Forex Daily Forecast, Analysis and Prediction

The New Year is off to a volatile start with Dollar losing across the board. If we are not in an existing position then trading the intra-day trends on a fast time frame can present some decent opportunities.

The recent move upward will be held strong by the likely Pending Home Sales numbers, which are not looking good for the dollar. Though the pair is high for the Bollinger Bands and the StochRSI, it is around the centerline for the Full Stochastics and RSI. More signs say the EUR/USD will be moving up on the fifth, so that is where I will place my bet.

EURUSD bulls didn't manage to break resistance level after second attempt. A rebound back to support level occurred, at the moment waiting action is better to follow in order to confirm a possible breakout of support level. While resistance and support levels stay active, further bouncing between these barriers are expected.

The Loonie has been range bound against the Dollar since the beginning of November. When candlesticks move sideways for extended periods of time, trades refer to price as consolidating. In the chart below notice how the CAD went from trending to ranging to mini break out and then back to ranging. After an extended period of consolidation, expectations of a break out increase.

Price action is comfortable at 1.4300 and moving downward. Full Stochastics and RSI would like to bring things higher though. The 14,2 Bollinger Band indicator is about in the center and the StochRSI is trying to keep the RSI down. Anyway... not everyone is looking at the same technical indicators or interprets them the same way, what will move the market is, the hard hitting news for this pair tomorrow and it bodes well for the dollar and will help keep the downward trend in line.

The daily chart for the EUR/USD has kept the four technicals committed to it, grounded and begging for upward movement again. Bollinger Bands, Full Stochastics and RSI are each asking the pair for the same thing price action will easily allow. Only the StochRSI will disagree, it wants the RSI to stay down for a bit longer. With the low volume at the end of the year, December 31st will likely be a range bound day, trade at your own risk.

The EUR has fallen roughly 6% since reaching its high for the year back in late November. Here are some key levels of Support and Resistance. A breach of these levels would trigger a continued directional play.

Each of the four technicals except the StochRSI the daily EUR/USD chart enjoys is asking for a move upward. The Bollinger Bands, Full Stochastics and RSI each are in line with a retracement that the price action looks like it would support. The trend is your friend though remember, I would still short the highs and ride it for all it is worth.

Measuring velocity can be difficult. The accuracy of the measurement is often dependent on what is being measured. Charts as we all know are subject to manual manipulation. This means that altering the view from a minute chart to a daily chart, or increasing or decreasing the time horizon will make the chart appear differently. In the graphs below, one side is a 3yr tenor and the other a 1yr tenor. Compare how vastly different the current time period presents itself between the 2 graphs.

London and Canada are taking the day off, so liquidity and spreads might not be the same for many brokers, be careful when entering a trade. No hard hitting news for the EUR/USD pair is released today also. Bollinger Bands, Full Stochastics and RSI are ready still for a move upward.

Most analysts were prepared for the EUR to go short once the EUR broke the 50 SMA, which had been holding support since April 2009. If you followed that advice you are doing great, except one issue. The EUR is 150 pips off its recent low. Did you miss the bottom or is this just a minor retrace?

The EUR/USD's descent has stopped and the Bollinger Bands, Full Stochastics, StochRSI and RSI are starting to lift and show some comfort for the pair at the 1.4300 level. Price action still will allow for some lift and the indicators, all below their centerlines, are all more than willing to allow for a jump up in this pair.

Well hopefully you entered this Short EUR position when the candle appeared below the 50 day MA. If you did then you are ahead 600 pips. The next question is how do I know when to exit the trade and realize my PNL? This is a very important component of trading. Before you enter every trade you not only need to establish a stop loss but also a profit target and a contingency plan.

EURUSD after sharp movement downside near support level, bulls made a recovery progress. At the moment waiting option is better to take while low trading range will end up. Further bouncing is expected.

The Yen has been volatile at times this year and thus very difficult to trade with regularity. In recent days a number of technical indicators have been triggered to warrant a potential Short JPY position. The 50 day MA was breached last week, but due to volatility, that by itself is not a lone trigger.