Forex Daily Forecast, Analysis and Prediction

The Euro has rallied strongly for the past day or so, but that does not make the hourly chart bullish yet.

The USD-JPY rallied in March from the all time low of 76.12 to 85.82. Within the most recent price history, this is the dominant swing, one defining critical support/resistance levels. Those must be broken before new trend gets under way.

The Australian Dollar has become one of the most popular currencies to trade. Its volume increased dramatically during the past couple of years, making it as liquid as the so-called "major."

The Swiss Franc remains one of the safe havens among currencies. It just keeps getting stronger, especially against the US Dollar. The long term down trend continues and the price has set a new all time low at 0.8551 about 2 weeks ago.

Like most of the Japanese Yen pairs, the EUR-JPY is not very clear about what to expect next. Following the intervention in the Yen couple of months ago, the price rallied strongly to over 123.00.

After reaching a twenty-year high at 1.3789, the Australian Dollar-New Zealand Dollar pair has settled into a consolidation period.

The hourly trading chart for this pair continues to be quite choppy.

The past few weeks have been unkind to the commodity currencies – all of them lost ground following sell offs in metals and energy sectors. These currencies rebounded few days ago but are drifting down again and not just in relation to the US Dollar. They are getting weaker broadly.

The British Pound has advanced strongly against the US Dollar. From a low of 1.5344 at the start of 2011, the GBP-USD rallied to as high as 1.6745 about two weeks ago. Since then, however, the price has been drifting down.

In case of its relation to the US Dollar, the AUD has been in the all time high territory, climbing to as high as 1.1011 in early May. That level proved to be a strong resistance.

Just last week the GBP-CHF touched 1.4108, another all time low. This pair has been in bear market for, well, years now, with the current main price swing starting in 2007, from the high of almost 2.5000.

The EUR-USD has been in a strong uptrend since the beginning of the year, advancing from 1.2872 to 1.4939.

One of the more underappreciated currency pairs is the CHF-JPY. Under most circumstances, it does not move as much as many others, since both the Swiss Franc and the Japanese Yen often serve the function of “safe havens” and tend to move in unison.

Last week’s sell off in commodities had a similar effect on some of the currencies. In particular, the Australian, Canadian and New Zealand Dollars lost ground. The biggest beneficiary was the US Dollar, for once, but a few other currencies also registered smaller gains.

Financial markets have reversed directions this week. Not just currencies, but stocks and commodities as well. The volatility increased, dramatically in many cases. The question is, are these moves just corrections, or reversals?