that the market will struggle to get above. Once we do, it frees the British pound to go to much higher levels. In the meantime, I think that the market simply is going to go back and forth, grinding sideways.

If we were to break down below the 1.35 handle, the market probably goes looking towards the 1.34 handle underneath, which would be the next support level. Under there, there’s even more support at the 1.3333 handle, which is a massive level for buyers as far as I can see. There is also an uptrend line underneath, which should keep the market afloat as well. I believe that the British pound had been oversold and that the Forex markets are starting to correct that. Beyond that, the US dollar looks vulnerable going into 2018, and that could help this market as well. If we were to break down below the 1.3333 handle, then I must rethink my entire outlook for this pair.

GBP/JPY Price Forecast January 11, 2018, Technical Analysis

We have broken down below the uptrend line that had been supporting the GBP/JPY pair lately, and by slicing through that uptrend line, I have become a bit concerned about the uptrend in this pair. I don’t think we are going to explode to the downside, I think this is more based upon the idea that perhaps the Bank of Japan isn’t going to keep its monetary policy as loose for as long as we thought. I believe that the 150-handle underneath is massively supportive, and therefore I think it’s not until we break down below there that I truly become concerned. Obviously, we need to reassess the entire situation, but I think that it’s only a matter of time before we rally again. After all, this is a market that is typically driven by risk appetite, but it the idea of the Bank of Japan stepping away from quantitative easing has spooked a lot of people. In the end, it is just speculation and there’s nothing written in stone about that idea, and I think the market may have gotten ahead of itself.

The volatility will remain, so I would be very careful about putting a lot of money into the market, but I think that given enough time I think that we will see a lot of buying pressure. However, I think it’s a very careful situation though, so add slowly, if we break out to the upside. Otherwise, if we break down below the 150 handle, it’s likely to be a market you should step away from until we get a longer-term signal.

EUR/USD Price Forecast January 11, 2018, Technical Analysis

The EUR/USD pair has been very noisy over the last several weeks, and as you can see during the Wednesday session, the buyers came in and started buying with force. The 1.20 level has offered a bit of resistance, but at the end of the day I think we will sliced through the level again. The reaction of negative pressure wasn’t much of a surprise, this is an area that was previous support, so it should now be resistance, but I believe that it’s only a matter of time before the buyers come in and breakthrough. If we can break above the top of the candle’s signing of the 1.20 level, I think it’s a sign that we will make another serious attempt at the 1.21 level after that.

I suspect that the volatility will continue to be a major issue, but longer-term I think that the buyers will take over, as the US dollar looks to be a bit soft longer term. This of course can change, and I think that it will be interesting to see what’s going on in the bond market, as yields are starting to rise in America, but we also have good news for the Euro as the ECB looks likely to be tightening monetary policy in the future. If there is more of a “risk on” attitude around the world, that should help this pair as well, as it dries money away from the treasury markets. For me, I’m a buyer of dips but I don’t see the bounce yet that I want to take advantage of. I suspect that the 1.19 level will continue to offer support.

EUR/GBP Price Forecast January 11, 2018, Technical Analysis

The Euro rallied rather significantly during the trading session on Wednesday, reaching as high as the 0.8875 handle. Ultimately, this is a market that I think remains consolidation, between the 0.88 level underneath, and the 0.90 level above. I think that the market will bounce between the important areas, and as we were close to the bottom of the range, it makes sense that we would rally from there. I think that there is going to be a lot of noise going forward though, because quite frankly there are so many headlines coming out of the negotiations between the European Union and the United Kingdom. Because of this, expect sudden and volatile movements, and therefore you should be careful.

I think that the 0.89 level above is essentially “fair value”, and that looks likely to be a bit of a magnet for price. I suspect that the market will go looking towards that level next, and that the short pullback that we have seen later in the day on Wednesday will probably end up being a buying opportunity. I must certainly see a lot of support at the 0.8825 level, so I’m willing to put money to work as certainly we have seen a return of the Euro bulls. Beyond that, the British pound has a massive barrier above current trading against the US dollar, which of course is the benchmark for that currencies value. If we can finally break above the 0.90 level, the market is free to go much higher.

