Forex Daily Forecast, Analysis and Prediction

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.

The dollar again defies price action on the EUR/USD daily chart. Wrapped around it's 1.4350 support and defying the Bollinger Bands, Full Stochastics, StochRSI and RSI indicators, it seeks new strength against the Euro while waiting for the good existing home sales numbers forecast for the United States on the 22nd to gain even more.

Riding support at 1.4300, price action from the past couple weeks shows some desire to move upward. The Bollinger Bands, Full Stochastics, StochRSI and RSI on the EUR/USD pair are all as low as they can go. Each is begging to be pulled off the floor by the pair. Technical indicators are lagging however and will not tell with certainty when the next powerful retracement will happen.

EURUSD negative trend is active. Concentration near support level is formed which can indicate a short term upswings. At the moment, waiting action is better to take with selling possibilities below trend line.

Gold has fallen 10.59% since reaching its all time trading high on December 3rd. There has been a long standing historical positive correlation between the change in the price of Gold and the Swiss Franc. Over the same period of time the Dollar has had its best rally in more than 9 months.

Technically the EUR/USD should clearly be going up. Bollinger Bands, Full Stochastics, StochRSI and RSI do not need any long interpretation to see that. Price action is also marching in lock step with these four technicals on the daily chart also. The sentiment and feelings of market movers around the globe is what moves the market though.