Forex Daily Forecast, Analysis and Prediction

Technical and fundamental analyses in one place, with charts of the major currencies to give you a glimpse of what to expect in your Forex trading during the week of July 11, 2011.

After the nice run up in March, when the AUD/JPY appreciated from 74.48 to 90.02, this pair has not done much. The Japanese became “lifeless” and the price is largely responding to what happens to the Australian Dollar.

The British Pound hit below the 1.5990/70 level and we can therefore consider the hourly trend as down at the moment.

The overall behavior of this pair does not offer many clues about what the price might do next. However, when we look at highs and lows we can identify certain patterns.

The British Pound/Swiss Franc has been in one of the longest and most persistent trends of recent years. This pair, together with the EUR/CHF, started a downtrend during the financial panic of 2008 and is still moving lower.

NZD/USD is seeing the end of a flat correction - see what our expert trader is doing now.

We need to see a move below 1.4440 to confirm that the current leg up from the late June low has ended. The market is now oversold on hourly chart and that makes it questionable as to whether it will break down directly from here.

With so many markets closing up last week, it looks like the tides are finally changing - or are they? Take a look at our forecasts for the majors this week to see what you can expect in your Forex trading.

So far, in 2011 the EUR/NZD pair has not made much progress. It started the year at around 1.7250 and now, six month later is at 1.7500, which not much more than a daily fluctuation. Nevertheless, that does not mean that the price action has been boring – quite the opposite.

Standard & Poor’s after-market hours downgrade of the U.S. economy is not necessarily that big of a surprise as the credit agency had put the U.S. on credit watch with negative implications (suggestion a 50/50 chance of a downgrade within 90 days) back on July 14th. Following Saturdays announcement, investors are now faced with two concerns.

Following a week of extreme market volatility, the U.S. Dollar Index closed relatively unchanged against its major counterparts, as illustrated by most liquidly-traded currency pair (EURUSD) which remains locked in an astonishingly narrow 3.3% range since mid July. Get the roundup of all major currencies here.

Technical and fundamental analysis of EUR, USD, AUD and four other major currencies, all in one place.

This has been a very good week for the Euro. The common currency rallied first anticipating a positive austerity vote in Greece and then in response to it. All said, in last four days, the Euro advanced over 400 pips against the USD while also gaining on other currencies.

With the move above 1.4440, the hourly trend is now considered on the upside. Right now the market is overbought and some kind of a pullback towards 1.4425/20 can be seen later today but as long as the prices hold above 1.4340, the hourly trend remains higher and gains towards 1.4570 are seen. However, the upside potential is likely to be limited to there as the triangle on the daily chart from the May top does not look complete yet.

With the financial world focusing on Greece, it is of no surprise that the European currencies are among the most volatile now. The Euro responds sharply to every news release, while the Swiss Franc keeps making new all time highs against other majors, just as the Australian Dollar used to do only few weeks ago.