AUD/USD Price Forecast January 11, 2018, Technical Analysis

The Australian dollar has been very noisy during the day, bouncing from the 0.78 handle, reaching towards the 0.7875 level above, and then pulled back slightly. I think that the market continues to find buyers on dips, as the US dollar looks a bit susceptible to selling pressure going forward. I think that a break above the 0.7875 level should send this market looking towards the 0.80 level above, which is a large fulcrum for price overall. I think that ultimately the market should continue to find reasons to go higher, and once we break above the 0.80 level, the market should continue to go even higher over the longer term, possibly offering a “buy-and-hold” scenario. After all, that’s an area that has been very important in the past, essentially a fulcrum of price going back decades.

If we were to break down below the 0.78 handle, I believe that the market goes to the 0.7750 level underneath, and then possibly the 0.77 level. Below there, we have a “floor” in the market towards the 0.75 level underneath. A breakdown below that level should send this market much lower, as it would represent a complete breakdown in the bullish pressure. However, I suspect that is very unlikely to happen, and of course we have the gold markets to guide us as gold seems to be a good barometer of where the Aussie dollar goes. If gold can pick up a little bit of momentum, this pair should take off to the upside.

USD/JPY Price Forecast January 10, 2018, Technical Analysis

The US dollar has been very volatile during the trading session on Tuesday, as we have reached towards the 112.50 level twice. Both times, we have seen buyers jump into the marketplace, so now looks as if the buyers are willing to get involved and push from that region. This is typically a good sign, especially considering that there was a massive selloff that started the move. Because of this, the market looks likely to be building enough momentum to make a significant move, perhaps an attempt to break above the 113.50 level. If we can clear that area, I think the market goes to the 114 handle after that, followed by the 114.50 level, and then the ultimate price: the 115 barrier above.

If we can break above the 115 handle, this market will be more of a “buy-and-hold” scenario, but I think it’s going to take a lot of work to get that done, so it’s likely it will be something that we see down the road. In the meantime, I think that short-term pullbacks are buying opportunities, as I recognize that although the 112.50 level has been supportive, the 112 level was even more supportive than that. I don’t have any interest in shorting, I think that the markets will do the usual correlation to risk appetite, meaning that it goes higher as the stock markets around the world rally, and of course vice versa. By being careful and patient, you can hold up a large position to anticipate the move higher.

USD/CAD Price Forecast January 10, 2018, Technical Analysis

The US dollar drifted a little bit higher against the Canadian dollar during quiet trading on Tuesday. I still see a significant amount of resistance near the 1.25 level though, so I don’t have any interest in trying to press the issue right now. If we were to break above the 1.2525 level, then I could be convinced to start buying again, as the next significant resistance is somewhere near the 1.2750 level, followed by even more significant resistance at the 1.29 level. Alternately, I think that is only a matter of time before the 1.25 level offers resistance though, so I’m waiting to see if we get a bit of selling in that area that I can take advantage of as the breakdown was so significant. I think that the other opportunity would be to sell on a fresh, new low, as I see significant support at the 1.20 level that longer-term traders will more than likely be willing to aim for. At that point, I think that a lot of long-term questions will be asked of the marketplace, and a breakdown below that level would be catastrophic for the greenback against the Loonie.

With both economies being so heavily intertwined, it makes sense that the currency pair remains very volatile. The oil markets also drive this obviously, which of course has been very choppy and difficult to deal with as of late, although certainly has been in favor of the Canadian dollar.

AUD/USD Price Forecast January 10, 2018, Technical Analysis

The Australian dollar initially tried to rally during the trading session on Tuesday, but then rolled over to reach towards the 0.75 level underneath. That’s an area that features a gap on the chart as I have marked, and I think that the area is likely to attract a lot of interest, and I believe that the market should be supported. However, if we were to break down below here I think there is even more support at the 0.7750 level. The Australian dollar is obviously driven by the gold markets as per usual, so if gold markets start to rally, that should drive the Australian dollar higher. Beyond that, it also reflects what people think about the US dollar, as gold and the Aussie both will move counter cyclically to greenback bias.

