Forex Daily Forecast, Analysis and Prediction

Much to a surprise of many traders, the Euro has been very strong recently. It rallied against many other currencies, in many cases reaching important resistance levels, where next price swings will be decided. The EUR/GBP pair is at just such juncture.

Financial markets, including the currencies are having hard time finding direction.

Recently, the Swiss Franc has benefited greatly from its perceived status of a “safe haven”. This currency has been very strong, reaching an all time high against the Euro and marking major gains in relation to other currencies.

The major down trend in USD/JPY continues. Earlier in the week, this pair made another 15 year low at 83.34 and large-scale charts show no signs of a trend reversal yet. However, on smaller time frames the Dollar appears to be regaining some strength. Is it for real?

Although cable seems to want to push back up again and continue the uptrend of July, having a look at the markets there seems to be not enough steam to move the pair forward. Positive news is helping some weak rebound but to soon again find resistance and fall back off, sometimes even at a lower low.

On Wednesday, the Bank of Canada boosted its interest rates to 1 percent from 0.75 percent, making it a third increase in a span of four month. In response, the Canadian Dollar rallied strongly against other currencies, including the Swiss Franc.

The most liquid currency pair, the EUR-USD, has been sending many mixed signals lately. After reaching a high of 1.3330, this pair pulled back to 1.2600.

Just like the other currencies, the Canadian Dollar has sold off considerably against the Japanese Yen lately

Recently, currencies have been subjected to a series of wild swings in public sentiment. Seemingly, every few days the perception switches from a “flight to safety” to a “pursuit of risk”. One of the best examples of this wavering opinion is the AUD-JPY.

So far this week, the Japanese Yen, and all its crosses have been very volatile. They sold off significantly for 2 days following the emergency Bank of Japan policy meeting and recovered to some degree on Wednesday. This recovery ran into a stiff resistance though, and currently the JPY pairs are in a “no man’s land” of sorts – a holding pattern.

Over last few months, the USD/CAD has been moving sideways. It has not made any meaningful high or low since late May, when it reached 1.0852. Since then, the price oscillated in a range between 1.0680 and 1.0105.

The AUD/USD is still in an uptrend, as judged on basis of technical analysis. The price is above the 100 SMA and the up trendline, too. Last week, this pair rebounded from a conjunction of both of these lines, finding a support at 0.8770.

So far in 2010, the GBP/CHF has remained in wide trading range, between 1.5785 and 1.7105. This is best visible on weekly charts and gives this pair an appearance of non-action. However, this congestion zone is wide enough for trading opportunities on smaller time frame charts, including the daily graph.

One of the currency pair that has been lacking significant attention recently is the EUR/GBP. That could change soon.

Finally, after couple of weeks of trying, the USD/JPY broke through the 84.70 support and made new 15 year low. It dropped 83.58 before a correction set in.