Forex Daily Forecast, Analysis and Prediction

A major jump may be coming if it breaks above the 0.92 level significantly as this could lead to an 800-pip move

I wrote in my previous BTC/USD forecast almost one week ago that the technical picture had more bearish, with the price printing a series of lower highs and heading towards an area of very key support above $91,000.

The GBP/USD exchange rate resumed its downward trend after the recent UK and US economic numbers. The pair dropped to a low of 1.2170 and is nearing its lowest level since October 2023. It has fallen by almost 10% from its highest level in 2024.

The EUR/USD exchange rate was unchanged on Monday morning ahead of a data-lite week and key macro events like Donald Trump swearing in and the World Economic Forum event in Davos, Switzerland. The pair was trading at 1.0270, a few pips above this month’s low of 1.0178.

The British Pound has fallen a bit during the trading session on Friday, which in and of itself isn't surprising because we've seen it do that all week.

During my analysis of Bitcoin, the first thing that comes to the forefront is the fact that Bitcoin is rallying rather significantly, as we have broken through a significant short-term swing high, and now that we are above there, it looks like Bitcoin could continue to go looking to the upside. After all, the market had been in a major consolidation range, and now it looks like Bitcoin might go looking to get to the top of it.

During my daily analysis of the major indices around the world, the NASDAQ 100 is always one of the first ones I look at, as it can give you a good idea as to what risk appetite might end up being. After all, these are some of the largest technology companies in the world, and therefore we need to have more of a “risk on attitude” in order to throw money at them.

During my daily analysis of the major currency pairs, the AUD/USD pair is one that has caught my attention as we are hanging around the 0.62 level. The 0.62 level is an area that’s been important multiple times, so I think you should pay close attention to what goes on here. All things being equal, looks like a market that is going to be very noisy and choppy, and of course the fact that the area previously had been important multiple times over the longer term.

The AUD/USD exchange rate remained on edge ahead of Donald Trump’s inauguration in the United States. The pair retreated below the psychological point at 0.6200, a few points above this month’s low of 0.6133.

The USD/CAD pair rose initially during the trading session on Friday, reaching the top of the recent consolidation area before giving back quite a bit of the gains. By doing so, it shows just how noisy and choppy the markets are right now, considering the currency markets are typically a lot less volatile than stock markets, which have been a bit of a monster themselves. That being said, this is a pair that I think eventually has to resolve to the upside, unless something drastically changes.

During the daily analysis that I do of major currency pairs, the USD/JPY pair has captured my attention as we tried to break down below the ¥155 level, which is an area that has been important multiple times. In fact, it is almost as if the level acts like a brick wall, so that tells you just how much support there is there.

Markets are seeing rising risk-on sentiment as economic data points towards an increasing likelihood of US rate cuts in the foreseeable future.

After opening this past Monday with strong selling and falling below the 1.02000 level, the EUR/USD did show some ability to create upwards momentum, but its price action remains uninspiring for bulls.

WTI Crude Oil did go above the 79.000 USD price level this past Wednesday, a mark not seen since August 2024, but then reversed lower and closing on Friday near the 77.055 ratio.

Get the weekly Forex forecast for major currency pairs for the week of January 20-25, 2025 here.