I believe that eventually were going to go looking towards the 0.80 level above, which of course was an area that has been attractive for traders more than once over the last several decades. If we were to break above that level, becomes a “buy-and-hold” market, but until then I think we will see a lot of volatility. By adding to your position slowly, you can build for a massive move later. I think that the 0.75 level underneath offering support has been very important in the past, and of course the recent bounce. It’s not until we break down below there that I would be concerned about the Aussie dollar, and a breakdown below there would be very negative longer term. Until then, I like buying dips in small bits and pieces, but I also recognize is going to take a significant amount of momentum to continue above the 0.80 level.

EUR/GBP Price Forecast January 10, 2018, Technical Analysis

The EUR/GBP pair continues to bounce around just above the 0.88 level, which has been supportive for some time, and I think that the market will probably continue to respect his general vicinity, but given enough time I recognize that the market is in an uptrend, and I believe that longer-term traders will be leaning towards the European Union, as it is going to be a bit more stable than the United Kingdom over the next several years. That’s not to say that the British pound is going to collapse, but I think it makes a lot of sense for the consolidation overall to continue, meaning that we could go to the 0.90 level above. That would be a simple bounce back to the highs that we have tested several times.

Longer-term, I anticipate breaking above the 0.90 level, which could send this market towards the highs at the 0.93 level. I know a lot of pundits are calling for parity over the longer term, but quite frankly it is taking quite a while to make that move. Because of this, I think parity is becoming less likely. However, the overall consolidation should continue, and a retest of the 0.93 level makes sense as well. If we were to break down below the 0.8750 level, then I could consider selling this market, but only for a couple of handles.

EUR/USD Price Forecast January 10, 2018, Technical Analysis

The EUR/USD pair has been very noisy over the last several weeks, but the last couple of days have been a bit of a pullback. Ultimately, the market looks likely to find support just below, as the markets have been a bit overextended. I think that as we bounce from here, the market will probably go looking towards the 1.20 level above. If we can clear the 1.20 level, the market will more than likely continue to go to the 1.21 handle, but I think it will be very noisy. After all, there are a lot of questions about what the ECB does next, and of course a lot of questions about the United States dollar.

If we do continue to go lower, the next obvious support level for me is the 1.1850 level, which should be even more supportive. On the weekly chart, we had formed a bullish flag, and it looks now as if we are trying to test the area that had previously offered resistance. With that in mind, I think it’s only a matter of time before the buyers get involved so I’m looking for either a bounce, or perhaps some type of supportive daily candle to start building a position back up to anticipate a breakout. Move above the 1.21 handle sends this market much higher, and for what it’s worth – the measured move of the bullish flag is for 1.32 to be tested.

GBP/JPY Price Forecast January 10, 2018, Technical Analysis

“The Dragon” is one of the most risk sensitive trading pairs that we follow here at FX Empire. The market sold off rather drastically during the open, but has found a bit of support at the 152 level. By bouncing the way it has, I suspect that the market is trying to put a bit of a floor in the place, perhaps sending it back towards the 153 level, an area that has been important more than once. The fact that we broke above there recently suggests to me that the buyers are trying to push towards the upside, but it may be very choppy indeed. After all, if the stock markets rally, that’s typically good for this pair, but of course the exact opposite happens as well.

There is a significant uptrend line underneath, and that is what I look at from the overall attitude of the market, but I recognize that you should probably add slowly as the market is in your favor, because the noise in this market can be deafening at times. Because of the choppiness, it’s best to play this in a trend following type manner, meaning that adding slowly in building a larger position if we can make a fresh, new high, that to me suggests that we are ready to go much higher, perhaps the 163 handle over the next couple of months.

