Forex Daily Forecast, Analysis and Prediction

The hardest hitting news items for the EUR/USD pair are canceling each other out. Turning then to the technicals, they are all clearly far below their center lines, except for the StochRSI.

New Home Sales data is ready to devastate the recent new low around 1.3450 with wonderful news for America's dollar. Only the RSI of the four technicals put to the daily EUR/USD chart is far above it's centerline and clearly ready for a easy ride downward but that news will easily overpower any lagging technical indicator.

EUR/USD very nearly reached an important target on Friday, followed by a rally to resistance at 1.3653. Overnight we briefly rallied above that level, but quickly dropped lower, as the euro tries to find a bottom to rally off of. We may find support today at the 1.3535 area, or test the bottom at 1.3444. Beyond that, there are targets at 1.3333 and 1.3310. A rally above 1.3691 should find resistance at 1.3790.

Yesterday’s price action increases the chances of the MT up-cycle having completed at 92.14 (light green) with three channels-plus-extension. We fell short of the LT target, which would come in at 92.43 today, but it remains a possibility if a rally takes hold.

Heavy news is favoring the Euro today for a change. The likely retracement that might follow the recent rise in the last four trading days however does not. The Bollinger Bands, Full Stochastics, StochRSI and RSI rising higher than they have in recent weeks could mean this high period for the EUR/USD will make traders uncomfortable and this pair will be kept range bound or moving downward.

The consistent angle of the Bollinger Bands has been the only unceasingly correct directional indicator in the recent downtrend for the EUR/USD on the daily chart. Full Stochastics, StochRSI and RSI have all waned in their efforts to give us lagging truth. The trend and the B.B.s still direct us downward.

With the trend able to bend the daily chart's Bollinger Bands, Full Stochastics, StochRSI and RSI, it best to trade with it. Today's largest news item for this pair also helping the greater trend, should also help convince you to trade with it, today at least. The technical indicators give a idea about the sentiment of traders, they do not tell the future. They are often based on averages and will creep back to their centerlines even though the trend has long been moving up or down.

USD/JPY got the test of the 91.27 high we mentioned yesterday in our daily report, topping at 91.38 before declining overnight. That 91.27 level also happens to be the top of the 2nd channel of the LT angled up-cycle (dark green).

The 4th channel target of the ST up-cycle (light blue) proved to be the end of the ST cycle, and likely the end of the correction that began Friday after the bottom at 1.3587. The subsequent decline made a lower low at 1.3531, but it was part of a sideways trade that now appears complete.

The downtrend will continue, with more good news forecast for the Dollar, the EUR/USD will likely continue down on the daily chart today.

Lifted to their centerlines or beyond, Bollinger Bands, Full Stochastics and StochRSI are now satiated and ready for the greater downtrend to continue or let the RSI and the hard hitting news that favors the EUR side of the EUR/USD have it's way with this pair and start a bit of a rise on the daily chart.

USD/JPY traded down near 3rd channel extension support (purple) at 89.66, but has rebounded.

The market appears to be calling for more sideways price action before resuming the LT down-cycle.

All of the major stock markets closed at least marginally higher at the end of last week’s trading session. In Europe over the course of last week, the FTSE put on 1.6%, closing at 5142.5; the CAC managed to rise by almost 1% closing at 3599.1; the Dax made 1.2%, ending the week at 5500.4.

Taking each indicator's vote, with Bollinger Bands, Full Stochastics and RSI below their centerlines and only the StochRSI wrapped around it's center area, the EUR/USD should be headed for the clouds on the daily chart.