Forex Daily Forecast, Analysis and Prediction

Gold bulls have once again stabilized above the historic psychological resistance of $4000 per ounce, following a period of limited profit-taking sales after gold prices reached an all-time high of $4059 per ounce. According to gold trading platforms, the recent sell-off did not extend beyond the $3944 per ounce level. Moreover, the previous week's trading closed with the price stable around the $4018 per ounce resistance.

Investor confidence in the US dollar as a safe-haven asset was renewed following Trump's threat to impose harsh tariffs on China starting next month, despite the ongoing US government shutdown now in its third week. This increased sell orders on the EUR/USD pair last week, with losses extending to the 1.1542 support level, near the pair's two-month low, before it closed the week stable around the 1.1622 level. Today, given the American holiday, the EUR/USD is expected to trade within a narrow range with a downward bias, hovering around and below the 1.1600 support level.

The US dollar has rallied a bit during the trading session here on Friday as we are approaching the 18.50 pesos level. This is an area that previously had been support, so it does make a certain amount of sense that it ends up being resistant as market memory comes into the picture. The 50 day EMA is sitting right around that area as well. And of course we have a downtrend line. So, it all ties in together quite nicely to offer resistance. Because of this, I will be looking forward to seeing if we get signs of exhaustion because that would be probably one of the better signs that you can get. Although obviously nothing is 100 % accurate, it is an area that you would expect to see it. If we can break above the 18.8 level, which probably takes a couple of days’ worth of pressure, then the US dollar probably rallies quite significantly against the Mexican peso.

The US dollar has pulled back slightly against the Swiss franc during the Friday early hours, but that's not a huge surprise considering that we are shortly extended over the last couple of days. And I think the 0.81 level will continue to be important. What I have noticed though is that the US dollar continues to strengthen against almost everything. And with that being the case, you've got a situation where we are trying to form some type of bottom. This pair might be a little trickier than many others because quite frankly, both are safety currencies. Now, what TradingView can't show you is a few decades ago, we were down here and there is a little bit of potential market memory.

The NASDAQ 100 initially tried to rally during the trading session here on Friday, and we did gain a little bit, but it looks like we’re probably just going to drift into the weekend. That's not a huge surprise because, quite frankly, Friday is typically a session where a lot of people will be very cautious unless there's something to move the markets. Keep in mind that the US government is shut down at the moment, so we don't have economic numbers coming out to influence what traders might be doing. With all of that being said, we are above the 25,000 level. And I think that in and of itself is probably going to be some type of market moving factor by itself because traders love these big figures and will be reading about it in all the news over the next few sessions.

The Euro tried to rally a little bit during the trading session here on Friday, but it looks like the 1.16 level is in fact going to continue to offer a bit of resistance. At this point in time, if it does, the Euro probably drops down to the 1.15 level. And then after that, the 1.14 level, which of course has an area that I think a lot of people will be watching as it's been important previously, and it was where the market tested an uptrend line. Furthermore, the 1.14 level is also an area that the 200 day EMA is racing towards. With this being said, any rally at this point in time, I look at with suspicion until we can break above the 50 day EMA, and that of course being broken to the upside then could reassert the potential of the upside. But I think at this point, it really looks like the Euro is starting to roll over. And it's worth noting that the US dollar is strengthening against most currencies.

The British Pound has gone back and forth during trading here on Friday as we are testing the 200-day EMA. This is a market that I think you will have to continue to look at through the prism of negative, but bouncing from the 200-day EMA is not exactly a huge surprise, I think we could see a little bit of technical uh momentum come back into the market. I don't know if it sticks, but I do think you've got a situation where traders are going to at least acknowledge this indicator. A rally at this point in time probably opens up a move to the 1.34 level at best, and then we probably roll over there.

The US dollar broke down significantly against the Japanese yen during trading on Friday, as the ¥153 level has offered a significant amount of resistance, and perhaps gravity came back into the picture. That being said, we also have a little bit of an exacerbation of trade tensions between the United States and the Chinese, and therefore a little bit of a “risk off move” made sense. In other words, people started running to the safety of the Japanese yen, but I also would argue that the market was overdone to begin with, and we were heading into the weekend.

It appears that the spat between the United States and China is far from over after Chinese leaders have decided to put massive restrictions on exports are rare earth minerals out of that country, and the United States has decided that they will be retaliating one way or the other. Because of this, the nonsense about the trade war has taken front and center stage again, and it’s likely that there are concerns about how the Chinese may punish Tesla, but at the end of the day we are still in the consolidation area and as we head into the weekend, it’s very difficult to grasp on what may or may not happen here. After all, this is a market that panics first and thanks later.

Germany plunged during trading on Friday, as we have seen the fears of an increasing trade war between the United States and China not, lot of risk appetite out of the markets. All things being equal, this is a market that I think continues to see a lot of concerns about whether or not the situation gets worse between the United States and the Chinese, which could have a major influence on the Germans as well as they have to deal with a lot of volatility due to the fact that the Germans are such major exporters to the rest of the world.

Ethereum felt rather significantly during the trading session on Friday, as we have seen a decidedly “risk off” type of environment. In fact, Ethereum is down almost 6.5% for the session, as we continue to see Ethereum move back and forth with the overall risk appetite of traders around the world, and of course Ethereum continues to be very far out on the risk appetite spectrum, and that of course means that Ethereum will fall significantly anytime that the rest of the market breaks out.

Bitcoin initially attempted to rally during the session on Friday but gave back gains rather quickly in order to show signs of negativity. We have plunged below the $120,000 level, which of course is a large, round, psychologically significant figure, and of course where we had bounce from during the previous session. Now that we have broken down below that candlestick, it does show a lot of negativity, and you have to look at it through the prism of a market that is panicking due to the idea of the United States and China increasing sense. After all, that puts quite a bit of pressure on risk appetite in general, and I think we will continue to see that be the case.

The USD/MXN is near the 18.45775 mark as of this writing, but traders need to take a look at the wide spreads in the currency pair before venturing forth with a speculative position today.

The USD/ZAR is around 17.27700 with a wide spread being seen at this moment, this after the currency pair jumped on Friday to a high of nearly 17.49700 momentarily on heightened rhetoric from the U.S White House.

The GBP/USD exchange rate has pulled back and reached its lowest level since August 1 as traders braced for a renewed trade war between the United States and China. It dropped to a multi-month low of 1.3263, down from the September high of 1.3730.