GBP/USD Price Forecast January 10, 2018, Technical Analysis

The British pound drifted a bit lower during the trading session on Tuesday, reaching down to the 1.35 region, which has of course offered a significant amount of support. I think at this point, I would anticipate a bounce, but I also recognize that we could break down below here and go looking for even more significant support below. I think that the market has a massive amount of support near the 1.3333 handle, so I would not be concerned about the uptrend until we break down below that level at the very least. Beyond that, there is an uptrend line just below, and that of course is an area where we could see the trend either be confirmed, or possibly changed completely.

I believe at this point, a lot of the movement in this market as dictated by the anti-US dollar sentiment, and the perceived historical cheapness of the British pound. The 1.3650 level above is massive resistance, so if we were to break above there I think that the longer-term “buy-and-hold” investors start to get back into the market and aiming for the 1.40 level above, perhaps even much higher over the next several years. I think that the market is likely to see buyers every time we dip, based upon value. I don’t have any interest in shorting this market, I think that the longer-term outlook for the British pound is much higher from here, but patience will be needed to realize significant gains. Because of this, jumping in slowly is the best route.

NZD/USD Price Forecast January 10, 2018, Technical Analysis

The 0.7150 level seems to be offering a bit of support in the NZD/USD pair, which has been very strong as of late. However, I also recognize that the markets are essentially consolidating in general, so I think that pullbacks will more than likely be an attempt to build up momentum to continue to the upside. The longer-term charts show consolidation between the 0.68 level on the bottom, and the 0.75 level on the top. Because of that, this is a market that will continue to be very much consolidating, but this is a larger and longer-term situation. I think that the market continues to be one that is “buy on the dips”, as we have not reached towards the top of the consolidation area since the bounce from the bottom.

I think that the New Zealand dollar had been a bit oversold for some time, so it makes sense that we recover and go back to normalcy. If we do break down from here, I would anticipate a significant support at the 0.71 handle, which has been significant resistance in the past, and the scene of a sizable gap from a couple of weeks ago. Ultimately, I believe that the US dollar continues to weaken, and that of course will be the same here as it is around the Forex world. Buying dips and adding on the way up to the 0.75 level aggressively is how I am trading the kiwi dollar.

EUR/USD Price Forecast January 9, 2018, Technical Analysis

The EUR/USD pair rolled over a bit during the trading session on Monday, as the 1.20 level underneath had been broken. I think that the 1.19 level underneath is also supportive, so even if we do continue to go a bit lower, it’s likely that it will only offer more value for people who are interested in going long. I do not have any interest in selling this market going forward, because we have a bullish flag on the weekly chart that has recently been broken to the upside. That suggests that we are going to go to the 1.32 level on the upside, but that of course is a long-term target. I believe the pullbacks offer value, and with the US dollar looking so weak over the last month or so, I believe that it shows where we want to go for 2018.

The 1.21 level above is massive resistance, and once we can clear that area, the market will be much more bullish going forward, offering plenty of “buy on the dips” attitudes. I think that the 1.24 level above will be targeted after that, and then 1.25. At this point, short-term pullbacks offer buying opportunities as well as the potential break out above, but I would add slowly in this market, as the volatility will probably continue. Going higher over the longer term is my expectation, but I also recognize that jumping into aggressively could cause undue stress to your account.

AUD/USD Price Forecast January 9, 2018, Technical Analysis

The Australian dollar has climbed a nice up trending channel over the last several sessions, but finally break down below the uptrend line on Monday. Ultimately, looks as if were going to go down to the 0.78 level underneath, perhaps even the 0.7750 level, which was the beginning of the overall channel. I look at this market as one that will be influenced by gold, which has been a little lackluster during the Monday trading session. However, we have seen a lot of buying pressure in general, and I think that the Australian dollar will go higher overall.

It’s not until we break down below the 0.77 level that I would be concerned about the uptrend, and the market will more than likely go to the 0.80 level after that. That is an area that has been important over the longer-term charts, and a break above that level signifies that it’s more of a “buy-and-hold” scenario. Until then though, it’s probably a situation where you will have to trade the short-term trend, and aim for short gains at best. This market should continue to be volatile in general, but I do favor the upside longer term. Pay attention to the US dollar, as the market seem to be moving more based upon the bias of the greenback than anything else. The FX markets have recently been trading either with or for the US dollar, and that should continue to be the way going forward. The new year has brought in more money, and it looks as if the US dollar is going to be sought. That being said, short-term pullbacks seem to be forming.

EUR/GBP Price Forecast January 9, 2018, Technical Analysis

The EUR/GBP pair drifted lower on Monday, but then speeded to the downside as the Europeans came on board. It looks as if the 0.88 level will be tested again, but that’s an area that has been rather supportive and reliable in the past, so I think some type of bounce is more than likely going to happen, and as you can see on the hourly chart, the stochastics are in the oversold area, and looking likely to cross over. I believe that a rally from here should send this market back to the 0.89 level, an area that is essentially “fair value” for the overall consolidation.

The overall consolidation area starts at the 0.88 handle, with the 0.90 level above being resistance. Overall, I think that the market will continue to go back and forth, as we await to see with the results of the negotiations between the European Union and the United Kingdom will produce. I think it’s can be difficult to trade this market for the longer-term standpoint, so as we get down to the bottom of the overall consolidated region, it makes sense to start buying. Remember, this pair has much more value per tick, so it doesn’t take as much of a move to make money. If we do break above the 0.90 level, and I think we will longer-term, then it becomes more of a “buy-and-hold” situation, aiming towards the 0.93 level above which is proven to be resistance.

GBP/JPY Price Forecast January 9, 2018, Technical Analysis

The British pound fell significantly on Monday, testing the 153 level. That’s an area that was previous resistance, and should now be support based upon plastic technical analysis. If we can break to the upside, the market will more than likely go looking towards the 155 handle above, and then eventually the 160 level. I believe that the market continues to offer opportunities on pullbacks, as it shows the British pound as being “cheap.” I think that the market will react to the overall attitude of stock traders around the world, which seems to be positive in general, but we have a bit of a “risk off” attitude on Monday. I think this will be short-lived though, so look at this as an opportunity to pick up value.

It’s not until we break down below the 152 level that I would be a seller, and based upon the recent action over the last couple of hours as I record this, I think that the buyers are most certainly looking to step in. We need help from stock traders and commodity traders to help lift this market, but is in this things calm down, I think we will see a resumption of the recent trend. I saw the 153 level being broken as a major turn of events. At this point, we will find out whether that was true now that we are retesting the region. If we fail, that’s an extraordinarily negative sign.

GBP/USD Price Forecast January 9, 2018, Technical Analysis

The British pound fell slightly during the trading session on Monday, reaching down towards the 1.35 handle. There is a significant amount of support in that area though, and I believe that the buyers will return to push the market towards the 1.36 handle above. This is a market that continues to be noisy in general, but I believe that we are trying to build up enough momentum to finally break out to the upside and continue the overall bullish move. I believe that given enough time, the market will eventually break above the 1.3650 level, sending the market towards the 1.40 level over the longer term. I believe that pullbacks continue to offer value in the British pound, as it seems to be driven more by the weakness of the US dollar than anything else. I also believe that the British pound should continue to benefit from the lack of the collapse of the United Kingdom, that so many people had priced in.

Even if we break down below the 1.35 level underneath, I think that the 1.33 level would be targeted. Ultimately, this is a market that has a massive amount of support at that level also, and an uptrend line that will come into play. Given enough time, this is a market that I think continues a longer-term “buy-and-hold” situation just waiting to happen. I will be buying on dips when that happens, but it’s not until we clear the 1.3650 level that we can go ahead and do that though.

NZD/USD Price Forecast January 9, 2018, Technical Analysis

The Australian dollar has gone back and forth during the trading session on Monday, as we cannot pick up substantial momentum during the trading session. The 0.72 level seems to be offering a bit of resistance, but at the same time we aren’t exactly selling off. The market has been consolidating between the 0.68 level on the bottom, and the 0.75 level on the top. Because of this, if we pull back I think it will offer value as the market is trying to reach to the upside.

In the meantime, I believe in adding slowly to the upside, especially if the commodity markets rally as the New Zealand dollar is so sensitive to the overall attitude of those sectors. Volatility is probably something that you can expect, as the New Zealand dollar is the least liquid of major currencies around the world. A lot of what we have seen in the New Zealand dollar has been due to an anti-US dollar bias to the markets, and with the New Zealand dollar being the “riskiest” of the major currencies. In fact, you can extend gains by going long of this market when it is a negative dollar bias type of trading session. As the US dollar has gained a bit against many of its competitors in the Forex base, and makes sense that this pair hasn’t been able to fall. I see support at the 0.71 handle, and most certainly at the 0.70 level. Selling isn’t something I’m interested in doing right now.

USD/CAD Price Forecast January 9, 2018, Technical Analysis

The US dollar rallied a bit during the trading session on Monday, as we are starting to see a little bit of a “risk off” attitude, as the 1.25 level above is a significant barrier though, and I think it is going to be difficult to break above that level. If we do, that could change the overall attitude of the recent selloff, as the Friday session had seen the US jobs number coming under expected figures, while the Canadian jobs number was better than anticipated. It makes sense that the market broke down below the 1.25 level significantly, but as you can see pulling back shows a perhaps traders are not as confident as they were on Friday.

If we make a break below the bottom of the move on Friday, then I think the market extends down to the 1.20 level underneath, and right now that is my base case, where I would expect to see much more significant support near the 1.20 level. I do recognize that a break above the 1.25 level would be very bullish though, and that would send this market much higher, perhaps towards the 1.29 level above which has been massively resistive. Pay attention to the oil markets, as they have a massive influence on the Canadian dollars well. They have an inverse correlation, so if the oil markets rally, that will provide more fuel to the fire for selling. If oil falls back, that should send this market higher.

USD/JPY Price Forecast January 9, 2018, Technical Analysis

The US dollar initially rally during the trading session on Monday, reaching towards the 113.40 level. We fell from there and broke to the 113 handle. As an area that has been important in the past, so it doesn’t surprise me that we have seen a bit of a reaction. If we continue lower, I think there is even more support underneath that the 112 level. We have recently been bullish, and I don’t see that changing overall, but I recognize that it might be noisy. After all, this market does tend to be very volatile, and that of course will change anytime soon. It is a “risk sensitive” market, as the US dollar tends to rally against the Japanese yen when stock markets do the same.

I recognize that the 114 level above is resistance, just as the 114.50 level is, and even more resistive, the 115 handle above all of that. Once we break above that level, it is more of a “buy-and-hold” situation, but until then I think that you can buy on short-term dips. Gives you an opportunity to add slowly to and build a large position as this pair looks as if it is winding up to pick up speed. It’s not until we break down below the 111 level that I would be concerned, although I think noise is going to be a major issue.

AUD/USD Price Forecast January 8, 2018, Technical Analysis

The Australian dollar initially fell during the trading session on Friday, but found the one-hour uptrend line to be supportive enough to turn the market around and make it rally. I think the market will continue to struggle to go higher, as the 0.80 level above is massive resistance. The 0.80 level has been important more than once on the longer-term charts, and essentially “longer-term fair value.” I think that if we can get above that level, it is going to signal a “buy-and-hold” scenario for the Aussie. Therefore, think it’s a difficult to get above that level. In the meantime, I think short-term pullbacks are going to continue to be opportunities to pick up the Aussie on the cheap, as we try to build up the breakout momentum.

If we do break down below the uptrend line, I think it is only a minor setback, as we have a significant amount of support in the form of a gap near the 0.78 level. In fact, the gap has already held, so I think breakdowns are simply going to be minor events in the longer-term perspective of things. The Aussie of course will be highly influenced by what’s going on in the gold markets, which have recently broken above the psychologically important $1300 level. By showing the strength that it has, I think the gold markets give us an idea that the Aussie needs to continue to the upside, but both may be looking for value in the short term.

EUR/GBP Price Forecast January 8, 2018, Technical Analysis

The EUR/GBP pair fell on Friday, reaching down towards the 0.8 a 75 handle. The market looks likely to be supported under this area though, and on the hourly chart we are trying to cross in the oversold part of the stochastic oscillator. I think that it is only a matter of time before the market rallies from here, and goes looking towards the 0.89 level again, and perhaps even the 0.90 level after that. The market has been consolidating overall between the 0.88 handle on the bottom and the 0.90 level of the top. The choppiness should continue though, because there are a lot of headlines that could move the markets. After all, we are negotiating the exit of the United Kingdom from the European Union, and therefore it’s likely that we will see a lot of noise based around those conversations.

I believe that the market will eventually break out to the upside, because quite frankly most traders are going to be much more comfortable holding the EUR over the GBP, as the European Union will more than likely be much more stable than the United Kingdom going forward the next couple of years. Traders love the idea of stability, so I think that puts a natural bid in the market which has been in an uptrend for years anyway. If we were to break down below the 0.88 level, that of course would be very negative, but seems to be unlikely at this point as value hunters continue to come back.

EUR/USD Price Forecast January 8, 2018, Technical Analysis

The EUR/USD pair drifted a bit lower during the trading session on Friday, after spiking shortly after the Nonfarm Payroll announcement missed jobs growth in December. I believe that the market will eventually find reasons to go higher, and that the 1.20 level underneath should continue to offer buying opportunities. After all, we have a gap just above the 1.20 level, and although the 1.21 level above has been resistive in the past, I think it is only a matter of time before we break out and continue the move to the upside.

When I look at the longer-term weekly chart, it is apparent that we have broken above the top of a bullish flag recently, and it suggests to me that we will eventually go looking towards the 1.32 handle. It’s going to take a long time to get there obviously, but the pair seems to be ready to rally every time we pull back with any type of significance. Because of this, I’m willing to add on dips, building up a large position for when I think will be a longer-term target. In the meantime, expect a lot of noise but that’s okay, the markets should continue to favor the uptrend that we have been in for some time.

As the market continues to be very noisy, look at it as either “expensive” or “cheap.” I believe that value hunters will continue to be attracted to the market, and that they will most certainly become much more aggressive above the 1.21 handle.

GBP/JPY Price Forecast January 8, 2018, Technical Analysis

The British pound continues to be very volatile, but we have obviously seen great gains against the Japanese yen. By breaking above the 153 handle, we are hitting a fresh, new high on the weekly chart, it’s likely that we are going to continue to see buyers jump into this market place, as this pair looks likely to go looking towards the 153 handle above. That’s an area that will attract a lot of attention, as we see plenty of interest in the British pound overall, as the headlines coming out of the negotiations will of course move the marketplace.

I believe that the 153 level now is the “floor” of the market, and that short-term pullbacks will continue to offer buying opportunities in a marketplace that has been very noisy, and is known to be very explosive at times. I think that the market will have a bit of a reaction to the 155 handle, but looking at the weekly chart, I think we could even go higher than that, perhaps the 160 handle. There will be a course at the occasional pullbacks, but those pullbacks should be thought of as value. It’s not until we break down below the 152.50 level that I would be concerned about the move to the upside. Overall, I am very bullish of this pair and I think we have hit the bottom, and are starting to see the next phase higher just waiting to happen as “risk on” becomes the mantra.

GBP/USD Price Forecast January 8, 2018, Technical Analysis

The British pound was volatile during the Friday session, initially tried to rally, but then pulled back towards the 1.35 handle. Americans bought this pair as the jobs numbers missed in the United States, so therefore it looks as if we are going to end up forming a supportive looking candle for the daily timeframe. The 1.3650 level above continues to be massively resistive, so it’s going to take a significant amount of momentum to finally break out. Once we do though, this is a market that continues to reach to the upside, perhaps the 1.40 level initially, followed very shortly by the “buy-and-hold” market.

The 1.35 level underneath should continue to offer plenty of support, and I think at this point you must look at it as a short-term floor. If we break down below there, then fine, we will probably go looking towards the 1.3333 handle again for support. I fully anticipate that the level will hold the trend to the upside, based not only by the structural support of the horizontal level, but also the uptrend line on the charts. I am bullish of the British pound, and I believe that the US dollar is going to continue to be very difficult to keep afloat, as it looks very vulnerable to most currencies around the world, with of course the British pound being much the same. Once we break the 1.3650 level, I think that the market will start to pick up momentum, and I would become much more aggressive above that level. Until then, I would add slowly on dips.

NZD/USD Price Forecast January 8, 2018, Technical Analysis

The New Zealand dollar went sideways initially during the trading session on Friday, but once the jobs number came out as a bit of a mess in America, the New Zealand dollar rallied against the greenback. Ultimately, I think this pair is going higher anyway, so it was probably just an excuse to put a short-term bid into the kiwi dollar. Remember that the commodity markets have a massive influence on what happens with the New Zealand dollar, so if they can rally overall, it’s likely that the New Zealand dollar will go much higher. However, I also recognize that structurally we have a significant amount of support below at the 0.71 handle, an area that has been resistance in the past.

Overall, the US dollar looks to be soft, and I think that will continue to be the case going forward into 2018. While we do expect 3 interest rate hikes coming out of the Federal Reserve, that’s already known, so there’s not much else to price into the US dollar beyond that. Also, if it’s a “risk on” environment, that’ll benefit the New Zealand dollar as global economies around the world will demand for commodities. In general, I like the kiwi dollar, and I think we are going to go back to the top of the overall consolidated area, which means the market is reaching towards the 0.75 level longer term. Buying on the dips continues to be a good way to play this market.

USD/CAD Price Forecast January 8, 2018, Technical Analysis

The US dollar went sideways against the Canadian dollar during the trading session on Friday, as the 1.25 level has of course been very important. Now that we have broken through there, I think there is a significant amount of bearish pressure coming, especially considering that the Canadian jobs number was better than expected while the US jobs number was weaker than anticipated. Because of this, I think that as it looks likely to bounce from here, I suspect that the buying pressure should eventually form some type of exhaustive candle that you can start shorting. A breakdown below the 1.24 level should send this market down to the 1.2250 level, followed by the 1.20 level which of course is the major area that we had seen the market bounce from. At this point, it’s very difficult to buy this market, because not only do the employment situation seem to be diverging, but we also have a significant move to the upside in the oil markets, and that of course favors a Canadian dollar as well.

If oil markets look relatively strong, this market is going to struggle to gain significant momentum, at least to the upside. I believe that we are starting to see the US dollar weakened against most currencies around the world, and that should be a theme for most of the year, and perhaps the Canadian dollar will be any different. However, the 2 economies are highly leveraged to towards each other, so I believe that even though we have seen a nice move during the Friday session, this might be a slow move.

USD/JPY Price Forecast January 8, 2018, Technical Analysis

The US dollar rallied during the trading session on Friday against the Japanese yen, before and after the jobs number. True, the jobs number was weaker than anticipated, but the buyers came back at the vital 113 handle, and found the market interesting enough to get involved. I think we are going to go looking towards the 114-handle next, and then eventually the 114.50 level. Above those areas stands the 115 handle, the gateway to much higher pricing. If we were to break above the 115 handle, it becomes more of a buy-and-hold scenario. Until then, expect volatility and dips occasionally to send this market looking for value.

The market continues to be supported underneath, but I would advise taking small positions and adding as the markets prove your trading position correct. Eventually, once we get a break above the 115 handle, it’s likely that we become more of a “buy-and-hold” market, giving us an opportunity to build a large position between now and then. I believe that there are multiple areas where we are going to see massive amounts of support, not just the 113 handle. After all, it’s likely that there is plenty of support at the 112 handle, and then the 111 level.

This pair tends to be a “risk on” market, meaning that as stock markets rally this pair does as well. Pay close attention to the US stock indices, because there is a certain amount of positive correlation between both this pair and those markets. They are obviously very strong, so I think that continues to put this market in a positive move.

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